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the Complete Review
the complete review - economics / science


How Economics Shapes Science

Paula Stephan

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To purchase How Economics Shapes Science

Title: How Economics Shapes Science
Author: Paula Stephan
Genre: Non-fiction
Written: 2012
Length: 241 pages
Availability: How Economics Shapes Science - US
How Economics Shapes Science - UK
How Economics Shapes Science - Canada

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Our Assessment:

B : solid descriptive overview

See our review for fuller assessment.

Review Summaries
Source Rating Date Reviewer
Times Higher Ed. . 12/4/2012 James Wilsdon

  From the Reviews:
  • "Informed, authoritative and thoughtful, Stephan's book will be an invaluable resource for scientists, policymakers and all those working to improve the "science of science and innovation policy" in the US, Europe and further afield." - James Wilsdon, Times Higher Education

Please note that these ratings solely represent the complete review's biased interpretation and subjective opinion of the actual reviews and do not claim to accurately reflect or represent the views of the reviewers. Similarly the illustrative quotes chosen here are merely those the complete review subjectively believes represent the tenor and judgment of the review as a whole. We acknowledge (and remind and warn you) that they may, in fact, be entirely unrepresentative of the actual reviews by any other measure.

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The complete review's Review:

       Advances in science are a major contributor to improved human welfare, but science tends to be expensive -- and often with uncertain outcomes (including that of no immediate 'pay off', even if long term the advance(s) may prove (or lead to things that are) enormously beneficial). Companies pursue research and development, with the hope of profiting from advances (especially during the period of patent-protection), but much science is so large-scale, basic, or long term that other forms of support are necessary. In the US -- the focus of Stephan's book -- a university-system where scientists must also find outside (often federal government) funding dominates; some other countries have different systems, such as of established research institutes. Stephan's book offers an overview -- with a very American focus -- of the monies involved, their flow, and various incentives involved.
       Stephan argues that prime motivators for scientists in choosing and pursuing their careers are those of puzzle-solving and discovery -- and, in particular, recognition (specifically for priority -- figuring it out/getting there first). She repeatedly suggests that scientists do not primarily go into their field for the money, arguing that there are more remunerative career-choices, but she provides little evidence (beyond the anecdotal -- scientists' explanations of why they chose their careers) and the question seems far more open than she suggests. (For one, the pay seems pretty good; beyond that: it's not clear those who choose this career would have the skill-set to compete in other, more remunerative, fields; the study of science can lead to remunerative careers in other professions (all those physics PhDs who become Wall Street quants); and, while there is a lottery-element to potential payoffs (whether in the forms of cash-rich prizes or discoveries that can be cashed in), these payoffs can now be huge -- bigger than those available in almost any other field).
       Money is certainly central, and among the interesting things discussed here is how it can be used as an incentive -- whether as specifically targeted grants, ends-oriented prizes, or profit-participation with any intellectual property advances that can be monetized. Among the fascinating observations is how much time and effort scientists in the US system dedicate to pursuing grants -- generally NIH grants -- and how efforts to reform the system (by offering richer and longer grants -- i.e. ones that don't have to be applied for as often) seem to have exacerbated the problem. Stephan notes also how much -- especially federal -- money flows to life sciences research -- an easier political sell to constituents, she suggests, than the hard sciences, which don't seem as immediately and obviously applicable to everyday life, leading to the interesting question of what kind of science should be supported, and what kind of incentives can lead to money being directed appropriately.
       Stephan offers a very good overview of the inputs involved, from the personnel costs associated with university labs (and how the salaries and opportunities for those employed there might affect personal choices) to materials (even the cost of lab mice adds up quickly, as does their care: Johns Hopkins: "employs ninety people, including seven veterinarians, to care for their 200,000 mice"). There's less clarity, unfortunately, about outputs -- determining the value of the work. Much can not be monetized, certainly not immediately, and so the fall-back stand-in tends to be reputation -- itself hard to measure, even if in some cases obvious (the Harvard name alone (e.g.), she notes, carries immense weight). Other measures, such as number of publications, also come with problems (there are a variety of circumstances where scientists get to attach their names to work they have only had limited involvement with, for example).
       Other incentives become the flavor-of-the-day, too: "since 2009, prize fever has struck Washington", Stephan notes -- but especially specific-results-oriented prizes ('first X to do Y') also come with a host of problems, suited to some goals, but far from all.
       The peculiarity of academia -- that it produces more would- and want-to-be academics than the system has room for -- is also considered at some length, as is the effect of foreign-born scientists making up such a large part of the support system of PhD students and postdocs who do much of the grunt work. Clearly, the allocation of resources here is less than optimal, with too many students spending years on a career-path that doesn't lead to the expected career. (Of course, this is a common problem, from actors to athletes, as well.)
       Given the importance of scientific research and development, and the huge amounts of money involved, it is in the national interest to determine how funds might best be allocated. The complex public-private mix -- with some foundations also providing vast sums of funding --, and the fact that some science is an easier public sell than others (as there are some diseases that are 'sexier' than others, and some projects that look a lot like white elephants (the Texas Superconducting Super Collider, for example)), make it difficult to allocate funds (and incentives) appropriately -- if, indeed, it's even possible to figure out what 'appropriate' might be.
       How Economics Shapes Science offers a good descriptive overview of the current state of how science is conducted (mainly in the US). But Stephan doesn't dig into much of the economics, describing some of the basic problems, such as poor incentives or misallocation of time and money but not pursuing some of the economic reasons behind many of these (or the adjustments that could be made to change/correct them). Nevertheless, even in just describing the many issues she at least points readers (and policy makers) to the questions that should be pursued (though offering only limited guidance as to possible alternatives and remedies). Of course, there are basic questions, like simply what d we want from our science, that shape any policy answers and determine what direction to take .....
       A useful companion-volume to the debate about the study and practice of science, especially at (American) universities, but raising far more questions than it tries to answer (as, admittedly, it doesn't try to answer all that many).

- M.A.Orthofer, 8 September 2015

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How Economics Shapes Science: Reviews: Paula Stephan: Other books of interest under review:

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About the Author:

       Paula Stephan teaches at Georgia State University.

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© 2015 the complete review

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