MADISON – Even after the federal debt ceiling is raised, one thing is certain about federal spending over the next decade: There will be less of it than expected. To be precise, federal spending will drop by about $2.4 trillion from current estimates. That means a full range of programs, from social services to defense to academic research, are likely to feel the pinch.

For major research universities such as the UW-Madison, that could present a troubling scenario.

Year after year, the UW-Madison is among the nation’s leaders in attracting “sponsored” research, meaning research sponsored by federal agencies, private foundations, industry and, in small amounts, state government. In fact, the UW-Madison has ranked among the nation’s top five academic R&D powerhouses for more than 20 years running – with more than $1 billion in sponsored research from all sources in fiscal 2009, according to the National Science Foundation.

Because the UW-Madison has excelled over time at attracting merit-based grants from federal agencies such as the National Institutes of Health, it may become more vulnerable if federal research funding takes a hit. Perhaps the best research institutions will always do well under any circumstances, but it may also be a good time to start hedging some bets.

A recent report by the State Science and Technology Institute demonstrates why Wisconsin’s major research institutions – which also include the Medical College of Wisconsin and the UW-Milwaukee – should encourage more industry sponsored research.

According to SSTI, Wisconsin is below-average in attracting industry R&D dollars to its major research institutions. The state’s academic research institutions reported about $24.4 million in industry-sponsored R&D in fiscal 2009, which represented just 2 percent of total academic R&D spending in Wisconsin. There was about $1.23 billion in total academic R&D spending in Wisconsin in fiscal 2009, counting science, engineering and the humanities.

Wisconsin ranked 48th among the 50 states in its “share” of industry research spending as a percentage of the state’s total academic R&D. It ranked 28th in actual dollars spent. In both categories, Wisconsin fell behind neighbors such as Illinois, Indiana, Michigan, Minnesota and even Iowa.

What do those states have in their academic institutions that Wisconsin lacks? Nothing, when it comes to sheer expertise and range of scientific disciplines. However, Wisconsin may lack a great deal when it comes to making a persuasive case to industry.

Commission after commission at the UW-Madison has urged that industry research should be handled differently than federal R&D contracts, at least in terms of barriers to entry and overall paperwork. But a one-size-fits-all approach has persisted, discouraging businesses that believe they need to make too many stops to get their work done.

“Business goes to where doing business is easily facilitated,” said Carl Gulbrandsen, managing director of the Wisconsin Alumni Research Foundation, which is the intellectual property arm for the UW-Madison. “We haven’t always done a good job of that at Wisconsin.”

Other universities are figuring out better ways to enhance industry research, which only makes sense in an era when more companies are willing to contract for such services than keep them in-house.

The Ohio State University recently recruited a technology transfer director from the University of Utah to serve as vice president for commercialization. The University of Washington just recruited the University of Utah president as its new president – primarily because of his success at making connections with industry. At the University of Michigan, a decade-long push to improve industry R&D was featured in the Chronicle of Higher Education under the headline, “With federal support uncertain, university researchers look to industry.”

There are signs of change at the UW-Madison, where Chancellor Biddy Martin recently resigned and Interim Chancellor David Ward is filling that role until a national search for her replacement can begin. The No. 2 leader at UW-Madison, Provost Paul DeLuca, recently stressed the need for the campus to better capitalize on the potential for increasing its industry research contracts. In fact, DeLuca has asked that an Office of Industrial Contracting be established by the UW-Madison.

Also on line through the Wisconsin Institutes for Discovery is the private Morgridge Institute for Research, which opened early this year. It offers industry options to conduct research near the campus, but in a private setting. 

Wisconsin’s major research institutions already conduct top-flight research, especially for federal agencies and private foundation that know and trust their work. It’s now time to persuade private industry to do its R&D shopping here, too.

Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal.