The Social Benefits of Investing in Science

Abstract

This is nicely said, and the unexpected utility may be apparent ex-post. But what about ex-ante, when decisions must be taken, and governments convinced to fund a new project? With an interdisciplinary team in Milan (University of Milan, Department of Economics, Department of Physics, and with the Centro Studi Industria Leggera [CSIL, Center for Industrial Studies]) we have designed and tested a social cost–benefit analysis model for large-scale facilities [2, 3]. The surprising result of our approach is that, even leaving aside the unknown future impact of discoveries, there are impact pathways that create social value in the short to medium term, and these effects can be quantitatively predicted in a stochastic framework. For example, we have been able to forecast the Benefit/Cost Ratio of the High Luminosity Large Hadron Collider (LHC), an upgrade of the previous collider, currently under construction [4]. Against an investment cost around one billion Swiss Francs, the B/C ratio is predicted as 1.76: this means that for every Franc spent on the HL-LHC 1.76 Franc of benefits for the society are generated. After a Montecarlo simulation (50,000 runs) the probability of a negative NPV is just 6%, even under very conservative assumptions on the potentials for the generated benefits. The benefits in this context arise from three main pathways, each of them measured for convenience by a money metric: first, impact on the production of scientific output (publications, citations, and further waves of literature) and on the careers of early stage researchers, including Ph.D. students and postdocs (a human capital effect measurable by an expected salary premium); second, direct and indirect impact for technology suppliers and users of innovations (including for software, medical imaging, new materials); finally, cultural impacts for both actual visitors of the facilities (including online visitors) and for citizens who consider science as a public good and are virtually willing to pay for it (this is revealed by carefully designed experiments with surveys of representative samples of taxpayers in France and Switzerland). After all, we do not need to just hope that the knowledge derived from large-scale facilities in physics will be useful to citizens in the distant future. In fact, we can predict that investing in science starts to pay back for itself from the first day.