SAH CTCH 821 Strain of Entrepreneurship on Higher Ed 051714

Invention, Innovation, Migration: The Strain of Entrepreneurship on the University

Following the American Psychological Association’s Guidelines

Seth A. Hudson

George Mason University

CTCH 821: The History of Higher Education in the United States

Dr. Mary Frances Forcier

May 17th, 2014

Invention, Innovation, Migration Hudson

Introduction

In 1949, in his inaugural address, President Truman called on institutions of higher

education to lead the way in research that would aid the developing world, promote social

justice, and possible help the human race stave off nuclear annihilation (CITE). While

engaged in those pursuits, developments in the following 60 years complicated matters

for research universities and their faculty. Greater federal resources for small business

entrepreneurs, dwindling state funding, and a reliance on private funding have moved

faculty invention to commercial innovation. Given that move, these faculty may now

migrate from the university and seek to profit for themselves.

Background

Truman’s lofty goals for higher education set a tone for years to come, lading to

inventions like the ENIAC and Mark I computers at major universities—initially

developed to aid the military, these are early example of a long line of

federally/commercial partnerships that made a path for future innovation.

[…] But the scientific knowledge and technical skills that have made atomic and

bacteriological warfare possible are the products of education and research, and

higher education must share proportionately in the task of forging social and

political defenses against obliteration. […] The indirect way to-ward some longer

view and superficial curricular tinkering can no longer serve. The measures

higher education takes will have to match in boldness and vision the magnitude of

the problem. (The President’s Commission on Higher Education for Democracy,

1947)

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Surprisingly, this theme of the interaction of science and technology as a valid research

problem lost momentum in the seventies (Hughes, 1979). Looking back at the initial

relationships between industry and higher education, government funding and higher

education, and the current state of so-called academic capitalism allows one to plot the

future trajectory of research in higher education. Modern technology has a long

umbilical cord (Hughes, 1979), so the path between scientific invention and commercial

innovation is one that needs examining. The role of universities in this invention to

innovation transition is up in the air.

Business Involvement

Though the ties between university education and advances in industry have been

long established, providing qualified individuals to drive the economy, the relationship

has become more apparent over the years. For some, the role of university research in the

21st century is to take discoveries out of the lab and into the commercial world. By 1988,

of 107 U.S. universities surveyed, 41 had direct industrial ties via corporate liaisons.

(Chaddock, 1992). Programs like MIT’s Media Lab (Figure 1), began to get most of their

financial support from corporations

Rosenberg (1970) differentiates invention from innovation: “we still look upon

the transformation of an ‘invention’ into an ‘innovation’ as the work of entrepreneurs,”

mostly the work of the capital goods industry (569). Decades ago, universities had less

capability to move into the commercial space and thus relied on industry to take

discoveries to market. As gatekeepers, corporations were able to run research and

development in a low-risk environment with the potential of great profits.

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Figure 1 (Pasley, 1992)

Whereas the incentive for faculty researchers is to share knowledge that

contributes to the field, industry partners are concerned with securing any commercial

applications in order to generate profit (Van Looy, Callaert, and Debackere, 2006).

Although this commercialization is mutually beneficial in most cases, industry

constraints placed on faculty can disrupt university life. For example, it is now fairly

common for industry partners to delay (or disallow entirely) publication of faculty

research to protect intellectual properties. In the academic environment, though, this

practice can hurt faculty by reducing the incentives on initial inquiry on two fronts.

Firstly, university researchers who rely on publishing to advance in their careers,

or in some cases to begin them, will be hurt in their professional lives. Instead of

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engaging the academy in the creation of proliferation of knowledge, they become no

different than an employee working for the profit of a corporation. Secondly, some

faculty may shy away from these opportunities in fear of the aforementioned scenario.

Though the resources of a corporate partner may allow university researchers to amplify

their efforts and do more ‘good’ for society in the long term, junior faculty may seek

safer projects that have a clearer path to publication. In turn, this impedes the flow of

private funding that justifies the current ties to industry.

Though it plays a major role, private industry has not completely taken over

funding of university research. State and federal governments also affect the climate of

university discovery. In fact, examining the relationship between the industry, university,

and the government bears fruit in this conversation.

Government Involvement

The Triple Helix Concept first presented by Leydesdorff and Etzkowitz (1996)

maps the role of industry, university, and government in the 20th century. Even though

state-funded research has been reduced in many cases, new structures of cooperation

have kept university innovation relatively healthy. The Triple Helix concept provides a

framework to view political and industrial involvement in higher education.

Leydesdorff and Etzkowitz also address the enhanced role of the university in terms of

communication. Academics must learn the languages of business and intellectual

property law in order to flourish. A basic visual representation of the Triple Helix is

below (Figure 2).

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Figure 2 (Leyesdorff, 2006)

As partnerships between the ‘helices’ have evolved, the different parties have

assimilated some common language. This “common language” helps collaboration, but it

also brings potentially complicating knowledge: as researchers see the resources available

to entrepreneurs, they naturally question their role in the large system. They may ask:

“Why should large corporations have the lion’s share of profits from my invention?” or

“Shouldn’t my efforts be put to use in bettering society?”

Rosenberg saw Truman’s vision of science and industry solving the world’s

problems as failing (1970). Conversely, he argues, the rapid development of technology

in major powers impedes under-developed countries from doing the same. Technological

advance does not help developing world because there was no labor or market for most of

these advances other than agriculture. Though altruistic motives are common in

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university research, invention and innovation are driven by the mass market in the United

States (Hughes, 1979).

In the decades following Bayh-Dole, discussed in greater detail later on, federal

policies have sought to shield corporations from risk in research and development,

though in past years these policies have been vilified as picking “winners and losers”

(Link & Scott, 2001). Technology research in higher education is more comfortable with

risk by its very nature, so it stands to reason that corporations would seek to increase the

depth of this relationship.

The energy crises of the 1970’s and other examples of national recession/conflict

ask for a reconsideration of government, state, and industry relationships. Research

institutions are looked at as a way to solve state and federal economic concerns,

universities and their faculty are empowered (Shinn, 2002).

Today the potential for commercialization activity outside of disciplines

traditionally associated with industry, specifically in information technology and

computer science. This move toward industry-relevant research that does not require

expensive equipment means that faculty quality can lead to greater technology transfer

rather than just university resources (Powers & McDougall, 2005). Even in the popular

imagination.

Academic Capitalism

In Academic Capitalism and the New Economy: Markets, State, and Higher

Education (2004), Slaughter and Rhoades seek to identify the current relationship

between the academy and other institutions in society. They cite amendments to the

Higher Education Act of 1965 as a turning point in the relationship between researchers

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and the university. In 1972, the act was amended to give aid to students rather than

institutions. The overhead that came with former aid was now gone, so new models of

funding were sought. Perhaps paradoxically, while federal funding for students

increased, on-the-ground support for instruction may have waned. What has followed in

the last 40 years has been a shift toward commercialization; some say, a shift away from

students.

Figure 3 (Yang, 2008)

Schools believed that, with one major discovery, they could commercialize and

solve all of their financial woes (Dupree, 2008). Naturally, faculty with potentially

lucrative research were encouraged to spend more time in the lab rather than the

classroom. When major grants come in, many universities simply award faculty with a

course reduction rather than direct payment. The perception is that these classes are then

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taught by less-qualified instructors—the misguided stigma attached to taking courses

with graduate assistants and/or adjuncts.

Mendoza (2007) explores the phenomenon of academic capitalism, a set of

market like behaviors the must be adopted by faculty and academic institutions in order

to find alternative funding. Centered in the culture of higher education, Mendoza

examines how this academic capitalism affects other parties, from poor graduate students

in the lab to tenured faculty adjusting to these conditions. Instead of following passionate

curiosity, faculty must now bend the focus of their research toward commerce. The

troubling reality is that many research decisions inside the university are now being based

on potential profit rather than potential benefit to the public good (Rae-Dupree, 2008).

Figure 4 (Slaughter & Rhoades, 2004)

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The traditional “public good” model of research (Figure 4) is now under question. Many

of the motivations and practices for important university research are now put on hold to

better serve industry. Given this current climate, faculty may be tempted to forego the

traditional “public good” model altogether, moving instead directly to the application side

of the equation.

National developments to promote innovation and support small business

entrepreneurship make this possible transition from the academy to industry easier. For

students, higher education is a means to a better life, upward mobility with a greater

earning potential later in life. If improving one’s financial prospects is the real goal,

however, then a clear path to circumvent the university altogether may be appealing.

What’s more is that faculty have an even easier time taking their goods and expertise to

market.

Faculty as Entrepreneurs

The Bayh-Dole act allowed for copyright of not only printed materials, but digital

works; swelling the intellectual property stream coming from universities (Slaughter &

Rhoades, 2004). With the new affordances of Bayh-Dole, the relationship between

university managers and faculty changed. Trustees, boards, etc., now saw faculty work

as intellectual property to be protected and perhaps profited from. At the same time,

faculty began to conceptualize their research pursuits as licensable products and

processes, rather than just knowledge to share for the good of the field (Slaughter &

Rhoades, 2004).

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Additionally, the Small Business Innovation Development Act of 1982 (SBIR)

aimed to help fund research outside of traditional institutions and promote technological

innovation and aid minority groups in this pursuit. Over time, the benefits of the SBIR

have spread to the university, allowing innovative ideas to leave the academy and go to

market (Audretsch, Link, & Scott, 2002). One study found that researchers who

participate in SBIR have greater motivation in their research (Toole & Czarnitzki, 2007),

so for the time being there is benefit to be had by both faculty and institutions. The same

study also found that researchers involved in SBIR are more proactive in

commercializing applied research instead of waiting for the traditional cycles of external

funding.

This entrepreneurship is currently a benefit to universities, but perhaps a tipping

point: O’Shea, Allen, Chevalier, and Roche (2005) hypothesize that those universities

receiving the greatest industry funding also receive a large proportion of public funds.

Even if an institution is unable to directly profit financially from an innovation, colleges

and universities that can align themselves in anyway with these entrepreneurs benefit in

the press. There is a danger of romanticizing a lack of higher education; achievement via

rugged individualism rather than institutionalization.

Most know that Mark Zuckerberg and Bill Gates were Harvard men, even if they

were dropouts. This breaking out of the mold is frequently celebrated in popular media;

even Time Magazine ran a profile of the “Top 10 College Dropouts” in 2010. It should

be noted that although these few exceptional cases dropped out of school, they likely

benefitted greatly from the instruction they received and other social benefits of the

university.

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Conclusion

We are on the precipice of a major change in higher education. Faculty, some

that may feel victimized by the publish or perish mentality of the university, have new

avenues to take their talents elsewhere for greater financial gain—obviously with a risk in

regards to job security. These external opportunities are made even more apparent with

university focus on commercialized research, so what motivates faculty to stay?

The students—hopefully our focus shifts back. Faculty must now undergo a

socialization process to adopt the academic capitalism required of them (Mendoza, 2007),

but perhaps this is merely a wave to pass over. Some very talented faculty-entrepreneurs

have reason and resources to leave the academy in pursuit of greater wealth and

notoriety; a possible migration will drain the talent pool serving our institutions of higher

education.

Those faculty who remain will do so, hopefully, out of a passion for students and

the traditions of higher education. As faculty attempt to enter the commercial space

directly, corporations may have less sway of university research. What remains will be a

focus on enrollment dollars for the university. What happens next is vital—focusing on

the quality of student experience to raise enrollment, rather than lowering standards or

increasing marketing budgets, can mean an improvement in the quality of higher

education across the board.

Faculty will be allowed to focus on teaching and mentorship, rather than chasing

dollars. Administrators can better manage the operations of a university with less time

spent wooing potential corporate partners. Students will gain a sense of shared meaning

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around personal growth and intellectual betterment, knowing that the emphasis in on their

education and overall experience.

Though seemingly utopian, the transition to this new student-focus will be long

and hard. Our current system of academic capitalism and corporate involvement will

have to run its course. Eventually, market forces identify the victors and others will have

to seek a new way. Hopefully, this new way will be one that returns our focus to mission

statements and personal return on investment for those pursuing higher education.

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SAH CTCH 821 Strain of Entrepreneurship on Higher Ed 051714