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Who owns science? Manchester Manifesto can't answer

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The smart choice: opportunity from uncertainty

One thing that does very much get missed is that while people are indeed being rewarded for their innovations and some people do very well indeed out of them, the amount in total that goes to the innovators is near trivial. This paper by perennial Economics Nobel also-ran William Nordhaus (with the snoozy title Schumpeterian profits in the American economy: theory and measurement) tells us quite how trivial: innovators only end up with three per cent or less of the wealth they create. The other 97 per cent goes to the rest of us in the new products, lower prices, longer lifespans and all the rest that the innovations allow.

We should also be careful in our definitions of invention and innovation. William Baumol is the economist here and he defines invention as well, the invention of new things. This encompasses everything from the blue skies scientific research through to the writing of a new Linux driver and the iPhone.

This can be, as he points out, done by a number of different systems: the Soviets produced some pretty spiffy technological wonders after all. Innovation however is the getting of these spiffy new wonders into the hands of those who would use them. With this terminology we get that three per cent going to the inventors while the 97 per cent that we get comes from the innovation: the actual use of the new gewgaw being what raises our productivity and makes life better.

The basic idea is pretty obvious: we wouldn't buy the new things if they weren't worth more to use than the cost us, the surprise is in quite how high the benefits to us of continued invention and innovation are. And as Baumol goes on to point out, this strange creation of liberal capitalism (or call it free market capitalism if you like) is the one and only economic system which has managed, consistently and over not just decades but centuries, fostered this innovation. Invention can be done by other means but we've not yet found a system that can beat the current one for innovation.

So, when we get two Nobel Laureates (one in medicine, one that faux Nobel of economics) leading a research group into the structure of the incentives around science, looking at patents and copyrights, how we should be structuring the whole shebang, do we get a discussion of these fundamentals?

Sadly, we don't. We at no point get a discussion of public goods (“the public good” is mentioned but as above, that's something quite different), innovation is constantly invoked when they mean invention and by and large we get a very damp squib leavened with the usual guff we always seem to get from British academia.

“We call for further research towards achieving more equitable innovation... Greater cooperation between all actors is required; alongside development of theory, there is a clear need for practical engagement with actors at all stages of the innovation process...”

That's pretty much the meat of their conclusion. Very small beer indeed - and yet they get 50 of the Great and Good to sign on to it. Something of a missed chance there, I would say. ®

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