Carolina as a research powerhouse

The University’s research enterprise has seen remarkable growth in recent decades. Here’s a look at the numbers and what they mean.

Photo illustration showing the outline of the state of North Carolina against a blue background. A photo inside the state borders shows two mean on a boat in the ocean, one holding a diver's air tank.

The Well devotes this installment of Behind the Numbers to Carolina’s research enterprise in honor of UNC Research Week.

Carolina is a billion-dollar research university.

You probably knew this already, but what exactly does that mean? What gets counted in that billion dollars? Who’s taking the measure? In terms of research dollars, how did Carolina stack up 10 and 20 years ago? (Spoiler alert: The growth has been extraordinary.) What accounts for the growth, and why does it matter?

The Well answered these and other questions with the help of Don Hobart, associate vice chancellor for UNC Research.

First, a few distinctions.

All sorts of research

The research enterprise at Carolina involves many academic disciplines, those in the natural sciences but also the social sciences, arts and humanities. In fact, the largest research award ever received by Carolina was for MEASURE Evaluation, a five-year global survey and capacity-building program run out of the Carolina Population Center. That award, funded by the United States Agency for International Development, totaled $232 million over five years. It ended in 2020, but work continues at Carolina on a series of follow-on USAID projects.

Awards versus expenditures

Research funding from an external source — the federal government or a state government, nonprofit organization, business or other source — is often referred to as a grant or award. For budgeting purposes, the University tracks grant proposals and awards received. But when it comes to ranking universities and colleges, a different measure is used: research expenditures. That’s because the ranking is done by the federal government, and a list of expenditures is what the federal government requires.

Each year, more than 900 universities and colleges in the U.S. and outlying areas add up a prescribed list of acceptable research expenditures and report them to the National Science Foundation, which Congress charged with tracking how the nation’s research enterprise is spending its money and where. The NSF publishes the results in the Higher Education Research and Development survey. The HERD survey helps federal, state and academic planners set future R&D funding priorities. It also lets schools know how they performed relative to their peer institutions. (See “The HERD survey: What gets measured?” below)

In the most recent HERD survey, Carolina ranked 6th in the amount of research expenditures that came from the federal government ($721 million) — an objective measure that provides an “apples to apples” comparison among universities. It ranked 12th in the broader category of total research expenditures ($1.15 billion). That was for fiscal year 2019.

But why expenditures and not awards?

In a word, objectivity. A list of expenditures provides an actual snapshot in time of what research activity took place at any given university. But that leaves a time lag. The HERD survey is completed annually for a given fiscal year and is due by the end of January of the following year. The HERD survey for 2020 expenditures is scheduled to be released in December 2021.

“It’s essentially an after-the-fact measure,” said Hobart. “You spend the money. You tell the NSF how much you spent, and they do the report. As soon as the next year is done, they’ll get to work on that one.”

FY21 Research awards by source: federal sponsors (69%), Education and research institutions (10%), Foundations (6%), Business and industry (6%), NC State government (4%), Nonprofits (3%), Other (1%).

Though research expenditure totals lag by more than year, the University tracks awards to give a snapshot of current research funding. (Courtesy of UNC Research)

FY21 federal breakdown of research funding: National Institutes of Health (73%), Department of Education (8%), National Science Foundation (6%), Department of Health and Human Services (5%), Department of Defense (3%), Agency for International Development (3%), Department of Energy (1%), EPA (1%), all others (2%).

(Courtesy of UNC Research)

The big picture

Measurement aside, there’s no doubt that Carolina has become a research powerhouse. Carolina surpassed the billion-dollar mark in research expenditures in FY 2016 and has hit that mark every year since.

The trajectory over the past several decades has been remarkable, Hobart said. In 1998, total research funding barely topped $300 million. That figure has tripled in 23 years. “The role of research at the University relative to the rest of the activities was nothing compared to what it is today,” he said.

Research funding and the Carolina budget: Graph charting research awarrds, state appropriations and aid, and tuition and fees from the year 2000 to 2020. Tuition and fees climbed steadily from around $100 million in 2000 to a high of nearly $600 million in 2019, with a slight drrop in 2020; state appropriations and aid began at $400 million in 2000 and rose and fell to reach around $520 million in 2020; Research awards began just under $400 million in 2000 and climbed to moer than $1 billion in 2020.

(Courtesy of UNC Research)

How did Carolina become a research powerhouse, and why does it matter?

The answers, of course, are vast and complicated. But Hobart noted a few key factors.

“One thing I would point to is the state’s investment,” he said. “We’re a public university. The taxpayers’ investment and the bond referendums have made it possible for the University to expand facilities and hire faculty. One of the major drivers for success in research are faculty members. Whether it’s one person or a team in a lab, the only way you’re going to get research funding is for someone to take the initiative to apply for it. That initiative comes from the faculty.”

Facilities and faculty go hand-in-hand, he said, since a faculty member’s success in winning a research award hinges on the equipment, facilities and infrastructure they have to conduct the research. “So the initial investments that the state makes in both have been integral to the success and the ability of the University to grow and expand the research enterprise. And as sponsored research funding grows, so does our ability reinvest our own resources to support and attract top faculty. It’s a virtuous cycle.”

Timing also helps. At the moment, “there’s a lot of money being put into pandemic response and understanding the nature of viral disease,” Hobart said. “The investments that the state has made and that the University internally has made with its own revenues have put us in a position to take advantage of these current opportunities.”

For example, Hobart points to the investment the Office of the Vice Chancellor for Research made through its Creativity Hubs program in UNC School of Medicine Associate Professor Nat Moorman’s ID3@UNC initiative to develop broad spectrum antivirals. That funding, which began before COVID-19 emerged, enabled the University to launch the Rapidly Emerging Antiviral Drug Development Initiative, or READDI, in response to the current pandemic. “That’s an example of an internal investment we made that is paying off.”

“The state invests heavily in not just UNC-Chapel Hill but also NC State and other universities because we provide the workforce for the state economy, but also because our institutions are themselves able to secure these large, externally funded awards, which have the benefit of developing new answers to problems that are facing the state and the people.”

Nine dollars out of every $10 Carolina’s research enterprise bring in come from out of the state. That research often leads to new technologies and spins off businesses that become part of the state economy.

“It’s sort of like the state primes the pump with the funding that it provides the institutions,” Hobart said, “and that makes it possible to secure the research awards that drive the research enterprise and ultimately grow and attract new industry and thousands of jobs for North Carolina.”

The HERD survey: What gets measured?

The NSF asks for R&D expenditure reports in the following categories:

  • Basic research. Experimental or theoretical work undertaken primarily to acquire new knowledge of the underlying foundations of phenomena and observable facts, without any particular application or use in view.
  • Applied research. Original investigation undertaken in order to acquire new knowledge. It is directed primarily towards a specific, practical aim or objective.
  • Experimental development. Systematic work, drawing on knowledge gained from research and practical experience and producing additional knowledge, which is directed to producing new products or processes or to improving existing products or processes.

The following R&D expenditures qualify:

  • Salaries, wages, and fringe benefits. Includes compensation for all R&D personnel whether full time or part time, temporary or permanent, including salaries, wages, and fringe benefits paid from institution funds and from external support.
  • Software purchases, noncapitalized and capitalized. Includes payments for all software, both purchases of software packages and license fees for systems.
  • Capitalized equipment. Includes payments for movable equipment exceeding the institution’s capitalization threshold, including ancillary costs such as delivery and setup.
  • Pass-throughs to other organizations. The subrecipient for an award carries out the work but receives the funds from a pass-through entity rather than directly from the original funding source. Subrecipients tend to be the coauthors of publications, writers of technical reports discussing findings, inventors and similar. Vendor relationships were not included.
  • Other direct costs. Other costs that do not fit into one of the above categories, including (but not limited to) travel, tuition waivers, services such as consulting, computer usage fees, and supplies.
  • Indirect costs. Includes both recovered and unrecovered indirect costs.