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Report: NC leading in industry-funded university research

A new report from the Information Technology & Innovation Foundation finds North Carolina leading all other U.S. states in industry-funded university research.

The report, based on data from the National Science Foundation, found North Carolina getting 12 percent of its university research funded by industry. That’s well above the U.S. average of 5.9 percent.


Many faculty members at universities see heavy industry financing as a potential threat to independence and academic freedom.

But as the report notes, the states with the highest percentage of industry funded research – which also include Georgia, Kansas, Ohio and Missouri among the top five – have both well-regarded research universities and long-running state-supported technology commercialization programs. A close relationship between industry, government and state university systems also characterize the top ranking states. North Carolina’s Research Triangle Park is seen as a model many states would like to emulate and a driver of industry funded research at the university level.

From the report:

Before WWII, industry funded a significant share of university R&D. However, as federal research funding increased dramatically during and after the war, industry’s share fell, to just around 3 percent in the 1970s. That percentage started to rise again in the late 1970s and early 1980s, in part due to the growth of more science-based industries, including information technology (IT) and biopharmaceuticals, but also because of federal and state policy changes. For example, the Bayh Dole Act in 1980 gave universities rights to intellectual property generated from federal funding, which spurred many universities to work more with industry. Separately, the National Science Foundation during the Reagan administration developed new industry partnership programs like the Engineering Research Center program, while many state governments developed university-industry research centers to grow technology-oriented businesses. Both of these types of initiatives spurred industry funding. As a result, the share of university research funded by industry increased from 4.9 percent in 1980 to a high of 7.4 percent in 1999. The share has fallen since then, even as federal funds have dropped overall. In 2016, industry funded just 5.9 percent of U.S. academic research.

Many of the highest ranking states also have some of the country’s lowest wages even for skilled research positions, leading critics to note the industry investment goes where labor is cheapest.

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