American research universities are essential for U.S. prosperity and security, but the institutions are in danger of serious decline unless the federal government, states, and industry take action to ensure adequate, stable funding in the next decade, according to a report released Thursday by the U.S. National Research Council.

As trusted stewards of public funds, universities must also meet "bold goals" to contain costs, enhance productivity, and improve educational pathways to careers both within and beyond academia, the report says.

U.S. Congress requested the report, which was written by a committee that includes industry CEOs, university presidents, a former U.S. senator, and a Nobel laureate. It recommends 10 strategic actions that the nation should take in the next five to 10 years to maintain top-quality U.S. research institutions.

"The talent, innovative ideas, and new technologies produced by U.S. research universities have led to some of our finest national achievements, from the modern agricultural revolution to the accessibility of the World Wide Web," said Charles Holliday Jr., chair of the committee that wrote the report and chairman of the board of Bank of America. "Especially in these tough economic times, the nation cannot afford to defer investment in our best asset for building prosperity and success in the future."

Federal funding for research has flattened or declined, the committee found, and state funding for research institutions has dropped by 25 percent to as much as 50 percent in some cases. U.S. colleges have had to raise tuition, threatening to put a college education out of reach for many. At the same time, other countries have increased R&D funding and are pouring significant resources into their own institutions.

To renew the critical partnership between the federal government and universities, Congress and the administration should fully fund the America COMPETES Act. This would double the level of basic research conducted by the National Science Foundation, U.S. Department of Energy, and National Institutes of Standards and Technology. In addition, Congress should at least maintain current levels of funding for basic research across other federal agencies, including the National Institutes of Health. Such support would achieve a balanced research portfolio and ensure that universities would be able to educate "the scientists, engineers, physicians, teachers, scholars, and other knowledge professionals essential for the nation's security, health, and prosperity," the report says.

States must maintain high-quality regional research institutions in order to compete in an increasingly knowledge- and innovation-driven economy, the report adds. It also calls on the nation's research universities to play their part by significantly increasing cost-effectiveness and productivity in both operations and academic programs.