IST- MeGT Science, Tecchnology and Innovation Policy

IST- MeGTScience, Tecchnology and Innovation Policy

The Economic Benefits of Publicly The Economic Benefits of Publicly FundedFunded

Basic ResearchBasic Research

A critical reviewA critical review

Ammon J. Salter & Ben R. MartinAmmon J. Salter & Ben R. Martin

Students:Students:

Isabel MatalongaIsabel Matalonga

Paulo CameiraPaulo Cameira

Main questions this article puts onMain questions this article puts on

The specific nature of basic research and the need of being The specific nature of basic research and the need of being publicly fundedpublicly funded Difficulties to measure the relationship between publicly funded Difficulties to measure the relationship between publicly funded basic research and economic benefit and productivitybasic research and economic benefit and productivityHow important is the public funding of basic research as a way to How important is the public funding of basic research as a way to sustain technological developmentsustain technological developmentThis critical review identifies six types of contributions that This critical review identifies six types of contributions that publicly funded research makes to economic growthpublicly funded research makes to economic growth


Conceptual approachConceptual approach Basic Research is considered as Basic Research is considered as

«curiosity-oriented» research.«curiosity-oriented» research.

Literature uses other terms such asLiterature uses other terms such as : : «Strategic research».«Strategic research». «Academic research».«Academic research».


Definitions and ScopeDefinitions and ScopeBasic ResearchBasic Research is experimental or is experimental or theoretical work undertaken primarily theoretical work undertaken primarily to acquire new knowledge of the to acquire new knowledge of the underlying foundation of phenomena underlying foundation of phenomena and observable facts, without any and observable facts, without any particular application or use in view.particular application or use in view.

(Frascati Manual)(Frascati Manual)



Definitions and ScopeDefinitions and Scope The study focuses on the economic The study focuses on the economic

benefits from basic research rather benefits from basic research rather than the social, environmental or than the social, environmental or cultural benefits. cultural benefits.

There is a fuzzy boundary between There is a fuzzy boundary between the economic and non-economic the economic and non-economic benefits. benefits.

Main methodological approaches Main methodological approaches adoptedadoptedEconometric studiesEconometric studiesSurveysSurveysCase StudiesCase Studies



The main types of benefit from The main types of benefit from publicly funded basic researchpublicly funded basic research

1.1. Increasing the stock of useful Increasing the stock of useful knowledge. knowledge.

2.2. Training skilled graduates.Training skilled graduates.

3.3. Creating new scientific Creating new scientific instrumentation and methodologies. instrumentation and methodologies.


The main types of benefit from The main types of benefit from publicly funded basic research (cont.)publicly funded basic research (cont.)

4.4. Forming networks and stimulating Forming networks and stimulating social interaction.social interaction.

5.5. Increasing the capacity for scientific Increasing the capacity for scientific and tecnological problem-solvingand tecnological problem-solving

6.6. Creating new firms. Creating new firms.





ConclusionsConclusions

1.1. As regards the specific case of basic As regards the specific case of basic research, one can try to estimate the research, one can try to estimate the rate of return, but only on the basis rate of return, but only on the basis of very questionable assumptions. of very questionable assumptions.



2.2. Traditional justification for the Traditional justification for the public funding of basic research is public funding of basic research is based on the argument that science based on the argument that science is a public good.is a public good.



3.3. The tacit knowledge and skills The tacit knowledge and skills generated by basic research are generated by basic research are especially important in newly especially important in newly emerging and fast-moving areas of emerging and fast-moving areas of science and technology.science and technology.



4.4. A fourth type of benefit stems from A fourth type of benefit stems from the fact that participation in basic the fact that participation in basic research is essential if one is to research is essential if one is to obtain acess to national and obtain acess to national and international networks of experts international networks of experts and information.and information.



5.5. Fifthly, basic research may be Fifthly, basic research may be especially good at developing the especially good at developing the ability to tackle and and solve ability to tackle and and solve complex problems. complex problems.



6.6. Lastly, basic research may lead to Lastly, basic research may lead to the creation of “spin-off” the creation of “spin-off” companies, where academics companies, where academics transfer their skills, tacit knowledge, transfer their skills, tacit knowledge, problem-solving abilities and so on, problem-solving abilities and so on, directly into a commercial directly into a commercial environment. environment.


Conclusions : policy implicationsConclusions : policy implications Basic research is crucial for the Basic research is crucial for the

strategic position of industrialised strategic position of industrialised nations in the world economy.nations in the world economy.

Is difficult to arrive at simple policy Is difficult to arrive at simple policy prescriptions. prescriptions.


Conclusions : policy implicationsConclusions : policy implications One reason relates to the One reason relates to the

interactions between basic research interactions between basic research and innovation, and in the relative and innovation, and in the relative importance of different forms of importance of different forms of economic benefit with scientific economic benefit with scientific field, technology and industrial field, technology and industrial sector. sector.


Conclusions : policy implicationsConclusions : policy implications Secondly, there is the dependance Secondly, there is the dependance

of new products and processes on a of new products and processes on a range of technologies, and the range of technologies, and the dependance of new technologies on dependance of new technologies on a large number of scientific fields. a large number of scientific fields.


Conclusions : policy implicationsConclusions : policy implications A third reason concerns the A third reason concerns the

importance of “spillovers”, importance of “spillovers”, including both geographical effects including both geographical effects and the interactions between one and the interactions between one form of activity and another. form of activity and another.


Conclusions : policy implicationsConclusions : policy implications

In s h o r t :In s h o r t : There is a great heterogeneity in the There is a great heterogeneity in the

relationship between research and relationship between research and innovation.innovation.

No simple model of the nature of the No simple model of the nature of the economic benefits from basic research is economic benefits from basic research is possible.possible.

There can be no simple unified policy for There can be no simple unified policy for basic research. basic research.

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IST- MeGT Science, Tecchnology and Innovation Policy