The FINANCIAL -- When a country engages in scientific research, the fruits are harvested by the whole of humanity.
The FINANCIAL -- When a country engages in scientific research, the fruits are harvested by the whole of humanity. Fundamental research, generating knowledge without direct applications but needed for developing applications, is published in international scientific journals open to everybody. A society can exploit this knowledge without having to pay royalties or patent fees, and, most importantly, without investing in its own research facilities.
Yet even the results of applied research can hardly be monopolized. The economic fortunes of some Asian countries, in particular China, are built on technology developed in Europe and North America. Through reversed engineering and industrial espionage, the Chinese copycats managed to get close to the heels of world’s most advanced producers of various commodities. For a couple of reasons that we will not discuss here, international patent laws are largely impotent to protect intellectual property when the delinquents are implicitly backed by their governments. Western research money was heavily subsidizing the Asian competitors.
Why should a society then allot resources to research at all?
There are at least three reasons. Firstly, it is essential to have a well-educated population. Without smart people, it will be impossible to even copy what others have discovered. Yet university professors who do not engage in research themselves quickly lose touch with the research frontier in their fields, and they will not be capable anymore to participate in the worldwide scientific debate. At this point, they also cannot teach to their students the modern developments in their fields anymore. This insight was behind the concept of “unity of teaching and research”, propagated by Wilhelm von Humboldt in the 19th century.
Secondly, even though others can copy what you invent, you will be the first to have the knowledge available. By copying European and American technology, the Chinese could get close to the heels of Western companies, but they could not overtake them. Copying gives you access to a new technology for free, but there is a delay. In particular with regard to high-tech products, a lag of one or two years can make a huge difference.
Thirdly, and this is what we want to discuss in some detail, there may be a need for strategic research. In order to understand this idea, let us turn to a Brazilian example.
SPECIAL KNOWLEDGE FOR SPECIAL NEEDS
In the 50’s and 60’s of the last century, Brazil was suffering from rural poverty and frequent food supply crises. The country was the world’s main exporter of coffee, yet at the same time, Brazil needed to import huge amounts of other agricultural products in order to feed its population. While coffee was produced at the state of the art of the time, other goods were produced highly inefficiently, as Brazilian agricultural practices were not adapted to the tropical climate and various unique geographical conditions of the country. The available arable land could not sustain the increasing demand for food, and allow for exports at the same time. Exports were deemed essential for the overall development of the Brazilian economy.
Brazil was in dire need of specific knowledge that would increase the amount of arable land, but those countries that faced similar conditions were even poorer and lacked the capacities to come up with technological solutions. So, nobody else would generate this knowledge if Brazil would not do it on its own.
Understanding this dilemma, the Brazilian government founded Empresa Brasileira de Pesquisa Agropecuaria (EMBRAPA), Portuguese for Brazilian agricultural research corporation. EMBRAPA is a state-owned company affiliated with the Brazilian Ministry of Agriculture. As stated on its website, the corporation’s mission is to “provide feasible solutions for the sustainable development of Brazilian agribusiness through knowledge and technology generation and transfer”. EMBRAPA is an example for strategic national research, tailored for the specific economic needs of a country.
Many things changed with the establishing the EMBRAPA in 1973.The changes were not rapid, yet in the long run they were drastical. EMBRAPA introduced innovations to Brazilian agriculture that allowed to turn cerrado (the Brazilian savanna territory) into arable green land. EMBRAPA became the foremost center of expertise in tropical agriculture, not only in Brazil, but worldwide. After agricultural production in the tropical areas of Brazil picked up, the country became one of the world’s main exporter of orange juice, sugar, coffee, chicken, and beef (see Chart 1).
The article ”Embrapa, a successful case of institutional innovation” by Eliseu Alves (published in Revista de politica Agricola, 2010) emphasizes the importance of support from the federal government, in particular in the early stages of the institution. During the first twelve years of its existence, the corporation had to offer little more than promises. Nevertheless, the government, not forced to generate an economic return in the short run, invested in the human resources and the infrastructure of EMBRAPA on a large scale.
The government is still the major supporter. Chart 2 shows the compositions of the EMBRAPA’s budgets in the years 2000 to 2009. In most years, the government provides 90-95% of the budget.
A similar story could be told about how Israel managed to successfully operate farms in the Negev, a desert that covers almost half of the country. In the course of these efforts, Israeli researchers became the world’s foremost experts on how to do agriculture in dry regions.
In 2011, the Georgian government recognized agriculture as one of the strategic priorities of the country. As it is written in the “10-Point Plan for Modernization and Employment 2011-2015” of the Government of Georgia, the main goal is to create new jobs and improve the quality of life in rural areas through upgrading the Georgian agriculture.
While Brazil in the 60th and Georgia today had similar policy priorities, Brazil in their time understood the importance of scientific research, while in Georgia this aspect is not featured as prominently on the political agenda. And indeed, the geographical and meteorological circumstances in Georgia may not require tailored research on Georgian agriculture.
However, Geogia’s agricultural sector does have unique problems. These are, however, more of an agricultural economics type. There is no blueprint available on how to deal with the social implications of structural changes in the rural regions, as Georgia’s social and cultural characteristics are rather unique. The situation is further complicated by the geopolitical complexities and various conflicts in the region, affecting possibilities for trade. Also in terms of infrastructure, Georgia is not a country like any other.
Therefore, it should be considered to declare not agriculture, but agricultural economics to be a field of strategic research in Georgia. This might help to cope with the huge challenges of Georgia’s rural regions that will come up in the near future.