As the Rector of the University of Groningen, and an economist, I am often asked why universities receive so much public funding for academic research. What is the use for society? A simple first response is that academic research is one of the best possible investments. The proposal for the next EU Framework Programme for Research and Innovation, Horizon Europe, demonstrates the relevance of the question.
A European Commission impact assessment shows that the €100 billion investment between 2021 and 2027 through Horizon Europe could generate more than 100.000 research and development jobs by 2027.
Furthermore, the Programme will lead to an extra €800 to €975 billion in economic output over the next 25 years. This return exceeds by far the yield of any other asset.
We are becoming ever better at calculating the return on investment in research. The economic and social benefits of academic research are clear. For example, Nature recently published an article noting the significant impact of Europe’s flagship programme for research: the European Research Council (ERC). The article quotes the annual assessment of the ERC on the results of its funded and completed projects.
Science Business also pointed to the excellent return on investment in research by mentioning in a report called “Why fund research” that “there is overwhelming evidence from multiple sources to justify research as one of the best investments that can be made with public (and private) funds. Rates of return are of the order of 20-50 per cent [annually].”
Public research and development expenditures generate impact through two main channels. First, the so-called total factor productivity (TFP) – an economic measure of technological progress - increases via innovations and especially the implementation and adoption of those inventions. Increased TFP ultimately benefits all, because national income grows. Secondly, productivity increases when people attain higher skill levels through education. So, saving a bit more and raising public investment in the interest of future prosperity really works. However, a bit of patience helps, because some returns will not materialise in the short term.
With public funding for research being clearly such a good investment, I call upon the European Commission to take the extra step and double the funding for the ERC and the Marie Skłodowska-Curie actions in Horizon Europe, as proposed by the university sector and the European Parliament. If the European Union wants to be as competitive as China and the United States, it should step up its investment in curiosity-driven research.
Public investment in research has helped raise standards of living, combat hunger and increase life expectancy. These are examples of achievements that would not have been possible with only safe and comfortable investments. Public funders should better reflect on how investment in curiosity-driven high-risk research pays off in the long run. Ultimately, investing in academic research is one of the best investments you can make, for the economy and for society as a whole.
All views expressed in this article are those of the author(s) and do not necessarily reflect those of EUA.
The European Commission’s proposal for the next Framework Programme for Research and Innovation (Horizon Europe) shares broad similarities with Horizon 2020, but there are some significant differences that should be pointed out.Read more
The proposal for the next Framework Programme for Research and Innovation, also known as Horizon Europe, has been published by the European Commission. Universities and research centres across Europe are welcoming with excitement the budget increase dedicated to research and innovation, as compared with the current Horizon 2020 programme. Although this is undoubtedly an important milestone for European Science, a bitter feeling remains. Despite the increase, the proposal is far from the ambitious financial scenario that the European science community was expecting.Read more