The American Research University from World War II to World Wide Web: Governments, the Private Sector, and the Emerging Meta-University

2. Industry, Philanthropy, and Universities: The Roles and Influences of the Private Sector in Higher Education

37 two Industry, Philanthropy, and Universities The Roles and Influences of the Private Sector in Higher Education Today the multiversity contributes to society through a wide spectrum of activities, with academia playing the ancient and honorable roles of discoverer, conservator, interpreter, and transmitter of knowledge, values, and understanding, as well as the contemporary roles of creator of opportunity for young men and women; developer of new technologies, processes, and even products; and partner with governments, industry, and philanthropists to directly contribute to the advancement of economies , security, health, and quality of life. As universities pursue these new roles, especially in their scientific and technological contributions to economic development , they are at the nexus of five interested parties whose expectations are frequently mutually orthogonal. Students are attracted to science and engineering by curiosity, awe of nature, and the excitement of the unknown. Researchers are driven by “fire in the belly” and obsessive concentration on solving challenging puzzles. Legislators at all levels believe that 38 / Industry, Philanthropy, and Universities tax dollars should produce jobs. Industry wants faster and faster innovation. Donors want universities that implement their personal worldview. Through an increasingly complicated, and largely implicit, integration of federal and state policies and appropriations with academic mission and means, we try to bring some coherence and synergy to these seemingly disparate aspirations. In chapter 1 I concentrated on the role of governments. My purpose here is to address the role of the private sector by exploring a few of the many interesting and continually changing interactions of universities with both industry and philanthropic individuals and organizations . I draw primarily on my personal experience, and thus claim no comprehensiveness. INDUSTRY U.S. corporations and corporate foundations have been a signi ficant part of our national philanthropic community for several decades. In 2003 they made cash and in-kind donations estimated at $13.6 billion, of which 11 percent supported higher education.1 The purposes and nature of donations to universities and other nonprofit entities have varied widely across companies and over time; however, it is fair to say that, increasingly, donations are targeted at activities and institutions that are of direct relevance to donor companies. For example, among the largest recent donations has been the approximately $40 million per year in cash and over $200 million in software that Microsoft has donated to nonprofit organizations. Such donations accomplish a lot of good and also expand potential applications and software markets in the long run. In general, the blend of philanthropic Industry, Philanthropy, and Universities / 39 intent, public relations, capacity building, and social agenda behind corporate giving is complex, as is the tax and regulatory environment in which it operates. Although the distinction is not always clear-cut, I will concentrate here on direct universityindustry interaction in research and education, rather than on corporate philanthropy. If one simply looks at industry as a source of support for research in U.S. universities, its role appears to be modest. In 1953 industry funded approximately 9 percent of American academic research, and the federal government funded about 55 percent. Then came the golden era of federal support, driven in large part by the national reaction to the Soviet Union’s launch of Sputnik. Between 1960 and 1967 federal support grew to 75 percent of the total, and industry dropped to only about 2 percent. Since the mid-1980s industry support has been quite stable at about 8 percent of the mix, while federal support accounts for about 60 percent.2 In other words, for decades industry has funded less than 10 percent of university research. But this belies both the importance and the complexity of the research relationship between academia and industry today. The comparative advantage of the United States in world competition is our combination of a strong R&D base and a free-market economy. Companies and universities have critical and intersecting roles in maintaining this advantage and building upon it. The relationship between academia and industry is therefore of fundamental importance. The evolving relationship between industry and academia can be viewed in the context of the U.S. innovation system. This is, effectively, a loose interaction among universities, governments, and industry that creates new knowledge and technology through 40 / Industry, Philanthropy, and Universities research, educates young men and women to understand and extend it, and to move it to the marketplace in the form of goods and services. The traditional...