New Reports: Impact of Sequestration on University Research, Importance of Federal R&D Funding for New Companies

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Publication date: 
18 November 2013

At  last week’s hearing of the Senate Commerce, Science and Transportation  Committee  there was  considerable discussion about the impact of mandatory budget reductions (sequestration)  on research supported by the federal government.  Senators and witnesses also spoke of the  important role federally-sponsored university research plays in the creation of  new companies.  A survey released earlier  this week and an October 30 report provide insight on both matters.

Impacts of  Sequestration on Research at Private and Public Universities:

A  survey of research universities revealed a wide range of negative impacts resulting  from sequestration.  A summary of these  findings was released  on November 11. 

This  survey of 171 public and private universities was sponsored by the Association  of American Universities, the Association of Public and Land-grant  Universities, and the Science Coalition.  Forty-three percent (74) of the  universities responded; the margin of error was +/- 10 percent.

“In the first  seven months of sequestration, 70 percent of responding universities cited  delays in research projects and 70 percent experienced reductions in the number  of new research grants,” the survey summary states.  In other findings, reductions of up to 31  percent were made in research-related staffing positions.  Responding universities experienced  reductions, delays, or cancellations in undergraduate student research, equipment/instrumentation,  conferences, research and training grants, admitted graduate students,  projects, and field or experimental work. 

The  summary concludes:

“The  results from the sequestration survey are an early indicator of the devastating  impact that sustained cuts to research and higher education will have on the  economy and the United States’ role as a global innovation leader. Research  university leaders from both public and private universities express deep  concerns about both the short-term impacts on current research and the  long-term effects on future research and the scientific enterprise.

“University  leaders noted that although sequestration was clearly harmful during its first  year, it was not as damaging as it could have been. Some universities and  federal science agencies were able to ameliorate the impacts via short-term  tactics such as exhausting reserve funds, temporarily realigning activities, and  provisionally reassigning staff, faculty and students. However, these devices  will not be available to cushion the impact of sequestration in 2014 and  beyond.”

Under  the provisions of the Budget Control Act, mandatory budget reductions  (sequestration) will continue through FY 2021.


Role of  Federally-Funded University Research in New Companies:

The  important role that federally-funded research plays in the development of high  technology companies is often discussed by Washington policymakers.  A report published by The Science Coalition  provides examples of how federally-funded university research was instrumental  in the establishment of 100 new companies.    

The  Science Coalition describes itself as “a  nonprofit, nonpartisan organization of more than 50 of the nation’s leading  public and private research universities.”   The report explains “These  companies were self-selected by the member universities of The Science  Coalition and are illustrative of the many companies that are the result of  federally funded university based research.”

For  each of the 100 companies in “Sparking Economic Growth 2.0”  the location, founding date, university at which the research was performed,  number of company employees, public or private status, and technology is  listed.  The report also provides the  name of the funding agency and the amount of federal funding.

Funding  agencies include the Department of Agriculture, Department of Commerce, Department  of Defense, Department of Education, Department of Energy, NASA, National  Institutes of Health, and the National Science Foundation. Fifty universities  were involved.  The companies employ more  than 7,200 people in 26 states, with the number of employees ranging from 2 to  1,169.  An estimated $330 million in federal  funding for university research was provided in amounts ranging from $40,000 to  $35 million.

The  Science Coalition has related information on its Success Stories website.