Monday, November 09, 2015

Science, Innovation and all that jazz

This morning's reflections and Monday Forum is loosely linked to innovation, that presently popular topic. As always, feel free to go in whatever direction you like!

In a piece in the Wall Street Journal  (23 October 2015), The Myth of Basic Science, British peer Matt Ridley concludes:
 The perpetual-innovation machine that feeds economic growth and generates prosperity is not the result of deliberate policy at all, except in a negative sense. Governments cannot dictate either discovery or invention; they can only make sure that they don’t hinder it. Innovation emerges unbidden from the way that human beings freely interact if allowed. Deep scientific insights are the fruits that fall from the tree of technological change.
To get to this point, he argues that the old linear model dating back to Francis Bacon now encapsulated in the idea of pure research feeding into applied research into useful technology is misleading. In fact, in most cases, technology, innovation feeds into, drives, science. Technology has, he suggests, become a self-replicating, self-steering system that will give best results if left alone. Politicians should stop believing that innovation can be turned on and off like a tap. Governments should stop funding basic research, do away with patents and get out of the way. This drew a protest from (among others) Don Aitkin - Should the public funding of basic science stop? Don is clearly impressed by the view of Mr Ridley in a general sense, but this was a bridge too far.

Without research, I do not remember when systems approaches first emerged. I do do know that I was arguing in the 1970s that the now popular systems approaches could be fruitfully applied the archaeology and Australian prehistory to provide insights. This followed work that I had done attempting to use economic constructs to analyse Aboriginal economic life, work that seemed to yield fruitful results. However, what we might think of as modern "systems" approaches suffers from severe weaknesses.

With the exception of marxist and some socialist theorists who always wanted to make the evidence fit the model, system approaches were simply another way of analysing evidence. Considering a system as a series of interconnected parts, a systems approach led you to ask questions about possible parts and the relationships between them.  Today, the old normative approach adopted by some on the left has sadly become universal, with the dominant right imposing its own particular orthodoxies on the evidence. It's not just the right of course, for normative systems approaches have become deeply embedded in policy debate. Still, economic models have a lot to answer for in, among other things, keeping thesis and antithesis alive!

Mr Ridley is correct, of course, in arguing that the pure, applied, useful technology model is flawed. To use his own thinking, technology feeds into science, science feeds into technology. It's a system. However, and those involved with systems know this, systems involve multiple flows and interconnections. It seems to me that Mr Ridley wishes to impose his own conclusions on the system. using selective evidence to support his thesis. Damn, thesis and anti-thesis again! 

Network economics focuses on the way networks, systems operate, Network economics suggests that under certain defined conditions, networks will lead to monopolistic or oligopolistic outcomes.We have seen this in the higher technology areas so beloved by Prime Minister  Turnbull. A fair bit of economic and policy analysis has been concerned with overcoming this problem. Apart from recognising the way in which patents can be used to protect market power, Mr Ridley ignores this problem. He implicitly assumes that the technology system will give best results. He does not test this, nor recognise that it may lead to undesirable outcomes such as under investment in basic research. It may not, but the question has to be addressed.

I now turn to another topic, the present conflation between innovation and science and technology. It's deeply embedded, and it seems to affect all our thinking. Certainly it affects Mr Ridley's thinking, even though he is clearly influenced by Adam Smith, surely one of the great innovative thinkers of the 18th century measured by his continuing influence.

In a discussion in one of the comment threads, I suggested that innovation meant change. It's a little more than that, of course. Innovation means something new, something that is outside the current box. It is not the same as productivity improvement, nor of cost reduction, nor of improved efficiency and effectiveness. although all these things may be an outcome. It is also not the same as science or technology. Adam Smith was an innovator, the Austrian economist Joseph Schumpeter was an innovator. Indeed, the phrase "creative destruction" that he coined has suddenly now become very popular jargon. 

The imposed linkage between innovation and science and technology is an example of the mental blindness created by definitional ambiguity, These ambiguities, the lack of  clarity or of questioning, act as blinkers: they force us to gallop down one track when we might be better on another. Our very obsession with innovation blinds us to the real possibilities of innovation. That is why I have doubts about Mr Turnbull's emphasis on innovation. He does not ask questions, he feeds us his pre-determined answers. 

Finishing by returning to the funding of basic research, during the 1980s I was an active proponent of the need for greater linkages between industry and universities, of the need to effectively commercialise research carried out in the university sector. By the early 2000s, I thought that the focus and process, however imperfectly carried out, had gone to far, far too far. I was particularly concerned with what I saw as the collapse of curiosity based research in all disciplines, not just science. How, I wondered, were new ideas to come through, how were existing structures to be challenged, how were issues to be clarified, when everything had to be justified by outcomes linked to pre-determined questions and measurable results, usually with a dollar sign attached?

Since then the position has got worse, especially but not only in Australia's "top" research institutions. The proliferating buildings and institutes based on special applied research areas are, to my mind, a sign of failure. Staff no longer have freedom to pursue questions just for curiosity. Adam Smith himself was able to think and write because of access to patronage. Very few people have that luxury today. 


2 tanners said...

I have any number of stories to confirm your view, married as I am to a former research scientist. In the '90s, she could only continue work as long as she could interest donors. The institute funded 50% of her project costs if the donation level was generous enough. Very largely, except for patrons, that's a recipe to kill curiousity-based research.

Anonymous said...

This is important stuff. I suggest a publicly funded review (with appropriate parameters, derived from a Senate hearing) to investigate the truth of this. Green/white papers to follow.

tanners: "she could only continue work as long as she could interest donors". A pole dancer once made almost the exact same comment to me :)


Winton Bates said...

Hello All
There is an article by Tim Dodd in the AFR today that seems highly relevant to this discussion. The PM had an interesting exchange of views with Glyn Davis about involvement of large corporations in funding research in universities. There are good reasons why some of the best business-university collaboration in Australia has been in research in agriculture and resources. See:

Jim Belshaw said...

I wouldn't object to that process, kvd. It has the advantage of potentially clarifying issues in a structured way. Couldn't read that piece, Winton, it's behind the paywall.

The agriculture case is an interesting one because there have been different models used. Earlier studies, I cant give links: I'm quoting from memory, showed very high benefit-cost returns from the earlier model in which research was funded and the results made freely available, disseminated through farmer organisations and extension services. I have written a little on one aspect of this, the role played by farmers and graziers in encouraging research and in experimenting on their own properties.

Later came multiple models. There has been very little analysis that I am aware of in regard to varying results. There was almost none when I first looked at this area in the 1980s, at least so far as Australia is concerned. I don't think there has been much since.

Prior to the 1980s, there was very limited interest in research based innovation outside agriculture and especially in regard to the new computing and communications technology. The late Don Lamberton's pioneering study into science and technology in Australia didn't mention these areas at all. It wasn't until the late seventies and especially the 1980s that interest grew.

There are several difficulties in all this from my perspective. One is the confusion between internal rates of return on specific research projects or projects in aggregate (the recent focus) as compared the broader cost-benefit approaches. A second is the sometimes blind application of theoretical models which, in conjunction with the usual policy instability, created a very unstable playing field.

I think an economic history study of all this would be instructive. I'm a bit tired of people reinventing wheels.

Winton Bates said...

Sorry about that. An extract from the article relating to the exchange between the PM and Glyn Davis:

"The Prime Minister pointed out what has long been a sore point with the Australian higher education sector. Universities in Britain, with their similar structure and academic culture, are far more embedded with major companies, and have access to far more business research budget than their counterparts in Australia.

"It doesn't actually make sense why this is so," Turnbull told Davis at the session. "What can we do about it?" he asked.

To Davis it did make sense. "We don't have the large corporations that invest in R&D to develop products," he replied, betraying his attachment to reality.

That was nowhere near an adequate answer for the Prime Minister who retorted: "So it's somebody else's fault."

Davis, undaunted, cited the example of the University of Warwick in Britain – which has research partnerships with Jaguar, Rolls Royce and Tata Industries – and the lack of such firms in Australia.

Turnbull was having none of it, deciding to lecture Davis on the dangers of defeatism and urging him to be more optimistic lest students lose faith in him.

Davis hit back, telling the gathering that his university was no slouch in making business connections where they could be made. It had spun out companies worth nearly a billion dollars in the last year and a half, he said.

The problem, the vice-chancellor said, was that the money had been raised in the US because Australian investors weren't interested. "So the production associated with those companies will be going to US," said Davis, unable to throw off his realism.

The Prime Minister came back with one more sally. "I'd say if you've spun out a billion dollars worth of business that's what you should be talking about. Boost that and you will attract more. That is a platform for growth – not something that you mention as a footnote."

Read more: But there is no guarantee that link will work either!

Jim Belshaw said...

Thanks, Winton. I'm with Davis on this one! Interesting blind spot on Mr Turnbull's part.

Winton Bates said...

It is difficult for political leaders to maintain the right mix of optimism and realism, and it seems to be particularly difficult for some to get the balance right between listening and lecturing. I think Sir Robert Menzies might have had similar problems.

2 tanners said...

Is a populist right a real danger for MT? The cancer of our immigration story defies Labor/LNP splits - both are committed to inhumane, hugely expensive non-solutions. One report I read (it was an opinion piece and in the Fairfax press, but I can't recall it to cite it) claimed that Abbott's "successful" stop-the-boats operation was mainly set in place by Rudd who wasn't around long enough to claim the populist benefits of its success. The main Abbott addition was a clamp on information and "trust us" rhetoric.

Who, politically, is going to challenge our boat people policy? Only the Greens, and with Labor and LNP singing the same song, the cross benches are unimportant.

On realism, I think MT's message was a little different. I think the argument was about funding, and MT was saying that the Government would fund success stories to claim reflected glory, not listen to piteous appeals that had no popular ring.

Academia, public servants, used car salesmen. Everyone benefits from their trade, no-one appreciates the people.

Jim Belshaw said...

That's a fair point, Winton. With Mr Menzies, he went through an earlier of baptism of fire that reduced his natural arrogance and improved his listening abilities.

Jim Belshaw said...

There are different issues, 2t. One is the erosive effects of current policies. I think that's not sustainable. There will have to be some changes.

Now, as you note, both parties are committed to certain policies. If they stick as they are, and I don't think that's possible, then it may well feed into a rise of the populist right. Is that a political danger for Mr Turnbull and the Coalition in the short term? In party political terms, perhaps not. Is that a danger for Australia? I would have thought so. Remember here my own positions are not unsympathetic to some elements of the popular right. But Australia needs them right now like it needs a hole in the head.

As I write, the Christmas Island imbroglio drags on. Minister Dutton says they are caused by hard core criminals. That may or may not be true. The Government will not be moved, Mr Dutton says. And yet, as I said, it is the Government that has created this mixing problem.