Declining Higher Ed R&D Expenditures: A Crisis or an Opportunity?

131220-University-RD-BudgetA recent National Science Foundation (NSF) report revealed that R&D expenditures among U.S. higher education institutions remained flat in FY2012 compared to FY2011, and, when adjusted for inflation, declined by 1.1 percent. “This represents the first constant-dollar decline since 1974 and ends a period of modest growth during FYs 2009–11, when R&D expenditures increased an average of 5% each year.”

While this statistic is newsworthy, it may not be as much of a crisis as it first seems. Granted, federally funded research does have a positive impact in economic development terms. (For example, the Science Coalition released their Sparking Economic Growth 2.0 report this fall, which showcases 100 companies whose origins are in federally funded research and their economic impact in terms of jobs.) Let’s not forget, however, that federal funding increases in recent years are largely due to the American Recovery and Reinvestment Act of 2009 (ARRA). As multi-year projects supported by the ARRA continue to wind down through FY2013, funding levels may continue to decline relative to previous years. This statistic may therefore be the natural result of a one-time surge in funding.

Rather than get stuck on this bit of bad news, Universities should instead focus their efforts on re-evaluating their capacity for interacting with the private and non-profit sectors. According to the NSF report, expenditures by nonprofits and businesses increased by $281 million in the period FY2011 to FY2012.

In our work around the country, Fourth Economy has come across schools that are trying to make it easier to do business with their institution. One school in North Dakota is creating internal templates for industry agreements in an effort to simplify their currently convoluted paperwork process. Following the lead of other schools, the University of Rhode Island recently established a Business Engagement Center to serve as the front door to the university.

Indeed, academic-industry relationships can be challenging to establish and maintain. (There is even a national organization called the University-Industry Demonstration Partnership dedicated to addressing collaboration issues between the sectors.) However, these relationships can generate positive returns not only in terms of research funding, but also by creating valuable opportunities for students to work with local, national, and international businesses while they are in school. As with most economic development initiatives, results do not happen overnight. Coordinated and sustained investments in the relationship coupled with a long-term perspective are necessary for a successful public-private partnership.

This entry was posted in Ali Mabel, Blog, Businesses, Collaboration Facilitation, Economic Development, Grants & Development, Higher Education, Innovation Based Economic Development, Investment, Leadership, Program Evaluation & Design, Public Policy Analysis, Reflections & Takeaways, Research & Data, Research & Development, Transformation, Universities and tagged , , , , , , , , , , , . Bookmark the permalink.

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