The International Consortium on Agricultural Biotechnology Research (ICABR)
paper deals with Science and Technology in research policy, trying to draw some
lessons from recent and hot cases, such as the race to sequence the human
genome and the controversy over GMOs. The innovative feature of the paper is
the analysis of Science and Technology, i.e. public and private research, in a
single framework, while the existing literature on the economics of knowledge
has usually examined R&D, or Intellectual property rights, in isolation from
In the proposed approach, Science and Technology are not defined according to
the types of knowledge they produce (i.e. general principles vs. applied
knowledge) nor on the methods of inquiry they adopt (focused vs. broader
perspective). Rather, Science and Technology are defined according to the
differences in the institutional arrangements involving the allocation of
resources and efforts in the production of knowledge. Science is a non-market
allocation mechanism, where knowledge is treated as a pure public good and where
fixed compensation, together with research grants and the rule of priority,
gives scientists an incentive to work and disclose their results. In such a
mechanism, knowledge cannot be owned, but financial resources must come
from outside (usually general taxation, but also philanthropy). Technology
identifies the market allocation mechanism where intellectual property rights on
knowledge exist and can be sold to users on the market for a profit (provided
there is demand for it).
Science (through the so called priority system) and Technology (through
patents) reward discovery since winners take all. Unfortunately, both
Science and Technology are institutional arrangements with their own
shortcomings. Science, as an effort allocation mechanism, ensures full
disclosure and positive externalities, but implies well-known agency problems (moral
hazard, free riding, low effort). Technology, by nature, is a highly motivating
allocation mechanism, but seizes the main results of research and prevents many
positive spillovers related to the nature of knowledge.
above framework, which was set forth in two seminal papers by Dasgupta-David and
Barba-Dasgupta-Maler-Siniscalco, is now formalised by means of a model where
Science and Technology interact. The aim of the paper is to show that in some
crucial research areas, where demand and knowledge externalities are important,
Science and Technology do coexist and sometime must coexist even in the same
above model makes it possible to say that the present phase of co-existence of
Science and Technology in certain fields of research (e.g. human genome
sequencing, GMOs, etc.) is not a transition phase, where Science is giving
way to Technology, but reflects a stable and somehow optimal institutional
setting, where the two institutions do and should coexist.
paper begins with the recollection of the race to sequence the human genome and
the controversy over GMOs development in agriculture. Such cases rise few
fundamental questions: (i) why do researchers with similar backgrounds and
education choose to do research in the same field but in different institutions
(Science and Technology), thus revealing a deeply different attitude to work?
(ii) Is the co-existence of Science and Technology in similar research areas a
transitory or permanent state of affairs? And finally, (iii) is the coexistence
between Science and Technology socially desirable?
elaborate the proposed viewpoint, we firstly introduce the distinctive
characteristics of the commodity that both scientists and technologists are
engaged in producing, namely knowledge. Secondly, we discuss the resource
allocation mechanisms that can sustain an efficient production and diffusion of
Under fairly reasonable assumptions, our model shows why even identical researchers choose to work in two different institutions (S,T) and why this state of affairs can be welfare maximising. In a nutshell, (i) we recognise that the production of knowledge involves several market failures and (ii) we argue that the two approaches to solve such market failure problems, namely Science and Technology, even within the same field, can mix optimally combining somehow the best of both worlds.
Starting from this result, in the race for human genome sequencing neither public nor private researchers won the race. The real winners were research and social welfare. In the GMOs story, due to the lack of a public funded counterpart, the real losers were research and social welfare.
University of Venice, CEPR, CESifo and Fondazione Eni E. Mattei.
 University of Turin and Fondazione Eni E. Mattei.
 University of Turin, CESifo and Fondazione Eni E. Mattei