Study explores positive link between research and economic growth

Recent research in South Africa confirms what has almost become a truism, particularly in the developing world: knowledge production and the pursuit of higher education is good for a country’s economic growth, and governments would do well to bear such evidence in mind in their development of research-related policies.

A paper by Roula Inglesi-Lotz and Anastassios Pouris, published in the journal Scientometrics, found that over a period of 28 years, from 1980-2008, South Africa’s research output – published articles as measured against the rest of the world – could be considered a factor influencing the country’s economic growth as measured by gross domestic product, or GDP.

Citing studies dating back to 1986, the authors from the University of Pretoria admit that interest in the relationship between knowledge production and economic growth is “neither recent nor innovative”. However, they argue that an “appropriate indicator to represent accumulated knowledge has always been a predicament”.

Enter scientometrics, which provides the tools to measure knowledge as research output in a country. Citing earlier researchers, the authors argue that research publications of a country have been found to be good proxies of scientific manpower and knowledge accumulation.

According to Pouris, scientometrics is a system of knowledge that endeavours to study the scientific system using definite methods: observation, measurement, comparison, classification, generalisation and explanation. To use a parallel, scientometrics is for science what economics is for the economy.

Inglesi-Lotz and Pouris argue that evidence that the research undertaken in a country is appropriate and can fuel economic growth could be a powerful argument for the science and technology community in its quest to raise scarce resources.

Using an autoregressive distributed lag method, the study analysed two main variables: South Africa’s GDP, derived from Reserve Bank data, and research output derived from the multidisciplinary Institute for Scientific Information (ISI) Thomson Reuters family of databases, which cover the world’s most influential and important journals across all fields.

The study reveals that from 1981-2010 South African publications, as well as the share of South African papers in relation to the rest of the world, showed an upward trend that became steep from the beginning of 2000 onwards. Pouris attributes this to a new funding formula that subsidises universities by more than ZAR100,000 (US$12,300) for each publication that their staff produce.

The South African study confirms earlier research, which found that the nature of the link between research and economic growth varied depending on the development stage of the country under scrutiny, and its specific emphasis on particular scientific disciplines.

Thus, only in developing countries was there a significant positive correlation between GDP and research output – assumed to influence economic growth through the improvement of academic human capital as the main creator of knowledge.

Interestingly, however, the paper found that the opposite does not hold: economic growth did not influence national research productivity for the same period. This was also confirmed for the various specified scientific fields.

The authors argue that for as long as the ‘directional causality’ between research and economic growth lasts, science and technology authorities should maintain and increase their support to the research community.

“Undoubtedly, there are different ways that various scientific disciplines interact and affect economic development.

“For example, development based on the pharmaceutical industry requires substantial basic research and risk capital. Development based on engineering products, on the other hand, requires less basic research and (from the example of the East Asian countries) more expertise in reverse engineering and accommodating intellectual property regime,” the authors write.

They suggest that future research could examine whether scientific disciplines should be linked to the country’s economic planning, whether emphasis in different scientific disciplines has an identifiable impact on economic growth, or whether the 'East Asian tigers' paradigm – with its focus on engineering-based disciplines – is applicable to other countries.

* Click here to find out more about the article titled “The Influence of Scientific Research Output of Academics on Economic Growth in South Africa: An autoregressive distributed lag (ARDL) application”.