Research spending not an expense but an investment

If we are serious about transitioning to a real knowledge economy, then we need much more credible investment in R&D

For years we have heard about Ireland becoming a knowledge economy, with highly skilled workers in highly paid jobs and with economic growth deriving from high-tech industries and all the sectors that support them. While multiple governments have espoused this vision, we have yet to see the sustained commitment that would realise this goal.

The Government is devising a new strategy for science, technology and innovation that will lay out a plan for the next five to 10 years and, one hopes, a vision for much longer. Getting this strategy right requires an integrated approach over a long time frame, a greater investment in research and education and structures and policies that enable translation of research into innovation and economic growth.

A crucial component will be the support of the full continuum of scientific research, from basic to applied. During the economic crisis, the Government made the decision to focus support almost exclusively on applied research that was deemed more likely to lead to commercialisable outcomes in the short term, and on a number of prioritised research areas where it was felt we had or could build an advantage and create an economic payoff.

While support for such initiatives is an essential part of an overall strategy, the recent focus has been far too exclusive, undermining support for basic research, which is aimed at simply finding things out about the natural world, rather than solving a specific problem.


This kind of research is driven by scientists at the cutting edge of specialities, whatever they may be, and the knowledge generated may seem obscure and academic. Indeed, some see it as a black hole, simply sucking up funds without generating an obvious economic payoff. Nothing could be further from the truth. Study after study has shown the collective value of investment in basic research, using broader and longer-term economic measures.

First, there are the unpredictable discoveries that are the reason people do blue-skies research – because we don’t know what the outcome will be. In some cases, such discoveries can be commercialised.

Blue-skies research

Though the economic returns from such commercialisation emerge over a longer time frame, they can far outstrip those deriving from applied research. A study by the Russell group, an association of the 24 leading UK universities, found the commercialisation of blue-skies research generated average returns of £44 million for the group over the period from 1998-2008 – more than twice the average returns from applied research.

Based on numerous case studies it was estimated diversion of funds from basic to applied research would have resulted in a cumulative loss of £1.2 billion to the UK economy. But basic research has a far greater collective impact than just these individual commercialisable discoveries. A thriving research ecosystem, founded on the bedrock of basic research, is a strong and vital driver of innovation and economic growth, generating the human capital, expertise and absorptive capacity that attract inward investment and support indigenous industry.

A recent survey of chief executives of US businesses in Ireland cited “talent” as the single most important factor in their decisions to locate in Ireland – ahead of tax rates or any other criterion. That talent, in high-tech sectors, is generated by research-led education and training. Funding for basic research is the lifeblood of this system, supporting the labs where students learn cutting-edge techniques, critical thinking and creative problem-solving. The resultant “knowledge transfer on legs” is the most valuable output of universities.

Research funding also maintains our expertise and capacity to adopt new technologies. Some would argue that since the results of basic research are published in the scientific literature, we can rely on other countries to do this work and concentrate instead on applying these discoveries to generate new technologies.

It doesn’t work that way. If scientists here are not at the forefront of research in their fields, and we are not educating and training students to that level, we will have no one with the expertise to understand and implement new discoveries.

More generally, if we are serious about transitioning to a real knowledge economy, then we need to make a much more credible investment in R&D. Our current rate of 1.58 per cent of gross domestic product is far lower than the OECD average (2.4 per cent) and just over half the EU target of 3 per cent set out in the Lisbon agreement of 2000.

Public investment acts as a direct driver of innovation and economic growth, but it also has the indirect effect of “crowding in” additional private R&D investment from industry. We may have attracted many high-tech multinationals here, but most of their activity is in manufacturing or services, with very little R&D. The best way to change that is to increase our own public investment. If we don’t take research here seriously, neither will they.

Third-level funding

At the same time, we need desperately to fix the crisis in third-level funding. The State grant to universities has dropped by 35 per cent since 2008 and capital funding has been cut by 80 per cent. We are far beyond the point of what Ministers call “sweating the asset” – the asset is now bleeding profusely.

It is no wonder the international rankings of Irish universities are in freefall. The funding system is untenable – we need a system that is fair, with equal access and opportunity, but that actually provides sufficient funds for a first-rate university system. Without realistic levels of core funding, the universities will not be able to support either their teaching or their research missions. Funding for higher education and basic research are not expenses, they are investments – with an enormous and proven rate of return. If we want to develop as a knowledge economy, we need to start valuing and investing in knowledge.

Dr Kevin Mitchell is associate professor in the Smurfit Institute of Genetics at Trinity College Dublin