Perspective from a University with an Industry-Funded Research Program
Alexis G. Clare
The New York State College of Ceramics at Alfred University is both a teaching and a research institution. Unlike research at many other institutions, the college's research is, in large part, industry funded rather than federally funded. This paper describes the nature of much of that industry funding, how it is obtained, and how consortia can be formed to leverage funds for high-risk or pre-competitive research. In recognition of the severe and daunting financial cutbacks that our Russian colleagues are experiencing, this paper describes some of the recent steps that my institution, as a state college, has taken to counterbalance potentially serious cuts in state funding of its academic program.
What is the New York State College of Ceramics?
The New York State College of Ceramics at Alfred University is a statutory college of the State University of New York (SUNY), which originally was established by the state legislature in 1900. SUNY long has been hailed as one of the more heavily subsidized state university systems and as one of the largest such systems in the country. Because SUNY, like other state universities in the United States, usually subsidizes tuition for students, it is advertised as offering an excellent education at a reasonable price. Its 64 separate campuses located throughout the state report to a central administrative body called SUNY Central. Some of these campuses are largely devoted to vocational education and offer two-year associates degrees; others grant undergraduate and graduate degrees. In all SUNY serves approximately 40,000 students.
Five statutory colleges belong to the SUNY system. Housed at private educational institutions, statutory colleges were established by the state legislature to provide specialized education related to the industries in the
geographical area where they were located. For example, the College of Veterinary Medicine at Cornell University is located in a heavily agricultural area. The New York State College of Ceramics (NYSCC) at Alfred University was established to educate engineers and artists for the local ceramics industry. The private school in which NYSCC is housed is responsible for the day-to-day administration of the college program and for providing student services as well as accessory tuition for courses in subjects not taught in the college (liberal arts, business, natural science, and so on). Students at NYSCC pay substantially less tuition than students in other disciplines at Alfred University.
The reputation of NYSCC in both ceramic engineering and art is without equal. The college graduates one-third of the ceramic engineers in the United States. It offers three B.S. degrees, three Masters Degrees, and two Ph.D. degrees; the Ph.D. in glass science is offered at only two other institutions—one in Sheffield in the United Kingdom and the other in St. Petersburg, Russia. All of the aforementioned degrees are considered by academics and industrialists to be the best offered in their fields.
Individual Industrially Funded Research Projects
Alfred University faculty members traditionally have conducted a larger proportion of research under industry contracts than under government grants. Compared to government grants, industrial contracts are of shorter duration with lists of well-defined deliverables and milestones toward meeting project goals. With industry contracts, considerable flexibility in intellectual property policies usually is required. Publication of results can be subject to veto or delay, depending on patent status and type of research. And because industry contracts entail confidentiality agreements and are often short in duration, they are not conducive to graduate student-based research.
For these reasons, the performance of basic research under industry funding is difficult. However, Alfred University has circumvented problems with such research by making agreements with the sponsoring companies concerning publication of research results. According to these agreements, research pertaining directly to a sponsor's product or process may not be published, but results obtained during the course of the contract that do not compromise the sponsor's competitive market position may be published (subject, of course, to examination of the proposed publication by the sponsor).
Some faculty members believe that industrial research is the scientific equivalent of prostitution, while others thrive in the problem-solving environment. Some industry representatives have complained that university researchers are slow to respond, lack focus, and generally do not understand industry needs. These criticisms usually can be reduced when scientists spend leaves of absence in industry. To build industrial partners' confidence in their
abilities, scientists initially might have to take less interesting or financially rewarding projects to get the industry ''hooked" on the institution and on reliance on the scientists' advice and abilities. Lastly, to obtain industrial contacts it pays to advertise both by word of mouth and on the World Wide Web.
State-Funded Research for Industrial Development
The ability of the College of Ceramics to carry out industrial research has been recognized by the State of New York's Science and Technology Foundation. For ten years the Foundation has designated the College's Center for Advanced Ceramic Technology (CACT)—which focuses on processing, characterization, and modeling of high performance ceramics, telecommunications, photonics, bioceramics, and other ceramic-related technology—as a Center for Advanced Technology (CAT). A CAT focuses on a high-technology field pertinent to faculty talents and supports economic development in New York State by (1) developing potentially commercializable ideas, (2) providing small companies with analytical facilities and problem solving assistance, and (3) helping larger companies with high-risk but potentially lucrative technologies. When a CAT receives $1 million in external funding, of which 60 percent must come from New York State companies, the New York State government will provide $1 million in matching funds. These funds are carefully reviewed every year.
In a growing market economy, virtually the only way to persuade government to invest in research is to show that the research will create jobs and increase the profitability of local firms. Testimonials from companies assisted by research institutions as well as a clear plan for leveraging government investments are extremely helpful in this regard. Documentation of the number of jobs created or saved, the amount of profit increase, and the level of production efficiencies achieved is all-important.
NSF Industry/University Centers for Research
More than ten years ago, the National Science Foundation (NSF) established the Industry/University Cooperative Research Centers Program (IUCRC) to increase the participation of industry in research in universities and colleges. The idea was to establish industrial research centers at appropriate university sites to carry out pre-competitive research funded principally by industry and facilitated by a small contribution from NSF.
The philosophy behind these centers is that to remain current in the marketplace, companies must conduct a certain amount of pre-competitive research to ensure (1) a firm basis for development of novel ideas in a pre-
competitive stage that might lead to profitable new products, (2) a logical approach to common manufacturing problems, and (3) the availability of reliable data for input into modeling sequences used in manufacturing. Such research typically is deemed important to the knowledge base of the company but is either too expensive for the company to conduct on its own, too high-risk, or too low a priority to command resources, which instead are diverted to immediate production problems and product development. It is our experience that fundamental studies can be financed by industry, provided that the studies are relevant to a current commercial product or process, are possible precursors to new commercial products or processes, or are funded in a leveraged fashion.
In the United States, approximately 50 centers have been established through the NSF program. Each center has a membership fee (usually about $30,000 to $50,000 per year), part of which may take the form of "in-kind" services, such as the provision of laboratory space, consumables, equipment, or personnel time. Member companies meet twice a year and receive reports on ongoing research and new project proposals. They vote to select projects and fund them from the resources provided by the membership fees.
One of the first centers in the NSF program was established at Alfred University for research in the area of glass. The Center for Glass Research (CGR) now boasts 26 members from all of the major glass industries, along with their suppliers, and an annual budget approaching $1 million. The success of the CGR can be attributed to several factors. First, the NYSCC has a very long tradition of industry-sponsored research and has a reasonable understanding of industry's needs. Second, the CGR members have a great amount of input into the projects and how they are conducted. Finally, the center gives all members, many of whom are competitors, opportunities to meet and discuss common problems and possible solutions.
The Industry/University Center for Biosurfaces
One discovery of the IUCRC program is that what works well for a traditional manufacturing industry, such as the glass industry, does not necessarily work well for other, newer industries. The biotechnology industry, for example, is much more diverse than the glass industry and much more complex in terms of intellectual property protection, government regulations, and development time lines. The NSF Industry/University Center for Biosurfaces (IUCB), therefore, has been less stable than the CGR.
The IUCB was established at the University of Buffalo. Its membership has fluctuated throughout its existence. Approximately six years ago, NYSCC joined the IUCB as a satellite center to provide a perspective in ceramic materials; the University of Memphis joined the IUCB to provide expertise in flow mechanics in cardiovascular systems. Last year, a third satellite with
expertise in cardiovascular systems, at the University of Miami, also became part of the IUCB.
With 11 members, the IUCB is much more diverse in interests than the CGR, although its annual budget of $250,000 is considerably smaller. Its struggle to maintain membership is explained by the fact that many biotechnology firms are small companies for whom the membership fee usually represents a significant portion of their overall budget. These companies also have highly directed research needs. Some members of the IUCB are larger companies that currently have no products in the biotechnology area but that might wish to examine potential new product lines or the interaction of biological systems with their products for health and safety reasons. When there is little overlap between members' needs, consortium research is difficult. In addition, many companies are not satisfied with the IUCRC program's provisions on patent coverage and royalty-free licenses. These companies are inclined to pursue developments in-house, where they can keep discoveries more secure. Finally, small high-tech companies are far more competitive than larger companies and less inclined to pool resources and share ideas. Despite these problems, the IUCB continues to grow, albeit at a slower rate than the CGR.
Several conditions are needed to make a consortium like the IUCRC work well. First, the members need a common material or process about which they have shared concerns. All companies must pay the same membership fee and enjoy the same rights and privileges, regardless of size. Such equality can present a problem if companies considerably different in size wish to join the consortium. However, a policy of equality must be maintained to avoid the creation second-class members. Third, the institution's scientists must be prepared to listen to and work with the industry members; otherwise, their interaction is not as useful or productive as it might be. Finally, both industry and institution participants must understand the benefits of consortium research and should use the consortium as a springboard for further interaction.
While consortium-based industrial research is economical, in a nascent market economy the difficulties of creating a consortium can be severe. These difficulties might be avoided by consortia formed to focus on a very specific problem or to finance a specific invention with applications in two or more non-competing industries. The Whiteware Research Center at Alfred University represents the former type of consortium. It was formed in response to a production problem experienced by a local dinnerware company. The company, delighted with the response to its needs, contacted a number of other, similar companies to form a consortium. Alternately, a scientist might be able to initiate a mini-consortium to finance work on an invention that is ready for the pre-development stage and that may be of use to industry. This type of consortium works particularly well if the research serves two or more entirely different purposes and if non-competitive industries can use the invention specifically for their application. For example, a researcher could invent a non-stick coating
which might be applied to windshields, sanitary-ware, industrial machinery, and cookware. Each industry making these products might adapt the invention to its specific need and apply for an application-specific patent.
When a new governor of New York was elected about two years ago, the generous budget for the state university system of which NYSCC is a part was threatened, and all of the SUNY units faced severe cutbacks, downsizing, and tuition increases. The statutory colleges were in a particularly precarious position because their cost to educate a student appeared considerably higher than that of a regular SUNY campus. Although NYSCC's research program enjoyed a large proportion of funding by industry, it too was put at risk because of its interdependence with the academic program.
To survive, NYSCC needed to respond quickly to the new fiscal environment. The school cut its budget by downsizing through natural retrenchment—for example, leaving positions open and those vacated by retirements unfilled. It also mounted an intense student recruitment campaign to make up the shortfall in funds with tuition dollars, and it achieved greater efficiency through economizing in programmatic offerings. At the same time, the school expanded its degree offerings to remain attractive to students and to offer commercially relevant programs.
While the financial problems are not completely resolved, the College's decision to be proactive rather than reactive appears to have been wise. Crises have a way of forcing changes in strategies and in expenditures—changes that are not altogether bad—although at the time they can be frightening. Sometimes the most advantageous moves—in this case, the expansion of course offerings—can be counter-intuitive.
Success in industry-sponsored research requires flexibility in intellectual property policy (in accordance with any restrictions imposed when federal funding is involved) and understanding of industry needs. Such research must be fast, focused, and relevant; and scientists must listen to their industry counterparts and not assume that they, as scientists, know what is best for industry.
Research consortia need to have common ground and are easiest to create with large, well-established industries that are willing to interact with one another. Small consortia appear to work best for more highly focused research. In today's economy, probably the only way to obtain industry funding of basic research is through consortia of large companies desirous of carrying out pre-competitive research.
A proactive response to potential cuts is more beneficial than a reactive response, although the best response may not be the intuitive one. An analysis of the responses of other institutions in similar situations can be helpful. There is an old saying—"if you want to make an omelet you have to break some eggs." This is tough if you're an egg; but being in an omelet is more constructive than being an unbroken egg in a refrigerator full of bad eggs.