SciBlogs

Sir Paul Callaghan (1947-2012) Shaun Hendy Apr 02

1 Comment

Sir Paul Callaghan was arguably the greatest scientist ever to ply his trade in New Zealand. He led the world in his chosen field of science. He led a team of almost three hundred scientists who changed the way New Zealanders do science. He led the thinking behind the science and innovation policies that are embraced today by the major parties in New Zealand politics.

Paul was born in Whanganui in 1947 and often attributed his interest and aptitude for science to the adventurous, free-wheeling childhood he was able to enjoy there. He did not come from a wealthy family, and he was always grateful for the opportunities afforded to him through the New Zealand public education system. This no doubt helped cement Paul’s strong sense of social justice and compassion for the less fortunate.

He studied physics at Victoria University of Wellington before winning a Commonwealth Scholarship to Oxford University to study for a Doctor of Philosophy in the Clarendon Laboratory. At Oxford, Paul was introduced to the phenomenon of Nuclear Magnetic Resonance (NMR), which he used to study atoms implanted in crystals that had been cooled to milli-Kelvin temperatures. Paul’s first scientific article on “Nuclear Magnetic Resonance of Sb124 and long-lived Sb120 oriented in Fe” appeared in 1972 in Physics Letters B.

Paul returned to New Zealand in 1974 with a freshly minted DPhil to take up a lectureship at Massey University in Palmerston North. He soon formed a partnership with chemist Ken Jolley and a JEOL FX-60 spectrometer that enabled him to strike out in a new direction: the use of the NMR effect to study the properties of complex liquids and materials at the molecular scale. This was the field in which Paul would become pre-eminent.

The sensitivity of the NMR effect to the strength of an applied magnetic field allows the use of magnetic field gradients to encode a spatial signature on the atomic nuclei in a sample. The decay of this spatial correlation over time can be measured, providing information about the movements of molecules within the sample. By developing several clever variants on this basic technique, and then designing and building the necessary hardware, Paul’s team was able to non-destructively image the structure of soft materials under strain or shear. This mastery of technique and technology allowed Paul’s team to be the first in the world to image the internal structure of a microporous material and the first to observe the flow profile of a complex polymeric liquid during shear banding.

At Massey, Paul’s natural talents for leadership soon began to shape his career. In 1984 he was made Professor of Physics and took over as head of the new physics department, a position which he held for more than a decade. This role involved many new responsibilities and Paul soon found he was busier than ever. Looking back on those years, Paul would often remark that the busier he became, the more success he had. This era saw a step change in his research productivity and impact, culminating in his first book, “Principles of Nuclear Magnetic Resonance Microscopy” in 1994.

Paul remained an active and energetic lecturer throughout this period. One of us (SCH) was lucky enough to have been taught by Paul as an undergraduate at Massey in the early 1990s and well remembers the panache and clarity of exposition that Paul brought to his lecturing. His sharpness of mind and his deep grasp of the subject matter made an impression on all those he taught.

In 2001 Paul was given the opportunity to return to his alma mater, taking up the Alan MacDiarmid Chair of Physical Sciences at Victoria University of Wellington. This was a great coup for Victoria, which had been struggling to maintain critical mass in its physics faculty in the EFTS era of university funding. The following year, he helped establish the multi-institutional MacDiarmid Institute for Advanced Materials and Nanotechnology, becoming its founding director.

With the MacDiarmid Institute, Paul hit on a new way of doing science in New Zealand. Having shown how a Kiwi scientist could do world-beating science from a lab in New Zealand, Paul now set out to build an Institute of world-beating scientists. Slicing through the institutional barriers that had fragmented the science community in previous decades, he assembled a team of the best materials scientists from around the country. Within a few years, Paul had forged a truly national collaboration of scientists that was competing with the MITs and the Cornells. Many other research institutes and organisations in New Zealand have now followed Paul’s model and there is evidence that this has lifted the performance of New Zealand science across the board.

International success opened up many opportunities for Paul. After he became the first scientist outside of Europe to win the AMPERE Prize for magnetic resonance in 2004, Paul was interviewed by Kim Hill on National Radio’s Saturday Morning show about the science that had put him on the world stage. National Radio immediately realised that it had uncovered a sparkling new talent. Over the next three years, Paul and Kim discussed a diverse range of topics in science, from fatty foods to string theory to antibiotics. Paul became New Zealand’s first celebrity scientist.

With the support of the communications staff at the Royal Society of New Zealand, Paul took science communication to a new level. From traditional forms of outreach, such as lecture tours, through to science classes for people in leadership roles in business and the media, Paul was tireless in his efforts to showcase the importance of science to the public. Anyone who was lucky enough to attend a Paul Callaghan talk will have vivid a recollection of his ability to captivate an audience with an unmatched eloquence and flare for storytelling.

At around the same time, Paul’s career took yet another turn when he and several of his students and colleagues founded a company called Magritek. In order to take their imaging systems to the Antarctic, Paul and his team developed a portable NMR imaging system that utilised the Earth’s magnetic field to control the NMR effect. Realising the value that could come from being able to perform NMR imaging outside the laboratory, Paul and his team started Magritek to commercialise this technology. Today, Magritek exports millions of dollars worth of NMR instruments for use in teaching and as analytic tools for a number of industries.

This confluence of his new interest in the commercialisation of science and his growing role as a public figure in New Zealand now presented him with another intellectual challenge. Why had New Zealand’s prosperity fallen behind that of the rest of the developed world over the preceding decades? Paul’s response came in his book, “Wool to Weta: Transforming New Zealand’s Culture and Economy,” where he outlined a powerful vision for New Zealand. Aspects of this are now embedded in the policies of all our major political parties.

Paul wrote and edited number of other books for the general public, including “As Far as We Know: Conversations about Science, Life and the Universe,” based on his interviews with Kim Hill. Of these, he regarded “Are Angels OK?”, which came out of a collaboration between physicists and artists, as the most important of his public works. Paul thought that this project in particular had broken the mould for scientists in New Zealand. Scientists had been unshackled from their laboratories.

Paul loved New Zealand and all things Kiwi with a passion. He was immensely proud of New Zealand’s multicultural heritage and particularly valued the place of Maoritanga in contemporary New Zealand society. He prized New Zealand’s unique landscape, flora and fauna, and played an active role as a patron of the mainland island, Zealandia, in Wellington. In recent years, reflecting on how he had to use Skype to read his grandchildren in the UK their bedtime stories, he became particularly concerned with what he termed the “Kiwi diaspora”. He became determined to reverse the outflow of talented young people from New Zealand and make the country “a place where talent wants to live”.

Paul’s exceptional achievements brought him many accolades. For his scientific advances, he was elected as a Fellow of the Royal Society in 2001. In 2005, he received the Rutherford medal, New Zealand’s top science honour, and in 2010, he received the Gunther Laukien prize and the Prime Minister’s Science Prize (together with his team at Magritek). For his achievements as a leader, he was appointed a Principal Companion of the New Zealand Order of Merit in 2005, awarded the 2007 Blake Medal and named as the Kiwibank New Zealander of the Year in 2011.

Paul faced his battle with cancer with no less determination than he had shown in other spheres of his life. His descriptions of his journey through the health system and the people he met along the way, which appeared in his blog and occasionally the media, were infused with his characteristic humanity. Paul thoroughly researched his cancer and the treatments available, and as his options dwindled, he was prepared to test less credible alternatives such as high dose vitamin C. These he eventually rejected as his prognosis worsened. He worked as hard as ever throughout his illness, completing yet another monograph, “Translational Dynamics and Magnetic Resonance”, in 2011.

From our own perspective, it has been an honour and a privilege to have worked with such a formidable scientist and human being. It is quite likely that neither of us would have remained in science in New Zealand were it not for the opportunities and support Paul lent us at critical moments in our careers. There are many other New Zealanders, young and old, and from all walks of life, who are similarly in his debt.

Paul passed away at home on Saturday, 24 March 2012, surrounded by his family. He will be mourned by all those whom he inspired, motivated and moulded during a career that was cut tragically short. We will all miss him greatly.

Shaun Hendy and Kathryn McGrath

Print This Post Print This Post

Marsden 2011: Toughest year ever? Shaun Hendy Oct 10

4 Comments

The successful Marsden Fund applicants were announced on Thursday after what might have been the toughest round ever. Although the total number of proposals received in the first round this year was slightly down, the overall success rate plummeted to just over 8%, the lowest in the data series I have*.  The overall success rate since 1998 has been 10.5%, but to achieve that rate this year the Royal Society would have needed to fund another 25 proposals, requiring approximately $15 million more than the $53 million available.

image

The number of applications received has stayed close last year’s historic high, quite possibly because the new Engineering and Interdisciplinary Sciences panel continues to attract proposals on subjects that previously would not have received Marsden Funding.  Unlike the mid-2000s, where success rates fell at the same as the funding per proposal rose, this year saw a continuing erosion of the average amount of funding per proposal as total funding fell dramatically.

image

We have now had two consecutive years of sub-10% success rates.  In a recent PLoS article, Paul Roebber and David Schultz used game theory to model the optimal strategy for researchers in a competitive funding environment:

“Once available funding falls below 10–15% in our model, however, submitting many proposals, despite the tax that this represents on both individuals and their scientific communities, appears to be the only recourse if the goal is to maintain research funding.”

Of course, the Marsden Fund limit the number of proposals that applicants can submit, and one should note that we have a two round system which probably encourages higher submission rates than the single round systems used, for example, by the Australian Research Council.

The only advice I can offer to unsuccessful colleagues is to keep trying and to remember that under these circumstances panels are often forced to make quite arbitrary decisions when ranking proposals.

In the last year, we have seen the loss of the FRST post-doctoral fellowship scheme and more recently the International Mobility Fund.  Both schemes which were important to me early on during the establishment of my research career.  This makes the Fast Start scheme even more important for young scientists.  From this point of view, the one piece of good news from this year’s round then is the continued growth of the share of the pie going to Fast Start applicants. This year it reached 20% partly due to an increase in the value of a Fast Start grant from $300000 over three years to $345000.

image

However, last year I suggested that it may be time to cap growth in the share of funding allocated to fast start grants, in order to ensure that full proposals are large enough to fund post-doctoral fellows.  A post-doctoral fellowship will consume nearly 50% of the funding of the average full proposal.  I think it is clear now that the Marsden Fund will simply need new money or a new way of awarding funding to remain viable.

* Unfortunately I don’t have the data prior to 1998.

(Disclosure: I am a Principal Investigator on one current Marsden funded project awarded in 2008. This year I also served on the Physics, Chemistry and Biochemistry Marsden panel).

Print This Post Print This Post

Women in Science Shaun Hendy Aug 19

8 Comments

The recent 2011 snapshot of women in science in New Zealand (you can get it here from the The New Zealand Association of Women in the Sciences) makes for sobering reading.  Peter Griffin has reproduced some of the stats in his blog.

In a nutshell, the report shows that there is a large gap in pay and status between men and women in science, especially at the highest levels.  There is evidently plenty of more work to do, but I believe that there would be big benefits for New Zealand if we were to close the gender gap in science.  The report does a great deal to bring transparency to the treatment of women in the scientific workforce, and this in itself is an important step forward.

The report shows that the gap between men and women grows steadily from high school, where gender differences are insignificant, through to the top of the science system, where women have very little representation.  Ministry of Education statistics from 2006 show the proportion of women New Zealanders with tertiary qualifications in science and engineering falls as the degree becomes more advanced:

image

From gender parity in undergraduate science, the proportion of those with a PhD in science who are women falls to nearly 25%. It is even worse in engineering: less than 15% of those with a PhD in Engineering are women. Why is this?

The missing half

Historically, the lack of women in science was justified on the basis of ability. However, the evident gender parity in the sciences at high school and at undergraduate level suggests that the gaps at higher levels have little to do with innate scientific ability.  Indeed, modern studies of gender differences in science and mathematics fail to find differences in ability, even in those with exceptional talent [1].

What about discrimination?  A recent US study [2] seems to suggest that explicit discrimination has been diminishing: given equal access to resources for research, the authors conclude that women scientists today perform as well as men in metrics such as publication rates, citation rates and grant success.  And indeed, the NZ Women in Science report shows that the gender split of principal investigators on Mardsen grants is very close to the overall gender split in the scientific workforce*.

Nonetheless, the fact is that women do receive fewer resources for their work.  Women physicists report [3] receiving less access to lab space and travel funds, fewer invited talks at conferences and fewer invitations to serve on important committees.

A female friendly workplace?

Of course, eliminating explicit gender discrimination in science is not the same thing as making the workplace female friendly.  Most of the women scientists I work with can share anecdotes of awkward, unsettling and occasionally hilarious encounters with condescending male colleagues.  In a recent Nature article [4], Professor Carol Robinson (the first woman to hold chairs in chemistry first at the University of Cambridge and then at the University of Oxford) notes some of the more subtle ways in which women are excluded:

Today, female postgraduates note less explicit biases that can make them feel excluded: from the all-male photos in chemistry departments, to the timing of early evening seminars, and the ensuing discussions in the local pub.

My impression is that increased mentoring and networking between women scientists has made factors like this less damaging than they would have been in the past.

Academic careers

Another factor that arises repeatedly in all these reports ([2], [3] and [4]), is the poor fit between academic career priorities and the desire to have a family.  Academic careers, especially those in science, are not tolerant of breaks.  Professor Robinson recounts her experience [4]:

I took an eight-year career break to cover the birth of my three children. I was warned that it was highly unlikely I would be able to return to science. I thought this was too high a price to pay for motherhood. Nowadays, when asked to talk to young women, I am often asked not to mention my career break, although I usually do. Sadly, it is not something that many institutions encourage.

If we compare the employment status of women with tertiary qualifications with that of men in similar circumstances, we see that women are much more likely than men to be working part-time (see below).  This most likely reflects child-care duties, which still fall disproportionately on women.  And being a part-time scientist in today’s highly competitive scientific world makes it that much harder to reach the top of your field.

image
Even when women chose not to have children, there is still pressure for women to put their partner’s career above their own.  Scientists are expected these days to have worked in several different institutions before they land a permanent job; at the very least that usually means working in different cities for one to two year stretches, if not different countries.  Under these circumstances it can be very difficult for partners, and I suspect that when push comes to shove many women choose their relationships over their career.

And then there is the ‘two body problem’.  A surprisingly high proportion of scientists have partners who are also scientists, and if the scientist is a woman, she is even more likely to have a partner who is also a scientist.  Finding a pair of good jobs in the same city is notoriously difficult for these couples.  In my own personal circle, I note that most of the women scientists I work with have a partner who is a scientist and many of these women have made compromises – some big, some not so big – for their partner’s career.

So what next?

New Zealand needs all the scientists and engineers it can get, so the current situation, where a significant proportion of our talent is marginalised, is not acceptable.  Furthermore, by creating an environment where women scientists can flourish, New Zealand could create a significant competitive advantage for itself by soaking up talent from around the world.

So what do we need to do?  For a start, I think that more transparency would be useful.  Organisations should be regularly reporting on the gender gap in their workforce  This should include publication of salaries, status, awards and grants received, broken down by gender and years of experience.  Once the data is out there, employers can either choose to address the gap or to bring Alisdair Thompson out of retirement to help justify the inequalities.

We also need to work on making scientific careers more female friendly.  For the last twenty years we have had one of the most competitive science funding systems in the world.  I suspect this system has been very hard on those who take time out for child care.  Professor Robinson has a more positive account of her break:

On returning in 1992, well-meaning academics tried to persuade me to follow fashionable pathways in proteomics and, a few years later, in metabolomics. But becoming a principal investigator in my forties, much later than most, I was already several years behind the leading labs and not sufficiently excited by these trends. I needed to do something different.

I pursued a path of putting macromolecular complexes into the gas phase of a mass spectrometer, not an obvious choice for the structural-biology questions I intended to ask. Well-respected scientists told me that the results would be meaningless. Happily, I chose not to follow too much of this advice.

So how about some Marsden restart grants for scientists returning to the work force?  It is clear that Professor Robinson’s break enabled her to step away from the mainstream and see her field in new ways.  Such a scheme might not only help retain our best women scientists, but might also inject new ideas and new directions into New Zealand science.

The countries that can solve these problems for women are the countries that will win the battle for scientific talent in the twenty-first century.  Lets make sure New Zealand is one of those countries!

* Comparing the 2006 scientific workforce (excluding the medical and veterinary sectors) on Pg 11 to the 2004 Marsden Fund principal investigators on Pg 17.

[1] T. Andreescu, J. A. Gallian, J. M. Kane, and J. E. Mertz “Cross-Cultural Analysis of Students with Exceptional Talent in Mathematical Problem Solving” Notices of the AMS 55, 1248-60 (2008).

[2] S. J. Ceci and W. M. Williams “Understanding current causes of women’s underrepresentation in science” Proc Natl Acad Sci USA 108, 3157-62 (2011).

[3] V. Gewin, “Gender divide in physics spans globe” Nature 473, 547 (2011).

[4] C. V. Robinson, “Women in science: In pursuit of female chemists“ Nature 476, 273–275 (2011).

Print This Post Print This Post

New Zealand’s voyage of economic self-discovery Shaun Hendy Jul 22

21 Comments

ResearchBlogging.orgHow do we generate improved economic growth for New Zealand?  Sir Paul Callaghan argues that we must shift from low productivity industries, like wine and tourism, to new high productivity industries, such as advanced manufacturing.  If we were to do this, we would no doubt lift our economic performance.  So why don’t we just get on with it?  What’s holding us back?

It’s the economy, stupid

There is no lack of opinion on the matter:  check out the comments that follow this NZ Herald editorial.  Much of the debate relates to the size and role of government.  Twenty years ago, a group of economists might have held a similar discussion.  The Washington Consensus (now defunct) more or less held that

“Once a developing country government establishes the rules to a fair game and ensures their enforcement, it would be well advised to stand back and enjoy the self-generating growth”

J. Talbott and R. W. Roll, Why Many Developing Countries Just Aren’t. (The Anderson School at UCLA, Finance Working Paper No. 19-01. 2001).

In other words, once New Zealand’s economy was liberalised in the 1980s, the economic theory of the day said that we should have ‘just gotten on with it’.  Instead, this happened.

New Zealand’s liberalised economy is not alone in its failure to perform as advertised.   Latin America signed up wholesale to the Washington Consensus in the 1990s, with disappointing results.  In contrast, the Asian tigers (South Korea, Taiwan and Singapore) didn’t follow the script:  their governments were active in encouraging industry and R&D in advanced sectors, and their economies have flourished.

In fact, over the last decade, economists have spent a lot of time thinking about why some governments have been more effective in growing their national economies than others.  Do governments have a role to play beyond simply ensuring macroeconomic stability and building strong institutions?

Economic complexity

As I discussed in a recent post, economies are complex things.  A recent collaboration between economists and physicists at Harvard has attempted to illustrate this by mapping the relationships between products that countries export [1].  These maps of ‘product space’ provide a way of representing the complexity of a country’s economy.  A more complex economy will tend to contain firms that are more specialised, and according to Adam Smith, a more specialised firm is a more productive firm.  Indeed, the Harvard analysis shows that countries with more complex economies are richer.

In addition, the Harvard team found that countries face barriers when exploring the manufacture of new products.   Some parts of product space are more densely populated with opportunities than others.  Countries that export existing products in these regions find it easier to develop comparative advantage in the manufacture of new products.

Countries that occupy sparsely populated regions, on the other hand, find it difficult to develop new areas of comparative advantage.  It appears to be difficult to jump to new regions in product space.

Countries like Taiwan and Singapore, where governments have not been afraid to intervene, have made the transition from sparse to rich regions of product space, enabling them to grow rapidly in the last few decades.  Governments don’t always get it right:  Taiwan’s push into the aerospace industry has not been as successful as its move into electronics.  However, it seems that governments do have an important role to play in moving economies into new regions of product space.

The trouble with markets

What might be behind some of the barriers to moving to new areas of product space in a free market?

A few posts ago, when I made a case for R&D tax credits, I looked at an externality that reduces innovation.   In a competitive marketplace, a firm will not put as much effort into innovation as is optimal for society as a whole, because its innovations can spill over to other firms, preventing the innovator from capturing the full benefit.

This spillover of knowledge is an example of a positive externality:  society shares some of the reward from private R&D without contributing to its costs.   Because of this, many countries, including New Zealand, subsidise R&D to encourage innovation in the private sector, via tax credits or otherwise.

A second type of externality is relevant to this discussion [2].   This arises at the point where an entrepreneur or firm starts producing a new product.  When a firm does this, it is experimenting.   If the new product is not a success, the firm will withdraw it from the market, or maybe even go bankrupt.

On the other hand, if the product sells profitably, the innovative firm may do quite well for a while, but eventually other firms or entrepreneurs will notice and play copy-cat.  The first mover bears all the risk of launching the new product, but does not necessarily reap the all the benefits.  Hence it is possible that firms may not be as entrepreneurial as would be socially optimal.

If these externalities are in play, then a laissez-faire approach to economic development might not be sufficient to diversify an economy.

Shockley Semiconductor

The story of the transistor illustrates some of these points.   The transistor was invented at Bell Labs in 1947, but it was not commercialised until one of its inventors, William Shockley, left to found Shockley Semiconductor Laboratory in Mountain View, California (near where his mother lived).  In the end, Shockley Semiconductor floundered as Shockley’s employees left to found their own firms and it is these later entrants that dominate the market today.

Why should we care whether or not Shockley Semiconductors turned a buck?  Today, we all own billions of transistors – this hardly seems to be an example of market failure.  But look at it from Shockley’s point of view.  He and his investors bore much of the risk for establishing the semiconductor industry in California, but later arrivals like Fairchild and Intel went on to reap much of the benefit.

If first movers are not adequately compensated for the risks they take, then there will be less entrepreneurship than is optimal.  While patents reduce some of the risks associated with being a first mover, Shockley’s discovery that the San Francisco Bay area was a great place to found a semiconductor industry is not something that is subject to intellectual property law.

In the end, even the success of Silicon Valley was contingent on the support of the US government, which bought almost every integrated circuit built during the first decade after they were invented.   The large volumes required by the Apollo space programme and the US military drove down the cost of production until the circuits were cheap enough to be incorporated into consumer products for the general public.

Economic self-discovery

The key to improved economic growth for New Zealand lies in the discovery of new areas of comparative advantage and the diversification of our economy.  Unfortunately, by retaining the focus of its innovation system on areas of historic comparative advantage, I would argue that New Zealand has largely failed in this task.   Indeed, the Harvard team found that New Zealand’s productivity is quite consistent with the existing complexity of its economy.

So can New Zealand escape its productivity trap?  Laissez-faire does not seem to provide a way out, and the data suggest that a focus on historic comparative advantage will also lead to a productivity dead end.  We have little choice but to explore fresh economic territory.

The success of companies like Fisher & Paykel Healthcare and Rakon show us that we can learn new tricks.  Forty years ago, an Auckland doctor identified an unmet need for respiratory humidification in his intensive care patients, and took his problem to the DSIR.  A DSIR engineer put together a prototype and took it to Fisher & Paykel.  Fisher & Paykel tried it out and discovered that Auckland was a great place to build respiratory humidifiers.

Could this light handed, serendipitous approach to picking winners be what is needed today?   As Sir Paul Callaghan says, we will be good at what we are good at.  It’s just that at the present moment in our economic development, we need to discover a lot more of what we are a good at.

[1] Hidalgo, C. A. & Hausmann, R. (2009). The Building Blocks of Economic Complexity Proc. Natl. Acad. Sci. 106(26):10570-10575 arXiv: 0909.3890v1

[2] Hausmann, R. (2003). Economic development as self-discovery Journal of Development Economics, 72 (2), 603-633 DOI: 10.1016/S0304-3878(03)00124-X

Print This Post Print This Post

Markets and the scientific method Shaun Hendy Jul 06

9 Comments

I went undercover last week at the New Zealand Association of Economists conference to see what they had to say about innovation.  Not so incognito was the Undercover Economist, Tim Harford, Financial Times columnist and author of several highly entertaining popular economics books, who delivered the opening keynote address at the conference.  In this post I will touch on some of the ideas that Harford covered in his talk.

Harford made his name with 2005’s Undercover Economist, an account of the effects of markets in our everyday lives.  Via a deft deconstruction of the factors that govern the price you pay for your morning espresso, he delivers an orthodox expose of the inner workings of the marketplace:  markets are good for you, except when they aren’t, in which case there are straightforward interventions that will correct most failures.

The trouble with markets

Yet the Harford of 2011 is not the Harford of 2005.  The recent global financial crisis gave many economic commentators pause for thought, and Harford’s response comes in his most recent book, Adapt: Why Success Always Starts With Failure*.

Harford’s new world view is a tad less orthodox, although it stands firmly on the shoulders of the old.  The Undercover Economist told us of three ways in which markets can fail:  externality, information asymmetry and monopoly.  To this list, argues Harford, we must now add a fourth cause of market failure:  complexity.

Harford’s original faith in markets was vested in their ability to tell the truth.  In a market economy, bad ideas will ultimately be shut down by the bankruptcy court, whereas good ideas will spread as they are copied by competitors.  In a centrally planned economy, bad ideas can become Great Leaps Forward.

Nonetheless, Harford sees the financial crisis as an example of where complexity may have overwhelmed the ability of the market to sift the good from the bad.  The bewildering variety of complex financial hedges that were in place to manage risk instead ended up concealing that risk; at least for a time, markets were unable to tell the good loans from the bad.  This was not so much an information asymmetry as an information deficit.

Beyond efficiency

Harford has not abandoned his confidence in markets altogether.  Rather, he draws a lesson from the fact that markets seem to work at all in the face of complexity, and applies this wisdom to the broader swathe of institutions that advanced economies rely on to regulate, to innovate and to govern.

Beyond the efficient allocation of goods, Harford celebrates the ability of markets to explore new ideas, experiment with them and eliminate those that fail.  In contrast, governments, bureaucracies, and even most companies are not good at taking risks or experimenting.  It is an unusual political career than can survive more than a few failures, and middle managers in a hierarchical corporate or government structure have little incentive to report failure up the chain.  This generally results in organisations that struggle to filter good from bad.

Yet some institutions have learned to flirt with failure.  The scientific method, for instance, formalises the procedure for proving ideas wrong.  Peer review, the double blind trial and the requirement for repeatability in any experiment, are all tools the scientific community use to weed out the ill-founded ideas from the sound.  Companies like Google expect 90% of their projects to fail, relying on the 10% that succeed to keep the company ahead of its competitors.

Picking winners?

So what can the rest of society learn from the way in which markets explore and scientists experiment?  Imagine a government, Harford muses, that had the confidence to experiment, that was able to run properly controlled trials of new initiatives, and that above all was ready to accept failure.  Such thoughts sit quite nicely along side those of Sir Peter Gluckman, regarding evidenced-based policy making.  A government that could properly trial and refine educational, social or correctional initiatives would get my vote.

There are also lessons for how New Zealand should spend its innovation dollars.  It is frequently argued that New Zealand is doomed to choose; our resources are too limited to fund a full portfolio of science.  We must put our resources where we think they will do best.  We must pick our winners.

Yet much of Harford’s talk was spent busting the myth that this is possible.  Fonterra today seems as good a bet to Kiwis as US Steel must have to Americans at the beginning of the twentieth century:

This was a company with everything going for it:  it was the market leader in the largest and most dynamic economy in the world; and it was in an industry that has been of tremendous importance ever since.  Yet US Steel had disappeared completely from the world’s top one hundred companies by 1995; at the time of writing, it was not even in the top five hundred.

So if we can’t pick winners, what do we do?

An entrepreneurial government

Harford argues for an entrepreneurial approach to funding science and innovation:  governments should intervene in research and development as if they were entrepreneurs rather than investment bankers.  When pressed for an example of what this might look like, Harford suggested that innovation prizes were one way in which governments were being more entrepreneurial.

Harford is not alone in holding this point of view.  I recently read a very interesting evaluation of the human genome project, which concluded:

… that reframing science policy around the notion of conducting entrepreneurial experiments – experiments that increase the diversity of technical, organizational and institutional arrangements in which scientific research is conducted – can provide policy makers with a wider repertoire of effective interventions.

…  policy makers can use the levers of entrepreneurial experimentation to transform scientific progress, much as entrepreneurs have transformed economic progress.

Huanga and Murray, Research Policy 39  567–582 (2010).

To attempt this would entail a radically different approach to funding science in New Zealand.  It would demand a commitment by government to maintaining a diverse set of scientific and technical capabilities.  It would require new methods for evaluating the effectiveness of these experiments.  It would require an acceptance of greater risk and a tolerance of failure by our policy makers.

But the pay-off could be huge. Do we have the courage to rise to the challenge?

*The talk I saw on June 29th was largely based on the first chapter of this book.

Print This Post Print This Post

Professor Hendy retires Shaun Hendy Jun 27

2 Comments
The Allan Wilson Centre ca 2002. Penny and Hendy are second and third from the left in the back row.

The Allan Wilson Centre ca 2002. Penny and Hendy are second and third from the left in the back row.

No, it’s not me … it’s my Dad, Mike Hendy, who retires this week from his Chair in Mathematical Biology at Massey University in Palmerston North.

Not surprisingly, people often ask me whether I am related to Mike Hendy.  Hendy is an unusual last name, which we get from our Cornish ancestors, and Mike is probably the best known New Zealand Hendy, especially in academic circles.

On the Googling of Hendys

If I google “Hendy” at google.co.nz with the flattering personalised search features off, I find that Dad shows up in third place, after the town of Hendy in Wales and some chap called Peter Hendy, the commissioner for transport in London.

So what has my Dad done that gets him third place in Google’s hall of Hendys?

Well, the family story goes that my Mum and Dad went to a debate between evolutionary biologist David Penny Professor Robert Brooks of Massey University** and a creationist*** in Palmerston North.  My Mum has never been entirely convinced of the value of mathematics, but on this occasion Dad says that she poked him in the ribs and said that surely if Darwin’s theory of evolution had truly occurred then he ought to be able to prove it mathematically.

(While I would like to be able to claim to remember this first hand, at this stage of my life I was too occupied with blowing things up with double happys down on the banks of the Manawatu to pay much attention to such things.  Luckily for all concerned, I developed an interest in science a few years later after my Dad gave me a copy of John Gribbin’s book on quantum mechanics.)

Putting Darwin to the test

Now strictly speaking you can’t prove things in science, you can only disprove them.  But if a theory survives many attempts to disprove it, while its rivals don’t, then scientists will come to regard it as very likely being true.

The problem with evolution lies in putting it to the test.  In the late 1970s, the philosopher Karl Popper had caused a stir by suggesting that natural selection might not be falsifiable – he argued that it was based on a kind of tautology: only the fit survive, but the only way to tell fit from not is by watching what survives*.

In fact, it was Popper’s scepticism that inspired my Dad and David Penny to put evolution through a particularly stringent mathematical test a few years later, showing not only that it was falsifiable but that it stood up to a particularly rigorous attempt to disprove it.

They used new techniques that were emerging in the 1980s for constructing evolutionary trees using molecular genetics.  By seeing how specific chunks of DNA differed between species, scientists were beginning to infer genetic relationships between species that resembled family trees.

How does this let you test evolution? If the ancestors of gorillas diverged first from the ancestors of humans and chimpanzees, then evolution suggests that the match between the DNA of humans and chimpanzees should be closer than either has with the gorilla. Although we don’t know a priori whether gorillas did diverge first from humans and chimpanzees, the theory of evolution predicts that the DNA will tell the same story no matter which piece we look at.  If we don’t get the same answer from different pieces of DNA, then we have falsified evolution.

Back in the 80s, it was still difficult to sequence DNA, so David and Mike used proteins, which are coded for by DNA.  They used five different proteins from eleven different species, finding that the trees constructed from each protein did indeed paint a common evolutionary picture of the relationships between the species.

They had found a way in which evolution could in principle be falsified, but then had found that it stood up to their test.

Putting Massey on the Map

David and Mike published this work in Nature in 1982.  It is one of the scientific articles that put Massey University on the map, and today remains the eleventh most cited scientific article written by anyone at Massey.

They went on to develop better methods for constructing trees based on genetic data.  The Penny-Hendy collaboration has Massey’s second and fourth most cited scientific articles, while overall the two of them account for more than 2% of Massey’s articles and attract 6% of Massey’s citations.

So I guess you might say that Massey is a Dad and Dave kind of university.

In total, Dad worked at Massey for 38 years. He did many other things, including training a band of very successful graduate students who have gone on to have a big impact on the New Zealand science scene and founding the Allan Wilson Centre, which is one of New Zealand’s Centres of Research Excellence.

Of course, no true mathematician ever retires, and in that spirit Dad is going to carry on his research for a few more years at the University of Otago.  He takes up a research Chair there on Friday July 1.

Have fun Dad!

*Popper later backed away from this position as the debate unfolded.

** Correction from Dad ;)

*** Dad also adds “opposing Robert Brook was the creationist debater was Duane Gish, who is referred to in your link to Popper. Robert was such an unusual debater that he floored Gish on a number of points!”

Print This Post Print This Post

Lifting New Zealand’s productivity through R&D Shaun Hendy May 24

11 Comments

It gave me a warm glow to see innovation put at the heart of Labour’s new policy offerings this week.  As I said to the Herald last week, I held no optimism for R&D in the 2011 Budget:

“Both our government R&D spending and our business R&D spending is pretty tragic, both in terms of our percentage of GDP and in absolutes.  A lot of the work I’ve done shows that you get what you pay for.  If you want a high-tech, export-based economy then you actually need to put both public and private sector money into it and we haven’t had a Budget in my lifetime that’s actually addressed that.”

However, Phil Goff put R&D tax credits back on the table at the Labour Party conference over the weekend.  R&D tax credits were introduced by Labour deep into its last term as government, but were scrapped in late 2008 by the new government.  In this post, I will look at the case for and against R&D tax credits.

Innovation for the masses

It is well established that innovation drives economic growth in developed countries:

“In advanced industrial economies, innovation and exploitation of scientific discoveries and new technology have been the principal source of long-run economic growth….  In the future, the innovation performance of a country is likely to be even more crucial…”.

OECD (2005).  Innovation Policy and Performance:  A Cross-Country Comparison.

It is also well known that the benefits of innovation are shared across an economy.  When new ideas are patented or turned into products, it is not just the inventor that benefits.  Ideas can be copied, shared and improved upon, so the benefits accrue across the economy, not just to the original innovator.

Unfortunately, this means that individual firms will invest less in research and development than is optimal for economic growth:  why should businesses bear the full cost of R&D when the rest of us share in its benefits? Economists refer to this underinvestment as market failure; you may know it as the tragedy of the commons.

So this is the theory for why governments should invest in, or subsidise, research and development.  What’s the empirical evidence?  Take a look at the plots below of the distribution of patents among applicants in New Zealand, the USA, Australia and Finland:

Applicant distribution Applicant distribution by BERD

The plot on left shows the raw distributions, while that on the right shows those distributions once they are scaled by business R&D spending.  I have already discussed how these distributions follow something very close to Zipf’s law, but for our purposes here, it is sufficient to note how the the data collapse almost onto one curve when we scale by business R&D spending.  At least in terms of patents, you get what you pay for.

The case for a tax credit

So quite understandably, New Zealand firms under-invest in R&D.  Individual businesses will not be competitive if they are carrying the burden of innovation for the economy as a whole.  This means there is a strong case to be made for subsidising business R&D in New Zealand in some way.

However, not everyone agrees that R&D tax credits are the best way to deliver this.  For instance, David Farrar suggests that they are too blunt a tool; he worries that firms will reclassify existing work as research and development to gain tax credits, rather than actually innovate.

That is a minority viewpoint.  In early 2008, The Treasury wrote that the introduction of R&D tax credits was key for New Zealand’s long term productivity growth.  The OECD is even more unequivocal:

“Given New Zealand’s very low levels of business R&D investment, the provision of a tax incentive in this area seems urgently needed.”

OECD (2007).  OECD Reviews of Innovation Policy – New Zealand

Further, the OECD considers that R&D tax credits may be the best way to subsidise business R&D, noting that they can be both responsive:

“The overwhelming advantage of R&D tax incentives is their market friendly nature.  Another is that, if well-designed – keeping barriers to access and compliance costs at a low level – they are immediately available to any firm that sees an opportunity to develop an innovative new product or service.”

and cost effective:

“Another feature of well-designed R&D tax incentives is that administrative costs are low.  Overly complicated and targeted schemes tend to lead to high administrative and compliance costs and lose the specific advantages that characterise such tax incentives.”

Tax incentives are not enough

So while the case for R&D tax credits is very strong, I would argue that they are not sufficient for economic growth.  A few weeks ago, Sir Paul Callaghan noticed an even better way to scale my patent distribution data.  He suggested dividing the patent distributions by government R&D spending:

Applicants by Govt R&D

I didn’t believe it at first, as roughly 80% of patents are generated by the private sector, but public sector R&D spending would seem to be a better way of scaling the data than private sector R&D.

Why might this be?  Government R&D spending, whether at universities, government labs or at businesses themselves, is more likely to improve the long term capability and capacity of the private sector to undertake research.  In my case study of Finland, I found that it was government spending on R&D that produced the thousands of innovators needed to build Nokia.

Where to from here?

I think the case for R&D tax credits and for increased government spending on R&D is compelling.  In a recent analysis of how New Zealand can lift its productivity, MED’s Roger Procter argues:

“By themselves, size and distance can explain a substantial part of the gap between New Zealand’s GDP per capita and the OECD’s.  This means that all New Zealand’s policy settings must be close to world best practice if New Zealand is going to close the gap with the high income OECD countries.”

So while it is often argued that New Zealand cannot afford a first class innovation system,  I would argue that we cannot afford to not have a first class innovation system.

Print This Post Print This Post

Sir Paul Callaghan on sustainable economic growth Shaun Hendy Apr 20

20 Comments

Another great talk from Paul Callaghan, available on YouTube:

Paul argues that New Zealanders have earned their prosperity by exploiting their environment.  Not only does this bust the myth that we are clean and green, Paul points out that we are poorer for it:  in fact, this strategy has seen our GDP plummet to the bottom of the OECD ranking.  This approach to paying our way in the world is neither economically nor environmentally sustainable.

Particularly telling is the slide at 8 minutes, which shows how we earn our living in New Zealand.  Ever wondered why our productivity is so low?  Paul suggests that it is because we choose work in low productivity industries, such as tourism and the wine industry.

At 13 minutes, regular readers of this blog will be wondering whether the TIN100 revenue distribution is described by a power law:

image

Yes, it seems so, at least in the tail (the plot shows the cumulative distribution of the TIN100 revenue in 2007, x, in millions of dollars).  The exponent is close to 2, similar to what we found for the distribution of patents amongst applicants.  I will be posting on this in a few weeks.

If you are in Wellington on Thursday, 19 May, Paul will be giving a version of this talk at 6pm at Soundings Theatre at Te Papa Museum.  Tickets, available from the Royal Society, are free.

Print This Post Print This Post

The New Zealand Innovation Ecosystem Map Shaun Hendy Apr 14

4 Comments

Ten days ago we released a map of New Zealand’s largest inventor network using Google Earth to geo-locate the inventors in New Zealand. The map revealed some interesting connections between companies and public sector research organisations that at first sight may have seemed unrelated. It also showed that Kiwi inventors are collaborating across the country, with Auckland well connected to the other major centres.

NZ ecosystemThis time I would like to release the full New Zealand map (get it here – you will need Google Earth to open it), which I have decided to call the innovation ecosystem map. It contains all the New Zealand-based inventors from the European Patent Office database, including those in the previous map (note that you can toggle between the previous map and the full map in this file if you wish). It’s obviously a much denser map, and in some ways this makes it much harder to pick out the detail. It does give a very visceral impression on the intensity of inventive activity in and between New Zealand cities.

I have had comments from a number of people about the map:

The NZ Innovation Map clearly shows the extent of research-industry interaction and innovation in the field of technology. This data will be a useful tool for expanding technology networks that communicate new opportunities and provide connections between relevant partners in research, industry and government.

Dr. Peggy Tompkins, The Lighthouse Platform

We are fortunate in the sense that geographical distance is not an inhibiting factor for collaboration in New Zealand. Besides patents, people collaborate and share ideas by attending the same conferences, workshops and seminars – but this map shows we have a great platform to build on and deepen. Seeing our inventor network in this form is a good reminder that New Zealand needs to operate as a single entity if we are going to compete globally.

Lesley Middleton, MSI

We need these perspectives (albeit something of an ICBM’s view of innovation :-) ). For example the map highlights that we do manage to collaborate over quite large distances within New Zealand, despite our centres widely dispersed across a geography that is sizable for a 4 Million population.

John Houlker, NZTE

Shaun Coffey, my CEO at Industrial Research Ltd, also had some comments:

In New Zealand there is a wealth of great ideas and innovative companies but collectively we face many disadvantages due to our small size, distance from markets and lack of access to capital. It is widely understood that active management of the innovation ecosystem is critical in small economies like New Zealand but to do this effectively it is important to first have a deep understanding of the nature and complexities of the ecosystem.

In fact, Shaun has provided me with some extra resource (an IRL Fellowship) in order to develop this further. The next version will illustrate our international linkages and then I would like to produce an equivalent map based on companies and organisations. This will be a bit more challenging as we will have to infer these connections by the connections between people. It would also be good to add subject area information.

Print This Post Print This Post

New Zealand’s largest inventor network: A glimpse of our innovation ecosystem Shaun Hendy Apr 04

14 Comments

We have been experimenting with ways to represent the inventor networks that we can extract from patent databases.  In this post, I will focus on New Zealand’s largest inventor network, as extracted from 30 years of European Patent Office (EPO) data.  The network gives us a glimpse of New Zealand’s innovation ecosystem.

NZ inv largest v3At the left is a network we have constructed showing the largest group of connected inventors in New Zealand.  Each red dot represents an inventor, and the size of the dot represents the number of patents on which that person is named. Inventors are connected by a blue line where they have shared a patent.

There are four hundred and fifty inventors in the network, and it links fourteen New Zealand companies:  Fonterra, A2 Corporation, Fisher and Paykel Healthcare, Genesis Research and Development, Wrightson Seeds, Biojoule, Sensortec, Arborgen, Protemix, Neuren Pharmaceuticals, Brainz Instruments Ltd, Dashfoot Ltd, Vital Food Processors Limited and Envirofocus Ltd.  A number of international pharmaceutical companies are linked together through this network, including Chiron Corporation, Cancer Research Technology, Xenova Limited, Proteotech, Pharmacia & Upjohn (now part of Pfizer) and Warner-Lambert (also now part of Pfizer).

Four of the Crown Research Institutes are in this network (Crop and Food Research, NIWA, Industrial Research Ltd and AgResearch) as well as three universities (Massey University, the University of Otago, the University of Auckland) and the Malaghan Institute.  There are also scientists from several of the Centres of Research Excellence:  the Maurice Wilkins Centre, the Riddet Institute and the MacDiarmid Institute.

This is a very interesting snapshot of New Zealand’s innovation sector. It links several of New Zealand’s largest companies to much smaller startups.  It links a company that manufactures advanced respirators to a company that sells seeds.  It links researchers from several of our major public sector research organisations to those in several of our most R&D intensive companies. It really does suggest there is an innovation ecosystem out there!

Largest Inventor NetworkIf we geolocate the inventors by the addresses listed on the patents, we can get an idea of the geographical spread of the network.  The image on the right (generated using Google Earth) shows that the network stretches from Northland to Dunedin.  It is truly a national network, although its heart is in Auckland.  Try it out yourself – the kmz data file is available here (and you can get Google Earth here).  Viewing the data file in Google Earth will enable you to zoom in on particular regions in detail.  You will be able to see the connections between individual researchers.

Here is a close up of Auckland and its inventors in the network:

Auckland Largest Component

So go take a look.  In the next few weeks, we will be releasing the full EPO patent map of New Zealand in Google Earth and also a map that traces our international linkages.

We are also interested in improving the usefulness of these maps – at the moment you will find both the inventors’ and the applicants’ names on the map, but we would like to add subject areas and other information.  Let us know if you have any ideas!

P.s.  I would like to thank Catriona Sissons for her hard work in putting these maps together.  She has worked with me since 2008 on patent analysis, but recently moved to Melbourne to try life on the other side of the Tasman.

Print This Post Print This Post

« Older Entries