Could the rise of crowdfunding impact on the type of research being undertaken?

2 mins read

From hoverboards to a flexible solar 'cloth' to harvest the sun's rays, a growing number of technology projects are turning to – and getting – financial backing via crowdfunding, a financial technique that works by pulling together small amounts of investment from a large number of individual investors usually via an online platform. Crowdcube, Seedrs and Kickstarter are examples of crowdfunding providers in the UK.

A few years ago, crowdfunding was seen as a last resort for companies looking for funding. It was seen as a home for the 'desperate' and analogous to 'online dating', something people did, but didn't really talk about. Today that perception has gone. Bill Gates talks of it as a solution that 'helps close the gap for potential and promising, but unfunded projects'. Many would argue that crowdfunding has come of age, offering a potential new source of money for both start-ups and established businesses. Crowdfunding research organisation Massolution claims the technique raised $5.1billion alone last year and the latest figures from Nesta UK suggest it was worth £84million in the UK last year. But while its proponents argue that crowdfunding has many benefits, there are those who have raised concerns about its possible impact on science and research in general, let alone worries over the weak regulatory environment in which it operates. Dr Joe Cox, an economist from the University of Portsmouth, while welcoming researchers asking members of the public to back their projects by making a donation, has said that it could be viewed by government as a way of cutting future spending. According to Dr Cox, topics perceived as 'drier' may have real problems attracting funds from the public, even if they are valuable academically. He warns that this could have a significant impact on certain fields of research and could 'undermine the innovation cycle'. At a time when the UK Government is presiding over a science budget which is declining in real terms, this has to be a concern. So could crowdfunding as a mechanism for supporting research actually change the shape of the science research being undertaken? It seems obvious that projects that appeal to the public and that are easily explained to them will be able to obtain funding more readily. Investors will be giving money to what they like and understand. The Pebble Watch is a case in point. A new piece of technology, its developers were able to raise millions of dollars to support its development and launch. "The Government has broader responsibilities," says John Cridland, director general of the Confederation of British Industry. "Public funding of research and development is crucial in the development of new products, processes and services in order to fuel economic growth and which for businesses may be too risky or costly to undertake." Public funding has a vital role in underpinning investment in research into 'blue-sky' or future technologies. A good example of this is graphene. It is highly unlikely that the original research would have attracted the attention of crowdfunding investors unlike, in all probability, the products with which it is now being associated –from touchscreens to more efficient phone chargers. All forms of funding should be welcomed, but there has to be a concern that during a period of austerity the Government may look to crowdfunding as an excuse to reduce its financial commitment to key research and development into new technologies and materials. So, while crowdfunding has a role to play but it should be complementary to existing funding strategies, otherwise the UK might just miss out on significant new discoveries.