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Scientific Productivity Predicts a Nation's Future Wealth Better Than GDP

In a sure-to-be controversial paper, a group of researchers argues that investment in basic science is the best indicator for current and future prosperity.
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There are scores of different metrics economists, politicians, mathematicians, and bureaucrats have whipped up to measure and predict a nation's prosperity. Currently, the go-to indicator is Gross Domestic Product—the more goods and services your nation churns out and sells, the better—though plenty of folks think that's inadequate. There are others, of course: the Gini Index measures inequality, and Bhutan is famous for quantifying Gross Domestic Happiness.

But none is as good a measure as science. That's what a team of scientists is arguing, anyway.

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New research published in PLoS One purports to show that the best way to determine how prosperous a nation is, and how wealthy it will be in, say, five years, is to analyze how productive its scientists are.

"Scientific productivity is a much better predictor of economic wealth and Human Development of a nation than other variables tracked by a number of commonly used indices proposed worldwide," the authors state. The study first assessed the predictive capacities of previously used indicators like crime rates, GDP, press freedom, and property rights. The result of that assessment looks roughly like this:

The researchers then looked at nations' scientific activity, namely, how many papers each published in a given field each year. They used that number to calculate a country's "relative research effort"—essentially, the percent of its total research investment it devoted to that given field. They then sought to calculate what they term "Revealed Comparative Advantages" (RCA) by comparing a country's productivity there to the total number of scientific publication output worldwide.

Still with me? Essentially, you can think of the resultant number as a sort of Gross Domestic Science (a term I just made up). That's becauseresearchers think that middle income nations that invest in science research continually show the most prosperous growth. Looking at different periods, researchers found "a highly significant correlation between high RCA in science and fast economic growth in the following year."

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But the kind of science invested in is important, too. Nations whose scientists publish more papers in chemistry and physical sciences do better than those that focus on applied sciences like agriculture or medicine.

As the authors write in the abstract, "Results suggest that the economies of middle income countries that focus their academic efforts in selected areas of applied knowledge grow slower than countries which invest in general basic sciences."

Developing countries expend more resources combating disease and hunger, so investing in medical and ag research makes sense. The RCA, then, reflects that in its effort to describe a country's current and future prosperity. It also describes the fact that rich nations, which can afford more R&D, can keep accumulating wealth faster, while poor ones grow more slowly.

But the RCA also describes the middle income countries that experienced explosive growth over the last ten years. Countries like Kazakhstan, Russia, Azerbaijan, and China all invested heavily in material science research, and each grew like crazy since the turn of the century:

Now, there's a pretty clear reason why this is—all of the above, with the exception of China, are focusing their economies on resource extraction. So you need to invest in material sciences and chemistry to pull out oil, coal and gas effectively.

And it helps explain the paper's first conclusion, that "the economic growth of middle income countries can be predicted with high accuracy by looking at their relative academic productivity in physical sciences and engineering."

But it takes more than resource extraction to sustain growth, of course. Science education helps diversify the economy, by improving product and service offerings. Interestingly, researchers also found that "No country with exclusive preferential investment in technology, without investment in basic science, achieved relatively high economic development." No jumping the gun, then. Tech hubs and mini-Silicon Valley's aren't going to cut it; if these researchers are right, basic science education is still the key to a robust economy.

All told, it makes for an interesting entry into the 'evaluation of nation-states' game; science surely undergirds the foundation of any modern economy, so it makes sense to analyze a states' competitiveness using it as a central metric. It should also send a powerful signal to nations looking to speed their economic development: do science.