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Is research automatically impacting on economic development? No, not necessarily

Who knows me is aware that for more than twenty years I have been dealing with business development, value creation, competitiveness and capacity building in companies, governments, science parks and research centers.

I have been leading large organizations in my home country, Italy, constantly traveling worldwide, and I have also received important assignments in foreign governments, before in the Middle East and now in Australia.

In spite of the many experiences through my professional life, I am still surprised to realize how often scientific research is so wrongly associated to the concept of economic development.

The error that I keep seeing around is the assumption that making a major investment in research infrastructures automatically leads to a positive impact on local economic development.

This belief is widely spread in political, academic and business environments, in all geographic areas, but it is an error. Infact, unfortunately there are many examples where a great deal of investments in research has not produced any evident impact in terms of economic development.

A strong capability to generate knowledge is definitely an important starting point, it is a necessary condition, but certainly by itself not a sufficient one.

The target of local competitiveness is achieved through initiatives that are able to increase the innovativeness and the added value of local economic activities, resulting in increased sales, higher margins, more and better sustainable jobs.

When you invest in a new research center with the intention to produce a positive impact on the local competitiveness, first of all you must wait until the research activity reaches a certain level of critical mass and productivity in terms of data and newly generated knowledge.

Once you are there, it is evident that the research itself is not enough: what counts is not to search, but to find something relevant.

But even finding is not even enough, because then you need to create value out of it, transferring it into a business entity that takes care of the development of the innovation in order to finally produce wealth, through more sales or higher margins.

If you leave the process unattended by limiting the intervention just to the research capability, it is highly probable that you will not create any impact on the economic development in spite of your big initial investment and your high running costs.

Even the theorem claiming that research activities have an automatic impact on local environment because of the spontaneous cross contamination of ideas and stimulation to the local environment generated by the geographical proximity is erroneous. In fact, the technology transfer process is global and intellectual property is by definition an intangible asset that can be moved anywhere, so it is statistically very unlikely that the ideal partner is just right there, near to your research center.

In conclusion, it is clear that the research activity by itself cannot automatically generate local economic development. The condition to make it happen is that the territory must establish an effective ‘interface’ with the local economy and the global market: its structure has to be business-minded, market driven, accountable and possibly independent from the research structures and the local political environment.

The interface must take care of the critical factors of local competitiveness and manage all the possible collaborations between technology, skills, know-how holders able to improve the bottlenecks, driving in any possible solution wherever they may be found (and it is evident that it is statistically not probable that the best solution is generated by the local research environment).

Similarly, on the research front such an interface must find exploiters for any innovation locally generated, wherever they may be found, managing the complex value generation process.

The presence of such an effective structure is also the condition to ensure an effect of ‘capacity building’ and entrepreneurial mindset, two extremely important ingredient of the economic development.