Education Policy Analysis Archives

In the 1980s, the US government encouraged the cooperation of industries with universities in order to bridge funding gaps and cope with global competitive markets through legislations that allow universities to start spin-off businesses and to generate profits from patents. At the turn of the century, university partnerships with the private sector have greatly increased through research grants, licensing patents, and in some cases, the formation of new firms—mainly at research universities and in the hard sciences. In response to these entrepreneurial opportunities, university administrators developed intellectual property policies to facilitate the commercialization of research. The purpose of this study is to explore the differences across IP policies among nine research universities as potential sources of influence on faculty engagement in for-profit research ventures according to existing models of faculty role performance and achievement. Higher education has become increasingly driven to engage in market-oriented behaviors and many of the specific market-oriented activities involve university research partnerships with private industry. This phenomenon, identified as academic capitalism (Slaughter & Leslie, 1997), started in the 1980s as markets became increasingly globalized and funding to postsecondary education continued to decrease as faculty and universities moved towards greater participation in Education Policy Analysis Archives Vol. 13 No. 4 2 post-industrial knowledge markets (Slaughter & Leslie, 1997) and as competition for research federal funding became increasingly intensified within the higher education arena (Newman & Courtier, 2001). At the same time, the US government encouraged the cooperation of industries with universities in order to bridge funding gaps and cope with global competitive markets by introducing a number of laws to allow universities to participate in profit making and the development of products competitive in the global market (Altbach, 1999; Slaughter & Leslie, 1997). These federal initiatives were largely a consequence of Reagan’s economic policy of open markets and less government intervention, which resulted in less federal support to federal agencies and more privatization (Altbach, 1999). The Bayh-Dole Act in 1980 was the first legislation that allowed universities to start spin-off businesses and to generate profits from patents (Campbell & Slaughter, 1999). As a result, university partnerships with the private sector have greatly increased through research grants, licensing patents, and in some cases, the formation of new firms—mainly at research universities and in the hard sciences. In response to these entrepreneurial opportunities, university administrators have established intellectual property (IP) policies to facilitate the commercialization of research (Olivas, 1992). IP is defined as inventions, discoveries, procedures, know-how, and artistic productions; examples include computer software, chemical or biological procedures, and electronic or mechanical devices. Little knowledge has been empirically documented regarding how well the wide variety of IP policies actually accomplishes the intended goals of university agents. Therefore, the purpose of this study is to explore differences across IP policies among nine research universities as potential sources of influence on faculty engagement in for-profit research ventures. From 1980 to 1995, research and development (R&D) federal support at universities and colleges increased by 51 percent however, due to the Bayh-Dole Act, industry support research increased by 203.8 percent (Gladieux & King, 1999). These types of activities have increased material resources streams for research-oriented postsecondary institutions. In addition, commercialization of research through patents has also been a source of professional prestige as an important symbolic resource for participating universities. Therefore, private commercial partnerships and ventures have become both a symbol of prestige and a source of material funding for research universities (Slaughter, Campbell, Hollernan, & Morgan, 2002). Currently, research universities are developing a culture in which external fund-raising is an ongoing responsibility: In most other states with first-class research universities, they figured out back some time in the '80s, if not before, that the states would do what they could do, but it wouldn't be enough to support competitive excellence and that the institutions themselves had to take ownership of their own revenue stream. They had to raise money, and they had to commercialize their intellectual property, and they had to push their grants and contracts to the outside limit, and they had to make relationships with industry and business, and they had to make their auxiliary enterprises at least break even if not profitable, and so on (Buchholz 2002, p. A1). The preceding quote reflects the degree to which academic capitalism as the engagement in marketlike behaviors on the part of faculty and universities has become a dominant force within higher education in general and an even a stronger trend among research universities (Slaughter & Leslie, 1997). Academic capitalism has also been fostered by significant changes in the nature of scientific research due to the development of new fields, techniques and projects involving hundreds of Mendoza & Berger: Patenting Productivity and Intellectual Property Policies 3 researchers and millions of dollars—a phenomenon that has been dubbed "big science" (Zusman, 1999). For example, prior to fundamental breakthroughs in molecular biology and genetics, life scientists in universities were mainly conducting basic research and industrial laboratories were at the forefront of applied research. The new developments in these fields combined with academyindustries partnerships have given rise to an emerging biotechnology industry hosted mainly in research universities where academics in these fields have become part of a larger technological community involved in commercial activities (Powell & Owen-Smith, 2002). After the inception of the Bayh-Dole Act, university-based research with close ties to industry nearly doubled between 1980 and1990 (Zusman, 1999) and by the 1990s, there were roughly 1,000 university-industry research centers at more than 200 U.S universities. At the turn of the new century, the number of universities involved in commercial ventures has increased eightfold and the number of university patents has increased fourfold (Slaughter et a. 2002). Moreover, some of the traditional non-profit institutions have created for-profit subsidiaries or partnered with forprofit firms and adopted other forms of commercialization by outsourcing and through high executive salaries (Newman & Courtier, 2001). However, academic capitalism is not a uniform phenomenon across higher education institutions. The unevenness is primarily due to unequal distribution of research and development (R&D) funds among universities. Zusman (1999) reported that the top 50 research universities in 1995 accounted for 60 percent of the R&D academic expenses and the top 100 for the 80 percent. The distribution of funds across disciplines has been stable over the last two decades although uneven as well. For example, faculty in engineering receive 79 percent of university-industry funding (Zusman, 1999) whereas around 54 percent of federal funds go to life sciences, 16 percent to engineering, 11 percent to physical sciences, and only 6 percent to social sciences and humanities (Gumport, 1999). As faculty engage in research with commercial potential and as the number of partnerships academia-industry grows, university administrators have invested a significant amount of resources in appropriate infrastructure to promote commercialization of research as a means to generate revenues through royalties and licenses (Olivas, 1992). However, there are difficulties in having contractual arrangements and IP policies that accommodate the differing needs of industry, individual faculty members, and university campuses when the three parties have different objectives and cultures (Hum, 2000). For instance, faculty have usually conducted basic research for noncommercial reasons and their rewards system is based on priority of discovery and prestige rather than material stock options of royalties. Conversely, industry representatives are motivated by profits as well as the challenges of product development and market risk (Slaughter & Leslie, 1997). Other issues fostered by faculty partnerships with industry representatives include conflict of interests, restriction of information flow, shift power to non-academic personnel, universities' fragmentation into entrepreneurial fiefdoms, shifts of research priorities toward more marketable areas with the consequent distortion of traditional academic missions as well as both positive and negative impacts on graduate education (Campbell & Slaughter, 1999; Gumport, 1999; Powell & Owen-Smith, 2002; Slaughter & Leslie, 1997; Slaughter et al., 2002; Zusman, 1999). In addition, as research universities compete against each other for federal funding, annual giving, earnings on endowment state agencies, internal savings, and other surplus-generating activities such as returns on patents and licenses, administrators try to promote these partnerships by controlling faculty research more than a decade ago and by offering external rewards to faculty such as wages and distribution of royalties (Hum, 2000). In sum, industry-university partnerships have provided university administrators, faculty members, and businesspersons with new relationships that are changing the nature of academic roles Education Policy Analysis Archives Vol. 13 No. 4 4 and rewards (Campbell & Slaughter, 1999). These professional shifts have had a variety of impacts on higher education; some–have been viewed quite positively—such as the generation of new sources of revenue noted above—while others are concerned that other unintended consequences may be having a negative impact on the academic profession. The understanding of these shifts and their consequences is a relatively new area of study that provides a unique opportunity to investigate the reshaping of professional roles as well as the tensions and conflicts that surround such changes (Campbell & Slaughter, 1999). This exploratory study is designed to increase existing knowledge about the impact of IP policies on the promotion of commercial research activity within postsecondary institutions. More specifically, this study analyzes the relationship between IP policies at nine public Research I universities with levels of faculty engagement with entrepreneurship. In addition, this study uses the findings from this analysis to provide recommendations for increasing patenting levels at public Research I universities. Theoretical Framework The American professoriate is shaped simultaneously by the social, political and economic contexts of academic capitalism mainly in research universities and in those disciplines most closely aligned with the market (Campbell & Slaughter, 1999; Etzkowitz & Leydesdorff, 1997; Powell & Owen-Smith, 2002; Seashore, Blumenthal, Gluck, Soto, & Wise, 1986). After reviewing existing literature on academic capitalism, we identified two major areas in which academic capitalism has influenced the academic profession in terms of faculty motivation to participate in partnerships with the private sector in Research I universities and primarily in the hard sciences. These two main areas of influence are (1) faculty motivation and academic rewards systems and (2) administrative control over the faculty profession. In this section, we review previous empirical results regarding these two areas and develop a conceptual framework for this study. Faculty Motivation and Academic Rewards Systems Seashore et al. (1989) conducted the first research on faculty attitudes towards partnerships with the private sector. Based on two surveys with 778 life scientists and administrators from a sample of 30 mayor research universities, Seashore et al. found that the major factors that determine faculty interest towards relationships with industry include past success as measured by research publications, degree of establishment that faculty may have such as having more to sell, less motivated by traditional academic rewards, and having greater financial interests. However, based on the finding of Agrawal and Henderson (2002) study, faculty involved in commercialization of research are a minority, even in institutions heavily involved with academic capitalism such as The Massachusetts Institute of Technology (MIT), which holds most of the patents filed by American universities. Moreover, most of the MIT faculty surveyed by Agrawal and Henderson estimated that their patents account for less than 10 percent of the knowledge transferred from their labs and nearly half of the surveyed faculty have never patented, in contrast to 60 percent of the faculty that publish in any given year. The findings above are consistent with existing knowledge about faculty motivation in general (e.g. Bellas & Toutkoushian, 1999). More specifically, studies on faculty attitudes towards commercialization of research suggest that rewards are an important influence in faculty activity and that publishing research in peer reviewed journals is the recognized norm for academic achievement under traditional rewards structures (e.g. Hum, 2002; Kirk, 2002; Powell & Owen-Smith, 2002; Seashore et al., 1989; Slaughter & Leslie, 1997). In fact, Agrawal and Henderson (2002) explain their Mendoza & Berger: Patenting Productivity and Intellectual Property Policies 5 result by observing that publishing academic papers as well as conducting basic research are far more rewarding and important activities for most faculty than patenting. However, for private sponsors, secrecy of new knowledge, rather than broad dissemination, is essential for their survival in the competitive market of patents. Therefore, the secrecy demanded by private sponsors on faculty works is in contradiction with traditional academic values regarding knowledge dissemination (Merton, 1975). Other studies of faculty show that internal motivations such as desire for recognition, science contribution, need for professional freedom, and development of their capabilities are stronger than external motivations such as monetary incentives, unless those monetary rewards allow them to do more research (Campbell & Slaughter 1999; Hum, 2000; Peltz & Andrews, 1976; Slaughter & Leslie, 1997; Slaughter et al., 2002). Slaughter et al. (2002) found that faculty prefer to engage in basic research over commercial endeavors because symbolic rewards have been institutionalized to be more highly valued than have more materially-oriented rewards such as stock options or royalties that are awarded for accomplishment of commercial research efforts. In contrast, industry rewards are pecuniary and patents are the coin of the realm in the world of commercial science (Slaughter & Leslie, 1997). According to these empirical studies, internal motivations and rewards structures and values are areas where most of the differences between industry and academic cultures exist. The academic profession is abundant in resources of intrinsic motivation that supercede monetary incentives such as fascination of research, the enchantments of teaching, peer recognition, and prestige (Clark, 1997). The role of internal motivations and rewards structures in faculty behavior can be better understood through a framework of faculty role performance and achievement developed by Blackburn and Lawrence (1995), which integrates research on faculty role performance and productivity with motivation theories. The following paragraphs are dedicated to a description of the main aspects of this framework and how it applies to faculty behavior in light of academic capitalism as it has been documented in previous empirical studies. The Blackburn and Lawrence (1995) framework models immediate and future faculty productivity as the result of interactions between faculty members as individuals and their work environment. As the basis for this model, they classify existing motivation theories into two main groups, non-cognitive and cognitive. Non-cognitive theories of motivation are based under the assumption that little or non-human cognition is required and that internal needs, personality dispositions, and external incentives and rewards affect individuals’ behavior in predictable ways. Cognitive theories of motivation assume that people make decisions about their behaviors by evaluating their capacity to respond and by estimating their possible losses and gains. The properties of individuals used in this model are: 1. Socio-demographic: including age, gender, race, ethnicity, and country of origin. 2. Self-knowledge: including self-image, self-assessed competence and sense of self-efficacy as well as personal attributes, skills, internal needs, values, and dispositions. 3. Career: including graduate socialization experiences, academic discipline, type of institution, positions held, career age and experience, and past accomplishments. 4. Social knowledge: including how faculty perceive their work environment including individuals’ understanding of others’ expectations, views, and values. On the other hand, the properties of the work environment that affect behavior are: 1. Environmental conditions: including structural and normative features of the institution such as fiscal well-being, geographical location, governance structures, policies, mission, facilities, and resources. Education Policy Analysis Archives Vol. 13 No. 4 6 2. Environmental responses: including the various forms of formal feedback that faculty receive about their performance such as tenure reviews and students’ evaluations 3. Social contingencies: including events that happen at a personal level such as childbirth and marriage. According to empirical studies on faculty entrepreneurship, this study applies the Blackburn and Lawrence (1995) framework by associating relevant environmental and individual properties relevant to faculty patenting productivity into the different components of their framework. Figure 1 is an adaptation of the Blackburn and Lawrence framework representing the components of their model and how they relate to faculty patenting productivity. The thickness of the arrows represents the intensity of the influence from one component to another. Faculty productivity is defined in this study as the number of faculty patents facilitated by faculty engagement with entrepreneurship. The salient environmental conditions that have fostered entrepreneurship in higher education include the shrinking federal research funding as well as the legislations by the federal government in order to promote academic entrepreneurship and industryacademy partnerships. A subsequent environmental response to these conditions is manifested in an enduring competition in higher education for research funds, which brings prestige to those institutions and faculty that successfully acquire such funds. In addition, universities have responded to these environmental conditions by developing IP policies to facilitate the commercialization of research. These policies have induced greater control over the faculty profession and monetary rewards to faculty in the form of funds for research, salary increases, and royalties from technology transfers. The environmental conditions and responses brought by academic capitalism have influenced the social knowledge of faculty in departments involved in academic capitalism especially in regards to shared values and expectations. However, the environmental responses are more directly related to the faculty profession and thus, they have a greater influence on social knowledge of faculty than do environmental conditions. According to Blackburn and Lawrence (1995) framework, productivity influences environmental responses. Therefore, patenting productivity should influence competition for research funding as well as IP policies. Empirical evidence indicates that faculty in departments that are significantly involved with academic capitalism are receiving mixed messages regarding values and expectations of their work environment (Slaughter & Leslie, 1997). This tension inhibits faculty from fully engaging in entrepreneurial behavior, which results in low patenting productivity. These mix messages are due to traditional academic values in opposition to business-oriented values brought by academic capitalism. For example, academic freedom, self-governance, peer recognition, publication of findings, and internal motivations and rewards are in opposition to secrecy of knowledge, control over the faculty profession by administrators, and monetary incentives. Mendoza & Berger: Patenting Productivity and Intellectual Property Policies 7 Figure 1. Conceptual framework for understanding faculty patenting productivity (based on the Blackburn and Lawrence (1995) framework of faculty role performance and achievement) Socio-demographic