13 min readFunding Trends in Biological Sciences – Europe – part 2
London, UK — A decade before the creation of the EU in 1993, the European countries had already established a centralized funding system for science research. As we reported previously, the first Framework Programme for supporting research and development in Europe, began in 1984 and had a budget of about €3.75 billion.
This is the second part of our article on Funding trends for Biosciences in Europe. The first part and more information can be found here.
The European R&D expenditure includes both private and public sectors, in other words, the business R&D and the research conducted at the universities and public institutes. Below is the statistics on expenses in these sectors compared to the personnel employed in both of them. The data was published by the European Commission in 2013.
After one calculated the amount of money spent per employee in both sectors, the average expenditure per person in business entreprises would be about 64% higher than that in higher education institutions.
We should observe that often positions that require the greatest talents, are the worst rewarded. A professor may only obtain his post after twenty years of preliminary studies. Now who would in the future be willing to take up such a career, if, after a painful journey, the goal should appear only a sad prospect?
If the disparities in funding between private and public sectors seem important, the still greater differences exist among the EU countries. The expenditure graph in our previous report (link) shows that not all EU member states can afford to spend equal amounts of money on R&D. Countries with stronger economies such as Germany or Sweden can easily direct 3-4% of their GDP to research and development, while Greece and Romania have been struggling to reach the mark of 1%.
To cover these gaps, the European Commission created what is known as Structural Funds. This consists of the European Regional Development Fund (ERDF), European Social Fund (ESF), Cohesion Fund and Youth Employment Initiative. Similar to the ERC, structural funds are meant to provide support to individual projects. However, in this case, the main criteria for project selection will be their implementation and tangible outcomes. Among the projects sponsored by structural funds are, for instance, a newly built Research Centre for Cell Therapy and Tissue Repair in Czech Republic and a Learning-Nano lab kit for schools in Germany, containing materials and tutorial for teachers who wish to introduce nanotechnology into their curriculum. The chances of success and the amount of money for each project will depend on the size of the budget allocated for each EU member state.
National public funding for science in the EU
Despite the increasing amount of funding available from the EU, the majority of research projects are still competing for sponsorship on the national level. These often are smaller projects and projects not involving international collaborations. A typical model of the science funding system is quite similar across all European countries. The main source of money for projects are National Funding Agencies, which receive the funds directly from the government and distribute it on a competitive basis, according to the main priorities identified by the national advisory bodies and European Commission. The main funding bodies in the UK are seven specialized Research Councils, whereas, with the main funding body in Germany this function is performed by the DFG and in France by the National Research Agency.
Most of the resources allocated to research today are coming from member states. That, in my view, is a great obstacle in developing a consistent, ambitious and comprehensive funding strategy for research.
In the UK, where annual R&D expenditure equals about 1.7% of the country’s GDP, £4.6 billion was allocated to science research in 2014, from which £2.6 billion went to the national Research Councils and £1.6 billion to HEFCE (Higher Education Funding Council for England). The Royal Society received £47 million to be spent on “specific projects and programmes, principally to allow a cadre of the most capable academics to work full-time on research”.
The chart below shows the amount of funding allocated in 2010-2015 to three Research Councils that mainly sponsor life sciences. Over the last 5 years, the numbers do not seem to have changed significantly. However, the White Paper of the UK government from 1993 reports annual expenditures of about £6 billion on science and technology. Corrected for inflation, this would equal to about £11 billion now, making it more than twice the amount that science research in the UK has been receiving every year since 2011.
Abbreviations: BBSRC – Biotechnology and Biological Sciences Research Council; MRC – Medical Research Council; NERC – Natural Environment Research Council.
According to the report of the Federal Ministry for Education and Research in Germany in 2014, the latest key priorities for research (the so-called Future Projects in R&D) include: Saving resources / Decreasing CO2 production; Alternative energy sources; Individualized medicine and prevention therapy; Improving life quality in ageing society; Sustainable mobility / Improving transport system; Internet services for the benefit of business and economy; and Internet privacy protection. Six out of ten priorities potentially involve bioscience research, particularly in the areas of medicine and biotechnology.
The largest public funding organization in Germany, DFG, set its main goal in providing “funding for projects with a basic research orientation, carried out by scientists and researchers working at universities and non-university research institutions”. The annual budget of DFG for life sciences comprises about €800 million. Applied life science projects are often supported directly by industry and are carried out either by companies themselves or in specialized privately funded research institutes.
The research landscape itself changed significantly in Europe over the last decades. Since the middle ages, science research was primarily conducted at the university campuses, but as the extent of knowledge grew, there came an urging need for specialization. Many countries today have independent institutes that only conduct research in a particular area, such as Biochemistry or Cancer Research. Such institutes can be funded privately and provide a research base for companies but often these are funded by the state.
One such example is the Max-Planck Society – a whole network of publicly-funded research institutes hosting over 40 chapters in Germany, Italy, Luxembourg, Netherlands and the USA. Public money allows the institutes to establish their research facilities and pay salaries to their staff members, both permanent and short-term. In addition, the money for individual projects within the institutes comes from external funding organizations, such as DFG on a national or ERC on the European level.
To step even further away from the idea of supporting individual universities, in 2005 the German government announced a new Excellence Initiative, inviting public institutes and universities to submit their research proposals. The best ones received a total of €1.9 billion additional funding and were organized into 37 local Clusters of Excellence, with the main aim to make Cluster research internationally visible and promote collaboration. The concept proved successful and another call for proposals was issued in 2009, providing another €2.7 billion to successful candidates, to be distributed until 2017.
Whereas all above-mentioned examples show total spending on research, including infrastructure and administrative expenses, the infographics below illustrates how funding can be distributed among individual research projects. The first chart shows how much money the National Research Agency of France (ANR) allocated to projects in different science areas in 2013. Assuming that the intensity of research in each area is demonstrated by the amount of grant proposals, the second graph shows the number of applications submitted to ANR in 2014. The success rate of applications at ANR in 2013 was 16.5% but the agency expected it to raise to 25-30% in the subsequent year. At the time of this report’s publication, the statistics for applications in 2014 has not yet been made available.
Charities supporting academic research
Advancing the society and making the world a better place is not always profitable. Much of the needed money for activities such as combating AIDS or malaria come from charitable foundations. The Global Fund reported that their total expenses on malaria in 2012 comprised about $308 Million, while Google donates about $100 Million every year in grants “combatting the biggest human challenges of the 21 century”.
For scientists, charities can be another source of funding in addition to the national and EU support. The largest charity in the UK, the Wellcome Trust foundation, was established in 1936 and named after a pharmaceutical entrepreneur Sir Henry Wellcome. The foundation since then has grown to become one of the largest charities in the world. Apart from donations, the foundation receives a significant amount of money from investments – about 20% of all shares from the Henry Wellcome’s drug company have been made publicly available in 1986.
Dedicated “to realizing the full potential of biomedical research to improve health”, with its annual budget of over £700 million, Wellcome Trust supports science initiatives and projects within their identified strategic areas. Somewhat reminiscent of the priorities identified by the government, in 2010-2020 these include: (1) Maximizing the health benefits of genetics and genomics; (2) Understanding the brain; (3) Combating infectious disease; (4) Investigating development, ageing and chronic disease; and (5) Connecting environment, nutrition and health.
Findings in one discipline are often highly relevant to a different field, making division of funding based on such designations a silly endeavor. Also, what is “hot” is often dictated by private or corporate interests or even political interests, which can underappreciate or completely ignore the relevance of certain sub-fields.
Other charities often focus on sponsoring projects in a particular area, such as Cancer Research or Alzheimer’s Research UK. The names speak for themselves and most or all money that these organizations receive come from individual donations, events and corporate partnerships. In 2013/14, Cancer Research UK raised £490 million, from which £379 million was then spent on funding cancer research projects, numerous awards, career development fellowships and other charitable activities. The charities’ support for specialized research areas tends to be the highest in the UK – the total annual budget of the France Alzheimer foundation, for comparison, comprises only about €14 million.
“Basic research is, by definition, research without a specific end in view and here the market does not operate,” – these words appeared in the UK government White Paper “Realising our Potential” in 1993. The traditional approach to turning the results of academic research into a market model implies that scientists have a creative freedom for defining their own research topics. Industrial partners will then pick up the latest discoveries and, more or less successfully, turn them into a tangible product.
It is important to connect people, whose work have similar objectives. Sometimes they don’t realize that they should join forces. For example, when you think about medical research, you usually forget that you need an economist to prepare the next step in the new product development, you need lawyer to make sure that you protect intellectual property the way you should.
This approach dominated the world for centuries, leaving the responsibility of funding basic research mainly on the shoulders of taxpayers. Hence, striking the balance between getting the best value for invested money while making possible discoveries like DNA double-helix has always been a sensitive issue. Applying for a patent is one way of making academic research known by companies. Nevertheless, while history gives us examples of Emil Fischer, whose research into the structure of sugars led to discovering a range of artificial sweeteners, most academic projects would not have immediate impact.
As the world of business changed its shape in the last couple of decades, so did the interaction between academia and industry. The word “innovation” dominates most of the government strategic plans for R&D and even made it to the title of Horizon 2020 as a Framework for Research and Innovation. As a way to help new ideas develop, governments and giant businesses began investing into startups – newborn companies with a potential to revolutionize the market and boost the economy.
Startups are now expected to become a junction point between the worlds of academia and business. With their flexibility and open-mindedness they can make a perfect platform for testing the commercial potential of research outcomes. However, to survive and grow, small companies need a nurturing environment alongside financial support at the early stages.
During the last decade, a number of startup campuses or so-called “incubators” have been built around Europe, many of them hosting startups in biotechnology or drug research. Bayer HealthCare built two incubator spaces – in Berlin and San-Fransisco – as a “new home for startups in life sciences with ideas related to Bayer HealthCare’s R&D strategy”. The incubator provides lab and office spaces for new companies and its Berlin chapter, which opened in May 2014, is currently hosting 9 companies.
The UK is probably the best example when it comes to government support for innovation. Since 2010, Innovate UK developed into a complex system providing various grants for businesses to collaborate with academic partners. In 2015, four of such programs called Catalysts and co-funded by Innovate UK and Research Counsils, are offering grants from £150,000 to £10 million per project.
To encourage academia-business projects, Innovate UK developed the Knowledge Transfer Network (KTN) covering a range of areas including Industrial Biotechnology. In addition, it built an online platform _connect where users can explore running projects and find potential partners.
To take the concept a step further, in 2012 Innovate UK began building Catapult centers, allowing academic scientists, engineers and businessmen to meet and explore how they can work together. One of the seven existing centres is currently devoted to Cell Therapy and two others – Energy Systems and Precision Medicine – are expected to open this year.
Since the financial crisis of 2008, the UK seems to have taken the idea of research impact on national economy very seriously. As of 2009, all applications for grants from the Research Councils are expected to contain an Impact Summary and Pathways to Impact statement. As explained in the recent RCUK Review of Pathways to Impact: “RCUK want to ensure that activities are pursued during the research cycle that will increase the likelihood of the research having the intended societal and economic impact in order to add value in the UK and stimulate interest from wider stakeholders”. “A clearly thought through and acceptable Pathways to Impact statement is an essential component of research proposals and a condition of funding,” – it says.
Basic scientists are expected to be creative, imaginative, to think out of the box, and I don’t think that we should put pressure on them. It would be the responsibility of the Technology Transfer Office at the university to scout for promising results, and then discuss with the private sector the best way to develop the results. But I don’t think that the burden should be on the shoulders of basic scientists.
In contrast to the statements from the German and French national funding bodies, where excellent basic research is named as a priority, this trend may seem slightly alarming. On the other hand, it may give scientists a chance to think about implementing their research and encourage more of them to take their discoveries to industry. As always, getting the best outcome for the invested money in research is walking a fine line between restricting creativity and boosting the economy.
This report, including part 1, focuses on the European science funding trends. We will now look at the issue from the audience’s point of view – please take 5 minutes to participate in our survey on Funding for Biosciences here and leave your comments. We will be back next week with a detailed analysis of the results and your expert comments.