Does academic research cause economic growth?
lemire.meFor the studies mentioned, how do you decide what leads to economic growth and what doesn't?
Take Lasers for example. The first Laser was made at Bell Labs, a commercial research lab. It would not have been possible without the maser that came before it in academia, or the work done by Einstein, also in academia. Lasers have had an immense economic impact, but do we credit them to academic or commercial research?
The answer is both.
Academic research is less frequently the final link in the long chain to profits than commercial research is. This is only natural since commercial research labs are motivated to invent products that will make money while academics can afford to take a longer view.
Why else might nations that spend a lot on fundamental science benefit? A skilled work-force. Scientists may publish how their experiments work in broad strokes, but the nitty gritty details are often something that can only be learned by working in a lab. If your country has a lot of labs, you have a workforce that commercial enterprise can draw upon to bring products to market based on research. A country can always lure immigrants, but having a home-field advantage is more cost effective.
The author is misrepresenting his first quoted study: 'little or no direct effect', my emphasis. He takes this to mean 'no effect', which is a lot of screaming bullshit, as you say.
Another example of government research being very beneficial in an indirect manner is in things like mental illness research. Little is done privately outside of pharmaceutics, yet improved treatment of mental illness significantly improves the economy - workers are more productive, more people participate in the workforce (and subsequently fewer crimes), and of course there are a ton of non-economic benefits.
Similarly, the US saw a massive economic growth from its early days all the way to WWII
The US is an incredibly wealthy landscape, in terms of mineral wealth, agricultural wealth, and temperate weather. Throw in a massive population increase, successful wars of conquest, and a productive temperate climate, and the author is pushing shit uphill with a pointed stick if he's trying to make the argument against publicly-funded R&D this way.
I like "number theory" as a favorite example of practical reasons to fund seemingly impractical and useless academic research. A quote from Hardy (who I think was a number theorist, but could be misremembering) that I like is:
"I have never done anything 'useful'. No discovery of mine has made, or is likely to make, directly or indirectly, for good or ill, the least difference to the amenity of the world... Judged by all practical standards, the value of my mathematical life is nil; and outside mathematics it is trivial anyhow. I have just one chance of escaping a verdict of complete triviality, that I may be judged to have created something worth creating. And that I have created something is undeniable: the question is about its value."
And I can't find a quote, but I think I remember reading that he viewed his mathematical research as consistent with his pacifism, because nothing he developed could be used for military purposes.
Of course, now that we have computers...
But, given the different channels that research can become commercially viable, and given the long and uncertain time lags before new developments in research show up in GDP, a statistical analysis based on aggregate data is going to be absurdly difficult. And there are other reasons to expect that private companies will underspend (from a societal-benefit point of view) on research that has positive spillovers/externalities (really quickly: they're only going to want to spend to the extent that they directly benefit. If there are benefits that they can't profit from, as a society we'd want them to pay for the research anyway, but they'd be crazy to). So funding as much research as possible seems like a decent approach.
Incidentally, this is the first time I've seen someone claim that the US or Canada governments have massive research expenditures. Does anyone have a link for good numbers?
I do not believe that the U.S. government should fund translational research. I firmly believe that private enterprise will be able to efficiently make immediate use of any important scientific breakthroughs or discoveries. Instead, I believe that the government should pore funding into basic science research.
I completely disagree with the Author's implicit assertion that the U.S. government should spend less money funding scientific research. Private industry did not discover the importance of DNA, nor was it responsible for determining the chemical structure of this nucleic acid. Many fundamental discoveries would never have occurred in private industry simply because private industry cannot afford to heavily fund basic science.
The value of basic science is not felt within a decade or two. It takes a lifetime to appreciate.
Some private organizations have very deep pockets, and it's not just industry, as non-profits can also fund research. But if industry is biased toward applied/translational research, perhaps it's not just a focus on short-term profitability or a lack of funds for large projects. One interesting idea is that patent laws are partially responsible for this bias, because they grant a temporary monopoly on inventions/applications, but not on basic science.
> as non-profits can also fund research
They can, but the reality is very few are really prepared to do a good job of it and even fewer have the resources to really fund the portfolios relevant to them in the same way other institutions (gov, some large corps, etc) do.
The non-profit sector has a bunch of hard working folks with great goals and there's a bunch of good uses for them to put money toward, but frankly I'm not sure R&D is the one that makes the best impact. I think if a non-profit is going to fund R&D they need to be really really smart, innovative and/or creative to make their money get the type of impact they could get on spending it in critical areas outside of R&D.
This changes depending on the field though. In some areas of the arts and humanities, non-profit funding is a huge and valuable source of funding.
But in tech/sci/eng? Not so much.
One of the most naive statements I have ever heard on HN: "I firmly believe that private enterprise will be able to efficiently make immediate use of any important scientific breakthroughs or discoveries."
The reality is that companies don't do anything with academic discoveries until they are shovel-ready. Translational research is critical and horribly underfunded.
Well, it's industry-dependent. The pharmaceutical industry spends plenty on internal research; they fund some academic research; and there's a revolving door between academia and private industry.
Most industries aren't like this, of course; I doubt my barber or my accountant have much use for academic research output.
It seems author goes from presupposition that economic growth is something inherently good or better than pursuit and dissemination of knowledge. Knowledge itself is valuable for society. If you don't agree, I don't want to know you.
Private companies don't fund fundamental/basic research, unless we have semi-monopolistic situation like with AT&T Bell Labs before breakup, and Microsoft Research today. If you're in highly competitive market, you simply can't fund things which don't improve your bottom line in foreseeable future.
Academic institutions provide highly trained employees for industry, without funding of academic research, quality of teaching will decrease significantly. Even if there is a problem in finding correlation between funding of public research and economic growth (which I find highly dubious, it goes against intuition and lots of examples) it definitely helps humanity as a whole, because knowledge is not locked up in borders. Although people who go with commercialization of an invention they've come up with while in academia, most commonly do it in their home country.
From what I've heard, those regressions aren't totally valid. It can simply be that poor countries grow faster (leapfrogging on the research of rich countries), but don't fund a lot of public R&D.
Once the regression hits a dead end (as it doesn't distinguish the causal factors), we jump straight to anecdotes - the Industrial Revolution, and the USA. Both of these are probably outliers.
It's possible that academic research causes economic growth, but that it doesn't do so on a country by country basis. A significant proportion of people trained in American research universities are not Americans. Many of these people probably return to their home country where they use their knowledge in industry. Furthermore, anyone who picks up your scientific paper can go ahead and implement what's in it regardless of where they are.
It may be that the we should fund scientific research because it benefits everyone rather than because it gives us an advantage over other nations.
It's very important to remember that government research money is taken from the citizens, who otherwise would allocate it in accordance with their preferences.
Taxes in the US are actually very high, plus the government takes a lot of money via inflation of the money supply.
It seems likely to me that government-funded research is a "local maximum."
If we were to massively shift the backbone of the economy from consumption to production (i.e., letting people and companies keep more of their money), we would certainly see much more private research.
In fact, we could potentially have a "research economy," if the intellectual property issues were sorted out. In this system, research institutes would take over a lot of functionality from academic departments (including training new researchers). Such an institute my employ tenured academicians who make lower, fixed wages (as with current academicians) but are free to do basic research, plus applied people try to market the results and are paid competitively (as with current industry people).
There is also a high level of regulatory capture in most industries that punishes any attempt to transition research results into a marketable product.
Taxes are not very high in the US. We have about 26.9% total tax revenue (which I will abbreviate TTR. TTR is measured as a percentage of GDP)[0][1]. I hate seeing this statement thrown out as if it is fact. We have very low taxes comparatively, especially given our status as a highly developed and competitive economy.
We are #7 on the Global Competitive Index, behind Switzerland (29.4% TTR), Singapore (14.2% TTR), Finland (43.6% TTR), Sweden (47.9% TTR), Netherlands (39.8% TTR), and Germany (40.6% TTR) [3].
Sweden, the Netherlands, Finland and other countries that are close below the US have socialist governments. As much as hip, intellectual go-getters who read Ayn Rand would love there to be no government, it's simply not feasible. It may be great in theory, but it's not great in practice. However, I do not know much about the Ayn Rand's entire philosophy, so I wont comment on it further. I do know that most people who blindly latch on to some of her ideas don't truly understand her philosophy.
Half of that 'regulatory capture' you refer to is because of private interests lobbying for government restrictions. The will of the free market may drive such anti-competitive practices by private interests out of business eventually, but humans do not operate on the long term.
Regardless, the point of this post is that even if you thought you opened up your eyes before to the realities of the world and exactly how it should work, I invite you to take a step back every now and then and reevaluate your philosophies.
[0]http://en.wikipedia.org/wiki/List_of_countries_by_tax_revenu... [1]http://www.taxpolicycenter.org/briefing-book/background/numb... [3]http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport...
> Taxes are not very high in the US. We have about 26.9% total tax revenue (which I will abbreviate TTR. TTR is measured as a percentage of GDP)[0][1].
So, 27% of the economy is shifted towards government, which is almost entirely consumption, not production... that's a massive amount of waste. I mean, it's 27% of the entire US economy! Of course, you probably interpret the utility of this shift differently than I do. No need to argue ideology here.
> As much as hip, intellectual go-getters who read Ayn Rand would love there to be no government, it's simply not feasible.
As an Objectivist (i.e. I agree with Ayn Rand's formal philosophy), it is not "hip." It's incredibly painful to be a small minority that is treated with disgust by people who can't even state what they actually disagree with. This is my experience living in a college town in the US. It's a perfect way to be ostracized. Even, say, Paul Ryan Republicans who claim to like Ayn Rand will tend to personally reject me, since I'm an atheist.
> read Ayn Rand would love there to be no government
This is just technically incorrect. Ayn Rand was actually a very strong defender of government over anarchy. You clearly have no idea what you're talking about.
> I do know that most people who blindly latch on to some of her ideas don't truly understand her philosophy.
It's true that this is a problem. But it's a problem with those people, not with her philosophy.
> Half of that 'regulatory capture' you refer to is because of private interests lobbying for government restrictions.
Yes, there are lots of evil businessmen who seek regulatory capture. In fact, a main character of Atlas Shrugged was one such. That's why we need to keep government out of the business of business.
> I invite you to take a step back every now and then and reevaluate your philosophies.
This is an intellectually irrelevant pretension on your part. I've spent ten years actively obsessed with figuring out philosophy.
Those who think taxes are high in the states have simply never lived outside of the states.
I'm so sick of online American-bashing, which is a fad. Please stop. Where someone has lived has nothing to do with it whatsoever.
27% of the entire economy shifted entirely to government consumption? That's a humongous amount of the economy. It's almost 1/3.
I'm not bashing America, I'm even American. I just get so tired of those of us who complain about paying so much taxes and so much for gas for our SUVs and so much rent for our McMansions. And here I am living in a country where I can't even buy a car, live in a small apartment, and pay 40% income tax, and a pair of jeans sets me back 800RMB. And you know what...it's not the end of the world, it works out.
And...our government consumes less than 1/3rd of the GDP when social spending in other developed countries is at 1/2 or more! Libertarians would have us be like Somalia.
> Libertarians would have us be like Somalia.
It's important to realize that that's not actually true. I think we should have a small government that protects citizens from force and violence. That still includes all the core functions of government (e.g. police, courts, military, I don't care if you throw in basics like roads).
That is a world apart from Somalia, or anarchism. It's actually just a return to earlier ideas of American government that served us well at the time.
To be clear, I'm not a libertarian, for reasons that aren't relevant here.
> I think we should have a small government that protects citizens from force and violence.
How about protecting us from peasant revolts when our social services suck so much that people lose hope and take advantage of their second amendment rights? Or how about just avoiding the revolts in the first place by having a decent moral government that evens the playing field between rich and poor?
> It's actually just a return to earlier ideas of American government that served us well at the time.
This is BS rosy-tinted glasses revisionism that has no grounding in real history. Like how everything was better in the 50s if you just ignored segregation and the 90% tax rate we had on the rich. Did isolationalism serve us well before WWI and II? Did our hands off approach prevent the dishonest greed and speculation that led to the depression? The 1800s weren't that much better, just look at all the crashes and war that went on then.
> To be clear, I'm not a libertarian, for reasons that aren't relevant here.
Good, because libertarians tend to be bad historians and have a poor understanding of human nature.
I think your viewpoints are completely inane.
For example, our current economic model is completely unsustainable. It's not going to prevent the "peasant revolts" you talk about. It's going to guarantee them. Yet you seem to be calling for more of the same.
I wasn't talking about the 1950s, but pre-WWI. And, yes, isolationism did serve us well pre-WWI, though I am not an advocate of isolationism at all, as a principle.
Now, to get to the interesting bit.
> having a decent moral government that evens the playing field between rich and poor
Pray, tell me where you have found a rational, reason-based morality that makes you so certain that the rich need to be punished and sacrificed to the poor? Where have you found a rational, reason-based economic philosophy that can prove that doing so will be good for the economy, instead of furthering its destruction?
Also, my numbering got a little off because it's late, and I can't edit. Looks funnier this way.
>It seems likely to me that government-funded research is a "local maximum."
So is private research.
Economic growth encompasses every single thing in the world and has no single defining factor as the "cause."
Yes, academic research causes economic growth. So does eating and sleeping. Everything on the planet affects trade.
I can't agree with this article. It is very thoughtful, and looks very thoroughly to verify (or refute) a very specific thesis. However, it is manifestly causal-ly false to assert that pure scientific advances do not affect the real economy. Where would we be, economically, without silicon chips and laser beams? In a very different place.
I looked up the Author's published manuscripts to see what his background is in research. It appears that his expertise lies outside that of physics, chemistry, or biology but is instead in algorithm design(??) and data analysis(??).
I wonder if the programming community relies on academia as much as for example the medical industry or the aeronautical industry.
I think the programming industry is interesting because my impression (I have no idea if this is backed up by data) is that there's much more mixing between academia and the private sector (i.e. people move from academic to industry jobs and vice-versa more frequently/easily) than in other fields (natural science, social sciences). I wonder if this increases the productivity of either.
I am in the Natural sciences. I see that people are trained in esoteric technologies or procedures that may only be useful to the immediate scientific question at hand. This would seem to make it hard for these individuals to transition to industry, unless their specific expertise is required.
The computer programming community has the advantage that its technologies and best practices are ubiquitous throughout the industry and academia (??). This may facilitate an easy transition from industry to academia and vice-versa.
I think it's actually the opposite. Academia is more divorced from industry in the computer science world than say the aerospace world. When I was working with grad students as an aerospace major, they were by and large working directly on problems relevant to industry. Most computer science research seems much more mathematical/theoretical than practical, in comparison. I think this is also a relatively recent phenomenon. Compare say Preston Brigg's thesis on graph coloring register allocation (1992) to Sebastian Hack's thesis on register allocation for SSA form programs (2007). The former I think was much more written with implementers in mind, and the latter has a lot more math and proofs (though it's more readable than a lot of CS papers these days, which can tend towards a dense maze of proofs and esoteric notation).
Indeed, I think there is a language barrier between CS academia and CS industry that doesn't exist between AE academia and AE industry. In aerospace, everyone speaks the language of differential equations, finite element analysis, computational fluid dynamics, etc. But CS academia is deeply steeped in type theory, automated proofs, etc, while CS industry talks about object orientation and test frameworks, etc.
I wonder if this increases the productivity of either.
My research as a CS grad student is very much motivated by interactions with industry people, and very much is intended to facilitate things they need.
So, yes, mixing in the computer science/software engineering field is very useful for both academia and industry.
Remember that Google began with academic research in mining data from the web. Google created billions of dollars of value and thousands of jobs around the globe. That certainly contributed to economic growth.
This is weirdly the exception to the HN rule - if a title is a question the answer is no. In this case it's a full-on, dumb-as-shit hell yes. Describe the world that did not have the useless work of that weird academic Isaac Newton - I mean he never even taught students except three times. Talk about failing to contribute.
I must stop winding up my sarcasm chip - just unbelievably stupid article.
Just a minor nitpick but I believe it should be "disclosure" instead of "disclaimer" at the end of the article. Interesting read nonetheless.