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Tim Finin (finin@prc.unisys.com) has called my attention to a Washington Post article by Michael Schrage (Los Angeles Times) based on a government-university-industry research round-table survey, "Industrial Perspectives on Innovation and Interactions with Universities." The report summarizes opinions of 17 top research officials from U.S. companies: Procter & Gamble, General Motors, Bechtel Group, Martin Marietta, etc.

If the comments are correct, university officials have an inflated view of the importance of university research efforts in innovation. "Many university officials erroneously believe that the discovery of new ideas represents the most significant step in the process of innovation, and that universities are the key source." ... In reality, "industry is the primary source for innovation. Universities play only a limited role in this realm. ... Incremental innovation in industry is more common than breakthrough innovation; the primary role of the university is as educator and provider of talent."

These senior officials complain that research universities are just not in sync with either the needs or the aspirations of American business. Universities neither understand nor effectively contribute to the technology transfer process. The officials are also turned off now by research consortia and expensive alliances. Instead, they've discovered that the most fruitful industrial-academic collaborations emerge from the bottom up -- small groups of researchers from industry and academe who share common interests and build on them. It is the collaboration of individuals, not the marketing of intellectual property rights, that creates progress.

Michael Schrage believes that the lines between scientific discovery and technical innovation are not as sharp as these officials claim. The published view, though, is that "whereas universities are at the forefront of scientific discovery, product-and process-oriented technical change occurs within industrial firms for most fields." In any case, "a different relationship is necessary, one that's far more intimate and collaborative than giving a university a million bucks and expensive equipment in exchange for the exclusive rights to some anticipated breakthrough."

"While the research executives complain about their relationships with American universities, Japanese companies have platoons of their top young scientists and engineers studying at the top universities. They prefer to send people, not money. The Americans do just the opposite. None of the research executives talks about how many people they have on campus or, for that matter, how many top-notch professors and grad students come into their facilities to consult."

An article in Business Week (5/20) by Gary McWilliams and John Carey fleshes out the picture with NSF statistics. Federal research funding continues to increase, but growth has slowed -- we are unlikely to see the past 10% increases per year. The number of researchers continues to increase -- NSF apparently quoted 155,000 -- and corporate funding is not sufficient to take up the slack. It takes $140,000 to support a researcher, based on NSF's average 54% overhead. (Stanford received 74% in 1990, but is now capped at 55.5% -- for a $20M loss in 1991.) Industry provided 6.6% of university research in 1989, vs. only 3.9% in 1980. MIT has been the #1 recipient ($39.6M in '89). North Carolina State climbed to #4 from #23 ($21.7M). Other top- ranking schools are Penn State ($30.2M), UMichigan ($22.0M), Georgia Tech, Texas A&M, UWashington, CMU, Cornell, and UIllinois ($15.7M).