How much should the government spend on science? One view is that it should spend a lot, since every dollar pays back many times over. The other view is that governmental research spending is wasteful and that many of its benefits could be better realized by industry-funded research.
I know both worlds. I spent the first part of my career working in academia before moving on to industry research eleven years ago. If I’m honest, I have no idea which of the two views is closer to the truth.
In my field of drug discovery, academia has a bad track record. To a first approximation, all useful work is done by industry. Almost all investigational new drugs are developed by industry, even though in principle there’s nothing stopping governmental entities or academia developing new drugs. This in itself doesn’t mean academic research is useless. I collaborate with academic researchers and use their publications. Recent cuts and freezes to government funding of biomedical research has forced me to consider how I could continue my work without these collaborations. My guess is that for some time, there’d be relatively little impact on which drugs we can develop, but it’s much harder to tell what the long-term impact would be. New industry talent would be an obvious challenge: There is no alternative source to academia for recruiting junior scientists, and there’s no appetite in industry to set up the necessary training programs. I have no idea, and I don’t think anyone else does, what the long-term impact of significant cuts to government funding would be for basic science, and how this would in turn impact biotechnology innovation. My guess is that the impact would be negative but unevenly spread. In some areas, charitable or industry funding may be able to compensate.
The first view, that government funding of science is essential and in a society’s interest, is well represented by economist Mariana Mazzucato in her 2013 book, The Entrepreneurial State. The opposite view is represented by Matt Ridley in his 2020 book, How Innovation Works. Ridley’s interview about the book with Russ Robert is here.
Ridley’s definition of innovation doesn’t necessarily require invention. Instead, it’s developing something in such a way that it gets widely adopted. Often there is no single big breakthrough but multiple small improvements. Technology is often absurdly predictable in retrospect but wholly unpredictable on prospect. Another recurring feature is that innovation are often developed simultaneously and independently by multiple people or multiple teams. As he puts it:
Innovation is a collective phenomenon that happens between, not within, brains … Individuals do not matter much in the long run, but that makes them all the more extraordinary in the short run. They emerge among billions of rivals.
Ridley asks which changes could further promote innovation. He points out that the patent system, far from encouraging innovation, is now discouraging it. There’s no evidence of less innovation in areas unprotected by patents. The first-mover advantage is usually enough to get a substantial reward. Increasing patent protection neither increases research spending not innovation. Four times as much money is spent litigating over IP as reaping rewards from it.
Patents may make the most sense in areas where large upfront investment is needed, which includes drug development.
Having read both Mazzucato and Ridley, I find Ridley’s case better supported.
My thoughts on Ridley’s other books: Birds, Sex & Beauty | The Rational Optimist | The Evolution of Everything
Nehaveigur 