Speaker 1: So, how do research labs actually make money? So what I want to do in this video is really get into some of the details of where research labs actually make money and, you know, hopefully this is going to help you out if you're curious about that. So if you don't know me, I'm Professor Dave Maslach, I'm an Associate Professor of Innovation Strategy and Entrepreneurship and I created this whole Reciprocity Project to give back as much as I possibly can. And there are so many people that help me out that I want to pay the favor for to help you out. So this is actually a really real question that I had when I was in my undergrad and I didn't really know what the answer was. So I just want to give you a sort of a heads up and where research labs actually make money. Now, you know, I need to give you a caveat. I'm in a business school and the funding structure is a little different in a business school than it is in many of the other, you know, heavier sciences, natural sciences, for example, at an institution. So this is probably it's just different in terms of how funding happens. But you know, there's lots of similarities between what actually happens. So there's private and public sources of funding for research labs. So I'm talking about research labs at universities for the most part, at some sort of research institute for the most part. And depending on what country and lab you're participating in, they come from different sources and they come from, you know, a blend. Typically there's some sort of blend of sources that they get where you are funding, you know, the activities that are happening in the research lab from multiple different sources, but they come just in different ways. And you know, depending on what fields you're in, it really makes a difference. And there's not a great answer for, you know, what is the ultimate sort of combination of them, but just know that you can get these different sources. So private sources, these are things like charities and foundations where they might actually give, you know, large amounts of money. So a foundation might be, you know, maybe it's a Bill and Melinda Gates Foundation, for example, they might give a substantial amount of money to a lab to run something that they are interested in. So it's going to be very motivated by the donors themselves or the charities themselves or sometimes is motivated from them to sort of seek in those, you know, those questions or solve those particular questions. Sometimes so a lot of people think that it's actually a lot of high net worth individuals, but a lot of times regular everyday people, just normal people donate money in, you know, a matter of, you know, maybe it's 500 bucks, you know, 1000 bucks here and stuff. And, you know, that adds up over time as these sort of micro donations, I guess you can call them. And this is becoming more common, I would say with crowdsourcing and things like that, where people are looking for different sources to fund the different programs. In fact, there's, I think there's a couple of websites out there that you can fund your research project based on crowdsourcing. Not entirely, I don't think for the most part, it's just like every other sort of crowdsourcing project. But, you know, the funding isn't as, I mean, you're not going to be flush with money. It's mostly friends and family and stuff like that, that are donating to those things. And every once in a while, you might do something that is sort of a hit that goes viral and people pay attention to it, and then they want to fund that particular thing. There is sometimes you get royalties for products that you've actually developed or things that intellectual property that you've actually created. And so at some labs, they create something that's interesting, they commercialize it, and it gets sold, the intellectual property gets sold to, not necessarily sold, but there's a contractual agreement that the, maybe it's Pfizer, for example, uses this intellectual property and they get paid a royalty. I don't know, maybe it's, you know, it's typically at a university, I think it's pretty normal for the university to get 40% of the royalty, and then the lab might get the remaining, maybe they get, you know, 20% of the particular royalty that gets paid or 60% of the royalty that gets paid. And that goes and funds the research activities that are going there. I don't think for the most part, I don't think that that's a huge source of funding. So things have this distribution where some things get funded a lot, because they just sort of strike it rich. But most things are in the long tail, right? There's a lot of sort of activities that don't have that kind of funding from royalties. And sometimes they do services. So sometimes research labs will do some sort of service where they get paid to do that particular thing. You know, it might be that you do some consulting project or something for some other organization, and then you get funded that way to fund your research. But I think for, you know, even within the United States, I'm in the United States right now, I think a lot of sources and universities come from public money. And I am pretty sure at most labs, it's typically the largest source. And so public sources could be coming from, you know, grants, federal grants, like the NIH and NSF in Canada, SSHRC and NSERC, and then, you know, all the different granting agencies around the world. Britain has one, I'm blanking on their name. But, you know, all these different countries have funding sources where you apply for grants. And then, you know, you get if you win the grant, after you write this grant application, that's, you know, typically 30 pages, maybe longer, maybe less, depending on where you get the funding from and their requirements. And then they sort of evaluate it based on available funds and competing against others. Other labs evaluate it and sort of source the ones that are the best top ranking, and they give money to those particular projects. And so you might be part of that and you get funding that way. You know, that's a portion and depending on what field you're in, it could be a much significant more larger portion. So if you're doing something in chemistry, for example, make it a lot of federal funding that way. But I think, you know, I think some programs sort of varies in that and depending on what you're actually doing, right? So universities do fund labs, they give money to different labs, but a lot of that is for like personnel and infrastructure. So building the buildings, for example, the universities themselves will pay for a lot of that infrastructure. But there's a lot of different things that goes on in a lab that you have to pay for and fund, right? So graduate students sometimes are funded through various different sources, so you need to find funding for them. So sometimes, you know, but they still sometimes provide, you know, funding, you know, in the sort of public funding that way comes from either the state or province, or, you know, sometimes the federal government gives funding, funding for new infrastructure projects, for example, that you might get to build a new building, a new science building, for example. And then, you know, lastly, you might get grants from various different sources that you can participate in. And those are, you know, they could come from foundations, they could come from, you know, various different public sources. They could come from private sources, sometimes private corporations give grants. It comes in many different sources. And so you can come in and look at it. What you're trying to do when you create a lab is as you grow as a lab, what you're trying to do is piece together these funding sources to allow you to grow a little bit more and work on this project. And so some things that are very incredibly important, get a lot more funding than other things that, you know, based on what society determines is sort of more important, or the current environment determines what is more important, they get more funding than others. And so some things don't get that much funding. And then the university has to sort of pipe up and fund some of those things. But we as a society, we believe that those things are incredibly important. And they often are. The things that don't get, so this is a funny thing, the things that are difficult to fund because there's no direct commercializable, you know, there's no commercializable benefit in the immediate future. Often those things provide tremendous amounts of benefit in the long term. And we just can't put our fingers on what that actually means, right? So doing stuff in theoretical physics, yeah, you might get funding in theoretical physics. You know, there might be sources for funding and stuff, but it might be tough to get for some projects because they're just kind of really kooky. And people just don't see what the value is of working on that project or some sort of math thing, some new math formula, your mathematics, for example, combinatorics, and you're trying to figure out some new optimization algorithm and stuff like that. And maybe people might think that there is some value there, but maybe not. And so you have to do things where you scrape together money from different various sources to accomplish that particular thing, or you just rely on your own funds as a professor to do that particular thing. And, you know, we just have this sort of belief that this project that we're working on is going to provide benefit in the future, long run benefit of whatever that particular thing is. That's why professors actually do it. We believe that there actually is value in the thing that we're actually trying to do research on and develop. There often is, but we might not see it. But, you know, in the short term, we might not sort of realize it. That's what I'm looking at. If they sort of realize the outcome. But, you know, there is inherent value that we can see. And it just may take some long, long time to actually work on that particular thing. So public sourcing for funds is often a very good thing because it fills in the gaps. What we want is kind of like a mosaic in terms of funding sources. And the more the mosaic is, the more that we're sort of going to cover different various aspects of science that we can gather information from or discover and sort of discover things. So the more of a mosaic we have, the better off we're going to be in terms of funding various different things. There's so many different ideas in science that are difficult to fund from one particular source. So if we can have this giant mosaic of private sources and public sources and various different institutions and foundations and stuff, the more that we can actually accomplish things and get better insight into the world. So that's all I want to say with this video. Give me a thumbs up if you like it. Hopefully I answered your question. And good luck with all your projects. Take care and have a wonderful day. Bye.