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In addition, one can argue that the presence of private funding is likely to be disruptive to the fragile social equilibrium that I described earlier, which supports the norm of openness in academics. A number of speakers have described already how that process would unwind. However, I would like to point out that, although there are some obvious challenges to academic institutions to accommodate various sources of funding, there is also a silver lining. Private corporations, such as biotechnology firms who wish to establish a capacity to apply basic research for their own business, may find it worthwhile to strike alliances with universities and to establish their own research groups. To the extent that they wish to do so, they may be forced, if they want to get into that line of business, to accept some of the norms of openness that go along with academic research. They may also find that accepting these norms can be beneficial to them. It allows them to commit to do scientifically objective research. It gives them an advantage in attracting the best scientists and in establishing a reputation for being a leading technology firm. These opportunities aside, some very challenging steps remain for academic institutions to take to successfully accommodate different funding sources.

In concluding, I make three suggestions regarding strategies universities might undertake. First I suggest that universities carefully manage the portfolio of private and public research they undertake. Here, they could learn a lesson from accounting firms. Accounting firms have learned recently that packaging auditing and consulting services at the same time to the same clients is a bad idea. This situation positions the accounting firm in a huge conflict of interest. It is difficult for the auditing arm of an accounting firm to issue an honest statement about the financial health of a client, knowing that in doing so, it may risk losing the lucrative management consulting business that it has with that client. We have seen in recent months some of the abuses that can occur. Accounting firms have learned that it makes sense to sell off the management consulting activity to an independent firm thereby breaking up these two activities. Why? Because these two activities when grouped together just do not mesh. They present such perverse incentives that one could not possibly expect one firm to perform these contradictory activities in a satisfactory way.

This principle applies to the university as well. Universities should discipline themselves to reject private research that would enlist their advocacy or that would restrict their ability to disclose research findings. They should separate out research that hinders the universities from providing public education and research. One should apply the same principle to individual faculty. Faculty should not be asked to undertake multiple tasks, which inherently conflict and interfere with each other.

A second, and related, suggestion is universities should adopt job-related compensation. Universities undertaking research from different sponsors are going to ask their faculties to engage in various activities. It makes sense to compensate a faculty member based on his performance on the tasks he undertakes. Fine-tuning compensation to the particular job each faculty performs allows the university to target salary and resources to the most valuable areas. It also allows the university to compensate faculty according to whether their research is privately or publicly sponsored.

My final suggestion concerns the transfer of research and technology to the corporate sector. I recommend the university tailor revenue-sharing arrangements to suit the type of research transfer it undertakes. Given the different research output the university may transfer, it is unlikely that one arrangement, such as exclusive licensing, will fit all applications. Instead the university should develop a menu of transfer mechanisms conditioned on two important factors. One would be the corporate sponsor's requirements for cost recovery and exclusive access to research findings. The second factor would be the opportunity costs to other researchers of having incomplete or delayed access to the research findings. Transfer agreements should reflect these factors in computing compensation for transfer of research findings to corporate sponsors. Transfers permitting greater circulation of research to the public domain should be performed at lower cost to the sponsor.

Some of the symposium speakers have suggested one cannot expect universities acting alone to be faithful agents for the public good. If this is true, one might establish a standard for sharing arrangements. This would prevent a “race to the bottom” where universities offer overly attractive transfers to compete against others for private funding. Standards should, however, provide universities enough flexibility to tailor transfers to different types of research.

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