Few could disagree that research and development (R&D) is a critical success factor for the economic strategy of most countries. The challenge that every administration faces is how to embed R&D in a national strategy to ensure that it promotes economic growth.

The president of the Chamber of Commerce Frank Farrugia insisted, just before the new Cabinet was announced, that a Cabinet member for R&D is ‘a must’. As things turned out no minister or parliamentary secretary was given a specific brief to handle the R&D function in an exclusive way. Does this undermine the role of research in our economic strategy?

There are various aspects to R&D. The objective or academic and institutional R&D is to obtain new knowledge, which may, or may not, be applied to practical uses. In contrast, the objective of industrial R&D is to obtain knowledge applicable to the company’s business needs, that eventually will result in new and improved products, processes, systems, or services that can increase profits.

Embedding R&D successfully in economic strategy will be successful if a multi-pronged approach is adopted. Basic research is usually conducted in tertiary education institutions where the objective is to gain a fuller knowledge or understanding of the subject under study, rather than a practical application thereof. The Minister of Education should therefore be responsible for ensuring that our University, and other tertiary institutions like Mcast, should be given sufficient resources to conduct basic research effectively.

Applied research in a business environment is directed towards gaining knowledge or understanding necessary for determining the means by which a recognised and specific business need may be met. The former Federal Reserve chairman Ben Bernanke says that: “The economic arguments for government support of innovation generally imply that governments should focus particularly on fostering basic, or foundation, research. The most applied and commercially relevant research is likely to be done by the private sector, as private sector firms have strong incentives to determine what the market demands.”

The relationship between R&D and economic growth is complex, but several economic studies have come to the conclusion it is very significant. The challenge that small countries like Malta face is the lack of significant clusters of organisations that need to cooperate to make the expenditure on R&D effective.

R&D is 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 must pay for the unsuccessful. The most promising prospects for beneficial results from expenditure on business R&D can be gained by attracting international successful businesses to involve Malta in parts of their research efforts.

Promoting R&D is a multi-faceted task that involves a number of government ministries. Coordination between them and the business community is essential as is the promotion of cooperation with international business and research organisations.

Ideally a consortium of several companies with congruent interests join forces with educational organisations to research ways of developing more advanced products and processes and in transferring the results of their R&D to operations and to customers.

What is really needed is a shared vision of how to embed R&D in all aspects of economic planning.

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