A Composite Economic Index for Research Projects “ An Application to the Egyptian Academy of Scientific Research and Technology”

The twenty one century witnesses a multi-dimensional global Knowledge Revolution characterized by a considerable surge in science and technology, a growing socioeconomic impact and a far-reaching direct and indirect developmental effects. A central part of this knowledge revolution is research, development and innovation (RDI) activities. Given its important role in enhancing scientific Research and technology system and boosting innovation policies, the Egyptian Academy for Scientific Research and Technology (ASRT) provides financial aid and technical support to a comprehensive set of research projects, innovation initiatives and technology development programs. As part of its responsibilities, ASRT seeks to prepare analytical studies with the purpose of assessing the economic impact of investments in scientific research, measuring the development .effects of innovation initiatives, and evaluating the consequences of the current intelligent technological revolution
The purpose of this paper is to develop and implement a composite index directed to estimate the direct and indirect economic impact and development effects of ASRT projects, as one criterion for comparing research and innovation proposals for financing. Based on statistical survey, this composite index is used on one hand, to draw a socioeconomic map of the expected outcomes of the comprehensive set of projects financed by ASRT, and to rank on the other hand, these projects with respect to their direct and indirect impact on the Egyptian Economy. The composite index is composed of three pillars; the first pillar estimates the “ private economic impact” representing the direct effect on the company or industry applying the research project. The second pillar assesses the “ indirect social effects” on other industries and sub-sectors of the economy benefiting from the outcomes of the project. The third pillar is directed to estimate “ the spillover or positive externalities” resulting from the research and innovation projects on the whole economy, as measured by the improvement of public goods and services performance or the the reduction in their cost of production. The composite index is designed according to the scientific .international norms of constructing statistical indices
Despite the differences between projects with respect to scope of application, societal effects, development dimensions and economic interactions, the analytical results of applying the RDI index to a representative sample of ASRT projects suggest that, their economic impact is moderate in size. It is worth noting that both the private direct economic effects and the economy wide indirect spillover consequences have practically the same level of effect in case of national-wide large projects. This applies similarly to the research projects characterized by intensive economic interactions. On the other hand, the statistical results show that the innovation oriented initiatives have generally a better economic impact than basic and applied research projects. Furthermore, the statistical analyses suggest that socioeconomic impact is more sensitive to improving the quality of output of ARST projects ( such as ameliorating the characteristics of the products, or enhancing the manufacturing process, or developing a new product) than reducing the cost of producing commodities, or cutting marketing cost. Finally, the incubation programs have shown the best performance with respect to socioeconomic impact. In principles, the incubation process aims at transforming patents into new or significantly modified products, or significantly improved marketing methods and organizational models. These changes contribute positively to accelerating economic growth and achieving sustainable.development