Why funding for basic research is essential

Yesterday’s post may have inadvertently given the impression that I disagree with the AUCC’s call for increased academic research funding, including an increase to the tricouncil (NSERC, SSHRC, CIHR) granting agencies. I apologize for any misconceptions. Supporting academic research through the traditional granting agencies is a core part of Canada’s research success, and increasing funding to keep up with other countries is absolutely essential in these turbulent economic times. Any reservations about the AUCC release stem from my sense that straightforward demands for increased funding are increasingly likely to land on deaf ears, and that the research community needs to make strong and persuasive arguments to sway reluctant or resistant governments.

Yesterday, I outlined the direction research funding policy seems headed: forced collaboration between academia and industry through matching funds programs, support for needs-based and applied research at the expense of basic science, and increased direction of research by “end-users”. This policy drift is being pushed, in part, by worries about Canada’s lack of innovation, the perceived lack of success at turning academic research into commercial products.

There are several reasons this is a wrong-headed direction – why linking academia to industry-based funding decisions is bad policy for all concerned – and why increasing support through traditional academic funding models is a good investment. Below are just a few.

First, the current system is successful. As this spring’s STIC Innovation report highlighted, Canadian researchers are among the best in the world at publishing in peer-reviewed articles about their work, Canadian universities generate spin-off companies better than most countries, and Canada ranks second in the world in the share of national R&D performed at universities. Most analysts agreed that the STIC Innovation report identified academic R&D as one of our greatest strengths.

This success isn’t coincidental. It is in large part thanks to government increases to academic funding. According to a StatsCan document released this month, expenditures on R&D in higher education increased more than 85% between 1998 and 2008. More money means more, and better, researchers at our universities, producing world-class research.

Second, the groundwork has been laid for even greater success. Huge spending announcements by CFI mean new labs with increased capacity to do cutting-edge science are being built across the country. Even the much-maligned (here, at least) Knowledge Infrastructure Program  means that many of our institutions will see improvements that will help them recruit and retain top international research talent. Investment in these new and improved facilities will be wasted if we don’t find top-notch people to use them.

In sum, academia is successful, and is poised for even greater success.

So why not force it to ally more closely with business?

According to another Statscan Report, industry spending spending on R&D has slightly decreased in each of the last 3 years, and has remained basically steady since 2001. Maybe of greater concern, these numbers have remained steady because of an increase in the actual number of firms performing R&D. The average expenditure on R&D per company – and remember this is only among the companies that actually engage in R&D – has actually fallen more than 30%. And this is despite what the STIC report calls the most favourable tax credit system in the G20 for encouraging R&D. Furthermore, when measured as a function of GDP, Canada ranks 16th in the 20-member OECD in industrial R&D spending. Ultimately, industry just isn’t spending enough on R&D to support world-class academic research.

According to the StatsCan report, industry’s share of funding for academic research has remained effectively constant since 1994, despite a huge increase in matching funds programs and other programs designed to encourage collaboration between academia and industry, at about 9%. This, despite the fact that partnering with academia effectively acts as a subsidy for industrial R&D.

Though these numbers seem low, Canada still ranks fourth in the OECD in the proportion of academic research funded by industry. This suggests that industry-funded academic R&D is not a good indicator of innovation success. Given Canada’s poor innovation record in relation to the countries below us in this index, I’d suggest that increasing efforts to encourage collaboration between industry and academia are a poor stimulus for encouraging the “innovation economy”.

Finally, funding academic research through the traditional granting system provides advantages that partnering programs cannot. Tricouncil operating grants:

• fund basic research labs that train both graduate students and undergraduates, most of whom move out of academia and into the “innovation economy”
• provide well-paying jobs for thousands of highly-skilled people – often in smaller, regional centres across the country,
• attract top-notch professors who, in addition to performing research, mentor graduate students and teach undergrads,
• allow targeted research in uneconomic but socially or strategically important areas,
• support the basic science that leads to unexpected discoveries, and thus build a foundation upon which both startups and collaborations can be built.

Since collaborative projects are unrelated to the results-based, highly focused needs of industry, companies investing shareholder money don’t, and shouldn’t, support these activities, despite their unquestionable benefits to society.

Increasing funding for basic research will build a strong future for both Canadian academia and the Canadian economy. Today’s graduate students may become tomorrow’s entrepreneurs. Or they may lay the groundwork and point the way for unanticipated advances in, say, cystic fibrosis research or wireless communications. The competitive nature of the granting councils keeps researchers focused, but allows for broad, imaginitive approaches to shine through.

While many are focused on fixing Canada’s “innovation system”, it’s important not to sacrifice the hard-earned successes we already have. The innovation economy isn’t going to magically appear by forcing academics into commercial research. To create the innovative economy, we need a broad pool of pre-commercial or un-commercial science and an increase in highly-trained entrepreneurs who can imagine how to develop it. Strong, stable funding for the granting agencies is the best way to achieve these goals, and Canadian scientists need to continue to speak strongly (as more than 2200 already have) in its support.