Framing public research investment decisions for the policy community

Published on September 20th, 2024

How do we present the case in countries that invest poorly in research to invest more? The most common approach is to focus on the quantum (usually as a percentage of GDP) rather than providing the intervention logic for greater investment. Yet from the policy maker’s perspective, comparative arguments are often sterile and don’t make the case well. 

A common way of categorising research is linear from basic through applied to development but that does not describe the purposes of research well from a policy perspective. Since Vannevar Bush’s report Science: the Endless Frontier in 1945, developed countries have accepted that science is critical to economic and strategic growth. Certainly, the arguments from OECD, the European Commission, and Mazzucato, amongst others, have highlighted the importance of state investment even in advanced economies in fuelling private sector development.  In the context of this essay, we need to think beyond major powers.

Another way of characterising research is whether it is disciplinary, or systems-based. Most training in research is discipline-focused and this has extended to how funders and research providers act. However, many of the problems we face require interdisciplinary and systems-based approaches. The need to balance training and recruitment between those with deep disciplinary expertise and those experts in systems approaches will become of greater importance given the nature of problems ahead and the computational tools now available. This too has implications for the organisation of science funding.

We developed and found it useful to apply a more utilitarian taxonomy of why a government should fund research. We define four types of research that are not mutually exclusive, and within each, there may be research that spans Pasteur’s quadrant. But the primary purposes of each differ, meaning that they may require distinct governance and strategy, different prioritisation, assessment, funding and delivery mechanisms. And importantly they suggest the importance of engaging other stakeholders in presenting the case.

Stewardship research describes that research necessary for a government to ensure its basic obligations of stewardship. It includes the collection and processing of basic data, and the research needed to protect core human, social, economic, and environmental assets of a country. These activities provide backbone services or critical information that are needed by all economies to operate. Examples include measurement standards or monitoring natural hazards. Governments depend upon access to robust evidence to target resources, inform policy design and implementation, and meet statutory reporting obligations. Such data gathering includes climate related measures, measurements for natural-hazard modelling, estimation of pollutant levels, the collection of economic and social statistics etc. Many aspects of defence science, security and cybersecurity research fit this class of research. It is this class of research which is the main argument for public research organisations.

Although data collection often does suit contestable funding, it is the essential fuel for subsequent analysis and modelling and is often useful to researchers and industries outside Government: for example, land use data is essential for many industries; and weather data is essential for farmers. Typically, stewardship research does not offer immediate commercial value but is a critical investment to ensure the resilience of nature, communities, infrastructure and the economy. Thus, governments must support such research often through contracted means.

A particular form of stewardship research is foresight and technology assessment. Stewardship requires anticipating the future and in particular addressing, where possible, identified stresses and shocks. Further, in a world driven by rapid technology change, the lack of an expert technology foresight and assessment unit puts a country at risk of being a ‘slow follower’ in a world moving quickly.

Policy-focused research is that research needed or desirable to meet governmental needs to make informed decisions. This includes, for instance, the economic and/or social consequences of a possible tax change, or the effects of different predator-control strategies for threatened species or mitigation approaches to addressing climate change in local contexts. Evidence-informed decision-making should rely on this form of research to ensure that the Government is clear why and where it is spending money and should cause a better investment return.

Funding policy-focused research can be problematic. Some ministries have research capability in house, but this can be vulnerable when ministries and departments seek to economise. What is needed is a clear understanding of the need for the research, the questions that need answering, and ensuring a robust methodology appropriate for that. If quality assurance is lacking, the utility of the result cannot be assured. In contrast to discovery research, the results of Government’s policy-focused research are seldom published, nor are they normally subject to external peer review. These linked issues – funding and quality assurance – need to be addressed.

Operational research is a type of policy-related research a government should undertake to improve the efficiency and effectiveness of its agencies. This is particularly so in domains such as education and health which are data-rich, yet the level of investment in operational research is often poor relative to what a private sector equivalent would spend.

Knowledge-generating research is where the primary driver is to produce new knowledge, perhaps for its own sake, but often to solve an intriguing problem. Consequently, it is primarily driven at its earlier stages by curiosity and is thus usually investigator-led, although that may evolve in time to mission-led research. Often such research unexpectedly spills over to become highly impactful through either its public utility or seeding commercialisation. Thus, it has a fuzzy boundary and the spirit of enquiry must infuse the entire research and innovation system.  

Knowledge-generating research is open, usually after going through a form of quality control, notably peer review. Without ideas flowing from knowledge-generating research, there can be no flow of locally derived innovative ideas that can be exploited by end users, whether the community, government or the private sector. This is the main class of research funded by contestable research funding agencies.

Exploitable research describes research that is directly pertinent to commercial, public good or other actionable interests and often derives from the above. Some of this research is conducted within the relevant businesses, but some is also done within or alongside research institutes or universities depending on its technology readiness level (TRL). TRL levels 1–3 may be encompassed within knowledge-generating research either in the public sector or in large companies within their R&D function. In general, innovators and entrepreneurs seek to invest in research once it reaches higher TRLs.

The role of Government in exploitable research is not passive. Some degree of risk-sharing between a government and the private sector is often appropriate. Innovation is acknowledged worldwide as a major driver of economic prosperity, so governments want to encourage such research. Nevertheless, the Government does not want to be seen as subsidising legitimate business costs, for both political and sound economic reasons.  Distinct mechanisms for funding this research once it leaves the public sector generally lie with economic agencies.

Discussion

Much research can serve several of the above purposes, but the above categorisation is useful with the policy community because it illustrates the broader value of research, science, innovation and technology in a country’s development. It allows a deeper analysis of the shape of needed prioritisation, funding mechanism and provider parts of the system.

It can promote more dynamic policy making identifying where it is appropriate for governments to have a role in prioritisation (and where not), where research quality should be the primary consideration and where developmental potential should be the key factor. It also makes it much clearer for other stakeholders such as businesses and NGOs to engage.  

Irrespective of a country’s state of development, all four classes of research have critical value. Low-income countries will clearly prioritise the first two classes of research but even they should not ignore the importance of knowledge generating research. Without indigenous knowledge generation, universities and expertise cannot develop, limiting the capacity to absorb knowledge and investment from offshore. Without knowledge generation, exploitable opportunities will not occur.

In a world increasingly constrained by economic and other crises, science must get better at making a compelling case to governments as to why investment in research must be protected and enhanced.

[1] https://www.nsf.gov/about/history/vbush1945.htm

[2] https://www.oecd.org/en/topics/science-technology-and-innovation.html

[3] European Commission, Directorate-General for Research and Innovation. 2024. “Why investing in research and innovation matters for a competitive, green, and fair Europe - A rationale for public and private action.” doi: 10.2777/01237.

[4] M Mazzucato 2018 Top of FormBottom of FormThe Entrepreneurial State Debunking Public vs. Private Sector Myths. Penguin, London

[5] https://royalsocietypublishing.org/doi/epdf/10.1098/rsbm.2004.0017