January 20, 2006

Innovation and the Scientific Wealth of Nations

In 1997, Dr. Robert May of the UK Office of Science and Technology wrote a very influential article in Science magazine entitled The Scientific Wealth of Nations (PDF format), sorting through the relative strengths of the world's nations in terms of their share in creating scientific literature. A wave of further research and government policy tinkering followed, responding in part to the dot.com bubble of the late 90s.

In July of 2004, Dr. David A. King (of the same UK Office) followed up May's research with an article in Nature entitled The Scientific Impact of Nations (PDF format) which went even further in detailing which particular disciplines were best represented in different parts of the world, and which countries were most represented in the critical "top 1% cited" scientific articles. The top eight countries, at the time, represented 84.5% of the most influential scientific articles published.

The "usual suspects" in Scientific Impact appear, both as major contributors to the scientific literature and as countries which make significant contributions even in relation to their relative wealth and population. Indeed, the chart below, fiddled on the X and Y axis could just as easily be a chart of per capita income, OECD standard of living ranking, Transparency International corruption ranking, Freedom House ranking, etc. etc.


The work of May, King, and other scholars has highlighted both the importance, and the relatively uneven distribution, of research and innovation across the world. Basic research funding (a mania of both governments and venture capitalists in the US and Japan) is often the foundation for technological breakthroughs and vast intellectual property incomes. Yet for many nations, such financial commitments are not seen as a central priority.

Converting the scientific strengths of each nation's universities and corporate labs into productive economic growth and jobs is no easy matter. The former do not automatically lead to the latter.

An EU initiative to increase effective R&D spending in 2000 (the "Lisbon Agenda") to gain parity with the US has had limited success, to put it most diplomatically. In a report published Friday (Jan 20), an independent Expert Group commissioned by the EU "urges Europe’s leaders to take radical action on research and innovation “before it is too late” " ... UK Telegraph article. The authors "propose a 4-pronged strategy focusing on the creation of innovation friendly markets, on strengthening R&D resources, on increasing structural mobility as well as fostering a culture which celebrates innovation."

The reported, effective abandonment of Europe by pharmaceutical companies, for example, is occurring at the very moment that the synergy of computation, biotechnology, and medicine is just getting underway (cf. earlier posts on Ray Kurweil's book The Singularity is Near). Europe's world-class scientists and corporations tend to focus on important, profitable but well-established fields. Meanwhile, the international ties associated with "frontier" research create wealth and productivity gains that pass much of Europe by.

Even when knowing what has to be done to encourage greater innovation, nations struggle to change attitudes in government, business, and society. Will adding more money and committee members to the problem boost innovation in Europe? Northern Europe, however, and the Anglosphere seem to have some systemic cultural advantages which leverage available people and money, in ways that translate into broad national productivity boosts. As social scientists still struggle to identify what "made" Silicon Valley or Route 128, the possibility exists that such places simply can't be reverse-engineered. Perhaps they happened by chance ... the "wisdom of crowds" just kicking in spontaneously. A case in point: Cambridge UK's science park, intentionally built to mimic the benefits of Silicon Valley, and now being enthusiastically used to convert British university genius into practical solutions ... by American and Japanese corporations!

National science policy, and its results, is one of the great slow-motion spectator sports for the technology-minded. For readers of this blog, however, monitoring the net flow of post-docs around the world, and of the head offices and labs of the high-tech multinationals, might be a faster way to track the scientific wealth and scientific impact of nations. "Planning for innovation" with painfully sincere EU Expert Groups seems like a thankless task.

Posted by jmccormick at January 20, 2006 11:35 PM

As with the Heritage index, it's interesting to look at the large-state/small-state distinction. Again, the Nordicsphere and the small Germanic nations do as well or better than the Anglosphere; look only above 5 million population the Anglosphere nations tend to predominate, although not as much as on other indices.

Posted by: Jim Bennett at January 21, 2006 10:54 AM

From the Wikipedia entry on Ashkenazi Jews: Ashkenazi Jews also perform highly in correlated areas. For example, while only 0.25% of the world population is Jewish, Jewish scientists make up 28% of Nobel prize winners in physics, chemistry, medicine, and economics, and have accounted for more than half of world chess champions.[10] In the U.S., Ashkenazi Jews represent 2% of the population, but have won 40% of the US Nobel Prizes in science, and 25% of the ACM Turing Awards (the Nobel-equivalent in computer science).

The Ashkenzim are Northern European. Nearly all Jews in the Anglosphere would be descended from the Ashkenazim, who settled communities along the Rhine.

Posted by: Assistant Village Idiot at January 21, 2006 09:12 PM

That fool Hitler gave us many of the key players of the Manhattan Project. Of course he didn't believe in "Jewish physics" anyway -- that was the kind that made tthe A-bomb work.

Posted by: Jim Bennett at January 21, 2006 11:08 PM

I recently finished a book by Steve Fuller describing the conflict between Thomas Kuhn and Karl Popper's views of science. Kuhn's vision of science being directed by several elites, normally based in a guild(the university) won out.

The book also described how science never started out as faculties in universities, only to be later subsumed into tertiary institutes in France and Germany as nationalist movements and sentiments came to the fore. While this had the effect of spurring science onto greater progress along the roads already marked out, it was also argued that posible side branches were ignored for a long time. A prime example of this directed style was the Manhattan Project. After that, Big Science was all the rage.

Fuller noted that nowadays, research efforts in the natural sciences are slowly migrating out of universities into specialised institutes paid for by private concerns, a return to the old modes of the past. His conclusion was that the university was never the natural habitat for the sciences, especially when directed for national purposes.

The planning made by the Europeans seem all too reminiscent of Kuhn's model of science, with its authoritarian tendencies and lack of innovation simply because of their inability to ask, "What if?"

The very concept of a 'national science policy', is another idea we have Kuhn to thank(blame?) for. My own take is that there should be no such thing, except in times of crisis when human existence is at stake.

Posted by: The Wobbly Guy at January 23, 2006 02:43 AM

Best way to commercial innovation leading to wealth comes from rewarding inventors for inventions. That was the purpose of the patent system. Nowadays bigtime R&D is in general too costly for independent inventors, so it is done by employed researchers "hired to invent," i.e., salaried, in the US. A royalty is an incentive, while a salary is a disincentive, R&D people being smart enough to realize that on salary you get the maximum return on your work by doing the least amount of work. An example should make this clear. If an R&D person gets $1000/week for doing 40 man-hours of work, then he makes $25/man-hour; but if he does only 1 man-hour of work and fucks off for 39 hours, then he gets $1000/man-hour as a return on his work. It is surprising that capitalist businessmen and economists are so zealous about the profit incentive, but oblivious to the incentive motive for employed inventors. Is this because business is as much about control and status in the hierarchy as about profits? One could argue that a pharmaceutical company, for ex., is led as much by the lab personnel coming up with new drugs as by the CEO.

I dig the way political correctness has reversed the ethnic order of discrimination. Aryan superiority is out; Ashkanazi Jewish superiority is in.

Posted by: Myron Leek at January 25, 2006 12:12 AM

Innovation happens, unless someone stops it. Surprisingly, many nations, corporations, and individuals do stop innovation. Fortunately for humanity, these stasists tend to lose their power over time as their obsolete methods leave them weaker than those dynamists who apply the latest and greatest. Still, dynamists frequently turn into stasists once they're on top, and suppress innovation until their own obsolescence leaves them too weak to keep the latest generation of dynamists down. Frequently, the dynamists come from another nation or corporation that has no vested interest in the old technology.

Since stasists are a constant threat to innovation, and exist in all cultures at all times, humanity's ability to take inventions and turn them into new industries depends on dynamists finding ways around stasists. It turns out that the Anglosphere is particularly well equipped for dynamism, since its Common Law permits what it doesn't prohibit -- a contract is presumptively valid, even if no prior statute contemplates what the contract does. The Roman Law, on the other hand, prohibits what it doesn't permit -- a contract is only valid if a statute allows the activity covered, and the notary has the responsibility to ensure that contracts follow the law. The Roman Law gives the stasists a huge advantage. The Common Law does not.

The Common Law explains why the Anglosphere creates new industries to replace obsolete ones more consistently than other cultures. And this technological strength is the Anglosphere's enduring advantage over other cultures. To the extent that bureaucracies vitiate that strength with their rule-making and micromanagement, the Anglosphere gives stasists more power vis a vis dynamists, and tends to resemble the more sclerotic societies prevalent on the Continent.

It doesn't matter how many scientists and engineers a nation has if all its industries are run by quasi-monopolists cosseted by the state's restrictive rules. Those firms will tend to be stasists, and that's why innovative technologists tend to end up in Anglosphere countries, even when they were born, bred, and trained in quite distinct cultures. The Common Law provides opportunities to offer revolutionary products, services, and processes that undermine the power of existing elites. The Roman Law restricts opportunities to protect those elites, leaving Roman Law nations with predominately obsolete industries until the next political revolution brings in a new regime.

I've long hoped Jim Bennett would understand this point. Perhaps he'll get it now, since he's contemplating how the Anglosphere can continue to maintain its technological lead. It all comes down to preserving the Common Law freedom to innovate that's part and parcel of the rights of Englishmen.

Posted by: Mark White at January 25, 2006 05:13 PM

Looking at this in reverse - assuming scientific success as a given & how to convert it into economic success I find an interesting result.

2 of the 3 outstanding countries on the right of the curve (ie richer than they should be) are the US & Ireland (I think we can exclude Luxemburg as being the EU capital) have deliberately free market economies with low business taxes & a relatively low level of government spending.

The countries visibly to the left of the curve Israel, UK, Finland, Sweden, Denmark, Netherlands & Switzerland are, with the exception of Israel (where all these smart Ashkenazi live) & Switzerland (I don't know what they are doing wrong) all have relatively high government spending & business taxes.

So a classic liberal business policy together with a very good technological education system, particularly at the top end, seems optimum.

This fits fairly well with the observed fact that innovation tends to work proportionately better in small companies (Microsoft 20 years ago) than in large ones. The government is the largest company you can get - ask NASA.

Posted by: Neil Craig at January 26, 2006 12:38 PM
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