Directions (1-10): Read the following passage carefully and answer the questions given below it. Certain words/phrases have been given in bold to help you locate them while answering some of the questions.
However, at the same time as R&D and innovation are emphasized as the appropriate response to the economic, social, and environmental challenges of the 21st century, there is also a concern that Europe may suffer from an “innovation gap” in comparison with other leading economies. For example, the Innovation Union Scoreboard 2014, which calculates multidimensional performance indices for the EU countries and some other major economies, suggests that the EU’s innovation performance has fallen short of that in the US and Japan for the past decade, and that South Korea also shows better results than the EU since 2009.
One obvious explanation for the gap is that the EU invests less in R&D than its main competitors. While the EU’s R&D expenditures amounted to 2.01% of GDP in 2013, Japan reached 3.34%, South Korea recorded 3.61%, and the US used2.55% of GDP for R&D. Another reason could be that there may be differences in how efficiently countries are able to transform R&D into commercial innovations and growth. In particular, growth effects may vary depending on how total R&D expenditures are divided between the public and private sectors. Both the EU and its main competitors devote roughly one percent of GDP to publicly funded R&D, but Japan, South Korea, and the US have substantially higher rates of private sector R&D than the EU. It is possible that privately funded R&D generates stronger benefits than publicly funded R&D, those interactions between private and public R&D result in more innovations than purely public research efforts, or that private R&D is necessary to create the capacity for absorption and commercial exploitation of the results of publicly funded R&D. The growth effects of R&D are also likely to vary depending on the specific features of the national innovation system, which determine how effectively knowledge is created, commercialized, and diffused.
The quality of higher education, the efficiency of the labor market, incentives and attitudes toward entrepreneurship, openness to trade and foreign direct investment, the availability of venture capital, the quality of market institutions, and the availability of infrastructure are only some of the determinants identified in the literature. In many of these areas – in particular those related to entrepreneurship, venture capital, and market institutions – the US is often promoted as a best-practice example, suggesting that the US position as a global technology leader has more to do with an efficient innovation system than with higher R&D expenditures.
An analysis has been made to define the relationship between R&D spending and growth by conducting a meta-analysis of the relevant literature on a large number of countries at different stages of economic development. The purpose is to investigate whether the EU (or more precisely, the EU15 – the 15 countries that had joined the EU before 2004) differs from other economies in terms of how it is affected by R&D. The results suggest that the growth-enhancing effects of R&D spending in the EU are somewhat weaker than those in other industrialized economies, and that the gap is largely explained by a comparison with the US. It was also found that studies analyzing the level of income generally record a stronger relation between R&D and output than studies analyzing changes in growth rates: this finding is relevant also for the present analysis.
1. What according to the author is one of the answers to the rising social, environmental and economic challenges of the present age?
1) Increased investment by foreign banks.
2) Heavy investments in higher education.
3) Innovation in the heavy industries’ sector.
4) Research and Development is an appropriate response to the economic, social and environment challenges.
5) A substantial growth rate.
2. What is the tone of the author in the passage?
3. What can be a possible title of the passage?
1) Investment of the European Union in Research and Development.
2) Role of Research and Development in the economic growth of nations.
3) Newer production processes vis-à-vis increased output per worker.
4) They were fond of animals and sometimes shared their food with stray animals.
5) The economic and social challenges faced by the 21st century world.
4. The passage is most likely taken from a/an
1) Economics journal.
2) Political Science journal.
3) school book.
4) Social Science book.
5. Which of the following statements is correct in the light of the passage?
1) USA has lesser private sector R and Ds than the European Union.
2) The position of US as a global technology leader is due to higher R and D expenditures.
3) The short term benefits of Research and Development investments are more theoretical.
4) The European Union wants to increase the expenditure on Research and Development substantially by 2020.
5) The R and D expenditure of the European Union is lesser than many developed countries.
6. Why does the author show that the innovation performance of European Union could not match American and Japanese standards?
1) Europe has been plagued by political crises one after another.
2) This is due to the fact that the European Union invests less in Research and Development.
3) US and Japan have witnessed huge foreign investments in the last couple of years.
4) The economic recession of 2008 dealt a death blow to the economic stability of the European Union.
5) European leaders underestimated the importance of Research and Development since the end of World War II.
Direction(7-8): Choose the word which is most similar in meaning given in bold as used in the given passage.
Direction(9-10): Choose the word which is opposite in meaning given in bold as used in the given passage.
1: 4; Refer to the first sentence of the second paragraph for the answer where the author cites that Research and Development and Innovation are appropriate response to the economic, social and environmental challenges of the 21stcentury.
2: 3; The author is incisive in his observations. Incisive refers to being analytical.
3: 2; The entire passage talks about the importance of Research and Development or R and D.The author quotes figures and data to substantiate that R and D plays a pivotal part in the economic growth of a country.
4: 1; The passage is most likely taken from an Economics journal. The passage is scholarly and the author mentions a number of illustrative examples. Therefore, it can be inferred that the passage is an excerpt from a journal article. The topic discussed in the passage is essentially related to Economics.
6: 2; Refer to the ending of the second paragraph and the beginning of the third paragraph. The author mentions that EU’s poor innovation performance is because of low investments in R and D. The other options are out of scope.
7: 5; Excesses: An amount of something that is more than necessary, permitted, or desirable.
8: 5; Addition: The action or process of adding something to something else.
9: 5; External: Belonging to or forming the outer surface or structure of something.
10: 3; Condensed: Made denser or more concise; compressed or concentrated.