North Carolina, Georgia, Kansas Lead US in Share of University Research Supported by Industry; New ITIF Report Urges Greater Collaboration to Spur Tech-Based Economic Activity

January 8, 2018

WASHINGTON—With federal funding for university research possibly on the chopping block, industry funding is an increasingly important driver of U.S. academic discovery and industrial innovation. But a new analysis by the Information Technology and Innovation Foundation (ITIF) finds there are wide disparities among states in the share of their university research funding that comes from industry.

The report shows that the five leaders are North Carolina, Georgia, Kansas, Ohio, and Missouri—and among the country’s top 50 research universities, there is a five-fold gap between the top 10 and bottom 10 when it comes to the industry share of total funding.

ITIF, a leading science and tech-policy think tank, urged state policymakers across the country to increase their focus on attracting industry funding for academic research, because it is linked to technology-based economic activity.

“All states, but especially the laggards, would benefit from policies to attract more industry research funding, because there are correlations to tech-based economic activity,” said ITIF President Rob Atkinson, who authored the report. “At the National Science Foundation, in Congress, and among the academic community as a whole, industry-university partnership models have been an afterthought at best—and at worst viewed as an unseemly attack on the ivory tower. Those attitudes need to change.”

ITIF’s new report uses the latest data from the National Science Foundation to rank the 50 U.S. states on the share of their university research that is supported by industry. Universities in first-place North Carolina pull 12.1 percent of their research funding from industry while their counterparts in last-place Nevada attract just 1.7 percent. Other states in the bottom five include Rhode Island, Nebraska, Hawaii, and South Dakota.

ITIF’s report calls on all states to adopt policies specifically focused on spurring universities to attract industry funding. Among the recommendations:

  • Target university research funding increases to areas and programs linked to the technology needs and capabilities of in-state industries and firms;
  • Modify R&D tax credits to give firms a larger credit for funding academic research; and
  • Tie a small portion of total higher education funding to how well individual universities do at obtaining industry funding for R&D.

The report also calls for better targeting federal research funding to leverage industry funding with programs such as the Industry-University Center Research program and the Engineering Research Center program.

“Contrary to skeptics’ arguments, there is no indication that industry involvement comes at the expense of high-quality research or academic standards,” said Atkinson. “But the evidence does suggest that having strong industry funding for university research in many cases can spur an increase in tech-based economic activity.”

Read report the report.