Public sector research - core policy instruments - competitive R&D project grants

 

 

Competitive R&D project grants are funding instruments for public research where researchers based in research universities and PRIs obtain public funds on a competitive basis. Together with discretionary organisational funding (block grants), where public resources are allocated directly to institutes according to various criteria (e.g. formulae, performance indicators, or budget negotiations), competitive R&D project grants are the main funding instruments for public sector research. While block grants usually tend to ensure sufficient public financial resources for research institutes in the long-run, competitive R&D project-based funding regimes put more emphasis on the outcomes and quality of the research performed by researchers in a shorter-run.

 

Broadly, what activities and outcomes do competitive R&D project grants seek to influence?

Given their prevalence, competitive R&D project grants typically influence all of the activities and outcomes associated with public sector research, depending on the criteria for funding, e.g. excellence, relevance, collaboration, etc. Such grants, however, make their biggest contributions to supporting the scientific recordR&D collaboration and technological development, reflecting in part the often strategic nature of this type of funding.

 

How do competitive R&D project grants have an influence?

Competitive R&D project grants seek to rectify several failures in research systems, including a lack of strategic orientation of research, out-dated patterns of research specialisation, and too few incentives for researchers to collaborate or to engage in certain types of activities:

  • In most OECD countries, the funding organisations providing competitive R&D project grants use different mechanisms to influence the nature of research performed by research universities and public research institutes. The first mechanism consists of broad calls for investigator-driven, bottom-up proposals in which researchers apply for funding. This mechanism is often used by research councils to support scientific excellence. A second one is for funding organisations to dictate predefined areas in which researchers can apply. A third mechanism offers funding for predefined research projects.
  • Funding organisations providing competitive R&D project grants can dictate a set of requirements that recipients must fulfil to benefit from those grants. For instance, research universities may be required to collaborate with the business enterprise sector, including SMEs, in order to increase university-industry linkages, or with public research institutes from other countries to foster international R&D collaboration.
  • Competitive R&D project grants can be a means for funding organisations to influence the diffusion of new knowledge in the economy as whole. The latter can require recipients of such grants to provide them with an ex ante impact assessment or an ex post dissemination strategy. Furthermore, funding organisation can establish specific rules governing intellectual property rights resulting from the funded research.

 

What factors should be considered when implementing competitive R&D project grants?

Several factors should be considered when implementing competitive R&D project grants:

  • Requisite capabilities: both research performers and funders must adopt certain behaviours and acquire particular capabilities for competitive R&D project grants to be used successfully. Research performers need to be able to respond to competitive calls and have the incentives to do so. The latter may be weakened by too generous discretionary organisational funding, for example. As for funding organisations, they should be able to articulate research needs and to validate research quality, ex ante and ex post. Both articulation and validation require close cooperation with the research performing community.
  • Mix of block and competitive R&D project grants in public research sector: a rise in the share of competitive R&D project grants in total public funding in many OECD countries over recent decades has raised concerns about an excessive emphasis on short-term, often low-risk projects and away from longer-term fundamental research. There are also concerns about whether this trend negatively affects research institutes’ capacity to invest in infrastructure. It is hence important that funding organisations continue to provide block funding to give research universities and public research institutes a certain degree of autonomy in the selection of their research and to allow them to build up expertise in new fields.
  • Concentration versus fragmentation: competitive R&D project grants, if awarded largely on the basis of established notions of excellence, risk overly concentrating resources in a few centres of excellence and stifling the emergence of new centres (‘Matthew effect’). On the other hand, such grants might also be too thinly spread across the research system, providing insufficient critical mass of resources to yield satisfactory research outcomes.

Public sector research

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   Activities and outcomes

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   Core policy instruments

Discretionary organisational funding

Competitive R&D project grants

Support for R&D infrastructures

Centres of excellence

Collaborative R&D platforms

Technology platforms

Cluster initiatives

Science and technology parks

University-industry linkage schemes

PhD studentships

Post-doctoral fellowships

Inter-sectoral mobility schemes

Risk capital measures in support of spin-offs

Entrepreneurship training schemes

Technology diffusion schemes

Innovation vouchers

Technology incubators

 

 

 

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