When scientists are asked to describe scientific research that isn’t done for short-term economic benefit, they call it blue-skies research, basic, fundamental, or sometimes investigator-led. But what do these terms mean to non-scientists? Is it perhaps time to discuss the value of the science that we do more explicitly, without necessarily resorting to economic jargon?

Nicola will have to grit her teeth, because I am going to make excessive use of economic jargon in this post. How do you put a value on science?

This is actually a very difficult question. If I asked you to place a value on a car, you might well go to Trade Me and see what cars of that particular make, model and year were selling for. This will give you an estimate of the market value of the car, and for many goods, this is a very good way of determining their value.

Unfortunately, it turns out that scientific knowledge cannot be valued this way. Unlike a car, many people can possess the same piece of knowledge and once this knowledge exists, it is hard to stop it spreading. Because it is difficult to have exclusive ownership of an idea, the market will pay less for that idea than it is worth to society as a whole. In fact, because the market undervalues knowledge in this way, a free market economy produces less scientific knowledge than society would like.

In other words, the social value of scientific knowledge is typically greater than its market value.

This is true even for scientific knowledge that has direct economic value. Economists have found that scientific knowledge produced by firms often spills over into others. Firms that develop valuable new technologies or products will soon find that others begin to copy them, forcing them to share the benefits of their discovery with others. As the market value of new knowledge represents its worth to an individual firm rather than to the economy as a whole, the economic value of scientific knowledge will often be greater than its market value.

Should governments do science?
This is not good news because markets are amongst the best tools we have for allocating resources in society. If markets are poor at valuing knowledge, how should we go about allocating resources to scientific research?

Most of us look first to our government to redress the market’s undervaluation of science. Indeed, governments have developed all sorts of tricks to deal with this. Patents, tax credits and R&D grants are all mechanisms that governments use to stimulate scientific research over and above that which the market will deliver.

Yet many of these tools rely on the government being able to determine the economic or social benefits of scientific knowledge, often in advance of the research itself. What then are Kiwis to make of their government, which funds far less science than the governments of most other advanced countries (see below) and often tries its best to rely on the market for estimates of the value of science?

(Source: OECD, 2006)

A culture of knowledge
Well, you get the government you vote for. Our government’s reluctance to spend on research and development mirrors that of our private sector. Frankly, I think that New Zealanders place less value on scientific knowledge than the citizens of other countries. Attempts at getting Kiwis to place a value on science through initiatives like the National Science Challenges have met with a lukewarm response. Sadly, our politicians are well aware that the New Zealand public is ambivalent about science. Why campaign on increasing spending on science if no one cares?

I suspect that it is the countries that place a higher cultural value on scientific knowledge that vote in governments that are prepared to fund science generously. That these countries are also richer is perhaps not surprising – their cultural values compensate for the market’s underestimation of the value of knowledge.

So how could we create a country that places a higher value on knowledge? And would such a society be healthier, wealthier, and happier? Join us on April 3 in Wellington to discuss this further.

While scientists pride themselves on objectivity, there is surprisingly little in the way of objective assessment of the nature and quality of peer review processes for grant allocation.

Ironically, under-resourcing at the Ministry of Business, Innovation and Employment last year has provided us with an opportunity to put one aspect of the peer review of grant proposals to the test. In the midst of yet another restructuring, the Ministry was unable to run a complete peer review process for the 299 proposals it received last year. The results of this incomplete process allow us to put peer review to the test.

Sir Peter’s paper is particularly concerned that the peer review process used in allocating grants may lead to an overly conservative decisions being made:

… the most innovative research tends to involve intellectual risk and thus can invite criticism, it is generally accepted that the general processes of grant awarding bias decisions towards conservatism …

Sir Peter suggests that bias can arise because:

… simple but positive reviews are often discounted as if the reviewer has not been serious in his/her evaluation. Conversely, simple but negative reviews carry extra weight in tight funding systems with low success rates.

The numbers

Last week, Radio New Zealand’s William Ray received information from the Ministry concerning the distribution of the number of reviews received by each proposal and the corresponding success rates. This data is shown in the plot below. In total, 298 proposals were sent out for review (one was ruled ineligible for other reasons), with each being subject to at least one review. The Ministry had aimed to obtain five reviews per proposal (three scientific reviews and two end user reviews), but in the end it only managed an average of 2.7.

Sir Peter’s hypothesis that negative reviews are weighted by assessment panels more heavily than those that are positive would mean that the more reviews a proposal receives, the less likely it is that it will be funded (all else being equal). The data is consistent with this, as nearly 35% of proposals that received one review were funded as opposed to around 25% of those that received more than one review. But is this difference statistically significant?

Because I am doing this at home on a Sunday, I will just use a one-sided 2-by-2 Fisher test. My null hypothesis is that there is no difference in the chances of success between proposals that receive one review and those that receive two or more. Applying the Fisher test gives me a p-value of 0.125, telling me that in the absence of bias, roughly one in eight funding rounds would produce a skew in success rate of the observed amount or more. This tells us that the observed difference cannot be regarded as statistically significant.

The conclusion

This does not allow us to rule out bias in peer review, of course, it just means that we can’t reject the hypothesis that it is absent. Thankfully we are told that the Ministry is better prepared this year to deal with the peer review process. With such a spread in the distribution of peer reviews, the process last year was very vulnerable to any bias in the way that panels weight peer reviews. If a peer review process is to be run, then the Ministry should strive to achieve a consistent number of reviews per proposal.

However, this does illustrate the possibility of conducting deliberate experiments that might allow us to test further for bias. Although not without difficulty and expense, it would be very interesting to compare the decision making of panels that received different numbers of peer reviews for the same set of proposals for instance. Let’s just hope we are not subject to further unplanned experiments by our Ministry!

Disclosure: I was a successful applicant in the funding round last year.

Although many of us would like to see the Marsden fund substantially increased, the figure below shows that the historically low success rates of the last three years have been driven by a large increase in the number of proposals received rather than a loss of funding. This increase in the number of proposals may reflect a reduction in the amount of funding available for investigator-led research across the system (note to self: see if it’s possible to use http://www.msi.govt.nz/update-me/who-got-funded/ to get some hard numbers on this!). However, I think we have also seen an increase in research activity within the scientific community, possibly driven by the Performance Based Research Fund.  A successful Marsden grant is now worth more to a university than its nominal book value.

While the number of applications has increased from last year, the total amount of funding available has remained essentially the same (see below). In fact, in real terms, the total funding awarded is about 16% more than it was a decade ago. However, over this decade, the amount of funding awarded for a full proposal has increased by 22%.  Although there are more of them, the Marsden fund’s dollars buy less science these days.

The last decade has also seen a steady increase in the proportion of funding awarded through the fast-start scheme for early career researchers (defined as those who were granted their PhD in the last seven years).  However, the share of the funding allocated to the fast-start scheme flattened off this year as is shown below.  As I noted last year, the loss of the FRST post-doctoral fellowship scheme and the International Mobility Fund means that young researchers are even more dependent on fast-start funding as they establish their careers.  I suspect the Marsden fund is now playing a much bigger role in supporting the vitality of the science system than it did a decade ago.  Is the drop in success rate over the last few years a sign of other stresses in the science and innovation system?

This year was my last as a panellist on the Physics, Chemistry and Biochemistry panel.  Being a panellist is hard work.  Reading on the order of 100 proposals in the first round (and later another 20 or so in the second round) is a time consuming process, and of this 100, less than 10 will eventually be funded.  As an applicant, you can do both yourself and the panel a favour by making your proposal as readable as possible – make use of your colleagues to help you do this, but not just those closest to you.  Perhaps try to select a spread of proof-readers that reflects the expertise of the panel. In the end, however, it is always very evident that there are more great proposals than there are dollars.  If you were unsuccessful this year, see if you can obtain internal funding to develop your ideas further.

(Disclosure: I was a Principal Investigator on one Marsden funded project that finished this year).

We will be running the game in conjunction with the Transit of Venus Forum that take will take place in Gisborne at the same time.  While the Forum will be webcast live, the game will allow a much broader cross-section of New Zealanders to participate actively in the discussion of New Zealand’s future.

I am really looking forward to it – a few of us had a blast last week putting the game through its paces.  My forecast that everyone would be sharing their DNA profile on facebook was hotly debated.  The pros: by sharing your DNA data openly, you’ll be helping researchers understand health and disease, and maybe you’ll get advice on how to change your lifestyle to avoid triggering a genetic predisposition to a disease.  The cons: what will your health insurance provider do with that information? And some people didn’t want to know whether they had a genetic condition, even if this knowledge meant they could do something about it.

What do you think? Tell us by registering and then playing Pounamu on June 7-8!

No wonder then, that in 2011, Christchurch scientist Melanie Massaro and more than five hundred others from around the country called for action to address the lack of opportunities for post-doctoral researchers in New Zealand.  According to MacDonald’s article, the current Minister of Science and Innovation, Stephen Joyce, disputes the notion that there are fewer opportunities for young scientists in New Zealand, although in doing so he has to describe the decrease in fellowships as  ’… not an increasing number …’ *.

However, the Minister notes that there has been an increase in PhD students in New Zealand and suggests that the science system ’… needs to encourage more young scientists to consider private-sector research’. The figure below shows that there has indeed been a large increase in science PhD enrolments over the last eight years (source: Ministry of Education), particularly in biological and environmental sciences.

The Minister may have a point

I have blogged in the past about New Zealand industry’s need for more scientists.  But are there private-sector jobs for our young scientists?  The good news is that private sector R&D spending has been growing in New Zealand.  The bad news is that this spending is not coming from the industries where most of our science graduates are likely to work. The figure below breaks New Zealand’s R&D spending down by industry and sector of performance (source: Statistics NZ)*.

This figure shows that a large fraction of our private sector R&D is taking place in the manufacturing rather than the primary or environmental sector, while the bulk of our science PhD graduates are graduating in the biological and environmental sciences.  These days the biological sciences have a much wider application than just the primary sector.  Bioscience has applications in biotechnology and human health, for instance. However, there is a similar mismatch between public ($429m in 2010) and private (only $86m) bioscience spending. Although Statistics NZ found 99 firms conducting bioscience R&D in 2010, the R&D spend amounts to less than $1m per firm.

If you have a PhD in the biological or environmental sciences, it seems you are going to look first to the government to continue your career.  In contrast, private sector R&D spending in the manufacturing and services sector has leapt ahead over the last decade (up by 40% in real terms since 2004) to over $900m in 2010 (Statistics NZ).  These sectors receive significantly less public funding than the primary or bioscience sector.

Why do we have such a large mismatch between the allocation of public and private sector R&D?  The environmental sciences (and much of the medical sciences) are largely public goods that are generally not going to be provided by the private sector.  Government has a clear role in providing environmental and medical science so we should not be surprised that there is a big mismatch here between public and private sector spending.

On the other hand, government investment in the primary sector has historically been justified by the need to address the difficulty that producers have in collectively investing in research and development.  Although there are a number of primary sector industry bodies, most of these have ceased to fund significant R&D efforts in recent times.  Outside of big industry organisations like Fonterra, I am not sure whether there are a large number of primary sector jobs that make direct use of the skills of biological scientists.

Scientific sweatshops?

Why have PhD enrolments in the biological and environmental sciences grown so strongly in the face of weak private sector demand?  My analysis of the bibliometric output of the New Zealand science system showed that productivity (measured by papers per FTE) has not changed much in the last two decades, while total output and the number of papers per dollar have both increased significantly [1].  Our output has gone up, our costs have gone down, while our productivity has remained the same. To me this points to a science system increasingly fuelled by less expensive PhD students.

There is no doubt that the loss of the NZ S&T post-doctoral fellowships in 2010 has been a big blow to the science system, but the decline in post-doc positions began before this.  My guess is reflects the displacement of post-doctoral fellowships by less expensive PhD scholarships.  Furthermore, the strong imbalance between public and private R&D spending in our innovation system means that we may be pumping out graduates in areas of science where there are fewer private sector opportunities.

Looking for ways to shift funding from graduate students back to post-doctoral fellowships should be a priority for our public research organisations, particularly those responsible for areas of science where private sector spending is weak.

* To be fair, I am not sure that Minister Joyce had seen the latest figures quoted here when he made his comments.

[1] S. C. Hendy ’New Zealand’s bibliometric record in research and development: 1990-2008’, New Zealand Science Review 67 56-59 (2010).

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

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.

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.

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).

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:

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.

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).

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

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.