If you believe ABC News Online, “Howard spends up big on medical research“:
Prime Minister John Howard has announced health and medical research grants worth $560 million, saying the funding is the result of good economic management.
Of course, this is judging the state of the forest by examining one newly-planted tree. See over the fold for the picture on overall government R&D spending:
(Source: OECD)
The R&D forest is looking rather dry, parched, and bare, actually.
The whole idea of the Howard government was that it would create an environment conducive to R&D, so that there wasn’t such a heavy reliance on government spending. Now all he offers is the lame outburst of late-term governments, “record levels of spending”, as though they are doing us a favour by spending our money.
Oh well, let’s not make that mistake again. It would be nice to think the next government might lift things a bit in this area.
Why is only Government sector R&D spending the only measure you show?
Why not also show what incentives for private sector R&D spending are given by Governments and total private sector spending on R&D?
This is as deceptive as the dribble put around about Federal Governemnt spending on private education, while ignoring State Government expenditure.
Lies, damn lies, adn statistics, eh.
Razor, I think you need to back your argument up here. You say the comparison’s deceptive. Where’s your evidence of this?
Private sector R&D in health is invariably parasitic on the public health system: its staff, its patients, resources, infrastructure, and socia capital generally. but with the big minus that very little of the government handout comes back to the public in monetary terms. In other words it is a rort, a blatant outright subsidy to the private sector, in most cases these days, the drug industry, topped off the usual: private appropriation of monetary benefits.
How about this for a start.
Perhaps charts of the levels of OECD public debt and GDP Growth would be nice to include also, just to see who are running sound economies.
jinmaro - Private sector R&D isn’t a complete waste of cash - it still employs scientists and other staff and, hopefully, develops spin-off companies which keep everything going. Sure, the money doesn’t find it’s way back into public hands immediately, but it kinda does by virtue of there being more people employed.
I’m sceptical of Razor’s claims as well. I gather Australia is worse off in terms of private sector R&D than it is for the amount of $ provided by the Government. I know that certainly in the natural sciences public money compensates for a frustrating lack of R&D support from private industry.
Sorry Razor but I don’t see how that article supports anything.
It quotes the BCA as saying that research dollars are representative of the industries that exist. Well, sure, that’s the point isn’t it. R&D in Australia is suffering from lack of ideas but is rather suffering from a lack of support. The article began with complaints by two Nobel laureates who had to take their business development offshore because private industry in Australia wouldn’t support it.
I’m not saying that Australia is a world leader in R&D spending.
I recognise R&D as very important, but I don’t think Government is the best place to have decisions made on where to focus R&D, except for in the pure sciences and some public goods, such as space flight.
Without combining private and public sector spending a complete picture isn’t given, unless the idea is not to give complete picture.
mick, if you compare the numbers in the article with the graph above you will see that Australia moves above Italy and further above New Zealand when both private and public sector are added together. There would be a significant reordering of the list with complete data shown.
I work for a company that spends a *lot* of money on private R&D, all funded from sales.
Let me tell you - enlightened management is the biggest help you will ever get. Government hand outs don’t come our way, just the R&D tax concession.
I would have thought governments will always be the best source of funding for R&D, because they have serious money that no-one else would cough up, even in the USA where philanthropy is more commonly practised. Re Razor’s last comment, within each broad area, like medical research, it is not government bureaucrats alone (or even at all) who decide on where to spend money. Researchers and practitioners influence the direction of grant applications and a panel of the same assesses the merits of the applicant and the proposal. The government can nominate some high priority issues of the moment but these may not be critical to the success of the proposal.
Razor - Moving above Italy isn’t something to exactly be proud of. Italy’s R&D performance is commonly considered to be among the worst in Europe.
ashleigh - sorry, I’m a bit dense today. What are you trying to say? I don’t think anyone here is saying that the Government should prop-up private industry R&D.
I agree that the key to getting industry to fork out the dough is to convince them that it’s in their interests to do so. The business culture in Oz, for one reason or another, seem to believe that they don’t have to put in the cash. Part of that problem is that Australia does quite well out of low-tech industries. The thing is that we could do very well out high-tech industry if industry was more willing to inject some cash into the right areas.
Ashleigh, it would be interesting to compare the types of R&D done by government and private enterprise. It strikes me that the latter won’t fund research into esoteric or not immediately useful things. Commercially unviable in short. Much social sciences or humanities research likewise would not survive in this environment. I also think privately funded researchers tend to do more of the finishing-off D and government funded ones tend to do more of the original R, but that is going to take some time for me to do the research! By the way the government does fund private-enterprise partnerships with researchers, but some organisations appear not to want to enter into these.
Joe D - What you are saying isn’t entirely true. It may be true in Oz but in other countries industry has realized that in order for it to get the research dollars at the end of the process that it helps to give money to the scientists who are working on the foundational stuff.
In any case, private industry concentrates on stuff that can turn a profit in the not-too-distant future.
They don’t, as a rule, do the blue sky stuff.
But, Razor, my point was that if you read the article you’d get the impression that JWH has been hugely generous in doling out government money to do research. It is a highly misleading impression.
As to mining and agriculture, since when do they not benefit massively from R&D work?
I dunno Rob, private industry does fund foundational work in a lot of countries. RIM (the people that make Blackberrys) fave poured on the order of half a billion into foundational phyiscs research in Canada. IBM, Intel, Microsoft, HP, and Bell also have a history of investing in the blue sky stuff.
You are defintely right though that for the most part the research that won’t turn a quick buck is paid for by government agencies.
Oh I jus trealised the Agriculture and Mining thing was probably meant for me. You are right, they do massively benefit from R&D dollars. More dollars to all I say, I was just trying to find a reason why Australian industry routinely fails to support new industries.
Well the pharmaceutical industry is probably one of the top two or three most profitable industries in the world and its R&D is, as I said, parasitic and wholly dependent on government funded health systems. So this statement is simply untrue.
Mick: I think we’re in heated agreement
Sorry jinmaro what you are saying seems to be the same as what I am saying? That is, most basic R&D is paid for by governments.
Very much so Robert, damn you and your reasonable arguments!
Jinmaro: emphasis on quick. Yes, government funded R&D ends up making Big Pharma richer, but the distance between the initial observation of some biochemical pathway and the commercial release of a drug which can mediate it is often in the order of a decade or more. Hence, the private sector leaves it for the government to do.
That is so funny, if it weren’t so tragic. Yeah, but it gives people jobs, right?
We are talking about health here aren’t we, not spaceflight and coal and computers? Love the involuntary segue there menfolk.
You can bet all of Howard’s putative grants will be focussed on diagnosis, treatment and “cure”, i.e. x-rays, surgery and drugs and all those other profitable but highly questionable adjuvant therapies and the massive industry that accompanies and reinforces them - to such little overall positive effect.
Part of the point being, surely, that this ties in quite neatly with the government’s non-policy on renewable energy (and the consequent movement of growing Australian renewables offshore); non-policy on university funding; and non-policy on the CSIRO.
Really, to be beaten by Belgium. Oh, the shame…
quite a euphemism you’ve constructed there, Robert. What it means, in layperson’s terms, is, in practice, unethical testing of drugs on very ill or dying, ill-informed people, paid for and endorsed by government. If a drug seems to work, short-term, then, gangbusters for the drug companies, and Bob’s your Uncle.
Interesting.
Here the MSM description of the Coalition’s spending of $560m as ’spends up big’ is decried as minor when put into context.
At another place the MSM’s description of the ALP spending $50 million on health in Tassie as a ’splurge’ is decried as a pejorative cos its suggests vote buying [?] and $50mill is not a lot in context.
So, according to 2 sets of bloggers, $560 mill is not a lot and $50 mill is not a lot.
In their contexts.
So what if we swapped the descriptors?
Howard ’splurges’……
Rudd ’spends up big’…..
Different impression given to the public?
There is a need for caution when making international comparisons of this sort. The Productivity Commission noted this in their recent report on public support for science and innovation in Australia:
“Data, such as that presented in figure 2.8, often assume an iconic status as ‘proof’ of
endemic underinvestment in business R&D in Australia, especially among those
wishing to attract more funding. However, comparisons of input ratios are usually a
conceptually unsound basis for assessing optimal investment in R&D. Nothing says
that ‘high’ input ratios are necessarily better than ‘low’ ones, since it is possible to
both under- or over-invest in R&D. For most other inputs — such as labour or
capital — the usual interest is not in maximising inputs per output, but rather
maximising its inverse (output per input or productivity).”
(The above quote comes from page 43 of Productivity Commission (2007), Public support for science and innovation, Productivity Commission Research Report, Productivity Commission, Canberra, 9 March.)
The full report is available online at the following website:
http://www.pc.gov.au/study/science/finalreport/index.html .
(Disclosure: I used to work for the Productivity Commission and was somnewhat involved in some preliminary work that was used as an input into the production of this research report.)
Damien - From the report summary I gather that Australia isn’t that far below the OECD average when industry structure is taken into account. But that pre-supposes a fixed industry structure no? Indeed it seems that much of the report is based on optimizing current R&D costs and current funding programmes than looking into advancing Australia’s R&D framework.
Damien I’ve just read the Productivity Commission’s section on the “Brain Drain”. It seems to me that the conclusions of the commission don’t really tie in with the analysis that was performed.
The conclusion was that there is no “Brain Drain” because the number of PhD’s leaving the country was offset by the number of PhDs coming in and the increased number of PhD graduates.
Yet, the same analysis points out that Postdoc salaries haven’t matched inflation and have been in effective decline for 20 years, and at the same time the number of postdoc employment opportunities has not increased relative to the size of the market. When you combine these numbers with the knowledge that scientists are most productive in their early careers it seems that this is a fairly massive personell crisis that is dismissed as a problem for universities and individual employers to work out.
Given that personell costs are one of the major costs for most universities (on average we are talking about 25% of overall costs though obviously this depends on the university), how could the Productivity Commission come to the conclusion that Australia’s R&D position isn’t that bad?
Sorry Damien, I’m not taking shots at you by the way. Just trying to point out that these numbers can be read in many ways.
Mick,
I think there are two key points to remember. The first is that it is not at all clear why the OECD average would be an appropriate benchmark even if all OECD countries has identical industry structures. The second is that Australia has a compatative advantage in agricvuilture and mining. These sectors typically have lower expenditure on R&D than manufacturing sector. So there are reasons to believe that even if the OECD average was an appropriate benchmark, which is not at all clear, Australia would be expected to be have somewhat lower R&D expenditures than foreign countries who have a comparsative advantage in manufacturing. The industrial structure of an economy and indeed the industries in which an economy has a comparative advantage may change over time. They may even be influenced by various policy decisions. However, it is not at all clear that it would necessarily be desirable for Australia to try and reduce its reliance on agriculture and mining and increase its reliance on manufacturing.
jinmaro, you are making even less sense than usual.
Are you actually asserting that things like “diagnosis, treatment and cure, i.e. x-rays, surgery and drugs” have no positive overall health effects? I must admit I had never contemplated an elaborate conspiracy involving our public health institutes.
Are we to suppose that testing drugs on healthy people would bear more fruit?
BBB
I’m not familiar with the data on skilled migration or the data on post-doctoral salaries, so I can offer at best some qualitative remarks. The issue of a brain drain concerns skilled migration between countries. This will be a function of the relative purchasing power of wages for such people in different countries. If the wages to skilled poeople were falling in all countries, then a fal in the real wage for skilled people in Australia would not necessarily result in a net brain drain. On the other hand, changes in relative wages within an economy might alter the type of job that skilled people accept. It might also alter the incentives for people to undertake doctoral studies.
Damien - I get that comparing to the OECD average isn’t necessarily appropriate, it’s a very rough figure for something that is quite complex. However, the Productivity Commission’s writ was not really to analyze the prospects for industry growth as opposed to whether resources are being used in the most appropriate way.
Like I said above, it seems to me that there are very serious problems to do with utilization of personnel that requires serious thought. Though, to be fair other countries are dealing with the same problems - I spent my lunch hour today discussing different countries approaches to dealing with the problem of postdoc placement.
By the way, I thought the section on tax incentives was very interesting.
Damien - According to the number of qualified scientists living in Australia I think you’ll find that there is no brain drain. Also, relative to the number of open positions in Australia there are only a few industries which don’t reach full employment. The problem is more with regard to utilization of resources, in short there aren’t enough science jobs to go around.
This means that many scientists are “lost” to other sectors of industry because they don’t have a clear and secure career pathway in the R&D sector. They can can secure higher salaries and more job security by leaving the R&D sector. This is mentioned in the report. However it is exactly these scientists, those that are near the start of their careers, which are the ones that should be encouraged to stay in R&D as this is the period in which scientists are normally most productive.
Then again, these scientists use their skills in the finance and manageament which probably isn’t the worst thing in the world.
The economics discipline in the US holds a centralised job market for new PhD grads each year. Jobs for new grads are advertised online in “job openings for economists” in most months. The key months for new grads are August to December. Universities looking for newly minted economists decide which of the applicants they want to interview and then arrange to interview them at the Annual Meeting of the American Economic Association in January of the following year. The universities then form a short list of candidates that they are really interested in and fly them out to give a seminar and meet with various faculty members. After this, they decide which candidates will recieve an offer of employment. this process seems to work reasonably well, although I suspect that it is expensive for the students involved. More information on this process can be found at the following website:
http://www.aeaweb.org/joe/ .
Wow, it’s like a draft for PhD grads. That’s cool. Many of my friends have joked about setting up a draft in my field, except for the whole field. It’s a lot of fun to try to work out who the top draft pick should be.
The thing is, in the sciences PhD grads don’t get permanent jobs. What they get is between 2 and 10 years of short-term competitive contracts before they either leave the sector or land a permanent or semi-permanent job.
Damien, that sounds like a formalisation of the normal practice in most disciplines in the social sciences in the States where people do the rounds of the annual conference doing interviews and there’s normally a clearing house of some sort via the net - that’s when all the departments recruit entry level Assistant Professors. But that’s for teaching/research gigs. I’m not sure how postdocs work in the social sciences over there.
It is even better than a draft. There is no prescribed order of selections from the candidate pool for the universities. As such, they need to compete for the top candidates on the basis of salary, teaching load and other working conditions. The standard tenure track contract is typically a six year up or out contract. But I have the impression that the other conditions can and do vary from candidate to candidate even within a single department in a particular university.
That should be:
“But I have the impression that the other conditions can and sometimes do vary from candidate to candidate even within a single department in a particular university.”
While postdoc positions do exist in economics, I don’t get the impression that they are all that common. I suspect that they are often handled in the same way as the other academic jobs. Indeed, many non-academic employers also participate in the centralised job market for economists in the US, although they probably don’t always require seminar presentations.