Prof. David Colquhoun makes some comments about the increasing proportion of research funding coming from industry here. First, a declaration of interest: my research funding at present comes from a consortium of oil companies, namely Norsk Hydro, Statoil and ConocoPhillips.
Clearly, industry funding can lead to conflicts of interest, especially where the research is into the efficacy of a product manufactured by the funder (e.g. in drug trials). But this isn't necessarily the case. In the work I'm doing, the companies are interested in finding out something about the geology of rift systems, so they can apply that knowledge to the assets they have with similar geology. In this case, the companies have no interest in influencing the results. They have an interest in us conducting good science, because that will help them recover more petroleum. In return, we get access to the best quality data, and publish (hopefully) good basic research on the evolution of rift systems. We also get our wages paid. Everyone's a winner. It's possible to envisage a situation of conflict of interest if we were involved in, say, estimating reserves, because that might have an effect on the share price of the funding company. But as a rule, this is not the case.
Of course, it isn't all good news. Companies are sometimes cagey about releasing data for publication. This can be a real problem. During my PhD, a company that had provided seismic data for me to work with (but did not fund the project) did not want the data published. In fact, they were unhappy about me even publishing my interpreted line drawings of the data. I eventually managed to get around this and get the work published, but the reviewers were not particularly happy that they could not independently evaluate my interpretations against the data. Unfortunately, this situation is so common in petroleum geoscience research that work often gets published without anyone getting to look at the original data. Obviously, this is not the way to get good science. I work at a university, a public institution, so I think that any work I do ought to be publicly available. Where projects are funded by industry, this is not always (or even usually) the case.
The other problem relates to what kind of work gets done. Clearly, industry is only going to fund projects that it has an interest in. Hence here at Manchester the petroleum geoscience group is awash with money, but other groups doing research that is no less interesting struggle for funding. Again, a university is a public institution, and it ought to work on behalf of the public. Working on behalf of industry is not always the same thing (although sometimes it can be).
Industry funding is not necessarily bad in itself. But we need to be clear about its drawbacks. I'm not convinced these drawbacks have been carefully considered in the rush to increase industry funding.