European perspectives on the expected returns from investment in university

research[incomplete set of slides – 3 more to be added]

Costs & Compacts SymposiumCanberra

15th July 2008

Dr Mark MatthewsExecutive Director

Forum for European-Australian Science and Technology cooperation (FEAST)and

Research School of Social SciencesThe Australian National University

mark.matthews@anu.edu.au

© Mark Matthews, FEAST

Overview of talkOverview of talk• Stress the importance of Europe for Australian

research and innovation• Brief you on current developments in Brussels• Clarify what the Framework Programme is and is not• Highlight salient aspects of some specific national

experiences:– UK– France– Finland– Netherlands

• Draw some conclusions for policy-making in Australia

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European R&D matters on the global stage (and university R&D in particular)

European R&D matters on the global stage (and university R&D in particular)

© Mark Matthews, FEASTSource: OECD Main Science and Technology Indicators Database (Purchasing Power Parity basis)

The growth in Australian publications output is driven by international engagement

The growth in Australian publications output is driven by international engagement

Source: ISI data analysed for FEAST by the ANU Research Evaluation and Policy Project (REPP)

increase of approx. 200 publications per year

increase of approx. 600 publications per year

© Mark Matthews, FEAST

Source: ISI data analysed for FEAST by the ANU Research Evaluation and Policy Project (REPP)

Collaboration in science with Europe now outstrips that with the USACollaboration in science with Europe now outstrips that with the USA

© Mark Matthews, FEAST

Source: ISI data analysed for FEAST by the ANU Research Evaluation and Policy Project (REPP)

Multilateral cooperation with Europe and the USA leads to particularly strong impacts

Multilateral cooperation with Europe and the USA leads to particularly strong impacts

© Mark Matthews, FEAST

Policy context in EuropePolicy context in Europe

• Diversity in entrepreneurial cultures: with very specific national policy challenges– Individualist– Collectivist– Corporatist– Sustaining national cohesion

• The European Union, searching for– Cohesion– Subsidiarity– Global prescence– Social equity

• Diversity in how universities operate• But some converging trends emerging?

© Mark Matthews, FEAST

Work-in-Progress: the EC’s Survey of Research Funding Indicators and Characteristics

Work-in-Progress: the EC’s Survey of Research Funding Indicators and Characteristics

• Follow-up to 2006 report ‘Delivering on the Modernisation Agenda for Universities’– Europe needs autonomous, accountable, well managed and well

performing universities that are financially sustainable

• Challenges for universities in Europe are to handle:– growth in project based funding– diversification of funding streams– move towards the full recovery of research costs– Foster better financial management– adapt to a more competitive strategy-based environment

• EC Expert Group established to examine the impact of external project-based funding on financial management in universities

New comprehensive questionnaire launchedNew comprehensive questionnaire launched

• Research income sources• Co-funding model for top 3

funding sources– Formula-based core funding– Competitive-based funding– If competitive

• 100% of all research costs• 100% of direct costs only• Direct costs plus overhead (at what

%?)

• Funder conditions stipulated– Matched funding by university– Matched funding from elsewhere– Time sheets– Accountability of expenditure at level of

research project– Activity reports

• Primary methods used for allocating core funding to universities– Formula based using past performance

metrics– Formula based using current

volume/activity metrics– Set lump sum amount– Set proportion of national core funding

available– No core funding– Other

• Degree of autonomy where core funding received

– Free to use with no reporting requirement– Free to use with explicit reporting requirement– Must be allocated to specific activities

• Covers non-European nations (incl. Australia)• Opportunity to drive forward via a major

comparative policy analysis• Some “heads up” results already made available to

FEAST by the EC – but on a confidential basis at this stage

• Important to augment with work on evolving thinking on: – the nature and extent of the expected returns from

investment in university research

Findings will be extremely usefulFindings will be extremely useful

New CREST working group:Mutual learning on approaches to improve excellence of

research in universities

New CREST working group:Mutual learning on approaches to improve excellence of

research in universities

• CREST = Scientific & Technical Research Committee that advises the EC/EU

• New study a German suggestion in 2007• Review the scope, objectives and measures of national

policies to improve research performance in universities – excellence, relevance & impact

• Review the effect of these policies on universities re– Governance, strategies, performance & good practices

• Another opportunity for Australia to conduct a policy dialogue with Europe

The EU’s Framework Programme (€54bn: 7 yrs)The EU’s Framework Programme (€54bn: 7 yrs)

• Expected returns on investment are innovation related

• Industry-academic partnerships on critical path

• Not simply an academic research funding programme (point not always understood in Australia)

• Benefits from university researcher participation arise in the relevance domain not just in the excellence domain

Involves non-Europeans where national FP buy-in or niche capability on offer

Long-term intent to create a less nationalistic global cooperative research and innovation system

UK: The evolution of HM Treasury thinkingUK: The evolution of HM Treasury thinking

• The HM Treasury move to become more engaged in research and innovation policy– Combined Economic and Finance Ministry profile generated strong

incentives to get more engaged (productivity drivers plus spending accountability)

– meshed with internal departmental spending advocacy structure: structural incentive to grasp policy issues

• Consequences:– Flaws in the ‘linear model’ became apparent– Over emphasis on IP/commercialisation avoided

• role of Universities UK/AURIL IP strategy report: driven by Treasury & Cabinet Office

– Initial short-termism overcome– Arguably, too great an emphasis on corporatist thinking: not well aligned

with robust entrepeneurship

• Realised that universities can deliver against complete over-arching policy framework1. Create new businesses2. Improve the performance of existing businesses3. Improve public policy and public services4. Delivery highly qualified people to the labour market5. Attract (overseas) R&D investment from business: “straight to GDP”

• Evolving priorities• Take much longer term view• Deal with backlog of under investment in research infrastructure• Identify highest yielding areas• Move beyond concern with formal R&D and into service-based

innovation/creativity• Define 10 year priorities

UK: The evolution of HM Treasury thinking (cont)UK: The evolution of HM Treasury thinking (cont)

Additional slides to be added

• Brief country profiles for– France– Finland– Netherlands

• Each highlighting a particular policy issue

Some conclusionsSome conclusions• Exploit the potential generated by microeconomic reform in

the economy as a whole – engage with Central Economic Ministry priorities more effectively

• Foster creativity via greater support for cultures of entrepreneurial risk-taking– move to a more integrative ‘whole of education’ ethos (schools as

a locus for nurturing creativity)– learning-by-doing from the creative economy policy narrative

• Locating university research capability in this human capital-based policy narrative

• Avoid mechanistic policy narratives: focus on agency not structure?

• Fairness to future generations – the very very long term view of what university research does

• Full costing of research is important, but…..... The capability to develop good effective strategies will be

critical to making Compacts work - particularly in getting “bottom up” strategy definition (hence the link with entrepreneurial risk taking/creativity)

• In short: trend for the expected returns to move away from ‘mechanistic’ narrowly defined outcomes and toward a more general ‘enlightenment’ ethos with human capital centre stage

Some conclusions (cont)Some conclusions (cont)

Next stepsNext steps• FEAST can facilitate a policy dialogue between

Australia (via Go8) and the EC– Brussels keen to be briefed on this Costs &

Compacts symposium– Use that meeting to agree a way forward (sharing

data, ideas and experiences)?