The current worldwide economic situation is bringing scrutiny to how developed countries balance their national budgets, and for the scientific community this provides a timely and interesting opportunity to observe how public investment in scientific research and development (R&D) is being either increased or significantly reduced by different countries.
Some countries believe that investment in R&D is one to help get out of the crisis; heavily investing in R&D can diversify their economies and increase their competitiveness. For example, France has announced a €35,000-million ($4.6-billion) investment in research. Germany has implemented a 5-percent increase in the budget of its main research institutions until 2015. But other countries are trying to reduce public expending at all costs. Recently, Spain announced a whopping 25.6-percent cut in its budget for R&D. It is interesting to note that Spain is, along with the countries that have been bailed out (Portugal, Italy, Greece, and Ireland), among the countries that spend the least amount in R&D. Conversely, countries that invest more in R&D have very low-risk premiums. It seems that public investment in R&D is the effective recipe against the contagious economic illness that many developed economies are suffering.
One could think that at least the markets will react positively to short-term radical measures to reduce national deficits. Unfortunately, for those countries that are dramatically cutting in R&D, although markets will be benevolent to dynamic and competitive economies, they will be merciless to economies with high unemployment rates, lack of opportunities, and brain drain, trends that underinvestment in R&D will only aggravate. A good example was seen when Spain was significantly punished by the markets in the days after announcing these austere but unselective measures on March 30. Just few days later a national call for promoting scientific culture was announced by Fecyt, a government organization devoted to promoting science and technology. A crucial issue is how to convince now-young Spaniards that there is a future in science when there is no money there, and when the leaders of the country have decided that is not a priority. Furthermore, what does this mean for those who already decided to go for a career in science? In the past, companies have been incentivized via tax deductions to invest in innovation, but now many of those incentives are gone. How can we convince others to place a bet on R&D when the leaders of the country have decided that this is something superfluous, something that has to go in difficult times?
However, the unprecedented reduction in government investment in R&D is only one of the recent measures announced that exacerbates our "science deficit" and that will impact our ability to create a more competitive and diverse economy in Spain. Since the end of last year, by law, no public institution can hire any new scientist, teacher, or professor, no matter how good, how capable of attracting funding, or how able to create new companies he or she is. This is especially dramatic for the researches under the Ramón y Cajal program, which include some of the most brilliant scholars of Spain, typically between 35 and 45 years old. Sadly, it seems that bright futures for these individuals exist only abroad. Suddenly closing programs that took years to build doesn't make any economic sense, as the losses and opportunity costs will be far greater than the money saved. Similarly, pushing the best and the brightest away at their best time of their careers after investing so much in their education and training is possibly the worse decision a government can make to recover from an economic crisis.
A similar cut has been announced in education (22-percent reduction), which is significantly higher than the average reduction in the national budget (16.9-percent). This is despite the fact that three out of 10 students in Spain are unable to finish the Obligatory Secondary Education (ESO) and Spain is 12 points below the average of the OCDE countries (18 points below in science) in the PISA study. As in the case of public investment in R&D, those countries at the top positions of the PISA ranking are also the ones with lower-risk premiums; more sustainable, competitive, and diversified economies; and better-paid jobs. Research and education seems to act as vaccine against the worst consequences of the crisis, which in the case of the Spain is unemployment, which reaches almost 50 percent for young people. In the U.S., the Obama administration has identified education as one of the key strategies for the future of the country, specifically focusing on the teachers, announcing a nation-wide program to train 100,000 teachers of STEM in the next 10 years.
Balancing public budgets is not only necessary but urgent in many developed countries, because their economies are not able to grow at the level that will allow maintaining many public services. However, dramatic reductions in strategic programs and education, and closing the doors to the most talented, will have only limited, short-term budget impacts, and they come at the expense of making it impossible to create conditions that foster growth, competitiveness, and a dynamic economy.