This very well written and thoughtful book is an excellent survey of the economic aspects of the scientific enterprise. The author is a well known academic economist who has spent much of her career studying the economics of the sciences and has played some role in scientific policy making. While there is some international comparative analysis, the primary focus is on the American natural sciences.
Stephan discusses the economics of science from essentially 2 perspectives. One is what might be called the economic environment of the sciences. What is the basic economic structure of the sciences? What is the nature of the incentive structure of science? What are the nuts and bolts of scientific funding, training, the scientific labor marke, the behavior of universities and firms, and the relationship between academic institutions and industry? The second perspective is how do the natural sciences influence the larger economy. What is the relationship between research and economic growth? How does that relationship work? In terms of ultimate economic output, what is the relationship between academic institutions and industry?
Stephan opens with a general description, drawing on prior sociologic and economic literature, of the structure of science. Drawing on the work of prominent economists such as Paul Samuelson and Kenneth Arrow, the institutions of science are a relatively efficient way of producing an important public good in a way that circumvents the limitations of markets. This is hardly to say that economic incentives in the conventional sense don't play a role in the sciences. Stephan discusses at some length the nature of conventional incentives in terms of funding, potential for commercial products, and other factors that enter into the practice and administration of the sciences.
Stephan then provides a series of interesting chapters laying out how science is administered and structured, particularly in the USA. These chapters lay out the nature of the academic enterprise, how it functions, some discussion of industrial research, training, and funding of the sciences. Both strengths and weaknesses of our system are discussed well. There are very good chapters on the nature of the scientific labor market, including the somewhat exploitative nature of graduate student and postdoctoral training. Stephan devotes an entire chapter to the important topic of foreign-born scientists in the USA. Much of these discussions will be familiar to experienced academic scientists and administrators but they are placed in a very useful context.
Stephan has a very interesting chapter on the economic impacts of research. It is a truism that scientific research and technology development is the ultimate engine of economic growth but measuring such impacts is quite difficult. Stephan has a nice discussion of the existing literature which clarifies both the importance of the research enterprise for growth and how it works. The importance of taking a long view of the impact of research, the importance of reciprocal interactions between academic institutions and industry, and the importance of academic institutions for training are emphasized.
Stephan concludes with a concise chapter of recommendations for improving the scientific enterprise in the USA. These are generally thoughtful and sensible. Even if you don't agree with all of Stephan's recommendations, she has identified the crucial issues. Reocmmendations include a general increase in support for funding, rebalancing scientific funding priorities somewhat away from biomedical research, and a more just approach to training of students and postdocs.
This book is written clearly; clearly aimed to reach a larger audience of scientists and policy makers, Stephan keeps use of economic technical language to a minimum. There is a good bibliography for further reading. This book can be read profitably by most scientists and is recommended strongly for policy makers.