Dr. Grunwald introduced Panel IV by noting the great range of university missions in German and the United States, and their varied roles in contributing to innovation. Some universities were seeking to improve along traditional lines of research and education, while others would present new models of partnership with both the community and the private sector. “We are expecting,” he said, “some insights from at least two worlds into how to do innovation, and the contributions the universities can make. Universities can always be reformed,” he added, “but today let us hear about their actual status.”
Dr. Mayer said that he had spent many years on both sides of the Atlantic, most recently returning from seven years as chair of the Department of Sociology at Yale University. In the 1990s he had spent six years as a member and co-chair of the German Council of Science and Humanities. At the end of that term, he wrote a paper titled “Perilous Past Dependency,” a pessimistic view of the future science system of Germany. He said that today he would “have another look” at that topic, beginning with several conclusions.
His first conclusion, Dr. Mayer said, was that the German research system—specifically the public research system—had evolved under certain federal constraints, and its institutional form could be understood only in that context.
Second, apart from “this very peculiar historical development,” the science system actually functions very well “as a differentiated field between
different institutions, with a clear division of labor, different mandates, varying degrees of autonomy and state control, varying degrees of bottom-up and top-down approaches to science, distinctive types of research organizations, and partly overlapping and partly different areas of research.” He noted that the system was often “pilloried,” but said he would “present it as a very functional kind of productive system.”
A ‘Jump-start’ for German Public Science
In recent years, Dr. Mayer said, the German public science system had experienced a “veritable jump-start” in regard to the resources allocated, level of competitiveness, increased national and international cooperation, and measured outputs. Three things responsible for this renewal were major topics for the workshop: the Excellence Initiative defined by Prof. Pinkwart, the contract for research and innovation, and the European Research Council. He suggested that these measures were “segregated and not functioning well together.”
His final thesis was that the challenges to the science system arise mainly from two sources. The first “has to do with the balance of financing the tech space between the states and the federal government.” The other source is the very successes of the system itself—the “downsides or unintended consequences of some very positive developments.”
Dr. Mayer said he would begin with a “three-minute history of the German science system.” It essentially began in 1810, with the creation of the German model of the research university—the “very model that was taken over by Johns Hopkins University” in the United States. He referred to a question asked in a recent book on the American university by Jonathan R. Cole, provost of Columbia University: what is its base, and what can explain its success? In his answer, Cole described the value of the German model in terms of its unity of instruction and research.24
In 1911, as part of the 100th birthday commemoration of that event, the Kaiser Wilhelm Society for the Advancement of Science was established.25This, he said, was the first large research organization outside the university and was launched primarily by private and commercial interests. In 1946, it was the Allied powers that set the path for the later development of what became the research system in Germany today, decreeing no central German government should be in charge of education and higher education. By formalizing this mandate into the constitution, he said, “we have an institutional structure and structural financing that explains a lot which happened later.”
24Jonathan R. Cole, “The Great American University: Its Rise to Preeminence, Its Indispensible National Role, Why It Must Be Protected,” Public Affairs, 2010.
25The Kaiser Wilhelm Society was an umbrella organization for many institutions, testing stations, and research units. After World War II its functions were taken over by the Max Planck Society.
In 1947, the German states agreed to share some of the research financing and other responsibility jointly, and they were joined by the federal government in 1949. This mutual responsibility for research was institutionalized in 1969 by a constitutional change, article 91-B, which allowed the federal government and the states together to support scientific research in institutions outside the universities. Finally, the Unification Treaty of 1990 (Article 38), mandated that all academy of science research institutes should be evaluated by a body of German scientists. A major product of this evaluation, which reduced by about 2/3 the personnel in most institutions, was the Leibniz Association. The Association took over 37 of these institutions, which joined with 40 other institutions in West Germany into the current German research system.
A Research System Distinct from the Universities
Dr. Mayer said that this resulting German research system, distinct from the universities, is now well differentiated into several large programs, each with its own mandate. They include:
• The Max Planck Society, with which he said he had worked for more than 20 years. Each Society institute is directed by a single great scholar who is given virtually complete autonomy.
• The Fraunhofer Institutes focus primarily on industrial research and receive both industry and government funding.
• The Helmholtz Association manages a community of 18 large research laboratories that are similar in some ways to the U.S. national laboratories of the Department of Energy, each focused on a long-term “grand challenge.”
• The Leibniz Association consists of 87 institutions that conduct application-oriented basic research and provide scientific infrastructure.
He elaborated on the Leibniz model, which he called “a kind of a hybrid of research, where we combine basic research, applied research, research infrastructures, and the big research museums. We enjoy a large degree of autonomy in choosing programs, always with the goal of contributing to economic, ecological, and social problems.”
Dr. Mayer gave a broad comparison of the German and U.S. research and education universe. The population of the United States is about four times larger, the GNP per capita of Germany is slightly smaller, R&D spending is about the same, and Germany “does slightly better” in research personnel. For institutions of higher learning, “we could have a long debate,” he said, with about 250 research universities in the United States and 105 in Germany. While this number is proportionately higher in Germany, relative to population, the German universities lag far behind in international rankings. “One reason for
this,” he said, “is that the big research associations are not part of these rankings.”
He said he would challenge some aspects of the comparison of university graduates presented by his colleague Klaus Zimmermann. “Very clearly the proportion of a cohort entering any institution of higher learning is about 2/3 in the United States and about 40 percent in Germany. However, for the proportion finishing four-year colleges, the picture is different. And if you actually compare the proportion of the cohort that completes MA and diploma programs, then Germany looks much better.”
Dr. Mayer said that the doctoral picture in Germany looks better. “There might be some debate over the meaning of recent data,” he said, “but overall I would claim this is a significant and positive difference.” He added that this “provocative” statement, or any comparison in terms of overall human capital, “is totally misleading if you do not include apprenticeships.” The proportion of people in Germany entering the labor market with a highly qualified vocational or professional degree is about 80 percent. He estimated that “at least 50 percent of four-year college degrees are not up to the cognitive standards which are imposed by apprenticeship exams after three and a half years. So if you take these together, I think there’s no doubt that overall human capital in Germany is much to our advantage.”
Funding the Public Research System
Dr. Mayer turned to the support and funding of the research system. About 10 billion Euros go into higher education, he said, and about two billion Euros go into the German National Science Foundation, a doubling over the last decade. The large laboratory programs consume about three billion Euros per year, with the Helmholtz, Leibniz, and Fraunhofer programs each receiving around 1.5 billion.
In terms of funding and share of funding, he noted a mixture of top-down and bottom-up strategies. Some 90 percent of the funding for the Helmholtz Association is provided by the federal government, which is accompanied by “a very top-down approach in terms of program research.” The Max Planck Society is funded in equal proportion by the state and federal governments. “This, in turn, having 17 masters for 17 institutes, insures a very high degree of autonomy.” The Leibniz Association is funded by a 50/50 state-federal partnership as well.” He said that all these association would receive a 5 percent increase for the next five years; the Max Planck Society planned to invest exclusively in new institutes.
Dr. Mayer reviewed the differences among how the programs make decisions. The Leibniz institutes are totally independent, legally and financially, but they have a close relationship with the resident states, and this can lead to different types of innovation. University institutes found to be innovative can sometimes develop into a full-fledged Leibniz institute, and Liebniz scientists often hold joint professorships in universities. The Helmholtz program innovates
from the top down. Max Planck innovates independently without outside influence. The Fraunhofer program, with 1/3 of its funding public and 2/3 private, follows the innovation needs of industry.
He turned to events of the past decade within this “fairly well-balanced system” of programs “with different mandates, different modes of research, and different sizes.” He said that the “jump-start” had begun with a publication of the National Science Council in 2000. This publication advocated more internationalization, stronger research, greater competitiveness, increased mobility, and increased investment by federal, states, and industry. He said that he had had low expectations for this strategy, but that “what happened in the last 10 years is that the universities just turned around. Ten years ago, if anybody had told me that German professors would spend their three-month summer vacations meeting to develop cooperative plans for research collaborations, I would have said they were crazy. But this is exactly what has happened.”
Introducing the Concept of Competition
First, Dr. Mayer said, the Excellence Initiative brought differentiation and inequality into the system. It brought a high degree—”some people say too much”—of competition. And the contract for research innovation has invested 5 percent increases for the next five years. “This was the response of our government at a time of financial crisis when the budget of all the departments and ministries were being cut.”
What is the outcome? he asked. “If you look at the outcome, there’s no doubt that it has worked. The number of publications in Germany has doubled over the last 10 to 20 years.” And in Europe, Germany has consistently increased its university rankings over the past three years, according to the European Research Council The same applies, he said, when comparing the different research associations and calculating the number of published pages and the number of publications. In a recent paper on innovation performance in the European Union, Germany was exceeded only by “the fairly small Scandinavian countries,” which recurs “in a number of indicators of innovation performance. In addition, the number of spinoffs has increased in all the associations, he said. The 87 institutes of the Leibniz Association have generated more than 100 spinoffs within the last year, even though 40 percent of the institutes work in the humanities and social sciences.
Dr. Mayer saw two kinds of challenges. First, the federal states are weakened by low tax revenues during the recession; they are also slow to set clear priorities for higher education. “That means the whole initiative is falling to the federal government. If programs have to be funded jointly, the states are in danger of not being able to carry the load. The big question then is will there be a further increase in the role of the federal government in financing universities along the lines of this model.”
A positive development, he said, is much closer cooperation between the research organizations and the universities. One reason for that is that only the top universities can compete for the funds. Also, the number of joint professorships between institutes and universities are “skyrocketing.” In the DIW, one of the Leibniz Institutes, only one director previously held a joint professorship; today there are between 15 and 20. Finally, there is much more competition between the research organizations. “We actually compete formally within the contract, using a number of indicators on which we are compared in a yearly report.”
Dr. Mayer concluded with a comment on innovation. He said that while all the research associations have been more successful in recent years in their technology transfer, there is ambivalence in Europe about this. A current restructuring of the research programs of the European Union includes a shift of support toward innovation and technology, and away from more fundamental research. “That of course presumes an idea about the production and use of knowledge by the old pipeline theory, where you start with basic research and go to applied research and then marketable goods. I very much doubt whether this theory still applies, and therefore I have doubts that the European research policy is correct in not investing enough in basic research.”
Dr. Proenza said that Professor Mayer’s story “could in many ways be told about the United States,” and that he would describe a story about one university that had many of the same challenges “in a highly competitive environment.” The University of Akron, he said, was a small research university, “certainly toward the bottom of those 250 research universities Prof. Mayer mentioned,” and it realized it had to work in new ways in order to compete.
“Before I tell you how,” he began, “I want to share two pieces of context.” The first was that universities today are being asked to play a different role as the economy has become a knowledge economy. “Largely, we’ve tended to think of universities as producing human capital and some new knowledge. But in fact they generate many kinds of capital: creative capital, knowledge capital, human capital, social capital, financial capital, and natural capital in many ways.” In short, he said, their “product portfolio” is much broader than we have tended to think. In addition, universities have always had natural roles as conveners, bringing people together from all parts of their communities, and as developers, reflecting their substantial real estate presence.
A University Model Based on Relevance, Connectivity, and Productivity
Dr. Proenza said that the University of Akron had developed a model that is based on three principles: relevance, connectivity, and productivity. He noted that many people have a low opinion of the professoriate, joking that “something is academic when it has no relevance.” He suggested that universities do indeed have to become more relevant, so that the value of their activities can be seen more clearly by the larger community. This can be done, he said, by engaging more interdisciplinary teams, communicating more effectively with the community, and focusing on real-world problems.
“We at Akron are fortunate in that we grew up over the last 140 years with the rubber and polymer industry, and developed very close ties with the larger economy. Now I believe that we need to be much more productive it the broad sense.” He said that in the United States, most metrics behind university rankings are input measures that are not related to productivity or output. “If you attract very good students, you don’t have to show that you add any value to them; you simply sit back and watch them develop. And if you’re a large research university with lots of money, you’re somehow judged to be better, even though your output per dollar may be much smaller than others. So we need some new metrics for that process.”
The model Akron has developed, he explained, is to engage with its community, and to understand that if the community is not successful, neither is the university. “It’s a cooperative model between our campus and the community, with lots of feedback.”
Dr. Proenza said that the image of a “world that is flat” was not accurate in his experience—that economies are uneven and “spiky.” “If you look at economic activity, it tends to ‘spike’ in these regions of high activity, and that tends to be near universities. Thousands of institutions containing specialists can add huge value to the economy.” He showed a satellite picture of Germany, taken at night, revealing that the concentration of economic activity and talent is quite different from features of geopolitical maps. “All the major concentrations or pieces of your economy,” he said, “are much larger than the individual cities they contain.”
The University as a Broad-based, Robust Platform
In the context of relevance, connectivity, and productivity, he said, he considers the University of Akron as a broad-based and robust platform for connecting itself to the economy and the community. This platform began its initiatives with a sense of urgency. The university is within the city of Akron, so that about 1/3 of the students wanted to live within the city and the convenient vicinity. And yet that neighborhood was both unattractive and unsafe. “If you were a parent,” he said, “you wouldn’t want your son or daughter to live there.”
Enrollments were diminishing, and the governing board concluded that it had to improve the physical facilities of the campus.
Dr. Proenza and his board began the first two initiatives, a New Landscape for Learning, a campus enhancement initiative, and University Park, an initiative to revitalize the neighborhood around the university. The university sought the help of a major Ohio-based foundation, the Knight Foundation, which responded with a $12.5 million donation to be used over 11 years. The New Landscape for Learning has resulted in 20 new buildings, including a 30,000-seat athletic stadium and two residence halls, 18 major additions and renovations, 34 acres of new green space, 30,000+ trees and other plantings, and new walkways, plazas, terraces, and gardens.
The University Park initiative, too, has been largely successful. Through both private investment and community engagement, it has prompted some $52 million in civic investments, and more than $300 million in private investments. These investments have resulted in benefits to 15,500 residents, about half of whom are students, and 300+ businesses with 24,000 employees, including 920 new jobs.
A New Orientation for Traditional Skills
The university also found itself in a fortunate position with respect to its academic programs. Akron had long had one of the strongest polymer programs in the world, a legacy of an earlier industrial era when the region was a world center of tire design and manufacture. The university realized that its skills in physical sciences, chemistry, and polymers could be reoriented toward biomedical applications. It invited four partners, including the medical school and three hospitals, to form the Austen BioInnovation Institute. Again it sought the support of the Knight Foundation, which provided another multi-year catalytic grant of $20 million. The institute was then able to leverage this grant into a total of $200M to create “the world’s leading biomaterials, orthopedic, and wound healing entity,” as Dr. Proenza described it.
The university has also partnered with “other atypical entities,” Dr. Proenza said. “It’s almost anathema for a research university to collaborate with a community college, but we did so—with two of them—and initiated a series of initiatives.” One is called Operational Excellence, by which the UA and the colleges formed a voluntary partnership with three main goals: to increase educational efficiency by sharing services (such as IT); promoting all phase of job growth, from discovery of knowledge to application; and lowering the cost and time of degrees through more efficient learning pathways.
Another innovative initiative has grown out of the term “Rust Belt.” The UA responded to a request by a trade organization to support more research on corrosion. The university went to the Department of Defense, which agreed on the importance of the topic and lent its own support in creating the first bachelor’s degree exclusively dedicated to corrosion engineering and funded a national corrosion research center.
In another surprising direction, the UA has also collaborated with Inventors Hall of Fame, based in Alexandria, Virginia, to create a series of educational programs for high school students in STEM subjects. The program introduces well-known people who have been inducted, giving students a firsthand exposure to innovative thinking.
The University of Akron Research Foundation (UARF) is a fundamental piece of the UA strategy, a boundary spanning organization designed to link the university and industry. It has grown to $16 million in assets, provided contract services worth about $20 million, manages about 430 patents worldwide, and has initiated five joint ventures. With a research portfolio of less than $100 million, it has started more than 50 companies and 115 industry-sponsored research projects.
Growing Strength from ‘Weak’ Assets
Dr. Proenza explained why the UA approach is significant. In technology transfer, he said, most institutions focus on two objectives: traditional licensing of IP, and supporting the occasional startup. The UARF has instead assembled a much more diverse “tool chest” for economic development, beginning with an inventory of all the assets of the region, many of them unused, and converting these “weak” assets in ways that create strengths. These assets included outdated libraries, space, instrumentation, people, and people’s patents. It also began to work with companies in new ways—”borrowing” unused IP, for example, and helping commercialize companies from other people’s technology. It created an Akron Innovation Campus that, separate from the university, purchased three buildings and started a series of programs staffed by a group of senior fellows and retired volunteer executives with many skills and a will to help. This group has developed networks to bring business and academic people together; started an angel network to fund small startups; started a women’s angel network and a student venture fund; and served the technology transfer needs of small firms.
In conclusion, Dr. Proenza said, “it’s a question of looking at the university not as a one- or two-product institution, but as a broad-based platform that can be both flexible and robust. We have found the value of organizing ‘guerilla’ or under-used entrepreneurial talent, identifying uncommon partners, partnering with the city and community, coordinating closely with other regional groups, and expanding the concept of the university. We have learned the lesson that if you do those things, your institution will be successful in the long term.”
Dr. Pinkwart said that Excellence Initiative had emerged after several months of political discussion in 2005. In June of that year, the federal and state governments of Germany decided to pool extra resources in a new research initiative. Called the Excellence Initiative, it was run jointly by the German Research Foundation and the German Council of Science and Humanities. Two stages of the program have been finished, with the third scheduled to end in 2012. “My opinion,” he said, “is that this is an excellent moment to give a preliminary report on this initiative.” He said he would organize his report under five questions.
1. Why Set up an Excellence Initiative?
In brief, he said, it was inspired by new challenges in the globalized world, which called for new ways to promote high-level research. He noted the comment of Jamed Salmi, coordinator of tertiary education at the World Bank, that economic growth and global competitiveness are today increasingly driven by knowledge, and that universities have a natural role to play in providing that knowledge.
One strategy recommended by Salmi is to “pick winners”—in the sense of focusing public resources on a small group of successful universities. The German Excellence Initiative follows this strategy in giving a few German universities a chance to close the gap with the best research universities worldwide. This strategy, he said, represents a dramatic change for the German science system, in which public financial support for science is commonly spread among every university. Focusing on just a small group could be interpreted as leaving the majority behind, and would have been unthinkable just a few years ago. Yet the federal and state governments now recognized that a new approach was needed if Germany is to be competitive in the brain race against the rest of the world.
2. What are the Goals of the Initiative?
The Excellence Initiative seeks to promote cutting-edge research by creating outstanding conditions at the universities. The results should enhance the international image and visibility of German research universities, he said, and improve their international rankings. Increasing third-party funds and high appointments of scientists with excellent international reputation were parallel aims of the initiative. “These were ambitious goals indeed,” he noted.
3. How was the Concept Implemented?
Supporting an elite within the scientific community signified a serious departure from Germany’s basic tenet of equal distribution of resources. Another revolutionary change was to hold a competition among the universities. The initiative had to apply for financial support, and then face up to the universities not included.
Three lines of funding were offered. First, 39 graduate research schools were selected and given an average of 1 million Euros per year. The objective was to give leading young doctoral students a chance to improve their careers through a network of young academics and experienced scientists. This support presented young scientists with an attractive alternative to moving abroad for graduate study.
Through the second line of funding, the Initiative supported 37 clusters of excellence, with average funding of 6.5 million Euros per year over five years. The clusters attempted to concentrate and focus the research potential of German universities so as to increase international visibility of one particular aspect of their research. This approach encouraged universities to concentrate on auspicious, forward-looking priorities within their research activities and connected them to industrial partners and non-university researchers. Systematic scientific networking abroad further broadened the horizons of researchers.
The third line of funding drew the most attention. Nine universities were given up to 13.5 million Euros per year to improve their international competitiveness. German media soon called them the “elite universities.” This label was not chosen by the government or any scientific organization, but it became popular and considered honorable as a recognition of scientific excellence. Universities in all three categories had to present a long-term strategy on how they would compete with universities of the international top flight.
Even the most daring expectations of politicians and scientists, including those of the DIW and the German Council of Science and Humanities, were exceeded by the number and quality of research concepts put forth in these competitions, he said. “The first round of the Initiative, in 2005 and 2006, shook up the German science system, as did the second round in 2006 and 2007. Selection of the winners from among the 600+ proposals proved extremely difficult for the reviewers, most of whom were from outside. They then consulted with political representatives. Often enough the sole difference was between very good and even better. At the end of the two rounds, science and politics together selected 85 concepts.”
In summary, Dr. Pinkwart said that 39 graduate schools were selected to train top-flight researchers; 37 clusters of excellence were supported; and nine universities were selected for plans to improve universities’ international competitiveness. “Germany’s universities submitted a wealth of forward-looking research concepts,” he said, “extending across all areas of science and all the country’s regions. This not only showed their creativity, but also demonstrated
that universities, which had often been seen as inflexible, actually do have an innovative side.”
4. What were the Results?
After the relatively short period of three years, the first results were clear from an assessment, published in November 2008. The Excellence Initiative, by spending almost 2 billion Euros during the first two rounds, had “created research-friendly structures and promoted interdisciplinary cooperation within universities, between different universities, and between universities, non-university research institutions, and the private sector.” Already existing strengths were being improved to attract both young scholars of promise and leading, already-established researchers.
The initiative was found to be especially beneficial for young scientists, in promoting equal opportunities for male and female scientists, and in helping “balance work and family life. Not least, the initiative has made important contributions to the internationalization of German universities, and increased their attractiveness to students and scientists from Germany and abroad.” Approximately 4,000 young scientists and 300 professors had been recruited in the final project, about 25 percent of them from other countries.
In the coming years, Dr. Pinkwart said, the winning institutions are likely to improve their ability to compete for the best scientists and students, thanks to new funds. The selection processes will filter out the best-performing students and perhaps achieve a goal of reducing the number of university places. Unless political changes block the process, it will be possible for the universities to establish exclusive courses for very small numbers of talented students. “The Excellence Initiative is not only changing the German science and research system,” he said. “It’s actually driving the country as a whole forward.”
5. What of the Future?
Even during the financial and economic crisis of 2009, he said, federal and state governments decided to start the third round of the Initiative, increasing financial support. The applications for this round are being reviewed, and the winners will be announced in June 2012. The program is scheduled to continue until the end of 2017, with 2.7 billion Euros of financial support reserved for the successful universities. With few modifications, the structure of the program, with its three funding lines, will remain the same.
Given the success of the Excellence Initiative, Dr. Pinkwart concluded, “it is hard to imagine that this remarkable program will not be continued in some form. In my opinion, there should be further competitions between the universities that have been supported and those trying to reach this goal. I’m sure this kind of competition is a keystone for the advancement of the whole German science system.”
Bruce Greenwood, of the European Office of the State of Massachusetts, asked who in Germany helps move innovations and new products to market. Dr. Mayer commented that one of the biggest issues being debated in Europe is the patent system. For many years the issue had stalled, he said, but now seems “moving in the right direction.” The question of whether or not to patent an invention is often an open debate. If a firm really wants a product, he said, they may not bother with buying its patent from an institute. “They just come in with a big crew of lawyers and get the property they want. In terms of revenue, there are a lot of patents being awarded, but the revenue is not impressive.”
Dr. Singerman asked Prof. Mayer how public investments in S&T should be measured in Germany, and whether he was feeling pressure from funders to justify the extraordinary growth in support. Prof. Mayer replied that each institute had a program budget, and had to define its goals, with indicators; these must be verified both by the board of scientific advisors and supervisory board. Nonetheless, he said, there is a debate, notably in the Leibnitz Association, about the downsides of this exercise. “It is clear that the combination of these indicators, program budgets, and peer review is needed.” He said he served for many years on the board of scientific advisors of the DIW, and supported the use of peer review. “But I think institutes use constructive ways of measuring,” he said, “and being accountable for output.” The research organizations, too, issue a yearly monitoring report on the program for research innovation, using indicators that compare outcomes irrespective of available resources. He said there is also “an interesting, ongoing debate on what these indicators mean.”
Dr. Pinkwart added that success “depends on what you want to measure.” For the Excellence Initiative, he said, it is important to see that German universities are more competitive in the world. “It’s not okay that German universities will rank starting at number 50 or 60 in the world. So we can now say that, according to the third European Union Report on Science and Technology Indicators, four of our universities of excellence are in top 10 in Europe, with the Technical University of Munich in third place, Freiburg University in sixth place, tied with Karlsruhe, and Heidelberg in ninth place. “That’s important,” he said; “you have to be visible to attract the best talent in the world, professors as well as students. And I think our excellence competition was very important in making our institutions more visible.”