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World Bank Research

Why we need a research department

Pinelopi Goldberg's picture

After a brief hiatus, the office of the Chief Economist of the World Bank Group was reunited last week with DEC, the well-known Research Department of the World Bank. This led me to reflect on a question often posed to policy institutions as well as the private sector: Why do we need research departments outside academia? 
 
Before attempting to answer this question, it is worth noting that research departments are common in top firms in the private sector. By research, I do not mean simple data gathering and processing, but rather the creation of original, innovative insights.  AT&T famously had Bell Labs.  Technology leaders from IBM to Microsoft to Amazon, Facebook, and Google have all funded basic research. Google has Google X, despite being located only a few miles from Stanford.  A strong research lab is a sign of company health and power.  Conversely, the shrinking of the research department often signals the demise of the company. And, of course, the phenomenon is not confined to tech.
 
The fact that these highly efficient companies choose to spend millions to support research departments reinforces the puzzle: Why not focus on engineering and application of knowledge and outsource the creation of fundamental knowledge, of primary research, to academia?