Industry Becoming the Big Partner on U.S. Campuses : Education: As public funds dwindle, colleges put themselves up for ‘adoption’ in private sector. University-business ventures are booming.
As growth in federal and state funding for higher education flattens, U.S. universities are looking at new strategies to attract scarce resources. Many hope to find them under the banner of “national competitiveness,” by defining themselves as commercial partners for business.
“The role of the research university in the 21st Century is to transfer technology or ideas out of our labs into the commercial world,” says Michael Hooker, new president of the University of Massachusetts, a system that has seen cuts of 35% in state funding in the last four years.
“Those companies that compete most effectively will be those that bring products to market quickly,” he adds. “The University of Massachusetts has only begun to lay out a vision for the future . . . to marshal resources of our five campuses to contribute to the economic development of the state.”
Many other universities are prospecting for new partnerships with industry.
* A 1988 General Accounting Office (GAO) report found that of 107 U.S. universities surveyed, 41 had initiated industrial liaison programs to encourage ties with industry.
* Lehigh University in Bethlehem, Pa., is trying to carve out a new industrial niche for itself as a partner with business in developing “agile” manufacturing. The university “is in the technology-transfer business,” says media relations director William Johnson.
* Companies like IBM, Xerox, Procter & Gamble, Intel, Motorola, Milliken, and Martin Marietta are establishing partnerships with universities to promote the teaching or use of “total quality management” techniques.
In Tune With Industry
Under the terms of a partnership launched last July, the Intel Corp. “adopted” the University of Arizona. The computer-parts manufacturer is providing full-time staff to “analyze academic and research programs” through the techniques of total quality management. This approach emphasizes data-based decision-making and continuous organizational renewal.
“Intel is supporting the University of Arizona as if it were a group within Intel,” says Ken Smith, dean of the College of Business. “Faculty are always nervous about bringing techniques from industry into the university. But we’re operating in a more constrained resource environment for higher education.”
A partnership between Xerox and Carnegie Mellon University in Pittsburgh, Pa., involves integrating quality management techniques into the university curriculum.
The point of the Xerox partnership is to develop more students who can work in teams and are “in tune with American industry,” says Richard Florida, associate professor of management at the university’s Heinz School of Public Policy and Management.
“Xerox and companies like it are drastically reducing their supplier lists and developing longer-term relations with a smaller number of suppliers. Those suppliers provided on-time delivery and a product tailored to meet the needs of the customer. The next step is to demand this of the universities, and what they supply is people,” Florida adds.
“The university sees this program as part of an answer to the question, ‘Where will money come from for basic research?,’ ” says Erik Devereux, assistant professor of political science at Heinz.
Long-Term Decline
In the last decade, federal contributions to higher education slipped from 14.9% in 1980 to 12.4% today, and state funds went from 30.7% to 27.5%. Declines in public funding were offset by increases in tuition and fees; private gifts, grants, and contracts; and sales and services. Sales and services now account for 22.6% of university budgets, just behind tuition (39.6%), according to the U.S. Department of Education.
Many university presidents are expecting a long-term decline in federal research dollars. “Federal research support at MIT has nearly leveled out during the last two years,” said Massachusetts Institute of Technology President Charles Vest in his annual report this fall.
“In the last couple of years, industry became the fourth-largest funder of research on campus, replacing the National Science Foundation, just behind the departments of Energy, Defense, and Health and Human Services,” says David Lampe, associate director of MIT’s industrial liaison program. MIT’s program was launched in 1948 to “justify the support we were asking for from industry as a private university,” he said. Many see this program as the model for subsequent university-business ventures.
A change in patent laws in 1980 opened the door to deeper university-business ventures. The Bayh-Dole Act--a Carter Administration initiative--allowed universities to license inventions arising from federal grants to the private sector. Many universities are adopting complex formulas for allocating returns from these investments. Meanwhile, complicated conflict-of-interest issues are arising from them. Along with a decline in federal funds, the past decade has seen a shift in the way federal funding is allocated: from competitive peer review to academic “earmarks.”
Pork-Barrel Science
Under this strategy, members of Congress insert into appropriations bills funding for a project that has not been submitted to a review or merit test through normal channels for funding scientific research. University lobbyists promise that targeting funding to applied research projects will create jobs in a lawmaker’s district.
“Earmarking has increased 70-fold since 1980,” says Rick Borchelt, spokesman of the House Committee on Science, Space, and Technology. “It involves authorizing in appropriations language, which is against House rules.”
Key to understanding this shift to earmarking is the move to abandon merit-based federal support for infrastructure and facilities, says John Burness, senior vice president of Duke University in Durham, N.C., who previously worked closely with Cornell University’s industrial liaison program. “Between 1968 and 1988 the federal government dropped the amount of money spent for facilities construction by 95%. Pork-barrel ‘science’ is a phenomenon of this switch.”
This trend is of special concern to large research universities. In his annual report, MIT’s Vest called for “full federal support for the full cost of programs” and for “merit as the prime determinant of grants, contracts, and facility funding.”
“Surely the wisest policy for the country cannot be random selection for awards, based on the location of colleges and universities in particular congressional districts. . . . It is not in the interest of the country to cut off the tops of its mountains to fill in the valleys.”
