The corporatization of the universities accelerated in the 1980’s and after. Due to passage of a federal law by Congress, universities became open to corporations to profit off their federally funded research. The biggest field is biotechnology.
In 1980, Congress passed the Bayh-Dole Act. Designed to speed up the commercialization of university research, it gave universities the right to patent products and inventions that came out of federally funded research. Also it gave them exclusive license to these patents and the ability to keep profits from these inventions. This came about in the aftermath of the economic downturn of the 1970’s, when the United States was no longer number one and secure in everything. Factory closings, more imports, and more foreign competition, the United States was feeling like it was losing its competitive edge. The Act was intended to reverse this economic slide by pushing all this research out of academia and into the marketplace where it could make money. Benefits for universities included a share of licensing patents, jobs created for graduates, industry grants for research, and to recruit professors who wanted to get rich outside of the classroom.
The Bayh-Dole Act did have some effects, the growth of Silicon Valley is proof of it. Much of the research came from universities, funded by venture capital. Universities became drivers of economic development. It also transformed the nature of universities, seeing the money it could make. Universities created technology transfer offices to create patents and license them to companies. One definition of technology transfer is “extracting commercial ideas from classrooms and labs, patenting them and injecting them into the marketplace.” Universities set policies where professors were allowed to share in royalties from their patented discoveries, all without leaving the prestige of academia. Tech transfer was seen as a “benefit to society,” and a mentality of “patent or perish” was taking over.
The results in numbers were evident. Patent applications from universities went from 250 a year in 1980 to 464 in 1982 to 3,151 in 1998, a 579 percent increase, and predicted to be over 5,000 in 1990. Industry funding for university research went to $1.9 billion in 1990. In 2000, universities made $1.26 billion on licensed inventions. Overall the same year, the U.S. spent $48 billion on basic research, with the federal government providing 58 percent of that. The National Institute of Health is the largest provider of this. It is not surprising that the biggest beneficiary of this new law was the growing field of biotechnology.
Biotechnology is replacing electronics as the major growth industry, and may even surpass it. Billions of dollars in revenue are expected.
This is also expanding academic and industry ties. Professors are starting their own companies, forging ties with private firms, doing industry funded research, or paid for consulting gigs. Scientists are becoming entrepreneurs. Clinical studies are paid for by the companies they own. There are issues of conflicts of interest and scientific integrity, especially as the company and the researcher become the same. An academic-industrial complex has emerged.
A 1996 analysis of 789 articles in medical journals by Dr. Sheldon Krimsky of Tufts University found that 34% of authors had financial ties, usually a pending patent, in the matter studied.
Startup companies have started to be located around universities, and research parks are created by universities to facilitate this technology transfer. These are referred to as clusters. Biotechnology has a tendency to cluster near a university because of the long research phases that goes through before coming up with marketable products. Universities are institutions with the facilities that can do long term research. Also many employees and affiliated hospitals where clinical trials are ran are nearby. High tech clusters are growing with the active involvement of universities, with “business incubators, house start-ups, research parks, technology licensing programs.” There is even an Association of University-Related Research Parks organization formed, based in Washington, with 200 members.
One example of these clusters is Kendall Square in Cambridge, Massachusetts, growing from the biotech boom. There is even a Massachusetts Biotechnology Council.
Another example was started in 1985, where The University of California in San Diego (UCSC) created CONNECT, to “assure that research that had industrial applications or social value got out into society.” In 1995, the University of California published a report, “UC Means Business,” which showed that 80 companies were spun from the San Diego campus, providing 7,000 jobs in the region. Each one of the nine UC campuses has a high tech cluster near it.
Some quotes from the Goldberg article:
“It is is the proximity of a research university shifting from ivory tower to revving economic engine. Indeed, the university is an increasingly powerful force in the knowledge economy, both because its brains are greater assets than ever before and because of a growing trend in which institutions of higher education see themselves as generators of business, whether professors start-ups or technology licensing deals.”
“As universities and their communities, from Washington State to Georgia, strive for economic horsepower, a host of fresh questions are being raised about what a university’s role shoud be, and what happens if the pursuit of money competes with the pursuit of knowledge.”
There are fears of the compromising of the mission of public universities from this corporatization. Ignacio Chapela says public universities should be an “unbreakable line of defense against the risks of technology.” Furthermore, only research universities can ask critical questions without the influence of potential profits.
The resources of the university were also being redistributed. More money was going to departments of computer science, biotechnology, and engineering, with humanities being cut out. Departments were being judged by how much funding they could generate.
The mission of universities being education and research, not business, the role of academia is changing. With neoliberalism, the potential to emphasize departments that make money is greater. Commercialization takes a short term focus. Also, the growth generated by universities can cause gentrification.
In the next article here, I will look at a case at the University of New Mexico where this trend led to a drawn out lawsuit that revolved around biotech patent ownership between inventors and the university.
Stolberg, Sheryl Gay. “Biomedicine is Receiving New Scrutiny as Scientists Become Entrepreneurs.” New York Times. February 20, 2000. Section 1, Page 26.
Abate, Tom. “Bayh-Dole Act Set Collision Course for U.S. Interests, Ethics.” San Francisco Chronicle. August 21, 2000. Pg. B1.
Louv, Richard. “Patent-or-Perish Academia Could Cost Us All.” San Diego Union-Tribune. March 3, 2002. Pg. A14.
Vergano, Dan. “Money Alters Scientific Formula.” USA Today. May 13, 2002. Pg. 5D.
Goldberg, Carey. “Across the Country, Universities Generate a High-Tech Economic Boom.” New York Times. October 8, 1999. National Section.