Malta scores quite low in most competitiveness indices in the area of research and this is often interpreted as one of the reasons why we may not be attracting the right type of foreign direct investment. Successive governments have often pledged to change this negative trend by allocating more money to research.
It was no surprise that Malta University biochemist Alex Felice pleaded for more money for basic research at the university. He said: “We need to have a debate on how much we are investing before trying to spread it across different initiatives. Otherwise we are not going to improve the situation”.
Research and development is a very broad term that needs to be well understood before more pressure can be put on the government to make use of taxpayers’ money to increase the amount we spend on research.
Ben Bernanke, former chairman of the Federal Reserve, in 2011 said: “The economic arguments for government support of innovation generally imply that governments should focus particularly on fostering basic or foundation research.” Basic research has as its objective “a fuller knowledge or understanding of the subject under study rather than the practical application thereof”. This is the kind of research that usually takes place in universities.
But universities are not the only players in the R&D field. Industry is one of the biggest promoters of applied research, which is directed towards gaining knowledge or understanding for determining the means by which a recognised and specific need may be met.
Industry-applied research includes investigations directed to the discovery of new specific knowledge having particular commercial objectives with respect to products, processes or services. This kind of research rarely gets mentioned mainly because those who undertake it jealously guard the results of their work from their competitors.
Prof. Felice’s is right when he says that €600,000 for basic research at the university is inadequate. He also pointed out that “Malta spends more than €23 million on giving postsecondary students an €80 monthly stipend”.
Any proposal needs to address how the university can strike deals with private industry through which the latter supports more basic research in return for academics getting more involved in applied research.
The relationship between R&D and economic growth is complex but several economic studies come to the conclusion that it is very significant.
R&D is a good investment for business but a risky one. The majority of R&D projects fail to provide the expected financial results and the successful projects (25 to 50 per cent) must also pay for the projects that are unsuccessful. The promoters of basic academic research cannot ignore the harsh economic realities that both the country and private industry are facing.
Another reality is that Malta’s economy is increasingly becoming services oriented. It is inevitable that more of our R&D efforts at an institutional, educational and business level should be focused on service industries.
The future for R&D projects is likely to lie in the formation of consortiums where several businesses with congruent interests join together with educational organisations and institutions to research ways of developing more advanced products and processes. The results of such joint R&D projects can then be transferred to business operations and customers.
Examples of such research in the context of the Maltese economy would be on how climate change is likely to impact the tourism industry in Malta and how to prepare for this evolving reality.