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The Anglo-Saxon pundit class is always hitting the same points:
  • More competitiveness (mention 'labour market flexibility'; 'bloated welfare state', call some large continental country 'the sick man of Europe', say that 'reform' is slowing down/must be reinforced, that high taxes discourage 'investment')
  • More enlargement (say it's the most succesful European policy, hint that the Eastern Europeans somehow like the UK/US and have bright ideas like flat taxes)
  • More de-integration (call subsidiarity a dead letter, say that '80% of legislation comes from Brussels', the Commission is an 'unaccountable/unelected bureaucracy')
It's hard work being a pundit, repeating the neoliberal conventional wisdom every day!

I'd say that the actual policy challenges in Europe are completely different. The biggest challenges, aside of the three you mention, are the demographic development, the environmental challenge, the low level of people with secondary education and the low level of spending on research.

by nanne (zwaerdenmaecker@gmail.com) on Mon Mar 26th, 2007 at 05:37:51 AM EST
I'd say that the actual policy challenges in Europe are completely different. The biggest challenges, aside of the three you mention, are the demographic development, the environmental challenge, the low level of people with secondary education and the low level of spending on research.
Explain? Low level of people with secondary education?
by Colman (colman at eurotrib.com) on Mon Mar 26th, 2007 at 05:41:39 AM EST
[ Parent ]
Mistake! I wanted to say tertiary.
by nanne (zwaerdenmaecker@gmail.com) on Mon Mar 26th, 2007 at 05:45:29 AM EST
[ Parent ]
That makes more sense! I'd still be interested in your reasoning on the list.
by Colman (colman at eurotrib.com) on Mon Mar 26th, 2007 at 05:48:54 AM EST
[ Parent ]
Translating problems into solutions is the hard part, of course. On education, the solution is relatively simple: more funding. The question is where you get the money from. I think that universities need to become better at getting money from the private sector and from alumni, but especially the issue of private sector funding is very sensitive. More money from the state is also necessary, but there you'd have to increase taxation or decrease other spending, which is a big issue.

Another issue is how you fund universities. I would be a fan of a voucher scheme to pay for the education part because I think that it will give universities more independence and students more power. The problem there is that it could be used as a step towards privatising universities, and that the level of funding will still be subject to political bargaining. The devil is in the details. I don't think the issue of funding creationist/antiscientific institutions is as big a threat in Europe, though in some parts it might be.

On the research gap: the problem in Europe is mainly that the private sector does not spend enough on research, and the problem is especially pronounced amongst small and medium-sized enterprises, IIRC. Sometimes people will compare the number of patents registed in Europe and the USA/Japan, but that is not a good measure as the US allows the patenting of business methods and software patents. A lot of the research done in the US can be because of the incentives offered by greater protection of IP, which don't have a beneficial effect for the overall economy. This needs to be kept in mind. More IP is the wrong solution. However, I don't really know what the right one would be.

by nanne (zwaerdenmaecker@gmail.com) on Mon Mar 26th, 2007 at 06:50:19 AM EST
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I am very suspicious of the whole "research gap" because I don't understand the statistics underlying it ... what is the "research gap" and what is the evidence for it?
by Colman (colman at eurotrib.com) on Mon Mar 26th, 2007 at 06:54:01 AM EST
[ Parent ]
Well, I know a large number of science graduates (and graduates, and post-graduates) working in service jobs. I call that an absolute research gap, never mind the relative one.

"It's the statue, man, The Statue."
by Migeru (migeru at eurotrib dot com) on Mon Mar 26th, 2007 at 06:57:53 AM EST
[ Parent ]
Or an over supply of graduates in certain areas.
by Colman (colman at eurotrib.com) on Mon Mar 26th, 2007 at 07:05:15 AM EST
[ Parent ]
So we don't need to educate more, do we, which would only lower the price of their labour even further.

"It's the statue, man, The Statue."
by Migeru (migeru at eurotrib dot com) on Mon Mar 26th, 2007 at 07:16:01 AM EST
[ Parent ]
Nope. It's all just a result of inefficiency due to government intervention in the market anyway.

Now, I'm off to call for more government subsidies for research and development of the type the market would like. I have a lobby group that knows precisely what the economy needs.

by Colman (colman at eurotrib.com) on Mon Mar 26th, 2007 at 07:18:28 AM EST
[ Parent ]
The labour market for R&D is not static. Or at least it is not supposed to be. It is very bad if it is static.

To put it another way, graduates should be starting up their own businesses.

by nanne (zwaerdenmaecker@gmail.com) on Mon Mar 26th, 2007 at 09:25:33 AM EST
[ Parent ]
Yes, but there is no capital for that.

I was going to suggest that microcredit or venture capital would be the solution, but the private sector seems to have little appetite for it. And, of course, there's the issue of the entrepreneurial/risk-taking culture (or lack thereof) among the graduates.

"It's the statue, man, The Statue."

by Migeru (migeru at eurotrib dot com) on Mon Mar 26th, 2007 at 09:28:49 AM EST
[ Parent ]
Indeed. It may be, as someone says, that this is not everyone's cup of tea. I certainly don't mean to suggest that every graduate should found a company (just a lot more than are doing it now). But at least you could encourage it, for instance by offering students a course or other assistance on starting up a company. If the private sector is unwilling to lend money, the government should consider giving funding (could give them a nice return on investment if they do it right).
by nanne (zwaerdenmaecker@gmail.com) on Mon Mar 26th, 2007 at 09:51:11 AM EST
[ Parent ]
Not everyone should fund a company, but I think that an effort should be made to help people over the hurdles of access to capital and lack of entrepreneurial attitude or skills.

And, of course, the suggestion is not that everyone starts a company by themselves, but as a partnership with others they know so that the group has the necessary mix of skills and attitudes.

But access to capital is the essential ingredient, and it is jealously guarded.

"It's the statue, man, The Statue."

by Migeru (migeru at eurotrib dot com) on Mon Mar 26th, 2007 at 10:01:38 AM EST
[ Parent ]
Ack, fund <- found

"It's the statue, man, The Statue."
by Migeru (migeru at eurotrib dot com) on Mon Mar 26th, 2007 at 10:58:11 AM EST
[ Parent ]
A theoretical physicist, an astronomer, a mathematician?

But even beyond fundamental research, I'm not too friendly to the idea of exposing university research to even the possibility of dependence on private companies.

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Mon Mar 26th, 2007 at 09:29:23 AM EST
[ Parent ]
Also, can we please separate research and education? The research university is not the best way to deliver a good higher education for the masses, but just an elite structure.

"It's the statue, man, The Statue."
by Migeru (migeru at eurotrib dot com) on Mon Mar 26th, 2007 at 10:03:11 AM EST
[ Parent ]
Ah, but if you try to create an elite research/university stream and a separate more vocational stream then your middle classes don't want to go to the vocational stream at all. Education as conspicious consumption.
by Colman (colman at eurotrib.com) on Mon Mar 26th, 2007 at 10:06:03 AM EST
[ Parent ]
Who said vocational?

In the US you can get a better basic science education at a 4-year college than at a research university. Not only are the resources more focused on teaching, but at a 4-year college, as there are no graduate students, professors use undergraduates to run research projects. There is hardly any undergraduate research at research universities.

"It's the statue, man, The Statue."

by Migeru (migeru at eurotrib dot com) on Mon Mar 26th, 2007 at 10:09:30 AM EST
[ Parent ]
I mean vocational in a very, very wide sense.
by Colman (colman at eurotrib.com) on Mon Mar 26th, 2007 at 10:11:29 AM EST
[ Parent ]
Whether a dependence develops depends upon how private companies are drawn in. The largest problem I see is that they may be used by the government to cut the level of funding either for research or for education. If the government funding is kept up (and increased a bit, as it should be), I really don't see the issue.
by nanne (zwaerdenmaecker@gmail.com) on Mon Mar 26th, 2007 at 10:04:23 AM EST
[ Parent ]
What about private involvement with a special education tax?

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Mon Mar 26th, 2007 at 11:32:59 AM EST
[ Parent ]
I'm not a big fan of policy-based taxation (I expect that it tends to make policies unpopular, aside of the overall loss of oversight). Aside of that, it's not really private involvement, is it? Something that could be thought of is a corporatist structure where business voluntarily pays into a central fund and collectively negotiates the areas on which it is to be spent with government and the universities.
by nanne (zwaerdenmaecker@gmail.com) on Mon Mar 26th, 2007 at 12:10:13 PM EST
[ Parent ]
Do you really expect business to pay more voluntarily?

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Mon Mar 26th, 2007 at 05:38:35 PM EST
[ Parent ]
Perhaps you were just snarking, but that was only part of the problem at where I was - there was a general tendency to consider third stream (industry funded) money to be dirty and morally objectionable. Research should come from the state, period. End of story.

Except of course, if the money came from Shell. Then it'd be alright. (!!)

So I would not be surprised if some of that particular culture is more pervasive within Europe - but this is a question I have which I've not researched and is extremely hard to research sitting behind a computer in South Africa.

by Nomad on Tue Mar 27th, 2007 at 02:23:06 AM EST
[ Parent ]
The problem with accepting non-charity money from a for-profit organisation is that it generally comes with intellectual strings attached.

So, yes, maybe private businesses will find it in their hearts to put money into an independent research trust, but I don't think it's likely.

If a researcher wants to consult or be employed with a private business, fine, but university funding shouldn't depend on that.

"It's the statue, man, The Statue."

by Migeru (migeru at eurotrib dot com) on Tue Mar 27th, 2007 at 02:50:06 AM EST
[ Parent ]
the TU Eindhoven and the TU Twente? That to me are two good examples of what can happen when industry and university research start co-operating successfully. They do some really neat stuff there - and are big in the patents. It looks definitely win-win - but they are not "classic" Dutch universities.

I agree that a university funding for research should not depend solely on private business funding. Which is why it should remain third stream money.

Migeru:

The problem with accepting non-charity money from a for-profit organisation is that it generally comes with intellectual strings attached.

Let me answer that one over three years...

by Nomad on Tue Mar 27th, 2007 at 04:01:15 AM EST
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No, I didn't know about those, but I did know about RIM's Mike Lazaridis funding the Perimeter Institute by endowing a $100M fund. But this is a "charitable" contribution into a trust, and neither RIM nor Lazaridis have any levers to affect the research that is carried out.

But it doesn't happen often.

"It's the statue, man, The Statue."

by Migeru (migeru at eurotrib dot com) on Tue Mar 27th, 2007 at 04:58:39 AM EST
[ Parent ]
Sure. Just call it part of corporate social responsibility.
by nanne (zwaerdenmaecker@gmail.com) on Tue Mar 27th, 2007 at 02:58:02 AM EST
[ Parent ]
Not everyone is business oriented enough to want their own. I could never work for myself. I wouldn't get anything done, and would probably starve to death. Many other engineers I know would likely be similarly poor business owners.
by someone (s0me1smail(a)gmail(d)com) on Mon Mar 26th, 2007 at 09:34:03 AM EST
[ Parent ]
The research gap is the difference in R&D spending between Europe and Japan and the USA. The gap is in percentage points of GDP (We do 1.9, the US does 2.5, Japan does 3.1). The difference is accounted for mainly by differences in the private sector.

I think that spending in Europe also tends to be skewed towards large undertakings (at least this is the case in Germany where the automobile sector accounts for over half of all private sector R&D), whereas the largest potential for wealth creation lies in R&D by SMEs.

Maybe it's silly to speak of a 'gap'. In terms the economy at large, it is probably better to spend quite a lot on fundamental research, applied research and the development of technology as it is one of the most potent sources for the creation of wealth.

Caveats with regard to creating wealth apply, though I think that changes in technology is a potent force for the betterment of just about anything. If used wisely...

by nanne (zwaerdenmaecker@gmail.com) on Mon Mar 26th, 2007 at 09:44:00 AM EST
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How would we know the gap has closed? Is just spending more money enough?
by Colman (colman at eurotrib.com) on Mon Mar 26th, 2007 at 09:46:50 AM EST
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The EU's own goal of reaching 3% in 2010 is probably good. If it can be reached without increasing IP protection or, say, massive increases in military spending, the result of more spending is going to be beneficial.
by nanne (zwaerdenmaecker@gmail.com) on Mon Mar 26th, 2007 at 10:32:33 AM EST
[ Parent ]
How does the US number account for research indirectly funded by the government? Weapons projects and so on?
by Colman (colman at eurotrib.com) on Mon Mar 26th, 2007 at 10:07:15 AM EST
[ Parent ]
I would think that weapons projects tend to be funded by the government? Or at least as well. Whether or not military spending on research & development is included I don't know. Quite possible that it is. This can't account for the difference with Japan, though.
by nanne (zwaerdenmaecker@gmail.com) on Mon Mar 26th, 2007 at 10:27:50 AM EST
[ Parent ]
I'd imagine - without evidence - that R&D directly funded as such is counted. If Boeing carry out R&D for a new fighter plane project would it be counted as governement or private spending?

I have no idea what would be behind the Japanese figure, but I'd be interested in the structure of it.

by Colman (colman at eurotrib.com) on Mon Mar 26th, 2007 at 10:30:12 AM EST
[ Parent ]
And are there differences in accounting rules or whatnot that encourage companies to report things differently?
by Colman (colman at eurotrib.com) on Mon Mar 26th, 2007 at 10:08:26 AM EST
[ Parent ]
This is probably a good time to point out that I think that there are problems with research and product development - why are these two even in the same box? - in the EU. I'm just not convinced that a comparions with other economies on GDP grounds tells us anything useful at all. We can close that gap simply by allocating more funds to university research projects from the university budget and then having the university charge the projects higher admin fees.

Problem solved.

by Colman (colman at eurotrib.com) on Mon Mar 26th, 2007 at 10:32:30 AM EST
[ Parent ]
The EU's own analysis of the matter is that the difference is due to a difference in private sector spending and that it should be made up through increased private sector spending on research and the development of new products (rather than shifting more public sector spending from education to research, which may solve one statistical/accounting problem but creates 10 other very real problems).

The difference in private sector spending points at something real. Of course, the figures need to be broken down, as you indicate. It may be that in the case of the US it is merely spending on military development and patent trolling. That's an interesting topic for further research.

I think that there is a fairly continuous line from fundamental research to applied research to new product development, and therefore it makes sense to group them together when doing an analysis in an economic context.

by nanne (zwaerdenmaecker@gmail.com) on Mon Mar 26th, 2007 at 10:49:58 AM EST
[ Parent ]
It doesn't make that much sense, because you end up with different people talking about different things. When I hear the right-wing party here talking about funding research at the same time that they're talking about "partnership with business" it is pretty clear to me that they're talking about subsiding product development, not more money for fundamental research.
by Colman (colman at eurotrib.com) on Mon Mar 26th, 2007 at 10:52:51 AM EST
[ Parent ]
Business is not going to engage in fundamental research. The problem I see is that the EU's own research framework programmes are oriented towards applications to the detriment of fundamental research. So the EU is picking up the slack of business, and encouraging researchers to do less fundamental research.

"It's the statue, man, The Statue."
by Migeru (migeru at eurotrib dot com) on Mon Mar 26th, 2007 at 10:56:18 AM EST
[ Parent ]
fully endorse your comment? Although I would be interested in your thoughts as well how you'd think the universities should be funded for research - which should be a separate money stream compared to education.

Because this:

nanne:

but especially the issue of private sector funding is very sensitive

is certainly debilitating capacities of the EU universities.

Can I also cajole you to this recent comment of mine regarding the same subject(s)?

Even while there is a lot to be done in education, the EU is getting there - and is in absolute numbers still ahead of Japan and the USA.

Research is the different beast - and for Europe I think currently the most urgent one.

by Nomad on Mon Mar 26th, 2007 at 09:13:19 AM EST
[ Parent ]
Interesting comment, especially re- research development.

I agree with you that research funding should be a separate stream. I think this should be done through direct transfers from the central government/EU. Private sector participation should be encouraged, possibly through a central fund, possibly through agreements between individual companies and universities and possibly through hybrids. Depending upon sensitivities...

by nanne (zwaerdenmaecker@gmail.com) on Mon Mar 26th, 2007 at 09:58:54 AM EST
[ Parent ]
Hm... I agree about the environmental challenge, but see the problem not in the demographic but the job market development, and would prefer quality over quantity in education. Further challenges I'd see would be further EU democratisation, a US-independent and coherent (and non-imperial) joint foreign policy, reducing greatly the ethnic hatreds (especially that of Romas), and to permanently separate the EU project from neoliberalism.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Mon Mar 26th, 2007 at 07:22:44 AM EST
[ Parent ]
what dodo said...

addendum: chemical farming need to end YESTERDAY.

grid decentralisation is a huge issue too.

oh, and can the eurovision song contest, pronto, and san remo while you're at it.

~"When an inner situation is not made conscious, it appears outside as fate." Karl Jung~

by melo (melometa4(at)gmail.com) on Tue Mar 27th, 2007 at 04:08:27 AM EST
[ Parent ]

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