University-Industrial Research Collaboration
UNIVERSITY-INDUSTRIAL RESEARCH COLLABORATION
Historically, university researchers have collaborated with industrial scientists on marketable projects. News coverage at the turn of the twenty-first century might lead one to believe that this is a current phenomenon. However, science historians have traced collaborations between European companies and university researchers back to the 1800s. In the United States, university-industry research relationships began with the industrial revolution.
Traditionally, industry sought partnerships with universities as a means to identify and train future employees. As global economies shifted, companies wanted access to faculty who created the cuttingedge knowledge and technology central to university research. Knowledge creation and technology development require considerable capital investments, historically provided by governments. However, declining federal, state, and local funds, as well as increased competition for monies allocated to human services, has forced university researchers to seek new sponsors. In 2002 industry-sponsored research accounted for 8 percent of total university research dollars. These contributions occur through grants, contracts (such as consulting agreements), and collaborative training programs. The areas most likely to benefit commercially from these relationships are agriculture, biotechnology, chemistry, computer science, engineering, and medicine. Furthermore, about half of the biotechnology firms have collaborative agreements with universities and account for nearly one-fourth of all funding for biotechnology research.
The interdependent research relationships between universities and companies enable both entities to sustain growth in their areas. While companies rely on university researchers for product innovations, faculty gain prestige through increased external research funds. Just as industry needs innovative ideas to ensure profits, researchers need additional research dollars to sustain faculty productivity.
Since the 1970s the United States government has aggressively promoted the alignment of university and industrial researchers through specific funding programs. The National Science Foundation (NSF) sponsors both the Industry-University Cooperative Research Projects Program (I/UCRPP) and The Industry-University Research Centers Program (I/URCP). Both began as pilot programs in 1972 and expanded in 1978. The I/UCRPP is a traditional consulting arrangement, for which the NSF provides the initial two years of fiscal support. The I/UCRC is more closely related to university-industry relationships that currently exist. The NSF outlays substantial initial funding, with the intention that the collaborative industry-university engineering centers will become self-supporting. The research centers consist of an interdisciplinary team of university faculty and business representatives. The government, in alliance with universities and industry, provides one year of planning and five years of decreasing operational funds. Generally, universities contribute through a waiver of overhead support for the centers, and businesses pay membership fees to participate. As of February 2002 there were fifty-six operational centers devoted to materials science, biotechnology and health care, energy, manufacturing, agriculture, electronics, and chemistry.
The National Science Foundation also provides funds for industry-university collaborations in engineering for twenty centers (as of February 2002). These centers are hybrids that combine basic with applied research projects, and they receive NSF support for up to eleven years.
University-industry research collaborations merge basic and applied research. Incremental research and product development often occur in industrial labs. However, industry scientists report that when they are involved in breakthrough discoveries, it is important to maintain close alliances with university researchers so that they can gain a better understanding of the science that underlies the discovery.
Academic-industry research relationships take other forms, as well. For example, some companies will gift scientific equipment to university researchers to conduct their studies. Although it is called gifting, companies expect that university researchers will somehow repay their generosity by communicating any cutting-edge research results related to the use of the equipment. This gives companies an edge in innovation, as they can capitalize on the research results and create new, potentially profitable, products.
Frequently, university-industry research collaborations take the form of clinical trials for drugs and medical devices. Universities provide the technical expertise, patients, and physical space to conduct clinical trials while companies supply the drugs, equipment (both diagnostic and therapeutic), and money to operate the trials. The section that describes advantages will address how both researchers and companies benefit from this relationship.
Advantages of the Collaborative Relationships
There are numerous benefits that derive from university-industry relationships, including benefits to society, universities, and companies.
Social benefits. Society benefits from university-industry research relationships through innovative products and technologies. Industry-sponsored university research is often developed into practical applications that benefit society. These applications include new improved medical devices, techniques, and therapies; efficient energy development; and innovative electronic technologies such as computers and DVD players. Indirectly, university-industry partnerships may spawn new industries that enhance the U.S. competitive advantage globally. Federal, state, and local tax bases expand because of the growth of new industries. These are just a few examples of the social promise of university-industry research relationships.
University benefits. Interactions with industry are clearly thought out with attention paid to the benefits that will accrue to the university. Some universities seek industrial partnerships because of the potential financial rewards of patents and licenses that result from the commercialization of academic research. This provides a means by which universities can decrease the governmental funding gap. Patents generated through industry-sponsored research are sometimes shared between companies and universities. The intent is that the university will use patent revenues to support activities that are not market oriented, such as the teaching mission of institutions.
Additionally, faculty benefit through the access to cutting-edge scientific equipment not always available in university labs. This equipment enables faculty to pursue additional lines of research that, ultimately, contribute to faculty productivity (such as additional external funds as well as increased publications). Both of these elements combine to enhance institutional prestige–an important component used by institutions to attract top students, establish their legitimacy, and acquire available public funds. Universities also enhance opportunities to find future employment for undergraduate and graduate students through university-industry connections.
Company benefits. University-industry collaborations can stimulate companies' internal research and development programs. University researchers help industrial scientists identify current research that might be useful for the design and development of innovative processes and potential products. This first look at cutting-edge research gives companies a competitive edge because it decreases the time it takes to move a potential product from the laboratory to the market, which strengthens international economic competition.
The association between universities and company sponsors also enhances a company's reputation. Oftentimes, university and industry researchers will coauthor refereed journal articles that describe research results. Joint publications are used as a public relations tool by companies to add to their prestige.
So far, the more abstract benefits companies realize from university-industry relationships have been described. However, the concrete benefits are the ones that drive these collaborations. When a company becomes involved with academic researchers and "buys" access to new ideas, it builds trade secrets that could lead to new, potentially profitable patents. Furthermore, if university researchers develop a patent, the company that sponsored the research often gains the first right of refusal to license the product. Companies thus become industry leaders.
Universities provide inexpensive lab space in which to conduct industrial research. One area where this is critical is in the arena of clinical trials. Medical companies use university partnerships to conduct clinical trials of drugs, devices, and emergent techniques. This is less costly for industry because university hospitals have access to large numbers of patients.
Finally, university-industry research relationships strengthen companies' research and development (R&D). Either through the generation of innovative products developed from current research or through a redirection of industrial development to more profitable lines, R&D is positively affected. University researchers also help industry scientists solve design and technical problems. Often, company employees learn new research techniques with their university partners.
Disadvantages of the Collaborative Relationships
Despite the benefits of university-industry research relationships, a number of disadvantages are also apparent. Many of these reflect significant normative issues related to the academic enterprise. Professor and business and ethics writer Norman Bowie suggests that a university becomes "caught between two of its compelling interests" because of its relationship with corporate sponsors (p. 12). Academic researchers are compelled to approach research without regard for its commercial benefits; to share the results with peers so they can be examined and validated; and to train future researchers for universities and industries. Universities must balance their relationships with industry to reflect traditional academic norms, as well as those of industry.
High-profile agreements and legal disputes have created concerns that university faculty no longer set their own research agendas. Instead, research topics are based on both available funds and university needs. This is especially problematic because faculty need the academic freedom to pursue any line of inquiry, regardless of where it may lead. If either industry or the university sets the research agenda, many important social benefits will become neglected as resources are targeted solely at those activities that increase income.
Ownership issues can arise between universities and companies who establish research relationships, causing universities to develop more formal relationships with corporate sponsors through contracts that clearly stipulate data ownership as well as interest in any products developed from university-industry research. For example, some company contracts stipulate that university researchers cannot share data or research materials with other academic scientists who request them. The company assumes that the research generated by the university researchers contains proprietary information.
These contracts extend to publication. Most university policies allow publication delays for up to six months while researchers and their sponsors develop patent applications. Oftentimes, publication delays arise because companies want to approve a journal article before it is published. This is especially problematic when the research reflects unfavorably on the product, a situation that occurred in a 1997 case concerning synthetic thyroid medication. A university researcher found that a particular medication was ineffective, but the university legal department had signed a contract that enabled the company to block publication of damaging results. Critics believe that this type of arrangement reduces the quality of university researchers and creates potentially harmful situations for patients.
Some university researchers are not allowed to include pertinent methodology details in either published or presented results. A company will argue that the methods used to conduct the research constitute a company trade secret and must be protected. This creates problems for academicians who need to publish to generate additional research dollars.
Corporations are concerned with their market edge, and they may require that university researchers not publish studies from their sponsored research activities. Market success depends partly on the innovation of specific products, as well as the investment in production necessary to make products available to the public. Secrecy is something companies use to protect trade secrets that emerge from corporate-funded projects. This is contrary to the wide-scale dissemination practiced in universities, where faculty, postdoctoral fellows, and graduate students publish results from the studies in which they participate. Commercial enterprises are more competitive than academic interests as a company must find a way to secure its niche with a new product.
The Role of the Collaboration in Biotech Development and Start-Up Industries
The collaboration between industry funding, university researchers, and start-up companies is complex. Most often, individual entrepreneurial faculty use their research to start a private company. Much of the research on these spin-off companies has looked at academic entrepreneurs. The university is a passive player, while the entrepreneur generates external venture capital. University faculty often leave institutions to manage the new company, or faculty may use the company to support their academic research activities. Universities tend to react unfavorably when faculty operate new companies in tandem with their research agendas. There is an assumption that faculty will neglect their core duties to the university and focus on research and other activities that support their commercial enterprise.
Some start-up companies that universities support are those that develop into incubation centers. Incubation centers are units that support faculty or students in the development of their research products. For example, incubators established near colleges and universities house start-up companies based on faculty research. This is the more traditional form of a collaborative university-industry relationship that results in start-ups. Currently, the development of start-up companies from university faculty research is housed in various administrative departments of institutions. For example, Massachusetts Institute of Technology (MIT) was involved in forming the American Research and Development Corporation, which has culminated in a venture capital firm.
The Role of the Collaboration in State Economic Development
Universities often use industry-university collaborations to define their role in economic development. Science policy, for example, has become associated with economic development, especially in light of cases like MIT's and Stanford University's relationships with local economic development. Stanford University faculty played a crucial role in the development of Silicon Valley. Both MIT and Stanford faculty have had profound effects on local and regional economies. Science parks, also associated with economic development, reflect strategies to draw industry and government labs to specific locations to stimulate growth. Research Triangle in North Carolina is an example of this type of enterprise.
A justification for the involvement of universities in economic development is that the government will provide large-scale financial support for university research, provided institutions conduct research that supports and sustains state economies. This is not quite accurate, as reduced federal research dollars have made grant-getting more competitive for university researchers. Thus, there is a greater reliance on industry relationships to help fund these growth areas.
State economic development programs encourage high-tech development through university-industry research relationships. However, the ability to identify any specific economic development agendas by universities is difficult. Many view the industrial-university partnerships as direct contributors to local economies. For example, the Michigan legislature funded a biotechnology center operated at Michigan State University. The legislature believed that the research generated at the center would increase jobs and, ultimately, fill the state coffers. The center did contribute to the creation of commercial products from basic research (e.g., the development of drugs). However, because Michigan lacked the manufacturing infrastructure to support wide-scale production of drugs, the state did not realize a direct economic benefit from its investment in the center. Instead, New Jersey, Illinois, and Indiana reaped the benefits from drug production based on Michigan State's research. The state legislature, disappointed with this outcome, decreased center funding. This story illustrates the misconceptions policymakers have about the direct economic benefits derived from the commercialization of academic research.
There is a belief that, because of their ability to increase external research funds and establish relationships with industry, only research universities contribute to state economic development. However, colleges and universities from multiple sectors play roles in state economic development. For example, community colleges contribute through training the workforce. Typically, comprehensive and community colleges often forge collaborations with industry that do not require a substantial investment in research. Instead, universities collaborate with industry to help reform higher education curricula, train employees for companies, assist local economic development offices, and retrain displaced workers. These important relationships between industry and the university are often overlooked when scholarly writers and journalists focus only on research collaborations that generate tangible goods.
University-industry research relationships have existed in multiple forms since the nineteenth century. Current collaborations are complex and often appear threatening to both the academic and industrial enterprises through value and goal conflicts. However, institutions have developed formalized relationships with industry that alleviate some of the tensions that arise from these relationships.
See also: Academic Freedom and Tenure; Faculty as Entrepreneurs; Faculty Consulting; Intellectual Property Rights; National Science Foundation; Technology Transfer.
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Lisa M. Jones
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