Report Examines the Business of University Research

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The annual research expenditures of Notre Dame total $191 million. The annual research expenditures of Notre Dame total $191 million.

Corporate giants like Eli Lilly and Company, Dow AgroSciences or Roche Diagnostics are likely top of mind as major players in Indiana’s life sciences economy. However, viewing the state’s three research universities as a single entity uncovers an equally powerful giant in Indiana. A new report says the $1.3 billion direct research expenditures of Indiana University, Purdue University and the University of Notre Dame more than quadruple the annual economic impact of the Indianapolis Motor Speedway.

Beyond their monetary might, the universities have a legacy of bringing innovation to our daily lives; Notre Dame scientists discovered neoprene—the first synthetic rubber—in 1930, IU researchers pioneered the now widely-used echocardiogram, and Purdue is driving the creation of next-generation biofuels.

“The Importance of Research Universities” report, prepared for the state’s life sciences initiative BioCrossroads, translates how such innovation impacts Indiana’s economy.

“Measuring universities as economic assets in the state seems like a pretty old-fashioned concept, but it really isn’t,” says BioCrossroads President and Chief Executive Officer David Johnson.

He recalls, when the Central Indiana Corporate Partnership was formed in 1999, its organizers had “the late thought” to add IU and Purdue to the group.  

“Because for the first time, businesses were starting to see universities as sources of innovation and economic activity in ways they never had before,” says Johnson. “There’s been an evolution in thinking of research universities, increasingly, not as ivory towers, but actually as economic actors in a number of ways.”

The report, written by Ohio-based TEConomy Partners LLC, reveals areas of expertise that overlap among the universities, highlighting research subjects that could benefit from further investment of minds and money.

“[University researchers] are a little too siloed; I think academicians have a tendency to do that just naturally, because they’ve got their head down working hard,” says Notre Dame McCloskey Dean of Engineering Dr. Peter Kilpatrick. “But these are important enough issues that taking advantage of the report makes a lot of sense for the state.”

The report shows Indiana is “punching above its weight” in academic research output, producing a greater percentage of academic publications than expected in accordance to the state’s population. Analyzing the universities also exposes areas where the state needs to build muscle. Johnson says many found it surprising that, compared to their peers, the Indiana universities aren’t getting as much federal research funding “despite their excellence.”

“The national norm is about 55 percent of a preeminent research university’s funding comes from federal funding, and [Indiana] is closer to 40 or 41 percent,” says Johnson. “That means the universities are having to make up that difference. It’s not coming from state funding, philanthropy is involved, and there’s still a 14-point gap between what you’d expect to see in federal funding and what we’re actually getting.”

He believes the finding reinforces the need for Hoosier businesses and the research universities to have more of a two-way exchange. The report says business-financed research makes up 6 percent of R&D funding at U.S. universities, but Indiana falls below that at 5 percent.

“[Purdue President Mitch Daniels] has said that, for too long, companies doing research haven’t thought about licensing that research closer to home,” says Johnson. “And likewise, universities have been very, very focused on federal funding and haven’t spent as much time thinking about how they could work in really productive collaborations with industry.”

Indiana life sciences and university leaders believe the state is improving its ecosystem, launching several collaborative efforts in recent years, such as 16 Tech, the Indiana Biosciences Research Institute and Indiana Clinical and Translational Sciences Institute. Dr. Marietta Harrison, special advisor for strategic initiatives at the Purdue Office of the Executive Vice President for Research and Partnerships, believes Indiana is overcoming its perception as “a flyover state,” making it “a place that is of value on its own.”

“The state and universities are hand-in-hand addressing the issue. I’ve been at Purdue 35 years, and it just seems to get better and better,” says Harrison. “It’s slowly spiraling up, and that spiral is getting quicker and quicker. As the state and research universities—major assets in Indiana—address this issue, we will get stronger and stronger.”

Harrison says Purdue is exceptionally strong in analytical chemistry, engineering, agriculture and, in general, its ability to transfer technology.
Johnson says the universities’ roles of producing a STEM-trained workforce and attracting talent are increasingly important for economic development.
Kilpatrick believes the state could use its power to stimulate more collaboration among Indiana’s research universities.
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