University research ‘spillover’ undervalued: Schmidt

Joseph Brookes
Senior Reporter

Australian universities are creating “genuine productivity spillovers” long before research is commercialised, according to Professor Brian Schmidt, who warns the demonstrable economic benefit of discovery research is being overshadowed by a funding and political system that favours “widgets”.

In a talk at the Universities Australia Conference last week, the Nobel Prize winner and Australian National University vice-chancellor called for a more nuanced conversation on the impact of universities’ wide range of research.

“By doing research in this foundational curiosity driven work, you actually raise productivity in a demonstrable way. The challenge politically is they want to have the story of saying ‘this research created a widget that employs people’.

“But the productivity spillovers don’t work that way,” Professor Schmidt said.

“They’re very, very complicated [and] interactive between many, many modes of the economy, and so there’s not a simple story.”

ANU vice-chancellor professor Brian Schmidt Image: ANU/Jamie Kidston

Professor Schmidt referenced research by UNSW economist Professor Kevin Fox, who studied the contribution of research and innovation to productivity.

The 2014 study found research and innovation impact is difficult to understand and has been “largely ignored” in Australia’s National Accounts. But Professor Fox showed government support for research and innovation had contributed to productivity gains through “spillover” to the market.

The impact varied depending on where the money was spent.

“The empirical findings suggest that government research agencies and higher education are areas with more potential gains…The paper finds strong evidence of productivity benefits from public spending on Commonwealth research agencies and higher education,” the study concluded.

“However, the results suggest no evidence of spillover effects on private productivity from public support to the business enterprise sector, multisector or defence R&D.”

Professor Schmidt said the UNSW research was the best economic analysis on the contribution of foundational research and supported universities role as “unique institutions”.

“Within curiosity, foundational research, we’re the only institutions in the world that do that. And that’s a really important part of the engine of growth.”

The ANU vice chancellor said the university sector would benefit from better demonstrations of the wider impacts of its research.

“We clearly have a role in translation, and translation is important, but it’s not the place where we are the only institutions. It has to be done in partnership,” he said.

“And I think one of the things that we need to think about in those conversations with Australia, specifically the policymakers and the politicians, is ensuring that when we do talk about translation, it makes sense in the same clear economic logic that they hold us to account to in other areas.”

He said that is not happening.

“I think we have a lot of what I would describe as very non-commercial programs that essentially splash money around but don’t actually kind of pass the economic tests.”

Professor Schmidt said investment in research translation should go to projects with “additionality” – it would not otherwise happen on its own – and address an area of market failure.

“It’s a place where you need government to put things in, for example, because the benefits of the research and the translation can’t be captured by the market. It kind of sprays throughout the economy,” Professor Schmidt said.

“So we need to really be rigorous and work on it. But I would say it’s a conversation that has a long way to go.”

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