The economic impact of public investment in research

During my time as an Irish university president I got used to hearing commentators – often economists – arguing that the investment of public money in academic research did not represent good value. It was suggested regularly – and indeed this was done several times in comments on this blog – that there was no evidence that such investment produced any benefits to the state or the taxpayer.

It is therefore interesting that an independent analysis commissioned by the Higher Education Authority (Ireland’s higher education funding agency) has now quantified the benefits. It has found that the investment by the state in the Programme for Research in Third Level Institutions (PRTLI) of €1.173 billion has yielded some significant results. It has produced 43 spin-out companies and has commercially assisted 113 other companies. The commercial impact to date is estimated at €753 million. Over the next five years the commercial impact is estimated at €1.108 billion. If these figures are borne out, the net financial return on the investment  will be over €700 million. However, this does not factor in the impact on foreign direct investment or start-ups that have been prompted by the availability of high value expertise or the support of graduates from funded research programmes.

It is difficult to argue that significant public investment in research is bad value for money. The opposite is true, and it is to be hoped that during difficult economic times in particular the investment will continue.

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6 Comments on “The economic impact of public investment in research”

  1. Vincent Says:

    Well they would say that now would they not. You cannot really expect them to come out and say that the whole thing is an expensive vanity project.

  2. bethduff Says:

    I think the general public would have much higher regard for research if they could understand it more easily – and thus understand the benefits, even the indirect ones. Much “academic writing” is the equivalent of Latin in past centuries, limiting knowledge to the few who can understand it. Of course, academic writing needs structure and rigour – but it can also tell exciting stories that would increase public engagement and interest.

  3. Niall Says:

    Maybe it’s my maths but it looks like it’s worth less to the economy than the money invested. Invested = €1.173 billion. Estimated gain over 5 years €1.108 billion.

  4. jfryar Says:

    I would argue that if we’re making a profit on the cash injected into third-level research, then we’re probably not being ambitious enough.

    Surely the point of research at third-level is to allow people to investigate interesting science that may or may not have a commerical or economic benefit. After all, if you don’t do the research, how will you know?

    The private sector performs research to achieve short-term goals. If we now insist that universities also only conduct research that has an economic impact in the short-term and can be justified on financial terms to the taxpayer then who is going to conduct the ‘maybe it will work, maybe it won’t, but we don’t know yet’ research to drive future developments? In which case why bother conducting research at universities – just get the lecturers to teach.

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