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Funding Frontiers: Companies at the Forefront of Funding Awards

June 19, 2023 — In the world of U.S. government basic research awards, universities are the entity most likely in the lead position. But companies and other non-academic research institutions have recently stepped up to take the helm in U.S. National Science Foundation (NSF) programs. This change emphasizes the growing momentum of cross-sector collaboration in research and its potential to produce groundbreaking discoveries.

Taking the lead

The NSF is one of the largest sources of federal funding for research in the United States. Some of its longer-running programs shed light on how companies have begun to lead funding awards. The Convergence Accelerator (C-Accel) program focuses keenly on multidisciplinary research, placing awardees in cohorts to facilitate collaboration between universities, industry, and other engaged organizations to solve society’s biggest challenges. Since its inception in 2019, the C-Accel program has seen non-university awardees take on the challenge of leading projects. Phase I of the 2022 cohort includes more than 10 non-university lead awardees, some with multiple awards. These awardees include UIDP member companies IBM and BlackBerry.

Another NSF program with industry taking the lead is the NSF Regional Innovation Engines (NSF Engines) program, in which 25% of the first awardee class is based outside academia. This program focuses on fostering innovation ecosystems to advance critical technologies and other pressing challenges while cultivating partnerships across sectors. The NSF Engines program requires collaboration with industry, nonprofit, and other community entities, so there are many non-academic institutions acting as subawardees as well.

By the numbers

According to NSF, federally funded R&D at universities surpassed $49 billion in FY 2021, accounting for 55% of total federal R&D funding, slightly more than FY2020’s 53%. Although colleges and universities remain the primary recipient of federal research funding, there is growing diversity among recipients as the United States continues to prioritize national research and development.

Historically, industry has had a large hand in funding R&D across the globe, often in direct partnership with academic researchers. The business sector is the source of 70% of U.S. R&D, according to an NSF report on the state of U.S. science and engineering. NSF has previously mounted programs to incentivize federally-funded, cross-sector partnerships, like its Partnerships for Innovation program.

The 2022 launch of the Directorate for Technology, Innovation and Partnerships (TIP) opened a whole new avenue to stimulate R&D partnerships with industry, nonprofits, and other research institutions as well as universities. In parallel, the U.S. Economic Development Administration is launching its Regional Technology Hubs, leveraging a $500 million budget to drive innovation-centered growth in regions where commercialization and capacity building will catalyze job creation. For companies willing to partner, federal awards expand access to faculty researchers and reduce risk associated with research investment. That allows industry to explore innovative projects and enter partnerships that can further drive innovation.

Why it matters

Companies that traditionally shied away from federal R&D funding may now consider it since the stakes are higher, recognizing the potential significant impact and the alignment of their R&D goals with national priorities. With more companies taking the lead in securing funding awards, we may expect to see a change in the dynamics of university-industry partnerships as these partnerships exercise the capability to leverage industry expertise and resources at an even greater scale. The passage of legislation like the U.S. CHIPS and Science Act will yield hundreds of millions in federal R&D investment over the next decade. With business taking an active role, we should see a marked uptick in translational research and new technology to address huge global challenges.

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The 3-Minute Read is a UIDP member information piece and does not represent the opinions of our members or representatives. We welcome your comments on our LinkedIn profile.