In addition, we have found the most useful metric has been one of knowledge, training, and recruiting. With this metric, most of the programs are successful. There are, of course, many outstanding successes. Crest toothpaste is a direct result of a university interaction, and our largest-selling home pregnancy test kit came from a university-industry program. DuPont's success in changing from fluorocarbons to hydrofluorocarbons (HFCs) was reportedly accelerated through an association involving 10 universities and national laboratories in combination with DuPont's internal capabilities.
Despite these outstanding successes, we have found that we cannot always justify external programs based on new products and jobs alone. However, we can do so based on knowledge integration and increased productivity. Often we have used these associations to explore a high-risk research area and have gained knowledge that has affected internal research but not always led directly to new products. This effort continues to provide knowledge, people, flexibility, and high-risk program leverage. The secondary factors, as were mentioned yesterday by Dr. Jasinski at IBM and Dr. Mitchell at Lucent, are motivation and "lustre." Motivation is important for our scientists, who, because of globalization and decentralization, have moved to research programs with shorter time horizons.
Finally, we are very pleased to pay royalties to universities, but we are concerned about the emphasis in this area. A recently published listing for the 1994 top 50 U.S. research institutions and their top 10 patents demonstrates that only 2 of these were associated with chemistry. There was, as you would expect, a heavy concentration in electronics and biotechnology. Dr. Jack Yost, who is director of research at Pennsylvania State University, had been quite aggressive in working out intellectual property details on contracts with industrial programs. He now reports that the track record over the last 10 years at Penn State shows that royalties are primarily developed from their own research funded from other than industrial sources.
Richard K. Koehn: You have covered a lot of ground. Let me make a couple of very brief comments here. One is on the economics of royalties. No university ought to think about this in economic terms. The University of Utah receives $175 million a year in research funding. Our royalty is about $2 million! And we actually rank around tenth among the universities in royalty income. Basically, the university would be better off putting its money in CDs. By the way, our largest royalty generator is a chemistry patent.
Royalties aren't the reason to foster university-industry interactions. You encourage such interactions for other reasons, not for economic ones. And there are substantial other benefits. As you may know, Netscape was founded by one of our graduates, Tim Clark, after he left SGI. Netscape is doing well and, when they recently visited the university, we discussed a possible partnership. Do you know what Tim wanted? He wanted to hire all of our computer science graduates this year! That is an undeniable benefit—not just to the university, but to its graduates also.
We must be careful when establishing metrics for university-industry interactions. Use whatever metric seems appropriate; the main metric is that the partnership be beneficial for both parties involved.
Charles G. Moreland, North Carolina State University: My comments are a follow-up to the last question. When you talk about start-ups, especially start-ups that come directly from the universities, I would contend that industrial funding (especially large industrial funding) is a detriment. If the universities, in early-on negotiations with industry, give exclusive license to the large company, it will not be possible to form a start-up directly from the university. Then the question is, where is the start-up company coming from? Is it coming from the company to whom you licensed the technology, or is it coming directly from the university? One of the criticisms that you may have read in the report recently published about the Research Triangle area is that we have been overwhelmed by large industrial