Bolstering Support for Academic R&D

Research & Technology

ROLAND W. SCHMITT

Bolstering Support for Academic R&D

Funding for academic research from all sources grew quite satisfactorily in the 1980s, at about 5.6 percent per year in constant dollars. Yet when I examined the picture in 1991, the future looked dim. The United States was just emerging from a recession, federal deficits were projected as far into the future as we could see, and the country was struggling to regain international competitiveness in a number of industries. The incoming president of the American Association for the Advancement of Science had issued a gloomy report stating that the academic research community suffered from low morale as a result of inadequate support and dim prospects.

Although I did not agree with all of the report’s arguments, I did believe that the academic research community had to vastly improve its appeal to its traditional funding sources if it hoped to thrive. It would have to “persuade our political and industrial supporters that academic research contributes to practical applications and to the education of students in sufficient measure to warrant the level of support we seek–particularly now, when adjusting to finite resources is fast becoming society’s watchword.” The community needed to improve its advocacy in the federal, state, and industrial arenas, and it had to bolster the confidence of sponsors by using resources more effectively and efficiently.

The scene has indeed changed during the past decade. Advocacy at the federal level has improved. More than three dozen research universities now have Washington offices, charged with establishing relations with members of Congress and their staffs and with agency and program heads. The aim of those Washington advocates is to promote favorable budgets for academic research generally and then to steer money to their institutions. Their job is little different from that of their counterparts in other interest groups. Beyond that, other activities that were once uncommon in academe have come into play. Professional societies now regularly communicate their views to Congress on a variety of matters. These societies also band together on particular issues, giving their voices even greater strength. Perhaps more important, some societies have learned how to practice constituency politics, alerting members to contact their congressional representatives on important matters. The scientific community has learned that politicians listen most attentively to people who can vote for them.

At the state level, support for academic research is widely associated with regional economic development. A strong research university embedded in a supporting infrastructure–one that includes incubators, tech parks, sources of angel and venture capital, mentoring and networking structures, and tech-based industries–can be an important source of economic development. In past decades, nearly all research universities viewed large, established, technically based companies as the principal source of industrial support for academic research and, often, the principal beneficiary. Today, spinoff of entrepreneurial ventures from academic research (the strategy behind Silicon Valley and Route 128) has become widespread. Because most such startups are too small to be a primary source of support, states step in. Despite those developments, however, the larger established firms continue to be the principal source of direct industrial funding, and that source has been growing.

On the matter of improving the use of resources, I made two main recommendations. One was that research institutions should do a better job of utilizing capital assets such as buildings and equipment. Little has been accomplished on that front. The other recommendation was that each campus should be selective in the fields of research it pursued and should consider the type of local industry, nearby research institutions, and other synergistic resources when making its choices. Here there has been progress. Instead of every research university trying to be all-encompassing, many campuses have enlisted faculty, students, alumni, and administrators to decide on areas of emphasis. As they have grown in number, research universities have recognized the need to become more distinctive.

In a subsequent article, “The Business of Higher Education” (The Bridge, Spring 1994), I dealt more extensively and critically with the leadership and business side of academic institutions: budgeting and accounting systems, committee functions, management skills, organizational effectiveness, and so on. For example, I noted that the classic accounting system used by universities–“fund” accounting–has been an egregious saboteur of good management. Among other defects, it undermines the ability to align programs with strategic directions and choices. It also fails to distinguish adequately between operating and capital expenditures and makes it difficult to allocate decisions to the most appropriate spot in the organization.

Fortunately, in the mid-1990s private colleges and universities adopted a new financial reporting model promulgated by the Financial Accounting Standards Board. The new model requires a balance sheet, an operating statement, and a statement of cash flows, which results in a system more congenial to the strategic management of resources. Although the full benefit of these changes remains to be achieved, they are at least a step in the right direction.

But before we congratulate ourselves on solving the funding problems I discussed a decade ago, let us take a look at what has actually happened. The 1990s departed radically from what had been expected at their outset. Federal deficits vanished, the economy grew handsomely, and the stock market boomed. One might therefor think that the support of academic research should have grown faster than in the 1980s. But the reverse is true. From all sources, support for academic R&D grew 77 percent (in constant dollars) during the 1980s, but only 49 percent in the 1990s. Federal support grew 55 percent in the 1980s, 47 percent in the 1990s. Even the biomedical area, which captured at least half of all increases (from all sources) in the two decades, grew less rapidly in the 1990s (68 percent) than in the 1980s (89 percent).

Funding did, however, became slightly less volatile during the past decade. Although annual variations during both decades were quite marked, the wide swings of the 1980s, when increases ranged from 0.4 to 9.5 percent, narrowed to a range of 2.4 to 7.7 percent in the 1990s. That modulation was true of both total support and federal support. A similar trend held for total biomedical support, where annual increases ranged from 1.9 percent to 10.2 percent in the 1980s and from 2 percent to 9.5 percent in the 1990s.

If I had written the article today instead of 12 years ago, I do not believe my advice would have been much different. Although our advocacy has improved in all quarters, it obviously needs to become better still if we hope to achieve real gains in support for research. And although academe has taken steps toward the more effective use of resources, too many bad habits prevail.


Roland W. Schmitt () is president emeritus of Rensselaer Polytechnic Institute and a former senior vice president for science and technology at General Electric.