The micro Economics of a Research Group

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The (micro) Economics of a Research Group
Michael Brent Washington University
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What do you know?

• What are indirect costs?
• What is the indirect cost rate at WU?
• Who pays your tuition?
• What are typical benefit rates for faculty/staff?

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Why do we do it?

• Intellectual satisfaction
• Community
• You are surrounded by smart, ambitious,
  interesting people
• Common effort with you department
• International research community
• Autonomy
• Feudal system, not modern hierarchy
• Job security, solid income

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How is a research group like a small business?

• No money, you fold
• Critical start up period
• Need early success to raise more money
• Continuing operations is easier
• Personnel are key
• Recruit and hire smart, energetic people
• Successful start up requires very hard work, and
  flexibility to do many jobs

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How is a research group like a small business?

• Must find a market niche for your products
• Do something that no one else can or will
• Do something that others care about
• Success is rewarding
• What is the value of tenure?
• E.g. 75K guaranteed income over 30 years, about
  90K with benefits (constant dollars)
• At 5, cash equivalent is 1.8 million
• Have to work / get to work

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Your Products

• Research results
• Publications (conferences and journals)
• Visibility
• Respect in your research community
• Citations
• Public appearances
• Name recognition in your field (broader)
• Broader impact (business, general public)
• Successful students and protégés

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Stake holders their stakes

• Department, school, university
• Start up funds (angel VC)
• Salary commitment (insurance company)
• Revenue from IDC (stockholder)
• Reputation (donors, tuition pricing power)
• Your chair
• Standing, satisfaction (Chairman of the board)

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Stake holders their stakes

• Your students ( postdocs)
• Very low cost labor (postdocs less so)
• Intellectual stimulation
• Career potential
• Your staff
• Incomes, security, pleasant environment
• Yourself (CEO, CFO, COO, VP everything)
• Very hard work
• Rewards discussed earlier

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The Cycle of Academic Success
Infrastructure
Significant research results
Visibility (publications)
Good ideas
Security, Career opportunity
Good funding proposals
Funding
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Funding sources

• National Science Foundation (NSF)
• National Institutes of Health (NIH)
• Department of Defense (DOD, DARPA)
• Other federal sources (NASA, DOE, DOA)
• Private foundations
• Startup funds
• Other university funds
• For profit businesses (Monsanto, Boeing, )

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Good money?

• National Science Foundation (NSF)
• Typically 100-150/yr with IDC, 3 yrs
• Some restrictions, 2 months summer salary
• National Institutes of Health (NIH)
• Typically 175-250K/yr PLUS IDC, 3-5 yrs
• Almost no restriction, academic year sal OK
• Department of Defense (DOD, DARPA)
• Private foundations
• Startup funds
• Other university funds

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Good money?

• Department of Defense (DOD, DARPA)
• Can be big money
• Can be big hassle (meetings, restrictions)
• Private foundations
• Usually 50-75K/yr 1-2 yrs but can be more
• Startup funds
• 100k cash, 2 yrs summer, equip, RA
• Can keep forever!

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What does it cost?

• Small group
• 2 Ph.D. students, 1-3 undergrads, 2 mo salary
• Medium group
• 4-5 Ph.D. students, 2-4 undergrads
• 2 mo to 4 mo salary support
• Large group
• 4 Ph.D. students, undergrads
• 4 staff/postdocs/research scientists
• 7-8 mo salary
• 100 CPU cluster, 9 TB, CTS cost

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Managing the Finances

• See the 3 spreadsheets for
• Small group
• Medium group
• Large group