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PRICING OF RESEARCH: WHAT WILL THE MARKET BEAR?

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It has long been the practice of many competitive funding agencies to fund research at a level below full cost, and frequently to exclude salary costs. The implicit subsidy to beneficiaries has been a matter of concern to research performers as well as to government. More recently the greater emphasis given to competitive funding, reductions in direct appropriation funding, the setting of priorities by funding agencies which may differ from a research performer’s assessment of priorities and the imposition of external funding targets on research performers by government with the aim of strengthening ties with industry have changed the nature of the game. The commercialisation thrust associated with these changes has given the issue of research pricing greater priority. This paper considers a number of theoretical pricing issues against this background, including the relevance of marginal cost pricing and the impact of the marginal funding policy of granting agencies. A Commonwealth view of research pricing is then offered, based on recent work undertaken by a working party of the Coordination Committee on Science and Technology. The paper concludes with a discussion of CSIRO’s recent experience with research pricing and likely future directions for research pricing policy.

SKU: 0810-90288629163 Category: Tag:

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By Ralph Young

It has long been the practice of many competitive funding agencies to fund research at a level below full cost, and frequently to exclude salary costs. The implicit subsidy to beneficiaries has been a matter of concern to research performers as well as to government. More recently the greater emphasis given to competitive funding, reductions in direct appropriation funding, the setting of priorities by funding agencies which may differ from a research performer’s assessment of priorities and the imposition of external funding targets on research performers by government with the aim of strengthening ties with industry have changed the nature of the game. The commercialisation thrust associated with these changes has given the issue of research pricing greater priority. This paper considers a number of theoretical pricing issues against this background, including the relevance of marginal cost pricing and the impact of the marginal funding policy of granting agencies. A Commonwealth view of research pricing is then offered, based on recent work undertaken by a working party of the Coordination Committee on Science and Technology. The paper concludes with a discussion of CSIRO’s recent experience with research pricing and likely future directions for research pricing policy.

page: 173 – 188
Prometheus: Critical Studies in Innovation
Volume 12, Issue 2

SKU: 0810-90288629163

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