John FitzGerald: Research to shape public policy is hard to measure – and fund

R&D attracts many funding models, but value for money can be difficult to measure

Apple have sold over 1 billion iPhones since it was first launched over 10 years ago, but a lot of the technology within the iPhone originated from public funded research and development.

 

Electricity to power our homes and industry, the invention of the car, washing machines, antibiotics and countless other technological advances have transformed our world and people’s daily lives over the past century. The technical revolution has put a computer in every pocket. The roll-out of these and other inventions has fuelled economic growth and raised living standards worldwide.

Across the globe, a billion or more people have been taken out of abject poverty in recent decades, partly through the application of new technologies.

The research which drives technological change has contributed significantly to the growth in output and living standards both in Ireland and elsewhere. However, it is less easy to determine the optimum way for public policy to foster successful research and development, and to ensure that taxpayers’ money is spent to best effect.

Ramping up investment

From a relatively low spend in Ireland on research and development (R&D) in earlier years, the National Development Plan for 2000-07 prioritised investment in R&D. However, rapidly ramping up such investment proved problematic. Trying to “buy” a team of star researchers in a hurry was likely to be less successful than trying to buy an instant soccer team. This meant that, in some cases, the value for the State’s investment was disappointing.

Added to this, the cuts of the recession years saw the dispersal of some key researchers to centres of excellence outside Ireland. Nonetheless significant progress has been made since 2000. By 2006, investment in R&D in the Republic was already around €525 per head. This compared to €560 per head in the UK, €620 in the Netherlands, and €940 in the United States.

However, in Ireland more than 40 per cent of R&D investment is undertaken by multinationals and it is less clear what benefits accrue to the Irish economy from this research.

Basic research which expands understanding of our world, whether in the sciences, maths or history, is of real public value

Investment by Irish-owned companies in R&D, while lower than investment by multinationals, is still significant and, since 2006, it has grown much faster than spending in this area by multinationals. R&D by companies is funded largely by the firms themselves, albeit with some State assistance through the tax system. It is up to the companies to ensure this investment pays off for them.

Public funding accounts for a quarter of all investment in R&D in Ireland, primarily through the third-level sector. We spend about €150 per head in this way, roughly the same as the UK, but only 60 per cent of per capita spending by the Netherlands.

Where the State is investing its own funds, there is no simple model for determining expenditure priorities or measuring value for money, particularly so in the third-level sector.

Pay-back

Basic research which expands understanding of our world, whether in the sciences, maths or history, is of real public value. But that value is intrinsically difficult to quantify, and there is no straightforward pay-back for the State.

It is less easy to determine the optimum way for public policy to foster successful research and development, and to ensure that taxpayers’ money is spent to best effect.

Science Foundation Ireland (SFI) was set up to allocate basic research funding. Over the past decade it has been forced to move away from its original mission, instead targeting investment in areas with future economic potential for Ireland. Mixing the two objectives – supporting business and supporting pure research – may be unwise.

Probably the best way to ensure value for research funding intended to directly support economic activity would be to insist on matching funding from the companies or sectors that may benefit. As it stands, our current model of funding business-oriented research at third level is paid for predominantly by the State, with modest contributions from business. This type of research also carries significant overhead costs, which are often underfunded, with the result that universities may have to raid monies earmarked for education. Between them, SFI and industry should cover such overheads.

A third category of research is designed to improve public policy. While the public sector directly funds individual projects, relying on that alone has disadvantages. There is the risk the research may be too closely aligned to the political needs of the funder.

There is strong merit in also having programmes of research on areas such as education, the environment, economics or social policy, where the scope of the research is guided by a broad concept of public good rather than by policy-makers who may want a specific answer.

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