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Growing industry-funded research when federal budgets tighten: a 12-month playbook for a research office

Andrew T. Flowers ·

Last month, a quarter of the provosts in a national survey said their institution is building more industry partnerships because federal research funding is falling. This edition is the 12-month plan I'd give a research office that's been told to grow industry-funded research by next year. It runs one quarter per phase of the partnership lifecycle.

The short version

Spend the first quarter finding out what industry already funds at your institution and deciding what you want to be known for, the second fixing the agreement path, the third building the habits that keep sponsors renewing, and the fourth measuring the results and reporting them to leadership. It takes an office that is willing to treat industry research as a portfolio it manages actively rather than a series of PI-led accidents.

Before the plan, an explanation of the numbers that make it urgent.

How many institutions are turning to industry, and why now?

In Inside Higher Ed's 2026 survey of 376 provosts, conducted with Hanover Research and published on 23 September, 24% said their institution is developing more industry partnerships in response to declining research funding. More of them said they were diversifying funding sources in general (31%), and 17% were expanding grant-writing support. The pattern: a quarter of provosts have named industry as the answer, and most of the rest have named "something other than the federal government" without yet saying what that is.

The reason isn't abstract. Nature's accounting of 2025, published on 20 January 2026, counted more than 7,800 NIH and NSF grants cancelled or suspended during the year, 5,844 at NIH and 1,996 at NSF, using the Grant Witness tally the piece relies on. Whatever happens to the next budget, the offices that lived through last year have learned that a single funder can change its mind, and this is what the institutional response can look like.

How large is the gap between what industry spends and what universities receive?

Business performed $722 billion of R&D in the United States in 2023, according to NCSES's Business Enterprise Research and Development survey. In the same year, business funded $6.2 billion of the research performed at universities, according to the Higher Education Research and Development survey for FY2023. Taken together, less than $1 of every $100 of business R&D is performed at a university. The two surveys measure different things (one counts where R&D is performed, the other who paid for university research), so this is a comparison of scale, not a market share. But the scale is enormous. Industry isn't a small funder that universities have already saturated. It's the largest R&D performer in the country, and universities are only involved in a sliver of what it spends.

Meanwhile the federal share of university R&D has been falling for years. NCSES's HERD series puts it at about 65% at its last high and most recently, at 55% of the $117.7 billion universities performed in FY2024. That's the share, not the dollars. Federal dollars grew over that period, but universities' own institutional funds grew faster, which means federal funding is not keeping up with the growth of R&D spending over time, and the 2025 cancellations landed on a share that was already shrinking.

Translation Box: industry-funded research

On the academic side: sponsored-research dollars from a company, counted in HERD under "business" and booked by sponsored programs as an award with a PI and an indirect-cost rate.

On the industry side: a line in the external R&D budget, often held by a business unit rather than central research, and judged a year later by one question: did it change anything we do?

In this playbook: both. An office that wants the first has to deliver the second.

What does industry get out of it?

Usually, less than either side would like, and that's the opening a well-run office can use.

The most-cited study of corporate-side outcomes is Pertuzé, Calder, Greitzer and Lucas in MIT Sloan Management Review (2010), a three-year study of 25 companies and more than 100 university projects. About 20% of all the projects they studied had an observable effect on the company, meaning a product, a process, or a decision that changed. Roughly half of the projects produced major research results, and 40% of those had an effect on the company, which is where "about 20% of all projects" comes from. The authors didn't conclude that the science was weak. The projects that made a difference were the ones where the company had assigned a project manager with the authority to carry results across organizational boundaries, where the company stayed engaged after the kickoff, and where someone had planned for what would happen inside the company when the results arrived.

Every one of those practices is owned on the company's side, but every one of them is also something a research office can design around from the university's side. You can pick partners whose problem is real, write the agreement so the results can move, and run the project so the company stays involved after the kickoff meeting. The four quarters below outline a plan to do exactly that.

Quarter one, Match: what does industry already fund here, and what should we be known for?

Inventory what industry already funds. Pull every active business-sponsored award, gift, consortium membership, and master agreement across the institution, by department, sponsor, PI, and dollar amount. Most offices don't manage this as one list, and the first reading usually changes the strategy. The sponsors tend to be fewer and more concentrated than anyone thought, three or four departments carry most of the volume, and a handful of PIs have been doing this for years without much of the office's help. Those PIs are the first people to interview, because they already know which companies come back and why.

Pick 3-5 technology areas to be known for. Not 30. An office can't market the whole institution to industry, and a company deciding where to place a research problem is looking for the place that's obviously the right one. Choose the areas where the inventory shows repeat sponsors, where the faculty bench is deep enough to survive one departure, and where a company could describe its problem in a sentence. Then write that sentence, because it's what the office's outreach, its web page, and its conference presence will say for the next year. If you want an outside view of where your bench stands, our technology area pages show what the public research record holds in a growing list of areas, from energy storage to drug delivery, and which universities and companies are most active in each.

Build the researcher profiles. A company scouting for help with a problem reads profiles, not department pages. For each of the areas, make sure the faculty have a profile that says, in plain language, what problems they work on, what they've done with industry before, and what they're open to. Our faculty survey for the R&D Management Conference (Flowers and Roadman, 2024) found that connections between faculty and companies "happen by chance and are personal," which is another way of saying connections didn't happen on purpose. Profiles are the simplest fix for that, and they're the first thing a company's scout checks after a conference conversation. On our Helikon platform, a researcher's publications, patents, and funding history are usually already there from the public record, so claiming the profile and adding the parts no database holds is an afternoon's work rather than a project.

Quarter two, Unite: how do we stop losing partners in the agreement negotiation?

Fix the agreement path. The slowest point in most university-industry relationships is the contract negotiation, and the office owns it. Map the current path from "a company said yes" to a signed agreement, using real dates from the last ten agreements. Most offices find that the elapsed time is mostly waiting rather than negotiating, and that the same common clauses cause most of the rounds of delays.

Put master agreements in place with repeat sponsors. The evidence here is specific. At five health campuses of one state university system, industry-sponsored clinical-trial contracts covered by a pre-negotiated master agreement took 39 days on average to finalize, against 73 days without one. That's a 47% reduction at the same institutions, through the same legal offices (Tran et al., 2017, n=581). The inventory from quarter one tells you which sponsors are worth a master agreement, and three to five of them, done this quarter, remove the slowest step for the partners most likely to renew.

Publish a position on IP and publication. Companies don't need the university to concede on IP. What they need is to know the university's position before they start, so their counsel isn't discovering it in round three. A one-page public statement of what the institution will and won't do on ownership, licensing options, publication review, and student theses saves weeks on every agreement. The positions themselves aren't exotic. In a survey of 107 academic medical centers, 96% accepted sponsor review of manuscripts before publication and more than 85% refused a sponsor veto (Mello, Clarridge and Studdert, 2005). Saying so in advance sets expectations, and our free Contract Red Flags Kit lists the clauses worth settling in that statement.

Quarter three, Steward: how do we keep sponsors renewing?

Build the engagement habit. The companies in the Pertuzé study that got value from university research stayed engaged after kickoff. The office can't make a sponsor show up, but it can make showing up easy. A standing quarterly review per sponsor, run by the office, gives the PI a place to report progress and the company a place to report what it's doing with that progress. The second half of that agenda is the one nobody schedules, and it's the one that produces renewals.

Put a charter on every new project. A governance charter signed at kickoff answers four questions: who decides what, how often the two sides meet, what counts as milestone progress, and where disagreements are escalated. Our default for that last one is one week to the project leads, four weeks to the steering committee, and eight weeks to the executives. We publish ours free as the Governance Charter. It takes a kickoff meeting to complete, and it removes the conflict from most projects.

Run a partnership health check. Ask both sides of every active partnership the same short set of questions, then score and compare the answers. Are the objectives still aligned? Is the status visible to both sides? Are decisions being made on time? Is the cadence being kept? Has anything been escalated? Would each side renew today? A partnership that scores badly in month four is recoverable, while the same partnership discovered in month 11 is usually a non-renewal. Our Partnership Health Check tool is built for exactly this: both sides rate the same 30 statements across six dimensions, and the workbook shows where the two views diverge and which dimensions need attention first.

Quarter four, Evaluate: what does the office track, and what does the provost hear?

Track a small set of measures, every quarter. Five measures fit on one page:

  • Industry-funded research dollars by department and sponsor, with the share of the institution's total research expenditure stated against its base.
  • The number of active industry sponsors, and how many of them renewed.
  • Days from "yes" to signature, by agreement type, with the share covered by a master agreement.
  • Health-check scores by partnership.
  • The number of faculty with an industry-ready profile in the named areas.

Report the base, every time. The provost survey tells you what your peers are doing, but it doesn't tell you what any of them achieved, and an office that reports "industry funding up 30%" without the base will be asked for the base in the meeting. Report the dollars, the share of total research expenditure, and the share that comes from the named areas. A small number stated with its base is more useful to a provost than a large one without it.

Decide what to renew, redesign, or exit. The fourth quarter is also when the office makes the portfolio calls for the next year: which sponsors get a master agreement, which partnerships get a redesign conversation, and which get a respectful close. The Evaluate phase exists so those decisions get made based on evidence rather than by default.

Where to start?

With your own institution's page. On the Helikon platform, every institution already has an organization page built from the public research record, and the free plan lets you filter researchers to your own faculty, see who's publishing and patenting in each of your candidate areas, and set up the first sponsored projects with their NDA, IRB, and contracts where the whole team can see them. That's quarter one's inventory and quarter three's charter habit in one place, and it costs nothing to start.

Start free on Helikon Labs

If you'd rather talk the plan through for your own office first, book a free 30-minute scoping call.

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