This is part 2 of a series of blogs – read part 1 here.
As I mentioned in yesterday’s blog, DFID’s recent lit review on links between science and development started by figuring out how people think science leads to development outcomes. By far the most common justification for investment in research given by developing country policy makers was its expected contribution to economic growth. The Nigerian Science, Technology and Innovation Policy is typical of many in stating:
“Specifically, the new [Science, Technology and Innovation] Policy is designed to provide a strong platform for science, technology and innovation engagements with the private sector for the purpose of promoting sound economic transformation that is citizen centred”
This focus is not likely to surprise anyone who has attended conferences related to science and international development; huge faith is put into Science, Technology and Innovation as drivers of economic development. If evidence is required to back this up, the example of the Asian Tiger economies, which invested in research and subsequently saw unprecedented growth, is frequently cited. For example, this recent communique from the Governments of Ethiopia, Mozambique, Rwanda, Senegal, and Uganda states:
“Inspired by the recent success of the Asian Tigers, We, the African governments, resolve to adopt a strategy that uses strategic investments in science and technology to accelerate Africa’s development into a developed knowledge-based society within one generation.”
If pressed on how research will lead to growth, it is typical to hear statements based broadly on endogenous growth theory: research will lead to new knowledge which will contribute to private sector development which will lead to growth.
So, what does the evidence tell us?
Well for a start, contrary to popular belief, there is little evidence to suggest that public investment in research was a major factor in the economic development of the Asian Tigers. Theories about what did cause this ‘development miracle’ abound but they can be broadly split into two categories. There are those who believe that increased growth was simply due to increased financial investments in the economy – and clearly this camp does not think that public investment in research played much of a role. Then there are those who believe that ‘knowledge’ was a key factor in explaining the rapid growth. At first glance this theory seems consistent with those who advocate for public investment in research to stimulate growth – but when you delve deeper you see that even this latter camp does not suggest that publicly-funded research knowledge was a major driver of growth. In fact, detailed case studies suggest that knowledge which drove growth was accumulated mainly through learning from the processes and technologies of more developed economies and gradually developing in-house R&D capabilities.
A world bank paper from 1999 summarises the findings of case studies from a range of ‘Asian Tiger’ firms as follows:
“. . . firm histories provide details of a complex interactive process in which. . . importers furnished some knowledge of production engineering. . . [Firms] were forced to constantly reduce cost through improving productivity.”
Of course just because public investment in research did not lead to past economic transformations doesn’t mean that it can’t do so in the future. There are many examples of initiatives specifically aimed at stimulating economic growth through publicly-funded research. Perhaps the most well-known – and popular – intervention is the establishment of a ‘science park’. These are generally property developments located near universities which aim to support technology start-ups and companies which ‘spin off’ from the university. They aim to emulate successful technology hubs in the USA, in particular Silicon Valley. The idea is that research in the university will lead to products and technologies which will be commercialised by start-up companies located in the science park.
There has been an explosion of science parks in emerging and developing countries. However, the evidence of their success is less abundant. Beyond a few high profile science parks linked to world-leading universities, there is little evidence that science parks actually succeed in supporting the commercialisation of university-generated research results; studies of science parks from both high-income and middle-income countries demonstrate an almost complete lack of technology transfer from universities to firms. Firms do report some advantages to location in science parks including access to information and informal linkages with academic colleagues. However there is little evidence that firms perform better in science parks than if they were located elsewhere.
In a 2004 article, Professor Stuart Macdonald of the University of Sheffield and Yunfeng Deng of Qingdao National Hi-Tech Industrial Zone describe science parks in developing countries as ‘pure cargo cult’ – aiming to superficially emulate Silicon Valley without creating any of the underlying factors which were necessary for its success. They conclude:
“. . .despite all the enthusiasm, there is little evidence that science parks work as their supporters say, and growing evidence that they do not.”
Other interventions to drive economic development by supporting technology transfer are not much more promising. Technology transfer offices have been set up in many universities world-wide – however, the evidence shows that the vast majority of such offices work at a loss. In fact, patenting and licensing of academic research knowledge only generates significant income for the very top tier (i.e. the top few percent in global rankings) of universities internationally. A 2005 (paywalled) paper by University of Cape Town academic Dr Anthony Heher, which aims to draw conclusions for developing countries from university licensing data from wealthier economies, concludes:
“Without a well-funded, high quality research system, it is unlikely that a technology transfer programme will make any significant contribution to economic development. It is also not clear that any other country can simply emulate performance of the USA in deriving benefit from technology transfer due to differing social and economic conditions.”
Given this, it seems unlikely that technology transfer from universities is likely to have significant impact on economic development in most developing countries in the short to medium term. In fact, there is evidence that this is unrealistic even in developed countries. A recent article by Times science columnist Matt Ridley concluded that:
“The idea that innovation happens because you put science in one end of the pipe and technology comes out the other end goes back to Francis Bacon, and it is largely wrong.”
There is one silver lining to the evidence on public research and economic growth – there is good evidence that the capacity to use research is an important factor in driving economic growth. And that fact leads neatly on to tomorrow’s blog which will focus on human capital.
Part 3 now available here.