Earlier this year Penn's David Morse and other federal relations specialists in research universities suggested to the Republican Conferencethe caucus of fifty-three Republican Senatorsa meeting on issues in federal funding of research. Here is a report on the discussion held March 25 in Washington, D.C.

Notes from a Forum on Federal Funding of Research

How should the Federal government approach funding scientific research against a backdrop of declining Federal spending?

Or, put another way, what is the proper level of government and industry spending for university-based research necessary to ensure that U.S. leadership in technology is sustained?

These questions were asked in Washington on March 25 when university presidents, corporate C.E.O.s, directors of national laborators, and U.S. Senators met for the Senate Republican Conference Issue Forum on Science and Technology. Penn participants in the session included Dr. P. Roy Vagelos, chairman of the University's Board of Trustees; Dr. Michael Brown, Paul J. Thomas Professor of Medicine at the University of Texas Southwestern Medical Center, Nobel Laureate and Penn Trustee, and David Morse, Associate Vice President for Policy Planning (presenting research of Dr. Edwin Mansfield, professor of economics, who was unable to attend).

The meeting examined three key issues: First, the priority of science and technology under tightening fiscal constraints; second, the appropriate roles of government, industry, and universities in supporting research; and third, how to evaluate the success of our nation's investment in science and technology research.

The session was chaired by Senators Bill Frist (R-TN), a former cardiac surgeon and NIH-funded researcher. Mike DeWine (R-OH), Pete Domenici (R-NM), Charles Grassley (R-IA), Frank Murkowski (R-AK), Don Nickles (R-OK), and Ted Stevens (R-AK) also participated, as did the presidents of MIT, Harvard, the Univsity of Texas at Austin, Iowa State University, and the University of Iowa, and North Carolina A&T University.

Participants noted that 50 percent of the industrial innovation and growth since World War II in this country has been due to advances in technology derived from research and development.

"Together, science and technology make possible modern health care, our manufacturing industries, our nation's military security, our housing, transportation, energy generation, environmental protection, agriculture, increasingly even entertainment communication and management of government and industry financial services," said Charles Vest, president of Massachusetts Institute of Technology.

Penn Trustee Dr. Michael Brown noted that decades of research on cholesterol and its role in heart disease have reduced mortality rates by 30 percent and have decreased the need for expensive surgery and angioplasty. "Some scientists are even predicting that coronary heart diseasethe most common cause of death in this countrymay be a disease of the past within 20 years," he told conference participants.

To reach breakthroughs like this, and sustain similar advances across scientific disciplines, will require continued Federal investment in basic scientific research, participants said. They added that the federal government's investment in research has brought tremen dous economic and social returns for the nation and is an essential source of new ideas and knowledge that will benefit society in the future.

Currently the federal government spends about $70 billion annually on research and development. Universities receive about $12 billion of it, and tend to focus on long-term basic research.

Senator Frist outlined budgetary concerns facing policy makers and challenged participants to explain how they would "make the case to Senate colleagues that science and technology should remain a priority for scare federal dollars."

Concerns about limited resources were echoed by Senator Stevens, who noted that approximately 50 percent of all federal expenditures cover entitlement programs such as social security and Medicare, roughly 20 percent over a seven-year period pays for interest on the national debt and only about 30 percent was available for all other federal programs, including research, education and other government functions. Stevens said that without a budget agreement to ensure long-term annual savings, "there will be no controllable expenditures by the year 2010."

"It's against that backdrop that we look at the problem of financing R&D," he said. "I don't think anybody could be more committed to R&D than Pete Domenici and I. But the two of us as chairman of these [appropriations and budget] committees will have to find some way to meet demands on our society in the other areas."

Dr. Vagelos, former chairman and CEO of Merck & Co. Inc., noted that entitlements are ballooning in part because of health care costs which have reached a trillion dollars a year. "If one controlled blood cholesterol in patients who have coronary heart disease . . . the cost of their care would be reduced by one to two billion dollars a year," he said. According to Dr. Vagelos, the best place to look for breakthroughs in such medical treatments is through the "machine" of university research.

In discussing the respective roles of government, industry, and universities in supporting and conducting research, Dr. Vagelos pointed out that universities, supported by the federal government, must continue to undertake longer-term, fundamental research. If government were to try to cede to industry the responsibility for fundamental discovery, the results would be devastating, since industry, he said, is set up to do applied research. Attempting to shift responsibility for basic research to industry would not only not work, said Dr. Vagelos, "it would slow down the overall development process."

According to a report prepared by economist Dr. Edwin Mansfield, companies investing in innovation receive a return of 25 percent a year on average. However, society reaps an even larger reward for the same investment, achieving a 56 percent per year average return.

Dr. Mansfield, who began his studies of the economic effects of academic research in 1977, found that a much greater share of the benefit from investment in research accrues to society because many of the returns go to users of the innovations, imitators and others. He reported that the rate of return for investment in Agriculture research is often over 40 percentand that in medicine, a recent study of computer tomography (CT) scanners suggested that the return to society was over 200 percent. He also said that his studies are narrowly focused on the measurable results of technical innovations but universities provide other benefits that cannot be easily quantified.

"Obviously, knowledge concerning the universe is important for its own sake, and the education of students, which occurs in many aca-demic research projects is socially important as well," Dr. Mansfield said. "Nonetheless, it is important to note that, even if research is evaluated in these relatively narrow terms, its returns seem to have been very considerable."

Senator Frist closed the session by underscoring the importance of sustained investment in basic research, and suggested that the Forum laid valuable groundwork for future policy discussions on R&D priorities among Senators.

--Carl Maugeri, Associate Director, Federal Relations


Volume 42 Number 32
May 14, 1996

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