Last modified: July 11, 2013
DISCUSSION PAPER PREPARED FOR THE IUPAB COUNCIL
In this discussion paper the often uneasy relationship between fundamental or basic and applied research is examined, with a particular focus on the central role that some governments play in shifting the balance back and forth between the two.
Currently, governments around the world seem to believe that an emphasis on applied research will lead to national wealth creation. In so doing they are undervaluing the many and real contributions made by fundamental research to that same end. Most scientists believe that the best way to enhance the capacity of a nation is to create a strong applied research culture based a vibrant and dynamic fundamental research foundation.
It is now our task to convince governments and science policy makers that this is indeed the case. In the following discussion there is a bias towards examples drawn from medicine. This is a deliberate choice because people (including politicians) naturally value medical applications.
BASIC RESEARCH DEFINED
CURIOSITY DRIVEN FUNDAMENTAL RESEARCH
The OECD recently defined basic research as that undertaken primarily to acquire new knowledge of the underlying foundations of phenomena without regard for a particular application. Fundamental research should be clearly distinguished from another form of basic research, strategic research, which is primarily aimed at understanding the fundamental basis of an applied ultimate goal.
Inevitably there will be arguments over the distinction between fundamental and applied research. For example, the National Research Council of Canada argues that fundamental research in one discipline could easily be construed as applied in a different field. It is true that basic discoveries in one field may represent “applications” of existing knowledge in another field.
In practice, fundamental research has led to many important applications that, almost without exception, were not anticipated at the time that the work was undertaken. It is impossible to over-emphasise two aspects of fundamental research that many politicians find hard to believe. Most applications cannot be foreseen; and, the period between a fundamental discovery and eventual applications is often very long compared to the criteria normally used by investors.
It is of course well known that fundamental studies of electromagnetic fields by Hertz and Maxwell underpin radio and television, developments that they clearly could not have imagined. The laser also falls into that category. The first working laser was built by Theodore Maiman in 1960. This idea came directly from atomic physics and, in particular, from principles of stimulated emission discovered by Einstein several decades before. With the subsequent development of gas lasers, these intense and coherent light sources found applications in experimental physics, enabled holographic and interferometric studies, and later were used for range finding and surveying.
But the most important applications came with the development of solid state lasers and their use in fibre optic communications. Lasers are now used throughout the world in medicine, in consumer electronics, and in scanning and printing technology. Modern communications and data storage technologies depend on laser optics and in the next decade or so, optronic laser-based computers will supersede the electronic systems of today.
New quantum computers may emerge from the use of trapped Bose Einstein condensates of atoms, cooled by laser action. It is a long pathway from the underpinning knowledge in atomic and quantum physics, through the key technical breakthrough of the first laser action, to the final widespread commercial implementation of laser physics.
Today the commercial value of the laser is extraordinarily high because of the way it has improved the quality of our lives.
Other examples that are more specifically in the field of biophysics include:
- determination of the structure of DNA which, like the laser, required about 40 years before it became commonly known as the basis of genetic engineering. In today’s newspapers we read about genetic screening for common genetic abnormalities and how it is central to techniques in forensic science.
- the discovery that the basis of sickle-cell disease was in a single mutation in the genetic code for one of the haemoglobin genes, opened up a molecular approach to the development of drugs to treat this and similar diseases of genetic origin
- the development of Relenza, the world’s first cure for influenza, arose from the X-ray crystal structure determination of the enzyme, neuraminidase used by the influenza virus to get into cells. By noting that part of the spikes on the surface of this virus were structurally constant, a molecule was developed which blocked the clefts on the heads of these spikes, effectively rendering the virus inactive.
- the ‘canyon hypothesis’ put forward by Michael Rossmann on the basis of his group’s studies of the common cold virus showed clearly how the virus could successfully defeat the human immune system by ‘hiding’ its host-recognition site, thereby guiding the rational development of new drugs.
- knowledge of the structure of the serum protein transthyretin, determined 30 years ago in the UK by Blake and his colleagues, led to the development and clinical testing of a drug to combat amyloid diseases such as Alzheimer’s.
- magnetic resonance imaging technology is now used widely for diagnosis (a non-invasive technique) and for research, with an increasingly wide variety of applications. Key developments include Carr and Purcell, who in 1954 described the use of magnetic field gradients to relate NMR frequencies to spatial position. Subsequently, magnetic resonance imaging became a multi-million industry although none of the early scientists had any idea that their work would lead to medical imaging technology of such practical significance.
On the other hand, the lack of fundamental research on the prion disease scrapie left us unprepared to cope with the BSE epidemic and related human diseases.
While only a small proportion of fundamental research efforts may lead to socially and commercially-acceptable applications, the attempt to direct financial support to applications may well be even less productive. For example, the decision by the U.S. government to direct large sums of money towards solving the problem of cancer was of questionable cost-effectiveness because of a lack of fundamental understanding of the nature of the disease process, and a consequent lack of research strategies.
BASIC RESEARCH: WHO DOES IT? HOW IS IT FUNDED?
National traditions vary. In some countries, particularly those of the former Eastern bloc, the National Academies play a major role in the development of basic research while in other such as Germany the Max Planck Institutes are strong contributors to fundamental research. In many countries much of the basic research is done in universities, many of which are heavily funded by governments (i.e. taxpayers).
Sir Robert May, Chief Scientists in the UK has successfully argued universities are the best places to provide an independent environment for fundamental research because they are essentially free of bias towards an desired outcome. They can provide the infrastructure needed to support basic research, and in almost all instances, basic research benefits from being assessed by peer review. However, large corporations increasingly understand that basic research is a source of new ideas, e.g. some pharmaceutical companies have initiated major X-ray crystallography projects to investigate protein structure.
Since governments usually control the allocation of funds for basic research, can they resist the temptation to steer basic research towards an applied outcome? Or will they see that there are clear differences between the two and maintain a strong, independent funding programme for fundamental research? It is equally import for the granting bodies to ensure that basic research projects per se are not ranked lower than applied projects.
COSTS AND RISKS OF BASIC RESEARCH
The actual costs of basic research are high. Salaries comprise the major cost of research projects but by community standards, scientists’ salaries are not high. Part of the problem is that basic research often requires a critical mass of scientists and this generates a multiplier effect (see below). Modern research requires increasingly sophisticated equipment and it is well known that the cost of scientific equipment (e.g. a glassware drying oven) can be inflated compared to equivalent commercial equipment (e.g. a food-warming oven).
Fundamental research is inherently a high-risk process and yet there is built into the peer-review system of scientific evaluation an oddly contradictory philosophy. Research councils which review scientific projects feel that it is their responsibility to minimise the risk to limited funds. At the same time, many scientists realise that if occasional failures do not eventuate, then the funding agencies might justifiably be criticised for having been too cautious. Thus the question becomes, how much risk is acceptable? Perhaps only one experiment out of seven will succeed but that is not to say the other six experiments are of no value or that the time was wasted.
Indeed, failed experiments often form the basis of important new research programmes. On the other hand, this philosophy of inherent risk can be a major impediment to investment by private enterprise, which normally expects a worthwhile return on investment within a short time-scale. We are not stuck with the minimal risk model. In the US, the DARPA grants deliberately seek to provide funding for wildly radical ideas (e.g. they fund a project which uses bees to sniff out land mines). Here researchers must provide clear milestones which must be met before funding continues.
DURATION OF FUNDING
Even when there are two or three closing dates a year for applications, one year grants are difficult to justify since there is often only a matter of weeks or months between the start of funding and the deadline for progress reports. One- year funding simply does not work and many funding agencies have given up this wasteful and unproductive form of grant. So what is the ideal duration a research project? Three years used to be the accepted norm but increasingly we realise that grants which take two or more months to prepare take a significant bite out of the remaining time. Five year grants seem to represent a better balance between productivity and optimal use of funds.
INCENTIVES FOR YOUNG SCIENTISTS
Young scientists need a clear career path. Therefore, if science is to survive, it is essential that new generations of scientists are encouraged to enter the field, and the best way to attract brilliant young minds into fundamental research is to match their undoubted commitment with appropriate salaries. Salaries are a major cost of science so it might be argued that it is in the interests of government to minimise them. On the other hand, it is natural for students in tertiary education to use the salary levels of scientists (relative to other careers) to gauge the perceived value of scientists by tertiary institutions, by government and by the community. If the present perceptions and salary structures persist, it will turn some of our brightest young students away from science and this will eventually degrade the intellectual level of the scientific community. Salary levels for scientists in Australia compare unfavourably with the scales used by the National Institutes of Health (NIH) in the US, particularly at the higher professional levels. Even when the salaries are not an issue, career path may be. Limitations of career path were recently recognised by the Wills Report (1998) which recommended that both pay scales and career opportunities be significantly expanded in Australia.
RESEARCH TEAMS AND MULTIDISCIPLINARY RESEARCH
Given the complexity and multidisciplinary nature of research in today’s environment, it is very difficult for a single researcher to have a significant impact on a field. Current wisdom suggests a two-tier arrangement of teams. The most effective size for research units is 5-12 scientists per group with each group containing several different fields of expertise. For example, in biomedical research, a research group might consist of scientists from molecular genetics, protein chemistry, physiology, biophysics, pharmacology, and mathematics. Such teams may then be grouped (at least loosely) around a major theme. An example from the field of cardiovascular research might be a grouping of teams dealing with different levels of complexity: the central nervous control of heart function, autonomic innervation of the heart, vascular control of the heart, cardiac ion channels and molecular aspects of heart failure. This type of organisation is likely to produce advances in both applied and basic sciences.
BENEFITS OF FUNDAMENTAL RESEARCH
There are three benefits of fundamental research: (1) acquisition of new knowledge; (2) social benefits to society; and (3) economic gains.
New knowledge is the primary product of fundamental research. This information, once stored exclusively in printed format, is increasingly available in searchable and down-loadable form. Although there are reservations which have stimulated considerable debate [Shaw, 1998] about the costs and benefits of electronic publishing, it will probably dominate the way scientific information is handled in future. The burgeoning network of websites on the Internet will also clearly have an enormous impact on the ease of exchanging technical information but their lack of any substantive review casts a serious doubt on their value to science.
The social benefits of educating high quality scientists, technologists and engineers are an immediately recognisable return for the funding of fundamental research. On the contrary, reduced government funding and the perception of lower status diverts our brightest and best young potential scientists, who turn instead to careers in commerce, law and medicine where, from the point of view of science, they remain lost. Thus, fundamental research is a crucial part of a research training, which in turn has important implications for the social cohesion of a nation.
The economic returns from fundamental research can be considerable, far in excess of the initial costs of the research. But because of the difficulty in separating funding levels for fundamental research and applied (goal-oriented) research, it is difficult and even impossible to statistically evaluate the economic returns from fundamental research alone. The US Department of Defense recently concluded that basic research was the principal contributor to product development and that the delay between the basic discovery and its application was significantly less for basic than for applied research. A report [Martin, 1996] commissioned by the UK Treasury focused on the economic returns. It concluded that basic research has a substantial impact on productivity, that new technology depends on advances in basic research, and that there is an interdependence between national strengths in industry and strengths in fundamental research.
HISTORY OF GOVERNMENT FUNDING
Government support for basic research has a long history. In 1842 a grant of $39,000 was made to Morse to build a telegraph line between Washington and Baltimore. This was perceived by many at the time as a straight gift to private enterprise but in hindsight it was a shrewd investment that gave a large return.
In the 1970s, threatened with a research funding squeeze in the US, the then Director of the famous Cardiovascular Research Institute at the University of California at San Francisco, Julius H. Comroe, searched for evidence that the advances in cardiovascular clinical practice was derived from basic research. Comroe and colleagues asked US cardiologists to list the professional activities they considered to be the most valuable. When the origins of these advances were examined, more than 70% of the clinical tools used by cardiologists arose from fundamental, curiosity-driven research performed without a cardiological outcome in mind. This report was used as a key argument to convince the US Congress that basic research had a better than average chance of translating into something clinically useful compared to that derived from problem-oriented research. The strategy was successful and although it has aged somewhat, the notion of substantiating the value of basic research has not.
WHAT FACTORS INFLUENCE GOVERNMENT FUNDING FOR RESEARCH
There is no evidence that governments around the world use systematic criteria to determine the level of funding for basic research. They seem to persuaded by a combination of influences which include the prevailing government philosophy, pressure from personal experience (e.g. a senator has a child die of leukaemia) and the force of personal contacts. But increasingly, governments of all persuasions are looking to their basic research budgets to produce economic returns and social benefits [Martin, 1996]. The problem is that basic research is, by its very nature, not goal-oriented and is unlikely to produce economic benefits within the time frame of elected governments.
GOVERNMENT EXPENDITURE ON RESEARCH AND SOCIAL EQUITY
The US government seems to have a good mix of federal and private sector funding for basic research. This is reflected, for example. in the US policy of tax credits for R & D expenditure. However, the fact that this funding is renewed annually suggests some apprehension about the long-term nature of such tax concessions. Congress wants to know more about where NIH research is heading, what scientific goals are to be achieved and whether the advantages to come from this research are socially equitable. US Senators then attempt the difficult task of weighing the social value of research against other demands like better schools or better roads.
High-profile scientists can help by providing compelling arguments for the benefits of a strong research sector. Different arguments appeal to different senators, so no single argument can be said to be the most effective. Some are more influenced by anecdotal evidence than a litany of scientific data, but it is important that mainstream scientists organise themselves to maintain the momentum once the funding ball is rolling. Governments need continually to be made aware of the role of basic research in generating goal-oriented, socially equitable outcomes.
OECD FUNDING FOR HEALTH RESEARCH
The most recent figures for expenditure on health research from OECD countries are more readily accessed than those for basic research. These data do not support the notion that countries with small economies must spend less on R & D. In the area of medical research (which traditionally is a strong supporter of basic research) Switzerland spends about twice as much (0.315% of GDP) as the USA (0.211%). Denmark also spends more (0.213%). And Sweden (0.190%) is well ahead of Japan (0.158%). These three small countries have strongly-developed private enterprises in health-related fields, particularly in pharmaceuticals. In 1998, the average government expenditure expressed as a ratio of GDP for all OECD countries was 0.174%. Even if small countries like Australia (0.115%) and New Zealand (0.051%) doubled their competitive research expenditure it would lift these factors by only about 30%, still leaving them well below the average. The take-home lesson for small countries is not to get left behind and, if they are behind, they must aim for long-term steady increases.
GOVERNMENT V. PHARMACEUTICAL INDUSTRY FUNDING
The 1998 OECD data for expenditure on health and medical R & D reveal an interesting finding. Those countries which have large pharmaceutical industries also have the largest government expenditure in this area. This is probably true for other sectors of research e.g. chemical industries. In the USA, a study [Levy, 1983] of the relationship between public funding and the level of private expenditure on basic research showed that every dollar spent by the US Government stimulated the expenditure of more than a dollar by private R & D. However, there was usually a lag of at least a year between increases in government and private expenditure [Hill, 1995]. Unfortunately the reverse is also true, namely, when government funding for basic research is reduced, there is a corresponding reduction in private expenditure but the delay is shorter. This suggests that governments should strongly avoid the temptation to indulge in stop-start funding but should take a much
longer-term approach to science support.
RECENT U.S. EXPERIENCE
In 1998 there was a dramatic increase (16%) in the funding of basic research by the NIH [Malakoff, 1998]. For years before this there had been a progressive and serious decline in funding. How was this situation turned around? The Federation of American Societies for Experimental Biology (FASEB) hired a retired US Senator to act as a lobbyist. His plan was cunningly simple. He formed a “caucus” and began recruiting senators who were sympathetic to the notion of funding for biomedical research. Scientists across the country were mobilised to contact their congressional representatives and put pressure on them to support an increase in funding for research. Gradually the movement grew until there was sufficient bipartisan support to win the day.
Many scientists became closely involved in this lobbying, particularly Tom Pollard from the Salk Institute and Ralph Yount (Washington State University) who was then President of FASEB. This was a tough job because, while governments may accept the value of basic research, there seems to be little understanding of why it is important. In this context, the input by high level scientists to high level political leaders is crucial although few scientists fully appreciate the personal sacrifices their colleagues make in trying to put the message across.
Just when U.S. scientists thought it was safe to return to the bench, the lobbying this year will start all over again. President Clinton has proposed a very modest 4% rise in NIH funding and much work has to be done to get it back to a double-digit funding increase [Malakoff, 1999]. In the end the projected increased in science funding prevailed, but many were nervous about the failure to maintain the funding momentum.
THE JAPANESE EXPERIENCE
In 1995 a report was prepared for the US Administration in which the levels of funding for fundamental research in Japan was compared to the US expenditure [Advisers, 1995]. It concluded that by 1997 the Japanese expenditure on non-defence R & D would exceed the US expenditure expressed in both dollar terms and as a fraction of GDP. Clearly the Japanese viewed the development of new technology as essential for its economic growth. Today, Japan is currently in the midst of a severe economic crisis. Despite this predicament, the Japanese government has not, as might be expected, reduced its expenditure on research, particularly fundamental research. In fact it has done the opposite. It has increased their research expenditure.
No doubt this decision was based on the argument that if Japanese technology made them the second largest global economy and so it will do it again. Twenty five years ago, it was difficult for the Japanese to induce foreign scientists to work in Japan. Their exchange programs were mainly there to support Japanese fellowships in the US and elsewhere. Today, this trend has been completely reversed by the steady stream of the best foreign scientists into Japan. Perhaps the most interesting insight into the Japanese scientific psyche is the comment from one Japanese colleague who said that the Japanese Government do not recognised the difference between basic and fundamental research. Japan simply funds science.
THE U.K. EXPERIENCE
In the mid-nineteenth century Britain led the world into the industrial revolution. However, during the Thatcher period funding for research declined sharply (despite the fact that she was a science graduate). The Chief Scientist in the UK, Robert May, is an Australian physicist largely credited for turning around the state of funding disaster. By mid-1998 he achieved a massive increase in the funding of fundamental research in the UK. £120 billion was injected into basic research, the bulk of which was to be spent on university-based basic research [May, 1997]. His argument to government was compelling: Either invest now in research or fall behind those countries like the US and Japan which had already increased their R & D budgets. The UK situation has, however, been very greatly helped by the large injection of funding from the Wellcome Trust which invested more than the Medical Research Council on a program of research grants and career development fellowships in addition to a joint initiative with the UK Research Councils to boost the provision of equipment and infrastructure in universities.
CAN COUNTRIES WITH SMALL ECONOMIES COMPETE WITH THE USA, JAPAN AND UK?
With the dominant global economies investing in their intellectual stock, it may seem like a waste of precious resources for small or developing countries to engage in basic research. Nevertheless, it can be argued that these countries can and should contribute to the advancement of human knowledge, if only because it stimulates their own intellectual stock.
Patenting of intellectual property provides essential protection for private investment but it is not enough to protect countries from losing the potential value of investments. Small countries need to put in place funding mechanisms to ensure that their technological developments stay in the country. Sweden is a good example. It used to be a net importer of technology but became a net exporter by providing government assistance to develop its native technology.
Australia also is a small economy (0.3% of the world population) but it makes a disproportionately large contribution to world health and medical research output (2.5%). Funding for fundamental research in Australia has declined over the past 5 years. By 1998 its scientific community was acutely aware that it was being squeezed into a critically small and inefficient state. A recent report by the Health & Medical Research Strategic Review Committee [Wills, 1998] suggested that even if competitive funding available from the National Health & Medical Research Council (Australian’s primary biomedical research funding body) was doubled (to $28/head) it would still lag behind the OECD weighted average public R & D expenditure of $66/head. The review Committee suggested that a good way forward was to provide a significant increase in government investment combined with links between public funding, research and the commercialisation of research outcomes by private enterprise. In this way, growth in the public and private sectors would be additive.
Following the privatisation of the New Zealand Government research laboratories, basic research there is now principally conducted in its universities. Their outcome-driven research funding system (Public Good Science Fund) now dominates research expenditure and may well lead to a dangerously reduced capacity for innovation. A recent paper from the New Zealand Vice-Chancellors’ Committee concluded that the proposed changes to the funding categories will weight the system in favour of low-cost, mediocre research. In searching for optimal accountability within universities, the Committee suggested that the best system might be a compromise between quantification of output (by numbers of weighted publications, numbers of graduated research students and success with competitive grant funding) and qualitative assessment at the university department level.
IMPLICATIONS FOR TAX POLICIES
Issues of taxation are complex because they can vary so much from one country to the next. The rate at which R & D companies are taxed varies considerably. Ireland is becoming a favoured place to locate intellectual property (IP)- based companies because of their low rates of corporate tax and the considerable taxation- free “holidays” granted by that government. This is important because the country where a patent is registered is the one where the taxes on IP royalties must be paid. Tax credits for industry provide important incentives for R & D and differentials in the generosity of these credits in different countries can be a major consideration.
In Australia, science-based businesses have been critical of government policies and point to the comparatively generous tax credit system available in the USA. There have been similar discussions over the easing of capital gains taxation which many businessmen believe is one of the strongest impediments to private investment in fundamental research. It is here that scientists should try to influence government attitudes. On the other hand, governments can fairly argue that medium-large science-based businesses (particularly the multinationals) need to plough a larger share of their profits back into research. Issues such as national allegiance can be important but are less so for multinationals.
BIOMEDICAL RESEARCH AND PUBLIC OPINION
An American public opinion survey published in the prestigious FASEB journal showed that more than 70% agree that it is necessary to advance the frontiers of knowledge and about 60% agreed that national spending on medical research should be doubled. In the USA in 1997 scientists were ranked second to doctors in terms of a prestigious occupation.
A national telephone poll conducted by the Australian Society for Medical Research showed that nearly 90% of respondents understood the importance of medical research in improving the quality of health care and that nearly 80% believed that it is primarily the responsibility of government to pay for this research. More surprisingly, about the same fraction said they would be prepared to pay extra taxes to finance it. This is truly encouraging and all scientists should see that this change is translated into action.
THE ROLE OF PRIVATE ENTERPRISE
Background: The German company Bayer is credited as being the first to establish its own R & D laboratory. Using a strategic basic research approach it developed aspirin, the world’s largest selling single pharmaceutical. Others companies quickly followed this lead but almost without exception these enterprises relied on close links to scientific information derived primarily from research in universities.
PRIVATE RESEARCH EXPENDITURE AND ECONOMIC PERFORMANCE
The fact that private enterprise necessarily leaves an economic trail (gross sales, net profit, capital gains) means that it is relatively easy to find a significant correlation between industrial economic performance and expenditure on research activity [Fagerberg, 1994]. In the UK, a recent report concluded that basic research is of central importance to the development of pharmaceutical technology, advanced engineering ceramics and parallel computing [Faulkner, 1995]. Governments measure economic gains using quite different indicators (e.g. balance of trade figures and annual growth rates) from those used by private industry, and this makes comparisons difficult.
A major difference between government and private enterprise funding of basic research is the length of time that each will tolerate before an financial return is produced. Government bureaucrats increasingly appreciate there is a long lead time (5-10 years) is needed between investment (research funding) in basic research and a commercial outcome. Private enterprise usually takes a much shorter view, namely 1-4 years from investment to the realisation of a commercial return.
INDUSTRY AND UNIVERSITY RELATIONSHIPS
In 1980 a study of manufacturing firms noted a correlation between basic research expenditure and productivity [Mansfield, 1980]. A subsequent study [Mansfield, 1991] of 76 manufacturing industries showed that universities provided 11% of new products and 9% of new processes thus showing how universities (supported mainly by public-funds) and industry can develop a synergy. In more recent times, this type of interaction has gathered pace [Mansfield, 1995].
The US National Science Foundation (NSF) commissioned an analysis of 100,000 patents and showed how publicly-funded research institutions produced 73% of these patents and that these cited public-funded science from the basic end of the research spectrum. These patents represent both real and potential commercial innovation. A recent report [Vergano, 1998] concluded that companies that produced the highest returns on the US stock exchange are those that most frequently cite publicly-funded sciences. This suggests that basic science is crucial to corporate profits and economic advancement. The report goes on to say that partnerships between industry, academia and government on an international scale will become the norm. Academia is seen as a low-cost source of collaborations. Furthermore, industry values the perceived independence of academia to validate industrial research. These collaborations seem to work well in the US and UK but not in Germany where the divisions between industry and academia are more pronounced.
UNIVERSITY-BASED FUNDAMENTAL RESEARCH
The UK has recently advocated that universities are better places to spend research funds than in than goal-oriented research institutes [May, 1997]. Pharmaceutical companies agree that investing funds into basic research is good business. Companies like Eli Lilly spend very large amounts on curiosity- driven research because they can see that, despite the costs, the returns are good. Increasingly, companies find that providing funding and support in kind for university- based research makes good economic sense. They avoid massive infrastructure costs while getting first look at marketable benefits.
PROBLEMS FOR SMALL ENTERPRISES
While large/medium enterprises are well placed to take advantage of the benefits of in-house basic research, small enterprises may simply be too small to cover their costs. If these companies then go to the capital markets for funds to develop basic research into viable commercial projects, those markets require disclosure of the intellectual property and this often makes the IP insecure. Another potential problem for industry arises from its inability to fully capture the economic advantages of the scientific discoveries they have funded. Examples of this follow the discovery of the laser when industry failed to predict their use in surgery, in CD players or in computer drives. The discovery of the transistor is another example.
The profit motive of private enterprise creates a strong stimulus for it to pick winners, but by its very nature, curiosity-driven research is not easily directed towards an economic outcome. In this context, an interesting development is currently underway in Australia. A manager of superannuation funds has proposed a novel approach to backing “winners” in biomedical research. Rather than going to the trouble and considerable expense of attempting to pick its own winners, it has suggested a collaboration with the National Health & Medical Research Council in which every research project deemed worthy of funding would be offered matching funds in exchange for a limited percentage of the IP that might flow from those projects.
Eligibility for the matching funds is to be based on agreement by applicants who check a box in the application. Clearly, they must be prepared to be patient during the period between a discovery and the development of a commercial outcome. On the other hand, the funds manager would clearly benefit from the scheme because it would not have to go through the uncertain and expensive process of picking winners. It simply places its “bets” on all participating NH & MRC projects. The scheme is still under consideration.
BASIC RESEARCH IS AN INVESTMENT
The continuing turn-around in the US NIH funding of fundamental research was based on several considerations. A major aspect was the re-birth of the notion that the funding of fundamental research is an investment rather than a cost. Our job as scientists is to convince governments, particularly those labelled economic rationalists, that there is both a financial return and an even greater social benefit.
YOUNG SCIENTISTS NEED CAREER PATHS IN SCIENCE
Stop-start funding for basic research is a disaster for established scientists because it makes medium/long-term planning impossible. Even worse, it is a source of a confusion and acts as a deterrent to young scientists who may be considering their career options.
SCIENTISTS MUST ENGAGE IN THE POLITICS OF SCIENCE FUNDING
It is important for politicians and research administrators to understand what scientists themselves see so clearly, namely, that while funding for fundamental research can be terminated at the stroke of a pen, such decisions cannot be easily undone, at least in the short term. Once the funding is interrupted there will be a long wait before a resumption of funding blossoms into scientific outcomes.
SEPARATING ELECTIONS AND SCIENCE FUNDING
Funding of science is essentially in the hands of our elected politicians whose future lies in being successfully re-elected. Elections in most countries occur on a 2-4 year cycle. Given that fundamental science requires expenditure of a significant fraction of a nation’s GDP, we can hardly expect politicians to resist using science as a political ‘football’ to gain votes at election time. If the nexus between political terms and science funding (about 10 years) can be broken this would de-politicise the situation. A possible solution might be to create bi-partisan support for a non-partisan administration to oversee the development and maintenance of adequate funding for basic research.
C dos Remedios
- The Council of Economic Advisers, (1995). Supporting Research and Development to Promote Economic Growth: The Federal Government’s Role.
- Fagerberg, J. (1994) Technology and international differences in growth rates. Journal of Economic Literature 32: 1147-1175.
- Faulkner, W. (1995) Conceptualising knowledge used in innovation: A second look at the science technology distinction and industrial innovation. Science, Technology and Human Values 19: 425-458.
- Hill, C. (1995). Private funds are unlikely to replace cuts in public funds for R & D in the US. Mimeo (June 19).
- Levy, D. (1983) Effects of Government R & D on private R & D investment and productivity: A macroeconomics analysis. The Bell Journal of Economics 14: 551-561.
- Malakoff, D.M.E. (1999) US Budget Plays Favorites. Science 283: 778-780.
- Malakoff D.M.E. (1998) NIH wins big as congress lumps together eight bills Science 282: 598-599.
- Mansfield, E. (1995) Academic research underlying industrial innovations: Sources, characteristics and financing. Review of Economics and Statistics 77: 55-62.
- Mansfield, E. (1980) Basic research and productivity increases in manufacturing. American Economics Review 70: 863-873.
- Mansfield, E. (1991) Academic research and industrial innovation. Research Policy 10: 1-20.
- Martin, B., Salter, A. (1996). The relationship between publicly funded basic research and economic performance. Report of the Science Policy Research Unit, University of Sussex.
- May, R.M. (1997) The scientific wealth of nations. Science 275: 793-796.
- May, R.M. (1998) The scientific investments of nations. Science 281: 49-51.
- Shaw, D.F., Elliott, R.J. (1998). ICSU Press Workshop on the economics, real costs and Benefits of electronic publishing in science – A technical study.
- Vergano, D. (1998). Buy, buy, buy! New Scientist 46.
- Wills, P. et al. (1998). Health & medical research strategic review. Discussion document.The virtuous cycle, Working together for health and medical research.