Could ‘the merchants of debt’ help science?

Melanie Smallman writes in this week’s (15 February 2012) Research Fortnight:

View from the top:  In Mammon we trust – could bank bonuses benefit research? 

Science minister David Willetts announced at the beginning of 2012 that the government wanted to build a new class of universities focused on science, technology and postgraduate training, as part of its commitment to boosting growth in the UK economy. But the announce- ment was coupled with a warning that there would be no extra public funding to make this happen.

“We will be looking to private finance and perhaps sponsorship from some of the businesses that are keen to recruit more British graduates,” he said, citing the recent competition to build a new graduate school on Roosevelt Island in New York as an example of how things could work here.

At a time when universities are seeing budgets squeezed, businesses are cutting costs and UK gradu- ates are joining the dole queue, you could be forgiven for wondering whether Willetts is being a little over- optimistic about industry’s willingness to help him out. Indeed, some science-policy academics have gone as far as to dismiss the proposals as ‘fanciful’, pointing out that industry has its own research labs, which it will invest in if there’s money to spend.

However, Willetts’ idea might not be completely mad. Although the government’s funding hopes were directed elsewhere, there is one UK industry that has an interest in gaining intelligence about research and innovation, with access to the scale of cash needed to set up a research institute, and it has a desperate need to demonstrate that it performs a social good: the bank- ing industry.

The amounts paid in bonuses to bankers have caused outrage frequently over the last few weeks. But significant possibilities are opened up if you take a cooler-headed look at the scale of money being handed out. For instance, Barclays boss Bob Diamond is report- ed to have taken home £60 million in performance-related pay in the years around the credit crunch—that could run the National Institute for Medical Research very comfortably for more than two years. Similarly, the total bonus pot of £2 billion that Barclays was reported to have handed out in 2010 was twice the size of the annual budget for Cern. And this is just one bank being compared with ambitious examples of international-level, Nobel prize win- ning research institutes in competitive fields. Focused in the right way, just a proportion of the industry’s bonus pot could create an institution that is capable of making a significant impact—and still leave city bosses richer than most of us can ever dream of.

But why should we expect super-rich individuals or institutions to pay for research when they could just spend it on fast cars and big houses? For a start, there is the argument of enlightened self-interest. The world of high finance and investment isn’t that far removed from the laboratory bench anymore. Besides the numerous hi-tech funds that rely upon technical information about new developments and innovation in order to value and trade their stocks, the brightest and best maths and science PhDs have been poached by the city for many years—so much so that the Royal Institution even runs an exclusive club for them so that they can keep in touch with their former fields. Bringing together city finance and scientific insight into one institution could create an interesting new model of knowledge production, investment approaches and career opportunities.

Second, although it has fallen out of fashion in the last century, there is a long history of the private profits of industry funding basic—and not just applied or trans- lational—research. Just think about the Wellcome Trust, which was created to administer the fortunes amassed from the invention of the tablet, and now funds £600m of university research each year. Or the Howard Hughes Institute in the US, again funded from the legacy of a business magnate and spending $852m (£538m) a year. Why not the bankers in the 21st century?

Perhaps most importantly of all, however, is the repu tational benefit that would come from doing something good with the money that many citizens believe was ill- begotten. The story goes that Alfred Nobel changed his will to create the Nobel prize from the fortune he made from the invention of dynamite when he read his prematurely published obituary, headlined “The Merchant of Death is dead”. He wanted to be remembered differently.

Instead of the government’s announcement being an over-optimistic idea from a minister grabbing at straws then, perhaps this is a chance for ‘the merchants of debt’—the city bosses who oversaw the credit crunch—to be remembered for something else too.