The Economics of Knowledge Production: Funding and the Structure of University Research

Abstract

Takes a fresh and illuminating approach to a subject whose importance for sustaining modern industrial development and improvements in economic welfare over the long run is now widely acknowledged. Almost forty years ago, Simon Kuznets remarked that the epoch of modern economic growth has been characterised by, and come increasingly to rest upon, the scientific expansion and systematic exploitation of ‘useful knowledge.’ That perspective has more recently been sharpened by an appreciation of the possibilities being created by rapid advances in information and communications technologies, giving rise to the conceptualisation of ‘the knowledge-based economy’ – a mode of production and social organisation in which a central, strategic place is occupied by the means of generating new knowledge and the institutional arrangements that enable individuals and societies more fully to appropriate its material benefits. Indeed, the policy importance that should be accorded to institutional arrangements and incentive structures in this area also constitutes one of the main messages to have emerged from the recent economic literature on ‘endogenous growth theory.