The third workshop of the Chemical Sciences Roundtable, ''Research Teams and Partnerships: Trends in the Chemical Sciences," was held in Irvine, California, on May 2–3, 1999. The presentations and discussions at the workshop considered the current status of research partnerships in the chemical sciences and methods to improve the ability to form and maximize such collaborations. This volume presents the results of that workshop.
Several of the presentations provided case studies in research partnerships, some from a university view (see Wakeham, Evans), others from industry (see Tao, Kohlbrand, Sloane), and still others from the federal government (see Jackson, Powell). In addition, various issues were raised that highlight the changing nature of research teams and the environment in which they are formed. Further elaboration on each of these points can be found in the accompanying chapters.
- Companies are now buying research and development (R&D) services on a global basis. They are looking for the best deals in terms of technology fit, value, and administrative ease (including easy-to-negotiate intellectual property arrangements). Universities in the European Union now actively seek funding from U.S. corporations, and U.S. universities are beginning to wake up to this new competition. Contrasting views of major industrial funding are offered in the contributions by Wakeham, La Porte, and Evans and Tirrell.
- Since the enactment of the Patent and Trademark Amendments of 1980 (popularly known as the Bayh-Dole Act), universities retain legal title to patents on federally funded inventions. As a matter of practice, universities also often seek to retain title to any inventions developed on their campuses with industrial funds. Some universities have found that licensing such inventions can produce large amounts of money. As discussed in Chapter 1 (Mowery), most royalties collected by universities come from life sciences patents, and it may be unrealistic for universities to expect large, routine royalties in other areas of technology. For many universities, royalties may not be enough to cover even the cost of operating a technology transfer office.
- The motives and expectations of organizations appear to be changing. Faced with both rapidly changing, complex technology and cuts in internal corporate R&D, companies now emphasize external research much more than in the past. However, they also tend to expect concrete results in their R&D work with universities and federal laboratories. Universities seek corporate funding, both to increase money for research and to gain royalties. For universities, one new issue is whether private firms hold key information that the schools need for their research and education (e.g., proprietary genomics information). Another issue is whether universities now need collaborations with industry in order to draw the best faculty and graduate students. Research groups (outside of the defense area) in federal laboratories often face two motivations: the need to work with outside groups in order to stay on top of fast-changing science and technology and the need to draw corporate funds in order to maintain research capabilities threatened by budget cutbacks. Overall, these trends indicate more interest in research collaborations but also different interests that will require forthright negotiations in order to reconcile.
- Although companies and universities are actively pursuing research collaborations, there is the danger that large, exclusive arrangements at public universities may lead to concerns, on the part of both other faculty and the general public, about the privatization of public institutions. In particular, will universities be seen as responding more to specific corporate interests rather than to a range of companies or to the overall public interest? The question arises of what kind of collaborations run the risk of generating a significant political backlash.
In the first session of the workshop, David C. Mowery (University of California, Berkeley) established the historical context by providing an overview of three cases of research collaboration in the chemical sciences. The first case examined was the pre-World War II relationship between the Massachusetts Institute of Technology and Standard Oil of New Jersey, of which there were also analogs at other universities and other corporations. The development of fluidized bed catalysis was one significant result of this collaboration. The characteristics of this case were that personnel exchange was of central importance, technology transfer was bidirectional, academic research benefited from access to industrial facilities, industrial collaborators obtained ownership of intellectual property, and much but not all of the results of academics' work in industry was published. The second case considered was the post-World War II activities of the Research Corporation, which had by then established a reputation since its founding in 1912 for expertise in patent management and licensing. The patent licensing goals, originally philanthropic, had by then shifted to production of income which created tension with some clients' interest in using licensing to promote a broader set of objectives. The third case summarized growth of university patenting and licensing since the passage of the Bayh-Dole Act in 1980. Although many universities entered into such activities with the expectation of making a profit, it has often been the case that the most valuable product has been other non-income-producing channels for research collaboration and training of students.
Christopher T. Hill (George Mason University) presented a second facet of the historical context by reviewing various models for organized cooperative R&D between corporations and universities. Beginning with the pre-World War II era of organized industrial R&D, he traced the emergence and linkage of university research with graduate education and, as a consequence of wartime mobilization, the increased government role in support of defense. Although academic engineering education was close to practice during this period, their paths began to diverge as federal support of basic research increased after World War II. Hill then traced events that have led by steps to reintegration of university-industry cooperative R&D following the oil embargo of the mid-1970s, the increased global competition of the
late 1980s, and the restructuring of industry in the early 1990s. Each of these periods saw major experiments aimed at increasing university-industry collaboration, both horizontally among partners and vertically in which research knowledge and trained students are a part of the supply chain.
William A. Wakeham (Imperial College of Science, Technology, and Medicine, London) described a university-industry strategic alliance that is being pursued at Imperial College. The converging forces that shape the strategy include a decrease in government direct funding of university income, emphasis on collaboration between industry and universities, increased student access, the desire to see research results used, and identification of new markets with special emphasis on the biomedical field. Government initiatives taken to address these issues include focusing research funding in priority areas, supporting precompetitive research in areas of commercial potential, rewarding researchers who have raised industrial funding, providing venture capital to help form spin-off companies, and setting intellectual property policies that retain faculty. Wakeham described approaches taken at his university with firms that are long term, based on trust, open-ended, customized and flexible, and multidisciplinary. These efforts are in turn having an influence on the campus through interdisciplinary research projects, targeted scholarships, new education programs, staff and student interchange, shared facilities, support of academic posts, and inclusion of small companies that cannot afford in-house research.
Teams and Partnerships in the University Setting
Matthew V. Tirrell (University of Minnesota), speaking for D. Fennell Evans (of the same university), described the value of research teams within universities, using the University of Minnesota's Center for Interfacial Engineering (CIE) as an example. The CIE is a National Science Foundation supported Engineering Research Center, established in October 1988. It is chartered to carry out research, technology transfer, and education. It is a cross-disciplinary facility, intended not only to help tackle research questions of interest to industry but also to help create a new field and train students for that field. One interesting feature is that the CIE has created a new mode of collaboration among faculty. Instead of the traditional approach of an individual professor asking colleagues for advice when he or she experiences a problem, the CIE encourages, and funds, joint projects and thus promotes new research ideas. CIE also has another important feature: Because all member companies may license any patented technology developed at the center, there is relatively little parenting and licensing. Instead, Industrial Fellows from member companies have become the main mechanism for transferring CIE knowledge and technology to the companies. This fits with the center's emphasis on fostering interaction and teamwork among researchers.
John C. Tao (Air Products and Chemicals, Inc.) presented a corporate perspective on how to build university-industry partnerships. He described how his company and others now fund more external R&D than in earlier years, largely because today no one firm has all of the R&D expertise needed to deal with such factors as faster development cycle times and increasing complexity. In the case of Air Products, 4 to 7 percent of its annual R&D budgets are now spent externally. Today companies work with a wide range of R&D partners, including universities both in the United States and globally, national laboratories, other large firms, and start-up companies. In the case of industry-university partnerships, there are problems rooted in different values. Companies are very concerned about cost and timeliness. Universities focus on the advancement of knowledge and education and less on timeliness. Depending on how important timeliness and intellectual property protection are in a specific case, companies can interact with universities in various ways: gifts, use of university consultants, consortia, contracts, and hiring graduates. Consultants, contracts, and hiring graduates provide greater intellectual property protection and timeliness for a firm than either gifts or consortia. Several factors contribute to
a good university-industry partnership, including a good historical relationship, complementary strengths, clear goals and roles, good teamwork and communication, good science, and clear agreement on who owns intellectual property. Tao sees his company moving toward long-term strategic relationships with a few universities, plus a number of smaller partnerships between individual Air Products' researchers and university investigators.
Todd R. La Porte (University of California, Berkeley) presented what he called a "cautionary tale" about the new, large agreement between the life sciences company Novartis and the College of Natural Resources at the University of California, Berkeley. La Porte chaired the Berkeley faculty senate's Committee on Research and thus reviewed the proposed project. In 1996, the College of Natural Resources faced two problems: old facilities with declining state support to modernize them and a new problem, lack of access to corporate-controlled information on agricultural genomes. The dean then solicited proposals from industry, of which one from Novartis was the best. However, the Berkeley faculty senate was surprised and taken aback by the scale of the proposed collaboration. To tie an entire department, and its intellectual property, so closely to one firm raised troubling questions for a publicly funded university that historically has served all of the people of the State of California. How far did this agreement put the campus down the road to privatization? The faculty senate then posed a series of questions to campus administrators on such issues as the effects of the agreement on publication, students, and California. In return, the senate received what it considered evasive answers. The senate ultimately decided not to block the proposal but to monitor it closely. This case raises issues that need thoughtful consideration.
Partnerships within Federal Laboratories
Henry T. Kohlbrand (Dow Chemical Company) discussed what industry seeks from federal laboratories and offered some examples of industry-laboratory collaborations. Industry R&D priorities are changing with globalization, industry consolidation, and the increased importance of information. R&D collaborations with external partners can offer speed, depth, risk sharing, and other benefits, but to be effective external technology programs require, among other things, clear priorities and an emphasis on win-win solutions. As part of Dow' s external technology activities, the company has had 50 collaborations over the past five years with federal laboratories, with 14 agreements active today. One successful collaboration is the Multiphase Fluid Dynamics Research Consortium, which involves several companies, universities, and Department of Energy laboratories. This and other collaborations offer several lessons, including that people exchange is what really facilitates technology transfer, the collaboration must be a win-win for all parties, the collaboration must be cost effective, and managing intellectual property can be a significant barrier.
Nancy B. Jackson (Sandia National Laboratories) addressed catalysis as a case study in research teaming and partnerships. Sandia, being an engineering laboratory and corporate run, has a culture with a strong commitment to partnerships with industry. In 1998, Sandia had some 300 cooperative research and development agreements (CRADAs) with industry and other research partners. Today, Sandia has a particular interest in precompetitive research in areas of joint interest to both companies and the laboratory. From the laboratory's viewpoint, one motivation is the decline in federal funding in many research areas and the interest in finding outside dollars so as to maintain Sandia's capabilities. From an industry's point of view, many corporate labs have closed. Collaboration helps both sides. However, the Europeans have more experience in building industry-government collaborations, and as Jackson tries to build a virtual, multidisciplinary catalysis research effort in the United States, she finds European
research centers to be the main competition. Nonetheless, U.S. federal laboratories are now motivated to seek partnerships and will continue to do so.
R&D Alliances and Consortia in Industrial Settings
Lura J. Powell, director of the National Institute of Standards and Technology (NIST) Advanced Technology Program (ATP), presented NIST as the only federal agency dedicated to industrial partnerships from its inception, and summarized a set of programs that have evolved to meet different industry needs in appropriate ways. NIST has a broad vision of collaboration as a multilateral, multimechanism activity, which will be increasingly demanded by the fast-paced, multidimensional, changing environment. The increasing requirement for multidisciplinary approaches will generate more partners in a given program. The presence of the government not only brings resources but also ensures recognition of the public interest in broadly enabling technologies. Among the NIST mechanisms are CRADAs, small business support throughout the 66 local centers of the Manufacturing Extension Program, the cooperative centers in Colorado and Maryland in the Joint Institute Laboratory for Astrophysics and the Center for Advanced Research in Biotechnology programs, and the ATP.
The ATP employs cost sharing to bridge the risk gap in developing technology between the basic science and demonstration of feasibility leading to private sector commercialization. It targets innovative technology having broad enabling consequences and is open to all areas of technology. In its tenth year, the ATP has funded 431 programs for $2.8 billion, with significant participation by universities and small businesses. A recently released report1 confirms that the first 38 completed projects have had a significant fraction of successes, as well as some failures. All goals of the program are being attained—not only technical success, commercialization, and financial payback, but also stimulation of collaboration. Several success stories were reviewed, including the National Center for Manufacturing Science printed wiring board and the auto body consortium. Both have already had significant success in improving the competitiveness of major U.S. manufacturing industries. It is expected that only three of the projects will yield benefits equal to the total program cost since inception. A list of partnership challenges has been culled from the experience, headed by bringing the right people together and just getting started. NIST intends to look upstream for collaboration with the basic science enterprise in order to identify opportunities for ATP programs. For this audience it was noted that relatively few of the projects to date involve the chemical industry, although chemical science is integral to several of them.
Discussion confirmed that the perception of the ATP as "corporate welfare" is dead, and the debate is now a healthy one about process improvement and funding and growth levels. Although the ATP does not directly receive a funding stream from successful projects, the payback is real in terms of jobs, economic growth, and quality of life. The audience again commented on the chemical industry's historic aversion to collaboration and speculated on the reasons for it.
Christine S. Sloane, (General Motors) director of technical programs for the Partnership for New Generation Vehicles (PNGV), summarized the content and learning of this program, which is much larger than is common in the chemical industry. PNGV had its origins in concern for global warming and the desire for the transportation sector to make a step change in energy efficiency. The scope of the program requires a very high level of integrated technical and business planning and coordination,
involving not only the major auto manufacturers but also many suppliers and government labs. The program has three major goals: a vehicle with three times today's fuel efficiency, near-term spin-offs to standard vehicles, and major improvements in manufacturing costs and development times. All aspects of the vehicle require significant improvement—often abandoning old paradigms—to meet the overall goal. The criteria evolve over time, with the early emphasis on safety, economy, and emissions growing to a full set including marketability and commercial viability. Despite early reactions that the goal was impossible, it is likely that the concept of vehicles that get up to 80 miles per gallon will be revealed on schedule in early 2000.
Examination of the program reveals that many of the highly challenging technical problems are chemical in nature (e.g., lightweight materials, assembly, combustion, and batteries). The key technology directions were chosen in 1997, but in many cases, such as combustion-ignition engines and fuel cells, fundamental chemical understanding is lacking, so that basic research must continue in parallel with development.
In addition to the revolutionary technical challenges, complexity has been added by the inadequacy of communication among government agencies, which required the auto manufacturers to provide the linkage. Key factors for success in such a large partnership include having a significant societal goal, overcoming adversarial histories, and resolving different value schemes. Many relationships between competitors, suppliers and customers, and manufacturers and government had to be reinvented. The consensus is emerging that economic competitiveness and environmental benefits go together. Delivery as promised is a key to credibility. The commitment must be commensurate with the goal, in this case at the CEO level. It is crucial to recognize the effect of changing market forces and the need for customer acceptance—for instance, fuel economy was second among consumer references in 1980 but fifteenth in 1999.
Emerging realities of the partnership are that government is not monolithic, delay and budget creep must be expected, Congress cannot be expected to understand science and technology nor scientists and engineers to understand Washington, and agency missions are variable but important. Despite the problems, the program is on the route to success and delivering many benefits.
Discussion clarified that issues raised by the merger of Chrysler and Daimler were favorably resolved, because the new entity still conducts R&D and manufactures in the United States. Despite its origins, both political parties have now endorsed the program, so political risks are not severe. The public taste for gas-guzzling sport utility vehicles has to be considered, but the technologies under development can and will be transferred to larger vehicles. No single technology area is emerging as the primary key; all are essential. The Japanese pursuit of similar goals has stimulated Detroit's competitive spirit, especially because it must be kept in mind that the relevant market is not solely the United States but the world. It is not possible to say with certainty that PNGV has permanently altered the level of trust between General Motors and the federal government.