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.
Italy's universities and research institutes protested at the creation earlier this year of the Instituto Italiano di Technologia (IIT).
With an annual budget of €100 million (£66 million) and headquarters in Genoa, it was presented by the Berlusconi Government as the new nerve-centre of Italian research, "Italy's MIT".
But objectors argue that, given Italy's chronic shortage of resources, the money would be better spent on revitalising the best existing facilities.
Figures show that research and development spending in the state and private sectors combined has slipped to 0.7 per cent of gross domestic product, compared with 0.9 per cent in 2001 and a European average of 2 per cent. Government promises in 2001 that the proportion would rise to 1 per cent in 2006 and 2 per cent in 2008 appear unlikely to be fulfilled.
State funding for research is channelled to universities and institutions such as the National Research Council (which runs research centres in many fields), the Italian Institute for Nuclear Physics and the National Authority for Alternative Energy. There is little crossover of researchers between universities and the other institutions. The resources are controlled by the ministry, and therefore by the Government.
If the state spends only 0.4 per cent of GDP, the private sector spends even less, preferring to buy patents abroad rather than investing in its own research. Many of the best young researchers go abroad. Only about 1 per cent of researchers in Italy are foreigners, compared with 33 per cent in the UK, Switzerland and Belgium.
Mario Pianta, professor of economics of innovation at Urbino University, said: "In the 1980s and 1990s, many huge state corporations were privatised and closed down their labs. The big drug companies, which once spent a great deal on research, have been taken over by multinationals that do their R&D in other countries. The chemicals industry, once a cornerstone of Italy's economy, has virtually ceased to exist."
The small spend compared with the UK or France was because the state had to spend more than 13 per cent of the budget to service a national debt of 110 per cent of GDP, Professor Pianta added.