Eurekas! Answers to the European and American Paradoxes
April 15th, 2010Counts of scientific papers in the world’s leading journals are an important indicator of national S&T leadership. For years I have been puzzled by the long term decline of America’s share of world papers, despite its huge and increasing investments in R&D–more than the next four or five countries put together. I call this the American Paradox. In 2006 I showed that after 1998 the decline was mainly due to China taking share away from the US, because of its more rapidly increasing R&D investments. http://itri2.org/Apaper I built a model that accounted for this, and, with Patricia Foland, used it in 2009 to forecast that China will soon overtake the US and EU to lead the world in scientific publications, because of its rapidly growing investments. http://itri2.org/Rpaper/
I was still puzzled, though, about earlier events in this race for scientific paper leadership. The EU passed the US in the mid-1990s to lead the world by sharply increasing its efficiency in papers per R&D dollar invested. This was before China became a significant player. I noticed that the EU and US had the same efficiency in 1990, but the two curves diverged rapidly in the 1990s with the EU rising much, and the US decreasing a bit. By 1998 the EU was 60% more efficient than either the US or PRC.
In spring 2010 I finally analyzed this phenomenon by checking which components of efficiency account for the overall pattern. The results are shown at http://itri2.org/Lpaper/ This paper was for a European audience, so it highlights changes there. I am more concerned by loss of American leadership of S&T.
Like a good mystery story, the answer is simple and logical once you see it. Now if everyone will gather in the parlor… The US lost world leadership in scientific paper production in the 1990s because of its well-known shift from government funding of R&D to industrial funding. In the early 90s these were about equal. By the end of the 1990s they had shifted to 1/3 - 2/3. In the Lpaper I did a multiple linear regression of the 1999 data from the 39 OECD countries, which showed that government R&D funding is vastly more effective at producing papers than industrial funding. (Actually the industrial component is not even statistically significant. This data is dominated by the US, so this is somewhat of a circular argument. I need to remove the US as an outlier, and re do this calculation with some lags.) It is no surprise that industrial funding tends to produce other outputs like patents and products, rather than research papers. In 2006 I did a regression with similar results and also showed that industrial funding is much more effective in producing patents than government funding, which was not even statistically significant–pretty much the opposite result as for papers.
What’s new is the connection of that great disparity in effectiveness in paper production with the huge shift in the US toward industrial funding in the 1990s, leading to an actual decline in US paper production in some years (not just share), even as the Science Citation Index database increased about 3% per year. The Lpaper has some charts that show an almost perfect match in the time series of government funding of R&D and of paper production, now obvious because of that close correlation from the regression. This is the smoking gun that solves that mystery.
This shift also occured in the EU, but much less so, giving Europe an advantage. These shifts toward industrial funding were not because businessmen had an epiphany about the benefits of R&D, but rather because of slowing of annual rises in government investment after the Cold War ended. When the USSR collapsed in 1991, much of the motivation for government funding of R&D was suddenly removed. There was talk in Congress and parliaments about the Peace Dividend, of beating swords into plowshares. Annual increases in government R&D were reduced, which led to the industrial sector emerging as the main funder of R&D.
The US also focuses its R&D investment on components that are less effective in producing papers. For example, it still spends more than 50% of its government R&D on military research; the EU less than 10%. More importantly, despite lower overall GERD, the EU spends more on university research than the US; regression shows that this “HERD” component is five times as effective in producing papers than the “BERD” component in business that the US emphasizes.
So what? Europeans have long worried about something they call the European Paradox–why don’t they reap the economic benefits of their leadership in papers? I didn’t set out to explain that, but this analysis does so. It is simply caused by their priorities on investments in basic research that results in papers, instead of investments that tend to produce outputs with more immediate economic benefits like patents.
Americans tend to do the opposite. And this analysis also explains the American Paradox as the opposite side of the same coin. Americans focus on investments in activities that produce patents and other outputs instead of papers, resulting in that long decline in paper share despite huge and rapidly increasing overall investments.
Who knows which national S&T strategy produces the greatest good for the greatest number of its citizens? But we do now know what is going on. QED
R. D. Shelton