Business of the sciences: ROI for basic research is high, but risk is too large for any single company / by Keegan Kelsey

Federal funds for basic research have recently slowed compared to prior trends, placing funding concerns on the minds of scientists. Specifically, long term state of funding is a source of concern for early career researchers; researchers like me.

However, it shouldn’t just be a concern for someone like me. It should be a concern for everyone. So much of one's daily benefits in life may be traced back to knowledge gained from basic research.

Through a science policy course (mentioned in my last post), a group of us have been making an effort to detail arguments as to why a slow in government funds should concern everyone. These arguments will be published along with addressing how we, as scientists, need to get better at advocating for the sciences.

Although there are many reasons and examples as to why research endeavors are justified, less publicized are the financial returns on investing in basic research.

One of my favorite return on investment (ROI) examples is the Human Genome Project (HGP). The HGP was an NIH funded initiative that mobilized a massive number of scientists to publish the full sequence of a human genome (available here). Not only has the HGP contributed to invaluable knowledge and health diagnostics, financial returns have been estimated to be an astounding 141:1.

Official HGP funding started in 1990. Total investments spanned 13 years and equated to a sum of $3.8 Billion, or 1.5% of the total NIH and NSF budget across those years. With a return estimated at $796 Billion - a return that is more than the combined NIH and NSF budget allocations since inception of each agency (see figure) - this single example alone financially justifies basic research.

NIH_NSF_budget.jpeg

Note: Data generated for this figure came from budget offices of the NIH and NSF. NIH received first budget allocations in 1938 (NIH was founded in 1887), while the NSF was founded in 1950.

Funding basic science not only generates knowledge and fosters innovation - it is an investment that makes serious money. While it is clear basic research is financially worth investing in, less detailed is why our government needs to supply the investment capital.

To frame this differently: Why aren’t companies or individuals pouring cash into basic research efforts, effectively removing a need for government supplied funds?

William H. Press, President of AAAS, recently published a terrific piece outlining why: The nature of return from basic research is that benefits (both human and financial) do not simply and neatly come directly back to the initial funder - returns are spread out to individuals across the world.

Individual companies have resisted investing in basic research because the financial risk is too high and the reward is too low for any single company to take on. Government is therefore necessary to fund the majority of basic research endeavors.

If you support the idea of basic research and believe the benefits of science extend beyond a financial return - or if you think financial return is enough -  then it should be very clear that current government funding efforts need to change. A plateau of funding is simply inappropriate and dangerous to the future of science, especially given past performance of the business. Individuals and companies cannot pick up the slack: Funding of the sciences is necessarily a large group effort.