Michael M. CrowExecutive Vice ProvostColumbia University

April 17, 2001

The Academy and the The Academy and the Market in the U.S.Market in the U.S.

Research and Economic Research and Economic Advance after 2001Advance after 2001

U.S. Universities: Stages of U.S. Universities: Stages of EvolutionEvolution

• Colonial colleges

• Research universities funded via philanthropy

• Land grant colleges via Morill Act

• Vocationalism

• Engineering and applied science disciplines institutionalized

• System of serious research universities established

• Universities tend toward basic research

1790 1840 1940

U.S. Universities and Industry: U.S. Universities and Industry: late 19th to early 20th centurylate 19th to early 20th century

• The relationship between universities The relationship between universities and industries is not a new oneand industries is not a new one

• Many U.S. universities chose their Many U.S. universities chose their missions, styles, and focus based on missions, styles, and focus based on needs of provincial economyneeds of provincial economy

• Most research at U.S. universities was Most research at U.S. universities was hands-on problem-solvinghands-on problem-solving

U.S. Universities and Industry: U.S. Universities and Industry: early 20th centuryearly 20th century

• New engineering and applied science New engineering and applied science disciplines were institutionalized at disciplines were institutionalized at universities universities – training scientists for industrytraining scientists for industry

– leading to rise of industrial research leading to rise of industrial research laboratorylaboratory

– involving elite institutions (rather than involving elite institutions (rather than separate schools)separate schools)

U.S. Universities and Industry: U.S. Universities and Industry: mid-late 20th centurymid-late 20th century

• After WWII, major shift in universities After WWII, major shift in universities towards basic research towards basic research

• Over the last half century, there has Over the last half century, there has been a clear division of labor between been a clear division of labor between academic and industrial researchacademic and industrial research

– industry focused on shorter-term problem industry focused on shorter-term problem solving, design and developmentsolving, design and development

R&D expenditures at U.S. R&D expenditures at U.S. universities and colleges, by universities and colleges, by source, FY 1992-99source, FY 1992-99

0

5

10

15

20

25

30

Billion

s o

f U

SD

OtherInstitutionIndustryState/ localFederal

University research important University research important to U.S. industriesto U.S. industries

• Milk and dairy productsMilk and dairy products

• Canned specialtiesCanned specialties

• Logging and sawmillsLogging and sawmills

• Pulp, paper and paperboard Pulp, paper and paperboard millsmills

• Farm machinery and Farm machinery and equipmentequipment

• Grain mill productsGrain mill products

• Processed fruits and Processed fruits and vegetablesvegetables

• Semiconductors and related Semiconductors and related devicesdevices

• Engineering and scientific Engineering and scientific instrumentsinstruments

• Pesticides and agricultural Pesticides and agricultural chemicalschemicals

• Millwork, veneer and plywoodMillwork, veneer and plywood

• Synthetic rubberSynthetic rubber

• DrugsDrugs

• Animal feedAnimal feed

University-Industry InteractionUniversity-Industry Interaction

• Industrial affiliatesIndustrial affiliates

• Industrial research Industrial research contractscontracts

• Joint Government-Joint Government-Industry centersIndustry centers

• Industrial grantsIndustrial grants

• Industry-endowed Industry-endowed chairschairs

• Technology transferTechnology transfer– Spin-offsSpin-offs

– LicensesLicenses

• Joint venturesJoint ventures

• Small Business Small Business Innovation Research Innovation Research (SBIR) grants(SBIR) grants

The new knowledge-driven economyThe new knowledge-driven economy

Knowledge is our most powerful engine Knowledge is our most powerful engine of production (Alfred Marshall, 1890)of production (Alfred Marshall, 1890)

Why is knowledge becoming more important?Why is knowledge becoming more important?

• Extraordinary progress in information and Extraordinary progress in information and communications technologycommunications technology

• Increased speed of scientific and technological advanceIncreased speed of scientific and technological advance

• Increased global competitionIncreased global competition

• Changing demandChanging demand

Industry-sponsored R&D Industry-sponsored R&D expenditures at U.S. universities expenditures at U.S. universities and colleges, FY 1992-99and colleges, FY 1992-99

0

0.5

1

1.5

2

2.5

Billion

s o

f U

SD

Industry

Technology Transfer TrendsTechnology Transfer Trends

• 3,914 new licenses and options were executed 3,914 new licenses and options were executed by U.S. universities in FY99 (up 7% from FY98)by U.S. universities in FY99 (up 7% from FY98)

• 62% of new licenses and options executed 62% of new licenses and options executed were with small companieswere with small companies

• 50% of new licenses and option were 50% of new licenses and option were exclusive; 50% were nonexclusiveexclusive; 50% were nonexclusive

• 83% of license income was earned on product 83% of license income was earned on product salessales

Industrial/Market Interface Industrial/Market Interface IssuesIssues

• Conflict of interestConflict of interest

• Conflict of commitmentConflict of commitment

• Changing research agendaChanging research agenda

• Private vs public sciencesPrivate vs public sciences

• Academic corruptionAcademic corruption

Knowledge As CapitalKnowledge As Capital

• Columbia needs to expand its ability Columbia needs to expand its ability to identify, secure and leverage to identify, secure and leverage those intellectual assets that have those intellectual assets that have the capacity to be used as the capacity to be used as knowledge capital in the new knowledge capital in the new economyeconomy

Columbia KnowledgeColumbia Knowledge

• Over $500 million in research supportOver $500 million in research support

• 22,000 students22,000 students

• 2,900 faculty2,900 faculty

• 58 Nobel Prizes awarded58 Nobel Prizes awarded

• Over 400 patentsOver 400 patents

Columbia Innovation EnterpriseFY84-FY00

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

FY

84

FY

85

FY

86

FY

87

FY

88

FY

89

FY

90

FY

91

FY

92

FY

93

FY

94

FY

95

FY

96

FY

97

FY

98

FY

99

FY

00

Mill

ion

s

License Research

$636 Mil Cumulatively

Columbia Innovation Columbia Innovation Enterprises (CIEs)Enterprises (CIEs)

• CIEs as a new type of venture CIEs as a new type of venture organizationorganization

• CIEs will coordinate the development CIEs will coordinate the development and transfer of Columbia’s intellectual and transfer of Columbia’s intellectual property, scientific and technological property, scientific and technological know-how and educational content to know-how and educational content to the marketplacethe marketplace

CIE/Science and Technology CIE/Science and Technology VenturesVentures

• Facilitate the creation of value from Facilitate the creation of value from University discoveries by conveying University discoveries by conveying them to industry either as licensee them to industry either as licensee or as the catalyst for new company or as the catalyst for new company start-upsstart-ups

CIE/Digital Knowledge CIE/Digital Knowledge VenturesVentures

• Stimulate innovation and adoption of Stimulate innovation and adoption of digital technology by our core asset, digital technology by our core asset, the facultythe faculty

• Build Columbia’s bridge and Build Columbia’s bridge and storefront to the digital economystorefront to the digital economy

• Establish a position in the high-end Establish a position in the high-end knowledge content businessknowledge content business

CIEs: Goals, 2001-2005CIEs: Goals, 2001-2005

• Increase the identification and recovery of Increase the identification and recovery of scientific and technological innovations from scientific and technological innovations from Columbia science and engineering laboratoriesColumbia science and engineering laboratories

• Establish mechanisms for innovation enhancement Establish mechanisms for innovation enhancement prior to new company formation or licensingprior to new company formation or licensing

• Build and operate transfer mechanisms that will Build and operate transfer mechanisms that will move Columbia knowledge content to the move Columbia knowledge content to the marketplace as quickly as possiblemarketplace as quickly as possible

CIEs: Goals, 2001-2005 (cont’d)CIEs: Goals, 2001-2005 (cont’d)

• Establish a new enterprise development team for new Establish a new enterprise development team for new technological and knowledge-based company formationtechnological and knowledge-based company formation

• Establish knowledge content and technology Establish knowledge content and technology partnerships to enhance the leverage of Columbia assetspartnerships to enhance the leverage of Columbia assets

• Establish web-based marketing mechanisms Establish web-based marketing mechanisms for new discovery of knowledge and technology for new discovery of knowledge and technology that fuel innovation and new enterprise that fuel innovation and new enterprise developmentdevelopment