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Stanford University. Photo: Philip Pacheco/Getty Image

A new study makes the case that as funding for university research shifts from government to private firms, entrepreneurship suffers.

Why it matters: The share of research funding to universities from the federal government has declined as private companies make up a bigger proportion of R&D spending. Far from encouraging the development of new companies, the shift may be slowing the pace of valuable innovation.

What's happening: In a new working paper, researchers led by Tania Babina of Columbia Business School compared research grants, patent filings and U.S. Census Bureau data to identify the effects that changes in the sources of university research funding had on academic scientists.

  • Tracking the career outcomes of researchers in high-tech fields, they found that a higher share of private-sector R&D funding leads to more patents and an increased likelihood of researchers leaving academia to join the companies that funded their work.
  • When government funding predominates, however, it leads to a higher likelihood of scientists remaining in academia and more new startups spinning off the research.

What they're saying: "If you get more private funding, it creates intellectual property that companies can appropriate through patents," says Elisabeth Ruth Perlman of the U.S. Census Bureau's Center for Economic Studies, one of the paper's co-authors.

  • "With federal money, those new ideas are open to be taken by people who worked on them and commercialized through the wider startup ecosystem."

By the numbers: Since 2000, federal funding as a percentage of university R&D has fallen from 60% to below 45%, while corporate funding has risen from 20% to 30%.

  • By some metrics, rates of entrepreneurship in the U.S. have been declining since the 1970s, and Perlman notes that "when you have more private money going in, you see more products of university research flow to large established companies that have the money to give those grants."

Flashback: The paper cites the example of a company born in the late 1990s through research funded in part by the federal government, which left its founders free to commercialize their innovations.

  • That company is Google.

Go deeper: Biden seeks to "refresh" America's grand science strategy

Go deeper

Mike Allen, author of AM
4 hours ago - Politics & Policy

Biden adviser Cedric Richmond sees first-term progress on reparations

Illustration: "Axios on HBO"

White House senior adviser Cedric Richmond told "Axios on HBO" that it's "doable" for President Biden to make first-term progress on breaking down barriers for people of color, while Congress studies reparations for slavery.

Why it matters: Biden said on the campaign trail that he supports creation of a commission to study and develop proposals for reparations — direct payments for African-Americans.

Cyber CEO: Next war will hit regular Americans online

Any future real-world conflict between the United States and an adversary like China or Russia will have direct impacts on regular Americans because of the risk of cyber attack, Kevin Mandia, CEO of cybersecurity company FireEye, tells "Axios on HBO."

What they're saying: "The next conflict where the gloves come off in cyber, the American citizen will be dragged into it, whether they want to be or not. Period."

Cedric Richmond: We won't wait on GOP for "insufficient" stimulus

Top Biden adviser Cedric Richmond told "Axios on HBO" the White House believes it has bipartisan support for a stimulus bill outside the Beltway.

  • "If our choice is to wait and go bipartisan with an insufficient package, we are not going to do that."

The big picture: The bill will likely undergo an overhaul in the Senate after House Democrats narrowly passed a stimulus bill this weekend, reports Axios' Kadia Goba.