I found out about it from Associate Professor Julianne Delcanton's latest entry on cosmic variance: Cosmic Variance: Not Without a Fight

She quotes an MSNBC Article:

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“One thing we all must worry about — I certainly do — is the federal support for scientific research. And are we all going to be chasing increasingly scarce dollars?” says Drew Gilpin Faust, Harvard’s new president.

Not that Faust seems worried about Harvard or other top-tier research schools. “They’re going to be—we hope, we trust, we assume—the survivors in this race,” she says. As for the many lesser universities likely to lose market share, she adds, they would be wise “to really emphasize social science or humanities and have science endeavors that are not as ambitious” as those of Harvard and its peers.

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Excerpt of Delcanton's response:

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Essentially, she is soooooo very concerned about those of us toiling away at public institutions that she helpfully suggests that we ought to bow out of any “ambitious” research. You know, stick with the dull, routine research. For our own good, of course.

I can’t imagine that she has really thought this through. Are we honestly supposed to avoid developing cutting-edge research programs on the fear that Harvard will win all the federally-funded grants in the future, so why bother now? Because, last time I checked, there are a hell of a lot of us at public institutions who are doing just fine in that department, thank-you-very-much.

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An Alternative view:
The Chronicle

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It used to be that your elite schools - Harvard, Cambridge, Oxford, etc. - pre-occupied themselves with the humanities while new schools caught up by providing a more technical education in engineering, the sciences and other disciplines.

The U.S. used to be the place for the biggest and best in engineering. Like, tallest sky scrapper, longest bridges, best super collider.

Now, France has the longest bridge, I think Italy has or will have the longest transportation tunnel, and Singapore has the tallest skyscraper, and the Germans are building the fastest trains, and Europe is building the biggest jets.

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Originally posted by Free_Radical:
What's ironic is that this is the complete opposite of how post-secondary education has developed in the past couple of centuries, especially in Britain.

It used to be that your elite schools - Harvard, Cambridge, Oxford, etc. - pre-occupied themselves with the humanities while new schools caught up by providing a more technical education in engineering, the sciences and other disciplines.

Really, all in all, this just sounds like Harvard worried about the fact that less "prestigious" schools are doing fine with their scientific research.

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Yes, she seems to be scared that harvard's rep doesn't, in itself, buy it much credence when it comes to science grants. In some settings, these days, not only does the school's name not matter for funding but even the school's country doesn't matter. The u.s.'s National Institutes of Health (NIH) funds foreign research all the time and so Canadian schools have received grants from it.