Special Report -- The 21st Century Economy -- The Innovative Edge
AN OLD UNIVERSITY HITS THE HIGH-TECH ROAD
Chicago's quest for relevance in the Information Age is forcing it to reexamine its traditional mission
In 1892, industrialist John D. Rockefeller underwrote the construction of a Gothic outpost in the Midwest to pursue higher knowledge in the manner of leading European universities. The University of Chicago soon justified its benefactor's vision, becoming an intellectual cauldron producing pioneering research in sociology, education, free-market economics, and nuclear physics.
But the Information Age has mostly passed Chicago by. The Massachusetts Institute of Technology and Stanford University--the turbines behind Route 128 and Silicon Valley--have become the nation's preeminent technology-research universities. Knee-deep in patents, both enjoy hundreds of contracts with companies to develop commercial products. Chicago, by contrast, never has had an engineering school, and it only recently reinvigorated a purely theoretical computer science department. More telling, it has seen its rank in science funding slip from among the top 10 universities nationally to about 20th over two decades.HIRING STARS. So Rockefeller's institution is evolving, hoping to participate in the economy of the new century. Building on its research muscle in life sciences, the university is trying to capitalize on sweeping medical and biotechnology developments. It's hiring established stars from rival universities and industry labs and seeking out opportunities to commercialize its discoveries. An in-house venture-capital operation called ARCH Development Corp., set up to back professors' entrepreneurial efforts, has lined up its highest number of startups and technology-transfer deals.
It is a quest for relevance--a search that drives dozens of major research universities across the nation. These schools, most of them enormous operations with billion-dollar budgets, are reexamining their traditional missions, attempting to adapt to an era of rapid technological change and globalization. They're trying to keep up as federal research budgets are barely keeping pace with inflation and industry is pulling back on investments in pure research.
The 21st Century Economy will depend on the continued vitality of a broad network of such institutions--sources not only of critical thinkers but also of their ideas. Research universities have helped drive innovation for decades, spurring development of everything from jet engines to the Internet. Indeed, more than half of industry patents issued in 1993 and 1994 credited some basic university research, according to consultancy CHI Research Inc.
The good news: Dozens of universities have the resources to act as research machines. A generation ago, there were perhaps 10, estimates Richard Florida, director of the Center for Economic Development at Carnegie Mellon University. To succeed, though, these schools must identify areas of research, foster collaboration, and invest to turn wispy ideas into full-fledged innovations. They must also work with funders and politicians to extend the "campus" to build mini-Silicon Valleys, Florida argues.
It's a delicate balance. Chicago President Hugo F. Sonnenschein talks of preserving purity--"the emphasis on the question"--but says "producing extraordinary education is extraordinarily expensive, and we can't afford to sit idly by." Observes Robert Zemsky, director of the Institute for Research on Higher Education at the University of Pennsylvania: "Chicago always has been the most classic of universities. They will be tested in the New Economy to remain true to their mission and market-smart."BOUTIQUE STATUS. Chicago's nascent transformation is made necessary, in large part, by a squeeze in federal research funding. Government grants, which in 1997 accounted for 60% of the $24 billion in academic research, have been rising at just 2.3% a year for the past five years, half the rate of the 1980s. And Chicago faces growing competition for both public and private funds from such big schools as the Universities of Illinois and California. Unless it changes, the university faces the prospect of becoming "a boutique, with narrow specialties, limited funding and limited impact," admits David W. Oxtoby, dean of physical sciences.
Chicago is moving quickly to license its technology. Stanford and MIT, aggressive pioneers of such arrangements, are way ahead of the pack, with 259 and 257 active licenses and options on technology, respectively. Chicago has just 36 such deals, but it's catching up: In 1996, by virtue of a few big payouts, it ranked sixth in royalty income, up from 29th the year before and ahead of MIT.
To regain its influence of old, Chicago hopes to reap commercial fruit from its reinvigorated combined division of biological sciences and Pritzker School of Medicine. Three years ago, Sonnenschein recruited Glenn D. Steele Jr., then a cancer-surgery professor at Harvard Medical School, to head the operation. Since then, Steele has replaced 50% of his department heads, many with outside hires--"insinuating the place," he says, "with entrepreneurial people" responsible both for raising funds and for turning out actual products.
Steele wants Chicago back among the top ten science schools within five years. He talks of a new ethic, one that requires measuring progress in commercialization and boosting collaboration with the drug and biotech industries. "I've told the faculty they have an additional responsibility to go beyond the discovery of new knowledge," he says. "No longer is the job description to sit in your laboratory and think, and expect me to provide all the resources."
The arrival of Anthony A. Kossiakoff, who started on July 1 as chair of the biochemistry and molecular biology department, reflects the new emphasis on entrepreneurialism. Kossiakoff, an expert in protein structure and design, brings 15 years of experience as a scientist and executive at Genentech Inc. Now co-chair of a new institute that will bring together basic and clinical researchers in physics, chemistry, computer science, and biology, his outsider's perspective has a refreshing ring: "There is a lot to be gained from interaction with industry, and students are looking for a different kind of high that entrepreneurialism can provide."
Steele's other new catches will join other recent hires such as Craig B. Thompson, an immunologist who arrived at Chicago from the University of Michigan five years ago. Thompson recognized that funding pressures from the feds and third-party health insurers would force researchers to become more entrepreneurial. His research has led to two startups, both backed by ARCH."WE DO SCIENCE." Will such bets pay off? Chicago's reinvention, and that of universities like it, amounts to a market test: Innovation will be rewarded with commercial revenue. That mercenary formula, to be sure, fuels misgivings. Maryellen L. Giger, a 20-year Chicago veteran with a dozen patents in computer imaging to her credit, fears the rush to commercialize will deflect scientists from their true mission: "What we do is science, what they do is business. The motivations are different."
Hers is a concern that resonates throughout higher education. "We are more and more geared to the reality of modern industry," says MIT President Charles M. Vest. "But as that pulls in one direction, we are pulled in another by the quest for fundamental research, which is long-term and uncertain but can result in true innovation." Perhaps universities can find a productive balance. At its best, innovation should spur a virtuous circle--generating revenue that can be applied to more basic research. That could produce the breakthroughs that drive economic growth.By Richard Melcher in ChicagoReturn to top