Last week I joined a Roundtable on Australian innovation policy organised by the Grattan Institute. It was Chatham House rules but that won’t prevent me from talking about what I said.
My theme was how to make a case for innovation policy. For decades many people, myself well and truly included, have argued that Australian needed science and innovation policy to develop the expertise for future growth because we could not surely continue to rely on primary commodities as we had in the past. There were many hard-line economists who pushed back on that argument. They noted the theory that local innovation was not the source of productivity growth for smaller countries — true although Australia wasn’t small in some sectors (like mining and agriculture). But they often supported it with poorly constructed empirical analysis that was easier to pick apart. However, just because that was so didn’t mean that the theory wasn’t true empirically.
Fast forward now two decades since I, at least, was making that argument and what have we got. Australia has had steady growth for almost 25 years. The growth has been spurred by productivity improvements in non-traded sectors (based mainly on overseas technological change) and export-focussed sectors (the traditional primary industries). In other words, the pattern is surely more consistent with the hard-line economic view than with the innovation theory view. I asked the Roundtable, “at what point do we have to admit that the innovation theory view is not true?” I think that point has passed.
What then of the case for science and innovation policy? The problem with “arguing on economic terms” for such policies is that we have got just that. Perhaps more so than many other places, Australian scientists and innovators are forced to make strong cost-benefit cases based on short to medium-term productivity improvements for funding. That is hard to do; so hard that the private sector and certainly the philanthropic sector doesn’t use those “metrics.” What that has meant is that what gets funded are things that have political benefits rather than economic; because the economic case is hard to make.
I want to argue here that the case for science and innovation policy is exactly the one that scientists, prior to being “educated” in economics, made: Knowledge production is a global public good that costs money. Australia is a rich country. Australia should contribute its fair share.
In other words, I am advocating for a moral case for science and innovation funding. It is the same argument that is made for funding culture and the arts although a little weaker as there is little that is uniquely Australian about science and innovation (although the astronomers and marine biologists make great counter-cases).
To be sure, funds need to be rationed. But the rationing mechanism should shy away from hard economic numbers. Instead, we should move to cases more akin to what the great US foundations: the Gates, Mellon and Sloan foundations do: Qualitative cases. I urged the Grattan Institute to study their mechanisms more closely.
I’ll admit my earlier complicity in moving the debate to economic terms. As it turns out, the theory and now the evidence are against that justification. My point here is that there is another justification. It is non-economic but surely one many people can understand and be comfortable in making.
Core Economics 
Isn’t there a greater need, that science & innovation policy be guided by how well citizens understand what is going on in publicly funded research?
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Joshua, I am confused by your argument. You seem to say that the economic arguments don’t help in making the case, so you revert to a non-economic argument, in this case appeal to a moral argument. That is, as a wealthy Country we should do our bit.
If we admit moral arguments, then don’t we need to construct the moral dimensions of the argument and also acknowledge the opportunity cost of resources to R&D? Is research the greatest moral imperative?(to borrow a quote). Or is it aid, refugees, aboriginals, or indeed climate change. It seems to me that moral arguments cannot escape to need for discipline that characterises economic arguments.
My reading of your article appears to suggest you want to promote investment in productivity and innovation, and have cast around for a framework which best supports your goals.
Maybe I have missed the point of your article. In a way I would probably prefer that was the explanation for my confusion.
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Too often someone will support something being done, say policy A, for some reason, often an ethical one, say reason B, but will argue that A should be done for some other reason, a more pragmatic one, reason C, because he believes reason C will be more convincing to others. Examples include arguing for more foreign aid (A) because it is an effective tool of foreign policy (C), rather than a moral imperative to help our impoverished neighbours (B), or arguing against extractive industries (A) because of local costs, say to tourism operators of farmers (B), rather fact that the environmental damage is morally unacceptable (C).
Without presuming anything about what Joshua thinks on the subject, I find this kind of shift (Arguing for A on the grounds of C, not B) common in debates about public funding for things like research or higher eduction. The danger is that if the pragmatic argument is shown to be false, you’re left looking inconsistent when you start arguing on the grounds you actually thought were convincing all along (reason B).
And of course, you’re right that there are many moral imperatives, and quantifying the costs of satisfying different imperatives does show how much “moral benefit” is needed for a given activity to yield a “net moral benefit” and even allow you to prioritise those activities with the greatest “net moral benefit”… So long as all parties to the debate think that the concept of a moral benefit is meaningful, let alone quantifiable.
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Joshua,
As per comments above, for each of us there is no shortage of worthy causes to support. Truly, “more is better” describes much of the human condition.
The challenge is how to ration those claims for more of what is scarce. Well, yes, economics.
Phrasing your argument for increased innovation spending as a “moral case” only serves to have it compete with the supplications of every other do-gooder who is out there beseeching resources for their “moral imperatives” and “sacred responsibilities”. Gloria in excelsis. You know, religion.
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