Finnegan's Take

A government-appointed expert group in Ireland makes uncomfortable reading for all invested in Europe’s “knowledge economy” experiment. It questioned (a) whether Ireland’s investment in ‘STI’ (science, technology and innovation) is really economically worthwhile and (b) whether producing 20% more PhD students might be counterproductive.

These points are buried in a lengthy report by an academic economist charged with rationalising public spending by the Irish taxpayer. It noted that STI investment is promoted as a key part of the “knowledge economy” that Europe has embraced but says the hard evidence that this is a good way to spend public money is scant.

Any return on this public investment “cannot be known with confidence at the outset”, it says, and: “the evidence adduced to date for the impact of State STI investment on actual economic activity has not been compelling.”

Blasphemy! Burn him!

Europe is firmly wedded to the notion that pumping cash into innovation is the only route to becoming more competitive. This is the central tenet of the Lisbon Agenda – we can’t compete on cost because Asia, Africa and South America will always be cheaper, so we invest in brains.

But even that might not be wise, according to Prof Colm McCarthy, lead author of the report.

Ireland (and other EU countries) are striving to increase the number of doctorates awarded by its universities. The Emerald Isle wants to double its number of PhDs – but this too may not be supported by evidence.

There is no “clear business need” for boosting PhD numbers and McCarthy says forcing an increase in the numbers in ‘fourth level’ education could lead to underemployment. It may even force over-educated young people to emigrate, he added.

“Indeed some empirical evidence suggests that 20% of new doctorate holders find employment overseas, and of those who remain in Ireland, most find employment in the public rather than the private sector.” In short, these extra PhDs are not being translated into private sector innovation – which was meant to be the point at the outset.

Could it be that our exuberance for the “knowledge economy” has led us to make public policy decisions that are not evidence-based?

Part of the rationale for doubling PhD numbers is that India and China are churning out doctoral students in dizzying numbers. But look what’s happening there: underemployment and frustrated graduates who have invested time and intellectual energy working for a qualification for which there is little demand.

Having spent a year working in the Graduate University of the Chinese Academy of Sciences, I am familiar with the anguish students in Beijing feel when they find themselves unemployed with a PhD hanging on their wall. It was a point taken by the Chinese Ambassador to the EU when I interviewed him recently and is acknowledged in China as a potential source of social unrest. Is this what we are trying to replicate?

The other thing that happens when you have a massive explosion in the number of top-flight graduates is that the quality of PhD falls, damaging the value of higher degrees. The return on this investment, therefore, is diminishing.

We, in Europe, are now debating the future of the Lisbon Agenda for Growth and Jobs so it’s a good time to take stock and ask which investments to date have yielded a return and which programmes are superfluous.

Let’s just hope that if we’re investing in evidence-based disciplines like science and engineering we are doing it on the basis of “compelling evidence”.

[More links on EurActiv]

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