UNIVERSITY PARK, Pa. -- After two decades of steady growth, Penn State's research expenditures in fiscal year 2013-2014 fell by 4 percent to $813.1 million, according to Vice President for Research Neil Sharkey. That total included $501 million in federal funds, $36 million less than the previous year. The drop is reflective of a significant decline in federal investment in research and development since the economic downturn of 2008, Sharkey said.
Budget cuts and sequestration continue to reduce federal funding for research and development in the U.S. at a time when other countries, including China, India and South Korea, are substantially increasing R&D investment. The result, according to a coalition of prominent university, scientific and business organizations that submitted testimony this spring to the U.S. Senate Appropriations Committee, is a growing "innovation deficit" that threatens the nation's international competitiveness.
"Given this background," Sharkey said, "we are proud of where we stand, knowing we are weathering the storm quite well, in fact better than most top-tier institutions."
The drop in Penn State's research expenditures "has been delayed and somewhat blunted relative to our peers," Sharkey added. According to 2012 figures, the latest available, Penn State, which ranked 15th in federal funding that year, saw a 43 percent increase in federal funding for the period from 2007 to 2012, compared to 37 percent for other top-20 institutions. In 2011-2012, Penn State's federal funding grew by over 13 percent, the highest rate of any institution in the top 20, while the majority of its peers reported negative growth, closely mirroring declines in the federal support available.
Sharkey attributed this resilience to several factors, including a diverse and well-balanced research portfolio, a "strong and hungry faculty" and a strategy of cluster hiring in a variety of fields that enables the assembly of cutting-edge interdisciplinary teams that can successfully compete for multimillion-dollar awards.
In addition to federal support, industry and other private sources accounted for $100.9 million of Penn State's research expenditures in fiscal 2014, state sources $71.3 million, and internal funds, $139.7 million.
"Indicators suggest that federal funding for R&D is not going to increase substantially any time soon," Sharkey said. "Nonetheless there is some reason for optimism." He noted that the University's income from grants and contracts, which precedes expenditures, has risen slightly for the past two years. "This suggests a somewhat brighter picture in the years ahead," he said.