NSF: Drop in Industrial Support for Academic R&D Continued into 2004

For the third consecutive year, industrial support of U.S. academic research dropped, according to an April 2006 InfoBrief by the National Science Foundation (NSF). The 2.6 percent decrease in fiscal year 2004 from the previous year is the sharpest yet in the three-year trend, following a 1.1 percent reduction in FY 2003 and 1.6 percent in FY 2002. Author Ronda Britt notes "the industrial sector is the first source of academic R&D funding to show a multiyear decline" since the survey inception in 1953. At only 4.9 percent of the total academic R&D in FY 04, the industrial share now parallels its FY 83 levels.

While the recession and dot-com crash may explain some of the drop, NSF does not offer any conclusions regarding potential causes for the drop. Others have offered globalization as a potential explanation. They see industry R&D migrating toward the markedly improved capabilities within the international academic community.

For example, basing their findings on a survey of more than 200 multinational companies, Drs. Marie and Jerry Thursby discovered more than half of the corporate respondents who identified the U.S. as their home country report that they have either recently expanded or planned to locate R&D facilities in China and India vs. other developed countries. Among the study's more surprising findings, according to the researchers, was the role university collaboration plays in the decision-making process for locating R&D facilities. In fact, collaboration with universities was particularly prevalent as a factor for expanding to emerging countries, even though these countries provide lesser degrees of IP protection. [See the Feb. 20 issue of the Digest for more details on the study.]

State support for programs encouraging university-industry research partnerships has varied over the years. Much of the recent surge in state TBED investments, for instance, has focused predominantly on overall university research infrastructure capacity building, faculty recruitment, and centers of excellence in a few targeted sectors driven by a pursuit of federal R&D investments, such as the life sciences and nanotechnology. Whether these strategic investments will be enough to woo industrial R&D spending back to the academic fold remains to be seen.

The new NSF InfoBrief is available at: http://www.nsf.gov/statistics/infbrief/nsf06315/