Money Changes Everything
Commerce, philanthropy, and the culture of the academy

Previous AE coverage of these issues:

Money Changes Everything
Commerce, philanthropy, and the culture of the academy

"We should be more creative in thinking about how we reward people for what they've done."
Rich Rothenberg, Professor of Family and Preventive Medicine

"If I'm going to accept [the Sloan Foundation's] money in good faith, I have to minimally carry out their agenda."
Bradd Shore, Professor of Anthropology

University, Inc.
License income, patents, start-ups, and research expenditures for a selection of eleven institutions

Who sees the money?
Emory's recently revised intellectual property ownership policy

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Two conferences, one big anxiety.

Growing worries about money in higher education—where it comes from, whether there will be enough of it—lay at the heart of the Sam Nunn Forum on the Commercialization of the Academy and the Graduate School of Arts and Science’s Conference on Philanthropy and the Research University, both at Emory last April. Recent shrinking markets and lackluster endowment performance also have heightened a more ineffable anxiety about the ways financial forces buffet academic culture. Participants in both conferences raised concerns about the ways university faculty seem committed to increasingly contradictory ideals. Does intellectual curiosity or market demand drive research? Does the university serve a profit motive or a greater good—or both?

The two Emory conferences highlighted two revenue streams—commerce and philanthropy. While more than half of all funding for university-based research still comes from the U.S. government (and most of that through the National Institutes of Health), federal support is gradually receding. Roughly 7 percent, however, comes from industry-sponsored research contracts and technology transfer, or the delivery of academic ideas into the marketplace, heralded as the most promising new source of support for higher education. In fact, decades of federal investment into biomedical research have fueled an explosion of patents and licenses on university-based inventions.

The benefits of technology transfer are clear—rapid and efficient application of important discoveries, economic development, profits for the university. But the marketplace isn’t encroaching as rapidly as one might think. The numbers
of university-owned patents and licenses are on the rise, but actual revenues from them are not skyrocketing. Aside from a few “blockbuster” patents that tipped total royalties to colleges and universities over the billion-dollar mark in 2000, only nineteen universities made more than $10 million on such revenues, according to the Association of University Technology Managers. Emory, which ranked nineteenth in licensing income, made $10.6 million, 4.9 percent of its actual expenditures on research. Two of Emory’s twenty-eight patents yielded more than $2 million in income. In coming years, however, the university and several of its researchers stand to earn significant royalties from the recent settlement of a patent and licensing dispute with GlaxoSmithKline and Shire Pharmaceuticals over drugs for treating HIV infections.

Private foundations add their own kind of pressure. Philanthropy, which accounts for another 7 percent of research funding, is becoming, as graduate school acting dean Gary Wihl put it, “something closer to investment.” In recent years, according to data from the Foundation Center, the rate of philanthropic giving to postsecondary education tapered from 14 percent of total grant money in 1994 to 11.3 percent in 1999, sliding to 8.8 percent in 2000. Demanding more in the way of evidence that their philanthropy is having a tangible impact, many foundations are leaning toward projects that will show an immediate, quantifiable return on their investment, such as giving computer equipment to elementary schools.

As these key sources shift, many observers note that universities have, in response, begun a kind of reordering of their own. These subtle changes in the climate of
the academy revolve around prized principles—tenure, curiosity-driven research, academic integrity, the sharing of data, and sweeping notions of intellectual culture.


“We have a unique and valuable thing in universities,” Derek Bok, emeritus president of Harvard University, told the Nunn forum. “We have an enormous amount of personal freedom as professors to do what we choose. That is necessary for creative work; it’s a major attraction of academic life. But when you have that much freedom, a lot depends on the willingness of faculty to do more than the job description literally requires. By legitimating profit-seeking, commercialization puts that voluntary, communal spirit—that set of values that makes professors spend more time preparing their courses, working with students, going to faculty meetings, working hard on the promotion process—it puts all that in danger. Professors are tempted to spend more time making money through consulting, giving speeches, and starting companies.”

Others, however, call for balance between those values and the fiscal realities of the academy. University of Georgia Provost Karen Holbrook exhorted the Nunn forum to “push our promotion and tenure guidelines into alignment with the modern world, in which the private sector and universities support each other in commercial collaborations.” Holbrook critiqued the notion that such faculty efforts fall “outside the academic promotion and tenure process, that technology transfer is more a matter of personal business.” Designating an emerging class of faculty as “scholar-entrepreneurs,” she described them as people with “unimpeachable” integrity, superior teaching records, abiding interest in research, an eye for market application of university inventions, and an ability to “move from the classroom to the laboratory to the company boardroom.”

Private Data, Public Trust

While technology transfer is “working,” suggested Marie Thursby, the Hal and John Smith Chair of Entrepreneurship at Georgia Tech, speaking at the philanthropy conference, it does have some “unintended consequences,” such as a proprietary resistance to sharing data. In her own research, Thursby has found that about half of the time, when a university researcher wishes to publish findings of industry-sponsored research, the sponsoring company reserves the right to withhold some information. Further, she suggests, sponsoring companies commonly delay publication of research in the interest of keeping industry secrets.

Moreover, industry, rather than disinterested science, is setting the research agenda and gaining greater control over studies conducted in universities, charged Marcia Angell, senior lecturer in the Department of Social Medicine at Harvard and former editor of the New England Journal of Medicine, at the Nunn forum. “Until the past decade, industry sponsors simply gave grants to researchers to test their products,” she said. “Then they stepped back, waited for the results, and hoped their product was good. That is no longer the case. Drug companies now design studies to be carried out by academic researchers who are little more than hired hands, supplying human subjects and collecting data.

“The point of drug companies is to sell profitable drugs, not necessarily important ones, and they sponsor clinical research as a means to that end. So instead of important new drugs, we’re getting a blizzard of ‘me-too’ drugs directed toward chronic, often minor ailments in adult populations.”

Such compromises, Bok said, “threaten to diminish the trust of the public in the objectivity of university work. As you develop these financial ties with industry, you have many more conflicts of interest. When you do not have adequate tools to limit them, public faith in the integrity and objectivity of research begins to decline.”

But the motives of academic research have never been entirely pure, noted president of the Social Science Research Council and professor of history and sociology at New York University Craig Calhoun, speaking at the philanthropy conference. “On the one hand, we research university faculty constantly share and produce knowledge,” he said. “On the other, we also engage in hoarding and accumulation. We store knowledge in inaccessible academic journal articles written for the approbation of a handful of colleagues or simply a line on a vita. We treat our opportunities to do research not as a public trust, but as a reward for success in our previous studies.”

But the real reward, Emory College interim dean Bobby Paul said in closing the philanthropy conference, is those moments “when a class or seminar produces an air of electric excitement, or when a student suddenly comes up with a wholly novel idea we had never thought of. Surely we have thought to ourselves, ‘this is why we went into this business. . . .’ It is our job to create, maintain, and protect institutions and practices within which these moments can occur, and be recognized and valued,
both in and for themselves, as well as with ancillary values of the monetary market and the prestige and status systems.”—A.O.A.