"Research is closely tied to the educational process and thus central to the university's ability to prepare both undergraduate and graduate students for the roles they will play as innovators in a wide range of fields," said S. Jack Hu, U-M interim vice president for research. "Last year's results show that U-M remains among the top research universities in the world."

Over the last year, the university's success in winning contracts from external sources rose, but value per award declined. The total number of research contracts awarded increased by 4.1 percent, but the total dollar value dropped by about 16 percent. To help strengthen the pipeline, U-M faculty boosted the number of proposal submissions by almost 2.7 percent in fiscal year 2014, with an increase of more than 12 percent in the requested dollar value.

Funding from the U.S. Department of Defense was up by $3.2 million (4.3 percent), and support from the National Aeronautics and Space Administration rose by $16.9 million (79.7 percent), largely due to a major new long-term award to develop a satellite system to improve weather prediction.

Overall, federal sponsorship accounted for 57 percent of the total research volume at U-M, down from 61.5 percent in the previous year. The majority of this decline resulted from a drop of 13.4 percent ($68 million) in funds from the National Institutes of Health. The decline in NIH funds is mostly due to the decrease in funding after a major infusion of short-term funding under the American Recovery and Reinvestment Act of 2009.

Some of the major awards received last year show the diversity and scale of research at U-M. They include a $5 million award from the Michigan Economic Development Corp. to support the Battery Fabrication and Characterization User Facility, a space developed in cooperation with MEDC and Ford Motor Co. to enable industry and university researchers to collaborate on developing cheaper and longer lasting energy storage devices. A $10 million grant from NIH supports research on the use of advanced imaging techniques to help evaluate the effectiveness of cancer therapies.

According to figures from the National Science Foundation, total federal research funding at the end of fiscal year 2014 was $67 billion, the same level in constant dollars as it was 10 years previously.

"Federal support of research has been central to the productivity of our nation's universities," Hu said. "The lack of growth in constant dollars of these funds poses a serious challenge to the pipeline of ideas and talent that drives our economy and our quality of life."

To help compensate for the stagnation of federal funds, the university has been stepping up its efforts to diversify its sources of research funding. In fiscal year 2014, research support from nonfederal sources, including industry and foundations, was up by 6.25 percent, to a total of $124.4 million.

"U-M is well positioned to compete for existing funds as well as to develop new sources of funding," Hu said. "Moving forward, we will draw on our inherent strengths to build new partnerships with government, industry and academia in the U.S. and around the world to sustain the breadth, excellence and impact of our research enterprise."

A copy of the Annual Report on Research: FY 2014 Financial Summary, produced by the U-M Office of Research is online at myumi.ch/LBK1J.