NIH DEPENDENCY

POST DATE February 19, 2007, 6 AM

Having left the bench 6 years ago to start a company I cannot help but see analogies between my experience then as a scientist and now and a business owner. I imagine that most academics think they have absolutely nothing in common with the small business owner, and many would probably disdain the analogy. But let’s explore this for a bit, because I think there are some rather interesting strategic implications for how scientists in academia (and, to some extent, national labs) should approach funding their research.

A research group is like a small business. A scientist running the lab is like a small business owner. The research group has a product (science), can have employees (post-docs, research assistants) and has to pay rent (space charges) and cover all expenses. The “customers” are the funding agencies who pay the research group for the product (science).

Any small business owner would tell you that having a single customer is an extremely precarious position. If you depend solely on one customer, they have enormous power over you. They can dictate the price of your product and they can dictate the terms of your work. In many respects, if you are a business owner with a single customer, they are YOUR boss. Their fortunes become your fortunes: if they are flush with cash you end up with more business. But if they hit hard times, you are in big trouble.

The NIH (or NSF) is a big and very important customer to a lot of small businesses (research groups) around the country. But these small businesses have allowed themselves to become entirely dependent on this one customer. Shouldn’t they diversify their customer base to prevent a catastrophe during periods of downturn?

You can’t tell me that NIH and NSF are the ONLY customers out there. There are LOTS of other customers. It may be that NSF and NIH have the most breadth, and allow scientists to explore topics that interest them (the scientist). Many (most?) other sources of funding are much more applied, and often require the scientist to focus on more specific customer-driven problems. But is that bad? A mix of applied and basic research can often be a good intellectual stimulus for a research group.

Not only are there several federal agencies that fund research besides NSF and NIH, but there are a myriad of foundations and private organizations. Most of these focus on specific issues (e.g. diseases), but why can’t a scientist pursue work that involves both basic (non-specific) research and targeted (applied) research?

Once you open your mind to the possibilities of revenue generation as a scientist you can find all sorts of creative solutions around you. Many scientists consult to private industry. I suppose most of them just pocket all that extra money but they could choose to funnel some of it into their labs. My father (a geologist at the Smithsonian) funds his research largely from the proceeds of a documentary he filmed years ago. One can build cooperative research and development agreements (CRADAs) with private industry. There is also state funding.

We certainly don’t prepare our scientists to look at their enterprise as a business. We don’t teach them the practical Business 101 lessons of starting and growing a research enterprise. We don’t teach them the critical need to diversify their income stream. As a result, we end up with a huge population of research groups totally dependent on the NIH or the NSF for their survival. But these scientists also have themselves to blame for building a business that is overly dependent on a single customer.

The moral of this story: diversify, diversify, diversify.

Your comment as been added.

8 Comments

Geoff Davis on February 19, 2007 4:55 PM

That's cool about your father's funding.

I heard a really interesting talk here at NBER a few years ago about the history of university funding. A century ago, almost all science in academia was funded by the private sector. If I am remembering correctly, not only was government funding scarce, it was seen as potentially problematic because concerns about state control of research, etc. Anyway, that system all fell apart during the Depression when corporate funding dried up. WW2 led to a big influx of government funding for targeted research projects, and after the war, [Vannevar Bush](http://en.wikipedia.org/wiki/Vannevar_Bush) got the NSF created.

Can anyone recommend good US science policy histories that won't put me to sleep?

Bob on February 19, 2007 7:26 PM

Geoff Davis on Mon, Feb 19, 11:02AM wrote:
"Can anyone recommend good US science policy histories that won't put me to sleep?"
-----------------------------------------------------------------------------------

Given that the number "comments" on this blog are quite low, and something of a flop, I would not lay down such an seemingly arrogant criterion for submissions. You and Peter will be left to chat by yourselves, which already seems to be the case for the most part.

Bob

Geoff Davis on February 19, 2007 8:26 PM

Surely "engaging and well-written" is preferable to "dull"?

This is not commentary on any previous stuff you've written, Bob -- I have appreciated (and have read) your contributions! I haven't had as much time to invest in the blog as I'd hoped -- you should know why next week...

Ginny on February 21, 2007 12:14 AM

The analogy drawn between running a lab and a small business is a good one. And I completely concur with your call to diversify post-graduate Science education. A similar call has come out in Nature Jobs through the new Recruiters column. Michael Alverez, from the Stanford Medical School Career Center in particular, appears to be mirroring your suggestion that researchers learn more in their training than simply how to pippet and run gels.

Geoff, I'd also be interested in learning about any sources of information you may find on the history of federal R&D funding.

Peter Fiske on February 21, 2007 12:48 AM

Bob,

Go easy on Geoff, he's been trying to read [The Structure of Scientific Revolutions] (http://en.wikipedia.org/wiki/The_Structure_of_Scientific_Revolutions)... and it's been slow going. Personally, I think somebody should take Kuhn and turn it into a comic strip series. The brilliant and funny Jorge Cham has gotten partway there with his hilarious [Piled Higher and Deeper] (http://www.phdcomics.com/) about life in grad school.

I know of only two places that teach a course on science policy: MIT (by former Lieberman Legislative Director and now MIT DC office director William Bonvillian) had a 3-day intensive called the [Science and Policy Bootcamp] (http://student.mit.edu/searchiap/iap-7351.html), and Princeton (by former Liberman staffer Dr. Joseph Michels) entitled [Science, Politics and Policy] (http://web.princeton.edu/sites/writing/Writing_Seminar/WSFallContent.htm#161). There may be others out there, but I'll bet that no science department sponsors such a course.

Understanding the history of science policy, as well as the current structure of scientific funding and, for that matter, the Federal budgetary and spending process, can be extremely empowering to those who's livlihood depend on it.

So, to make a long answer short: I don't think a practical, readable history of science policy written for practicing scientists exists.

It should.

Peter

Geoff Davis on February 21, 2007 1:01 PM

Will keep you posted, Flygal. I'm asking around here at NBER in preparation for a talk on the NIH doubling. So far I have mostly been learning how much I don't know. While that's always a useful exercise, it's a bit disconcerting so close to a talk. So I will have to know a lot more soon. It's good to have a gun to one's head (metaphorically speaking) every now and then.

Michael T will be up here next week, I think - will you be along?

Bob on February 23, 2007 3:30 PM

NIH dependency
Posted by Peter Fiske at 01AM on 02/19/07 | Categories: None | 6 comments

"You can’t tell me that NIH and NSF are the ONLY customers out there. ...There are LOTS of other customers.

Not only are there several federal agencies that fund research besides NSF and NIH, but there are a myriad of foundations and private organizations.... One can build cooperative research and development agreements (CRADAs) with private industry.

The moral of this story: diversify, diversify, diversify."

-----------------------------------------------------------------------------------------

I think some of these comments are overly simplistic and have not taken into account several factors:

1. Researchers have in fact already "diversified, diversified, diversified". ANY funding agency you can think of, public or private (DoD, DARPA, ONR, HHMI, SLOAN, etc.), have funding success rates at least as daunting as the NSF or the NIH (now at around 20%), some much lower. There are many researchers from engineering departments, national labs, small and large companies, waiting in long lines to get this more applied funding. More homework needs to be done here.

2. The quest for "diverse" funding sources (outside NSF/NIH) have led many research managers to turn to Congressional plus-ups (pork barrel spending). This practice has increased dramatically over the last 10 or so years and has led to a very inefficient use of research spending with little technical oversight. There is some action on the Hill to rein this in however, so now this approach to funding diversification is being questioned.

3. CRADAs are often more trouble from a legal perspective than they are worth. Corporations are usually stingy with their research funds and typically bargain from the position of the "research for free, and all the patent rights". Also, industry support seems to be on the decline:
"Industry Support for Academic Research Fell for a 3rd Straight Year in 2004"
http://chronicle.com/daily/2006/05/2006050201n.htm

...I could go on...

The upshot is one needs to do more homework on the budget numbers (success rates) concerning the overall R&D funding portfolio (both basic and applied) before making suggestions like "The moral of this story: diversify, diversify, diversify." I think the suggestion for basic researchers to give the applied research side of their work some thought is a good one, but if there is a funding bottleneck at the NSF/NIH, then turning those numerous and under-funded researchers loose on applied R&D funding is somewhat reckless from a science policy perspective, though clearly not the intention.

-----------------------------------------------------------------------
FYI, this link shows some funding success rates for the NSF that are plotted in an interesting manner:
See slide 5: "Decrease in proposal success rates coincides with increases in proposal submissions and average award size/duration"

www.nsf.gov/attachments/103193/public/AkayIPAMMupdate.ppt

Just my two cents..

Bob

Geoff Davis on February 23, 2007 9:44 PM

I think Peter is suggesting that it is useful to diversify beyond even the usual suspects that you have listed.

There are a number of new, interesting opportunities out there. A couple that I have direct experience with:

* Corporate sponsorship of open source projects. I spent a couple of years on the board of a foundation that was set up to further the development of an open source content management system. We received a lot of funding from a corporate sponsor that was selling solutions built on our platform. Because the code was open source, there were IP complications. There are a lot of interesting open source scientific software packages out there that are useful both for academics and those in industry (see the [Open Science Project](http://openscience.org) ) for which this may well be a reasonable model.

* Online ad revenues (e.g. AdSense). AdSense covers phds.org's operating costs (maintenance, not new development), and they took all of 10 minutes to set up. There are probably a few other projects that would be suitable for funding in this fashion.

One interesting recent phenomenon is that a handful of wealthy are starting to sponsor science on their own. The founder of RIM (maker of the Blackberry) is funding a theoretical physics institute, for example. I have a vague memory of a similar setup in neuroscience by some other tycoon. We could be returning to an age of wealthy patrons.

Sure, these are all niches, but I'm sure there are others. Is it realistic for a majority of people (or even a substantial minority) to be funded by such means? Of course not. But if one has the opportunity to diversify away from the usual sources, so much the better.

Nice slide on the NSF, by the way. I've seen similar things elsewhere and will be looking into some of the implications over the next couple of weeks.