Administration Costs in the Management of Research Funds; A Case Study of a Public Fund for the Promotion of Industrial Innovation

Research funding agencies routinely use a proportion of their total revenues to support internal administration and marketing costs. The ratio of administration to total costs, referred to as the administration ratio, is highly variable and within any single fund depends on many factors including the number and average size of projects and the overall efficiency of the funding agency. In this study, the standard agency activities have been identified and used to develop a model of administration costs against expected outcomes. In particular, the model has been designed to estimate the optimum portfolio success rate and administration ratio as a function of a range of key input variables including the project size, the complexity of proposal evaluation and project management, the risk tolerance of the sponsor and the targeted research domain.