In the first episode of our podcast this year, with the economists, Prof. Joanna Tyrowicz from the University of Warsaw and GAPE Research Centre and Prof. Łukasz Woźny from the SGH Warsaw School of Economics, discuss private research funding.
The podcast guests point out to a significant loophole in the Polish innovation landscape, a severe lack of private-sector investments in basic research. Public research funding in Poland is still below the country’s potential. At the same time, private-sector investments in basic research are virtually non-existent, setting us apart from the most developed countries.
Prof. Joanna Tyrowicz studies the labour market and business sector. She is a member of the Monetary Policy Council. Prof. Łukasz Woźny analyses the use of game theory in economics. His research findings were applied for consulting projects for large companies.
The discussion begins with a common question regarding the “usefulness” of the research. Our guests point out to the fact that this way of thinking fails to capture the process of generating new knowledge. Basic research evolves at the boundaries of human understanding where specific application is not yet determined. Application comes later, often with a delay.
Prof. Łukasz Woźny refers to the history of economics and physics where major advances occurred when research was free from constraints of ongoing improvement of industrial processes. A theory and understanding of a certain phenomenon are usually followed by practical application, often years later.
The next questions concerned the experience of other countries. How is basic research funded by the private sector in systems where it is a permanent feature? Prof. Joanna Tyrowicz refers to the systems of Western Europe and USA where academic chairs are sponsored by companies, and research teams and long-term basic research programmes are supported by family foundations. In these approaches, it is crucial that sponsorship and financial support do not come with any expectations regarding specific topics or quick results. Instead, support is directed to researchers and their research potential.
An important part of the discussion is whether private funding might lead the state to cut its already limited spending on science. Łukasz Woźny points to the so-called multiplier effects in countries like Japan and Korea. Every public penny invested in high-quality research can trigger additional private funding, creating a snowball effect. Observing the achievements of researchers publishing in top journals, businesses start to appreciate their prestige and see the point of supporting their work.
Private sponsorship of science, as with the arts and sports, merely creates the conditions necessary for the development of talent and knowledge. Prof. Joanna Tyrowicz emphasises that enterprises can benefit from the scientist’s unique perspective to see certain business aspects that are not necessarily seen by consultants. Experts suggest that enterprises should take the first step by sponsoring specific academic positions for doctoral students, thereby creating new academic chairs with relatively low outlays.
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Selected statements
Business vs Boundaries of Human Understanding
In public debate, there is a growing tendency to argue that science must be commercialised, and Polish science is not commercialised enough. It is hard to tell what it actually means and how it is manifested. It often sounds like a criticism towards researchers who fail to seek funding through their research or develop revenue-generating inventions.
When looking at it from another angle, we do not want researchers to seek funding. They should rather focus on their work that advances the boundaries of human understanding, where there is usually no business. Business reaches these boundaries several years later, when everything is already understood, diagnosed, pass the engineering application processes for specific use, be it service or industrial production (…) In other countries, basic research is supported by business as part of its fundamental responsibilities. Academic chairs are named after their sponsor companies, research is supported by family foundations and research centres established through private funding.
Joanna Tyrowicz
Science Needs Freedom
In their memoirs, Noble Prize winners often say that major advances in economy occur when it is free from constraints of ongoing improvement of industrial processes - to produce faster, better, and more efficiently. (…) The same applies to physics. When improved production is no longer the focus and a step back can be taken, some may say to a more theoretical approach, there is a rapid acceleration in the research progress. Interestingly, applications often appear years later.
Łukasz Woźny
Sponsorship Without Guaranteed Results
It is hard to lose face when one invests in science. The true value lies in the knowledge that is generated, even if its future applications are not yet clear. (…) The situation in science is not much different from private sponsorship of the arts and sports where success cannot be guaranteed and the whole point is to support talent development. The same applies to science. Those who fear that sponsoring basic research may harm their image need not worry, as research development alone is highly valuable.
Joanna Tyrowicz
Multiplier Effect of Funding
Literature refers to the so-called multiplier effect which means that every penny of government spending for research and development is either withdrawn by or contributed to business. (…) We have data from multiple countries showing that the results are often positive. It seems that this would be the case in Poland. If public spending [on science] was higher, we would have even more amazing researchers and subsequently, business would see the point in supporting their work. This is more like a snowball effect than mere replacement of one source of funding with another.
Łukasz Woźny
You can watch our previous podcasts in video format:
- Research That Pays Off featuring the Krzysztof Jóźwiak, NCN Director, Krzysztof Pyrć, President of the Foundation for Polish Science and Wojciech Fendler, President of the Medical Research Agency
- Next-Gen Science. The Future is Now featuring Agata Starosta, Aneta Pieczka and Maciej Stolarski
- Science in a Frontline Country featuring Justyna Chodkowska-Miszczuk and Michał Parniak