Boosted by revenue from lotteries and tobacco company settlements, state-financed basic research in the life sciences is soaring. The goal of such funding is usually to create wealth by attracting federal and private money. But this strategy raises difficult questions about how best to measure research outcomes, policy specialists say.

At least 17 states have directed tobacco settlement money into research and all but three of them are focusing on fundamental studies rather than direct commercialization, observes Walter H. Plosila, vice president of public technology management at the nonprofit Battelle Memorial Institute, a technology developer in Columbus, Ohio. For example, Michigan has a $1 billion life sciences research initiative, Florida is spending $1.7 billion on biomedical research, and California has put into place a competitive program to fund its universities in a variety of research fields. However, Plosila warns, "The federal government is hardly a model for trying to...

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