Ivory Trade

Steven Shapin

  • MIT and the Rise of Entrepreneurial Science by Henry Etzkowitz
    Routledge, 173 pp, £70.00, June 2002, ISBN 0 415 28516 X
  • Universities in the Marketplace: The Commercialisation of Higher Education by Derek Bok
    Princeton, 233 pp, £14.95, April 2003, ISBN 0 691 11412 9

Here is the sort of thing that appals critics of the modern American entrepreneurial university. Members of the physics department invent an electronic gadget that looks like it might be useful in aviation guidance systems. Hearing about the technology, the university’s administration, including a trustee who had been a right-wing Republican President of the United States, takes control of the intellectual property and proceeds to patent it, hoping to generate licensing income for the university, and to cut in one of the inventors for a small slice of the pie. They succeed in interesting a large engineering firm in the technology; an exclusive licence is arranged, and funds begin to flow to the university, including significant sums conditional on the physics department undertaking further work in this area. The administration is delighted with the arrangement, and offers the company privileged access to the department’s personnel and resources. The administration agrees to seek the company’s approval before allowing any of the university’s scientists to publish findings related to the technology. Among the scientists there is a certain amount of grousing about the propriety of this arrangement and its possible effect on their careers: they need to publish to secure their academic reputations. On the other hand, the deal promises a serious expansion of research resources, and, at the beginning of the relationship, there is little angst about such things as ‘academic values’ or a ‘conflict of interests’.

Once the company gets its foot in the door, however, it begins to assert its rights more aggressively. Corporate scientists are sent from headquarters to work in the university physics department, and the company demands that they be given adequate assistance, thus skewing the departmental research agenda. The academic scientists want to develop their work in one direction, but the company insists that it go along avenues that promise the most rapid commercialisation and the most effective protection of their patent position. The chair of the department begins to feel queasy about this but prudently reminds himself that he who pays the piper calls the tune. He considers complaining to the university’s president, but thinks better of it: ‘My guess is that the president would find a way of doing most anything that would bring in money.’

The technology in this story is a microwave tube called the klystron; the university is Stanford; the former President trustee is Herbert Hoover, whose eponymous Institute on the campus was to become one of the major free-enterprise-boosting think tanks; the commercial concern is the Sperry Gyroscope Company; and two of the academic scientists involved are the Varian brothers, who went on to found a high-tech company near the university in which a number of Stanford professors held equity. By the sound of it, a typical story of the thrusting entrepreneurial 1980s or 1990s, with their radically new blurrings of the boundaries between academia and industry. But in fact the time is 1939, long before the Silicon Valley Gold Rush, and even before the postwar institutionalisation of the contract-grant system that bound the American research university so tightly to what President Eisenhower came to call ‘the military-industrial complex’, later appropriately expanded to the ‘military-industrial-academic complex’. (The story is well told in Rebecca Lowen’s Creating the Cold War University: The Transformation of Stanford).

The golden age of ivory towers tends always to lie in an indefinitely receding past, when universities were wholly dedicated to purity, free inquiry, open publication and intellectual autonomy. (It should be said that autonomy and openness were hardly evident in medieval universities committed to the defence of Catholic orthodoxy, or when Oxford and Cambridge were purged by Oliver Cromwell, or again in the general exclusion of Dissenters, Jews and women throughout much of the 19th century.) Current American legend traces the loss of innocence, or the birth of relevance, to Public Law 96-517, the Patent and Trademark Law Amendments Act of 1980, more commonly known as the Bayh-Dole Act after its bipartisan Senate sponsors, which passed into law almost without dissent and with remarkably little public discussion. The compelling issue then was national commercial competitiveness, especially with Japan and the emerging Tiger economies of East Asia, and frustration that so little government-sponsored academic research had yet found its way into the marketplace, there to generate jobs (appealing to the Democrats) and corporate profits (for the Republicans). The Bayh-Dole Act allowed or mandated (depending on whose interpretation you credit) universities to patent and seek to commercialise any fruits of government-funded research that seemed to have market potential. In principle – and this contributed to its appearance as a mandate – the Federal government reserved to itself the right to ‘march in’ and perform these functions if a university failed to take such commercialising steps, but ‘march-in’ rights have rarely if ever been enforced, and American research universities enthusiastically took Bayh-Dole as an occasion to proliferate ‘technology transfer’ offices and to make commercialisation into a key aspect of their social and political identity. Last year, an overexcited piece in the Economist pronounced Bayh-Dole ‘possibly the most inspired piece of legislation to be enacted in America over the past half-century’ (the 1964 Civil Rights Act not, apparently, bearing comparison). ‘More than anything, this single policy measure helped to reverse America’s precipitous slide into industrial irrelevance,’ the article said, improbably identifying Bayh-Dole as the major catalyst in the high-tech innovation explosion of the 1980s and 1990s.

Yet, as the klystron story indicates, Bayh-Dole represented not the origin but only the standardisation, systematisation and political legitimisation of academic concern with commercial intellectual property and technology transfer. American universities had been at this game for many years. In 1918 – the year after Max Weber’s lecture ‘Science as a Vocation’ warned against the Americanisation of German universities – Thorstein Veblen’s The Higher Learning in America sounded an alarm about the ‘conduct of universities by businessmen’: ‘The graver issues of academic policy which now tax the discretion of the directive powers reduce themselves in the main to a question between the claims of science and scholarship on the one hand and those of business principles and pecuniary gain on the other.’ And, while some shared Veblen’s nervousness about university faculty doing ‘applied research’ at all, much of his criticism was directed towards the routine teaching functions which made such demands on academics’ time that research of any kind was impracticable. The proper business of universities wasn’t imparting technical information, the formation of character, football or turning knowledge to practical benefit: ‘Within the university precincts,’ Veblen wrote, ‘any aim or interest other than those of irresponsible science and scholarship . . . are to be rated as interlopers.’ True, Veblen didn’t like the influence of businessmen on university affairs, but neither technology transfer nor the distortion of research agendas by the intrusion of industry’s concerns was then on his mind. In the early 20th century, while some academic scientists might aim to do applied research, what went on in university laboratories was, in general, of little interest to American industry.

This situation gradually changed and, with it, American academia’s relations with the world of commerce. In the first decades of the 20th century, those rare university scientists who secured patents on the results of their research often found academic administrations to be wary of getting involved in the ownership or management of intellectual property. That reluctance, however, stemmed not so much from an ingrained sense of incompatible ‘values’ as from a lack of familiarity with the complicated process of securing, managing and protecting intellectual property; from fear that universities would endanger their major bases of political and economic support if they were seen to be engaged in monopolistic commercial practices; and, to an extent, from the encouragement industry itself gave to universities to stick to what they did best – fundamental inquiry and the training of flexibly skilled people for the labour force. For a series of practical reasons, it was thought better, on the whole, to keep commercial things at arm’s length if you could. So, academically generated patent rights were either assigned to those few individual inventors to do with what they liked, or to various semi-independent patent-holding bodies set up visibly to disengage the university from trade. Such university involvement as there was tended to be justified by public-service concerns: ensuring that exclusively licensed products were manufactured to proper standards, while generating income to support further fundamental academic research in an era when both government and corporate funds for these purposes were scarce.

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