There’s a lot of discussion about the potential impact of the American Taxpayer Relief Act of 2012, otherwise known as sequestration. Federal funding plays a very significant role in Georgia Tech’s overall budget, particularly the research program. Steve Cross is executive vice president for research, and along with Robert Knotts, Georgia Tech’s director of federal relations, he’s been monitoring the situation in Washington very closely. While Georgia Tech doesn’t expect a dramatic immediate impact and there are no plans for layoffs or furloughs, reducing investments in research would produce long-term consequences for Georgia Tech, the state and nation.
Georgia Tech has approximately 4,700 employees who are supported in whole or in part by federal funds. Georgia Tech’s research program received a total of $484 million in federal funding for fiscal year 2012. This funding, which amounted to about 70 percent of our total research expenditures, helped support 2,600 graduate students, nearly 350 postdoctoral researchers and more than 3,000 research and academic faculty members. So the stakes for us are very high.
Our federal sponsors have told us to prepare for cuts of 7.9 percent in our defense-focused research, and 5.3 percent in other research. Based just on those percentages, we estimate that sequestration could reduce federal investment in our research program by approximately $40 million. We are not yet certain where the sequestration cuts may come, but we expect the impact to be more on future grants and contracts than on existing projects. Still, if these cuts are made, there will be consequences for our research program and the national innovation ecosystem it helps support.
Beginning last fall, we asked our principal investigators – faculty members who direct and manage individual research grants and contracts – to stay in close contact with their sponsors to understand how individual agencies will manage the sequestration. We have not yet received notification of any specific reductions, and if they do occur, it’s our plan to manage them on a case-by-case basis to minimize the direct effects on our students, staff and faculty.
In recent years, we have been working to diversify Georgia Tech’s research base beyond the federal government to include more partnerships with industry, which is part of our historic mission to support economic growth. We have also taken steps that we believe make us more competitive for the research investment available. Together with the tremendous ingenuity and expertise of our faculty and students, these steps have created a resiliency that should help lessen the effects of these expected cuts. At this point in fiscal year 2013, our research awards are $50 million ahead of where they were in fiscal 2012. Whether that trend can continue throughout the fiscal year is not known.
University research is a major driver of economic activity in our city, state, region and nation. Georgia Tech’s economic impact has been estimated at well over $2 billion per year. The impact of any cuts will be felt beyond their direct effects on students, staff and faculty. Investment in research produces discoveries and inventions that help drive the development of new products and new companies that create jobs and new economic activity. Any reduction in research activity will necessarily reduce future company formation, job growth and economic health.
We remain hopeful that leadership in Washington will act to minimize this negative impact, and we’ll continue to make the case that federal spending on research and education are investments in our nation’s future.
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