For major research universities, one of these sources is licensing fees realized under the Stevenson-Wydler and Bayh-Dole acts, especially in the emerging field of biotechnology. The patent on DNA recombinant techniques by Boyer and Cohen is a particularly lucrative example: income from the Cohen-Boyer patents for 1991–1992 represented $14.6 million, or 58 percent of total income from all patents held by Stanford University (total income for 1991–1992 was $25.5 million). The GAO survey of the top 35 universities cited earlier does raise questions as to whether this is a useful source of financing for more than a few universities, however. The universities surveyed reported an average income from licenses of $1.6 million; nine universities reported income in excess of $1.0 million and only six reported income in excess of $2.0 million (Blumenthal, 1992). The relatively few commercially profitable inventions emerging from those institutions and the substantial minimum efficient scale of operation, "… [imply] there is a reasonably high probability that many universities that 'invest' in expanded technology licensing operations in order to produce substantial new sources of income [will fail]" (Feller, 1990, p. 340).
In response to increasing biomedical research opportunities, many larger research universities have also directly or indirectly established ventures to commercialize their academic research. In a recent issue of Health Affairs, Atkinson discussed the university-based venture capital funds that were established at Harvard, Johns Hopkins, and Columbia Universities (Atkinson, 1994). Critics of these arrangements have questioned whether true organizational separation is possible—Harvard University, for example, had rejected a 1980 proposal to invest in a start-up biotechnology firm intended to develop research by a Harvard faculty member because it was considered incompatible with the university's central mission of learning. "The preservation of academic values is a matter of paramount importance to the University," wrote Derek Bok, then president of Harvard University, "and owning shares in a company would create a number of potential conflicts of interest with these values" (Hunnewell, 1994). In 1988, however, the university reversed itself by establishing Medical Science Partners, an enterprise designed to commercialize biomedical research findings. More recently, Harvard has proposed to establish an academic research center, the Harvard Institutes of Medicine, that will also include biotechnology companies (Hunnewell, 1994). In both instances, the university has faced little of the faculty criticism or media attention that accompanied the 1980 proposal. To date, however, no evidence is available on whether these university-based venture capital funds are in fact an effective means of commercializing research findings.
Increased investments in R&D have contributed to the development of new knowledge; the strengthening of the pharmaceutical and device industries; the growth of universities, academic health centers, and medical specialties; and