Opinion - 22 September 2002

The Group of Eight

Meets the National Press Club

This past Wednesday (September 18th) the current chairman of the Group of Eight, Vice-Chancellor of The University of Queensland, John Hay, spoke to the National Press Club for its weekly lunch-time address. He chose "Research and the Australian Universities" for his topic and prefaced it with The Creation of the Future?

His take home message?

At present, Australia operates a 'dual funding' system for research. A successful applicant for a competitive research grant from an agency such as the Australian Research Council or the National Health and Medical Research Council (and only about 20-25% of applications succeed) will receive part of their funding from, say, the ARC or NHMRC and the rest of it (usually more than 50%) from the university's block or core operating grant.
    The strength of including research as a component of core or block funding is that it enables universities, either individually or in collaborating groups, to build up infrastructure and research groups that may compete for competitive grants. In a sense, competitive grants schemes tend to reward an institution’s past successes in these building tasks.
    A major, arguably disastrous consequence of the present scheme is that the research component of a university’s operating grant, i.e. the core funding for teaching, research, infrastructure and so forth, is not distributed according to research performance indicators but according to undergraduate student numbers. It is blind to the amount or quality of research being done, to the actual costs of building and maintaining major infrastructure, from high-tech labs to libraries... [in short] if you succeed in research you are penalized. If you do not, you are rewarded. This is probably a world first for Australia.

The cost of the subsidisation Professor Hay estimates at $385 million per annum, and he would like the federal Government to eliminate this quasi claw back returning to the universities the funds in proportion to the competitive grants awarded to the institutions' researchers. On that basis about 75% would go to the Go8 universities.

But there was considerably more to what the Group of Eight's Chairman had to say beyond Oliver Twist's, "Please, sir, [we] want some more."

[W]hile there have been recent increases in Gross Expenditure on Research and Development ...as a proportion of the gross national product GERD is significantly lower than it was in 1996. Projections for 2002-3 suggest we'll be at levels exiting a decade ago.
   
By comparison with other OECD members with whom we compete, the index of research intensivity shows us well behind North America, Scandinavia and most other Western European nations, as well as Japan, South Korea, Taiwan and Singapore.

However, Professor Hay pointed out that we were 0.01% above Slovenia as well as 0.42% better than New Zealand.
    Then:

Many people were surprised that the research issue occupied so little space in the Ministerial Discussion paper that initiated the Nelson Review.  It occupied one of the seven sentences in a fairly bland and conventional description of the "purposes of higher education":  It (i.e. higher education) extols the value of research, both 'curiosity-driven' and 'use-inspired'.  At a pinch, I could infer a link between this statement and the last sentence which asserts that higher education 'helps position Australia internationally'.  And while separate papers on teaching, governance, finance etc were released to progress the debate, no such paper on research appeared, despite the best endeavours of the Go8 and the Australian Research Council. Is discussing research akin to walking on eggshells? [emphasis ours]

A couple of matters that weren't mentioned but ought to have been: 1/ the continuing actions of the Government demonstrating its support for research as well as for higher education is calculated as an expense not an investment, and 2/ despite all the rhetoric of Backing Australia's Ability and support for innovation the indications are that our federal leaders follow the policy of letting others be the front runners while we can follow behind and that's good enough. Well, why not, it worked for Steven Bradbury in the Olympic 1,000 meter short course speed-skating final.
    It's quite out of step for example with the government of Canadian Prime Minister, Jean Chrétien who, with the support of his federal opposition, is forging ahead toward the goal of being among the world's top five R&D nations by 2010. How come?
    Perhaps this might be one of those topics that Dr. Nelson as Minister for Education, Science and Training might have his department analyse for a future "issues paper". For example it might be noted that currently Australia is at the R&D level Canada achieved by the mid 1980's (see chart, Canadian GERD).

As a defining example of the utility of supporting research Professor Hay notes the effect of MIT's research effort using data from the Bank Boston's Economics Department.
    "If the companies founded by MIT graduates and faculty formed an independent nation, the revenues produced by the companies would make that nation the 24th largest economy in the world.  The 4,000 MIT-related companies employ 1.1 million people and have annual world sales of US$232 billion.  That is roughly equal to a gross domestic product of US$116 billion, which is a little less than the GDP of South Africa and more than the GDP of Thailand.
    "Eighty per cent of the jobs in MIT-related firms are in manufacturing (compared to 16 per cent nationally) and a high percentage of products are exported . . . . The MIT-related companies have more than 8,500 plants in 50 states."

   

MIT's total enrolment for 2000-01 was 10,204 of which 4,220 were undergraduates while 5984 were graduate students. Just over 28% were foreign students, 78% of whom were graduate students. So apart from from contributing to the corporate wealth of the United States, MIT seems to be a pretty good direct foreign exchange earner as well. And as a final shot, "While noting that since about 1980 in the USA, industry rather than government had provided the majority of research funding, it remained the case that almost two-thirds of all patents cited university (52%) or government (11%) labs, with only 27% citing industry."
    To add that the Australian Government's parsimony appears short sighted in the extreme might be construed an understatement.

Of course nothing's been said of the cultural contributions of a nation's universities, but that wasn't a subject for Professor Hay's address to the National Press Club, perhaps that might be the subject of a future talk to the nation's Canberra based journalists.
 

Alex Reisner
The Funneled Web