The State and the Usefulness of Fundamental Science

The recently announced reform of the Ministry of Education was one of the few announced so far by the new government, and many of its details are still unclear. The announcement of the dissolution of the Foundation for Science and Technology (FCT), the body that funds almost all scientific research conducted in Portugal, and its replacement by the new Agency for Research and Innovation (AI2), provoked some optimistic reactions, but above all, concern and disapproval, even from the President of the Republic himself.

Ironically, much of the national scientific community spent many years criticizing the FCT, a sentiment I never shared. The real criticism and dissatisfaction weren't with the FCT itself, but with ministers and policymakers who systematically devalued this sector, underfunded science, and, what's more, did so irregularly (hence the unpredictability of the competitions, their implementation, timing, and format). In fact, FCT competitions, for all their problems, have always been far more meritocratic than the internal competitions at Portuguese universities, where scientific merit is all too often relegated to a secondary importance, driven by inbreeding and patronage.

Portugal is far from the 3% of GDP investment in R&D (Research and Development) recommended by the European Union, a target achieved by countries such as Germany, Austria, Denmark, Sweden, Belgium, and Finland . Outside Europe, this target is far surpassed by the United States, South Korea, and Japan , and China is at 2.6% of GDP in R&D, but this has been on a sharp upward trend over the last decade. We remain at 1.7% of our GDP, and contrary to popular belief, most of this investment is private . Only 0.6% comes from the state , with much of this money coming from European funds rather than our taxes. These are our country's priorities, shared by the recent Socialist Party (PS) and PSD (PSD) governments . Both parties are more interested in other sectors with greater electoral returns, with a short-term focus.

We still don't know how the new Agency will operate or how its budget will be allocated. But it's important to highlight a few things from the clues already provided. First, the elimination and replacement of government agencies often end badly — or , at least , they go through a long period of adaptation where everything works worse. The recent example of SEF/AIMA illustrates well the dynamics that often arise after the initial political decision.

Secondly, and more importantly, the merger of the Research and Innovation components — which until now were separate entities — into a single agency appears to be the major change announced, confirmed by numerous statements about the need to "connect" scientific research to Portuguese companies and the economy. This type of statement sounds good and certainly makes it easier to garner political support for scientific research funding. It's difficult for many voters to imagine the concrete usefulness of public spending on science when compared to other areas. And it's even more difficult to move away from a logic in which investment in science must have a tangible economic and social return, which , to be "visible , " ends up being inevitably short-term .

Scientific research is usually divided into two branches: applied science (with immediate commercial and economic purposes ) and basic or fundamental science. The idea that the former yields greater economic returns is widespread —among both politicians and voters — as is the idea that private investment in R&D has a greater economic impact . In fact, research shows precisely the opposite. The impact and return of basic research are much greater because it enables innovation in more areas . Patents more often cite so-called "basic" scientific research than applied research. The reason why fundamental research ultimately generates a greater return is simple: it is nearly impossible to predict all the areas and effects that a given research project can bring.

A recent analysis by economists, based on a massive database of French companies, concluded that basic research ultimately has greater spillovers into the economy. "Basic" research is used in a greater number of industries, while applied research tends to be too limited in scope . The article , published in a prestigious economics journal by Ufuk Akcigit and co-authors , has an even more interesting main conclusion: private companies tend to overfund applied research in their own R&D investments and underfund fundamental research. The state's most important role is, therefore , to fund basic science , correcting this market distortion , which already overly focuses on applied science . This is the smartest, most efficient, and most welfare-generating investment .

Public investment in R&D in Portugal is far below what would be desirable. Economist Arnaud Dyevre, in a recent and meticulous study , concludes that public investment in R&D in the United States has a productivity impact two to three times greater than private investment. But public underfunding is not the only problem in Portugal . The sociological problems of the Portuguese university environment and its formal and informal norms also hinder the development of our scientific research. But this topic deserves its own column.

For now , beyond underfunding, I simply note how Portugal is chronically, excessively , and almost exclusively dependent on European funds for these investments . These funds often have overly restrictive rules regarding what can be financed —and they are not supposed to constitute the entire investment in science . However , our taxes are used for other political priorities . For example, in September, Portuguese retirees will receive an extra check of between 100 and 200 euros, without any logical justification , which will cost us 420 million euros — more than two-thirds of the FCT's annual budget.