More than half of academic research funding in the United States comes from the federal government, and the national return on that investment is considerable.
Academic research contributes to an estimated 80 percent of our leading industries. Given innovations at Stanford and the University of California-Berkeley, the emergence of Silicon Valley was no accident. A 2011 study of alumni and faculty estimated Stanford entrepreneurs generate $2.7 trillion in annual world revenues and created 5.4 million jobs since the 1930s. Many companies founded by Stanford-affiliated entrepreneurs had their roots directly, or indirectly, in University research. For example, the original Google search algorithm was partly funded by a National Science Foundation research project.
In recent months, there has been much debate over the federal debt. When President Obama signed the American Taxpayer Relief Act on January 2, discussion focused on raising revenues. But the agreement also temporarily forestalled sequestration, or automatic spending cuts, including an 8 percent cut to federal agencies funding research.
As of this writing, the outcome remains unresolved. But such cuts would have significant implications for higher education and the country's ability to compete. Such cuts would also come as many countries are investing more heavily in research and higher education and would exacerbate a flattening in federal research investments over the past five years.
From 2004 to 2009, the government's share of total investment in university research in science and engineering dropped 4 percent, as universities turned increasingly to institutional and industry support. Completely replacing federal investment is almost impossible, as it would require Stanford to double its endowment and dedicate more than half the income to research.
While there has been some growth in other funding (from 7 percent of our research funding in 1981 to 16 percent today), this slow pace means it can never replace federal funding. And industry funding sometimes comes with constraints that do not support long-term basic research.
The potential implications of reduced federal research funding are considerable. Projects could be delayed or abandoned, fewer will advance to market and students will be discouraged from pursuing research and graduate education.
Breakthroughs do not come overnight: They require stable funding and years—sometimes decades—of effort. Faculty members work in teams with students. The more time faculty spend writing grant proposals, the less they have available for research. For example, after a decade of research, a decrease in funding eight years ago required Stanford professor Brian Kobilka, 2012 Nobel Laureate in Chemistry, to focus on writing grants to support his team. Young faculty also face increasing challenges in getting research support, with the average age of an investigator receiving a first grant from the National Institutes of Health now 42.
Although Stanford is well positioned to compete for limited federal funds, we continue to diversify our research funding. For example, we have crafted new industry partnerships that focus on long-term basic research and provide stable funding. The Global Climate & Energy Project (GCEP), established 10 years ago as a new approach to industry-University collaboration, now has a diverse portfolio of energy-related projects.
To provide stability for graduate students, we have increased support for University fellowships over the past 25 years to 40 percent of graduate student aid. Stanford Graduate Fellowships and Stanford Interdisciplinary Graduate Fellowships are critical to attracting and supporting the best graduate students. Despite these efforts, about 40 percent of our PhD students still depend on federal support.
Our nation is experiencing difficult fiscal times, and universities must play their part. But the longstanding partnership between government and university—its investment in basic research—must remain a priority. It enables innovation, promotes economic growth and creates jobs.
John Hennessy was the president of Stanford University.
