The UK is not alone in trying to find the best way to fund and carry out research. The Times Higher looks at how other countries are tackling the problem.
The historic division of Russian higher education between prestigious academy of science research institutes and classical universities where teaching is often considered more important than research, is breaking down under the pressures of modernisation and the demands of business.
Moves to increase the pace of mergers between research academies and top-flight universities to create a new generation of "centres of innovation" begun under Vladimir Filippov, former Education Minister. They are being accelerated following reforms that have created a new Ministry of Education and Science.
President Vladimir Putin's reform of higher education is intended to fuel progress towards ambitious targets outlined two years ago in a ten-year plan. It refocuses national targets in scientific and technological research to more specific economic aims.
"The division of academic science, industrial science and higher education science impedes development and hampers the integration of science and education," said Mikhail Strikhanov, who was in charge of the mergers scheme as Deputy Education Minister under Mr Filippov until his redeployment in March.
"Combining the sciences will help facilitate the successful commercialisation of the results of scientific research and experimental developments. Putting together a national innovation system is one of the most important tasks of current economic policy in Russia."
Rationalising the use of scarce research resources not only improves science, but will help attract back to research the brightest researchers, who have fled the underpaid, under-financed sector in droves.
More than 200 specialised joint academy and university centres of innovation have already been established, and creating a unified policy for education and science is seen as one of the key aims of the new Ministry of Education and Science, Dr Strikhanov added.
Combing the efforts and aims of pure, applied and university-based scientific research should also facilitate greater international cooperation, officials hope.
The innovation centres, although representing only a fraction of more than 1,600 higher education institutions in Russia, will develop a leadership cadre to cover the entire system. This will help overcome the chaos in the sector, where currently 22 separate ministries and state agencies fund and run universities and research institutes.
The budget for education and science is a priority for President Putin.
Currently standing at less than 3 per cent of gross domestic product, it is set to increase to 4 per cent under the ten-year plan. Annual spending of just under 54 billion roubles (£1 billion) on science - where research and development spending accounts for 0.3 per cent of GDP - is also set to rise.
The Russian Academy of Sciences is behind the mergers scheme. Valery Kozlov, vice-president of the academy, said meeting the aspirations of a new generation of scientists was essential.
He said: "Science graduates want to make their careers in science, but in well-equipped prestigious research centres, with modern computer and internet facilities and access to the latest world literature and journals."