IFS questions Osborne’s “short sighted” failure to invest in science and skills

The Institute for Fiscal Studies today urged the government to invest rapidly in skills and science, to avoid falling further behind rising economies like China. The IFS says austerity measures need not prevent “investment in our capacity for economic growth in the future”, nor should the success of China “be at the expense of the West”.

Highlighting the growth returns of investment in education, science, and research and development, the IFS’s Rachel Griffith and Helen Miller write:

“The key challenge for the UK and other knowledge economies is to invest now in order to foster a highly skilled workforce that is able to both compete for and engage collaboratively in tomorrow’s breakthroughs and that is flexible enough to adjust to changing conditions.

“Recent years have seen increasing attention on China’s technological performance, which is unsurprising given the barrage of statistics showing that innovative activities in China are growing at an astounding rate.

“Over the last decade, there has been rapid growth in investment in Research and Development (R&D) such that the proportion of Chinese national income invested in R&D (1.1%) is now comparable to that in the UK (1.15%).

“At the same time, large investments in education have produced a proliferation of Chinese graduates, almost half of which study for science and engineering degrees.

“This investment in research capacity has been translated into equally impressive growth in innovative outputs.”

And looking specifically at the challenges facing the UK, they add:

“The challenges for Western governments relate not to devising policies to deter investment in China or other emerging economies, but to ensuring that they make sufficient investments in their own economies such that they remain leaders in innovation.

“In large part this means ensuring that we have a high skilled workforce – that can engage, both competitively and collaboratively, in creating new knowledge and that is flexible enough to adjust to changing economic conditions – and that we invest sufficiently in science and research…

“Failing to invest sufficiently in science and skills can be short sighted. The impact of such spending occurs in the long run, in the form of higher productivity and economic growth. Being able to compete with China in 10 years time requires investment in skills and research today…

“The current economic climate should not prevent investment in our capacity for economic growth in the future. The impact of China’s rise will depend largely on whether we are with them at the technology frontier or onlookers from the sidelines. We should choose the former.”

Left Foot Forward has previously reported how the freezing of the UK’s £4.6 billion budget for scientific research – an effective real terms cut of 8.9 per cent, while otherr European countries and the US, never mind China, increase theirs - look likely to hit Britain’s global reputation, as do the abolition of Regional Development Agencies and the coalition’s immigration cap.

As Professor Evan Parker, of Warwick University’s Department of Physics, told us last October:

“If we are to keep our global position in pioneering R&D, Westminster politicians must keep up with counterparts such as China, Singapore and even other European member states such as France.

“Germany is now increasing its science budget by seven per cent. President Obama has committed three per cent of American GDP to scientific research - a doubling of the budget as part of the economic stimulus package.”

As the European Commissioner for Research, Innovation and Science, Máire Geoghegan-Quinn, told the FT (£) in February: 

“We have China breathing down our necks; we have the US far ahead of us… I think it’s disappointing… that what is being done in France and Germany is not being replicated in the UK.

“I’m talking about France and Germany substantially increasing their investment in this whole area, while at the same time that same increase in investment is not happening in the UK…

“If Europe stands still, we will see the US disappear into the distance just as we feel emerging nations breathing down our necks.”

And as shadow business secretary John Denham warned in March:

“Other countries, including those in the fast growing economies, are not standing still. This is not simply us falling behind our competitors. In science, the ability to collaborate internationally is the lynch-pin of the ability to be competitive nationally.”

With the news today that this is the slowest recovery since the Great Depression, coming on top of all the other evidence, George Osborne’s stubborn refusal to heed the IMF chief’s call for a Plan B, repeated this morning, looks more and more misguided by the day.