Academic R&D Growth Slows
The amount of R&D funded by U.S. academia is forecast to increase by 2.1% in 2013 to $12.7 billion. The amount of R&D performed by U.S. academia (funded by all sources) is expected to increase by 0.4% to $66.6 billion. Both of these values generally are well below 3% or larger range in previous Global R&D Funding Forecasts. This year's reduced funding and performance reflects 1) reduced government support due to across-the-board spending cuts, 2) slower economic growth in the U.S., and 3) the termination of ARRA (American Recovery and Reinvestment Act of 2009) funds which, after three years allowed for distributing roughly $18 billion in R&D stimulus funds, finally ran out in 2012.
Academia is one of the crown jewels of U.S. R&D. It is where more than 60% of the basic research in the U.S. is performed—75% of the research in universities is basic and 22% is applied. Academia also produces more than two-thirds of the scientific papers published in the U.S. And as noted above, it is where the U.S. government and industry annually outsource more than $50 billion worth of R&D. The quality of U.S. academia is also well recognized, with the majority of the top 100 global academic institutions ranked by independent organizations being in the U.S., according to a study by Thomson Reuters. The study also found that a significant amount of research (as measured by the output of published scientific papers) is concentrated in the top U.S. universities. Each of the top 25 U.S. schools, for example, produces well over 1% of the total U.S. output of scientific papers. These schools also received nearly half of all citations to U.S. papers, averaging over 22 citations/paper.
China produces more science-based doctorates than those awarded at U.S. universities. Besides population differences, the weak U.S. economy contributes to the gap as educational choices align with employment opportunities. For example, the 19,700 scientific doctorates awarded in the U.S. in 2009 exceeded the available jobs. A similar situation is evident in China, where scientists with good undergraduate degrees can earn up to 30% more than candidates with Ph.D. degrees. More than half the Ph.D.s awarded in the U.S. are employed in academia, 13% in government, and about a third in industry.
Chinese universities are aggressively recruiting leading researchers from top U.S. universities, targeting those leading world-class research projects. They also offer more than half of their graduate courses in English.
For more than a decade, concerns have been voiced in the U.S. that too few undergraduate students are choosing to specialize in science and technology fields, but a major supply crisis has yet to materialize. Part of this reaction was due to a declining number of students in the population about 10 years ago, which has now reversed. Enrollments in universities are now increasing.
One concern for U.S. academia is its heavy reliance on government and industry funding—for 2012, 62% of academic funding came from the federal government. State funding of academia has stagnated or declined over the past decade due to economically strapped state budgets. And now, with the possible automatic budget cuts due to the Budget Control Act of 2011 sequestration issues, federal support for academia could be facing up to 9% cuts as well in 2013. These cuts could result in 2,300 fewer grants awarded by the U.S. National Institutes of Health (NIH) alone.
According to a recent survey by R&D Magazine, academia is the most effective type of research organization for technology collaborations and outsourcing. However, the survey respondents also indicated that academic facilities, expertise and funding are likely to get slightly worse over the next three years than they are now.
Another weakness is that the research base appears to be concentrated in the top universities, and it is more concentrated there than in other countries such as the U.K. Against international competitors, U.S. research universities are losing share and their historic strengths are being challenged, according to the Thomson Reuters report.
The bleak outlook for federal funding of academic research has resulted in a greater cost sensitivity in university research laboratories. This also could result in extended buying cycles, delayed instrumentation purchases, and reduced project scopes. More academic laboratories are sending their purchase requests out for competitive bids than have ever done so before, according to a recent study by Frost & Sullivan for the Laboratory Products Association (LPA).
The continuing resolution (CR) was passed in September 2012 that extends all government funding through March 27, 2013, at FY 2012 levels plus 0.6%. The NIH decided to award research grants up to 90% of the previously committed level throughout the CR, which is the same as that for the previous CRs through FY 2006.
According to the LPA report, academic laboratories reported an increase in their total budget from 2011 to 2012, but don't expect a further increase in 2013. Purchasing shares across instruments, equipment, chemicals, life science kits, plasticware, and general laboratory supplies are expected to be stable during this period.
Universities with medical schools receive almost 10 times more R&D funding—or about $240 million—than those without. This is a result of the heavy extramural funding provided by the NIH, which has an annual research budget of approximately $31 billion, according to the National Science Foundation.