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Friday, December 6, 2013

Safeguarding Intellectual Research Capital: An Academic Priority

In her article with the title “U-Va. board approves basic framework of strategic plan - but not the plan itself ” published by The Washington Post online Nov. 15, 2013, Jenna Johnson reports on the University of Virginia (U-Va.)’s new mission revealed at last week’s board meeting and a five-year strategic plan, known as Cornerstone Plan, to implement the plan. The plan's implementation rests entirely on the provost's shoulders. In the plan’s second pillar, the institution recognizes its role as a public research university and sets a high priority on strengthening peer-reviewed funding, for which federal agencies provide the most common source.

However, U-Va.’s leadership did not supply a price-tag for the proposed plan. Jump-starting U-Va.'s scientific research enterprise will take a considerable investment. The revenue from tuition can never replace the revenue from federal agency funding.

Federally funded research adds more than knowledge.

Federal agencies allow universities hosting the research to recover indirect cost for infrastructure improvements, plant operations and administration. In 2010, U-Va. charged federal agencies 54 cents for overhead on the dollar directly allocated for research.

No doubt, federally funded research provides academic institutions with a substantial revenue stream. Even at public universities with extensive student enrollment, research revenue may rival tuition revenue.

Table I: U-Va.’s funding by the National Institutes of Health (NIH)

Fiscal year NIH awards
[million $]
2009 161
2010 134
2011 120
2012 120
2013 110

The National Institutes of Health (NIH) report that U-Va. received 110 million dollars in fiscal year (FY) 2013. This represents a third of what the University of California at Los Angeles was awarded in the same time frame. The paltry result seems the more shocking, because U-Va. had garnered 161 million dollars in FY 2009 (Tab. I). At uneven pace U-Va.'s NIH funding declined by 32 percent in just four years.

The downward spiral seems to continue. According to Nick Anderson's post with the title "Universities continue to lobby against sequester’s cuts of research funding" published online by The Washington Post Nov. 12, 2013, U-Va. may stand to lose at least another 7 percent in the current fiscal year because of sequestration-related across-the-board cuts in the NIH budget alone.

If U-Va.'s federal funding continues to decline unimpeded, the university's revenue stream from this source will slip below 100 million dollars by the end of the current fiscal year. It is difficult to conceive how an academic research university of U-Va.'s prominence with a teaching hospital can remain competitive under such condition.

The federal funding system is on its knees.

A decade ago, the NIH funded roughly 1 in 5 investigator-initiated research grant applications. Now the funding rate is closer to 1 in 10. Principal investigators, that is professors, may need two grants on separate renewal cycles to continuously support a laboratory. The grants substantially underwrite their salaries as well as those of research associates and research assistants involved in the research, that is 3,400 U-Va. employees.

Therefore, the drastic decline of federally funded research at U-Va. will be consequential and needs urgent action. Because the federal fiscal shortfall may not be addressed anytime soon and increases in the federal research budget cannot be expected in the near future, the implementation of short-breathed measures will not suffice.

Facilitating potentially stellar research may be less costly than the recruitment of stars.

Recruiting established faculty with multiple research grants from elite private schools may seem practical and promises quick improvement of the funding situation. However, the strategy is expensive. Success will be short-lived. Research awards usually last three to five years. Seven years, like the NIH Javits Awards, represent the absolute exception, and more often than not the recipients may fail in subsequent competitive renewals. Therefore, five-to-ten year funding life cycles are not uncommon for the stars.

A more viable, long-term strategy would invest in promising faculty at the beginning of their careers whose research will help push the next fundamental break-through in their area of expertise. The university needs to set up scientific councils, consulting outside experts who can guide the identification of future cutting edge issues and of the individuals whose research might make a substantial contribution. In-house search committees do not suffice. The Howard Hughes Medical Institute in this country and the Max-Planck Society in Germany represent models for best practices.

One way out.

In the 1980s, the pharmaceutical giant Hofmann-La Roche used 11 percent of the company’s annual profits to sponsor fundamental biomedical research in house as well as at universities and academic research centers elsewhere. Hofmann-La Roche benefitted greatly from this investment.

In analogy, U-Va. may set aside a similar percentage of the returns from the university's endowment investments and dedicate the money exclusively to the protection of the its intellectual research capital, until federal funding regains sustaining levels.

The price may seem steep. But, the investment is vital to the university's stated mission of “advancing knowledge and serve the Commonwealth of Virginia, the nation and the world through research, scholarship, creative arts and innovation.”

Conclusion.

Cutting-edge teaching is impossible without cutting-edge research. The success of the university depends on it. The dire situation at the University of Virginia is not unique. Other research university's must confront this predicament. My advice applies to all.

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