|
Items in cart [0] |
Questions? Call 888-624-8373 |
PAPERBACK + PDF PAPERBACK PDF BOOK PDF CHAPTERS Free Resources |
||||||||||||||||
|
||||||||||||||||
|
|
|||||||||||||||
| ||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
| Copyright © 2009. National Academy of Sciences. All rights reserved. Terms of Use and Privacy Statement |
Below are the first 10 and last 10 pages of uncorrected machine-read text (when available) of this chapter, followed by the top 30 algorithmically extracted key phrases from the chapter as a whole.
Intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text on the opening pages of each chapter.
Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.
Do not use for reproduction, copying, pasting, or reading; exclusively for search engines.
OCR for page 219
8
Challenges for the Future
Based on the conditions, experiences, and trends in the five industries exam-
ined in this study, the committee identified six major challenges that are likely to
affect the impact of university-based research on industry performance in the
coming years.
SERVICES
Finding X-1. Although innovations in service delivery are becoming more im-
portant, the academic research enterprise is not focused on or organized to meet
the needs of service businesses.
Services account for almost 80 percent of the U.S. gross domestic product,
employ a large and growing share of the science and engineering workforce, and
are the primary users of information technology. In most manufacturing indus-
tries, the service functions, such as logistics, distribution, and customer service,
have become leading sources of competitive advantage. The rate of innovation
and level of productivity in the services infrastructure (e.g., finance, transporta-
tion, communication, health care) have an enormous impact on the productivity
and performance of all other segments of the economy. Moreover, as the studies
of the financial services industry, the transportation, distribution, and logistics
services industry, and the network systems and communications industry show,
improving services is a major impetus for innovation throughout the economy.
Nevertheless, the U.S. academic research enterprise, despite its broad dis-
ciplinary base and potential for crossdisciplinary research and training, is not
focused on or organized to meet the needs of service businesses. Major
219
OCR for page 220
220 THE IMPACT OF ACADEMIC RESEARCH ON INDUSTRIAL PERFORMANCE
challenges facing universities are: (1) adapting and applying systems and in-
dustrial-engineering concepts, methodologies, and quality-control processes to
service functions and businesses; (2) integrating technological research with
research in social sciences, management, and public policy; and (3) educating
and training engineering and science graduates to deal with management, policy,
and social issues.
THE REGULATORY CLIMATE
Finding 8-2. Regulations and regulatory changes have profoundly influenced
industry receptivity to contributions by academic research. In some cases, aca-
demic research has helped to shape the regulatory environment; academia is well
qualified to provide interdisciplinary expertise to inform regulatory decisions.
All of the industries in this study operate in an environment that is currently
or has been highly regulated, and changes in the regulatory environment over
time have affected them in obvious and not so obvious ways. At one end of the
spectrum are the airline and trucking industries. For many years, strict regulation
precluded airlines and trucking companies from competing based on price; there-
fore, competition was based on speed, reliability, and other amenities that tended
to spur innovation. Deregulation in both industries has led to intense competition,
based on both price and quality of service. Although the need for innovation
remains, lower margins and, therefore, tighter research budgets have restricted
the focus of R&D. At the other end of the spectrum is the medical devices and
equipment industry. Companies in this industry operate in a highly regulated
environment in which the safety and effectiveness of new devices must be clearly
demonstrated. Universities, specifically academic medical centers, are particu-
larly well equipped to carry out the laboratory research and clinical trials de-
scribed in regulatory requirements. This industry is a prime example of how the
contributions of academic research are affected by the overall regulatory environ-
ment in which an industry operates.
Academic research has also greatly influenced the regulatory environment.
Based on economics research, much of it performed in academia, the role of
regulation has been redefined from protecting the public interest in naturally
monopolistic markets to promoting market entry and ensuring vigorous compe-
tition to achieve public benefits. The change has spurred deregulation in a num-
ber of industries, including network systems and communications. In the finan-
cial services industry, the impact of academic research on regulation has been
small historically, usually in response to crises; however, the impact is growing,
especially in the area of risk management. The influx of technically trained
scientists and engineers into financial regulatory bodies has enabled regulators
to draw on advances in risk modeling, which, in turn, has led to innovations in
the industry proper. In the medical devices arena, academic researchers could
OCR for page 221
CHALLENGES FOR THE FUTURE
221
play an important role in the ongoing reform of the Food and Drug
Administration's regulatory policies by assembling industry, regulatory, and
clinical panels to discuss appropriate requirements for bringing products, such
as artificial hearts and mechanical cardiac-assist devices, into widespread
clinical use.
INTELLECTUAL PROPERTY
Finding 8-3. Over the past 25 years, research universities have increasingly
emphasized technology transfer and the generation of income from research re-
sults, through patenting, the creation of technology transfer offices, and licens-
ing. Although the increased attention to management of intellectual property has
had many positive consequences for industry and academia, questions remain
about the overall effectiveness of technology transfer investments, as well as the
impact of these activities on universities' core research and education missions.
Throughout the 1970s and early 1980s, government policy increasingly
favored stronger protections for intellectual property resulting from publicly
funded research. Several universities had already increased patenting activity in
the 1970s, largely as a result of the emergence of biotechnology, but the propen-
sity to patent increased markedly after 1980. Since 1980, the number of univer-
sity technology transfer offices has grown from 25 to more than 200 (Sampat and
Nelson, l999~. These offices have provided an alternative interface with industry
to the traditional offices of sponsored research. Technology-transfer offices focus
on licensing university technologies and generating royalties.
Other mechanisms for profiting from research have also been developed. For
instance, some leading research universities have made long-term agreements
with individual companies for joint research, joint clinical trials, and profit shar-
ing; companies use these agreements to leverage research funded from other
sources. Universities are becoming more willing to take equity stakes in new
companies. A percentage of equity is often a requirement for companies' partici-
pation in university-based business incubators, and universities are increasingly
providing some of the initial funding for faculty members' start-up companies. In
addition, a growing number of university researchers have added financial gain
and entrepreneurship to their traditional university roles of teaching, research,
and service. In some cases, patents and royalties are shared with the university. In
other cases, faculty researchers have taken advantage of available venture capital
to fund new companies to produce commercial products based on their research.
All of these mechanisms patents, licensing, contracting, industrial liaison pro-
grams, and start-up companies have expanded interactions between universities
and industry and changed the traditional role of universities in that relationship,
which, for the most part, had been limited to faculty consulting, small amounts of
contract research for companies, and the preparation of graduates for careers
in industry.
OCR for page 222
222 THE IMPACT OF ACADEMIC RESEARCH ON INDUSTRIAL PERFORMANCE
The emphasis on commercializing research results has affected the structure
and dynamics of industry interactions with leading research universities. For ex-
ample, in the mature sectors of the aerospace industry the problem of the protection
and ownership of intellectual property is a significant barrier to collaborative
university-industry research. This situation may be attributable to the advanced
level of competition in the industry and could be indicative of things to come in
other mature, highly competitive, research-intensive industries. By contrast, the
treatment of intellectual property rights has not figured prominently in relations
between universities and the financial services industry, in which secrecy and first-
mover advantages prevail. Indeed, the lack of intellectual property rights in finan-
cial services might be an impediment to collaborative academic-industry research
in a different way because it is difficult for universities to maintain secrecy. In the
transportation, distribution, and logistics services industry, where intellectual prop-
erty is often developed and commercialized by the same faculty, consultancies and
start-up software companies have helped the industry avoid problems.
Increased patenting activity by academic researchers has had many positive
consequences for both industry and academia. Academic researchers now have
new incentives and new avenues for pursuing their entrepreneurial energies and
new products, services, processes, and companies to show for it. As Congress
predicted when it passed the Bayh-Dole Act in 1980, allowing universities to own
and profit from the results of their research has stimulated researchers to patent
and seek the commercialization of research results. Recent research indicates that
the willingness of industry to invest in the commercialization of inventions li-
censed from universities is closely correlated with strong property rights (Jensen
and Thursby, 2001; Dechenaux et al., 2002~. The increase in patents has also had
benefits for industry: (1) patenting places research results in the public domain,
where they are much more accessible than they are through journals or unpub-
lished papers; (2) patents have value that can be capitalized through licensing
agreements or as collateral in securing financial resources for start-up companies;
and (3) patents provide at least some protection for the resulting commercial
products, thereby encouraging investors to make the capital investments neces-
sary for successful commercialization.
At the same time, the growing emphasis on university ownership and exploi-
tation of intellectual property has raised questions about the near-term efficacy of
the patent-licensing infrastructure, as well as the long-term impact on university-
industry interactions and the health of the academic research enterprise. To date,
direct contributions of academic research through patenting activity has been
small. The creation of technology-transfer offices, with the technical, financial,
and legal expertise they require, however, can be expensive; indeed, relatively
few universities have earned much of a direct financial return on these invest-
ments. In fiscal year 2000, only 72 universities had income from licenses of more
than $1 million; and the University of California system accounted for nearly
one-quarter of the total license income reported in that year. Although even small
OCR for page 223
CHALLENGES FOR THE FUTURE
223
amounts of income are important in the context of tight university budgets, li-
cense income exceeded 5 percent of total research expenditures at only 15 univer-
sities; typically it is less than 1 percent (AUTM, 2001~.
Students of technology transfer and the research university have begun to
look into questions raised by the growing interest of universities and research
faculty in intellectual property (e.g., Henderson et al., 1998; Link et al., 2002;
Morgan and Strickland, 2000; Nelson, 2001; Press and Washburn, 2000; Stefan,
2000~. Have investments in patent licensing infrastructure been worth it? Have
they made technology transfer from universities to industry more effective? Or
would the licensed technologies have been picked up by industry in any case?
Does the emphasis on capturing intellectual property rights raise the transaction
cost of research? Are there other value-added results from these investments, and
how should they be measured? To what extent does the emphasis on intellectual
property and secrecy inhibit the free flow of ideas, impede advances, and disrupt
the research culture? How has increased emphasis on intellectual property af-
fected teaching and learning? A better understanding of these and related issues
will have important implications for future practices and policies. Therefore, it is
critical that these questions continue to be addressed.
INFORMATION TECHNOLOGY
Finding 8-4. Information technology is critical to the performance of all indus-
tries and will continue to be so in the future. Industry's need for the continued
development, diffusion, and application of advanced information technology pre-
sents major opportunities for academic research in many disciplines, including
mathematics, computer sciences, physical sciences, life sciences, multiple engi-
neering disciplines, social sciences, and behavioral sciences.
The importance of information technology to industry performance cannot
be overstated. As hardware becomes cheaper and more powerful, networks and
communications are becoming more pervasive, and the volume of information
created, stored, and exchanged is growing exponentially. As a result, questions
about the management of information for private gain and/or public benefit are
also increasing. Addressing these issues will provide a wide range of challenges
for academic researchers in almost every discipline. To name just a few ex-
amples, industries will need software that facilitates the interoperability of legacy
systems and reduces the vulnerability of infrastructure and business to breaches
of security and privacy. Academia will also be expected to continue supplying
skilled technicians. developers, and managers (NRC, 2000~.
A BALANCED RESEARCH PORTFOLIO
Finding X-5. Universities must maintain a balance of research projects to sustain
their role as repositories of expertise and resources in many disciplines basic
OCR for page 224
224 THE IMPACT OF ACADEMIC RESEARCH ON INDUSTRIAL PERFORMANCE
and applied research in engineering, life sciences, physical sciences, social sci-
ences, behavioral sciences, managerial sciences, public policy studies, and inter-
disciplinary research.
Basic, long-term research performed at universities is an essential part of the
national innovation system. All of the industries studied derive significant ben-
efits from basic research, although the importance of basic research to industry
performance is not well recognized, particularly among individual companies.
Most federal funding continues to support basic research, but industry-funded
academic research is focused mostly on problems that can be solved relatively
quickly. As universities become more entrepreneurial, the potential financial
gains from commercially relevant research could create strong incentives for
universities to focus on applied research at the expense of basic research. If so,
federal funding for basic, long-term research will be even more critical.
Federal funding is now virtually the only source of support for basic re-
search, which makes effective management of federal research programs of para-
mount importance. At the highest level, Congress should recognize and reaffirm
the importance of basic research at universities. To capture the imaginations of
the best academic researchers, program managers at the Defense Advanced Re-
search Projects Agency, National Science Foundation (NSF), and other agencies
should work with researchers to develop agendas that might lead to major new
insights. In some areas, such as network systems, the best researchers may al-
ready be losing interest. The challenge is not just to maintain a balance between
basic and applied research, but also to ensure that the basic research portfolio is
sufficiently diverse to stimulate innovative thinking by academic researchers in
many fields.
To meet this challenge, the balance of federal funding for research in specific
fields and agencies should be reassessed. The percentage of federal funding for
academic research supported by the National Institutes of Health increased from
49 percent to 62 percent from 1980 to 2001. During the same period, NSF's
funding decreased somewhat, from 20 percent to 17 percent. The relative shares
of federal funding for academic research at other federal agencies, such as the
National Aeronautics and Space Administration, the U.S. Department of Energy,
and the U.S. Department of Defense, have also declined (NSF, 2001~. In a policy
statement accompanying Science and Engineering Indicators 2000, the National
Science Board noted (NSB, 2000~:
The life sciences now account for more than 50 percent of the U.S. federal
investment in basic research.... Today's strong federal support for the life sci-
ences is warranted because biomedical research is on the cusp of a revolution in
preventative medicine and treatment. Nevertheless, today' s overall research bud-
get is increasingly out of balance.
OCR for page 225
CHALLENGES FOR THE FUTURE
225
The generation of key ideas that lead to technological breakthroughs, as well
as sustained incremental innovation, requires contributions both direct and in-
direct via cross-sector technologies from research in many fields. The value of
research results in one field often depends heavily on advances in complementary
fields, which is a strong argument for maintaining a balanced research portfolio
in many fields of science and engineering.
Finally, research opportunities in the social and behavioral sciences pose an-
other challenge for industry program managers, as well as academic researchers.
As the U.S. economy continues to shift toward services, and competitiveness in
manufacturing and services industries is defined increasingly by the relative ability
of firms to manage knowledge and human capital, as well as to anticipate and meet
the wants of customers (involving them more and more directly in the design and
production of goods and services), the importance of research in social, managerial,
behavioral, and policy sciences for industry and government will certainly grow.
For the most part, the value and relevance of this research has yet to be recognized
by industry or government agencies. Although research in selected areas of eco-
nomics and managerial sciences has had a demonstrable impact on industry prac-
tices, researchers in the social and behavioral sciences, in general, have not con-
veyed the value of their research to industry effectively. Examples in this study of
five very different industries show that research in the social and behavioral sci-
ences (integrated with the natural sciences and engineering) in areas related to
information technology and services can greatly improve our understanding of how
technological developments affect individuals and society as a whole.
KEEPING PACE AND MOVING FORWARD
Finding 8-6. The core strengths of the academic research enterprise are stable
enough and flexible enough to respond to the rapidly changing needs of industry.
A major challenge for universities is keeping pace with the rapidly changing
research and human resource needs of industries while continuing to pursue basic
research in new areas to generate ideas that will provide the foundation for
industries in the future. This challenge is manifested differently in different in-
dustries. In the network systems and communication industry, as well as the
medical devices and equipment industry, where linkages to academic research
have been very strong, industry leaders are concerned that academic research
may not be able to adapt, articulate, and pursue basic and applied research and
training in new directions. In the financial services and the transportation, distri-
bution, and logistics services industries, which do not have a strong industry
R&D ethos, and in the mature sectors of the aerospace industry, industry is less
concerned about academic research "keeping up" than about academia meeting
their research and educational/training needs. All five industry studies revealed
OCR for page 226
226 THE IMPACT OF ACADEMIC RESEARCH ON INDUSTRIAL PERFORMANCE
problems with participants in academic long-term research adapting to shifting
industry priorities and emerging opportunities in particular areas.
The academic research enterprise has some very important core strengths.
Universities address a broader spectrum of ideas and disciplinary perspectives
than any other institutions in the U.S. innovation system; they have enormous
potential for multidisciplinary research. Universities also integrate advanced re-
search and education. The constant flow of new students through universities
continuously revitalizes the academic research enterpnse, challenging the as-
sumptions of faculty and bringing fresh perspectives to research. Research-trained
graduates play a critical role in the development, transfer, diffusion, and applica-
tion of new knowledge and technology in industry. Universities can draw on
these core strengths to keep pace with current industry needs and move forward.
REFERENCES
AUTM (Association of University Technology Managers). 2001. AUTM Licensing Survey,
FY 2000. Norwalk, Conn.: AUTM.
Dechenaux, E., B. Goldfarb, S. Shane, and M. Thursby. 2002. Appropriability and the timing of
innovation: evidence from MIT inventions. Summer Institute 2002, National Bureau of Eco-
nomic Research, Cambridge, Mass. Available online at: http://www.nber.org/~confer/2002/
si2002/thursby.pdf. [June 24, 2003]
Henderson, R., A. Jaffe, and M. Trajtenberg. 1998. Universities as a source of commercial technol-
ogy: a detailed analysis of university patenting, 1965-1988. Review of Economics and Statis-
tics 80(1): 119-127.
Jensen, R. and Thursby, M. 2001. Proofs and prototypes for sale: the licensing of university inven-
tions. American Economic Review 91(1): 240-259.
Link, A.N., J. Scott, and D. Siegel. 2002. The economics of intellectual property at universities: an
overview (forthcoming in Special Issue of the International Journal of Industrial Organization).
Available online at: http://www.people.virginia.edu/~sa9w/ijio/abstracts/Accepted/
Overview.pdf. [June 24, 2003]
Morgan, R.P., and D.E. Strickland. 2000. U.S. university research contributions to industry: findings
and conjectures. Science and Public Policy 28(2): 113-121.
Nelson, R.R. 2001. Observations on the post-Bayh-Dole rise of patenting at American universities.
Journal of Technology Transfer 26(1-2): 13-19.
NRC (National Research Council). 2000. Making IT Better: Expanding the Scope of Information
Technology Research to Meet Society's Needs. Computer Science and Telecommunications
Board. Washington, D.C.: National Academies Press.
NSB (National Science Board). 2000. Science and Technology Policy: Past and Prologue. A Com-
panion to Science and Engineering Indicators, 2000. Available online at: http://www.nsf gov/
pubs/2000/nsbO087/nsbO087.pdf. [June 24, 2003]
NSF (National Science Foundation). 2001. Federal Funds for Research and Development: Federal
Obligations for Research to Universities and Colleges by Agency and Detailed Field of Science
and Engineering: Fiscal years 1973-2001. Arlington, Va.: National Science Foundation.
Press, E., and J. Washburn. 2000. The kept university. Atlantic Monthly 285(3): 39-54.
Sampat, B., and R. Nelson. 1999. The Emergence and Standardization of University Technology
Transfer Offices: A Case Study of Institutional Change. Prepared for the 1999 Conference of
the International Society for the New Institutional Economics, September 16-18, 1999. Wash-
ington, D.C.: World Bank.
Stefan, P. 2000. Remarks at the Conference on University-Industry Technology Transfer, Purdue
University, West Lafayette, Indiana, June 10, 2000.
Representative terms from entire chapter:
services industry
