Federal research funding cuts could slow tech innovation
With massive funding cuts proposed at both federal research agencies and U.S. universities, U.S. R&D investment is poised to fall behind China and the EU.
Universities and federal scientific research agencies such as the National Science Foundation and National Institutes of Health are facing significant federal funding cuts that may affect U.S. R&D and, eventually, technological innovation.
That's according to panelists speaking during an event hosted by the Information Technology and Innovation Foundation (ITIF) Tuesday. President Donald Trump's proposed FY 2026 budget cuts funding to NSF by 55% and NIH by 38%, said Stephen Ezell, ITIF's vice president for global innovation policy. The administration has also frozen funding for several universities, largely Ivy League schools, including Harvard, Cornell and Columbia. Harvard sued the Trump administration for the frozen funding, arguing that its $2.6 billion in cuts is illegal.
The Trump administration's cuts to both universities and federal agencies that often provide support for university technology research threaten the U.S.'s ability to innovate and compete on a global stage, Ezell said. Should the NSF and NIH budget cuts be sustained, by 2026, it would place the U.S. third behind China and the European Union in federal R&D funding.
"We must recognize that federal and private-sector funding of university research is absolutely foundational to America's innovation system," he said during the event. "It's the seed corn that has led to the new industries, the new occupations and jobs that keep the American economy at the forefront of the world."
Federally funded research leads to innovations
The Bayh-Dole Act, passed in 1980, gave universities and small businesses the rights to intellectual property generated from federally funded research. It serves as a foundational component of commercialization of products resulting from federally funded university research, Ezell said.
From 1996 to 2000, the pipeline from federally funded U.S. university research to technology products and companies led to the creation of 550,000 invention disclosures, 140,000 patents and 18,000 startups, contributing $1 trillion to the U.S. GDP, Ezell said. Companies like Google and Cisco resulted from federally funded university research, he added.
"The Bayh-Dole Act has been a foundational driver of this entire ecosystem of university-driven innovation," he said. "Policymakers need to be mindful of understanding this history but also curating a policy environment in which we can continue to reap the benefits of this incredibly powerful innovation system we've developed over the years."
Indeed, the legislation has played a huge role in creating technology ecosystems around universities in the U.S., said Jonathan Goldman, director of Quadrant-i at the Georgia Institute of Technology and an event speaker. Chip companies like Micron Technology and Absolics have established research groups in Atlanta to be closer to Georgia Tech R&D. Nvidia has also invested $10 million in an AI supercomputer hub at the university.
Federal research funding cuts also affect medical and pharmaceutical R&D. Boston Children's Hospital spends more than $500 million on research annually and is one of the largest NIH-funded pediatric hospitals in the U.S. Irene Abrams, Boston Children's senior vice president of research innovation and an event speaker, said the discoveries affecting people's lives are "based upon years of fundamental research."
There is a lot of concern in the universities and innovation community.
Irene AbramsSenior vice president of research innovation, Boston Children's Hospital
Federal research funding plays a crucial role in leading to innovations, inventions and new technologies, she said. While the private sector plays a significant role in bringing those innovations to the market, it's the federally funded research that gets that process started, she added.
"There is a lot of concern in the universities and innovation community," she said. "Venture capitalists are really nervous about what will happen if the beginning of this process really shrinks."
Dan Leonard, executive director of We Work for Health and an event speaker, said federal research funding cuts are already threatening research initiatives in the U.S., as other countries attempt to recruit U.S. scientists and researchers who are concerned that their projects won't receive funding.
Leonard said continuing the success of the Bayh-Dole Act means recognizing the importance of the partnership among the federal government, academia and private industry for technological innovation in the U.S.
"We can either preserve and strengthen the policies that made America the global innovation leader, or we can watch others fill that vacuum that would be created if we move in the wrong direction," he said.
Makenzie Holland is a senior news writer covering big tech and federal regulation. Prior to joining Informa TechTarget, she was a general assignment reporter for the Wilmington StarNews and a crime and education reporter at the Wabash Plain Dealer.
