IST- MeGT Science, Tecchnology and Innovation Policy The Economic Benefits of Publicly Funded Basic Research Basic Research A critical review Ammon J. Salter & Ben R. Martin Students: Isabel Matalonga Paulo Cameira

Main questions this article puts on The specific nature of basic research and the need of being publicly funded The specific nature of basic research and the need of being publicly funded  Difficulties to measure the relationship between publicly funded basic research and economic benefit and productivity  How important is the public funding of basic research as a way to sustain technological development  This critical review identifies six types of contributions that publicly funded research makes to economic growth IST- MeGT Science, Tecchnology and Innovation Policy

 Conceptual approach  Basic Research is considered as «curiosity-oriented» research. Literature uses other terms such as :  «Strategic research».  «Academic research». IST- MeGT Science, Tecchnology and Innovation Policy

Definitions and Scope  Basic Research is experimental or theoretical work undertaken primarily to acquire new knowledge of the underlying foundation of phenomena and observable facts, without any particular application or use in view. (Frascati Manual) IST- MeGT Science, Tecchnology and Innovation Policy

 Definitions and Scope  The study focuses on the economic benefits from basic research rather than the social, environmental or cultural benefits.  There is a fuzzy boundary between the economic and non-economic benefits.

Main methodological approaches adopted Main methodological approaches adopted  Econometric studies  Surveys  Case Studies IST- MeGT Science, Tecchnology and Innovation Policy

 The main types of benefit from publicly funded basic research 1. Increasing the stock of useful knowledge. 2. Training skilled graduates. 3. Creating new scientific instrumentation and methodologies.

IST- MeGT Science, Tecchnology and Innovation Policy  The main types of benefit from publicly funded basic research (cont.) 4. Forming networks and stimulating social interaction. 5. Increasing the capacity for scientific and tecnological problem-solving 6. Creating new firms.

IST- MeGT Science, Tecchnology and Innovation Policy

 Conclusions 1. As regards the specific case of basic research, one can try to estimate the rate of return, but only on the basis of very questionable assumptions.

IST- MeGT Science, Tecchnology and Innovation Policy  Conclusions 2. Traditional justification for the public funding of basic research is based on the argument that science is a public good.

IST- MeGT Science, Tecchnology and Innovation Policy  Conclusions 3. The tacit knowledge and skills generated by basic research are especially important in newly emerging and fast-moving areas of science and technology.

IST- MeGT Science, Tecchnology and Innovation Policy  Conclusions 4. A fourth type of benefit stems from the fact that participation in basic research is essential if one is to obtain acess to national and international networks of experts and information.

IST- MeGT Science, Tecchnology and Innovation Policy  Conclusions 5. Fifthly, basic research may be especially good at developing the ability to tackle and and solve complex problems.

IST- MeGT Science, Tecchnology and Innovation Policy  Conclusions 6. Lastly, basic research may lead to the creation of “spin-off” companies, where academics transfer their skills, tacit knowledge, problem-solving abilities and so on, directly into a commercial environment.

IST- MeGT Science, Tecchnology and Innovation Policy  Conclusions : policy implications  Basic research is crucial for the strategic position of industrialised nations in the world economy.  Is difficult to arrive at simple policy prescriptions.

IST- MeGT Science, Tecchnology and Innovation Policy  Conclusions : policy implications  One reason relates to the interactions between basic research and innovation, and in the relative importance of different forms of economic benefit with scientific field, technology and industrial sector.

IST- MeGT Science, Tecchnology and Innovation Policy  Conclusions : policy implications  Secondly, there is the dependance of new products and processes on a range of technologies, and the dependance of new technologies on a large number of scientific fields.

IST- MeGT Science, Tecchnology and Innovation Policy  Conclusions : policy implications  A third reason concerns the importance of “spillovers”, including both geographical effects and the interactions between one form of activity and another.

IST- MeGT Science, Tecchnology and Innovation Policy  Conclusions : policy implications In s h o r t : In s h o r t :  There is a great heterogeneity in the relationship between research and innovation.  No simple model of the nature of the economic benefits from basic research is possible.  There can be no simple unified policy for basic research.