While university environments can restrict academic freedom, private industry will often attach strings. It is typically very rare that the sole financier of scientific innovation is also the leading scientist, and so sponsored research typically proceeds at the direction of its investors. While there are no practical limits on what can be researched, and there is certainly enough money in the hands of enough people with enough worldviews that just about anything can be financed (see Kickstarter); practically, most professional investors are seeking financial returns on their investment. This creates a subtle but important difference to our discussion on academic freedom, because while anything can be funded, the team driving scientific research often needs to be able to demonstrate a realistic path to a financial return on investment to get funded. This is easier said than done, and biases privately-funded scientific work in favour of translational research whose time to market entry is proportional to the market opportunity (eg. longer-term projects must produce higher value propositions than shorter-term projects).
As a financial case, private investment in science needs to be justified relative to other markets where investors can conceivably put their money (eg. collecting interest in a bank, buying real estate, or opening a business such as a restaurant or a bar). This simple math explains investor interest in burgeoning areas like information technology (which have disproportionately shorter development timelines and result in large market opportunities), and biotechnology (which have longer development timelines but result in disproportionately larger market opportunities).
Risk of the venture not succeeding is the counterweight to this equation. Time-to-market-entry compounds risk since there is less certainty in the future and therefore more opportunity for failure. Science, by its very nature, is prone to failure and no where more so than in discovery research. If the thesis for supporting scientific development is financial return on investment, then preference is inevitably given to projects with large market opportunities that have shorter time horizons and for which the basic proof-of-concept work has been mostly worked out. This is historically why, following the Bayh-Dole Act of 1980, private industry began focusing on funding translational research, leaving federal programs and non-profit organizations to fund basic research.
Once an investment has been made to support a specific area of research, these same market drivers direct science programs to shorten timelines and focus resources on only those experiments that are core to advancing the translational research program. This means interesting discoveries are often put aside in the interest of advancing the central research question. As companies take on more financial investment and succeed in translating their discoveries to the bedside, investor emphasis typically turns to the clinical-stage assets where there is a more direct relationship between money invested and revenue returned. This makes it difficult for clinical and product-stage companies to justify discovery stage research programs, and why it becomes easier for these companies to license new discoveries from universities, or acquire promising young startups than create these programs internally themselves.
This, however, is not a rule – and there are so many examples of outliers to this model that it should reasonably beg the question as to why we believe this convention in the first place. Indeed, most of humankind’s greatest discoveries were requisitioned works by private investors. Likewise, as competition grows, so must professional investors acquire assets in promising research programs earlier to access disruptive new technologies or own a meaningful stake in the company. So how do we bridge this divide? I’ll be tackling this question in my next post.
