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Funding research at universities: Who should pay up?

July 14,2017
NbelLaureate Prof. Brian Schmidt
Read time: 5 mins

Photo: Vignesh Kamat / Research Matters


A recent report by the World Economic Forum states that India had 2.6 million new graduates with a degree in science, technology, engineering or mathematics (STEM) in the year 2016, next only to China, which stood first at 4.7 million. The numbers are not surprising, considering the ample career options available for those with a degree in science. In fact, the journey of humankind from caves and forests into the ‘smart’ cities of today was possible, thanks to science!

Today, with many youngsters motivated to pursue a satisfying career in science, universities across the world are seeing unprecedented enrolments. In spite of this, they still face a major roadblock when it comes to funding the research undertaken by students at universities. To understand the factors behind this strange phenomenon, we caught up with Prof. Brian Schmidt, Vice Chancellor at the Australian National University and the winner of 2011 Nobel Prize in Physics, during his recent trip to Bangalore. In a conversation with, Prof. Schmidt shared some insights into the challenges today’s universities face regarding funding and how they could be addressed.

The first step for a student to get a degree in science is getting into a university that offers one. With rising education costs across the world, students often end up shouldering the burden of increasing costs and cough up a huge tuition fee to get the best education possible. “In some of the best universities, students often have a chance to interact with the best researchers during their courses -- an advantage that comes with a little bit of a premium”, says Prof. Schmidt, talking about factors behind the soaring costs.

But, is this phenomenon justified when it comes to pursuing research in a research-intensive university? Prof. Schmidt is quick to disagree. “It is unfortunate that students are made to pay for research”, he says, adding that the costs for research should be borne by the government and the industry, which benefit from such research.

However, in reality, it is never an easy game to secure sufficient funding for a university from either the government or industry. Ask him why industry does not come forth to fund university research, and Prof. Schmidt is quick to point out – “Most research undertaken at universities is pre-commercialization where we build the basic blocks of knowledge and technology. But, companies are not interested in them!” Citing an example, Prof. Schmidt adds, “Why would a company be interested in investing on a research that tries to study the expanding Universe? In essence, the industry cannot capture the benefits of such research done at universities.”

For universities to thrive and provide the necessary infrastructure for research, they need a lot of money. Setting up a laboratory, procuring the right instruments, hiring the best faculty, providing data and internet facilities – all these make research a very expensive affair, sometimes to the tune of a few billion dollars. It is due to these reasons that higher education becomes expensive and pushes students into huge debts. Who else could help here? “It is the government”, says Prof. Schmidt. He argues that since the research in universities is mostly for public good, the government must fund these research activities.

Given that research is expensive, is the cost justified? Prof. Schmidt firmly believes it is. He goes on to say that there is so much value and return-on-investment for research undertaken at universities and many of today’s biggest innovations have all started at the universities. Take Google or Facebook for example – two tech giants that control the Internet. They all started as university research project ideas that have now grown into full-blown companies. There are many such examples through out the world where university research has proved to be a hotbed of innovation.

Can universities today take a page out of such success stories? “There is this area where public researchers and its practitioners have a role in translating ideas that can benefit society at large. Practitioners can help build start-ups and help take suitable ideas to the industry that might benefit from it. However, we in the academia have not yet really figured out this mechanism quite well”, says Prof. Schmidt, adding that the academia and the industry should work together towards realising a healthy partnership.

Today, most universities of higher education support an ecosystem of entrepreneurship through their incubation programs that are meant to help ideas that have the potential to make it big. “However, incubators alone are not sufficient”, remarks Prof. Schmidt. “When people have an idea of how research can translate into a company, they should be given the time and money to build a proof of concept to show that the idea really works. Incubation in terms of providing workplace and mentoring can then follow”, he says. He also highlights the need for universities to figure out a strategy to work with finance partners like angel investors and venture capitalists, who can pump in the money for incubated companies to make it big.

While many universities are still figuring the magic formula to make this work, Prof. Schmidt has a special callout for Stanford University that has excelled in making the model work. “They started it early and did it better than anyone else. Today, about a third of the world’s greatest companies are in close proximity to Stanford because of that. Others need to learn from them”, he says, wrapping up his thoughts on how universities can make research work for them.