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As America pursues economic growth and other national goals, its research universities have emerged as a major national asset — perhaps even its most potent one. This did not happen by accident; it is the result of forward-looking and deliberate federal and state policies. These began with the Morrill Act of 1862, which established a partnership between the federal government and the states to build universities that would address the challenges of creating a modern agricultural and industrial economy for the 20th century.

The government–university partnership was expanded in the 1950s and 1960s to contribute to national security, public health, and economic growth. Through this expanded partnership, basic research — the source of new ideas for the long term — would be increasingly funded by the federal government and largely concentrated in the nation’s research universities.

This partnership, which over time grew to include industry and philanthropy, has led to significant benefits for America’s economy and quality of life. Lasers, radar, synthetic insulin, blood thinners, magnetic resonance imaging (MRI), computers, and rocket fuel are among the countless innovations in which university research has played an essential role. And talented graduates of these institutions have created and populated many new businesses that have employed millions of Americans.


American research universities are widely recognized as the best in the world, admired for their education and research. They have the potential to drive innovation in areas important to America’s future, including health and medicine, energy security and efficiency, education, and defense and homeland security.

Yet research universities now confront critical pressures, including unstable revenue streams, demographic shifts in the U.S. population, changes in the organization and scale of research, and shifting relationships between research universities, government, and industry. Research universities also face growing competition from their counterparts abroad. While U.S. institutions have long attracted outstanding students and scholars from around the world who have contributed substantially to our research and innovative capacity, other countries are rapidly strengthening their institutions to compete for the best international students and for faculty, resources, and reputation.

With these developments in mind, we have identified a set of specific challenges and opportunities that a reasoned set of policies must address in order to produce the greatest return to our society, our security, and our economy:

• Federal funding for university research has been unstable and, in real terms, declining at a time when other countries have increased funding for research and development (R&D).

• State funding for higher education, already eroding in real terms for more than two decades, has been cut further during the recent recession.

• Business and industry have largely dismantled the large corporate research laboratories that drove American industrial leadership in the 20th century (e.g., Bell Labs), but have not yet fully partnered with research universities to fill the gap at a time when the new knowledge and ideas emerging from university research are needed by society more than ever.

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