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The Black Hole

National Research Council funding priorities miss the point


Christian Paradis, the minister of Industry and State (Agriculture) recently announced that in response to the continuing challenges facing the global economy, the Canadian government has elected to shift the National Research Council of Canada’s research priorities toward delivering support and services driven by market and industry demand. This sentiment was echoed by Gary Goodyear, Minister of State (Science and Technology) who, in response to the 2011 report on the impact of federal support for research and development, is working to continue transitioning the NRC into a research and technology organization dedicated to supporting business research and development. In other words, the NRC will be refocused to directly assist Canadian companies in their quest to grow, remain competitive and employ highly skilled workers at the expense of basic research. John McDougall, president of the NRC put forward this point most succinctly by stating that “A new idea or discovery may in fact be interesting, but it doesn’t qualify as innovation until it’s been developed into something that has commercial or societal value.”

The reasons for this shift in NRC funding priorities are evident (if not myopic), and the underlying question behind this decision is whether spending taxpayer dollars on basic research is a wise investment given the times. The smart answer is to allocate our money where we have the best chance of earning it back with interest in ways that improve our lives, grow our economy and secure our future.

What the NRC has failed to realize is that investment in basic research offers tremendous long-term returns on investment that far exceed the short-term benefits of investing in industry. Founding new basic research labs creates jobs directly – for the principal investigators, research teams, lab technicians, materials and equipment manufacturers, administrative staff, intellectual property lawyers, and everyone else who help support the work, as well as indirectly – through innovations that lead to new technologies, new industries and new companies.

The latter is particularly important because biomedical companies, where NRC funds will be directed, mostly outsource industry-creating research and development to academic labs. Indeed, academic research labs are better suited to shoulder high-risk high-gain ventures because they are supported by public allocations for broad, long-term quality of life advancements, and are therefore not supplicant to quarterly profit margins and market projections. Moreover, their direct affiliation to universities provides fertile soil for educating the next generation of scientists, engineers, doctors, educators, and entrepreneurs, and it should not be surprising that every major scientific discovery has had its origins in academic research labs.

The Science Coalition has compiled an excellent list of examples highlighting this extraordinary return on investment which I have summarized below:

  • Fueling economic growth. More than half of our economic growth in the United States and Canada since World War II can be traced to science-driven technological innovation. The seed for this innovation has been scientific research conducted at universities and supported by the federal government through agencies such as the Department of Defense, Department of Energy, National Science Foundation, National Institutes of Health and NASA which account for ~60% of all research funding in America.
  • Creating new technologies, new companies and new jobs. Companies that have spun out of research universities have a far greater success rate than other companies, creating jobs and spurring economic activity. Thousands of American companies of all sizes have gotten their start from federally-funded basic scientific research. A report by the Science Coalition tells the stories of 100 such examples. Collectively, the 100 companies highlighted employ well over 100,000 people and have annual revenues approaching $100 billion. Google is one such example of how investments in basic research can pay off in ways never imagined. Stanford University graduate students, Larry Page and Sergey Brin, whose research was supported by a National Science Foundation grant (the American equivalent to the National Research Council in Canada), generated the idea: a better kind of search engine. Today, Google has transformed the way we use the Internet and employs 20,000 people. The MRI, GPS and the Internet itself also are examples of technologies born from federally funded basic research.
  • Saving lives and saving money.  Every major medical discovery has had origins in academic research labs. Transferring funding from basic research programs examining the causes of our most chronic and costly diseases such as heart disease, cancer, respiratory disease, Alzheimer’s, and diabetes, would rob us of the transformative discoveries that will lead us to their cure. While the United States is far from a model standard for basic research funding, this point was ironically best made by the President of the United States of America in an address to the National Academies of Sciences annual meeting in 2008.
  • Ensuring our continued international competitiveness. Leaders of emerging economies such as China, India and the countries of Eastern Europe have invested billions of dollars to develop and support their own research infrastructure in order to compete directly in the fields of science and technology. Further investment in these areas will ensure Canada’s continued innovative leadership in the knowledge market.

While I agree that the relationship between academia and industry can and should be closer, cutting funding from the first to subsidize the second is not the answer. I am not alone. A recent poll by the Toronto Sun suggests that the Canadians overwhelmingly agree that science should not be driven by business interests. Indeed, responding to every short-term market fluctuation by shifting investment toward the latest economic trend is a bad strategy for growth. Returns from federal funding of scientific research take time to appreciate, and there is no question that the very industries the NRC would like to see supported are borne out of academic institutions. While these businesses may prosper in the short-term, the technologies on which they were founded will become obsolete without continued investment in the academic labs that birthed them.

But don’t just take my word for it…

Jonathan Thon
Jonathan Thon is a serial entrepreneur and founding CEO of STRM.BIO. Before STRM.BIO Dr. Thon founded Stellular Bio where he served as CEO and chief scientific officer. Before Stellular Bio, Dr. Thon was an assistant professor at Harvard Medical School.
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  1. Andy / June 27, 2013 at 15:08

    You have misquoted McDougall. See
    Also you’ve misunderstood what NRC is. It is not an academic funding agency. Maybe you’re thinking of NSERC?
    Given the seriousness of these journalistic errors, I will overlook the fact that you can’t spell principal investigator!

    • Jonathan Thon / June 28, 2013 at 09:41

      Thank you for your comment Andy. I have corrected the article as noted, and look forward to further discussion on this topic.

  2. DblC / July 3, 2013 at 16:23

    I agree with Andy’s comments. One must take care to have their facts right before penning an opinion…else one looks like an ID 10 T

  3. Kellogg Booth / July 4, 2013 at 16:32

    The article still says “National Science Foundation grant (the American equivalent to the National Research Council in Canada)” despite the author’s June 28 reply to the post by JT that points out the error in this statement. NRC has not been the Canadian equivalent of NSF for academic research since the creation of NSERC (if it ever was).

  4. Jonathan Thon / July 19, 2013 at 16:54

    While it is true that the Natural Science and Engineering Council of Canada (NSERC) has taken on the lion’s share of funding basic research in the natural sciences and engineering, the National Research Council (NRC) was nevertheless established to support scientific research and development in Canada, and presently supports (on average) 40-50 concurrent programs made up of multiple scientific projects 5-7 years in length. A shift in the National Research Council’s investment priorities away from basic research will have a profound effect on Canadian innovation by cutting funds from academic research labs that engage in this discovery work. There are better ways to turn scientific discovery into economic growth, and my following posts will point out how.