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Should Applied Funding Go To Academia Or Startups?

There has recently been a subtle, but important, shift in the focus of government support for scientific research.

With NIH funding capped at 2012 fiscal levels, government programs have shifted support to applied & translational research, rather than traditional R&D platforms. The new “Big Data R&D Initiative”, for instance, will put $200 million into commitments for applied tools and techniques in biomedical research.

And while it’s certainly exciting to see federal funds go towards translational research, it is somewhat worrying to see how these funds are to be distributed. The NIH typically awards grants to academic groups with little commercial experience, and the new applied research funds are no different. The NHGRI, for instance, has awarded $20 million in grants to support the development of NGS data analysis software; but all grant recipients are academic labs with not a single startup or commercial partner.

As an entrepreneur myself, this brings up a series of concerns:

  • Quality: Will the resulting products of these grants be useful? In my experience, startups are simply more efficient at translating ‘needs’ to products. Because they operate on commercial incentives, startups are better at iterating to ensure their software development efforts fit their customer’s needs. In comparison, academic labs seem divorced from the end user, and have less willingness and/or incentive to engage in lean customer development processes.
  • Sustainability: Will the funded efforts actually be sustainable? Startups, as opposed to academic labs, often are better founded to generate sustainable businesses. If you look at other startups in the “Big Data R&D” space, like DNANexus or CDD, they are focusing on commercial business models to ensure longevity of their operations. Academic labs, on the other hand, are accustomed to basic research incentives that are divorced from commercial outcomes. Consequently they are more often reliant on continuous government funding for longevity.
  • Unfair / illegal competition: Existing startups such as NextBio and SolveBio are already developing solutions to large-scale applied data analysis. It would seem that some of the recent grants will fund efforts that essentially duplicate the work of these startups. Is this is really the best use of federal funds? Is it even legal given the federal government shouldn’t provide or support a service which can be procured through ordinary business channels?

A pointed case study is that of an $12.2 million ARRA grant, awarded to an academic consortium to create a social networking tool for scientists. After 3 years, the tool has not been widely adopted and it is unclear what impact (if any) it has had, while commercial startups tackling the same problem, such and Research Gate, have seen considerable traction (each with over 1 million users). Simply put, academic institutions do not operate at the same standards of speed, efficiency, or reproducibility as startups, who by contrast must optimize best practices to compete and ensure applied outcomes.

Rather than focusing on exclusive support for academic labs, the NIH and NHGRI should make greater use of public-private partnerships and SBIR grants that support commercial startups to achieve applied outcomes.  The 1000 Genome Project within the Big Data Initiative is a notable example of a public-private partnership, where the NIH is partnering with Amazon Web Services to provide data sets for free to researchers. Similarly, SBIR grants have supported commercial startups that have, in turn, laid the foundation for ground-breaking advancements in scientific research. The development of Illumina’s BeadArray technology was funded by a $21 million SBIR for instance, which has since become an industry standard.

Similar support for commercial startups within current initiatives could lead to much more sustainable applications in Big Data R&D.


[about_box image=””]Elizabeth Iorns is Co-Founder & CEO of Science Exchange. Elizabeth conceived the idea for Science Exchange while an Assistant Professor at the University of Miami and as CEO she drives the company’s vision, strategy and growth. She is passionate about creating a new way to foster scientific collaboration that will break down existing silos, democratize access to scientific expertise and accelerate the speed of scientific discovery. Elizabeth has a B.S. in Biomedical Science from the University of Auckland, a Ph.D. in Cancer Biology from the Institute of Cancer Research in London, and conducted postdoctoral research in Cancer Biology from the University of Miami’s Miller School of Medicine where her research focused on identifying mechanisms of breast cancer development and progression.



Elizabeth Iorns

CEO and Co-Founder