A large proportion of the so-called public R&D spending is actually backdoor subsidies to company's normal production activities.
Here in the EU there has been a relentless lobbying push by industry to redefine 'Research' to include the higher 'Technology Readiness Levels' [1].
Traditionally 'Research' was deemed to be up to TRL-3, and 'Development' up to TRL-5. The distinctions are important as there are far stricter subsidy percentage limits on public funding of 'Development' then on 'Research'.
Now industry lobbying is trying (successfully) to have everything up to TRL-7 be labeled under 'R&D'. Sad times for the real research in the EU, as overall budgets aren't increased and the higher the TRL, the higher the investments that can now make a claim on the money.
A single car factory production line development subsidy can eat up a region's whole yearly R&D budget if left unchecked. It's not private enterprises aren't already swimming in public money, but this is a further land-grab on public funds.
An example: at the same time VW got fines for diesel-gate in other parts of the world, Belgium (which holds the dubious honor of being both a 'tax heaven' for companies with rates in practice close to 0%, while at the same time being the world record holder for taxing workers pay of around 54%) was cutting VW new deals and funneling VW millions of € in subsidies).
This. I can see the Netherlands on 2+% of GDP on the chart as well. The Netherlands indeed grants tax cuts if you do R&D (The law is called "WBSO"), however it totally depends on how you word what you're doing towards the tax authorities. Installing Kubernetes & building Jenkins pipelines? Sorry, that's obviously NOT R&D. Oh wait -- someone hired a company to word it slightly differently. Now you're getting an X million tax cut.
Source: Worked at a company that got a 10M+ tax cut for moving to Microservices & rewriting a fucking frontend in React.
I work for a company mainly based in The Netherlands that gets a ~$400 million USD/yr tax cut through WBSO. Search for "Innoation Box" here: http://ir.bookingholdings.com/node/23191/html
It's definitely a huge benefit, but as far as I know this doesn't subtract from government budgets for basic research in The Netherlands (but maybe I'm wrong).
It's basically a tax benefit the government uses as an incentive to get more knowledge workers into the country and to stimulate that sort of economic activity in general.
Those knowledge workers can also get a flat 30% tax reduction which is applied to their gross wage before other reductions. The end result is that someone earning 100k EUR a year has a net take home pay of 101k EUR.
Source: the tax returns of someone I know who took advantage of this scheme (I could have, only I found out about it too late).
Indeed, but this is unrelated to whether or not their employer participates in "research" via WBSO or any other schema, it's more like the U.S. H1B program, i.e. they've got to try to search for talent domestically (or at least make a show of it), not find it, and then pay above a certain amount for the job.
Yeah. I was in the same situation a couple of times: As a tech guy being asked to review the WBSO request drafted by some supposed subsidy expert, who was hired for a couple of days and for good money. These requests always contained utter gibberish. If I could bring some sense into it, but by using as much complex technical jargon and expensive words in it as possible. Otherwise they might conclude that most of it was not R&D. Rubbish. Did it twice, trying to be as honest as possible in the circumstance, but from then on always pressed my moustache (is that an expression in English? I made myself unavailable) when these things did the round again.
Governments are in a competitive market for how business friendly they are. This creates pressure to create beneficial tax and subsidy regimes or risk losing businesses. If a government plays it too strict, multinationals will minimize their operations and local businesses won't be able to compete internationally.
The way I see it, it's really the market at work, doing exactly what markets do. Negotiating a price (tax cuts and subdidies) in exchange for a good or service (business presence hiring staff and causing economic activity).
Given the expansive definition of R&D esp. given the tax rebates companies get in their respective countries even a website using a new framework can be categorized as Research and Development. So that begs the question how do we qualify real "R&D" from fake R&D ?
what are the markers a curious investigator should look for in this pile of data ?
Absolutely - in the past I've been asked to review past work to see if it qualifies as R&D for tax purposes; this was all bespoke client stuff really, but the retrospective criterion was a vague handwave about reusability.
Yes I had exactly the same experience! it seems like the people reviewing what qualifies have absolutely no technical understanding.
Even when trying to be honest, the questions are posed so vaguely that they are really relying on you taking the moral high ground when choosing what _you_ think qualifies as R&D, even then it becomes an internal battle of definitions.
As one of those reviewers I beg to differ on the non-understanding part :).
You have to understand that the reviews happen in context. What isn't always understood by the layman is that countries/regions etc. aren't reluctant to grant subsidies, but actually want to subsidize as much as they can get away with.
The break on the system is international treaties of mutually agreed limits on what you are allowed to subsidize. But the agreed budget will be spent.
The distribution strategy and selectivity are often set by the political factions that hold the office at the time, and the administration is bound by the strategy laid out.
This can vary from being realy critical and looking for true R&D high potential high-risk/high potential risk taking, to lowering the bar and just give everyone a little bit of the budget with few questions asked.
Reviewers are always allowed to be very honest in their assessments, and have more than enough experience in seeing through all the shady hand-waving. They also usually look into the potential of the company/team beyond the strict letter of funding proposal dossier as submitted. How the expert advise is taken into account in a funding decision is up to the administration. The reviewer is paid for the review, and is not even informed of the final decisions.
It sounds like we are talking about different things: this was in the form of R&D tax rebates, and all due respect, the reviewers involved asked for more and more "plain english" descriptions of the technology to the point of meaningless.
Ah! My review experience is in direct innovation project grants.
I have been on the defending (receiving) side of the R&D tax rebates. As far as I could tell, these types of negotiations are done by people from the finance and economy, not the innovation and R&D administration. This is also the domain of professional intermediaries from the Big-5 offering this as a service. If you were there as the token 'techie' (I know i was), your unspoken role would typically have been to spew jargon and tech details, of which neither your financial consultants nor the administration representative would understand one word. They weren't looking for technical insights, just judging in how-far the activities and people you are claiming the rebates for differ from your 'normal' activities and employee pool, so they can draw a line somewhere.
India's is a sad state. It is partly to do with the fact that the nation maintains (rather proudly IMO) the colonial structure of being a mere 'training ground' for Engineers and Scientists before they move to the US/UK/rem. Anglo-Saxon nations. K Vijayaraghavan, the DBT secretary, and a NAS fellow, has written a piece on the matter.
Respectfully, it seems to me that India (and other countries in the region and maybe elsewhere) has a problem with strictly hierarchical structure, issues with accessibility and availability of resources. There is no investment in improving training for teachers. Typically, people that don't find jobs anywhere else take up teaching. Teaching is also typically a high-stress, low-paid job. It seems to have not a lot to do with language. There are more factors here.
Yes the Germans are able to get ahead cause of the use of both German and English. But it seems like lazy reasoning to suggest that this is solely the reason why they do better. How about looking into what else their education system does that is possibly absent in the Indian system? How about comparing the structure, the resource usage, the training for educators and managers in education and research? Surely, language is not the only difference between the two systems?
>How about looking into what else their education system does that is possibly absent in the Indian system?
No rote memorization for starters. I have found that if you want problem solvers, it's usually not people from rote memorization cultures. Hierarchical thinking is the next problem. If you want to disrupt something, you have to be a little bit of a rebel.
That's the thing about being a rebel in a hierarchical system. You really are up against much more than a "rebel" in say the U.S. would be up against.
For example, think of the adoration that American people seem to have for people that do things off the beaten path. Being ordinary is to be avoided at all costs in the U.S.
In a place like India, you are taught to conform. A hierarchy is enforced. No deviation is tolerated. (Sorry to use such dramatic language. But there is no other way to describe this system.) You don't get to do anything outside of arbitrary norms that others have drawn for you. This is too much for young and curious minds that may want to do things even a slight bit differently. The path of least resistance is to just lie down and submit to rote learning or whatever other evil the system imposes on you.
> No rote memorization for starters. I have found that if you want problem solvers, it's usually not people from rote memorization cultures.
Rote memorization is the basis of all learning. It's actually the first step and it's at the heart of western education ( or it was until we decided to go to a silly route ).
You have to memorize the ABCs, the multiplication table, vocabulary, etc. And we used to teach kids latin and greek which required lots of memorization. Creativity and problem solving comes afterwards.
I'm against the anti-memorization movement in the US/West. It's great to memorize things and it's great to memorize things intelligently. Whether it be poems, songs, vocabulary, math theorems, code, etc.
As long as rote memorization isn't the end but the means to an end.
I see what you mean, you have to memorize the very basics. What I meant by route memorization learning culture is a bit different though.
I went to China once and during my visit I met a math teacher. He showed me some of the problems his students could solve.
I was impressed, it were very difficult problems for 11th graders. I couldn't solve some of them myself.
On one problem I asked him how to solve it and he handed me their math book. It was a chapter that had this problem solved in the beginning, and then about 100 questions which were just the same problem with different numbers.
I was hugely disappointed. The students didn't know how to solve a class of problems, just cherry picked problems that they learned by heart.
The problem here is not that you memorize some things, but in math you should understand the problem, and not just be able to input different numbers in an algorithm.
For vast memorization we have Google, for solving algorithms we have computers, for thinking how to solve something we need humans. And this class was trying to educate humans to be computers.
You might be right to the first order about language, but having a 'colonial' system is very insidious IMO.
First it means that a large fraction of the population is implicitly denied resources to develop their abilities. Second it means that people who do make it through the system (as it is) have no real incentives to stay back, neither cultural, nor fiscal, nor institutional.
Personally, none of the people I studied with/worked under ended staying in India. It's interesting that British India managed to sustain better state universities, than today.
What do you mean by a colonial system?
edited to add: I ask the question because I genuinely don't understand what you mean by it in this context. It seems to me that it might mean some sort of system that the British introduced in India that was then adopted by the Indians after Independence. But I could be missing the nuances in your argument.
From the OP: "the nation maintains (rather proudly IMO) the colonial structure of being a mere 'training ground' for Engineers and Scientists before they move to the US/UK/rem. Anglo-Saxon nations."
Even with that, India has done amazingly well in the space sector with the successes of PSLV in the 20th century and the recent Mars mission in the recent past.
Implicit in this is the idea that if country X invests a significantly larger amount in research than country Y, then X will have significantly more output than Y. I don't buy this. And the reason I don't is because my own country, a small one, gets so much of its input from the US, that a doubling of research spending probably wouldn't do much of a corresponding difference (not produce many more Feynmans, I'm afraid). Culture within the country (e.g. attitude towards disruptors) and how the institutions are set up matters a huge amount.
very simplified TLDR - Taiwan was in the UN as the representative of China and blocked People's Republic of China until 1970s when second and third world countries voted PRC in instead of Taiwan and now PRC as the representative of China blocks Taiwan
https://en.wikipedia.org/wiki/China_and_the_United_Nations
fun fact, because USSR was boycotting the UN over this issue in the 50s there was no one left to veto US's intervention in Korea, therefore it was okay by UNSC
I was excited to see such a fresh UI from the UNESCO site when the page first loaded, then as I started reading I realized the right half of every sentence is cut off in Safari on iPhone 6/7/8.
In all seriousness, data visualization requires all the space it can get. I agree the graphics are not that fancy, but displaying them on mobile would be rather uninteresting as everything would be tiny.
Usability. They tried to do all sorts of fancy charts when a simple one could have sufficed. I’d bet HN has more mobile viewers and desktop.
So in this case all that expensive money spent making that page isn’t really worth it since a large part of internet wouldn’t even be able to properly read it.
Worse is they half arsed responsiveness. Could have left safari to browse the page like a normal desktop page but their width metadata gives a very poor experience.
So by absolute spending, there are basically 3 centers:
1. USA
2. East Asia
3. West Europe
East Asia combined, their spending is bigger than USA and EU.
What will be more interesting is to break down those spending on what particular field they are spent on, but I guess that data is hard to collect.
Overall, in line with my every day feeling, but kinda unimpressed as well. South Korea is an outlier here, their spending in R&D is absolutely massive in both relative/absolute terms.
I always think of a toy-world example of a circle of 10 people cooking their own dinners. The GDP of that circle is 0$. Now if every person in the circle cooks not his own dinner but sells his dinner to the person on the right of them for 100$, suddenly the circle's GDP has shot up to 1.000$, while in fact nothing has changed.
Now I know very well that this is an oversimplification, yet it is not so outlandish and illustrates quite well how our economic ideology relentlessly pushes 'financialization' of service activities that used to be non-commercial. You need a job, and when you have one then you need to spend the money you earn on others to provide daycare and school lunches and house & garden maintenance ...
Financialization is key because it not just allows 'profits' to be made, but is essential to the 'rent seeking' economy as they can only exist by the nature of intermediating on transactions.
Even your example doesn’t seem that pathological if you assume that the individuals are actually pursuing their preferences rather than deliberately trying to inflate their group GDP.
Which is why a more exaggerated comparison would be this: a person who walks home after finishing work to cook dinner with the family using vegetables grown in the backyard vs a person who eats out in a bar, drives home drunk, gets into an accident, ends up in hospital, and creates a huge increase in GDP.
The example downplays the positive impact of the increase in GDP (eg the drunk driver creates jobs for car manufacturers, police officers, and doctors) but it shows how our narrow focus on GDP rewards behavior that may not be desirable.
That evening, sure. In the long run, their productivity is likely diminished. You see a similar binge-and-reckoning cycle in macroéconomies, the difference being practically nobody is rewarded for higher GDP. Governments are rewarded for having larger tax bases.
I hope you'll forgive me for the bluntness, but I'm trying to be brief.
First a question: how come 'productivity' has gone up by 2% annually for nearly a century (if you know compounding you know how massive this is), yet we all have to 'work hared' and 'longer' for less, while our social security is being eroded?
'productivity' in a 'Red Queen's Race'[1] economy has 0 value. We're not doing work to ensure 'survival' or 'progress' anymore. 10% of People could carry that. We long ago stopped having a production problem, we have a(n artificially sustained) distribution problem.
At the 'economic ground floor' level we're in a self accelerating 'service economy' which at the systems level is both driven and preyed upon by a 'rent-seeking' economy that in socio-economic power far outplays the former. Transactions are the key, not what actually goes around.
You could see real productivity increase by some measure (entropic, say, or total available free energy), with the "work harder and longer" dynamic, by other mechanisms.
Failure to equitably distribute gains, a capricious allocation such that individuals might make mint one year, be skint the next. No viable pensions or annuity system. Etc.
Value extraction from labour is the age-old economics problem. It faced feudal peasants, it faces the modern urban/suburban knowledge wage slave paying it all out in rent or mortgage interest. David Ricardo's two bugbears were the laws of rent and wages, in opposition to one another.
GDP's distortions are legion, but you still have the rent/wage dilemma without that.
... Though some measures of gross happiness or support might address that. Hrm. We mearsure GDP. But Smith says:
POLITICAL œconomy, considered as a branch of the science of aThe first object of political economy is to provide subsistence for the people statesman or legislator, proposes two distinct objects: first, to provide a plentiful revenue or subsistence for the people, or more properly to enable them to provide such a revenue or subsistence for themselves; and secondly, to supply the state or commonwealth with a revenue sufficient for the public services. It proposes to enrich both the people and the sovereign.
That is, his standard for economic performance is support of the population, generally, and financing the state. Elsewhere and earlier he calls explicitly for improving the lot of the poorest especially.
GDP does none of this.
I've beeen meaning to read Kuznts's notes specifically for some time.
That example would make sense if anyone was thinking or arguing that every individual transaction that increases GDP is inherently good simply because it increases GDP. But I don't think anyone has that narrow of a focus on GDP. Obviously no one enjoys needing to spend money for medical issues.
If you are part of the 'financial' economy (not looking profit through production but rather from arbitrage or intermediation, the old using money to make money), then that narrow focus on GDP serves you very well as it correlates directly with your opportunity.
Because for the current socio-economic market ideology, sustained happiness is a negative. It makes people consume less.
Short term happiness resulting from consumption that ensures a relapse and thus the need for more short term relief through further consumption is what the action side of our economy optimizes for. A furniture maker that produces quality tables that last for centuries will soon be bankrupt as he eats his own market. An IKEA that sells you a fashionable crap table that you want/need to replace real soon, either by induced need or low structural resilience quality, creates its own perpetual demand. That gives you an indication why despite major advances in manufacturing technology our physical goods now are so feeble when we could still make a decent washer that lasted for a lifetime just 50 years ago.
GDP is a fairly good indicator for the 'rent seeking economy' that rules our system, as it is more or less aligned with transaction sizes and volumes.
$ spent per person is biased towards richer countries. Just because a rocket scientist in the US gets paid 10x that of someone in Russia doesn't mean they're doing more relevant basic research.
Some of it translates into better research, e.g. ability to lure international researchers, access to better equipment because you're in a richer nation, but at least partially the number is inflated without any benefit to the research itself.
If the research is constrained by resources that can be acquired from global markets, then, yeah.
However, a lot of research tends to consume capital in form of wages to researchers. In this instance a percentage of GDP is a much better indicator of the resourcing level of research.
However, I don't know if there is any way to compare research on a high level by any financial meter in a way that would not be open to critique.
The graph seems to indicate that rich countries are spending a lot on R&D as a % of GDP. $ per person would be great though.
Edit: What's interesting to me is just how dominant business R&D spending is for the larger economies. The top spenders in nominal terms are all large diverse economies. The main industry that came to mind for me is the auto industry. The top countries all have massive auto industries.
Then look at the data, where you can sort by total R&D per million residents or thousand in the labor force. Denmark, Iceland, Sweden are the top three.
I am from a country in the bottom left 1/16th of the graph and can confirm. The whole economy is about subcontracting and sucking in money from various EU grants, any offices of global businesses are sad outsourcing and offshoring centers.
If you click on the country it shows you the "R&D spending by sector of performance" where sectors are Business, Government, University. For all big spenders (right part of the chart) the business share is the biggest.
Wouldn’t it have been a more helpful/useful comparison to show R&D as a % of GDP alongside % of PPP-adjusted GDP? Total R&D spend in PPP$ seems like a not-so-useful comparison since it's still biased by size of an economy, whereas % of total GDP is trying to normalize for that (albeit not perfectly).
I really admire Israel on the intellectual front. This is a nation that starts using an obscure liturgical language (Hebrew) at the turn of the 19th century, and today has Silicon Wadi which is second only to SV, the highest proportion of PhDs in the population, and a couple Nobels, Fields, Turing and Wolf prizes! I wonder if there are some aspects of Jewish culture than can be incorporated the world over.
India on the other hand ... It's interesting how the homeland of the Semitic and Dharmic religions have fared (both historically and contemporarily).
A big part of its success was the collapse of USSR. So luck and ability to self-reflect and realize on their fortunes and execute on that lucky break...
In the 90's they had a population of 4mil and something 300k Soviet immigrants were arriving every year. A large proportion of them was highly educated people. And those people who sent rockets to space were cleaning the streets...
So what they did right was just take money from US grants and give that money to everyone who wanted to build something and asked for it. They have built these huge warehouses/offices called "hothouses" on the outskirts of cities, put the unemployed scientists there, gave them some money and said build something.
Yes, I think a lot of thier curreny success comes from "exchange" with larger countries and a natural incentive to develop e.g. military technology. I guess it is similar to places like Taiwan.
If you removed all the US companies, restricted immigration and didn't allow people to go abroad to study it isn't clear how well they would do. From what I hear it is no dream to be young in Israel today. Also there seems to be a surprising amount of shady things coming out of Israel. Anything from spam and exploits to binary options and outright fraud. Which would suggest that people don't have better opportunities.
I think this book https://en.wikipedia.org/wiki/Start-up_Nation mentions it, but I don't know any source that writes in details about it.
All from my memory of seeing relatives and friends that worked for Soviet research institutes --> sweeping streets in the desert sun at +40 Celsius ---> working on interesting hardware/software projects. It's amazing how people can thrive and pull out of the lows if you give them a hand. Completely the opposite happened to people in Russia, these research institutes were shut down and people just succumbed to alcoholism. Decades of knowledge were lost or just transferred to the US defense industry.
I could be wrong but from what I read a while ago it's that there's not much traditional resources to export (Farming, Mining,..) and instead there's a focus on R&D and exporting technology. There's probably also a very high amount of R&D in the military sector that's subsidies as they have a very high export rate there (Elbit, Rafael,...).
Mandatory military service produces a disciplined and well-networked population. Israel also benefits from sensible commercial law and relatively efficient courts, two things India grossly lacks.
When a B is considered a poor grade by your mother and you are simply expected to be on top of your class, it does wonders. Genetics probably play a roll too, but that discussion is not allowed here.
Here in the EU there has been a relentless lobbying push by industry to redefine 'Research' to include the higher 'Technology Readiness Levels' [1].
Traditionally 'Research' was deemed to be up to TRL-3, and 'Development' up to TRL-5. The distinctions are important as there are far stricter subsidy percentage limits on public funding of 'Development' then on 'Research'.
Now industry lobbying is trying (successfully) to have everything up to TRL-7 be labeled under 'R&D'. Sad times for the real research in the EU, as overall budgets aren't increased and the higher the TRL, the higher the investments that can now make a claim on the money.
A single car factory production line development subsidy can eat up a region's whole yearly R&D budget if left unchecked. It's not private enterprises aren't already swimming in public money, but this is a further land-grab on public funds.
An example: at the same time VW got fines for diesel-gate in other parts of the world, Belgium (which holds the dubious honor of being both a 'tax heaven' for companies with rates in practice close to 0%, while at the same time being the world record holder for taxing workers pay of around 54%) was cutting VW new deals and funneling VW millions of € in subsidies).
[1]https://en.wikipedia.org/wiki/Technology_readiness_level