Examining Publicly Financed Corporate Research and Development as a Driver for Sustainable Development

The private sector’s long-term impact on progress towards the Sustainable Development Goals (SDGs) is considerably influenced by corporate research and development (R&D). Simultaneously, public financing emerges as a potent lever in guiding corporate R&D towards meaningful contribution to the SDGs. Focusing on 606 Finnish firms that received public R&D funds between 2015 and 2022, this paper explores the SDG orientation of firms’ R&D activities relative to the SDG-relevant impact of their products and services. We find that firms associate with a broader spectrum of SDGs in their R&D activity than through their products and services. However, some firms’ R&D activity relates to SDGs that the firms negatively impact in their main products and services. The study underscores the need for clear expectations and robust evaluation measures to promote positive impact when administering R&D funding. Policymakers are encouraged to integrate impact considerations into funding requirements to facilitate positive impact and avoid regressive activity.