How has the Research Funding Model Changed Due to the Coronavirus Crisis?

With international student revenue impacted by the coronavirus crisis, what can institutions do to diversify revenue streams and fund critical research in the future?  

Across the globe, higher education institutions have historically relied on international student revenue to fund their research, among other revenue sources.  

With the coronavirus crisis severely restricting travel and reducing student mobility, many institutions can no longer rely on the strength of this revenue stream. 

In Australia, universities are forecast to lose up to AU$7.6 billion in revenue, which would usually fund research, primarily due to this drop in fee-paying international students. This will have widespread ramifications for the Australian research workforce, with an estimated 6,100 researchers expected to lose their jobs.  

To address this funding shortfall, the federal government announced their 2020 budget would include critical research funding for the higher education sector, with universities set to receive AU$1 billion in new funding to support research in 2021. 

Though some argue that the funding boost “will help stop some of the job losses, but nowhere near all or even half of them”, says Peter Hurley, an education-policy researcher at Victoria University in Melbourne. 

Government funding, grants, and partnerships with industry and other institutions will become increasingly important as the crisis continues, with the balance potentially shifting towards these revenue streams beyond the pandemic.  

The Australian Research Council reported that it received 11,446 applications last year for 2020-21 National Competitive Grants Programme funding, which was a huge increase on the 5,031 applications it received in 2019. 

In the US, institutions already receive most of their research funding from the federal government with it providing “roughly 53%, or US$42 billion, of the US$79 billion worth of research done on US campuses.” 

One Ithaka S+R report states that: “It’s because there is broad consensus that research conducted at US universities is absolutely vital, and a long-term national investment in the future, that the federal government supports over 50% of the research conducted at universities. The remaining external support usually comes from industry, non-government grants, foundations, university funding, charitable foundations, nonprofits, and state and local governments.” 

Unfortunately, this reliance on federal government funding does present its own unique challenges during the crisis with funding diverted to COVID-19 research, while little information is provided on the future of non-COVID-19 research.  

In Europe, most higher education systems rely primarily on public funding, as well as tuition fees, research contracts, philanthropy, and European grants.  

report by the European University Association states that this reliance could be an issue in coming years. “As the countries digest the economic consequences of the coronavirus crisis, there is a significant risk that public funding allocations across Europe will decrease in the next two to four years, when considering the enhanced competition for public resources across various sectors of the economy.” 

Whether institutions are relying on government funding or international student revenue, this crisis has highlighted the importance of diversifying revenue streams for both sustainable research funding and long-term financial success.  

To discuss how the research funding model has shifted and what your institution can do to address this, please reach out to our QS Consulting team 


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