Why Universities Do Research?

The title of this post is a question.

My colleague Mark Guzdial recently asked whether it makes sense for colleges and universities to do research:

I’m wondering now why universities do research — how does it make economic sense? Is it because it’s their raison d’etre? I don’t buy that, because that wouldn’t explain why so many smaller colleges and universities are increasing their research portfolio. Is it because a “hit” cancels out all the losses? One good piece of IP makes up for all the research that didn’t bear fruit? Or is it because a research portfolio is necessary for reputation surveys?

It’s a question that I try to answer in my new book.  Here are some of the facts.

  1. University research seldom pays for itself. Institutional data is hard to come by because accounting practices vary wildly from place to place, and there is wholesale mixing of revenue sources.  According to the Center for College Affordability and Productivity, for example, the historical trend at AAU institutions has been toward reduced teaching loads for faculty actively engaged in research. But that is a trend that flies in the face of increased enrollments. Additional instructors are needed for the classes that would otherwise be taught by faculty members engaged in sponsored research.  Costs like these are not recoverable, so research sponsors get an effective discount because faculty salaries do not reflect teaching productivity. Who makes up the difference? Most institutions tap a general fund to cover these costs — the same fund that is used for instructional budgets.  Reduced teaching loads are a tax on the cost of instruction, and it is just one of dozens of ways that cross-subsidies fund the research enterprise. I recently asked the vice president for research at a top fifty land grand college about their discount rate. He told me, “We spend $2.50 for every research dollar we bring in.
  2. Institutional envy drives both behavior and investment. Presidents of public masters universities are motivated to define their institutional profiles to conform to a  “higher” Carnegie classification.  It is a phenomenon that Arizona State president Michael Crow calls institutional envy, and it drives the behavior of hundreds of colleges and universities. Sometimes institutional envy is simply the way that institutions climb the reputational pyramid.  Other times, it is the only way to make scarce resources stretch to fit expanding missions, because non-state, non-tuition revenues flow disproportionately to the universities at the top of the hierarchy. Public support for public masters universities declined by 15% from 2001 to 2006,  In that same period, tuition rose only 10%.  Gifts, endowments, grants, and research contracts are the only means available for closing the gap, but private giving has been in decline since 2001.  In fact, public university endowment income on a per-student basis is less than $600, which is essentially its pre-1987 level. That means federal and state research contracts have to generate enough income to keep fragile programs afloat. Since the 2008 market collapse, tuition increases have been used to try to stave off disaster, but,  according the Delta Project on Postsecondary Costs, Productivity, and Analysis, few of those dollars have benefited instruction.  In fact, once you remove discretionary spending,  instruction is dead last among the beneficiaries of increased tuition.
  3. You do not need a research program to prosper and innovate. The examples that come readily to mind are Williams College and Harvey Mudd College. Williams in particular eschewed the tug of becoming a research university in the wake of Daniel Coit Gilman’s 1876 launch of Johns Hopkins as a research institution in the mold of the great German research universities.  Harvey Mudd is a continuing experiment in how to keep a mission focused on students.   The University of Mary Washington in Virginia innovates around technology that keeps students and alumni closely bound to the university.
  4. Commercializing and licensing IP is a pipe dream for most institutions. Every tech transfer office knows the examples: Wisconsin’s vitamin D patent, Stanford’s rDNA patents.  But according to NSF’s John Hurt: “Of 3,200 universities, perhaps six have made significant amounts of money from their intellectual property rights.” John Preston, former head of MIT’s technology commercialization office is even more blunt: “Royalty income is such a horrible means of measuring success. Schools should instead focus on wealth and job creation, economic development, and corporate goodwill.”
  5. Research universities have conflicting incentives. They are in many ways inconsistent institutions. The legendary University of California president Clark Kerr used the term multiversity to describe the modern research university — it is a wonderfully clarifying word. What it means is that what we think of as monolithic institutions are actually loosely federated enterprises that all live together under the same brand.  A modern research university  consists of several undergraduate colleges,  one or more professional schools, many graduate schools, several intercollegiate athletic programs, hospitals, hotels, performing arts centers, technology commercialization offices, and distance education centers. Each component has its own network of stakeholders who demand success, even if it comes at the expense of another part of the university.

Viewed through this lens, Guzdial’s questions are even more interesting.  It frequently makes little economic sense for a university to conduct research. It may be part of the mission of a multiversity, but it is not the only mission — and there are plenty of examples to guide other choices.  If the dream of IP commercialization success drives  institutions to build their research programs, what about the data that predicts little chance of success? And if a university is concerned about reputational hierarchies, does building a research portfolio actually help?  Among the many components of a modern multiversity, few could survive without the instructional programs.  Academic programs, on the other hand, might do quite well without hospitals, theaters, or fancy football arenas. So, why should a university do research?

Let’s hear your thoughts.

  1. Most university professors do not enter the faculty ranks to teach students, but to perform research. The teaching part of the duty is to give students access to knowledge and to participate in the pursuit of new knowledge. Most professors are motivated by the “free” research and the ability to pursue a research agenda that they have defined themselves (modulo research funding….) There is a big difference in institutions where the motto is – our faculty teach students and are also allowed to pursue research and the other side – this is a research institution where part of your duty is to teach students. Attracting scholars is typically based on research reputation and the environment that facilitates excellence in research. Rarely are the best universities defined from their educational program. In summary universities are ranked based on research quality and not output or from a budget perspective of $s earned.


  2. richde said:

    I’ll be interested to hear what others say. It’s probably true that most professors at research universities are concerned with research, but that’s a self-selecting population. It’s probably not true that most professors enter faculty ranks to do research — there are hundreds of institutions (many more than Carnegie research universities) where research has traditionally played either no role at all or has been defined by a different kind of scholarship.


  3. One of the main reasons I took part in research was to give it a try and see what it was about. One of the biggest benefits I got out of it would probably be developing the mindset of a researcher. College is after all not as much a place to be educated on knowledge but on a way to think. Research in universities is as integral a part as a good athletic program or a performing arts center (the conflicting interests). The exposure to a variety of different ‘ways of thinking’ and the confluence of all these seemingly unrelated and often conflicting interests (and people interested in them) is the key to creating the Medici Effect that we hope for at Universities, specially the top tier ones such as Georgia Tech.

    Having students and faculty of all these varying interests come together and interact with each other provides the stimulus for us to not only better the world but also ourselves. The athlete, the dancer, the developer and the researcher all have something that they learn from each other even though they do not realize it. I’ll wrap this off something Mark told us during our Education Technology class: the actual learning in the class was due to peer interaction and not teacher to student. The professor was just stimulating the interaction in the classroom and steering it, the students were actually questioning and learning from each other.


  4. I think Rich is right here. Henrik, what you’re saying is true only because it’s tautological: scholars who seek university appointments to pursue research do so to pursue research.

    Another issue with Mark’s original question is this: is “economic” sense the only sense valued by universities? There are a great many critiques out there today that accuse universities of crass corporatization. One of the downsides often discussed is that the more embroiled universities become in the short-term logic of markets, the less they pursue the long-term questions and problems that are unthinkable in the marketplace.

    Here’s another issue on the financial side: dollars to donuts, it doesn’t make much financial sense for corporations to fund university research anyway, if the only interest in doing so is an IP yielding function. Between the cost of overhead and student tuition (particularly at private institutions), it’s probably more economical to hire up in an internal R&D department. Of course, “outsourcing” R&D to universities protects companies from that overhead, and could also be seen as an ante to get first dibs on graduates. But that’s a very different goal from pure research or IP contracts.


  5. richde said:

    Ian raises the interesting point about economics. The “economic sense” is not the only one that matters since universities have been losing money on research, supercomputers, and startup packages for years. However, an economic collapse can bring not only research but the entire mission of an institution to a grinding halt. The other point — which I think was implicit in Ian’s comment — is that there is no single economic “sense” Nil Reimer, who founded Stanford’s technology licensing office — was famous for imploring research administration not to behave opportunistically and would systematically reject pressure to maximize short term gains at the expense of academic priorities. The effect is legendary: Stanford created more economic value than a ton of other universities that have tried to outguess the short-term behavior of markets.


  6. Aaron Bobick said:

    When working on the Georgia Tech strategic plan, I argued that GT needed to figure out what the rationale for its continued existence was going to be. Some universities – MIT, Stanford, Harvard – will continue because they are MIT, Stanford or Harvard. The world – and alumni – support them because they think the world is a better place with them there. If the McGoverns want to contribute to solving the fundamental properties of the brain, they donates $350M to the MITs of the world. These are the preeminent research institutions and acknowledged thought leaders of our society. Other universities – like Ole Miss – will survive for the same reason my daughter’s summer camp survives: the place is 55 years old and has now seeing it 3rd generation of horse lovers. According to the Ole Miss foundation’s annual reports, private giving to the university in ’09 is 40% higher than in ’04. The flip side, of course, is that other universities who are “only” providing degrees that give students employment credentials are likely to have their heads handed to them by the Phoenix universities of the world.

    The question I asked is whether GT is going to be a preeminent research university, a university that the research supporting community as a whole believes should continue to exist as a research facility. If so, then obviously we continue to do research and we find economically viable methods to support it. If, as Rich discusses in this thread, research is not self supporting, then we find the resources, be it “taxing” the resources intended to create a better undergraduate experience, or convincing donors that research is likely to solve the world’s problems and that GT is one of a limited set of places in the world that are part of the solution. One way to have these other facets to draw upon is by being the “multiversity” institution. In that regard being a Division 1A athletic school may facilitate having the slack needed to continue to fund a core mission of research. As Rich points out, IP funding of research is simply not realistic. If we are lucky, the research will make someone associated with the university incredibly wealthy who in turn will contribute back. Whether it’s to build new dorms or buy supercomputers, it keeps the enterprise moving forward.

    I am reminded of a Harry Houdini story. Late in his career he took on debunking other escape artists. One poor victim had made a show out of being tied up with an arbitrarily long rope and yet escaping in seconds. Houdini had the performer tied up with several short pieces of rope. The poor sap could not budge. As Houdini said, with a long rope there’s enough slack for anyone to get out.

    Maybe any university that aspires to do research as part of its mission needs to make sure there’s enough slack in the (economic) rope.


  7. Ken Schmidt said:

    I have enjoyed working with research scientists, both in industry and academia, for the past 20 years. My role has been to be a bridge between the research lab and the business unit or application area in the world. So I will probably not answer the question from the same perspective.

    My simple answer is, researchers do research because it’s there. The problems are there. The challenge is there. Who doesn’t enjoy a good challenge – from the Gordian Knot to P=nP. I believe the mind is better charged when the answer is elusive, unpredictable, unknown, impossible. I’ve found many academic researchers are as interested in our problems and our data as they are in our funds (they go together, to be sure – but funds without problems/data are a different relationship than the complete package).

    This avoids the very real question of economics – but I believe the motivation to solve the problem gives way to the energy to find the funding or the right partner to keep the lights on. And as Rich points out above – having to kowtow to the economic gods many times can keep you from pursuing the right goal or from reaching the (sometimes unintended) earth-shattering revelations.

    I do hope academic leaders will continue to find ways to nurture the true genius of innovation – the research scientist – throughout his/her career. And I hope we in industry can keep the funding sources available in times of economic uncertainty.


  8. Anonymous said:

    Interesting read. One critical component to add to the facts listed abocve is that the reason many universities are getting into research is for the grant money. Universities see a financial gain by shifting a prof from teaching to grant writing. If you look at advertisements for tenure-track faculty positions (in science/technology) at good universities they clearly state that you must be able to attract external grant dollars, while they may or may not mention a teaching role at all.


  9. What if we rephrase the question: Why SHOULD universities do research? The answer is that research results generated at universities are substantially more open and accessible than those created at industrial or government labs. The resulting synergy of shared results and competition between peers is substantially more powerful than a set of closed commercial research labs.

    This happens at universities and not commercial labs because faculty at universities are incentivized to publish & share & have external impact (modulo overzealous and misdirected university IP lawyers).

    Observe also that the “best” and most open labs that followed the university tradition (e.g., Bell, PARC, Digital), failed.

    Now, it may be feasible to move the research mission of universities to some group of “open” labs like the national laboratories. But the incentive equation would need to change in order to draw the best researchers there instead of to universities.

    Finally, an important part of the research “energy” one sees at universities is a consequence of the synergy between faculty, students, and competition with other universities. It just doesn’t happen elsewhere.


  10. richde said:

    In the UK there is a public discussion of how thinly to spread precious university research dollars. I am indebted to Ferdinand von Prondynski for pointing this out in his blog (http://universitydiary.wordpress.com/2009/12/23/funding-research-concentration-needed/):

    Right now in Britain an argument is raging (http://www.timeshighereducation.co.uk/story.asp?sectioncode=26&storycode=409704&c=2/) between different parts of the higher education as to how university research should be funded: should it be concentrated in a small number of leading research universities (and allocated strategically on that basis), or should it be directed to those demonstrating excellence as assessed by peer reviewers, regardless of the status of the institution in which they work?


  11. Kunal said:

    I would disagree with some of your bullet points.

    University research seldom pays for itself.
    Research is what builds a university’s reputation. It attracts good faculty. It thus attracts good students. That in turn leads to successful alumni, who contribute to the university’s bottomline in many ways. Take away research, and the pyramid may fall.

    You do not need a research program to prosper and innovate.
    Two small examples don’t make an argument. These schools teach well, but do they innovate?

    Commercializing and licensing IP is a pipe dream for most institutions.
    Not making “significant amounts of money” is not the same as not making money. I don’t see how the Preston quote relates to this bullet point. Finally, innovation at a university can lead to start-ups that when profitable contribute to the university endowment.

    A ot of faculty I know, who are great teachers, are teachers because they want to do research. If universities stopped doing research, they would find work elsewhere. In general, I think excellent teachers are people who know their stuff well enough that they can find jobs that would pay much better than a faculty job. The primary reason they teach is the freedom to do the research they want to do. So universities need to do research to attract and retain the good teachers.


    • richde said:

      Thanks for the comments.

      It’s hard to argue over facts. The fact is that (even taking your points into account) universities lose money on every research dollar they bring in the door. The reason institutions feel a need to make a financial argument is that for many research is far outside their mission. By the way being part of a pyramid is not a good thing. The same holds for commercialization.

      You’re right about two small examples. See my post about damaged piplelines.

      I don’t think anyone is saying that all univesities should stop doing research. But for many the motivation, results, and finances are upside down.


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