Abstract: ‘Research, teaching, and service’ is growing to include business. With unbridled enthusiasm, academicians bring discoveries to market instead of having them sit fallow in the public domain. Dilemmas have emerged. Academic scientists underwrite their work with public funds and employ a utilitarian labor force, namely, students seeking an education. The benefits from a successful business are significantly higher than in academic ventures, so the temptation increases to abrogate professional responsibilities and loyalties in favor of personal gain. Safeguards are needed for the institution and its students while simultaneously permitting the development of scientifically, socially, and economically important discoveries. 

Keywords: technology transfer, entrepreneurial activity, ethics, graduate education.

1. Reassessing the Bayh-Dole ‘Technology Transfer’ Act

Historically, this story begins with the development of the ‘research university’ in the United States. For the first time, the U.S. government supported significantly the work of academic scientists during World War II (e.g., The Manhattan Project). Following the war, the presidents of Harvard University (James Bryant Conant) and M.I.T. (Vannevar Bush) advocated permanent mechanisms for government support that could turn the intellectual power of the U.S. college and university faculties towards conducting basic research (Graham & Diamond 1997). Founded in the late 1940s, the National Institutes of Health (NIH) and National Science Foundation (NSF) were a direct result of Bush’s persuasive argument. The contract between the universities and the government was implicit: public funding begets public knowledge. As the 1970s closed, this contract became cumbersome. Significant academic discoveries in the biotechnology area, although they could be patented, went largely undeveloped because the U.S. patents derived from public funding were held in the public domain, and companies could simply not afford to spend millions of dollars developing technologies that were in the public domain. Patent exclusivity is the only way to earn back the money from one’s investment. With the 1980 Bayh-Dole "technology transfer" Act (Public Law 96-517, H.R. 6933) the promise of the government-academia partnership set out by Vannevar Bush 35 years earlier was fulfilled. With this legislation, it was now possible for individual academic scientists and/or their institutions to hold exclusive rights to privatize academic discoveries, thus allowing (as the argument went) the development of significant and life-saving advances.

Using simple financial measures, the growth of technology transfer in higher education has been successful. In 1980, royalties paid to Harvard University barely reached $24,000; in 1994, that number had grown to $5.75 million (Katterman 1995). In 1997, Moscovitch of BankBoston estimated that the 232 billion dollar revenues produced by the 4,000 companies founded by MIT graduates and faculty would constitute the equivalent of the 24^th largest economy in the world, and employ 1.1 million people (Gwynne 1997). Between Fiscal Years 1995-1999, U.S. universities signed 10,477 license or option agreements with industry, 12% of which were start-up companies for which faculty members were the chief financial and/or executive officer (Reinhart 2001). Yet, although these efforts are encouraged by legislated national policy, namely the Bayh-Dole Act, feedback from students and faculty lead to cautionary tales about the dark side of this increasingly significant aspect of academic life.

Let me be clear: entrepreneurship is not merely another category of work to put alongside consulting or authoring. I collect money from consulting and authoring, and this is indeed a direct consequence of my work as a faculty member and my stature and experience in the academic community. It is tied to my scholarship. For a faculty entrepreneur, a critical ethical crossroads is reached when decisions made to support a healthy business venture are not aligned with the decisions needed to maintain a healthy academic environment (Gibbons 1989, Cech & Leonard 2001). This difference runs to the core of what a university means. The fallout from encouraging academic entrepreneurship without a strong set of safeguards is potentially devastating, not only in research universities but also at institutions whose teaching missions are being compromised by the pressure to conduct more research.

Technology transfer activities are diverse, and they can encourage practical, inventive, and important faculty work. Academic researchers are encouraged to patent and pursue the fruits of their research labors rather than having them languish undeveloped because industry cannot afford to invest millions of dollars in the unprotected public domain (Branscomb & Keller 1998). Another reason that institutions embraced this move, perhaps, was because of the perception that federal funding had reached its practical limit, and the difference in future needs would have to be made up by privatization (Kreeger 1997). Thorny dilemmas for higher education have resulted. Encouraging faculty members to combine "science and business, nonprofit and profit", Ellen Goodman (2001) wrote in her March 1 editorial of The Boston Globe, is also mixing "altruism and chumphood". In her criticism of academic entrepeneurship, Goodman speculates that Jonas Salk might be considered a chump by today’s standards for having given away his work on the polio vaccine instead of cutting himself in for a piece of the action. The stories I am using to frame this essay are more modest than the discovery of the polio vaccine because the problems are not isolated grand spikes in an otherwise calm baseline. The stories represent cultural conflict where the decisions that make sense for a business enterprise compromise "the basic scientific approach" needed for discovery (Katterman 1995). They are the troublesome, everyday bellwether warnings that academic entrepreneurial activity is not automatically good for everyone involved in them, and more significantly not automatically good for higher education or its institutions.

Interestingly, Reinhart ends his essay with the stronger words of caution as he zeroes in on the moral dilemma. "Public oversight and responsible management," he concludes, "is absolutely critical." This is Reinhart’s dilemma: How do we preserve the benefits from Bayh-Dole, while simultaneously preventing investigator-entrepreneurs from "sliding into abuses, tainting the research endeavor and letting the ends justify the means"? Bayh-Dole was argued on classical Utilitarian principles. Important biomedical discoveries could not be developed and brought to market, so the benefit to humanity was at risk. Universities would also benefit directly from a new revenue stream that flowed straight from established systems of public funding. Populist democrats in the U.S. did argue from the beginning that curtailing public disclosure of government funded discoveries was a problem, heralding some of the concerns for placing basic science at risk, but this was a minority view in 1980 (Branscomb & Keller 1998, p. 223). More recently, the National Research Council, which is the advisory body of the National Science Foundation (Bunk 2000), cautioned that Bayh-Dole, while originally peripheral to the actions of science, might create "substantial long-term consequences on the nature of the basic research enterprise". Cech and Leonard (2001) summarize the abuses, or "hidden dangers" from academic entrepreneurs as using university-paid time and resources for personal gains, causing colleagues to pick up the slack for work and responsibilities not done in favor of business pursuits, selecting student projects based on feeding the business interests, and diminishing the tradition of open discourse. 

While the effects of entrepreneurial activity on scientific practice are important, the consequences for educating students responsibly should be paramount in these discussions. Academic scientific researchers have increasingly dominated a powerless and dependent labor force, namely, students seeking an education and advanced degrees, so the problem of student exploitation, while not new, has become acute (Golde & Dore 2001). The potential benefits for faculty members from entrepreneurial activity, what Professor Carl Djerassi (Stanford University) calls participating in intellectual polygamy (Morell 1989), changes the equation to favor Utilitarian, or even Ethical Egoist ideals. The financial gain from a successful business venture is significantly higher than from a successful academic venture, and the faculty member and the institution are the direct beneficiaries. Tenure spares the faculty member from assuming any real risks, so safeguards may not have been a high priority initially. Students, however, are assuming and perhaps being subjected to the greatest risk, and we may all pay the greatest price, from placing them in a system dominated by a faculty distracted and dissuaded from their primary duties as educators. If academic scientific practice is compromised, then the system of education embedded in that practice suffers; students of science are harmed if their education as scientists is flawed. If students have no option for learning (or earning their degrees in their area of scientific interest) than by becoming the means by which an entrepreneur materially benefits, then we must accept a new academic cultural norm for exploitation.

2. Four cultural conflicts in higher education

Guidelines are emerging in response to these complex and sensitive issues. MIT, for example, uses a "Conflict Avoidance Statement" that asks its entrepreneurial faculty to ensure that funding lines remain clean, that students are not involved in company projects, that there is no delay or restriction on publication of research results, and that differentiation can be made between the research done by the company and the research done on the MIT clock (MIT 2001). The National Institutes of Health have installed new rules to safeguard the sharing of tools and materials (Marshall 1999), although a new Heath and Human Services regulation targeting conflicts that arise from an academic institution’s financial interest in a company conducting gene therapy experiments has proved to be controversial (Marshall 2001). The Howard Hughes Medical Institute (HHMI) has put a 5% limit on the interests that a faculty member may hold in a company, disallowed consultation with a company with whom a faculty member actively collaborates, and requires that the scope of the academic-industrial interaction being carefully delimited (Cech & Leonard 2001).

Conflicts of interest arise for faculty members in at least four areas when business interests collide with academic obligations. These are not new conflicts, but ones that require new standards of behavior for faculty members who assume an entrepreneurial role.

Public conflict. The privileged life of a faculty member, anchored for the majority on the multi-million dollar decision to grant tenure, includes the obligation to retain the public trust and confidence. Financial resources come to universities through many paths. Certainly those institutions supported wholly or in part by public funds carry the obligation to return this investment. I do not think the situation is less clear-cut for private institutions who, above and beyond public money that might support research and other activities, still retain their obligation to put out responsible and contributing members of our society; this, too, is a matter of public trust (Kennedy 1997). Beginning in the 1940s, the U.S. government asked universities and colleges to commit their enormous creative resources, in exchange for public funds, towards basic research. Unfortunately, the public policy decision to fund research is increasingly seen as an entitlement, and it is beginning to be exploited in the entrepreneurial culture. This consequence from Bayh-Dole should be assessed. Can it really be an appropriate or informed use of taxpayer money, as redistributed by the government through the NSF, the NIH, or even a state legislature, to be treated as no-risk venture capital by individual faculty members in the course of their academic research?

Professional conflict. A faculty member’s greatest obligation is educating the next generation, and carrying this out in a fair and timely way is a crucial responsibility. As a moral precept, ‘first, do not harm’ is an important way to think about the faculty-student relationship. At institutions that offer advanced degrees, this includes the professional development of graduate students. While a degree of labor exploitation has always been a part of modern scientific practice, the trade-off in the form of a responsible education and professional career options has apparently made this a defensible position. The concern raised by academic entrepreneurial activity is that a responsible education is not being guaranteed. Three issues (call them potential ‘harms’) stand out. First, as discussed in detail earlier, the process of science is being compromised. Second, responsible mentoring is suffering due to conflicts of interest and simple limitations placed on time management. A third issue is the time it takes to get the Ph.D. There are many reasons why this time has increased over the last decade, but anecdotal evidence suggests that one cause is that productivity from a more experienced graduate student is so high that there is no real incentive for the research advisor to let the person graduate. A new graduate student would not be as productive and a post-doctoral associate would be more expensive. As it is, a test of scholarly character has always been the decision not to hold onto a productive student in the face of competition for resources for research. The entrepreneurial faculty member, who sits at the confluence of what it means to be a ‘boss’ and what it means to be a ‘research advisor’, might be more easily tempted into exploiting the available personnel (students) when business success is on the line. 

Institutional conflict. If entrepreneurial faculty members neglect their teaching, research, and service in order to do the work of business, then their primary jobs are not being done. This is called dereliction of duty. It is up to colleagues to pick up some of the slack, contributing to increased faculty stratification, while some responsibilities just are not fulfilled at all. In her new book, Leaving the Ivory Tower, Barbara Lovitts (Lovitts & Nelson 2001) outlines factors contributing to an alarming attrition from Ph.D. programs, including "increased corporatization and pervasive labor exploitation", and the potential inability of this generation of faculty to replace itself. All the while, excellent future faculty candidates are turned off by what they see around them. While four of the undergraduates whose stories, related above, began graduate school fully intending to pursue a career in academics, two of them changed their minds before the end of their second year. One of them sharply admonished me, saying, "If I were in your position, I would not be encouraging students to enter this system."

Personal conflict. While the self-governance of a faculty body has been substantially turned over to academic administration, individual faculty members are still primarily responsible to themselves. Most of what we do is done without oversight. Perhaps the most difficult dilemmas arise from how to allocate appropriately one’s own time and effort. The continuum of what constitutes appropriate work in carrying out faculty work is filled with gray areas, and we are left with more questions than answers. How is a faculty member to resolve a conflict of interest when the gains from the ‘business’ aspects of one’s work are orthogonal to the best interests of ‘research’ or the ‘university job’? Where would you put your effort if the potential gain of millions of dollars and the responsibility you have for your corporate employees are weighed against the generally thankless academic environment where faculty compete over a meager 3-5% salary program dominated by the stars in the star system?
 
 

3. Reaction and Action

Duderstadt restates Reinhart’s dilemma. Can these goals (as stated in the title: preserving morally responsible education in a utilitarian entrepreneurial academic culture) be met simultaneously? Perhaps, but apparently not easily. Let me review the three responses that currently characterize the situation for faculty who have faced this dilemma, none of which satisfy simultaneously the needs of both higher education and business. First, the simple fact is that nobody can do everything. The de facto separation of the research function from the undergraduate teaching function has taken place at many institutions, where temporary, non-tenure track instructors are responsible for a large fraction of introductory undergraduate teaching. In chemistry, the growth of the so-called "chemical education" community as a separate and distinct group is a testimony to this, including the emergence of Ph.D. programs in chemical education (Coppola & Jacobs, forthcoming). Faculty members who collect salaries predicated on their instructional duties, but who do not actually teach, do not satisfy the needs or demands of responsible education.

Second, and more defensibly, are those faculty members who, upon making discoveries with significant commercial potential, simply leave the university to pursue their new interests. For them, the answer is easy: the conflict between education and business cannot be reconciled, and they make a choice. 

Third, some faculty members enter into negotiations with the private sector, turning over their discoveries in exchange for research funding and personnel support instead of personal gain and the loss of time that running a business entails. These faculty members have, in effect, exchanged one source of support (public government funding) for another (private funding). By turning one’s research time into a zero-sum game, exchanging one source of support for another does not, in principle, take away from one’s other obligations. Fair limitations, clearly defined work boundaries, and shared benefits is a solution most like those being developed at Howard Hughes Medical Institute or the National Institutes of Health. Students in this setting have a better chance to be safeguarded from exploitation while allowing faculty members to pursue entrepreneurial activities.

Faculty members who wish to pursue entrepreneurial activities should certainly be free to do so, but participating significantly in achieving these goals should be clearly recognized as work done outside of time allocated to faculty obligations in research, teaching, and service. For short-term activities, unpaid leaves of absence would work provided one’s obligations to research students could be managed appropriately. If entrepreneurial activity reaches a prescribed threshold that would constitute abuse, then the system must be able to respond in ways that preserve academic freedom yet protects the public trust. For instance, higher education already has a job description for faculty whose primary contributions are outside of full-time academic interests. Such faculty members are called adjunct faculty. Faculty members who chose to maintain significant business interests should be required to relinquish the privileges of their academic positions, including tenure, if they are no longer able to handle the responsibilities in the non-entrepreneurial part of their job. An oversight committee is also needed to monitor more closely research students who are mentored by on-leave or adjunct faculty members to prevent exploitation or neglect. Certainly, neither the institution nor the individual faculty member will embrace this option because both of them must assume risk. Yet, for the same reasons that advisory bodies such as the National Research Council will recommend governance to safeguard science as the more defensible position, advocates for the sanctity and preservation of higher education, and its students, must rise up and be heard loudly and clearly.

Do any of the recommendations in this paper preserve a morally responsible education in the context of entrepreneurial activity? No, of course not; but they do preserve its potential, which is my concluding purpose. Just because the classroom and laboratory are made into safer places for students does not mean that their education is being handled responsibly, but surely it is more difficult to impossible without this guarantee of safety! Certainly, there is a long distance between "safeguarding students from exploitation" and "preserving a morally responsible education", because even the notion of a morally responsible education (Kovac & Coppola, forthcoming) is barely examined and inadequately defined in today’s system of higher education. Academic entrepreneurial activity provides an opening to address these issues, though, because it forces us to consider the place of education in higher education, and the defensibility of choices that bring conflicting ideals into focus.
 
 

Acknowledgments

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Brian P. Coppola: 
Department of Chemistry, University of Michigan, 930 North University Avenue, Ann Arbor, Michigan 48109-1055, U.S.A.; bcoppola@umich.edu