Beyond the ring fence

By Melanie Smallman
Research Fortnight
29-05-2013

Protecting basic research is not enough. Unless the academic community engages with the debate on industrial strategy, the spending review will leave research and innovation on the margins, says Melanie Smallman.

In the next few weeks, UK researchers will be lobbying in advance of the government’s June spending review for 2015-16. Already, the four national academies have launched a joint statement entitled Fuelling Prosperity, calling on the government to retain the ring fence placed around the science budget in the 2010 spending review and provide a stable investment framework for the next 10 years of research.

But while the academies are focusing on the level and direction of funding, politicians are confronting a bigger issue: the future of the UK economy. This is the discussion that will determine whether the UK becomes a hi-tech, innovation-based economy, a low-wage manufacturing nation or a country dominated by service industries. The outcome will shape UK research, development and innovation for decades to come.

The debate about industrial strategy is uncharted territory for politicians and economists, as well as for researchers. For 30 years or more, free-market ideology has shaped economic and innovation policy. The state’s role, after funding basic research, has been to get out of the way.

The credit crunch showed the limits of this view. So whether it is David Cameron talking about responsible capitalism or Ed Miliband talking about reducing inequality through higher wages and skills, it amounts to the same thing. For the first time in more than a generation, an active industrial strategy and a role in markets for the state are on the table.

This raises questions for science policy beyond the percentage of GDP spent on R&D. Research from political science into alternative economic models, such as the work of Peter Hall and David Soskice on different varieties of capitalism, suggests that a nation’s industrial development is determined by factors such as industry finance and relations, and models of company ownership.

In Sweden, for instance, trade union power has led to higher wages, which have driven companies towards skilled, hi-tech industry, causing the state to invest in training. In Germany, access to finance being not entirely dependent on current profits has allowed companies to pursue projects that have paid off in the longer term.

Yet despite the clear implications for UK research and innovation, the scientific community is silent on these matters. In Fuelling Prosperity, the Academy of Medical Sciences, British Academy, Royal Academy of Engineering and Royal Society claim to be “working together to highlight the value of research and innovation to the UK”, but then ask nothing of government beyond stable funding for basic research.

This is not surprising. Topics such as industrial relations are beyond the scope of most science policy work today, let alone the policy interests of working scientists. The lack of a government audience for anything beyond free-market thinking has limited policy thinking to matters such as tax incentives for industry and creating markets for new technologies.

There is a clear need for research in the area, but enough is known already for the academies to set up a policy commission bringing together scientists, economists and policy thinkers to ask how to build the innovation economy. The questions should include: how active can and should the state be in driving innovation? Would science benefit from a counter-cyclical investment strategy, with government spending to stimulate growth when interest rates are low? How can the government encourage companies to invest some of the £800 billion they are believed to be holding? What skills does the workforce need to meet such an investment? 

The answers could provide a starting point for developing policy ideas for economic growth. Armed with such ideas, the scientific community might win a place at the manifesto planning table, rather than be running behind the big boys, begging to be spared the cuts.

Political decisions are about to be made on whether the UK can become an innovation nation or will remain an economy dominated by services. The research community must do more to be part of this debate. When politicians talk about growth, they are talking about innovation. When they say they want to stimulate growth, they open the door to suggestions for how to do more research in the UK. Let’s not miss this chance. With so much to gain, it is time for science and science policy to become mainstream economic and political issues.

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Melanie Smallman is director of the Think-Lab communications practice and a researcher in the Department of Science and Technology Studies at University College London.

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