Essays on the economics and geography of Big Science

This thesis examines how public investment in basic research can yield broader economic benefits beyond scientific discovery. It focuses on a specific type of publicly funded research associated with Big Science: large, mission-oriented projects that span long time horizons, depend on substantial public investment, and require co-ordination among institutions. In many instances, these scientific endeavours are the result of international cooperation, pooling expertise and resources from multiple countries. It analyses the procurement activities associated with the construction, design, and operation of these research facilities as a channel through which wider economic benefits for society can be generated and tracked beyond the host location. While directly contributing to the “Economics of Science” literature, this dissertation lies at the intersection of various streams of research, including the growing literature on public procurement, as well as broader fields such as economic geography, management, and innovation studies. This thesis consists of five chapters. Chapter 1 introduces the overarching question of why governments should invest public funds in curiosity-driven scientific research, and Big Science more specifically, whose benefits are inherently uncertain and often realised in the distant future. Mounting fiscal pressures, heightened by competing demands for resources, and rising populist scepticism towards science have intensified debates over the value of investing in these scientific projects. In this context, procurement emerges as a critical channel for realising and demonstrating the economic impact of Big Science, beyond the location of the research facilities. Focusing on procurement enables researchers and policymakers to track direct financial flows, assess the diffusion of technological advancements, and identify tangible economic benefits. Most of the evidence on Big Science procurement, as well as public procurement more generally, has focused on what happens to the supplier. However, the effect could go beyond the firm’s boundaries to impact the local economy in which the supplier is located. Chapter 2 uses a state-of-the-art counterfactual approach to estimate the local economic impact of a large Big Science contract, showing that a single high-tech order can significantly boost manufacturing employment through supply chain linkages, and that the effects outside the boundaries of the firm can be substantially larger than those within, providing new evidence on the economic benefits of these scientific projects. Chapters 3 and 4 examine the impact of Big Science procurement on suppliers’ innovation, using the case study of CERN. Chapter 3 uses a quasi-experimental approach to estimate the causal effects on firms’ patenting activity and how these vary across firms and orders. I find a positive effect on suppliers, with larger effects for financially vulnerable firms. I also produce causal evidence on the impact of contracts on firms’ innovative behaviour, showing that financially vulnerable suppliers boost their R&D efforts, and younger firms are more likely to collaborate with other technological partners. Existing studies on the impact of Big Science procurement and the wider public procurement literature have mainly focused on input and output innovation metrics, such as the number of patents or R&D intensity. Chapter 4 examines whether the contracts can also influence the type of innovation firms conduct. I find a positive effect on the number of science-based patents, with the effect being larger for financially vulnerable firms. Among young suppliers, innovation also becomes more relatively novel following a contract award. Suppliers are more likely to be early citers of scientific publications, suggesting that these procurement activities provide them with priority access to new scientific research. Policymakers are increasingly viewing investments in Big Science as not only a means of advancing scientific discovery, but also as tools to stimulate economic development and innovation. However, the socio-economic benefits generated by these projects are neither automatic nor evenly distributed. Chapter 5 develops a conceptual framework to help policymakers and scientific organisations think through the trade-offs involved in Big Science procurement. It characterises the political tensions, competing objectives, and payoffs faced by different actors, offering a structured lens for navigating these dynamics and identifying policies that are beneficial for all parties involved. It then draws on evidence from the public procurement literature and the empirical insights of Chapters 2, 3 and 4 to propose stand-alone policy recommendations to maximise the socio-economic impact of procurement. It concludes by outlining a forward-looking research agenda to strengthen the evidence base on what works.