Physics worth more to EU economy than retail and financial services, says study(sciencebusiness.net)
sciencebusiness.net
Physics worth more to EU economy than retail and financial services, says study
https://sciencebusiness.net/physics-worth-more-eu-economy-retail-and-financial-services-says-study
52 comments
Yeah, you've nailed it. If a spark plug manufacturer claimed that spark plugs added [insert amount] of value to the economy and claimed the entire amount of value cars add to the economy, everyone could and should call BS on that, despite the fact that without a spark plug, the car doesn't run. It's simply bad accounting.
Splitting hairs, but diesel cars are common in Europe and don't have spark plugs.
Brace yourself: you aren't splitting hairs, you're nitpicking.
This only adds to the argument because it shows that the importance of spark plugs is overblown.
They're correct in that the production of crude is not possible without the physics. It is a necessary input, ergo physics unlocks that economic activity.
It sounds like your concern is that all three fields of Physics, Engineering, and Chemistry could claim this output, which would be odd, because if every field did this, their combined 'value added' would be many times the total GDP, since their contributions overlap, like you mentioned. That doesn't matter, because we're not concerned about measuring the GDP with this method (if we were, we would have to divide credit like you mentioned) just the objective contribution of a single field.
It sounds like your concern is that all three fields of Physics, Engineering, and Chemistry could claim this output, which would be odd, because if every field did this, their combined 'value added' would be many times the total GDP, since their contributions overlap, like you mentioned. That doesn't matter, because we're not concerned about measuring the GDP with this method (if we were, we would have to divide credit like you mentioned) just the objective contribution of a single field.
Gravity keeps bank on the ground, thus physics funding is essential to the finance world. Imagine all banks floating away.
Funny. More seriously though gravity would keep banks on the ground regardless if we study it or not. So physics research doesn't really contribute in this case :(
But we only know it does because of physics, and without knowing there isn't a risk of banks floating away, people would be afraid of building banks. And, of course, mechanics generally are what enable the analysis of large static loads.
Same issue with how studying life expectancy and mortality allows you to quantify the risk of death, injury and disease, thus enabling life insurance and health insurance.
The problem with the claim "this is all physics" is that, yes, Newton wrote down the original formulas for mechanics, but those had to be translated into all the engineering practices to be useful. Most of the economic value comes from engingeers who have mastered nth-order derivations of the original equations.
Same issue with how studying life expectancy and mortality allows you to quantify the risk of death, injury and disease, thus enabling life insurance and health insurance.
The problem with the claim "this is all physics" is that, yes, Newton wrote down the original formulas for mechanics, but those had to be translated into all the engineering practices to be useful. Most of the economic value comes from engingeers who have mastered nth-order derivations of the original equations.
I really don't think people would be afraid of banks floating away, Newton or no.
Just tether them with the blockchain?
I would argue that physicists themselves do not unlock this specific economic activity as they are rarely directly involved in crude extraction. As a field, it is too far removed. It would be like saying mathematicians are instrumental to crude extraction. Sure, they provide the scientific/theoretical basis for that work, but the actual execution is performed by engineers and various other applied experts.
Unlike what most people think, engineering is only partly based on physical/mathematical models. In fact, much of engineering is based on heuristics and empirical knowledge/know-how, and some of this knowledge isn't quantitative and it's not in the province of most physicists.
The difference between physics and engineering is actually quite vast.
I think the economic activity referred to in the article is around large-scale physics activities by organizations like CERN.
Unlike what most people think, engineering is only partly based on physical/mathematical models. In fact, much of engineering is based on heuristics and empirical knowledge/know-how, and some of this knowledge isn't quantitative and it's not in the province of most physicists.
The difference between physics and engineering is actually quite vast.
I think the economic activity referred to in the article is around large-scale physics activities by organizations like CERN.
By that logic retail and financial services could claim the same output. All of these physicists and companies have to use them to survive in the modern world.
Yup. Every field that is a necessary input. Of course, physics could count every company that produced oil, whereas financial services could only count the specific activities that were financed. Giving Exxon a loan for a new office building does not mean you get credit for all of their oil production revenues.
Capital markets and banks fund every single project undertaken by public companies. The only other alternative is private funding, but in which case it's still financing and investors objectively get credit for it – it's why they get rewarded!
This exercise is completely pointless. At best, it serves to show people's biases.
This exercise is completely pointless. At best, it serves to show people's biases.
Physics unlocks oil production in that it is an absolute prerequisite. Debt funding isn't an absolute prerequisite, just the preferred funding approach.
This exercise provides valuable data, for example would you rather government research dollars go toward academic research into Chemical Engineering, Physics, or Aerospace? Data from this sort of study can inform that sort of decision.
This exercise provides valuable data, for example would you rather government research dollars go toward academic research into Chemical Engineering, Physics, or Aerospace? Data from this sort of study can inform that sort of decision.
> Debt funding isn't an absolute prerequisite, just the preferred funding approach.
Right, but I'm not arguing the Oil & Gas industry depends on debt funding. I'm arguing it depends on funding, period. And that funding is obtained through capital markets, generally, which includes equity raises as well. Even in private markets, someone will be performing valuation on the potential project and calculating expected returns, which will drive the decision on whether to extract the oil – and whether it's done today or in the future.
You need funding even to do basic research, so organizing all of that is a key aspect of the process, just as managing these businesses is.
> This exercise provides valuable data
Does it? That seems like an assumption. It attempts to provide valuable data, but some of us are arguing it doesn't. It could be garbage in, garbage out. Bad data is worse than no data.
> would you rather government research dollars go toward academic research into Chemical Engineering, Physics, or Aerospace?
I think this is a pretty limited framework for making such big decisions. I'd prefer deep research into each of these industries with qualitative discussion on which are the most promising ones for the next 25-50 years, an analysis of what other governments are doing, what is best covered by the private sector, what is the best form of government investment, and the expected return on any of these investments. Anything else is just too shortsighted.
Right, but I'm not arguing the Oil & Gas industry depends on debt funding. I'm arguing it depends on funding, period. And that funding is obtained through capital markets, generally, which includes equity raises as well. Even in private markets, someone will be performing valuation on the potential project and calculating expected returns, which will drive the decision on whether to extract the oil – and whether it's done today or in the future.
You need funding even to do basic research, so organizing all of that is a key aspect of the process, just as managing these businesses is.
> This exercise provides valuable data
Does it? That seems like an assumption. It attempts to provide valuable data, but some of us are arguing it doesn't. It could be garbage in, garbage out. Bad data is worse than no data.
> would you rather government research dollars go toward academic research into Chemical Engineering, Physics, or Aerospace?
I think this is a pretty limited framework for making such big decisions. I'd prefer deep research into each of these industries with qualitative discussion on which are the most promising ones for the next 25-50 years, an analysis of what other governments are doing, what is best covered by the private sector, what is the best form of government investment, and the expected return on any of these investments. Anything else is just too shortsighted.
Ancient populations were digging holes in the ground before physics was invented.
> 33% physics, 33% chemistry, and 33% engineering
How about financing investments, accounting, sales, supply-chain logistics and managing the business?
How about financing investments, accounting, sales, supply-chain logistics and managing the business?
You can have all those things - but without a steam engine your mine is staying full of water, and your industrial revolution isn’t happening.
Don’t know why you need supply chain logistics for a subsistence farm, because that’s the best you’ll get without physics.
Don’t know why you need supply chain logistics for a subsistence farm, because that’s the best you’ll get without physics.
You can have all those things - but without someone to invest in and run the business, your steam engine won't be operational.
Don't know why you need physics for a steam engine with no motion, because that's the best you'll get without money. That's if it ever goes beyond the blueprint.
Don't know why you need physics for a steam engine with no motion, because that's the best you'll get without money. That's if it ever goes beyond the blueprint.
What about human resources and project coordination?!
What about catering and sanitation and security?
Seriously though, I don't think the point behind counting value created by every dependant into dependencies is necessarily a bad one. Surely there must be some mathematical concept that would allow to "balance" the value in a dependency network of industries.
Seriously though, I don't think the point behind counting value created by every dependant into dependencies is necessarily a bad one. Surely there must be some mathematical concept that would allow to "balance" the value in a dependency network of industries.
What about catering and sanitation and security?
You jest but all those people are listed before the post-credits scene of any blockbuster movie
You jest but all those people are listed before the post-credits scene of any blockbuster movie
I thought about HR after hitting the reply button but figured there was no way I was going to think of every function! I cleared my conscience by mentally bucketing all of those under "managing the business" ;-)
I work in tech and any company with a website calls itself a tech company.
Saying you are a physics company as soon as you use advanced materials does not seem that far-fetched from where I stand.
And the criterion of "these companies competitive advantage depend partly on recent physics research" is a pretty good one that may indeed include drilling companies and geological exploration.
Saying you are a physics company as soon as you use advanced materials does not seem that far-fetched from where I stand.
And the criterion of "these companies competitive advantage depend partly on recent physics research" is a pretty good one that may indeed include drilling companies and geological exploration.
Any company with a website calls themselves tech because there is a value in doing so, not because they objectively believe that to be true.
There's no value in calling a company a "physics company" because that means nothing outside of this very specific conversation we're having
There's no value in calling a company a "physics company" because that means nothing outside of this very specific conversation we're having
This has indeed been spun in a way that it should not have been. But the way I see it is that out of the 700 possible sectors of industries in the EU, there are 72 "where the use of physics – in terms of technologies and expertise – is critical to their existence." [1]
These 72 sectors have a revenue of 4.40 million euros. This means that for example, if you ban all physics education tomorrow, all this revenue will drastically fall because they critically depend on physicists. Note that this is about ensuring that physicists of today are trained to continue working in this industry. And not what some physicists might have done in the past.
[1] https://cdn.ymaws.com/www.eps.org/resource/resmgr/policy/eps...
These 72 sectors have a revenue of 4.40 million euros. This means that for example, if you ban all physics education tomorrow, all this revenue will drastically fall because they critically depend on physicists. Note that this is about ensuring that physicists of today are trained to continue working in this industry. And not what some physicists might have done in the past.
[1] https://cdn.ymaws.com/www.eps.org/resource/resmgr/policy/eps...
Not an unusual lobby study. Then they turn around and tell everyone to teach more physics in school and invest in the field/studies. I've seen similar ones for very different professions with similar outcomes. A but unusual to see it for a field of study on its own though, I guess they have a strong lobby somewhere.
No kidding. CERN takes in public money which it turns into research. It then gifts that research to businesses (frequently owned privately by CERN employees) who then sell products which generate billions in profits. Following the money at CERN is a very complex task, but to the best of my knowledge none of those profits go back to CERN. The gifting of patents seemed like a good thing at the time, but now I think if CERN had a different model, where they kept a small percentage stake in the patents, they would have more than enough cash now to fund themselves and build the next collider, without all this daft lobbying and
begging for public money.
I have seen this happen at universities too, but I don't take issue with it. They will produce research and tech that is typically available for anyone to use. At this point the options are:
1. Technology transfer to an existing business 2. CERN employee starts a business to commercialise it 3. Nothing useful is done at all
Obviously people that originally worked on this research will have a head start when it comes to commercialising it. Most research never leads to anything commercial (at least not withing a reasonable time-frame)
1. Technology transfer to an existing business 2. CERN employee starts a business to commercialise it 3. Nothing useful is done at all
Obviously people that originally worked on this research will have a head start when it comes to commercialising it. Most research never leads to anything commercial (at least not withing a reasonable time-frame)
Maybe measuring the contribution of the economy to physicists would give a better indication? .. since physics education and it's application to employment is easily measured and accounted compared to the, say, the hundreds of trillions in value added by Sir Isaac Newton.
Some of that stuff the retail industry is selling must have involved physics at one point.
The kind of sophistry nonsense that passes as a scientific study these days is amazing.
Agriculture is worth much more than physics, since it feeds physicists all by itself. You could come up with many such dependencies to create chains of "worth more" relations, all utterly pointless. If the idea was to get more funding for physicists, it's unconvincing.
Agriculture is worth much more than physics, since it feeds physicists all by itself. You could come up with many such dependencies to create chains of "worth more" relations, all utterly pointless. If the idea was to get more funding for physicists, it's unconvincing.
Your example with agriculture doesn't really support your argument that dependency chain analysis is 'utterly pointless'. Agriculture is more important than physics; we would never prioritize physics research over food. So this example seems like a success for this analytical method.
Modern agriculture would be impossible without artificial fertilizer.
I'm hopefully a future physicist and the first to defend its importance but this kind of argument seems quite bad faith to me.
"Physics-based industries are those that rely heavily on expertise in physics. These include oil and gas extraction, nuclear fuel processing, and various forms of manufacturing like fibre optics, lighting equipment, office machinery, cars, ships and armaments."
Oil extraction, gas, and ships. Really? Sure, I get it, these areas wouldn't be possible without prior physics research, and present physicists will create new economic opportunities in the future; but blindly inhereting these fields' economic signifiance to physics seems incorrect. In other news, mathematics worth more than 80% of EU economy - these industries include finance, business, engineering, computing, and entertainment.
"Physics-based industries are those that rely heavily on expertise in physics. These include oil and gas extraction, nuclear fuel processing, and various forms of manufacturing like fibre optics, lighting equipment, office machinery, cars, ships and armaments."
Oil extraction, gas, and ships. Really? Sure, I get it, these areas wouldn't be possible without prior physics research, and present physicists will create new economic opportunities in the future; but blindly inhereting these fields' economic signifiance to physics seems incorrect. In other news, mathematics worth more than 80% of EU economy - these industries include finance, business, engineering, computing, and entertainment.
You say that, but an awful lot of people doing maths in industry are physicists - mathematicians are far more likely to stay in academia. One of my first jobs was writing trading algorithms in the early 2000s - I was a physics student, most of the dev team were physicists or chemists. We got a mathematician in to consult on some gnarly cluster analysis - but after a month he presented us a white paper that was very, very pretty, and described our problem mathematically very succinctly - but totally unusable as it wasn’t so much a solution as a beautifully defined problem.
But the point is you are not doing physics, you are at best tweaking some pre existing model.
I did it in the past while consulting for a major bank, I studied CS, not physics, and I haven't seen any applied physics in banks.
They hire young people studying physics because they are not scared of working "with numbers", but when you past 40 you're not scared of anything anymore and you'll find there a majority of people with a degree in economy, once you grasped the basics, you can do the job.
While the physics student hopes to be a real physicist someday in the future and stop working on trading models as soon as somethings better comes up.
I did it in the past while consulting for a major bank, I studied CS, not physics, and I haven't seen any applied physics in banks.
They hire young people studying physics because they are not scared of working "with numbers", but when you past 40 you're not scared of anything anymore and you'll find there a majority of people with a degree in economy, once you grasped the basics, you can do the job.
While the physics student hopes to be a real physicist someday in the future and stop working on trading models as soon as somethings better comes up.
The idea that the (whole economy) = (physics + retail + financials + other stuff) seems like somebody made a type error. You can't just add a research field to industries. I guess you could draw out 2 separate pies: 1 of GDP by industry and 1 by "field" but you're still comparing apples to oranges.
So they spent an absolute fortune on things which might be cool but really contributed nothing to the economy except construction and employment. And the argument is that because they wasted such a huge amount on these vapid endeavors, an incredible proportion of the entire economy, that therefore they should continue because it is "contributing" to the economy by virtue of its spending.
Give Universal Basic Income to everyone. That will spend more and then we can say with the same reasoning that UBI is worth more to the economy than retail and financial services.
Give Universal Basic Income to everyone. That will spend more and then we can say with the same reasoning that UBI is worth more to the economy than retail and financial services.
“All businesses require movement and the existence of stuff to make a profit and thus depend on physics. Please please please fund our new particle accelerator”
"Physics-based industries, it says, include electrical, civil and mechanical engineering, as well as computing and other industries reliant on physics research."
This model feels overly broad. For instance I'd agree developing a new process for microprocessor production is physics centric, but writing sofware is not and both are part of 'computing'.
This model feels overly broad. For instance I'd agree developing a new process for microprocessor production is physics centric, but writing sofware is not and both are part of 'computing'.
I don’t dispute the significance of physics to industry and economics, but basic physics innovation would not be commercialized without the participation of a host of non-physicists.
Which is why of course physics departments pay you ~50% to do a PhD, whereas in Computer Science they pay 100% because otherwise no one will apply.
They should pay like it is
As a physics graduate I would have considered this self evident. Of course we pretty much single handedly run the economy. Along with our sidekicks [0] in the other hard sciences we invented it.
[0] https://www.xkcd.com/435
</s>
[0] https://www.xkcd.com/435
</s>
This is probably a PR campaign by CERN, though. They're going through a rough patch after discovering little and needing new money for new experiments.
http://www.paulgraham.com/submarine.html
http://www.paulgraham.com/submarine.html
Scientist discovers that he is very important and valuable. Much more valuable than all those idiots who didn't go to university...or those people who did go to university but earn more than scientist despite being way way more stupid then scientist.
Our society does not value scientists, you can't become a billionaire by doing research.
Einstein, Steven Hawkins, and Isaac Newton went down in history, but their net worth is nothing compared to fast-food chains. Does that means KFC created more value for society?
Einstein, Steven Hawkins, and Isaac Newton went down in history, but their net worth is nothing compared to fast-food chains. Does that means KFC created more value for society?
As an example, they consider "Extraction of crude petroleum" as a physics-based industry. Naively I would consider that industry at least 33% physics, 33% chemistry, and 33% engineering. Aren't they largely overestimating their conclusion by neglecting chemistry and egineering?
Disclaimer: I am a former physicist. I really think that science funding is vital to Europe, that this kind of studies should help supporting the field... I would just like to better understand how the EPS and CEBR got to such a clickbait title. I have the impression that this kind of article could actually undermine the credibility of all the contributions that Physics research is actually bringing to society at large.