Sit quietly in any pub or cafe and you will soon learn why the economy is performing so badly. Most of the diagnoses centre round a few simple tropes: wages are too high, holidays too long, taxes are too heavy, hours worked are too short…….Now, we would not dare to cross the opinions of the towering intellects you find in the bar of the Dog and Duck (it’s physically unsafe anyway ) But we dare to offer an alternative explanation for why economic growth works so well for some countries, just for your consideration, gentle readers. And the answer is: the amount that each country spends on Research and Development,
Let’s take Switzerland as our shiny example. It’s a tiny country constituting only 0.1% of the world’s population. But its R and D spend (3.4% of GDP) puts at 6th place in the global ranking of R&D. The result is a highly diverse export orientated economy, a well embedded public-private sector ecosystem of research institutes, universities schools and so on. All of which puts it almost at the top of the GDP per head league. . There are local advantages: it has strong stable institutions, membership of the EU single market and a low defence spend. Other countries share all or some of these advantages to a greater or lesser extent. We could argue for paragraphs about the pull and tug of these various factors. But we think one lesson is unavoidable, writ both large and small
Writ large, technology is the true game changer for economies. The advent of steam power in the industrial revolution utterly transformed both the out put and wealth of the nations which adopted it. However many hours humans and their animals laboured, they could never match the colossal output capabilities of powered engines. And technology only grows from a huge ecosystem of more general research and scholarship. Current debates aside, Industrial Revolutions are rare. But they can be mimicked by a pipeline of small steady innovations in many fields, which achieve the same things. This is the lesson writ small, which the Swiss have learned par excellence. Tap room philosophers may be excellent at the book keeping needs of their various small enterprises. But they are blind to the bigger lessons: on this matter and many others.
[1]https://www.aboutswitzerland.eda.admin.ch/en/research-and-development
#R&D #science #technology #universities #investment #GDP growth
Learning, Science and Society 