16.02.2017 - Natural Sciences Sector

What is the optimal balance between basic and applied research?

© Shutterstock.com/lightpoet, Scientist conducting research in a quantum optics lab

Blue skies research, discovery research, non-oriented research, frontier research, fundamental research. It may go by different names but there is one constant about basic research: the outcome is inherently unpredictable.

Who could have predicted that Professors Andre Geim and Kostya Novosolev from the University of Manchester would discover graphene while using scotchtape to remove flakes from a slab of graphite? Graphene is the thinnest, lightest and strongest material known to date and can take any shape. Today, laboratories around the world are exploring its enormous potential.

Graphene is part of the European Union’s flagship project on new materials within Horizon 2020’s Future and Emerging Technologies Programme, the other flagship being the Human Brain Project. As the European Commission puts it, ‘visionary thinking can open up promising avenues towards powerful new technologies’.

According to the UNESCO Science Report (2015), the slow economic recovery from the debt crisis of 2009 has focused the attention of some governments on the commercial rewards of science, at the expense of basic research and public good science. The report suggests that this approach is ‘short-sighted’.

In parallel, ‘the focus of scientific discovery has shifted from basic research to “relevant” or big science, in order to solve pressing developmental challenges, many of which have been identified as Sustainable Development Goals [Agenda 2030] by the United Nations. The irony is that ‘an adequate investment in both basic sciences and applied research and development (R&D) will be critical to reaching the goals of Agenda 2030’.

‘We should not forget that basic science and applied science are two sides of the same coin,’ recalls the UNESCO Science Report. They are ‘interconnected and interdependent [and], thus, complement each other.’ This begs the question: in today’s rapidly changing world, what is the optimal balance between basic and applied research?

Most OECD countries still strongly committed to basic research

On average, the 35 members of the Organisation of Economic Cooperation for Development (OECD) devote 22% of their research budgets to basic research (2013). France contributes 24%, the USA just under 17% and Japan and Israel about 13%.

The government tends to be the primary funder of basic research, owing to the need for sustained investment over the long term. In the USA, for instance, the federal government funds just over half of basic research: 53% in 2012. State goverrnements, universities and the non-profit sector finance a further 26%. Technological development, on the other hand, is primarily funded by industry: 76% in 2012, compared to 22% for the federal government.

On average in the European Union, 52% of the government’s budget appropriation for R&D went to basic research in 2013. There are wide variations from one country to another, however. Germany devotes 57% of the government appropriation for R&D to basic research, for instance, France 45% and the UK 40%. Latvia counts the lowest share (23%) and Croatia and Malta the highest (more than 90%).

Despite the chronic debt crisis, the European Commission has maintained its commitment to basic research. The European Research Council, which was established in 2007 as the first pan-European funding body for frontier research in basic sciences, has been endowed with €13.1 billion for the period 2014–2020, equivalent to 17% of Horizon 2020’s overall budget. The UK obtained by far the most European Research Council grants in 2013 (almost 1000), compared to just over 600 for the next-biggest beneficiary, Germany. The UK’s future relationship with the European Research Council will no doubt be on the table during the forthcoming Brexit negotiations with the European Union.

Germany is forging ahead with construction of one of the world’s largest centres for basic research in physics, the Facility for Antiproton and Ion Research (FAIR), in Darmstadt. The particle accelerator is due for completion in 2018. Some 3 000 scientists from more than 50 countries are collaborating on the project design, in order to reduce costs and broaden the pool of expertise. In addition to Germany, the project involves seven EU partners (Finland, France, Poland, Romania, Sweden, Slovenia and the UK), plus India and the Russian Federation. The lion’s share of the budget is being provided by Germany and the State of Hesse and the remainder by international partners.

Basic research helps to adapt to a rapidly evolving market

Strength in basic research is essential for any country that wishes to keep producing frontier technologies in rapidly evolving markets. Switzerland, for instance, is an innovation leader but it also devotes 30% of research spending to basic research. In a country where almost two-thirds of R&D is funded by industry, the UNESCO Science Report observes that ‘there is a clear division of labour between the public and private sectors. This not only guarantees efficient technology transfer – the shortest route from scientific breakthroughs to competitive products are in-house channels – but also allows the public sector to concentrate on non-oriented basic research’.

Israel also has a strong industrial research sector. 'The Israeli economy is driven by industries based on electronics, computers and communication technologies, the result of over 50 years of investment in the country's defence infrastructure... this has given Israeli high-tech industries a qualitative edge in civilian spin-offs in the software, communications and Internet sectors. However, basic research accounted for only 13% of research spending in Israel in 2013, down from 16% in 2006. Most of this research was conducted in universities.

The UNESCO Science Report cautions that ‘the next waves of high technologies are expected to emanate from [disciplines that include] molecular biology, biotechnology and pharmaceuticals, nanotechnology, material sciences and chemistry, in intimate synergy with information and communication technologies. These disciplines are rooted in the basic research laboratories of universities rather than the defence industries. This poses a dilemma’ for Israel, observes the report. ‘In the absence of a national policy for universities,… 'it is not clear how these institutions will manage to supply the knowledge, skills and human resources needed for these new science-based industries'.

Crises have made governments rethink their priorities

In Canada and the USA, basic research has been a casualty of government austerity budgets adopted in the wake of the economic and financial crisis of 2008. In Japan, a triple catastrophe in 2011 prompted a radical departure from the past. In Ukraine, basic research became collateral damage of the armed conflict in 2014.

In April 2011, the Ukrainian State Agency for Science, Innovation and Informatization created the country’s first State Key Laboratory for Molecular and Cell Biology. The idea was to provide extra funding for research in this priority area that required collaboration among researchers from different institutions. Project funding was provided by the State Fund for Basic Research. Two projects were selected for funding in 2011– 2012 and another two in 2013 but funding for the laboratory dried up in 2014, as a result of the economic crisis. This crisis was, itself, 'associated with the ongoing conflict, which saw GDP drop by more than 6% in 2014'.

In the USA, the UNESCO Science Report has identified a risk that the congressional austerity drive of the past few years may affect the USA’s long-term capacity to generate new knowledge. The report predicts that ‘opportunities in federally funded basic research are likely to stagnate’, whereas ‘the future looks bright for innovation and development in the business enterprise sector’.

Japan’s Fourth Basic Plan for Science and Technology (2011) ‘made a radical transition from discipline-based to issue-driven’ policy that was directly influenced by the triple catastrophe (earthquake, tsunami and Fukushima nuclear disaster) of March 2011. Among these priority issues feature recovery and reconstruction, ‘green innovation’ and Japan’s contribution to solving global problems.

This trend is not restricted to Japan. Increasingly, the focus of research ‘is now on the bigger picture and how research can be applied to address challenges that could ultimately threaten human existence, such as global pandemics, water, food and energy insecurity or climate change’, observes the UNESCO Science Report.

This shift in research priorities is evident in the amount of research funds currently being allocated to applied science, remarks the report. Researchers are investing more than before in turning a discovery in basic research into a commercially viable and sustainable product or technology with a potentially beneficial socio-economic impact. (Surprisingly, university-industry ties are not as strong as one might expect, despite this being a priority of public policy).

Science powers commerce – but not only

The danger is that, in the race to improve national competitiveness, countries may lose sight of the fact that ‘science powers commerce – but not only’, as the author of the chapter on Canada put it.

The contribution of industry to Canada’s research effort shrank from 51% to 46% between 2006 and 2013. By this time, Canadian businesses were only contributing 0.83% of GDP to Canada’s research effort, compared to an average of 1.64% for OECD countries. This places Canada well behind the leaders in terms of business investment in research: Israel (3.49% of GDP), Republic of Korea (3.26%), Japan (2.64%), Finland (2.29%) and Sweden (2.28%). Seven analytical reports synthesized by the Canadian Council of Academies in 2013 found that Canadian academic research was well-regarded internationally but not Canadian business innovation.

The Harper government (2006–2015) tackled this problem by introducing measures to stimulate the economic return on investment in knowledge, while cutting back on federal funding of government science. In January 2013, the government announced its Venture Capital Action Plan, a strategy for deploying CAN$ 400 million in new capital over the next 7–10 years to leverage private sector-led investment in the form of venture capital funds. The Venture Capital Action Plan received mixed reviews, ‘with some questioning the wisdom of using taxpayer money to nurture venture capital funds when this role fell naturally to the private sector’.

A 2014 report by the Professional Institute for the Public Service of Canada expressed concern that the recent shift in budget priorities towards greater support for commercial ventures would be detrimental to basic science and public interest science. It cited a slated ‘decrease in internal science and technology funding of CAN$ 162 million in 2013–2014, much of which is devoted to public health, public safety and the environment, compared to a CAN$ 68 million increase in support for commercial ventures’. The authors cited a public opinion poll conducted by Environics in November 2013, in which ‘73% of respondents felt that the top priority for government scientific activity should be the protection of public health, safety and the environment’.

The UNESCO Science Report concludes that ‘the current drive to steer so-called public good science (e.g. regulatory, environmental) towards business and commercial outcomes reflects a focus on short-term goals and a rapid return on investment in research that is short-sighted. This trend suggests that federal funding for basic research and public good science may continue to decline in Canada, even though the business world itself relies on the generation of new knowledge to nurture the commercial ideas of tomorrow’.

Many emerging economies augmenting support for basic research

Emerging economies, too, are searching for an optimal balance between basic and applied research. Malaysia and the Republic of Korea, for instance, have concluded that they are not investing enough in basic research.

The Korean government wishes to correct the impression that it made the transition from a poor agricultural country to an industrial giant through imitation alone, without developing an endogenous capacity in basic sciences. Between 2001 and 2011, investment in basic research rose from 11% to 18% of total expenditure on R&D. By 2012, 25% of the government’s appropriation for R&D was going to basic research. The government plans to raise this share to 40% by 2017, within the country’s Third Basic Plan for Science and Technology. It is also fostering linkages between basic sciences and the business world. In 2011, the National Institute for Basic Science opened on the site of the future International Science Business Belt in Daejeon.

Malaysia hosts numerous multinationals specializing in electronics and electrical goods. The government has made the generation and utilization of knowledge dual priorities of its Third National Science and Technology Policy (2013–2020), as part of efforts to develop an endogenous research base. Between 2006 and 2012, Malaysia raised its investment in basic research from 11% to 34%. In parallel, the government created five research universities, within its Higher Education Strategic Plan Beyond 2020. Between 2008 and 2009, these universities received an increase of about 71% in government funding. Research output doubled to 5 777 publications (2010) in just two years.

China, too, intends to raise its commitment to basic research. Over the past decade, China has devoted just 4–6% of research expenditure to basic research, even as the government has injected massive funds into applied research and, above all, experimental development. Between 2003 and 2014, China’s domestic expenditure on R&D almost doubled from 1.13% to 2.09% of GDP, two-thirds of which came from the business sector. The Chinese leadership has recently become dissatisfied with the return on its investment in R&D, however, which it feels is not matching input.

Whereas universities play a key role in basic research in Brazil, this role has traditionally fallen to the Academy of Sciences in the Russian Federation. A sweeping reform undertaken in 2013 has reduced the power of the Russian Academy of Sciences by creating a Federal Agency for Research Organizations which has direct reporting lines to the government. Although the Academy has preserved its function of co-ordinating basic research, the new agency now manages the academy’s finances, property and infrastructure.

Both Brazil and the Russian Federation have prioritized innovation in recent years, in an attempt to harness innovation to economic growth. In the Russian Federation, the government adopted an innovation-led growth strategy in 2012. Since funding is finite, this readjustment occurred to the detriment of basic research, which dropped from 26% to 17% of total research expenditure between 2008 and 2013.

In Brazil, basic research consistently received the second-biggest (11%) government appropriation for research after university research (61%) between 2000 and 2012. This period also saw the founding of a regional research institute for basic science at the State University of São Paulo, in collaboration with UNESCO’s Abdus Salam International Centre for Theoretical Physics (ICTP) and the São Paulo Research Funding Agency. Between 2012 and 2015, the new ICTP–South American Institute for Basic Research organized 22 regional graduate schools, 23 regional workshops and 18 regional mini-schools.

With both Brazil and the Russian Federation facing an economic downturn since the end of the cyclical commodities boom, and with both encountering obstacles to entrepreneurship, tepid business interest for innovation and low productivity, it will be interesting to see whether they maintain, or even increase, their current levels of support for basic science.

Source: adapted from UNESCO Science Report: towards 2030 (2015)

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