Summer - the days of newsroom doldrums and silent Oireachtas chambers. "Silly season," says a former cabinet minister, "all the journalists are on vacation", implying that August scribes are not worth reading. I almost agree. On tranquil sunny days it is easy to miss the real point of summer politics - the subtle buzz of reviews quietly setting the stage for budget submissions in September.
Since the end of July two documents outlined a taxpayer-sponsored Great Leap Forward to bring Ireland into a brave new world of research-driven success. First was the Committee on Science, Technology and Innovation (CSTI) report titled "Building Ireland's Knowledge Economy". CSTI promised to deliver a "national pro-innovation culture supportive of invention, risk-taking and entrepreneurship" by, among other things, more than doubling Government spending on research and development from €422 million in 2001 to €1.1 billion by 2010.
The authors said: "The Government should continue to strengthen support for R&D in the higher education and public research sectors." The second report came from the Higher Education Authority (HEA). "The Programme for Research in Third-Level Institutions" also calls for a "consistent and sustained investment [in science\] by the Government" through the year 2016. Both reports cover an array of policies to foster growth in private sector R&D expenditure. Yet, it is clear that the HEA and the CSTI see State involvement in scientific and applied research as central to Ireland's economic progress.
The problem with all of this is simple - public financing for R&D is largely a waste of taxpayers' money. A recent Organisation for Economic Co-operation and Development (OECD) report on sources of economic growth finds no evidence to support the assertion that publicly financed research is productive. More than that, the report states that public research and development spending "crowds out resources that could be alternatively used by the private sector".
Two other documents confirm the mythical nature of the claim that science is a public good that can be effectively supported by State funding - the EU Commission documents "Towards a European Research Area (2003)" and the "Innovation in Europe" (Eurostat, 2004). Only 3 per cent of European enterprises view government and non-profit research facilities as being an important source of support for innovation. Since 1988 only 30 per cent of research-intensive EU enterprises were recipients of public R&D funding.
Considering that large enterprises, many of which represent the state sector, get 48 per cent of public funding, the EU-wide effectiveness of public expenditure on R&D in the private sector falls below 2 per cent, or 2 cent for every €1 spent.
Within the OECD the leaders in R&D investment and the most research-intensive countries, namely Sweden, Switzerland, Japan, Israel, the US, Belgium and Finland, all have a higher proportion of business investment and lower share of government spending in total than Ireland.
Although Irish public R&D budgets grew at an average rate of 12.3 per cent a year between 1997 and 2003, the leading countries' average growth rates were 3.7 per cent a year. Relative to Ireland, all research economies had a lower proportion of scientists employed by the government.
Compared to our successful competitors, Ireland has a high expenditure per Government-employed researcher, low expenditure for the private sector researchers and a similar level of expenditure for those in higher education. As a result we have relatively low productivity in the R&D sector. We are sixth in terms of the growth of publicly employed scientists and 15th in terms of the R&D intensity of our economy.
Adding insult to injury, our position continues to deteriorate - of 15 EU countries, Ireland shows the steepest decline in the average annual growth rates in R&D intensity from 1997 through 2001. In other words, we invest more like a research-poor country than a science-rich one.
Why? For years Irish supporters of State-run education and research nurtured a firm conviction that science is a public good, arguing that the market should not be entrusted with incentives for investment in either education or research.
Yet, economists knew all along that this is simply not true. Over the centuries people living under the spell of totalitarian regimes invested in knowledge - the most private form of property that no state can take away from the owner.
Nobel Prize winning Gary S. Becker, Robert W. Fogel and Theodore W. Schultz, alongside R&D guru Edwin Mansfield, supplied extensive research documenting the high costs of transferring scientific knowledge from the individual to society. These costs make it unprofitable for companies to copy others' inventions. Precisely for this reason, competition in the marketplace is more effective in producing incentives for investment in R&D and science.
At €1.1 billion a year, the cost of Government involvement in R&D funding to the Irish taxpayer may be relatively trivial, but the potential damage to our society from the continued adherence to the idea of State-sponsored science is not. Government spending on these activities crowds out private investment, centralises research and reduces the competitive nature of scientific discovery to a cartel-like setting of plans, programmes and directives.
It also, deceptively, gives the impression of activity, erecting barriers to R&D entrepreneurship. Increasing Government spending does not address such issues as creating proper price-incentives for science and education, or creating the regulatory and immigration climate to support research.
For example, over €25 million in taxpayers' money has been sunk into Media Lab Europe. What are the chances of any return on this "investment"? Something to ponder over during this "silly season".
Constantin Gurdgiev is a lecturer in Economics (TCD), research associate (Policy Institute, TCD) and a director of the Open Republic Institute.