The economic effects of basic research: evidence for embodied knowledge transfer via scientists' migration

The paper argues that a substantial proportion of the wider economic benefits to society from publicly-funded basic research is associated with scientists' migration into the commercial sector of the innovation system. Rejecting a reduction of the research process to the propositional knowledge it produces, a set of hypotheses on the value of different types of knowledge is derived. The hypotheses are tested with empirical data obtained from scientists formerly employed by the Max Planck Society (MPS), one of the main organisations for basic research in the German innovation system. Findings indicate that rather than applying latest theoretical insights, scientists mainly transfer elements of knowledge that underlie complex problem-solving strategies in basic research. (C) 2003 Elsevier Science B.V. All rights reserved.