We have a new report [pdf], summary page, out on 30th April, 2014, "The Economic Significance of the UK Science Base". It's done for the Campaign for Science and Engineering and is by Jonathan Haskel, Alan Hughes and Elif Bascavusoglu-Moreau.
We look at two main questions:
1. How does public-sector funding of the science base affect private involvement?
The caricature is that research-orientated universities and academics are removed from the "real world" and so have no connection to anything useful. In fact, completely the opposite is the case. Surveys of academics indicate there is a strong positive correlation between public-sector funding and private involvement in research both for universities and individual researchers.
Universities that receive higher levels of public research funding generate more research income from other sources (e.g. charities, industry, overseas).
Regardless of institution, individual scientists who hold Research Council grants are more likely than non-grant holders to be ‘outward-facing’ and interact with the wider community, for example through the commercial application of their research.
2. How does public science funding affect private sector productivity?
Looking at data for industries over time, we find that public science funding generates substantial returns to the private sector:
Public investment in research increases private sector total factor productivity growth
This effect is greatest in industries that themselves conduct significant R&D or report co-operative interactions with universities.
The rate of return to public investment is around 20% (in our most conservative estimate) which is a large rate of return for government projects. If government made a one-off increase in public spending on R&D of £450m (5% of its £9bn total R&D spend), market sector output would rise by £90m per year, every year. Discounting this flow of extra output at 5% per year gives a total boost of £1.8bn to business sector output over time.
Meeting to discuss the findings. Taken from CASE website
CaSE will be holding a panel discussion on the economic significance of
the UK science base in May. The panel and audience will discuss findings
from Jonathan Haskel and Alan Hughes’ new report, ‘The Economic
Significance of the UK Science Base’. This report, commissioned by CaSE
and funded by a consortium of CaSE members, provides crucial economic
evidence to support claims that Government can boost growth by investing
in science and engineering research. The event is kindly hosted by The
Department for Business, Innovation and Skills on 7th May, 2pm-3.30pm.
The event is open to CaSE’s organisational members and collaborators.
Please RSVP to firstname.lastname@example.org.
It's an example of the kind of work that HM Treasury will not be convinced by. Some of the work, see Chapter 8, takes spending on universities and multiplies it by a rate of return. For medical research, this rate of return is poorly estimated. Other parts of the work take e.g spend on construction by employment in construction plus employment supported by constructoin workers buying cups of tea etc. But what is the counterfactual? Would all those workers and tea-makers be unemployed if these projects did not go ahead?