The use of narrow economic measures to evaluate all research spending makes no sense

WHILE VIEWS differ on what exactly the Government should or should not do in the current economic crisis, all agree that growth is essential to returning Ireland to prosperity. But the Government faces a real challenge in determining how best to promote growth in the face of major fiscal constraints.

In developed economies, innovation is seen as the key to sustainable long-term growth – allowing for the creation of new or significantly improved products, services, processes and organisational methods. Innovation boosts productivity, which in turn improves our competitiveness and ability to export.

The myriad of interacting factors that influence innovation means a systemic policy approach is needed, since, like a bracelet, an innovation system is as strong as its weakest link.

While innovation lies primarily in the hands of entrepreneurs, government policy can enable and foster it. Funding of research and development [RD] in the higher education sector is widely used in most OECD countries to achieve this goal.

Over the past decade, the Irish Government has also adopted this approach, making significant investments in RD in our universities. Those who advocated such funding or who benefited from it now argue that expenditure should continue at the same scale as in the recent past. Others are sceptical and see such expenditure as ripe for cutting.

This raises several questions: how much should government spend on RD in higher education institutions and what is the most effective way of spending it? Should certain types of research be prioritised and, if so, how? If innovation is the justification for certain expenditures, are the incentives for researchers and the business community to co-operate strong enough?

Before looking at these issues, three facts deserve recognition.

The first is that research is just one of three interrelated activities pursued at third level; the other two, teaching and contributions to society, also contribute to innovation and growth.

Since the likely economic impact of research differs across disciplines, the use of narrow economic measures to evaluate all research expenditures does not make sense. Spending on research is a slow burner and Ireland needs to develop a better set of evaluation criteria that recognise this explicitly, so that RD expenditures can be assessed fairly alongside other public expenditures.

At a time when the Government is about to engage in a large-scale review of public spending, what should guide it in deciding how much to spend on third-level RD that directly supports innovation and growth?

First, international evidence points to the benefits from concentrated and sustained investment. After a decade of rapid capacity-building and significant achievement, the focus must now be on consolidation and sustainability.

We need to become more comfortable with identifying national centres of excellence, recognising that we cannot excel in all areas, and accepting that institutional missions should and do differ.

It is now timely to develop a set of sustainable, properly funded, appropriately configured national PhD programmes.

Second, the system of supporting RD in higher education institutions needs to be comprehensive and co-ordinated – it is questionable whether the current co-ordinating mechanisms are sufficient to manage the number of players operating in this landscape.

Third, prioritisation of RD spending on the basis of supporting growth must be both evidence-based and principle-driven. This is easy to say but hard to deliver since the relationships between RD, innovation and economic growth are complex.

At the outset it requires greater clarity about policy objectives than we have at present, greater willingness to engage in critical appraisal of current implementation strategies, and more independent evaluation of investment outcomes.

Research prioritisation to support growth should be less about “picking winning research areas” and more about supporting individuals and institutions for activities that combine research excellence and positive engagement with the innovation process.

Properly designed competitive research programmes can allow for the balance between these to be managed, and recognise the spectrum from pure “curiosity-driven” research through to the most applied.

The development of a sustainable RD model, covering the higher education, business and government sectors, is long overdue.

An Irish tendency of simply seeking to score well on international indicator lists is not a good basis for development.

To minimise disruption costs, adjustments to the present funding models should be well signalled, progressive and graduated, indicating clearly the patterns of funds for different types of research.

But above all, what is needed now is a policy mindset driven by evaluators rather than by advocates or detractors.

Irish taxpayers deserve assurance that the expenditure is socially justified and spent in the appropriate way. This may mean less expenditure but expenditure that is better allocated and more sustainable.

Uncertainty and volatility are anathema to growing a strong and sustainable research base that can attract and retain good researchers and ultimately support innovation and economic growth.

Prof Frances Ruane is director of the Economics and Social Research Institute