WIFO/IHS/JR: Basic Research Pays Off Faster and More Extensively Than Expected
The study on the impact of FWF-funded basic research, the first of its kind in Austria, makes two surprising key statements: First, the funded projects make an impact on the economy and society much sooner than previously assumed, and second, all investments made through the FWF quickly pay off for the federal budget. The economic and social effects come about intentionally or indirectly, ranging from direct applications by the researchers themselves to the implementation of research results by third parties. Another key factor is that highly qualified researchers from FWF projects often later move to companies or other organizations outside academia.
Stimulating effects for the economy and no burden on the federal budget
According to the Austrian Institute of Economic Research (WIFO), the Institute for Advanced Studies (IHS), and Joanneum Research, FWF projects have particularly positive effects on Austria's economy. These effects result from the turnover of start-ups or from new products that companies introduce, as well as from the salaries paid to researchers employed in the projects or start-ups. Conservatively estimated, funds invested in the FWF are recovered within one year through tax and social security revenues. In short: One euro invested in FWF funding is associated with €1.1 in government revenue and €2 in gross domestic product. Due to these short-term effects, investments in research through the FWF also have a stimulating effect on the economy.
In the medium and long term, these short-term effects are joined by additional productivity increases. It is estimated that 10% more funding for FWF-financed basic research would increase the gross domestic product per working hour by up to 3% and per capita by up to 0.6%. This productivity data is supported by numerous examples of FWF-funded projects documented in the study.
“Along with international analyses like the Draghi Report, the new study also urgently recommends that the science and innovation sector continue to focus on highly innovative basic research, applying suitable accompanying measures to implement the results rapidly into social and economic benefits. We appeal to the decision-makers involved in the current government negotiations to take bold steps to further expand basic research, which is so important for Austria's future," said FWF President Christof Gattringer at the presentation of the study.
“Funding the FWF generates a double dividend. It provides short-term stimulus for the economy while also laying the foundations for a long-term acceleration in structural growth," says WIFO Director Gabriel Felbermayr.
“The survey conducted by the IHS as part of the study suggests that research funding could yield more economic and especially social returns if the researchers’ own universities would provide even more support to the funding recipients in marketing their basic research,” said IHS Director Holger Bonin.
“A dynamic cycle arises when insights from basic research are integrated into applied research, while basic research is driven by practical needs. This accelerates progress and allows us to respond more quickly and efficiently to global challenges such as climate change, health crises, and technological upheaval. Ultimately, the goal must always be to successfully transfer innovation into application,” explains Heinz Mayer, Managing Director of Joanneum Research.
"Surprisingly, we found that FWF-funded research projects pay off economically in the short term and are a driver of structural change in Austria," says study coordinator Jürgen Janger (WIFO).
Further information
Starting point for forward-looking ideas, impulses, and innovation
According to the study, FWF projects have been proven to be an important basis for innovation in business and society. They are often the first step toward scientific breakthroughs, which then mature into applications. These include, for example, valuable patents and licenses, therapies and medications, or new production technologies. There are many ties to all relevant players in the research sector, such as the European Research Council (ERC), the Austrian Research Promotion Agency (FFG), and Austria Wirtschaftsservice Gesellschaft mbH in the start-up sector. There are equally close links with direct investments by universities and non-university research institutions such as the Institute of Science and Technology Austria (ISTA) and the Austrian Academy of Sciences (OeAW). Numerous scientific, entrepreneurial, and social achievements and innovations are based on the publications, patents, and findings resulting from FWF projects.
More innovation, new businesses, and start-ups
To date, 40 licenses and more than 170 inventions can be traced back to FWF projects conducted between 2009 and 2022, in addition to more than 800 patents filed worldwide. Companies have developed around 150 new or improved technologies and launched 200 new products as direct results of FWF projects. FWF projects also play a key role in the establishment of knowledge-intensive start-ups. A total of 60 start-ups currently benefit from scientific findings from FWF projects. The high quality of the start-ups is also reflected in the fact that 11 out of 20 winners of the Austrian Phoenix Founders Award are based on FWF-funded findings, and in the "Spin-off" category, it’s even 4 out of 5. In some cases, project staff move directly from a FWF-funded research project to a start-up. These figures emphasize the significance of start-ups as an important factor for the commercial implementation of findings from basic research.
Patents with higher impact than company patents
The number of patents alone says nothing about the associated innovation potential. However, if individual patents are cited often, this indicates that they are based on a particularly promising idea. Here, patents derived from FWF-funded research perform above average and achieve significantly more citations than the average patent filed by an Austrian company. According to the study, this is in agreement with the international empirical literature, which says that patents based on high-quality basic research are technologically broader and are generally filed to protect inventions that are potentially much more far-reaching and relevant for a wider range of subsequent products.
Most-cited patent publications led to the Nobel Prize in Chemistry
The study also identified those publications co-financed by the FWF with particularly high citation rates. Heading the list are two FWF-funded studies in connection with the 2020 Nobel Prize in Chemistry awarded to Jennifer Doudna and Emmanuelle Charpentier; the latter conducted research at the University of Vienna for several years. Their publication on gene scissors has been cited in patents over 2,600 times so far. In addition to this subject area, publications from cancer research also achieve high citation rates.
Contribution to industrial shift towards high-tech
While Austria's innovation performance has so far been based primarily on the modernization of established industries, FWF funding, together with the improved availability of private venture capital, can further boost the start-up sector. FWF funding also supports structural change for large, knowledge-intensive companies, increasing the economic benefits of public research. Around 1,600 researchers previously funded by the FWF now work in the private sector.
Qualifications, training, and skills for the R&D sector
Research-based training for students and junior researchers is a particularly important part of the FWF's impact aside from research: Alumni and former team members of FWF projects play an important role in passing on knowledge while also benefiting their own careers. The transfer of knowledge in figures: According to the results of a survey of FWF-funded principal investigators, around one in four highly qualified employees of an FWF project will move to the private sector after the end of the project, usually in the field of research and development. In total, the FWF contributed to the education of around 4,000 MSc graduates and 3,100 doctoral candidates between 2009 and 2022.
Social impact: insights for many areas of life
The study also shows that findings from FWF projects impact various areas of life, above and beyond any immediate monetary benefits:
- Improvements in the areas of biodiversity, sustainability, and climate
- Improvements in health and medicine
- Development of legal regulations
- Contributions to cultural heritage
- Contributions to security (e.g., protection against cyber attacks)
- Scientific expertise for the public and media
Examples of the path of impact from knowledge generation to application
Using concrete examples of successful projects, the study traces the impact path of FWF funding from research activities to applications and uses. These include, for example:
- The Austrian quantum ecosystem with several start-ups, two of which were awarded the Austrian Phoenix Founders Award, including ParityQC, a spin-off from the University of Innsbruck and the Austrian Academy of Sciences, which now has 60 employees and emerged from co-founder Wolfgang Lechner's research group funded by an FWF-START award
- Other successful new businesses such as the biotechnology company Proxygen, also a spin-off of the Austrian Academy of Sciences, with significant scientific groundwork from two FWF projects by molecular biologist and co-founder Georg Winter
- Excavations in Elea-Velia, Italy, carried out by archaeologists from the University of Innsbruck and the University of Vienna under the direction of Verena Gassner, Bernhard Neutsch, and Friedrich Krinzinger, which resulted not only in new research tools, but also the creation of an archaeological tourist attraction
About the study
The study "The Economic and Societal Impact of Basic Research Projects Funded by the Austrian Science Fund" was conducted in 2024 by the Austrian Institute of Economic Research (WIFO), the Institute for Advanced Studies (IHS), and Joanneum Research (JR) on behalf of the Austrian Science Fund (FWF) following a competitive tender (financed with funds from the National Foundation for Research, Technology and Development). The results are based on a wide variety of data sources, including a representative survey of around 1,500 FWF researchers who successfully completed FWF projects between 2009 and 2022, bibliometric and start-up databases (Researchfish, The Lens, Dealroom.co), and other economic data (AMECO, FORWIT's RTI Monitor).
Study authors: WIFO/IHS/Joanneum Research
Jürgen Janger, Alexandros Charos, Kathrin Hofmann, Gerhard Streicher (WIFO), Johanna Dau, Henrika Langen, Martin Unger (IHS), Angelika Sauer-Malin, Michael Ploder, Lisa Schön (Joanneum Research, Policies)
