Knowledge and Economics require different measuring sticks

Invention and Innovation are obviously closely interrelated.  But innovation is about economics, while discovery and invention are about knowledge. Innovation is about now, discovery is about now and the future. The problems arise when we start using the same measuring stick (or is it STIC?) and the same time scale to evaluate their respective successes and failures. The brilliant Chinese “fast follower” innovation has been extremely successful, but it has nothing to do with Chinese support for R&D.

We keep hearing about how Canada needs to invest in “innovation”, which will set us free from a non-sustainable resource based economy. Government officials and policy-makers keep tying their support for R&D to the premise that it will immediately generate the required innovation for a prosperous economy. Following suit, academic researchers, starving for government funds, keep making bold promises and suggesting that R&D is essentially an “instantaneous” driver of innovation, hence of success and prosperity in the “knowledge economy”. No wonder the pundits keep telling us that Canada is not getting enough bang for its buck from university research.

Rob Annan argues that innovation is quite distinct from the process of discovery and invention, “that innovation is about finding more efficient ways to do things, about increasing productivity, and about creating new markets – sometimes through the commercialization of discoveries and inventions”.

Innovation may involve invention, and it often does, but not always. Innovation is about economics, not knowledge. Its success can be measured in dollars and cents. This is not the case for discovery and invention. Innovation can be measured now. The impact of fundamental discoveries is –more often than not–  beyond current grasp.

The brilliant Chinese “fast follower” innovation is the ultimate case in point. This innovation policy adopted by China has generated the biggest transfer of technology ever, has been a boon to Chinese economic growth, and has tested the global competitiveness of the West.

Behind the “fast follower” innovation is “a combination of state-driven policies  — requiring Western companies to partner with Chinese firms to do business; demanding transfer of the latest technologies in exchange for access to markets; favoring “indigenous innovation” in government purchasing; fencing off green and other industries from foreign competition; offering low-interest state-bank loans to local champions. This industrial policy is at odds with WTO standards, but is a boon to Chinese economic growth and a long-term threat to U.S. global competitiveness”.

This is an innovation process that has nothing to do with current Chinese R&D. It just adapts quickly to whatever already works elsewhere.

On the other hand, inventions derived from fundamental discoveries will sooner or later generate innovations that will significantly impact (positively or negatively–think the arms race) our world. Many are now grumbling about Canada’s $3-billion investment in the Human Genome Project (HGP), and the hundreds of billions in US government funding that has gone into bio-sciences without any significant return. The bio-tech industry hasn’t yet become the next Silicon Valley, and the research did not lead to new companies, jobs, or economic growth in general. But does anyone question the importance of these discoveries for the future of humankind? Granted, “Personalized Medicine” and its related economic innovations remain a promise for some future date. But no one can deny that the HGP and the sequencing and amplification methods developed to complete it,  have been a phenomenal success story for R&D.

There are of course people who would argue that we should be much more like the Chinese and less like the Americans. In fact, some argue that we spend way too much on basic research that doesn’t give immediate economic spin-off. Why not direct that money to “innovation”? Some even say that some of it should be directed to “marketing”! If the Americans want to pay for the HGP let them. Why do we need it?

Well, let’s again look at what the Chinese are doing. They have increased R&D spending by 40% between 2007 and 2009, while R&D spending in the US will go down (after adjusting for inflation) in 2009. Guess where the new innovations are likely to come from in the future? In other words, the Chinese seem to have optimized their interests by capitalizing on a –surely questionable but efficient– “fast follower innovation device” for the short-term, while investing in R&D to keep their options open and stay in the game for the innovations of the future.

It is therefore time to stop making the case for deliverable-based academic research by overstating how it will drive innovation in real time.  We should say it as it is. University research is a worthwhile endeavor to increase our knowledge and understanding of our world. It also contributes enormously to a modern, innovative economy, as a repository of advanced technical knowledge, a training ground for HQP, and also as a generator of inventions. Some will be exploited immediately, but the best and deepest might not exhibit their innovative power till far in the future. It is also valuable for its own sake.

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5 Responses to Knowledge and Economics require different measuring sticks

  1. Pingback: Tweets that mention Knowledge and Economics require different measuring sticks | Piece of Mind --

  2. Ian Yellowley says:

    The term innovation has been beaten to unrecognizable form by government, the press and now it seems academia. The word seems to simply mean “to do something in a new, or different or manner” and one hopes it is as applicable to science as well as it is to economics.

    Discussions about research still elicit strong echoes from the linear models of research from Huxley and Bush, (First we do the science or discovery, then we see if there is a use, then we move out to design, then develop, market and sell). The academic value system generally follows the same line of descent and thus even schools of engineering have models of excellence that are related most closely to the first activities in the chain. The work of Stokes is a nice step forward. He characterizes the value of “research” in terms of the amount of “use” and “discovery” involved. Such approaches to the characterization and valuation of research encourage those who do both, (Pasteur in his analogy) as opposed to Bohr and Edison who inhabit two of his other quadrants.

    There are other intellectual pursuits that are deeply embodied in any rational approach to the achievement of gain, (economic or otherwise), from scientific endeavor. The principal of these is design! The Blackberry is not an invention, it is a complex integration of many, many inventions and is designed to satisfy specific functionalities in an appealing safe and effective manner.

    Design requires the infusion of a different, (almost orthogonal), mindset to science; it is also usually interdisciplinary. Design then is normally practiced in teams, and often requires fundamental science and applied science problems to be solved as one iterates towards a solution. It would be my hope that more of this sort of activity be encouraged within our faculties of engineering and that these activities provide encouragement and funding for the basic research required. Moving towards such directions is difficult given the current “science or discovery based” reward structure within the University.

    • Ghoussoub says:

      What a thoughtful and useful comment. I admit that I did fall in the trap, but it is becoming almost inevitable. Of course “Innovation” simply means “to do something in a new, or different or manner” but as you say, government, policy makers and press did indeed beat, define and highjack the term. It is almost like there is no way around their interpretation of the term anymore, since otherwise we will be talking past each other, each using a different proprietary definition of innovation. “Highjacking” is the word.

  3. John Smith says:

    I work in what could be described as personal genomics and after 15 years in the field of genetics have never seen so much money and promises wasted for such little result. Some comments by scientist in mainstream media about a few mutations found are borderline delirious when they try to look in the crystal ball. The reality is that most genomic center pump out more data with less results… Our lack of originality has turned us into massive sequencing centers and almost no bio-informatics back up…

  4. Andrew Park says:

    Fascinating and timely blog Ghoussoub,

    My problems with NSERC’s “brave new model” of funding go deeper than the qualitative differences between innovation and research. They are philosophical. It is not clear to me that basic research has any business being harnessed in service of a normative philosophy, like the doctrine of “economic growth” (one might all costs).

    For example, on NSERC’s web site try substituting “Christianity” or another religion of your choice anywhere where it says “economic growth” or “wealth creation”. You will readily see how ridiculous such a model would be. How come, then, that economic gorwth enjoys priviliged status? I know of at least two high level researchers whose main researches over the years have been critiques of the economic growth concept as a redundant and dangerous paradigm. Presumably, they would get their funding denied on the grounds that their research philosophy failed to meet NSERC’s government-dictated mandate…



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