Make science great again

Although former president Obama was quick to nominate his science advisor there is no clear pattern among either Democrats or Republicans with regards to science’s position on the presidential agenda: Key advisory positions are often filled only months after inauguration. While Obama has been hailed by his former science advisor as the most science-savvy president since Thomas Jefferson, the various marches for and against science, the invention of alternative facts or questioning of global warming do not bode quite as well for the incoming president’s scientific nimbus and willingness to take much advice on science policy. Indeed, Trump’s budget chief Mick Mulvaney questioned the need for government funded research altogether and although potential science advisors had been contacted by the transition team they haven’t heard back as of yet.

The low priority of science in many US presidents’ platforms and policies is unfortunate but not surprising — the contribution of basic science to corporate innovation and breakthrough discoveries that are touching our lives is vastly underappreciated by the general public and policy makers alike.

At first glance, Mulvaney appears to have a point: The list of the top organisations who have been granted U.S. patents in 2015, a metric seen by many as an indicator of innovativeness and prerequisite for sustained growth due to competitive advantage reads like the who-is-who of American Fortune 50 multi-nationals: Apple, Google, General Electric, Amazon, Boeing and the like are found among top patent grantees.

IBM is the undisputed leader of the pack — for years in a row the company has received the most US patents, a whopping 7,440 in 2015 alone. That is one patent per every 52 IBM employees (386,558 employees worldwide), innovative pharma giant Johnson and Johnson are in 32rd place among the top US patent grantees and have filed for one patent for every 117 employees (1,085 patents filed with a total 127,100 employees).

The most prolific among predominantly publicly funded research institutions — the University of California system — in comparison comes in at a meagre 87th place, or only 1 patent per every 388 faculty. That is despite a research budget of 4 billion USD (p. 108 here) which is not too far away from IBM’s 5 billion and about half of J&J’s 8 billion.

The observed disparity between the quantity of federal funded and corporate breakthroughs leading to patent registrations is however what we would expect following Peter A. Hall and David Soskice’s Varieties of Capitalism theory whereby liberal market economies like the US are characterised by radical innovation as opposed to incremental innovation prevailing in coordinated market economies. We would expect the US corporate environment to be heavily invested in the pursuit of breakthrough innovation and its patent protection.

This is also reflected in private versus public spending on R&D — whereas it is roughly two to one in the US it is opposite in Germany who invest 2.8% GDP into R&D in total, whereas the public portion of this funding amounts to around 2% GDP.

Interestingly, in Germany, a coordinated market economy characterised by more incremental rather than breakthrough innovation within the industrial sector, the share of academic patents amounts to as much as 5% of all patents granted. Furthermore, there is at least a correlation between comparatively high public R&D spending (around 1.8% GDP on average) in European countries that also score highest in innovation and competitiveness (Denmark, Finland, Sweden next to Germany — all coordinated market economies).

The state, supported by higher spending, is hence able to (i) generate unique and breakthrough innovations and (ii) fill the entrepreneurial function by further developing and exploiting these innovations through patent protection and onward development. In fact, Japan has increasingly done so: The number of patents filed by universities went from 76 in 1996 to 1679 in 2003 (table 1 here).

We can thus imagine a sliding scale of the involvement of the public sector in the development of new discoveries; the weaker the breakthrough innovation culture within industry, the stronger a role the state can — and in many cases will — play. Indeed, a majority among the most innovative public research institutions as per Reuters ranking are situated in coordinated market economies like France, Germany and Japan.

Does that mean that the US can make do without public research and leave it to industry alone? The answer is a clear no. Although a — judging from the distribution of R&D spend — large portion the development and exploitation of innovative ideas happens within the US private sector, American companies rely heavily on basic academic research when filing patents: The average US patent application cited 3 scientific publications in 2003 compared to only 1 in Germany or 0.5 in Japan (table 3a here).

Public research is hence an important enabler for US corporate innovation. Whereas the US private sector seems to scoop up insights from academic research early on, other countries, with less innovative industries, seem to push development further within the public sector.

A recent example for this difference in public-private R&D mix is the discovery and development of CRISPR/Cas9 technology. Discovered at the aforementioned University of Berkley, California, it is a powerful tool to edit genomes in a targeted fashion. Thanks to CRISPR/Cas9 the unthinkable is now almost within arm’s reach — medicine may finally be able to cure genetic diseases by deploying targeted gene editing to affected cells in the body. However, to get to this point, researchers need to refine and extensively test the technology. In the US, this development happens within large established pharmaceutical firms as well as newly founded startups based solely on the new technology. In China, on the other hand, the state controls both universities and most larger pharmaceutical companies. The result? CRISPR/Cas9 is already in clinical testing giving China a tremendous edge.

The moral? Whereas industry relies heavily on academic public research for its development of true breakthroughs, public research does not necessarily depend on industry in order to go all the way. The answer should thus not be less but rather more public research.

The incoming science advisor may enhance the linkage between public and private research by fostering, incentivising and facilitating technology transfer between the two sectors. NASA’s technology transfer programme is a beautiful example and should lead the way for more public-private exchange initiatives. In parallel, the US may also actively work towards pushing the slide towards further development within the academic sector itself following China’s example. The drug development programmes at Stanford and collaboration initiatives of the ten largest cancer centres to accelerate clinical testing of new oncology drugs are prime examples of predominantly public sector institutions working together to achieve economies of scale and pushing development of ideas further than mere academic publishing.

By fostering academic research, a state can hedge against slowing innovation within its private sector while retaining knowledge and further building innovation capacity — provided of course publicly funded research is not left off the budget.