One way of recovering costs for federally funded research is by having governments proportionately included in intellectual property agreements resulting from their angel investments. While not all projects are ultimately profitable, funds allocated to university investigators for basic research should be regarded as a diversified investment portfolio from which successful ventures offset risk. As lab-bench discoveries are translated to bedside technologies, funding agencies can earn profits from their grants, encouraging further funding through re-investment. Crafting a mutually beneficial relationship of this sort would keep politicians from having to choose between funding basic research (popularly believed to be a welfare practice) and supporting economic growth; which is a false dichotomy.
And why not? Unlike schools that return government investments in education through often hard-to-measure societal gains, biomedical research is a multi-billion-dollar industry whose money trail is easier to follow. Citizens invest in biomedical research through taxes, and federal monies often constitute the majority of laboratory funds for a research program. At American institutes such as Brigham and Women’s Hospital, overhead resulting from federal grants are set at 76% (and nearing 40% at major Canadian universities), which supports the institutional costs associated with maintaining an active research centre (See my earlier post, “Misallocated incentives in an already cash-strapped grants system.”)
At major American research institutes this money covers investigator, personnel and administrative salaries as well, such that only actively funded investigators can afford to be retained. At smaller American institutes and most Canadian universities, investigators receive a salary and a small research stipend from their employers while the majority of research funds are dependent on outside sources like private and federal awards. Uniquely, while the cost of basic research is borne almost entirely by citizens, discoveries resulting from academic labs belong exclusively to the research institute. Depending on the institute, a minor (and often variable) percentage of the intellectual property agreement is also awarded to the principal investigator for their contribution to the discovery (see “Patenting in academic institutes.”)
Were taxpayers to claim a proportional share of profit rights resulting from the scientific discoveries they helped support (which should constitute at least a small part of the investment, taken from the research institution’s share, not the investigator’s), it should be possible to make the academic knowledge market self-sustainable. Indeed, a lawsuit brought against a major academic research institute by the federal government would help clarify what research institutes do to deserve exclusive patent rights on research discoveries that are mostly supported by taxpayer dollars.
Instituting regulations that track federal research investments and resultant financial gains will also let us more accurately gauge the economic value of basic science such that future societal discussions on research spending can rely on something more tangible than emphatic arguments on both sides. To help close the funding circle, improve the public image of research scientists, and allow citizens to become more personally invested in the knowledge market they financially support, these numbers should be published online. An example of this can be gleaned from the microlending website Kiva, and like it, research labs should be required to publicize descriptions and operating costs for projects for which crowd-funding ventures such as government grants support.