- NSF has now frozen all funding for new and continuing awards. This is not good; just how bad it is depends on the definition of "until further notice".
- Here is an open letter from the NSF employees union to the basically-silent-so-far National Science Board, asking for the NSB to support the agency.
- Here is a grass roots SaveNSF website with good information and suggestions for action - please take a look.
- NSF also wants to cap indirect cost rates at 15% for higher ed institutions for new awards. This will almost certainly generate a law suit from the AAU and others.
- Speaking of the AAU, last week there was a hearing in the Massachusetts district court regarding the lawsuits about the DOE setting indirect cost rates to 15% for active and new awards. There had already been a temporary restraining order in place nominally stopping the change; the hearing resulted in that order being extended "until a further order is issued resolving the request for a temporary injunction." (See here, the entry for April 29.)
- In the meantime, the presidential budget request has come out, and if enacted it would be devastating to the science agencies. Proposed cuts include 55% to NSF, 40% to NIH, 33% to USGS, 25% to NOAA, etc. If these cuts went through, we are taking about more than $35B, at a rough eyeball estimate.
- And here is a letter from former NSF directors and NSB chairs to the appropriators in Congress, asking them to ignore that budget request and continue to support government sponsored science and engineering research.
Unsurprisingly, during these times there is a lot of talk about the need for universities to diversify their research portfolios - that is, expanding non-federally-supported ways to continue generating new knowledge, training the next generation of the technically literate workforce, and producing IP and entrepreneurial startup companies. (Let's take it as read that it would be economically and societally desirable to continue these things, for the purposes of this post.)
Philanthropy is great, and foundations do fantastic work in supporting university research, philanthropy can't come close to making up for sharp drawdowns of federal support. The numbers just don't work. The endowment of the Moore Foundation, for example, is around $10B, implying an annual payout of $500M or so, which is great but around 1.4% of the cuts being envisioned.
Industry seems like the only non-governmental possibility that could in principle muster the resources that could make a large-scale difference. Consider the estimated profits (not revenues) of different industrial sectors. The US semiconductor market had revenues last year of around $500B with an annualized net margin of around 17%, giving $85B/yr of profit. US aerospace and defense similarly have an annual profit of around $70B. The financial/banking sector, which has historically benefitted greatly from PhD-trained quants, has an annual net income of $250B. I haven't even listed numbers for the energy and medical sectors, because those are challenging to parse (but large).
All of those industries have been helped greatly by university research, directly and indirectly. It's the source of trained people. It's the source of initial work that is too long-term for corporations to be able to support without short-time-horizon shareholders getting annoyed. It's the source of many startup companies that sometimes grow and other times get gobbled up by bigger fish.
Encouraging greater industrial sponsorship of university research is a key challenge. The value proposition must be made clear to both the companies and universities. The market is unforgiving and exerts pressure to worry about the short term not the long term. Given how Congress is functioning, it does not look like there are going to be changes to the tax code put in place that could incentivize long term investment.
Cracking this and meaningfully growing the scale of industrial support for university research could be enormously impactful. Something to ponder.
19 comments:
We got into the position where government funds the overwhelming majority of research in this country precisely because industry concluded it wasn't a money-making proposition. I obviously don't have to remind you of Bell Labs, or IBM Almaden, or any number of other places that used to do world class basic research and have now stopped. Likewise, DOD labs used to make a much larger impact but have now been shunted to the side in favor of academia, where the labor supply is cheaper.
The irony in all of this is that DOGE (really Project 2025) is trying to use overhead rates as a way to bring the hammer down on academia, but overhead for research at DOE, DOD, and industrial labs is far higher. It's not about wringing efficiency from the system.
Bell Labs, with its government-supported monopoly, was great at funding research until the late 80s. Monopolists (google, microsoft, etc) generally fund research more because they have to look slightly longer term than the average company. But companies (usually medical ones) generally just slightly change taxpayer-funded research in their own labs and then claim their high prices are justified by R&D expenditure. Not holding my breath for them to fill the gap.
The only reason Bell Labs stopped funding stuff was because the government got fed up with AT&T and broke it up https://en.wikipedia.org/wiki/Breakup_of_the_Bell_System
It’s interesting to me that in the post-WW2 era, AT&T was able to invest in long term basic research at Bell Labs by virtue of its monopoly on the telecommunications industry.
Today, on the surface at least, it seems that mega corporations like Amazon, Facebook/Meta and Google have comparable or greater dominance in their sectors, so I feel like they should likewise be able to afford long term research investment.
I know that all of these and other companies do indeed already have vibrant research divisions, but I’m curious about how much that can expand. In particular, I’d be interested to know how much AT&T invested in basic research, as a percentage of its total profits / revenues, and what the equivalent investment would be today, adjusted for inflation.
Related to the previous comment, I’d be fascinated to know what the inflation adjusted salaries of the top AT&T executives were during Bell Labs’ heyday, and how they compare to what Bezos, Zuckerberg, or Musk make today. I wonder how many Bell Labs could have been supported from those extra profits.
A way in which industry subsidizes university research is by hiring science PhD degree holders in highly paid positions. This makes the PhD much more desirable and makes it possible to hire graduate students at huge discount (about $50k/year at MIT). This is a huge difference vs what the same guys can get in industrial jobs right after undergrad. These grad students are often the top students in their undergraduate program.
I understand the thinking, but I would advice against trying to replace govt support with industry support.
Even for a political system like in this country (very large amplitude swings as compared to other count), govt support is still more steady than industry support.
Without that overhead what are universities going to do to balance the budget? Borrow until Trump changes his mind? Layoff admin and facilities workers? Downsize?
As a current international student, it is so frustrating to read all the political instability and induced uncertainty that has now affected me in such a deep level that I have found myself paralyzed without doing anything. My productivity has decayed and I failed to see the reasons to continue towards my PhD. I am a big fan of your blog, and you are a voice of reason in all of the chaotic currents of the present. Could you recommend some literature for people who feel lost and paralyzed by the uncertainty?
I have a student from Palestine who, in spite of all that is going on, diligently continues to do her work every day and carries herself with such dignity. I once asked her how she manages to keep on going. There’s no easy answer but one thing I’ve learned from her is to not pay too much attention to things that you can’t control that don’t immediately affect you.
I know, it sounds like a privileged thing to say. Not everyone has the luxury of being able to ignore the outside world. And we all should try to do what we can. But there comes a point where you just have to tell yourself that reading more news or thinking about what might happen serves no purpose, either to you or anyone else.
Note that the indirect cost reductions proposed so far have been stayed at least for now by the courts. There is some kind of bipartisan effort at work to come to a "compromise" level of 30-something percent rather than 15%, though it's not obvious to me how/when that would pass. The answer is, yes, that universities or med school hospitals (for NIH funding) with large indirect costs would likely have to make some kind of adjustments if the IDC rate falls precipitously. If the cuts only apply to new grants going forward, then at least changes would phase in over time (assuming that existing grants continue to be supported). Small/non-R1 universities for whom research is really at the cusp of being unaffordable may face real problems. This is all a reasonable set of concerns, but the wholesale loss of grants is at least as severe a pressure.
Anon@1:38am has it right as far as I'm concerned. Concentrating on the stuff that you actually can control is the best plan. (I need to be better at practicing what I preach, btw.) I also encourage you to take advantage of any wellness/counseling services at your university. Grad school can be tough even in good times, and support structure is very important. I don't have any great literature recommendations that are directly related to the present situation. There are some relatively inspiring things to read about science and how it can get done even in trying circumstances and have major impact (e.g., The Demon Under the Microscope, about the discovery of antibiotics; The Alchemy of Air, about nitrogen fixation and fertilizers; The Invention that Changed the World, about radar; The Alchemy of Us by Ainissa Ramirez).
Ross McKenzie's blog has over the year posted some good down to earth (and experiential) advice about mental wellness for people in academia too. Worth having a look imo
I think that in order to fill the govt funding gap with corporate funding, publication obsession has to be curtailed. At the moment, PhD students carry out research just to publish in some scientific journal. Nobody cares about those journals outside academia. So I am sure big companies like Microsoft would certainly be interested in at least sponsoring individual PhD students who would do joint projects. In this manner, students wil serve as de facto interns who can continue working for the company after they graduate. It is a win-win model for students and companies but not for PIs who care about nothing but citations. This obsession for citations brought the system to this point where there is an artificially high supply of PhD students who struggle to get jobs after graduation. I am not a fan of Trump at all but I think he is right about this. He will let the market correct itself in this way by reducing the number of PhD students if there is no corporate sponsor. That simple. It has been known for decades that 100% govt funded univ research model served only PI's interests by cranking up citations. Nothing more. Every broken system has to come to an end somehow and this is its end.
I think you have to work hard to convince me that PhDs in the sciences and engineering have generally struggled to get jobs. Do we produce far more PhDs than faculty positions? Yes. Is there a serious unemployment problem for PhDs in the sciences and engineering? I see no evidence of this except at times when the entire economy is a mess (e.g. 2008 financial crisis).
I’m fine with the idea of effective internships, as long as the students are not getting screwed by, e.g., non-compete agreements. Is Microsoft willing to live with the possibility that the person they funded for three years is going to take a job at Amazon? If so, then no problem. While publication metrics have become a form of score keeping, it doesn’t have to be that way. At the same time, there are research results that absolutely should be accessible to the community. Having everything be a private, walled garden is not good for research. Just from the efficiency perspective, how do people know what problems have already been solved or what has already been discovered? Still, some greater component of industrial funding would certainly be beneficial.
If you count postdoc as employment, well, yes, there is no discernible unemployment problem. For instance, what percentage of your students (or your dept as a whole) take up postdocs after graduation? I bet it is close to 50%. I consider postdoc as underemployment at best (or purgatory to be more honest). I am not saying that Microsoft or Google model is going to work for everyone (certainly not for you) but 100% govt funded blue sky research would have to end somehow. If you believe in a free market economy, you cannot live in a de facto communist bubble forever. Certainly, those companies would be reluctant to share their secret source codes with universities etc. but it can be overcome by signing certain legal documents. You do similar things for NSF contracts etc. anyway. If a stranger appears at your door, you wouldn't give your group's software to him either. As I said, when there is a will, there is always a way.
6:46 AM
Sorry, there has been a repetition. Same thing has been posted twice. I just didn't know how to navigate here.
No worries - I took care of it. I appreciate your civil tone in discussing this, btw - not everyone does that. As for whether govt funded blue sky research has to end, that's not obvious to me. The US did it for 70+ years, and it's not like the situation is changing because we've had some well-informed, thorough analysis and debate. The situation is changing because of the vagaries of politics, not because govt funding of basic research has somehow failed to produce benefits to the country and its economy.
I do realize that this is an emotional issue for you. After all, there is a real risk of terminating your research group and there is certainly no immediate substitute for the federal govt money in your case like many others. Obviously, Microsoft wouldn't step in for you. I do share your frustration and misgivings completely. If you think it is political (I agree with you on that) then one has to bring up political arguments. For instance, how can they keep funneling tens of billions $ of arms to Israel and Ukraine while cutting back on insignificant amount of basic research $? They just seem to have spent billions of $ to bomb Houthis in Yemen yet there is no money for physics? Well, it may be time for you to speak against Trump regime perhaps... See what Harvard and Columbia are doing for instance. Trump's gestapo also keep abducting and deporting foreign students without any court order...
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