Industry tool or public good? Science’s split personality is responsible for debate over funding

For many years it has been widely accepted that science requires state funding; justified predominantly by the idea that science is ‘public good.’ In economics this term refers to a product that costs us all as individuals (i.e. in taxes), in order to eventually provide an economic gain to us as a society. According to Terence Kealey, vice chancellor of Buckingham University, this is purely theoretical and he thinks state-funded science cannot contribute economically. He even goes as far as to say it damages economic growth by “crowding out” private investment. Some are sceptical of the evidence he gives for this in his latest book “Sex, Science and Profits,” though whether he’s got his facts straight or not I still disagree that science would be better off in the private sector.

Firstly, contrary to Terence Kealey I would argue that investment in science does actually provide economic returns. This was the main argument made by the “Science is Vital” campaign following the Comprehensive Spending Review settlement last October, and was clearly responsible for its success. A 2008 medical report carried out by health economics researchers at Brunel University stressed that the relationship between public and private research is complementary. The study revealed that public funding actually encourages more private investment: “A 1% increase in NIH (U.S. National Institutes of Health) expenditure on basic research leads to a 1.69% increase in pharmaceutical industry R&D, after a lag of eight years.” Therefore suggesting that the relationships between different types of funding are more complex than Kealey makes out. The initial public investment stimulates private funding which benefits the UK economy, termed the social rate of economic return. The estimated figures for the UK state that every £1 of public money spent on medical research sees a social return of 30%. There is also evidence from other countries, namely Finland and Korea, which spent heavily on R&D during their economic downturns in the 1990s and experienced economic recovery as a result. Everyone knows that it is much easier to make money when you have money in the first place. It is the basic principle behind government loans for small businesses and is even student loans are based on the same reasoning. The government is willing to invest in students because it know that it gives them better chances of higher paid jobs in the future and will ultimately pay back more in taxes; investment in science is the same.

Just as public funding improves confidence for increased private funding, it also improves international confidence. The UK has benefited from its ability to attract some of the best scientists and international scientific companies. If a country is seen as committed to investing in R&D then it will be seen as a good place to build a scientific career. The UK pulled in 250,000 overseas students in 2008/9, generating £5bn for the UK economy according to BIS statistics. John Denham, the UK Shadow Secretary of State for Business, Innovation and Skills, expressed concern at the Campaign for Science and Engineering (CaSE) annual lecture that cuts to science investment means “there is a real danger of the UK losing our leading position in science”. His lecture, entitled “Science and Growth”, went on to describe the importance of a stable international reputation for science funding with 40% of papers products of international collaboration.

One of the major arguments in favour of private sector dominated funding is that it directs investment to those areas where there is a market-led demand and the highest potential for lucrative returns. Going back to the public good concept, is this really the best situation for public benefit? The answer is quite clearly no. Science funded by the private sector generally tends to be more short term and specific in its outlook. Relatively rarely do private companies invest in so called ‘blue-skies’ research, which takes a lot longer to reap rewards and may simply act as a basis for related research. And nor should they. Many areas of science are unpredictable in their nature making private investment unrealistic. A study published in 2010 by researchers from the University of Ioannina looked into the sources of funding for Nobel Prize winning research carried out between 2000 and 2008. They found that only 1 in 91 Nobel related papers acknowledged a corporate sponsor. A further five of the Nobel laureates worked in corporate firms, such as Monsanto and Shimadzu Corporation, but it was apparent that industry support seems to be limited to the applied sciences. Although Nobel Prizes may not be the best way of gauging scientific success, as we have already discussed economic progress in science relies on a world-class academic reputation and it seems that public funding is essential for this.

Even areas that receive plenty of private sector support are in need of some level of public expenditure. If not simply to support basic research needed due to the interdisciplinary nature of science, then to supply the infrastructure needed to make sure the public really benefit from scientific developments. A prime example of this is the biotechnology industry. Private funding dominates biotech research in the developed world but the developing countries, for who the technologies are intended, experience severe difficulties in accessing them. A comprehensive study carried out by the World Bank in 2002 into precisely this problem concluded that the public sector will be required to “play a major role in filling the gap”.

So it turns out science can indeed act as a public good. Even those areas that we consider to be primarily supported by the private sector will require public funding in order to actually reach and benefit the public, especially in developing countries. Economically successful science relies on complex partnerships between the public and private sectors. It is clear that this is currently not being applied to its full potential but to think science can be completely privatised is to be naïve about the way science works.

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