I'm not sure it's more funding, as much as the way it's doled out. The idea with the way funding has shifted was indeed (in part) to make academia more "real-world" and competitive. Instead of a university getting a big block grant from the NSF, or researchers getting unrestricted funding directly from their university's budget, as used to be common, individual researchers apply for competitive 3-year grants to fund an individual project. In addition, researchers are increasingly expected to fund their students and student expenses (e.g. travel), whereas a larger percentage of that used to be funded by universities. Some of that (particularly at state universities) is outright decreases in funding for research, but some of it is just a change in how it's administered.
The idea, which was plausible, is that projects can then be judged on their merits, instead of one big slush fund that who knows what comes out of. But the unintended, if not unforeseeable side effect is that it adds a huge amount of extra overhead, and incentives to target only "fundable", aka "sellable" research. With NSF funding rates for projects currently running at 5-10% of proposals, and typical large research universities expecting you to have 1-3 of these 3-year grants going at any given time, you need to be submitting 10+ grant proposals a year! And ideally also working your networks to see if you can attract some corporate funding. That's a huge amount of overhead, and it also sucks a lot of the appeal from academia, since rather than the university setting giving you freedom, you're in some sense closer to an independent firm that has to bring in its own funding, constantly chasing the next round of financing lest your lab implode and students go hungry.
There are likely people who will thrive in that environment, but I think it's increasingly going to be people who are skilled at research management and sales. The #1 job is attracting external financing, and the #2 job is heading up a successful mini enterprise with that financing, ensuring the lab is operating well. This is becoming pretty close to explicit. One university I've been at now sends around an internal newsletter ranking faculty by number of dollars brought in so far this year! If that's what you're going to be judged on, why even be in academia?
The idea, which was plausible, is that projects can then be judged on their merits, instead of one big slush fund that who knows what comes out of. But the unintended, if not unforeseeable side effect is that it adds a huge amount of extra overhead, and incentives to target only "fundable", aka "sellable" research. With NSF funding rates for projects currently running at 5-10% of proposals, and typical large research universities expecting you to have 1-3 of these 3-year grants going at any given time, you need to be submitting 10+ grant proposals a year! And ideally also working your networks to see if you can attract some corporate funding. That's a huge amount of overhead, and it also sucks a lot of the appeal from academia, since rather than the university setting giving you freedom, you're in some sense closer to an independent firm that has to bring in its own funding, constantly chasing the next round of financing lest your lab implode and students go hungry.
There are likely people who will thrive in that environment, but I think it's increasingly going to be people who are skilled at research management and sales. The #1 job is attracting external financing, and the #2 job is heading up a successful mini enterprise with that financing, ensuring the lab is operating well. This is becoming pretty close to explicit. One university I've been at now sends around an internal newsletter ranking faculty by number of dollars brought in so far this year! If that's what you're going to be judged on, why even be in academia?