On April 27, 2020, the Wall Street Journal published an excellent piece titled “A Secret Group of Scientists and Billionaires Pushing a Manhattan Project for COVID-19.” The piece outlined an effective partnership between private sector funding and citizen scientists to develop multiple waves of therapies, antibodies and vaccines for combatting the virus’s spread in an expedited fashion. Funding would come from the group members, and many of the scientists — including a 2017 Nobel laureate — resided at American universities. This group was doing what already could have been done earlier through federal, university and private sector partnerships: focusing on new areas of investment that have positive national implications. This needn’t be a monolithic industrial policy but must take into effect a new economic philosophy focused on the national, not just “multinational,” good.
As Jennifer Harris, senior director for international economics and labor on the National Security Council and National Economic Council, and U.S National Security Advisor Jake Sullivan state in a 2020 op-ed in Foreign Policy, “A return to industrial policy shouldn’t simply pick up where the country left off a few decades ago. Rather than focusing on picking winners in specific sectors, there is an emerging consensus that suggests governments should focus on investing in large-scale missions ... that require innovations across many different sectors.”
Since the COVID-19 crisis began, many in higher education have been asked why the finest university system in the world wasn’t able to predict the crisis or provide a solution. While the question is somewhat unfair, more Nobel laureates in physics, chemistry, medicine and economics reside at American universities than anywhere worldwide — yet we weren’t ready. In addition, COVID-19 has pushed many already stressed university budgets to the breaking point. Failure to predict or address the COVID-induced environment highlighted much of the public’s perception of higher education’s flaws for survivability: that it has been disinterested in markets and relevance, distracted by politics, distrustful of public-private partnerships and disengaged from business solutions that could commercialize research for the greater good. According to the Education Advisory Board, which met for an Academic Affairs Forum in May of 2020, higher ed was an industry already at risk pre-COVID, with flattening growth markets and declining demographics, increasing problems with affordability and an uptick in college closures. With the pandemic, we have seen a dramatic drop in international students (and their tuition revenue), lower overall yields in freshman classes and an accelerating college closure rate. When the education industry is looking directly at a crisis, it is a good time to look for new solutions as a profession.
Higher education has reached an inflection point where its financial models are not sustainable, and its mission is being questioned by both the public and private sectors alike. Many public universities are subject to the calls of state legislators for increased efficiencies, yet operational efficiency is not a strategy, especially at a university. All cost-cutting does is buy time. American research universities do not need to change models that are based on core strengths of research and teaching — far from it — but they do need to find new, long-term sources of funding beyond endowments, federal grants and tuition increases. However, there is a significant disconnect between university research initiatives, market and societal needs and effective funding sources. Potentially impactful university research often lies fallow due to a lack of a commercialization culture on campuses and governmental restrictions on nonprofits. Leadership at research universities needs to undertake an overhaul of how they look at revenue generation and how they generate greater economic and societal impact in this new era. As observed in a study conducted by the Cleveland Federal Reserve between 1987 and 2013, this means a fundamental rethinking of our research agendas to have a greater impact and stronger partnerships with both internal and external investors. A university’s research independence should not result in academic isolation. It is time to find a meaningful and profitable balance, for the greater good.
The Bayh-Dole Amendment of 1980 went a long way toward allowing universities to benefit financially from federally funded research. A National Science Foundation report published in December 2022 indicates that the country’s academic institutions spent $89.9 billion on research and development in fiscal year 2021. This level of spending is a 4% increase from the previous year — with almost all of that increase funded by the federal government. According to the report, federal support accounts for 55% of research funding at all universities. But beyond Stanford, M.I.T., Notre Dame and a few others, American universities have been slow to adopt an entrepreneurial mindset toward the commercialization of technologies and IP — this despite the networks of corporate, private equity and venture capital funding that exist in many university business schools. Conversely, European universities are intensifying efforts to get promising ideas out of their labs and into commercial use.
