Comments on

1
Comments on Dave Mowery What does economic
theory tell us about mission-oriented RD? Ed
Steinmueller SPRU
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What does economic theory tell us about
mission-oriented RD?
An immediate answer not much Once one defines
a mission as a public good, the question need not
be asked. Implicitly mission-oriented research
is pure public good it is not that its funding
will be inadequate without this funding research
in service of the mission will not exist. This
is a blank cheque rationale by which allocation
is purely a political matter and thus subject to
stories of pork barrels and the like This,
however, is not the end of the story
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• In meeting the mission, knowledge is produced as
  a byproduct
• By creating or expanding components of national
  innovation system, e.g. university research and
  training infrastructure
• By generating spin-offs when commercially
  relevant opportunities emerge from pursuing the
  mission
• Through procurement particularly when the
  mission is a lead user or when needed knowledge
  is absent
• Vast differences exist in the share of the R
  component of RD between missions. Universities
  have a role in R and not in D.
• Modern US research universities built on federal
  research funding (with defence as a central
  component)
• But it would be useful to report on the
  diversification of the funding in 1963 versus
  2003 when NIH achieves its 70 share)

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• So, what is the problem?
• Universities pioneer new knowledge areas and
  have to accommodate to changing mission
  priorities.
• Diversity may matter mono-culture of Federal
  research funding may tilt balances within
  universities, atrophying capabilities that are
  needed by other sectors of the economy.
• Research without procurement may create a
  misalignment between knowledge generated and
  knowledge needed for commercial purposes
• Expectations of secondary payoff may be
  unrealistic, as in the Bayh-Dole model which
  attempts to unlock the hidden wealth of
  knowledge assets or engage dual use
  possibilities

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• What else?
• Mono-culture of funding closes the multiple
  windows strategy for funding promising ideas
  energy storage technologies might be useful for
  several missions, rationalising its relevance to
  health alone may be more difficult
• Relatively rapid shifts in mission without
  adjustment allowances favour richer universities
  and concentrates the formation of research
  relevant human capital
• Similarly, the move away from physical sciences
  and engineering de-constructs infrastructure
  that might continue to produce returns

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Future prospects? War without soldiers Energy
without emissions Knowledge without learning All
very tempting and scarythese too are
missions Waiting for a missionthe opening line
of Apocalypse Now
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Comments on Bhaven Sampat The Dismal Science,
the Crown Jewel, and the Endless Frontier Ed
Steinmueller SPRU
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• So, lets look inside one of the missions
• Rationale for NIH
• Yields health benefits
• Produces knowledge private actors would not
• To which Bhaven Sampat, asks
• How?
• Why not?

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Evidence on mortality What do we expect? Is the
goal eliminating death or premature death or
some type of avoidable death? Since death
still seems inevitable, the fact that a lot of
progress has been made in reducing cardiovascular
disease-related deaths necessarily means that
people are going to die of other causes If we
use the phrase health outcomes it is still
relevant to say that medical intervention
relative to diet, exercise, and genetic
pre-disposition remains unimportant this
doesnt mean that 44 dollars per year is a
wasteful expenditure
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• Appropriability
• Nelson-Arrow framework is not binary except at
  the limit, which is partially recognised by
  Sampat
• Indeed, we will have to be concerned now about
  how patents are administered (to generate rent or
  to maximise social welfare goals that are not
  mutually exclusive)
• Arguably, patents can produce benefits through
  avoiding development races (and thus are a
  basis for private investment in development
  efforts)
• How much private funding will be forthcoming if
  markets for knowledge are imperfect? Arrow and
  Nelson say less than socially desirable the
  margin is one rationale for public funding

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Governance Is the political process adequate to
oversee the management of public research (a case
of governance failure?) Reason to be concerned
fear of death is a powerful motivator In short,
there is good reason to believe that rationality
will not triumph It is easy to make this
observation and its corollaries --Some diseases
make good poster children --Other diseases are
stigmatised --Drama wins over the routine It is
more difficult to carry the alternative does
rational health care policy mean let the public
health technocrats decide? Or, more cynically,
if they want circuses why not given them
circuses?