Valuing Science in New Zealand

By Shaun Hendy 20/03/2013

On April 3rd, the New Zealand Association of Scientists is holding its annual conference to ask “What is the value of science in NZ?” (you can register here). As the conference chair, Dr Nicola Gaston, puts it:

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?

image(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.

0 Responses to “Valuing Science in New Zealand”

  • I agree that our citizens don’t value science very highly.
    In my view the reason is that we are very resource-rich-per-head here, which most kiwis understand. They see our future in exploiting those resources rather than in some alternative knowledge-intensive scenario or high tech.
    We need a lot of science to exploit our resources in a sensible way, but a lot of that science isn’t very sexy.
    Being resource-rich can be a curse. It can distort your values, make you lazy, and drive the brightest and the best to leave the country. Maybe we already have this problem.
    Countries which spend a lot on R&D have figured out that if they want a growing economy, they have no alternative.

  • I agree with the lukewarm response to the National Science Challenges; the 142 public submissions included a few (?) made by scientists. Rumour has it that the total number of submissions well exceeded that number though. The brief for the NZAS looks very interesting and challenging; I wish I could attend.

  • Hi Shaun,

    I have to caution the use of something like the NSC as a metric for how NZers in general feel about science. Participation (or lack thereof) can, and likely was, subject to a myriad of other concerns over and above that of science’s value to NZ.

    With something like “Predator-Free New Zealand” featuring highly in the public eye at the moment – I think perhaps we need to ask whether New Zealanders truly undervalue science, or whether their priorities in science are simply different from those in other countries. This can very easy be misconstrued as non-scientific priorities, whereas it may be a case of people not realising that science has a large role to play in the solution of a problem.

    Apart from my own bias (and i have to admit that is huge) my own experience is that the public generally has a large appetite for scientific knoweldge – but as you note correctly in your article – has difficulty putting a numeric value to it. I find the hardest question to answer is something like (taking the above example) “If Pest-Free NZ is to cost NZ$3-30 Billion, can we guarantee that that money wouldn’t be better spent on roads, or medical treatments or business grants?”*. I would love for the answer to be a clear and easy yes – but I certainly don’t have the luxury of that simple answer yet. I’m certainly looking forward to discussing it further at the NZAS conference.

    *this is intended as a general style of argument, not a specific one. It could equally be stated “If this brand new electron microscope is to cost NZ$10 Million, can we guarantee that that money wouldn’t be better spent on roads, or medical treatments or business grants?”.

  • And one could naively ask “why try to put a value on science at all?”. It reminds me of the timeless Economist column from 2002 (, the first and last paragraphs of which are –

    IN 1969 Robert Wilson, the first director of Fermilab, a big American particle-physics facility, was asked by Congress what his new laboratory would contribute to America’s defence. He replied: “This new knowledge has all to do with honour and country, but it has nothing to do directly with defending our country, except to help make it worth defending.” ….

    Such knowledge butters no parsnips, however; so the crudely practical might ask why the world’s taxpayers should pay for its discovery. Yet those who believe in God should surely be sufficiently awed by His creation to want to understand it properly. Those who do not should be even more awed that something as vast, ancient, complex and interesting as the universe could come into existence spontaneously, and result in the evolution of beings who are able to contemplate it and debate its origins. Wilson was right. Those who study such fundamental questions are worth defending. What is mankind without understanding?

  • The way the question is framed too easily leads to an economic context. I think I would prefer a slightly different question, e.g. “What is the purpose of science in NZ?”. However, science is a process as well as way to explore and ‘view’ the (physical) world. To try and define a value proposition for science (in NZ) one has to include these aspects and not just the ‘aims’ or ‘objectives’ and ‘outcomes’ or ‘outputs’.