Could Crowdfunding Stem the Flow of Government Investment?

By Ryan Weeks on 21st January 2014

Equity Crowdfunding

Joe Cox, principal lecturer in Economics at Portsmouth University, has warned that academic crowdfunding may lead to a decline in government investment.

Could Crowdfunding Stem the Flow of Government Investment?

Crowdfunding has already made a mark on the education sector. But where most see it as a method of complementing existing fundraising mechanisms, Cox warns that government may see crowdfunding as a reason to cut their own research expenditure.

In a speech given at the Innovation in Enterprise Funding: University Crowdfunding conference, on January 17th, Cox warned:

“If we accept that crowdfunding does potentially have a role to play in backing projects of academic research then we need to ask some very serious questions about how this fits in with the existing landscape for funding academic research.

“You have a very real risk that crowdfunding will be seen, particularly by politicians, as a pure substitute for traditional funding streams.

“In other words, if people are willing to get behind and back particular projects out of their own pockets, we can cut back on the level of public funding we devote to university research.”

Dr Cox leads a team that secured a £750,000 grant from the UK’s Engineering and Physical Sciences Research Council in order to further research the intricacies of crowdfunding.

Cox alluded to the point that whilst some of the more sexy research questions may draw the favor of the crowd, dryer topics – though no less academically valuable – may struggle to gain the same traction. He also sees crowdfunding as a useful method of connecting academics to the public. Cox’s perspective is that crowdfunding can serve as a useful additive to existing methods of fundraising in education, and we agree. Some research projects will set fundraising targets which, frankly, the current academia-focused crowdfunding platforms cannot account for alone.

“I don’t think there is a scenario where crowdfunding can completely replace existing funding,” concluded Cox. I think the involvement of crowds and crowdfunding is exciting and offers great potential [for] research that has academic value but that also captures the public imagination.”

Comments

AltFi Amsterdam Summit 2018

AltFi is returning to Amsterdam for its second annual Summit in the city. The inaugural event last year was a roaring success, with key figures from across Continental Europe's alternative finance and digital banking sectors highlighted. These included Jeroen Broekema, managing director of Funding Circle Netherlands, and Mieke van Engelen, head of innovative partnerships at ABN AMRO's standalone lending platform, New10.

5th November 2018