Similarities between the growth dynamics of university research and of competitive economic activities

Quantifying the dynamics of research activities is of considerable current interest, not least because of recent changes in research and development (R and D) funding. Here we quantify and analyse university research activities, and compare their growth dynamics with those of business firms. Our study involves the analysis of five distinct databases, the largest of which is a National Science Foundation database of the R and D expenditures in science and engineering for a 17-year period (1979-95) in 719 United States universities. We find that the distribution of growth rates displays a 'universal' form that does not depend on the size of the university or on the measure of size used; and the width of this distribution decays with size as a power law. These findings are quantitatively similar to those of business firms, and so are consistent with the hypothesis that the growth dynamics of complex organizations are governed by universal mechanisms. One possible explanation for these similarities is that the combination of peer review and government direction leads to an outcome similar to that induced by market forces (where the analogues of peer review and government direction are, respectively, consumer evaluation and product regulation).