Here's an article from The Chronicle of Higher Education which exposes the problem:
Academic science is in a crisis. At a time when scientific innovation is desperately needed to solve some of the world's most pressing environmental, technological, and medical problems, how scientists get money for their research stifles, rather than spurs, creativity.Two things need to be done. First, increase the respect for teaching and lower the career rewards for publishing and winning grants. Second, give professors a free hand to pursue their own research interests through some system that gives them a large but not unlimited timeframe in which to establish their careers, say 10 years, before the publish or perish and grant wars pressures are brought to bear.
The structural defect causing this major problem can be stated simply: The failure rate for proposals submitted by academic scientists has reached such high levels that many professors must spend virtually all their time writing proposals, leaving the creative thinking to graduate students and postdoctoral associates. The result is science by proxy.
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Universities are partly to blame. Some institutions explicitly tell their faculty members that they are expected to bring in $300,000 or more in grants each year. Researchers sometimes receive awards for bringing in more funds than anyone else at their institutions. At one academic banquet, a dean requested that professors who brought in over a half-million dollars stand up and be applauded by the audience. Such displays of commercialism exemplify what has been called the "selling culture" and a "gold-digger" mentality among university administrators.
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