ATLANTA – In week two of the federal government shutdown, agencies say most new research funding is on hold, a freeze that could slow innovation in Atlanta and beyond.

What they’re saying:

According to the National Institutes of Health (NIH), no new grants are being processed, and most staff are furloughed. Once operating funds are exhausted at the National Science Foundation (NSF), the federal agency that funds most university research outside of medicine, normal operations will cease. Even a brief delay could have lasting effects on innovation within Atlanta’s growing life sciences economy.

“A lot of innovation is reliant on federal funding support, especially grants like the NIH,” said Ashley Cornelison, executive director of Portal Innovations Atlanta. “Companies’ access to that is going to be perhaps limited, and it will be really challenging for innovation to be able to scale. It could have some long-term effects.”

Portal provides lab space, funding and expert support to help early-stage biotech and medtech startups grow from university research into real companies. The life sciences incubator sits just off the Georgia Institute of Technology campus in Science Square, a public-private partnership on Tech-owned land designed to link university research with private-sector innovation.

One of the companies under the Portal umbrella, Topo DX, is developing faster lab tests to detect infections in hours instead of days, helping patients get the right antibiotics sooner.

“We want to help people, save lives and prevent overuse of antibiotics, which is a huge problem,” said Adam Krueger, co-founder and lead researcher at Topo DX. “Overuse of antibiotics and antimicrobial resistance is what they call the ‘silent pandemic.’ It’s a serious killer.”

Krueger built Topo DX from his research at Georgia Tech, as many Atlanta founders have done. The university routinely ranks among the top U.S. institutions in research activity.

On its website this week, Georgia Tech said the shutdown “is delaying payment for federally funded research activities at Georgia Tech, which represent more than $100 million per month in expenses.” The institute said it will begin implementing mitigation strategies “as early as next week to help ensure business continuity during this shutdown.”

“There’s a lot of grants that either aren’t being funded or there’s questions about them being continued,” Krueger said. “A lot of people are uncertain about their future and about their research future.”

Topo DX is applying for grants through the NSF but remains mostly privately funded. Krueger said the freeze will likely hit hardest at the seed stage of research.

“Research is all about finding something new, something that hasn’t been proven yet,” he said. “Private funding makes a lot of sense once you’ve proven what you have works. But in the seed stages, it’s high risk, high reward — and that’s where government funding really matters.”

At Portal, Cornelison said many founders are anxious about the uncertainty.

“They’re concerned about how it will impact not only them and their companies, but the therapies that they might be advancing,” she said.

Local perspective:

Before the shutdown, Portal began bridging the gap in federal funding with private capital, announcing a $100 million fundraising effort “to help these companies in this difficult time and really bridge them in the absence of what might have been other available resources,” Cornelison said.