1999 was a good year for Roland Green. That was the year he graduated from the UW-Madison with a Ph.D. in bacteriology and started NimbleGen Systems, a biotech company based on the federally funded research he did as a graduate student. NimbleGen was just purchased by pharmaceutical giant Roche for $272.5 million.
It's a story that seems apocryphal, a fable to encourage students to go to graduate school. But in Madison, it's the kind of thing that happens all the time.
"UW-Madison is viewed by many as being a leader in graduate education," says professor Tim Donohue, director of the training grant program that funded Green's research. "It's our graduate students who have generated the discoveries underlying technology for these start-up companies. It's the graduate students who are going to build the economic infrastructure of the future."
But a decline in growth in NIH funding has put the squeeze on research budgets, stirring particular concern for the university's legion of graduate students.
Between 1998 and 2003, the budget of the National Institutes of Health doubled, and the number of grants funded by the NIH jumped from around 27,000 to over 36,000.
This rate of growth has not been sustained. Yearly increases to the NIH budget have dropped from 15% to only 2% or 3%. 2007 marks the fourth year in a row that NIH budget increases have failed to keep pace with inflation.
In 2006-07, the UW-Madison - one of the nation's top research universities - received $276.7 million in NIH funding. This represents about half of all federal research funding to the university, and more than a third of the total spent on research. The NIH money is a major funding source for the biological sciences, including biochemistry, biology, bacteriology and genetics.
According to one study by Science magazine, the chance of an investigator's grant getting funded on the first try fell from 21% in 1998 to 8% in 2006. And the increased number of NIH grant obligations means funded researchers are routinely seeing their requested money cut by 10% or more.
That creates special problems for the UW-Madison.
"Basically, the entire university research engine is driven by graduate students," says Dr. Mike Culbertson, head of the new Office of Graduate Studies and Professional Development. "And because most of the funding for grad students in the biological sciences comes from the NIH, graduate studies is under threat from about every direction you can think of."
Since 1920, the UW-Madison has awarded more than 22,000 degrees to doctoral students in the science and engineering fields. The university also has nearly 300 students on NIH pre-doctoral training grants, among the highest number in the country.
"If a scientist has a plate over their desk from the University of Wisconsin, [everyone] knows they've been really well-trained," says Donohue. "Our reputation in graduate education definitely gives us the luxury of picking the cream of the crop."
The university's research excellence also boosts the local economy. More than 150 technology-based start-up companies came directly from work done in university labs. And numerous other science companies were drawn to the area because of its large population of highly skilled workers.
But waning federal dollars could change that. Last year, the NIH imposed limits on what pre-doctoral training grants can provide to cover student costs. While amounts vary by student status and department, funding per student consistently comes up several thousand dollars short. And the university is barred from using other federal funding to make up this shortfall.
Previously, much of the leftover cost was paid with state dollars. But these, too, are in short supply. Three decades ago, about 40% of the UW-Madison's total costs were funded by state sources. Today, less than 20% of its budget is paid by the state. And in terms of university research, state dollars cover only about 8% of the cost.
One obvious solution to the UW-Madison's graduate funding woes is to train fewer students. In fact, this is often what happens when money is tight.
"There is a legitimate balance between the priorities of funding graduate students and providing low-cost education for undergraduates," says Donohue. "Graduate students and graduate funding initiatives at state institutions are often not the highest priority."
Many UW researchers find this hard to take.
"It's the job of the administration and the Graduate School to fight for graduate education, regardless of the pressures on the budget," says Rick Gourse, a professor in the Department of Bacteriology. "I think deciding you're not going to train as many graduate students in the sciences because of the decreased funding levels is a mistake."
Culbertson agrees: "We have spent 40 years building up a reputation for graduate education in the life sciences, so if we lose the graduate students or shrink their numbers, we lose the engine that drives the research. If you look at getting funding as a pyramid, it all depends on the ones doing the research - the graduate students. If you decimate that level, the whole thing collapses."
Reverberations from this collapse could destabilize the local biotech industry, as the area becomes less attractive to technology-based companies. That would be especially tragic given that Wisconsin is poised to become a major player in the up-and-coming field of bioenergy.
"This is a critical time to be having a dialog about graduate funding," says Donohue, the newly named director of the new Great Lakes Bioenergy Research Center. "We have the ability in this state, with the proper investment, to become leaders in new fields like bioenergy and others on the horizon.
"If we don't invest now, we may lose not only our ability to move into these new areas, but also everything the state and the campus has built up over the last decades."