Research funding

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Research funding is a term generally covering any funding for scientific research, in the areas of both "hard" science and technology and social science. The term often connotes funding obtained through a competitive process, in which potential research projects are evaluated and only the most promising receive funding. Such processes, which are run by government, corporations or foundations, allocate scarce funds. Total research funding in most developed countries is between 1.5% and 3% of GDP; Sweden is the only country to exceed 4% [1].

Most research funding comes from two major sources, corporations (through research and development departments) and government (primarily carried out through universities and specialised government agencies). Some small amounts of scientific research are carried out (or funded) by charitable foundations, especially in relation to developing cures for diseases such as cancer, malaria and AIDS.

In the OECD, around two-thirds of research and development in scientific and technical fields is carried out by industry, and 20% and 10% respectively by universities and government, although in poorer countries such as Portugal and Mexico the industry contribution is significantly less. The US government spends more than other countries on military R&D, although the proportion has fallen from around 30% in the 1980s to under 20%[1]. Government funding for medical research amounts to approximately 36% in the U.S. The government funding proportion in certain industries is higher, and it dominates research in social science and humanities. Similarly, with some exceptions (e.g. biotechnology) government provides the bulk of the funds for basic scientific research. In commercial research and development, all but the most research-oriented corporations focus more heavily on near-term commercialisation possibilities than "blue-sky" ideas or technologies (such as nuclear fusion). One of the most famous exceptions is the innovation-favouring environment of the 1970s at Xerox Parc, where various ideas including the computer mouse were developed. Similarly, IBM's research into quantum computing has been going on for some years, and it will likely be some years more before it yields commercialisable technology.

Government-funded research

Many governments of developed countries provide considerable funds (primarily to universities) for scientific research (in fields such as physics and geology) as well as social science research (in fields such as economics and history). Much of this is not intended to provide concrete results that may be commercialisable, although research in scientific fields may lead to results that have such potential. Most university research is aimed at gaining publication in peer reviewed academic journals.

Northern and Central America


Government funding for research into defense-related technological research has historically been significant. Some of this takes place in public research institutions such as DARPA, whilst much else is carried out by major defense contractors in expectation of being able to sell the results to the government (so is funded privately, but on the basis of implicit or explicit agreement of costs being recouped from the government).

Inventions "conceived or actually reduced to practice" in the performance of government-funded research may be subject to the Bayh-Dole Act.

Research funding agencies:


Research funding agencies:



Research funding agencies:

  • National ICT R&D Fund (Pakistan): The Government of Pakistan has mandated that a certain percentage of gross revenue generated by all telecom service providers be allocated to development and research of information and communication technologies. National ICT R&D Fund was established in January 2007 by Ministry of IT, Government of Pakistan with the vision to transform Pakistan's economy into a knowledge based economy by promoting efficient, sustainable and effective ICT initiatives through synergic development of industrial and academic resources.

Europe (EU)


Research funding agencies:


  • Funding councils
    • Engineering and Physical Sciences Research Council (EPSRC)
    • Natural Environment Research Council (NERC)
    • Biotechnology and Biological Sciences Research Council (BBSRC)
    • Economic and Social Research Council (ESRC)
    • Medical Research Council (MRC)
    • Science and Technologies Facilities Council
  • Charities


Corporate and private research

In the eighteenth and nineteenth centuries, as the pace of technological progress increased before and during the industrial revolution, most scientific and technological research was carried out by individual inventors using their own funds. A system of patents was developed to allow inventors a period of time (often twenty years) to commercialise their inventions and recoup a profit, although in practice many found this difficult. The talents of an inventor are not those of a businessman, and there are many examples of inventors (e.g. Charles Goodyear) making rather little money from their work whilst others were able to market it.

In the twentieth century, scientific and technological research became increasingly systematised, as corporations developed, and discovered that continuous investment in research and development could be a key element of success in a competitive strategy. It remained the case, however, that imitation by competitors - circumventing or simply flouting patents, especially those registered abroad - was often just as successful a strategy for companies focused on innovation in matters of organisation and production technique, or even in marketing. A classic example is that of Wilkinson Sword and Gillette in the disposable razor market, where the former has typically had the technological edge, and the latter the commercial one.

Criticism and support of government-funded and privately-funded research


Government-funded research allows basic science

Government-funded research into such matters as the nature of quantum mechanics or the existence of water on Mars

Since the value of such knowledge is often difficult or impossible to judge, and no commercial benefit (at least on any relevant time horizon) can be derived, a frequent apparently common-sense position is that therefore such knowledge should not be pursued at public expense. However, even in the most theoretical of fields, it is often difficult to determine in advance where research may lead.

For example, decades of research into quantum mechanics have made possible work on quantum computing, which is now expected to be an even greater leap forward in computing technology than the development of the microchip, which in some areas is beginning to reach the limits of what is physically possible with this technology. It remains to be seen whether the inherent technical difficulties in quantum computing actually allow for a widespread application of this technology.

Privately-funded research is profit oriented

A characteristic of privately funded research is that it is almost always profit-oriented. In other words, private corporations tend to devote a relatively small investment to fund research into a field that shows little prospect of being profitable in the near future, even if such research could lead to highly beneficial results (for example, drug companies may not want to invest in finding the cure for a disease if most of the people affected by that disease are too poor to be able to afford such a cure). Some protest that cures and treatments for rare diseases are not pursued due to the lack of profit potential. Supporters of commercially funded research make a utilitarian argument, saying that the fact that profit potential directs investment in treatment for diseases that afflict the many individuals rather than few individuals is a good thing, since it results in alleviating the greater amount of human suffering.

Privately-funded research is more efficient

An often-quoted example used to illustrate the difference in efficiency between government-funded and privately funded research projects is the quest of mapping the human genome. The U.S. government was funding such a mission, called the Human Genome Project, while at the same time the quest was being pursued separately with private venture capital by Celera Genomics.

Celera Genomics used a newer, albeit riskier technique and proceeded at a faster pace and at a fraction of the cost of the tax-funded project (approximately $3 billion of taxpayer dollars versus about $300 million of private funding). Some HGP researchers claimed Celera's method of genome sequencing "would not work," however that project eventually adopted some of Celera's methods.

However, some researchers in the field of genomics have claimed that this comparison is unjust. Much of the funding provided for the HGP served the development of new technologies, rather than the sequencing of the human genome itself. Since Celera was a late-comer the company could already take advantage of the experience gained by the HGP. Though Celera's sequencing strategy allowed the sequencing of the majority of the human genome with a lot higher efficacy, the strategy used by the HGP allowed the sequencing of a higher percentage of the genome.

Influences on research

Funding influence on research

A 2005 study in the journal Nature surveyed 3247 US researchers who were all publicly funded (by the National Institutes of Health). Out of the scientists questioned, 15.5% admitted to altering design, methodology or results of their studies due to pressure of an external funding source. In a contemporary study published in the New England Journal of Medicine, a similar proportion of the 107 medical research institutions questioned were willing to allow pharmaceutical companies sponsoring research to alter manuscripts according to their interests before they were submitted for publication.

Political and social influence on research funding

Occasionally some research is politically controversial; in the US, there have been cases of controversy over research into sexually transmitted disease, and restrictions on federally funded research into stem cells.

Research funding process

Often research funding is applied for by scientists and approved by a granting agency to financially support research. These grants require a lengthy process as the granting agency can inquire about the researcher(s)'s background, the facilities used, the equipment needed, the time involved, and the overall potential of the scientific outcome. The process of grant writing and grant proposing is a somewhat delicate process for both the granter and the grantee: the granter wants to choose the research that best fits their scientific principles, and the grantee wants to apply for research in which she has the best chances but also in which she can build a body of work towards future scientific endeavours. This interplay can be a frustrating and lengthy process.


  • Martinson, Brian C. et al. (2005): "Scientists behaving badly". Nature Vol.435, p.737-738.
  • Mello, Michelle M. et al. (2005): "Academic Medical Centers' Standards for Clinical-Trial Agreements with Industry". New England Journal of Medicine Vol.352, Iss.21, p2202-2210.
  • Washburn, Jennifer (2007-10-11). "Science's Worst Enemy: Corporate Funding". DISCOVER Magazine. Retrieved 2007-11-02. Check date values in: |date= (help)
  • Odlyzko, Andrew (1995-10-04). "The Decline of Unfettered Research". Retrieved 2007-11-*02. Check date values in: |accessdate=, |date= (help)

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