Small science was the norm. In some areas of psychology, the old way is possible. But in many areas, it is difficult if not impossible. These days, many scientists are constantly writing grants in order to keep their labs running. Universities reward faculties who have large amounts of grant money.
Some grants are typical investigator initiated grants to one of the three funding councils.
However, an increasing percentage of research funds come from industry that gives contracts for specific research to be done. Sometimes these grants are topped up by one of the research councils or other government agencies. The councils encourage this approach in order to extend their resources. Academics are encouraged to be more entrepreneurial. In some areas of research, spin-off companies are common.