The crisis in Latvian science

Science in Latvia is in crisis

The symptoms of the problem are alarming – In the immediate term as of January 1, 2013 the research institutes that depend on Latvian government budget allocations have no defined funding, even to fire existing staff.   See discussion of this issue below (Immediate crisis).   In the intermediate term, during the next 2-7 years, Latvia is last in Europe in innovation and also last in investment in R&D as a percentage of GDP.  Since R&D and innovation are universally recognized as the pathway to economic development scientists in Latvia are very alarmed about the implications.  If this trend continues Latvia is in transformation to becoming poorer and increasingly less able to compete in the world, the very opposite of the economic breakthrough that is the byword of the National Development Plan that was recently approved by the Saeima.  The crisis in science does not seem to concern people in key budgetary roles in the Saeima and in the Government that have made statements that science brings no benefit to Latvia (“Zinātnei nav atdeve Latvijai”). The 2013 budget for science was actually cut from 2012.  The budget cut makes the statement that nothing will be done to deal with the problem in 2013, because any serious action will require additional investment.

Immediate crisis

As a result of bureaucratic bungling  research institutes funded by the Latvian government have no defined operating funds for 2013.  This problem applies to all scientific institutes regardless of their quality, or performance. Funding for publically supported R&D has to be supported by grants (via the Latvian Science Council), National Programs for Science and base financing of scientific institutions.  This issue affects nearly 2/3 of working scientists in Latvia.

This problem arises because pay for scientists is determined through a competitive system that is run annually starting sometime in November.  The ratings are completed by some time in March when the working scientist can receive the pay based on his prior year’s performance.  These salary payments terminate at the end of the fiscal year leaving a limbo period during which a majority of the scientists receive no payment.  How long has this been going on is unclear, but one year is too much.  Compounding the problem is that the Ministry of Education and Science (IZM) does not trust the annual performance reviews and is planning a quality review costing about 400,000 LVL that is expected to be conducted by mid-year.  Between the reviews and grant proposal development it is unclear where scientists find the time to conduct research and to write.

Base financing covers only administrative costs

Base financing is insufficient to cover basic operating costs that institutes need to survive, but even the level of base financing has not been disclosed to research management as of today, January 2.  As one example, the Photonics Institute with 100 researchers had an allocation of LVL 10,000 for 2012.  But, even this level of funding has not been disclosed.  Therefore, payments to staff cannot be planned.  Grants provided by the Latvian Science Council in 2012, have been exhausted.   European Union funded and Latvian state-funded grant proposals for 2013 are still under international evaluation and therefore this money cannot be obtained and used. National research program funding is also not accessible, because the government bureaucracy has not yet defined budget allocations and no funds have been transferred to the institutes. It means – in the reality Latvian scientific institutes do not have any state budget financing for their activities at this time.

If the immediate crisis is not resolved quickly

This means – our institutes have to fire their scientists, who had grants of Latvian Scientific Council in the past, because we have not money to pay their salaries.  We do not know which of them will win the grants for the future period of time.  There is no base financing to keep them going until we find out.

But money is needed to even properly fire employees.  Resources are needed for severance pay and outplacement costs, but there is no money allocated for such a purpose.

Even if base financing is soon allocated, these funds are too small to cover salaries.  Base financing is only enough to cover basic expenses for heating, electricity, security and administration.

A comment from Ivars Kalvins, Director of the Organic Synthesis Institute. [Funding uncertainty]  “means – we can’t even fire the people, but we have to do it because our authorities in Latvia do not do their job. Why the officers in Ministry of Education and Sciences have a right to get their salary’s starting January, but scientists – not?”

The aging scientist crisis

This section is paraphrased and translated from Latvian text provided by Dr. Ivars Kalvins, Director, Institute of Organic Synthesis.  The demographics of Latvian science are alarming.  Over 65% of active scientists with PhDs are of pension age.  The problem is worst in the hard sciences where new PhDs are fewer.  The trend is down.   According to the table below there is a declining percentage of students opting for the exams in the hard sciences:

Gads

Ķīmija

Fizika

Bioloģija

2009.

5,76

12,10

15,19

2010.

5,92

10,68

10,58

2011.

4,73

10,31

9,57

2012.

4,35

9,12

9,57

To replace the scientists that will be retiring at least 15 new PhDs are needed every year for the next 10 years.   At best only 1/3 of that number defends their thesis.  At this rate in five years physical sciences will be just a memory in Latvia.

The Organic Synthesis Institute had 17 scientists funded by grants with full salaries in 2012 and another 24 working part time.   In 2013 there is no budget to pay any of these scientists, because the 2013-2016 grants have not yet been reviewed, so it is impossible to sign contracts with any of them.

OSI applied for Latvian Science Council grants for 23 groups (69 scientists).  Funding in each grant would be sufficient to pay 3 people per grant, but OSI has 100 PhD scientists with 90 students not counting master’s and bachelor level students.

Realistically, we can only count on winning 2-3 grants because the budget allocations only assumes 5 chemistry related grants – pay attention – as a result in the theoretical chemistry field Latvia’s science budget allocation is such that only 15 researchers can get paid where there are researchers active in OSI, the LU Chemistry Department, the RTU Materials and applied chemistry department, the Inorganic Chemistry Institute, the Wood Chemistry Institute and others.   It adds up to fewer than 3 scientists funded per institute!  And the national development plan has identified pharmaceuticals and biotechnology as national priority fields!  How can anyone expect exceptional science and many publications if the budget limits work to 15 people with a total budget allocation for all 15 that is less than for one profesor at Gottingen University?

The IZM Minister should honestly declare that with the lowest financing for science in Europe that Latvia can realistically expect to have the weakest scientific results in Europe.  How would consolidation help with this level of funding?  This is like rearranging the deck chairs on the Titanic.

The planned international review of Latvian science appears to have limited value

The planned review of Latvian R&D by international experts in the first months of 2013 is touted by the Ministry of Education and Science as key to reform of research.   We can hope that the review will provide good information to the Ministry and introduce more Latvian researchers to their international peers.  The intent of the review of R&D is to identify what is quality research and what is poor. It has been declared that funding would be increased for quality research and cut for poor research based on the results of the review.   There are several problems with this approach.

  • The planned review does not address structural problems that disincentivize quality science, risk taking and innovation.  There are known solutions to these problems that often are independent of the apparent quality of researchers and research teams.  More needed than a quality review is an analysis of the structure of research, how research is managed and how incentives are provided to achieve excellence.  Change processes can be started almost immediately with organizational change specialists who understand incentive systems and their impact on research performance.
  • A field that international reviewers identify as poor quality may be vital to Latvia’s future and require increased investment, rather than cuts.  Which research should be funded by Latvia is a far more difficult question than assessment of the quality of research that is underway.
  • The planned review appears to target metrics that may not measure capabilities properly due to the distorted R&D environment in Latvia during the past decade.  Measures of the quality of research typically include numbers of papers published in peer-reviewed publications and the number of citations of published works.  This may have little to do with the capabilities of the researchers to perform cutting edge research.   Earlier funding uncertainties and dramatic budget cuts in response to the 2008 crisis have worsened the climate for R&D in Latvia reducing the number of articles submitted for publications as well as their quality.  In tough times scientists behave much like other people.  They close down, avoid risk and focus on small tasks that can meet formal requirements.
  • Research done for industry typically will not include the publishing of the results.  While relatively little industrial research is underway in Latvia, commercial research needs to be encouraged. This will not happen if the requirement is that promotions depend primarily on publishing. Commercial ventures simply do not have the time to do this
  • Researchers are presently incentivized to undertake smaller, low risk projects.   Increasingly funding for basic research is coming from EU funds such as Framework 7 and the European Research Council rather than from national science budgets.  There is no funding made available to prepare proposals for larger, more complex, high risk projects.  High risk cutting edge research that generates new findings results in papers that get cited often.   Papers from low risk projects tend to not get cited.
  • Funding is needed from national science budgets to build the capabilities of researchers to win grants, a topic that is not addressed by the planned review of Latvian R&D.

Failure to address the crisis in R&D raises strong concerns about the potential of Latvia to meet goals set forth in the National Development Plan (NAP), recently approved by the Saeima.   Many active researchers state their concerns much more strongly.  Some even claim that the government appears to have a goal to destroy Latvia’s R&D competence.  While this would be preposterous if true, it is becoming increasingly difficult to retain top quality researchers that are attracted to foreign research labs with better pay, better equipment and better prospects for the future.

If no action is taken to substantially increase investment in R&D in the near term – the next 2-3 years, Latvia’s ability to deliver quality science education will be increasingly threatened as more capable researchers emigrate.  Responsible parents with bright science based children will have to seriously weigh their responsibilities and consider emigration to countries more supportive of science.

 Innovation and high risk R&D need to be incentivized

The primary source of funding for universities in Latvia comes from government “budget positions” – students whose studies are funded from the education budget.  The budget for “budget positions” is roughly LVL 80 million compared to the national R&D budget which is roughly LVL 16 million.   This allocation of funding also determines the priorities of university leaders.  Rectors are much more focused on securing “budget positions” than on increasing the R&D budget.

There are significant issues with the legal framework for innovation covered by the Law on Scientific Activities and  government  issued  regulations. The quality estimation criterion for public scientific institutions includes such criteria as number of bachelors, masters and doctors educated by these scientific institutions. It is not correct for Latvian State Scientific Institutes ( there are 12 together, close to 1/3 of whole scientific potential of Latvia), because  these institutes are not a part universities and are not authorized to teach students. Nevertheless, for example, in the Latvian Institute of Organic Synthesis (IOS) there are at least 100 students  simultaneously performing scientific work and working out their doctoral thesis as well as bachelor or master works. Universities are counting results of students work in IOS as their indicators of scientific performance, even it is not truth.

Latvian patent policies discourage innovation

EU or USA patents (inventions) that are granted are equated during an evaluation of scientific performance to publications that are published in journals without an impact factor. It means that a patent, which often consist of 100-200 pages, is estimated to be equal to a non significant publication consisting of less than 10 pages.  Under Latvian law research performed using state provided resources and laboratory equipment belongs to the State with no monetary benefit to the inventor or to the institute where the inventor works.  As a result scientists avoid patenting their inventions and scientific institutes performing innovation are rated lower and are allocated lower base financing than warranted by their headcount and performance.

Together with lack of  financing for patent protection and maintenance fees of patents, as well as a deficient Law on Scientific Activities Concerning Intellectual Property Rights the innovative potential of Latvia can be expected to further decline in the future.

Austerity budgets promote low risk-taking, the opposite of what Latvia needs.   Given that budgets could be increased the research community needs “change managers” who act to promote innovation and risk taking among scientists who are focused on doing research, writing papers and preparing proposals.  Glen Grant, is an internationally recognized expert in organizational change who has identified change managers as a key building block of effective reforms of Latvian R&D.

Given that resources could be found to fund the change managers, and the incentive structure for researchers is changed to encourage innovation, experimentation and risk taking, then substantial additional funding for Latvian R&D could be raised from EU R&D funds such as Framework 7 and the European Research Council.  Arnolds Ubelis, the National Contact Point for the Framework 7 program, has suggested the creation of research managers to fulfill a similar function to the change managers suggested by Glen Grant.   There is a readiness to move forward in this direction by researchers.    They have been waiting for positive change for many years.  Failure to act and to resolve the crisis in Latvian science sends a strong signal that despite their very deep patriotism, they may need to consider emigration.

Links with Business

There is also a need to link national and university research with business. At present the two co-exist but not effectively for delivering a stream of new products. The Rector of the technical university is determined to create a 4th generation university where business and academic life work side by side. But this attitude needs to be formalized for the Ministry of Economies and Education, and all Latvian universities, whether providing new wood products, foods for pets or wing spars for aircraft. In the medium and long term, research means nothing to Latvia unless it is turned into market value.

What is a change manager?

A change manger is a person with a mission for organizational change.  Most likely the individual would have experience in R&D, business or change outside of Latvia, especially in industrially oriented research that drives towards commercialization of research results.

Latvia needs to encourage the return of émigré scientists and the participation of foreign scientists in research in Latvia

Returning scientists need to be more than welcomed, they need to be given incentives so that the knowledge that is gained from overseas experience returns to Latvia.  Every returnee is a change agent who can add tremendous value to the research effort underway in Latvia.

No incentives for challenging, high risk R&D

There is little incentive to write proposals for challenging projects where the chance of winning a grant is relatively low.   What would motivate a scientist to take time from his family and weekends and evenings to write grant proposals where the estimated success rate is 10% or less where their personal reward may be a modest increment to their base pay, if successful?

Latvia needs to incentivize proposal submission by compensating researchers for writing and submitting proposals that meet EU proposal guidelines.    If researchers could immediately receive a substantial bonus (LVL 1,000 +) for every fully completed proposal that is submitted in addition to regular salary, then the number of quality proposals would increase substantially.  More quality proposals would improve Latvia’s chances of winning more grants in the aggregate making it more possible for Latvian researchers to conduct high-risk, cutting edge research.

Completion of a proposal is necessary, but not sufficient to substantially increase the odds of winning grants. Successful research organizations use grant writing professionals to improve the quality of submitted grants.   Battelle Memorial Institute, the largest private R&D organization in the world with over 7,000 researchers, uses multiple teams for proposal development.   The Blue team writes the proposal and the Red team looks for mistakes and weaknesses to be corrected before submission of the proposal.   Estonia uses professionals to prepare many of its grant proposals and has achieved a much higher success rate than Latvia.

The challenge now is to find funds in the 2013 budget to hire change managers as well as to incentivize innovation and fund winning proposal development.    Substantial funding is available in the longer term from EU R&D funds and other sources.   The Framework 7 program budget from 2007-2013 is 80 billion Euros.   Latvia is 1/250th of the EU in population so Latvia’s fair share would be 320 million Euros.  Horizon 2020, covering 2014-2020 is budgeted at 100 billion Euros.  Latvia’s 1/250th would be 400 million Euros.   The European Space Agency and Euratom have separate funding from Framework 7.  Latvia has research programs that fit with ESA and Euroatom and have received funding in the past.   Now, that Latvia is on its way to accede to the ESA additional funding will become possible from the ESA.

Consolidation is no panacea

Latvian R&D suffers from fragmentation.  Reform efforts frequently refer to consolidation as a solution to the problem.  Size by itself does not generate competence.  Larger units will need to be managed by managers who can run larger organizations.  A large organization run by poor managers may generate poorer results than the fragments.  Some benefits of consolidation can be achieved by linking the work of researchers in related disciplines who work in different research organizations through arrangements such as the Photonics Association – Nuclear Physics and Spectroscopy Institute, Astronomy Institute and the Geodesics and Geoinformatics Institute – that won a major FP7 grant of € 3.8 million.  Comparable problem-driven arrangements are possible to flexibly achieve the benefits of consolidation without reorganization.

Consolidation does not have to be concentrated in Riga

Among the stated purposes of consolidation is to create an institution that ranks among the top 100 research universities in Europe.  The majority of top-ranked universities tend to be located in smaller universities towns rather than in the capital cities.  Lund and Uppsala are well known examples from Sweden.  Lund is the largest university in Sweden and is located in the town of Lund which is not much larger than Jelgava.  For Latvia, location of its largest university outside of the capital would have many advantages not least of which is to foster more balanced economic development of the country.  Jelgava, presents itself as an optimal site for a major university.  Jelgava could become the Lund or Latvia.  Jelgava is less than 50 km from Riga and has been the home to academic institutions from the 1500 when a Jesuit school operated there.  The Latvian State University of Agriculture, located in Jelgava, presently has about 6,000 students with a capacity for perhaps 10,000 in existing facilities.  The main campus building is the massive Jelgava palace designed by Rastrelli that housed the Dukes of Courland.   A major university campus could be developed in the nearby territory offering a the possibility of an extraordinary architectural entrance to the city of Jelgava itself.  The university territory is adjoined by land designated for a technology park intended for laboratories and high tech businesses.  A major campus could be developed in this territory at significantly lower cost than a comparable campus in the capital city where real estate prices are much higher.  The international airport can be reached quickly and the city serves as a hub for rail and bus transport.

Conclusions

There is an immediate crisis facing key research institutes in Latvia that they have no defined funds to pay research staff or even to fire them as of January 1, 2013.  This issue requires immediate action.  If police, parliament and ministerial salaries were comparably affected it is hard to see how the government could survive, unless it solved the problem, quickly.

If nothing substantive is done to address the crisis in Latvian science in 2013 we can expect emigration of scientists from Latvia to accelerate, even if there is an appearance of economic success with increasing exports and rising incomes in the overall economy.  This would have disastrous consequences for achievement of the economic breakthrough (“ekonomikas izrāviens”) by 2020.

Latvian science has multiple disincentives to innovation and excellence that have little to do with the structure of higher education that need to addressed immediately, rather than waiting for the education reforms to take place.

  • Proposals for high risk projects are discouraged
  • There is no support for increased quality of R&D proposals
  • Patent laws and practices discourage patenting

Recommendations

Salaries for institutes without defined resources for 2013 needs to be resolved immediately on a crisis basis, within days, at least for the first month to three months of 2013.

Latvia’s R&D budget for 2013 should be increased as soon as practically possible to meet specific goals that are independent of the overall higher education – research structure whose reform is politically difficult and can be expected to take time. The government and Ministry of Education & Science should actively work with research organizations to incentivize risk taking and innovation and to win more European research funds.   Goals include:

  • Increasing the quantity and quality of funding proposals by compensating researchers to complete proposals and by providing professional support to improve the quality of proposals.
  • Fostering change that increases innovation through hiring of R&D change managers

Incentives need to be made available at all levels to encourage risk-taking and innovation by researchers.

It is imperative that intellectual property law be passed in 2013 with provisions that encourage more patenting and innovation. 

These actions would give researchers a signal that Latvia is behind them, that Latvia has a future in science, and that they have a future in a more successful Latvia.  Not only would it stem the brain drain that is otherwise inevitable, but decisive and effective leadership in Latvia is also likely to motivate the return of good researchers who have already left Latvia.


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