Firms’ Research and Development Activity and the Public Support: The Italian Case ABSTRACT: In the Lisbon strategy, Member States committed to making structural reforms to their economies. Within this context, the European Council called for R&D investment to approach 3% of GDP by 2010, of which 2% should come from the private sector. At the moment, in Italy R&D investment represents 1,2% of GDP, of which about 50% comes from the private sector. The Financial Law 2007 modifies the italian support system to R&D introducing tax credit for R&S in the period 2007-2009. The paper analyzes the effects of this tax credit. In particular, we calculate that at 2009 private investment in R&D approach to 0,88% of GDP. Therefore, it is necessary to go one step further.