Home > UGC Publications > Speeches and Articles > 2001 > Speech by Professor Kenneth Young, Chairman, Research Grants Council (RGC) at the International Forum on Science Funding System Oriented to the Twenty-First Century organized by the National Natural Science Foundation of China in Beijing, China (1-3.8.2001)

Science Funding for the Twenty-First Century: View from a Small System

Paper presented at the

International Forum on Science Funding System
oriented to the Twenty-First Century

1-3 August 2001
Beijing, China

Kenneth Young
Chairman, Research Grants Council, Hong Kong
Special Administrative Region
China

ABSTRACT

The funding of science and technology takes on a more important role in the knowledge economy of the 21st century, which will be characterized by two features: the distance from basic research to commercialization is drastically compressed; at the same time, each region no matter how small must play on a global stage. From the perspective of a small system as a microcosm, some of the issues are seen in particularly stark relief. It is argued that there has to be a multiplicity of research support organizations and schemes, with different agendas and mechanisms, but well articulated one to another. Only such a division of labor can accommodate focus in applied research as well as diversity in basic research.

INTRODUCTION

I am grateful to the National Natural Science Foundation of China (NSFC) for the invitation to speak at this Forum on behalf of the Research Grants Council (RGC) of Hong Kong, which, like many represented here, has a formal joint research scheme with the NSFC. Allow me to start by offering congratulations to the NSFC on its 15th anniversary, and to say how wonderful it is to witness the NSFC's development. The increase in the NSFC budget from RMB 80 m to RMB 1290 m in just 15 years is an enviable rate of growth. The NSFC has contributed enormously in building research and educational capacity in China, a task so important for the development of the nation and the welfare of the people in the 21st century. We note with gratification that the 10th Five Year Plan has placed emphasis on science and technology as one of the engines of national development, and that the 2001 government budget for science and technology has increased by nearly 15% [1]. We also note that the Ministry of Science and Technology, in formulating policy within the framework of the Five Year Plan, has put forward a vision of market-driven applied R&D together with the necessary structural reforms, while at the same time sustaining basic research, including work, freely initiated, that aims only at revealing the regularities of nature [2]. All these developments bode well for the NSFC in the years to come.

KEY ISSUES IN THE TWENTY-FIRST CENTURY

Historical perspective

As we try to grapple with the challenges of the new century and indeed of a new millenium, it is of course necessary to do so in the light of evolving circumstances. If we go back in history, it is evident that the support of science has gone through major changes. Let me start by citing an example from Chinese history. One of the most important works on science and technology was Tiangong Kaiwu (Exploitation of the Work of Nature) written in 1637. In the Preface to this volume, the author Song Yingsheng made a plea that sounded like a research grant application -- for consumables and for per diem to support his co-investigators [4]:
In modern terms, two aspects of this grant application (if it can be so called) is worth noting. First, there was no salary item -- the investigator was unpaid, and was a man of at least sufficient means to keep his own (and his family's) body and soul together. Second, the plea was of course not addressed to a research council, not even the imperial court, but to a private benefactor, who was in fact able to come forward with the funds required.

The same is true in the West. From the days of the Renaissance it was largely a matter of patronage: for example, Leonardo da Vinci sought aristocratic patronage for the possible applications of some of his works to weaponry. The Industrial Revolution saw an explosion of engineering innovations, supported by commercial returns; yet science remained a proudly amateurish affair dominated by men of leisure, or at least men of means. Thus, of the two scientists who played key roles in elucidating the nature of combustion, Priestley in England was known to appeal to the Duke of Northumberland for support, while Lavoisier in France had a job as a tax collector for the king (for which he lost his head in the French Revolution). Lord Rayleigh endowed his own laboratories, and no funding agency ever told Benjamin Franklin to go fly a kite. Darwin went on his famous voyage on the Beagle as an employee of the Admiralty -- but an employee only to the extent of holding an unpaid post. Aries, the British Astronomer Royal now best known for the special function that bears his name, spoke out in 1851 against state funding for science, a stance that would now be regarded as quixotic if not downright insane.

In Britain, the Haldane Report of 1918, prompted in large part by evidence that science had played a significant role on the German side in the First World War, was the watershed in national support for science, leading to the establishment of research councils [4]. Support of R&D as national initiatives intensified on both sides of the Atlantic during the Second World War, with radar and the atomic bomb being prominent examples. This was followed by international competition fueled by the space race (with the West trying desperately to catch up with Sputnik) and the cold war. Then came the knowledge economy, characterized by a rapid integration between R&D and the market, and a partnership between the public and the private sectors, between universities and industry.

Given all these changes over the years (which tend sometimes to be forgotten), it is inevitable that the responsibilities, organizations and foci of public agencies supporting research must evolve with external circumstances, and need to be examined and tuned from time to time. It therefore behooves us, on the front line in this endeavor, to periodically pause and take stock of where we should be heading.

As a physicist, I should like to use a spacetime metaphor to encapsulate a major challenge for science and technology policy and funding in the 21st century: namely that activities will be compressed in time and dilated in space.
Compression in time

In the internet age that blossomed in the closing decade of the last century, the distance from fundamental research to applications and commercialization has been dramatically compressed -- in terms of the number of years (or even months) to go from the one to the other, and also in terms of the number of intermediary organizations and steps involved in the chain. As the gap narrows, universities and their staff and students have embraced entrepreneurship, starting dotcoms and biotech companies. At the same time commercial organizations are investing in research. Professors head towards industry, and industrialists become professors, even heads of universities. The movement of students is even more markedly changed; instead of starting at the bottom of a corporate ladder, increasingly young graduates want to work with (if not start) small companies engaged in innovation.

This change is so fundamental that some have questioned the description of upstream basic research and downstream applied research as erroneously conveying an impression of processes sequential in time, whereas they may now take place not in tandem but in parallel.

With commercialization possibilities brought from the distant future to the immediate present, there is more pressure to be relevant. As a result, in the 21st century there will be an increasing tension between focussing on strategic directions with short-term economic payback and protecting a broad spectrum of "rrelevant" curiosity-driven research. This theme is not new, but is amplified by the compression of the R&D chain.

This tension reveals itself in the competition for limited resources, which we know only too well. But an equally important element is less commented upon: namely that there is also a clash of values. Although seldom couched in such explicit terms, our funding decisions eventually come down to a question of where we wish to place the marginal dollar: on an astronomer probing the beginning of the universe or on an electronic engineer studying silicon chips, on a pure mathematician proving theorems or on a biologist trying to improve rice yields. These are different values, and we have to avoid the trap of asking the astronomer to demonstrate economic value, or demand of the engineer that his work should nourish the soul. Both sets of values are valid and important. The question is how a funding agency can avoid schizophrenia when pulled in different directions.

There are well-known instances where the different objectives have been accommodated with the same line of research. Galileo was able to persuade the city fathers of Venice to fund his research with the implied promise of turning his telescope towards the horizon to give early warning of hostile ships, but made his greatest contribution to humanity by turning his telescope towards the sky. But this is rare, and increasingly so in a world of specialization.

I should add parenthetically that the tension could border on the ideological. The purpose of applied R&D must be to increase knowledge and banish uncertainty. But, as so eloquently pointed out by Feynman [5], basic science is valuable precisely because it inculcates a sense of doubt and the habit of doubt. I shall not on this occasion elaborate on this ideological tension, important though it may be philosophically, save to cite the famous Cartesian dictum " doubt, therefore I am".
Dilation in space

Another distinguishing feature of the 1990s is globalization: every city, region or nation no longer stands alone in its economic or intellectual activities, but must participate and compete on a larger stage -- the stage is now stretched in space. Many issues confront the commercial world; for example, financial institutions without a global reach may find life very difficult in the 21st century. In the research enterprise it means two things.

First, quality benchmarks must be global. In research, anyone who cannot make a mark globally may as well forget it; there is no junior league. This is a particular challenge for the developing parts of the world. If research starts from a low base, how can the funding agencies nurture it until it can compete in the world league? Here our host the NSFC has achieved sterling success about which we should like to hear more. From the devastation of the educational and research institutions in the 1960s and 1970s have grown credible institutions, personnel and projects that are serious players on the international scene. On a much smaller scale, the Hong Kong RGC has also succeeded in building up a culture of research calibrated to the best standards. This we do by having international presence on our subject panels, and by ensuring that the expert assessors for project proposals are drawn from all over the world, nearly always with the vast majority from outside Hong Kong.

Second, in a global economy, activities become paradoxically more fragmented, creating specialization opportunities. Thus, software may come from India, hard disks from Singapore, RAMs from Korea and PCs from Taiwan. So too in research. No nation or region has the capability to lead in every research direction, but each can have the opportunity to lead in some.

The answer is therefore simple: to choose to do only a few things, but in these to do it as well as anyone else in the world.
Challenges to small systems

Several of the points I raised are accentuated in small systems. Proximity in a small community enhances the sense that whatever one does can affect jobs and productivity, and hence elevates the pressure to be "relevant". The necessarily small R&D budget (at least in absolute terms) makes selection and focus paramount.

In Hong Kong, we face another situation which is unique. The Basic Law stipulates that we pay no taxes to the Central Government, and therefore quite rightly we do not as a rule have access to research funding from organs under the Central Government such as the NSFC. Our research funding must be provided by the Government of the Hong Kong Special Administrative Region (HKSAR). Even with the best intentions, as a local or provincial government, it has unsurprisingly a limited scientific and technological vision, not only compared with larger systems, but also compared with national systems of about the same size -- Israel and Singapore for example come to mind. One wonders whether Silicon Valley would be what it is today if there is no US federal research support, and only research support from the State of California.

WAY FORWARD

Many of these issues are universal, even though they may be felt with greater intensity by smaller systems. I should like to suggest a few simple ideas. These are contained in advice that we have formally tendered to the Government of the HKSAR. What I have to say will be familiar to all of you, but one should not underestimate the novelty of some of these ideas to politicians and government officials.

Different organizations

First, because basic and applied research operate by very different values, their support and management should be handled by different organizations, each with its own agenda and mechanism. The way it is organized will of course differ from place to place. The situation in the US is probably the most well known: the NSF caters to more basic research; programs under the DoE support energy-related research; the DoD supports defense-related research and of course the large and growing NIH supports health-related R&D. Even if we cannot match the level of resources (on a per capita or per GDP basis), the diversity is a healthy role model.

One should not forget the large private-sector support for R&D in many parts of the world, in part driven by a robust capital market in the background, which provides the incentive for investments in R&D. In this regard, one must view the recent bloodletting on NASDAQ not as a disaster, but as the market performing its function of separating the sheep from the goat -- just as we in granting agencies fund some proposals and reject others. In one sense, the two processes are similar: they both direct scarce resources to the most worthwhile endeavors, based on peer review. Yet they operate by different mechanisms: in one case through formal written assessment by a few peers, in the other by thousands of investors each voting with his money. This underscores my point about the need to separate funding mechanisms for different types of R&D.
Support of basic research

Second, on this variegated landscape there should be at least one agency whose brief is to support basic research, to build educational and research capacity. Our host at this Conference, the NSFC, plays this role in China; the RGC discharges this responsibility in the HKSAR under the educational umbrella. It must be clearly understood that such agencies are not responsible for all R&D, but only for one component thereof. Otherwise resources will be diluted and more importantly priorities confused.

The role played by agencies that support basic research is best appreciated if one portrays the universe of all research endeavors on two dimensions: longitudinally from basic to applied to product development, laterally across different subject areas from pure mathematics to engineering. Then it is important for agencies responsible for basic research to consciously limit their reach longitudinally, to fund basic and (depending on their particular situation and charter) also some elements of applied research, but not to venture towards product development -- not because this is unimportant, but because others do it better. At the same time, they must try to encompass the entire range of disciplines laterally, if only because one never knows where the next big impact will come from; in other words, they must treasure diversity.

Here in Beijing, I can find no better advocate for diversity than Chairman Mao in his younger days [6]:
Bridging the gap

I have argued that different agencies should concentrate on different parts of the R&D chain. A corollary is that their activities must overlap and connect, for a chain is only as strong as its weakest link. Again this tends to be a problem in small and developing economies, for it is inevitable that different parts of the chain will mature at different rates.

The Government of the HKSAR is conscious of this problem, and has wisely taken steps to bridge the gap and fortify the link between basic research (principally in universities) and industry (both in Hong Kong itself and also in the Pearl River Delta with which the SAR is increasingly integrated in economic activities). Thus, an Innovation and Technology Fund (ITF) is established under the Commission for Innovation and Technology to support applied R&D, with strong preference for university-industry collaboration. The funding criteria are rightly different from those of the Hong Kong RGC. Discussions are in hand to allow those investigators who feel their academic research proposals may have an applicable component to register their intention with the ITF while they make an academic research proposal to the RGC, and for the ITF to be able to come in and independently vet the applied and developmental prospects at an early stage.

In addition, a Science Park is being established, in proximity to one and in partnership with all universities. An Applied Science and Technology Research Institute (ASTRI) is being established, to lead and manage R&D in focussed areas of direct and short-term relevance.

In fact, many of the points I have made have been put most succinctly by the Director of the Institute for Advanced Study at Princeton, at a conference in Hong Kong two years ago of nearly the same theme as the present one [7]:
Focus versus diversity

This leads me to my final point, on the need for both focus and diversity. For us, the contrast between ASTRI at the one extreme and the RGC at the other makes this point sharply. Put most simply, we expect that ASTRI will decide on its own what it wants to be done, i.e., broad project directions will be top-down; it will most likely focus initially on IT, perhaps microelectronics, and in time some elements of biotechnology. Proposals, if called for, will principally be about how each task is to be done, at what cost and on what schedule, i.e., on the R&D methodology. In contrast, for an agency like the RGC, the bulk of the funding will be allocated in response to bottom-up initiatives, contained in proposals that define for themselves what is to be done (and why it is important or interesting), in addition to spelling out how it is to be done; thus the project objectives are essentially unrestricted.

The focus in the one case and the diversity in the other are both valuable and necessary. Harking back to my earlier remark, they can only be accommodated in different organizations with different charters and different modi operandi.

The multiplicity of organizations and styles for research support goes without saying in a large system. For a small system of only a few million people, the point is not quite so obvious, especially to those unfamiliar with the complexities of research and its management. The Hong Kong RGC had therefore felt it necessary to spell out some of these points for the Government and the community.

Focus is now a vogue word, almost a mantra, in strategic planning, but in the context of research and its support, two aspects are often misunderstood by government planners. First, by focus (whether in a sector funded by an agency such as a national science foundation or in a university) one does not mean, for example, doing IT but not mathematics; it means working on selected areas of IT and selected areas of mathematics. Second, the extent to which one should focus varies along the chain from basic research to applied research and then to product development.

Perhaps the example of mobile phones will help make the point. In the production stage, a company makes a particular brand of mobile phones, Brand X, not Brand Y or Z -- a very sharp focus. During prototyping, the company tests the Application-Specific Integrated Circuit (ASIC) chips, but only the ASIC chips for mobile phones. In a forward-looking company, there will be a development section with ASIC capability for a broad range of applications. To keep abreast, or perhaps lead the technology and exploit the next generation of opportunities, the best companies will also perform applied research not just on ASIC chips, but semiconductors in general. Most academic departments of electronic engineering will have capability in ASIC design and in semiconductors. Moreover, in basic research, the corresponding problem would be the properties of electrons in solids, which ultimately underpin the entire enterprise, and this is a very broad endeavor indeed.

CONCLUSION

I have ventured to suggest a specialization of roles on a variegated landscape, and within this for at least one agency to support basic research over a broad front. These agencies in different parts of the world serve very similar functions, and because basic research is more often about the universal truths of nature than about (possibly competing) national or regional priorities, there is much to be gained from collaboration and dialog among funding agencies. I therefore salute our host for providing this opportunity for the exchange of views and for the different funding bodies to get to know one another better.

REFERENCES

Speech by Minister of Finance, 6 March 2001 (Peking: Renmin Ribao (Peoples? Daily), 7 March 2001).
Speech by Minster of Science and Technology, 30 October 2000 (Peking: Keji Ribao (Science and Technology Daily), 24 November 2000).
Song Yingsheng, Tiangong Kaiwu (1637). [English Translation: Exploitation of the Work of Nature, Chinese Culture Series 2-3 (Taipei: China Academy, 1980)].
H Rose and S Rose, "The Incorporation of Science", in The Political Economy of Science, ed. H Rose and S Rose (London: MacMillan Press, 1976).
RP Feynman, The Pleasures of Finding Things Out (Cambridge: Helix Books, 1999).
Mao Tse Tung, Selected Works (Peking: Foreign Language Press, 1967), p. 375.
PA Griffiths, "The Changing Character of Scientific Research", paper presented at the Conference on Science for the Twenty-first Century (Hong Kong, 1999).