Should University Research be Economically Justified? (Is this even the right question?)

April 3, 2011

In the pursuit of government spending reductions, questions have been raised about whether university research should be economically justified.  For the specifics about the questions raised in Texas, Eric Berger of the Houston Chronicle does a very nice job on his blog here and here.

It is safe to say that the fundamental objective of the proponents of the “economic justification” idea is to reduce government funded research by eliminating “waste” rather than to optimize current spending on economically valuable problems.  Nobody can reasonably argue with the idea that a portion of a nation’s or a state’s research budget should be relevant to solving real problems (like disease or energy costs) or creating new products and thus competitive advantage.  However, economically justifying the research projects individually is a bad idea. There are just too many ways to destroy what already works and too many impossible questions:  Who is qualified to judge the economic value of early stage research?  How to they factor in the creative process of innovation? How do you gauge risk vs. reward in an area where most approaches fail?  How do you measure the benefit of basis research to create the foundation for more applied research?  A state or university that tries to change research this way will likely lose its top researchers, both basic and applied, in no time flat.

I would argue that university research is already justified by the number of companies and jobs created around the science or around the people involved in university research.  Secondary benefits include exposing undergraduates to more than just book-learning.  The experience of working with a team at the cutting edge of science and engineering creates better, and probably more, engineers and scientists – both an economic benefit.  Some research, like clinical trials around drugs or environmental studies, can have a very positive impact on societal problems, like disease, without an economic benefit.

That being said, I believe that we could, as a nation, get more economic benefit out of our fundamental research budget without changing the things that work well.  People outside the university environment would probably be surprised at how focused many researchers in the hard sciences and engineering are on providing an economic and societal benefit from their research.  To be sure, not all think this way.  A professor in my graduate told me that production of graduate students is the real objective of research…of course he is now retired and the new generation of scientists and engineers is much more focused on making a difference.  In fact, I very often hear about universities competing for scientists where a key factor is what the university can do to support commercialization of the scientist’s research. So, the big question is not “How do we eliminate research that has an unclear economic objective?” or “How do we force all researchers to justify their grants?” but rather we need to be asking “What can we do to encourage and enable researchers to be more effective in having an economic/societal impact?”

If you believe, like I do, that having strong university research contributes to a national advantage, we should be doing everything to move it to the next level.  And we should be doing it rather quickly if you look at the competition coming from other countries, particularly China, that used to send their best and brightest students to the US where many stayed.  Our lead is not as great as it once was but our research universities are still a huge asset.  If you want to see the impact of just one good university, read the Kauffman report on MIT’s economic impact.

To me, the question is not “How do we chop unjustified research?” but rather “How can we take what we do well and improve it (or do it at more universities across the US)?”.  The answer is to give researchers, especially the next-generation “Young Guns”, better access to important problem statements and to provide better support for entrepreneurship in an around the university.  If we provide researchers a top academic environment AND enable them to change the world (and create wealth) the national economic payoff can be tremendous.

There is so much potential for improvement here, even at universities that think they are doing it right, that there is no reason to even worry about the costs of basic research (though I happen to think basic research is a necessary part of the productive academic ecosystem).  As I have mentioned before, I believe that improvement in these areas can be driven by fairly low cost initiatives by the federal funding agencies.

BTW, SBIR funding absolutely should have a strong economic justification. These programs are focused not on university research but on commercial companies with the objective of a national, economic benefit. In my opinion, these programs have not even come close to reaching their full potential.

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