In an earlier posting, I posed the following questions:

• What is the selection process used to determine investment in R&D in the country’s universities?
• Who are involved and how rigorous are the grant procedures at the university and individual researcher level?
• Which external body conducts monitoring of scientific and commercial outcomes and deliverables?
• Are there major issues related to leakages, wastage or inefficiencies of the allocations?
• Are reforms necessary in the disbursement of public funds for R&D in the universities?

These questions are applicable not only to universities that were the subject of the initial posting. They are also pertinent in terms of the entire framework set up to manage and disburse R&D funds in Malaysia.

Why am I asking these questions? The intention behind these questions is not to begrudge public expenditure on R & D. Indeed, such expenditures are necessary to nurture the innovation and creativity needed to raise the country’s economic performance.

The intention is to ensure that these scarce public funds reach the most deserving sectors and applicants, are optimally utilized and can achieve the results that the policy makers have in mind.

Seven-point checklist

In designing and implementing R&D grant policies (for the short term), our policy makers may want to take into account the following suggestions:

1. Ensure full disclosure, transparency and accountability by all the agencies in charge of R&D funds. As a best practice example, see Table 1 below and the information provided by the US National Institute of Food and Agriculture in its website on the grants that it administers.

All government Ministries and agencies provided with R&D funds under the Ninth Malaysia Plan should be required to use this as a model for public disclosure and monitoring of the funds under their control.

2. A designated Ministry – possibly the Ministry of Finance – should be made responsible for monitoring the disbursement of grants through a publicly accessible website. The website would collate the fragmented information on R&D allocations and spending from individual agencies and provide regular breakdowns and analysis on allocations, expenditure and results provided under the Ninth Plan.

3. A level playing field should be set up in providing grant access to applicants applying for R & D funds. If the R & D funds are restricted to various categories of applicants, the restrictions should be openly stated and the justification provided.

4. The policy of exclusion of private universities and bias in favour of public universities in the access to R&D funds (as well as training) needs to be revised.

Although private universities are profit driven, they should nonetheless also be granted eligibility towards R&D support and funding. In addition to direct funding through grants and loans, government should provide for a higher level of tax incentive for R&D conducted in private universities, loan guarantees for appropriate R&D projects undertaken by private universities and promote private universities participation in national R&D projects.

5. A combination of the best available experts – Malaysians and non-Malaysians – should be called upon to serve in the selection committees established to decide on R&D grants.

The committees should include a combination of industry and academic experts so as to ensure that relevant market-driven R&D applications are prioritized at the same time as cutting edge research is being fostered. There should be full public disclosure of the names and credentials of the selection committees or panel members to safeguard against the emergence of a select club of “non-expert insiders??? dominating the R&D selection process and disbursements.

6. A robust regulatory framework covering initial screening, rigorous selection, and frequent monitoring of successful applications should be put in place to avoid the emergence of free rider and moral hazard problems as well as weed out under-performers in R&D work that receive public support. Clauses for exclusion from future applications as well as harsher penalties for flagrant abuses of the grant should also be clearly spelt out.

7. Stringent evaluation of research outcomes and deliverables by independent and reputable evaluators should be made mandatory especially for large-sized grants. The evaluation results should be published and widely disseminated.

 

The long-term reform needed

The suggestions above in R&D grant reform are only a temporary Band-aid if the objective is to generate the best possible outcomes from the country’s investment. In the medium and longer term, a more radical solution is required in the way in which R&D is fundamentally carried out in the country.

For R&D to really generate the best outcomes, we have to learn from the lessons of other countries similarly engaged in fostering R&D. One such country is Australia where R&D has basically developed along the lines that our country’s policy makers seem to be bent on following.

In Australia, the thrust of the Australian Government's R&D policy is located in 64 government-run R&D centres. According to a recent analysis by Ted Roach, CEO of the Sydney Business & Technology Centre, these centres develop little or no innovation that is manufactured and exported. See Submission 2: Inquiry into the state of Australia’s manufacturing industry now and beyond the resources boom.

Not only are Australian Government-run R&D centres highly inefficient in commercialising research (by Roach’s estimate, Japanese private sector R&D centres are a staggering 1,800 times more efficient at producing exports from their innovation than the Australian government-run R&D centres), Australia appears to have socialised its development of innovation at great cost to the economy.

The other thrust to the Australian government’s R&D policy is to fund private companies in isolation or small clusters. Studies indicate that this modus operandi is also highly inefficient.

Instead of these two approaches, Roach has made the case for commercialising research needs in large private sector commercial centres as done in Japan where government funding is based on outcomes. In this way, outcomes can be measured by the level of exports achieved from the manufactured innovation developed in the private sector commercial R&D centres.

Although this Japanese model may not be directly applicable in the Malaysian context and may need to be considerably tweaked to achieve success, the lesson to be learnt from Roach’s and other similar studies is obvious. This is that government and committees should not try to pick winners when it comes to funding R&D.

The earlier part of this article was titled ‘Higher education: The worst aspect of policy discrimination of private universities’ and appeared Nov 12, 2009.

 

Table 1: Funding Information Provided by NIFA in Its Website: http://www.csrees.usda.gov/business/business.html

Federal Assistance

NIFA supports the base programs of state Agricultural Experiment Stations and the Cooperative Extension System nationwide at land-grant universities. As USDA's primary extramural research agency, NIFA provides working funds to researchers at institutions of higher education all over the United States. These research programs benefit all Americans.

NIFA helps ensure that a high-quality higher education infrastructure will be available at the nation's land-grant universities to address national needs, and it uses the infrastructure of scientific expertise from these and other colleges and universities, and also of public and private laboratories, to partner in addressing national priorities.

NIFA administers federal appropriations through the three basic funding mechanisms below: For more detailed information see NIFA Funding Mechanisms.

• Competitive Grants: NIFA awards competitive grants for fundamental and applied research, extension, and higher education activities, as well as for projects that integrate research, education and extension functions. Competitive programs enable NIFA to attract a large pool of applicants to work on agricultural issues of national interest, and to select the highest quality proposals submitted by highly qualified individuals, institutions or organizations. Awards are made following a rigorous peer-review process. Eligibility, administrative rules, and procedures vary for each specific program according to authorizing statutes.
• Formula Grants: NIFA provides funds for research and extension to land-grant institutions (1862, 1890 and 1994 institutions), schools of forestry and schools of veterinary medicine through several formula program authorities. The amount of funds provided to each institution is determined by formulae, often statutorily defined, that may include variables such as the rural population or farm population. Local or regional university leaders decide which specific projects will be supported by an institution’s formula grant allotment. These decisions are informed, in part, by stakeholders who both conduct and use agricultural research and extension.
• Non-competitive Grant Programs: Some projects are directed by Congress to specifically support a designated institution or set of institutions for particular research, education or extension topics of importance to a state or region. These projects are supported through Special Research Grants or Direct Federal Administration Research or Education Grants.
• Top

COMPETITIVE GRANTS

Agriculture and Food Research Initiative (AFRI). 7 U.S.C. 450i(b). The Agriculture and Food Research Initiative (AFRI) is the flagship competitive grants program at the U.S. Department of Agriculture. AFRI provides competitive grants for fundamental and applied research, extension, and education to address food and agricultural sciences. Awards may be made to the following eligible entities: State agricultural experiment stations; colleges and universities; university research foundations; other research institutions and organizations; Federal agencies; national laboratories; private organizations or corporations; individuals; or any group consisting of two or more of the aforementioned entities. Grants are awarded to address priorities in United States agriculture in the following areas:

• Plant health and production and plant products;
• Animal health and production and plant products;
• Food safety, nutrition, and health;
• Renewable energy, natural resources, and environment;
• Agriculture systems and technology; and
• Agriculture economics and rural communities.

In addition, a certain amount of the AFRI funds (i.e., no less than 30 percent) are dedicated for integrated research, education, and extension projects pursuant to the authority found in section 406 of the Agricultural Research, Extension, and Education Reform Act of 1998 (AREERA) and the awards made under this authority are limited to 4-year colleges and universities, university research foundations, 1994 land-grant institutions, and Hispanic-serving agricultural colleges and universities. Matching funds may be required under certain circumstances.

Contact: Deborah Sheely
CFDA Number: 10.310

Integrated Research, Education and Extension Competitive Grants. 7 U.S.C. 7626. The NIFA competitive integrated grants support research, education and extension functions to solve critical agricultural issues, priorities or problems in a broad array of disciplines. All four-year colleges and universities, university research foundations, 1994 land-grant institutions, and Hispanic-serving agricultural colleges and universities are eligible to compete for NIFA integrated grants. Matching funds may be required under certain circumstances.

Source: http://www.csrees.usda.gov/about/fed_asst.html