Disentangling University Research Policies

G. Bruce Doern and Christopher Stoney (editors). Research and Innovation Policy: Changing Federal Government – University Relations. Toronto: University of Toronto Press, 2009. David D. Dill and Frans A. Van Vught (editors). National Innovation and the Academic Research Enterprise: Public Policy in Global Perspective. Baltimore: The Johns Hopkins University Press, 2010.

The notion that university research can be the engine of economic prosperity has been with us in Ontario for a quarter-century. In the immediate postwar period, Ontario governments counted on robust economic growth, based on resource and manufacturing industries, to provide rising incomes despite comparatively weak domestic investments in research and development.  The apparent promise of continued prosperity meant  there was little pressure on governments to fund university research, apart from the national granting councils.

The first winds of change appeared in the 1980 report of a special committee on university research, sponsored by the Council of Ontario Universities and chaired by James Ham, president of the University of Toronto. Ham’s report – coming immediately after the second OPEC crisis, as governments coped simultaneously with high inflation and high unemployment and as interest rates in Canada reached record levels – proposed that research should become the centrepiece of Ontario’s economic development strategy. In 1984 Premier William Davis’s government set a precedent in Ontario by funding the direct costs of university research through a targeted program – the University Research Incentive Fund – that awarded grants based on the advice of an independent board and with a requirement that the research be supported in part by private-sector investors. The following year, Premier David Peterson’s government began to create the Ontario Centres of Excellence. The federal government followed suit in 1988 with a similar program nationally. Following the deficit-cutting years of the mid-1990s, targeted funding for research was vastly expanded. The federal government created in rapid succession the Canada Foundation for Innovation, the Canada Research Chairs, the Indirect Costs program, and the Canada Graduate Scholarships, and it revamped and expanded the granting councils. Ontario and other provinces launched parallel initiatives at the provincial level.

The effects of this new research paradigm are yet to be understood fully. G. Bruce Doern and Christopher Stoney of the School of Public Policy and Administration at Carleton University shed light on a critical aspect of the paradigm in their edited volume, Research and Innovation Policy: Changing Federal Government –University Relations. The book shows how the new paradigm has changed the relationship between the federal government and the universities, offering insightful contributions from Doern, Stoney and 10 other researchers on topics as diverse as the regulation of universities, commercialization, intellectual property, the contribution of university research to government policy development, the co-location of federal laboratories on university campuses, research ethics, and the development of economic clusters.

The new federal programs to support research were all created at the urging of university administrations, as Clara Morgan recounts in her chapter, and they have brought tangible benefits to universities in the form of research buildings and infrastructure, research chairs, and graduate scholarships. An additional benefit, as Débora Lopreite and Joan Murphy show, is that the Canada Foundation for Innovation has required every university to develop a strategic plan for its research activities.

Yet, if the intent of the new paradigm was to use universities to drive innovation and productivity improvement in the commercial sector, a consistent theme of the book is that the federal government has been awkwardly positioned to do so.  Universities are an attractive policy tool for governments because they are “one of Canada’s few remaining state monopolies,” so are notionally amenable to state control. Yet government values  concepts such as relevance, usefulness, and accountability for public funds, which  do not easily mesh with the university values that emphasize the independence of researchers and the primacy of peer review as a means of quality assessment. Attempts to impose government values on academic researchers risk stifling the innovation that government  intended to nurture.  

Even if conflicting values could be brought into better alignment, the paradigm assumes a linear process in which university research is transferred to commercial firms, who use it to create innovative products and services. It is increasingly apparent, as David A. Wolfe’s chapter argues, that successful economic development strategies depend on numerous and diverse channels where  universities and commercial firms interact and learn from one other. Much of this learning is tacit,  so is not captured in standard measures of research productivity. Governments have few tools for creating dense social interactions, and the subtlety of these interactions does not fit well with governments’ affection for short-term, measurable results.

An additional complication is what Allan Tupper in his chapter calls the “uncoordinated entanglement”  of federal and provincial policies towards universities. The federal government has a long history of providing research grants to universities but, for constitutional reasons, it has been reluctant to fund overhead costs or contribute to the salaries of principal investigators. The latter must be funded from general operating revenues, principally supplied by provincial governments and students. The expansion of federal research funding has therefore created significant distortions. Universities must find overhead funding by taking money from other operations, notably teaching. The bias of research funding towards health, natural sciences, and engineering has created workload imbalances, as faculty who win major research grants are typically given some relief from teaching, in a period when undergraduate enrolments are rapidly expanding. These distortions are addressed in part by the Indirect Costs Program and by the Canada Research Chairs, which de facto are a federal operating grant whose distribution favours the universities with the largest research programs. As Tupper, Wolfe, Doern, and Stoney all note, governments need to balance the new research paradigm with sustained attention to the quality of teaching. 

Are other countries managing these issues in a better way? David D. Dill of the University of North Carolina and Frans A. Van Vught of the University of Twente in the Netherlands suggest that Canada’s approach to supporting research shares many of the strengths and weaknesses of policies in other developed countries. Their edited volume, National Innovation and the Academic Research Enterprise: Public Policy in Global Perspective, provides a compendium of research and analysis on university research policy in eight countries, the European Union, and two American states. A full chapter is devoted to Canada’s policies, written by Donald Fisher and Kjell Rubenson of the Center for Policy Studies in Higher Education and Training at the University of British Columbia.

Dill and Van Vught define the academic research enterprise (ARE) to include academic research, doctoral training, and knowledge transfer. They find that all  the countries studied have adopted innovation as a pillar of their economic strategies and are attempting to  steer the ARE actively. All have been experimenting to find a “third way” between laissez-faire and a central planning process that promotes government priorities while not explicitly reducing university autonomy.  Countries that formerly treated their universities as an arm of the public service (Finland, Japan) are reducing administrative controls, while countries that have formerly offered universities high levels of internal self-management (the U.K., Canada, and Australia) are shifting towards contractual arrangements, whereby  funding is awarded in return for meeting specified outcomes. Government policies may set research priorities (as we see in Canada’s Centres of Excellence) or promote competition among universities (as with the Canada Research Chairs). 

A common trend is to provide a greater share of university funding in the form of grants tied to research performance. It has long been that case that grants from research councils are allocated based on expected performance, as assessed primarily through peer reviews. The newer trend is to allocate operating grants for research based on such measures  as research publications and citations, doctoral completions, and competitive grants received. (Ontario is so far an exception. Operating grants for research are melded into general operating grants and are mostly allocated based on enrolments. About one per cent of the provincial grant is allocated for overhead, based on success in federal research competitions.) Providing adequate funds for research overhead, which are allocated on the basis of  the value of competitive grants received, eliminates the problems created when overheads are funded using money intended for teaching,  a problem noted in the chapters on Australia, Canada, and the U.K. (although the chapter on Germany suggests that, in that country, the practice is to divert research funds to support teaching). The United States is shown to be unique among the countries studied in that almost all federal research funding is awarded based on competitions rather than formulas, and it includes substantial overhead funding, to reflect universities’ actual costs. Many countries set aside a small portion of research funding to provide compensation for universities that do not have a strong research base or to build capacity among this group (Australia, Canada, U.K.,  United States).

The book examines the effects of the new ARE policies on universities. The humanities and social sciences are being ignored or underfunded by the new policies,  faring best in countries where much research is still funded through basic operating grants. More surprising, there is evidence that basic sciences such as chemistry, physics, and mathematics are also being overlooked. Many universities have established technology transfer offices at government behest, but few of these offices are generating significant revenue because, apart from some fields such as biotechnology, the main gains from research are not patentable or licensable. Instead, in most disciplines, the gains take the form of exchanges of people, training of highly-qualified personnel, and stimulation of start-up firms.

The evidence that ARE policies increase diversity among the universities is mixed. Economic theory suggests that greater competition should cause universities to become more specialized in their research and  focus more closely on becoming excellent in their areas of specializations. Dill and Van Vught note that, in practice, with the possible exception of the Netherlands, there is much variation among universities in all countries in the production of research and doctorates. In some countries this has come about through explicit designation (Finland), while in others it has been created or enhanced through government-sponsored competitions (United States, Germany, U.K., Canada). Yet the authors argue that policies that stimulate competition are not enough to  produce diversity. “The forces of academic professionalism and the eagerness to increase individual and academic reputations impel all universities in the new, more competitive environment to imitate the leading research universities rather than to diversify their missions and profiles.”  This “reputation race” drives all universities to seek more money for researchers’ salaries, graduate stipends, and research facilities. 

The authors argue that the next policy step should be to publish more information about research performance and the effectiveness of public policies. Based on their case studies, they find that publishing data about the performance of institutions and departments – based on their research performance and the quality of their doctoral programs, and without necessarily tying performance to funding – encourages long-term improvement, provided that the data are consistently applied and are seen by faculty as reflecting professional norms. In lieu of newspaper rankings, publishing a variety of quantitative and qualitative data, the latter based on peer reviews, would improve performance by universities and also by governments. Canadian provincial governments are specifically mentioned as examples of organizations that could do a better job of learning from one another, along with sub-national governments in Australia, Germany and the United States. 

Dill and Van Vught further argue that these information-based policies, known as “mutual learning,” need to be accompanied by tuition policies  allowing universities that have demonstrated high research performance to set their own tuition fees, so that they have the resources to compete globally for researchers. Students should pay these fees, they say, because “universities with an international research reputation…provide substantial private benefits to their students.”   The majority of universities do not meet this standard, say the authors,  so their fees should continue to be regulated to prevent follow-the-leader pricing. 

These views on tuition come by surprise at the end of a long book in which tuition is seldom mentioned. Implementing them assumes one can find a way to distinguish between universities that have demonstrated high research performance and those that have not. It also raises issues of fairness: should a student who wants the benefit of a high-reputation university be required to take on extra debt to pay the salaries of research superstars and their would-be peers?

These questions aside, Dill and Van Vught and their colleagues have made a significant contribution to comparative public policy by describing the university research policies and situating them in historical and institutional context. Their work complements that of Doern and Stoney and their colleagues, and the two books reach similar conclusions. Governments world-wide are looking to universities to be the engines of the new economy. Universities have encouraged and welcomed this attention, even as they are being reshaped by it. The policy focus on specific disciplines has caused faculty in less favoured disciplines to reconsider who values their research and why. 

Meanwhile, the teaching mission of the university is receiving relatively less attention. In Canada, this situation is exacerbated by jurisdictional divisions: the federal government awards research funding but leaves it to the provincial governments and students to fund faculty salaries and most research overhead. With a large policy infrastructure now having been established to support research, a parallel opportunity exists for provincial governments to encourage high-quality teaching that will take students from a variety of backgrounds – some well-prepared academically, some not – and see them through to graduation and a successful transition to the workforce or to further education.

David Trick, PhD, is president of David Trick and Associates, consultants in higher education strategy and management and a part-time instructor in the Department of Politics and Public Administration, Ryerson University. He is a former assistant deputy minister for postsecondary education in the Government of Ontario and was the first CEO and vice-provost of the University of Guelph-Humber. He is the co-author (with Ian D. Clark, Greg Moran, and Michael L. Skolnik) of Academic Transformation: The Forces Reshaping Higher Education in Ontario (McGill-Queen’s University Press).