In July 2022, Professors K. Drosatos and N. Ktistakis published a letter in the prestigious scientific journal Nature requesting the establishment of a National Research Foundation in Greece. Forty scientists, including myself, signed the letter. This raises the fundamental question of the lack of systematic funding that could support research in Greece.

Greece’s spending on research and development in 2019 amounted to 1.3% of GDP. In Germany, it was 3.2%, while the OECD average was 2.7% of GDP. This huge deficit limits Greece’s growth potential and guarantees continued dependence on relatively low value-added sectors such as tourism and agriculture. At the same time, this makes Greece unattractive for highly qualified Greek and foreign researchers. Greece seems to be suffering from the curse of the middle-income countries: it is not quite a poor country, but it is not able to make the necessary leap to join the ranks of the truly rich countries with which we want to compare ourselves. Many of us have been writing for at least a decade about the importance of reforms that would make investing in Greece easier and more attractive. Some steps have been taken in the right direction, but now we need to step up to create the conditions for getting out of the middle income trap.

Greece lacks a stable source of funding for basic research. Countries with the standard of living we are aiming for, such as France, Germany and the United Kingdom, have significant budgets that are awarded competitively to researchers to carry out their creative projects. The process works like this: every year the government allocates funds for basic research. They are then given to independent research boards, which in turn distribute them to researchers after a highly competitive proposal evaluation process. Thus, a new researcher starting his career can receive 50,000 or 100,000 euros, while a more experienced researcher can expect much more. This creates a vibrant research community that generates knowledge, creates patents, and educates industry newcomers with cutting-edge knowledge. In turn, this attracts enterprises that need such qualified personnel. One only has to look at London to see examples of the results of such policies: tech companies like Deep Mind are being built next to world-class universities with a wide research portfolio, from neuroscience to the social sciences. And the biotech industry in the US Northeast, where many Greek scientists thrive, is another prime example of what can be achieved with well-funded research universities like MIT, Harvard, and Yale. What’s stopping Greece from claiming such knowledge and innovation – instead of daring to promote research – and a favorable investment environment?

What prevents Greece from claiming such knowledge, innovation and a favorable environment for investment?

Research funding should cover a wide range of scientific fields such as natural sciences, mathematics, social sciences and humanities. The first two are obviously related to industry. But how will we promote democracy and understanding of our society and its needs without excellent knowledge of language, literature and history? Who will fund research in these areas? And what about the social sciences, which are the basis of economic and social policy? To give an example of one of my areas of interest, there is no data that could provide a systematic understanding of how children develop from birth to the end of adolescence in Greece. And when it comes to understanding the behavior of marginalized groups such as underprivileged children, young immigrants and refugees, we are in the dark. We only see poor performance in the PISA study, but with a few egregious exceptions, such as the University of Crete, we don’t have major evidence to help us make a diagnosis. And one of the reasons is the lack of research funding. Many researchers give up and leave, offering their work for the benefit of other countries, while others, remaining in Greece, make do with what they can usually get from the EU.

A generous and stable research funding system, with minimal fluctuations from year to year, will stimulate the research of domestic scientists and eventually attract Greek scientists of all fields back to Greece, promoting the development of skills and innovation at the highest level. This will promote growth, support evidence-based policies, and strengthen the institutions of democracy. The first transformative step in the development of modern Greece took place in the post-war period and was brought about by investment in infrastructure and education. The next transformative step must be to promote a knowledge-based economy fueled by research and development.

Mr. Kostas Megir is Professor of Economics at Yale University.