Hunt for Cash Sends Colleges Overseas

China has sustained double-digit growth in R&D budgets for nearly a decade. India isn't far behind. Countries like South Africa and the United Arab Emirates also invested heavily in science and technology initiatives, according to the OECD's Science and Technology Outlook 2008.

In the U.S. it's a different story. Although the U.S. private sector is spending more on R&D projects, it is not spending those dollars in the same places it did a few years ago. In 2001, for the first time in nearly 30 years, industry funding for academic research in the U.S. fell. Then it fell for three years in a row. In 1993, 179 of the top 200 academic institutions received more than 10% of their funding from industry. By 2004, only 101 universities received 10% of R&D funds from private sector.

Although industry funds have stabilized in the past two years, the federal government in 2006 failed to increase funding enough to keep pace with inflation for the first time since 1982. And yet in 2007 the academic sector increased spending levels more than any other R&D-performing sector. It has done so--at least in part--by attracting foreign investors like Portugal.

"The motivation for many of these collaborations probably has more to do with being keyed into knowledge networks than achieving basic research objectives," said Philip Auerswald, a professor of public policy and innovation at George Mason University. "Large investments in specific institutions can make sense in certain circumstances if they allow researchers to tap new ideas and approaches and so forth. The insights and ideas that drive innovation systems are often discovered in larger knowledge networks. Mature institutions have developed networks of knowledge that foreign institutions like Max Planck want to tap. These are different types of R&D investments than we've seen."

While these collaborations may shape the evolution of science and technology over the longer term, the nation's economic prospects hinge on far more near-term competitive outcomes. The U.S. has been a net exporter of intellectual property-related services since the early 1990s, but rising imports have outpaced exports for several years, according to an ongoing study of data from the U.S. Bureau of Economic Analysis (BEA), data by members of the National Science Foundation, and the U.S. Department of Commerce.