Euro-Sante :: Euro-Health

Euractiv is reporting some concerns that there will be a decrease in research spending in the EU. The article is here.

According to the survey that triggered the anxiety, some 93% of those surveyed said that “investing in innovation is one of the best ways

Innovation can also be quite mundane, it all depends on what problem you're trying to solve (Photo credit: Stephanie Booth)

to create jobs in Europe.” This is absolutely right! However, investing in innovation is not the same thing as spending more on research.

There are two, broad schools of thought here. The first sees spending money on research, translating into innovation. The other is that innovation occurs when real-world problems are solved. The EU and most EU member states have pursued the first approach; the problem of job creation is pursued through the second approach. The evidence on job creation might suggest that the first approach is not working.

Spending more on research is not, in itself a bad thing. However, the quality of the research has to be good, results disseminated and academic researchers held to account for their work. I am not a big fan of state-run or controlled higher education, and less a fan of protected job status for academics. According to this model, more research literally pushes innovations into the market where hungry investors snap these great ideas up and go off start companies and hire people. And so it goes. This approach does not generally work. It is called the ‘research push’ model, and is faced with the tremendously difficult challenge of research translation, that is, of linking the research through various arrangements to people who can create innovations from the research. Research, itself, is not an innovation; it only becomes an innovation when it becomes useful. [see Michael Gibbons et al The New Production of Knowledge”, Sage 1994 on the distinction between ‘use-less’ and ‘use-full’ knowledge]

The other model involves innovation emerging in markets, which have needs and which investors, inventors and others are encouraged to respond to. This is called the ‘adoption pull’ model, as it focuses on how markets (that’s you and me needing something and buying it) adopt innovations which respond to our requirements. The value of any research is precisely in the context of whether it feeds this innovation or adoption pull. The research translation process here is about identifying knowledge needs that research can fill, and which in turn can be converted into innovations that people will want and value.

The key distinction is that the needs of academic researchers, to do research, solve problems, learn new things, etc., is not the same thing as the needs people have for innovations. Research commercialisation by European universities is generally very poor, and particularly so in countries which operate the research welfare state. They also have poor access to risk capital, burdensome public ownership of publicly funded research (as though no one learned anything from the role of Bayh-Dole in the United States, or hadn’t gone back to the 1940s and read Vannevar Bush) and generally complex labour market rules which frustrate businesses startups (for those who wonder why this is important, a business start-up is something new, creates employment, is risky, but is where all large companies start from. How they get to become big is not just a function of their products and innovation, but the flexibility by which they can grow, and that is often a function of the perverse impact of national bureaucracies.)

Spending more on research won’t address the development of innovation or create jobs as such. Spending more on research will of course expand the research system, and possibly expand the research welfare state. I am not ignoring the real challenge of what proportion of research funding should be for pure or curiosity research and which should be mission directed (or linked to Grand Challenges, which are proving such an effective way to align researchers’ interests with compelling real-world challenges.

If you want innovation to create jobs, as apparently 93% of people surveyed want, then you want different things from just more research spending; you need things that in Europe and particularly in some Eurozone countries are proving particularly hard to do, namely:

  1. You need a risk culture where it is easy to start companies, try out new things, and if they don’t work, start again; but many countries penalise innovators who go bankrupt, for instance, while other countries load small start ups with massive social costs, inflexible labour rules, so the company can hardly get going for the tax-burden.
  2. You need an environment which encourages adoption of research findings; perhaps better, you need the academic institutions to be more proactive in encouraging entrepreneurialism amongst academics. Secure employment contracts that restrict freedom to explore alternatives are not help. Key concepts here are: flexible academic employment contracts, real-world incentives within universities to encourage a career focus on problems as well as new knowledge.

Of course, this list can go on. The key message is that equating research spending with innovation investment is a broken paradigm that should be quickly abandoned.

Want to know more?

Well there is a lot out there. I’m going to recommend these for starters:

Roger Miller and Marcel Cote, Innovation Reinvented: six games that drive innovation. University of Toronto Press, 2012.

An older book that is worth a read about companies and innovation (remember that the SME is the engine of job creation, not the public sector) is this one:

Ikujiro Nonaka and Hirotaka Takeuchi, The Knowledge-creating Company: how Japanese companies create the dynamics of innovation, Oxford University Press, 1995.

And because this blog is about healthcare, everyone must be mindful that research and innovation in healthcare, as in other sectors, can be highly disruptive (this creates unemployment and new jobs at the same time and may even bend the cost curve down), I’m suggesting a read of this new book:

Eric Topol, The Creative Destruction of Medicine: how the digital revolution will create better healthcare, Basic Books, 2012.



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