What is science for? Part 1: The economic argument

Clearly that’s a bit of a simplistic question with a multitude of possible and valid answers. But I’m thinking here about public funding of science, that with which you and I and most members of the public are most familiar with. Why does the government spend taxpayers’ money on funding fundamental scientific research? A major reason is to drive economic growth, and this aspect has been increasingly emphasised by the current government. In response it is this aspect of science which has also been emphasised by those who want to see the maintenance of government funding for science in these times of public spending cuts. This has led to some interesting and controversial developments in science funding which I’ll explore in a second post. For now, I’ll consider the economic argument.

This has two aspects – research output and training. There is a traditional argument that pure research must precede applied research, which then encourages economic growth – a linear model. This isn’t necessarily true – much technology and associated economic growth has developed without a basis in pure research, and people like to point to the Industrial Revolution to show this. Nevertheless, pure research can and often does lead to economic growth by producing findings which have commercial applications, whether that be immediately or after further development. Hence scientific research is considered necessary to keep the UK at the forefront of developing technologies and create and sustain new products, businesses, and jobs. To make efficient use of the continuous research output, it is necessary that there is a large scientifically trained workforce, in both the private and public sectors, who can understand novel research and convert it into practical use. Hence public funding of scientific research not only produces novel technologies, but also the expertise to make them commercially viable.

However, the economic gain which derives from research suggests that there should be plentiful private funding and no need for supplementary public funding. The reason traditionally given for this public funding is that specific scientific knowledge cannot be monopolised, and hence it is equally difficult to extract exclusive commercial benefit. As such, there is a shortage of private investment in research which must be made up by public funding.

This argument is fallacious. Much scientifically knowledge is intrinsically commercially exclusive in that expertise is required to understand it and expensive and rare equipment is necessary to practically realise it. Simply having access to a paper on cell surface binding mechanisms does not mean the reader understands its content, knows how to produce a viable drug based on this research, or has access to the facilities needed to make, test, and sell this drug. These capabilities exist only at a very few institutions. Additionally, intellectual property laws exist to make the economic potential of research even more exclusive and render it more commercially viable. One need only consider the Cambridge Science Park and the number of start-ups the university has produced to realise the direct commercial potential of research. Imperial College has an agreement with the company Imperial Innovations to oversee the commercialisation of technology deriving from its research. In fact, in the UK and most other countries there is considerably greater private funding of research than public. The idea that there would be underinvestment in science if it were left purely to the markets is not true.

Why, then, publicly fund science? Part of the rationale is in aiming to provide solutions to public issues, such as illness, flooding, and climate change. Yet this is only a partial reason, and one which currently does not occupy as much rhetoric as the economic argument. The reasoning that I have heard in different guises is to do with diversity. Private sources tend to fund research which is known to be commercially viable.  Longer-term projects with uncertain or delayed returns are marginalised, and many novel ideas or potentially disruptive innovations may never be realised. Additionally, research will tend to mirror the concerns of the richer segments of society, as there lie the greatest commercial benefits. Funding a more diverse range of research is not a viable short-term economic strategy because it picks less winners than more focused funding. Only the state, with the resources to pursue longer-term strategies with uncertain short-term output, can consistently pursue diversity in its research funding. Over the long-term, this diverse research may produce unforeseen advantageous outcomes, facilitate the development of alternative technologies which would struggle in the short-term against established products, and ensure that the capability exists to react to unexpected circumstances. Meanwhile, private funding ensures that research produces optimal economic returns over the short term. Hence a mix of the two funding types is probably the best solution to ensure that research drives both short and long-term economic growth, whilst also preparing us for future problems.

In my next post, I’ll explore how the current funding structure supports research diversity, though it is typically justified by slightly different arguments. I’ll also look at how research diversity has been threatened as of late by a combination of policies which emphasise impact as a research criterion, government funding of specific research projects, and a tendency within science to favour original and positive results. These are some issues which have attracted a lot of discussion recently, and I look forward to writing about them.

Acknowledgements and further reading: The economic reasoning behind funding science has been, and continues to be, discussed a lot. I’ve personally been influenced most by Michel Callon’s and Geof Bowker’s ‘Is Science a Public Good?’ in Science, Technology, and Human Values, vol. 19 (1994), pp. 395-424. I wrote most of this post before I came across these next two articles, but they cover similar themes. First is an argument that science funding should be entrusted to private markets , and the next is one which takes a contrary view but shares the view that the economic argument can be fallacious, and hints at why it is dangerous. For some recent discussion of the commercialisation of research, have a look at this write up of a recent panel discussion on the topic here, and shortly on the CUSPE website. (Disclaimer: I am a committee member of the society which hosted this event, though there’s no money involved. I’ll write a future post on this society, as it’s trying to fill an important gap in science policy.)


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