UniversityâIndustry Research Partnerships - ACS Symposium Series

Chapter 9

University—Industry Research Partnerships A Corporate Perspective

Downloaded by NORTH CAROLINA STATE UNIV on November 5, 2012 | http://pubs.acs.org Publication Date: November 18, 1992 | doi: 10.1021/bk-1992-0478.ch009

J. D. Burrington BP Research, Warrensville Research Center, Cleveland, OH 44128

In t h e p a s t t e n y e a r s , t h e r e has been a surge in t h e level o f i n d u s try-funded university r e s e a r c h , d r i v e n by b o t h t h e financial e n v i r o n ment and a renewed realization o f t h e synergistic m i s s i o n s o f b o t h enterprises. The n a t u r e and e x t e n t o f t h e benefits d e r i v e d will depend on t h e joint ability o f b o t h p a r t i e s t o r e c o g n i z e t h e i r r e s p e c t i v e e x p e c t a t i o n s and t o a d j u s t key parameters which d e f i n e t h e partn e r s h i p t o maximize t h e probability o f m e e t i n g e x p e c t a t i o n s . A c o r p o r a t e p e r s p e c t i v e on these i s s u e s and a description o f the major p r o gram t y p e s funded by BP in t h e U.S. will be p r e s e n t e d , i n c l u d i n g a d i s c u s s i o n on BP's E x t r a m u r a l R e s e a r c h Award program as a means t o complement and extend internal R&D programs through fundamental research.

A historical account o f U.S university-industry p a r t n e r s h i p s over the p a s t 70 y e a r s has been r e c e n t l y d i s c u s s e d (1.) and is summarized below. I n d u s t r y - f u n d e d u n i v e r s i t y r e s e a r c h o f t h e 1920's and 30's was domi n a t e d by f o u n d a t i o n p h i l a n t h r o p h y , d r i v e n by t h e attitude t h a t c o r p o r a t e funds s h o u l d be used solely to benefit mankind and t h a t t h e academic m i s s i o n must remain uncompromised by a n y t h i n g b u t a "strict" division between its r e s e a r c h f u n c t i o n and t h e industrial l a b o r a t o r y . The postwar y e a r s o f t h e 1940 s and 5 0 s saw a boom i n government f u n d i n g f o r r e s e a r c h . These f u n d s , however, began t o encourage c o r p o r a t e - u n i v e r s i t y a l l i a n c e s , w h i l e m a i n t a i n i n g a s e p a r a t e academic r e s e a r c h e n t i t y , a t r e n d which c o n t i n u e d i n t o t h e 7 0 s . f

f

T

0097-6156/92/0478-0087$06.00/0 © 1992 American Chemical Society

In Partnerships in Chemical Research and Education; McEvoy, J.; ACS Symposium Series; American Chemical Society: Washington, DC, 1992.

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PARTNERSHIPS IN CHEMICAL RESEARCH AND EDUCATION


In the p a s t 10 t o 15 y e a r s , a s i g n i f i c a n t i n c r e a s e , i n r e a l terms, i n i n d u s t r i a l f u n d i n g f o r u n i v e r s i t i e s has o c c u r r e d , n e a r l y t r e b l i n g from $330 MM i n 1977 t o $890 MM i n 1988, and more than d o u b l i n g as a p e r c e n t o f t o t a l u n i v e r s i t y r e s e a r c h over the p e r i o d , from 3% t o over 7% ( F i g u r e s l a and l b , b o t h f i g u r e s i n 1988 d o l l a r s ) . It i s t h i s l a t e s t surge i n f u n d i n g which has g e n e r a t e d the most i n t e r e s t i n the development o f u n i v e r s i t y - i n d u s t r y p a r t n e r s h i p s . The f a c t o r s s u r r o u n d i n g t h e s e new developments, t h e i r i m p l i c a t i o n s f o r f u t u r e R&D i n the U.S., and examples o f how u n i v e r s i t y r e s e a r c h programs a r e t a i l o r e d w i t h i n BP f o r mutual b e n e f i t a r e p r e s e n t e d below. Recent Trends The i n c r e a s i n g l e v e l of i n d u s t r y - s p o n s o r e d u n i v e r s i t y r e s e a r c h can be p a r t l y u n d e r s t o o d by the environment which has a m p l i f i e d i t s v a l u e to b o t h p a r t n e r s . I n d u s t r y has been under i n c r e a s i n g p r e s s u r e to r a t i o n a l i z e i t s r e s e a r c h and r e c o v e r c o s t s from i t s o p e r a t i n g u n i t s , r e s u l t i n g i n an i n t e n s i f i e d f o c u s o f i t s i n - h o u s e r e s o u r c e s on a p p l i e d R&D. U n i v e r s i t i e s , on the o t h e r hand, a r e f e e l i n g the e f f e c t s o f f e d e r a l d e f i c i t r e d u c t i o n s , which c r e a t e the need to seek a l t e r n a t e sources of funding. The r e s u l t i s t h a t i n d u s t r y i s now b e a r i n g a g r e a t e r p e r c e n t a g e o f t o t a l b a s i c r e s e a r c h f u n d i n g , i n c r e a s i n g from 14% i n 1977 to n e a r l y 20% i n 1989, an i n c r e a s e o f $1.5 b i l l i o n ( i n 1988 d o l l a r s , F i g u r e 2 ) . I n d u s t r i a l f u n d i n g t o u n i v e r s i t i e s as a p e r c e n t a g e o f b a s i c i n d u s t r i a l r e s e a r c h has a l s o i n c r e a s e d over t h i s p e r i o d from 19% to 27% ( T a b l e 1 ) . Thus, w h i l e u n i v e r s i t y r e s e a r c h i s s t i l l o n l y 4% o f i n d u s t r y ' s t o t a l R&D spend, i t i s becoming a more s i g n i f i c a n t p a r t of i t s b a s i c r e s e a r c h p o r t f o l i o . But a s i d e from the u n d e r l y i n g f i n a n c i a l environment, t h e r e i s a l s o a renewed r e c o g n i t i o n o f the complementary m i s s i o n o f academia and i n d u s t r y and o f the synergy t h a t can r e s u l t t h r o u g h c o l l a b o r a t i o n . The academic m i s s i o n and i n f r a s t r u c t u r e , which i s geared toward edu c a t i o n and fundamental c o n t r i b u t i o n s t o s c i e n c e and e n g i n e e r i n g , c r e a t e an environment and a c u l t u r e which i s h e a v i l y l e v e r a g e d by p u b l i c funds f o r the h i g h e s t q u a l i t y , c o s t - e f f e c t i v e b a s i c r e s e a r c h . I n d u s t r i a l p a r t i c i p a t i o n encourages development o f c u r r i c u l a and r e s e a r c h which a r e r e l e v a n t t o commerical a p p l i c a t i o n w h i l e s i m u l t a n e o u s l y p r o v i d i n g a p e r s p e c t i v e on the c r i t i c a l t e c h n i c a l c h a l l e n g e s i n i n d u s t r y and the need f o r i n t e r d i s c i p l i n a r y r e s e a r c h . The i n c r e a s i n g r e c o g n i t i o n , e s p e c i a l l y among academics, t h a t b o t h money and t e c h n i c a l i n t e r a c t i o n a r e c r i t i c a l t o s u c c e s s f u l c o l l a b o r a t i v e programs r e i n f o r c e s the importance f o r i n d u s t r y to e n t e r i n t o a p a r t n e r s h i p w i t h u n i v e r s i t i e s , and n o t m e r e l y f u n c t i o n as a f u n d i n g source. Tailoring

Programs

While these g e n e r a l b e n e f i t s a r e r e c o g n i z e d g l o b a l l y , the j u s t i f i c a t i o n f o r i n d i v i d u a l programs must be based on the s p e c i f i c e x p e c t -


9.

University-Industry Research Partnerships

BURRINGTON

$1988 Billions


A

1958

1963

1968

1973

Industry:

1978

1983

$330 MM

ES

F«d«rol

•

StoU/Loeol

fZ2

Own Fundi

ISS

Othtr

1988

$890 MM

EBB Induttry

Β

CSS r*d«ral E223 Own Îundi

CZD SioU/Lecel fS3

EBB Indutlry

0th«r

Figure 1. Academic R & D expenditures by source. ^4,Total expenditure; B, Distribution. Source: " S c i e n c e , T e c h n o l o g y and t h e Academic E n t e r p r i s e : S t a t e s , Trends and I s s u e s " , The G o v e r n m e n t - U n i v e r s i t y - I n d u s t r y R e s e a r c h R o u n d t a b l e , N a t i o n a l Academy P r e s s , Washington, DC, O c t o b e r , 1989.


89


90


$1988 Billions

1953

1959

1965

1971

1977

Industry: ÉS3 Federal fZ3

Β

1983

1989

$1.8B $3.3B

EEB Induifry

Acodemlc/StaU

EE3 CHh«r

Percent

100%

mm®®®**

100%

80%

60%

40%

20%

1953

1959

1965

Industry: federal ÉZ2 Acodémlc/Slofe

1971

1977 1

4

%

1983

1989

20%

EEE9 Indutfry Other

Figure 2. U.S. basic research expenditures. A, Total level; B, Distribution. Source: " S c i e n c e , T e c h n o l o g y and t h e Academic E n t e r p r i s e : S t a t e s , Trends and I s s u e s " , The G o v e r n m e n t - U n i v e r s i t y - I n d u s t r y R e s e a r c h R o u n d t a b l e , N a t i o n a l Academy P r e s s , Washington, DC, O c t o b e r , 1989.


9.

BURRINGTON


91


ations of each partner. The expected outcome and the nature of the research planned should be a r t i c u l a t e d early i n the discussions. These w i l l serve as the basis for mutual agreement and w i l l be c r i t i c a l i n defining the type of partnership and i t s key parameters, including assignment of i n t e l l e c t u a l property r i g h t s , i n d i r e c t costs, and mechanisms for interactions and measurement of r e s u l t s . An understanding or agreement can be derived on this basis to handle a range of expectations and research a c t i v i t i e s , as discussed below. Examples of types of university research which f a l l within general categories of the nature of research and the expected outcome, as shown i n Figure 3, w i l l serve as a framework for this discussion. Major Program Types Graduate fellowships are an excellent way for a university to enhance i t s c a p a b i l i t y for research and education without s a c r i f i c i n g any rights to freely publish results or to i n t e l l e c t u a l property and, i f the research i s fundamental and the sponsor i s not expecting any competitive technology, without overhead costs. However, these arrangements generaly involve smaller funding levels for limited periods, and can sometimes be lacking i n the sponsor's technical p a r t i c i p a t i o n and i t s a b i l i t y to provide s p e c i f i c applications. Contract research, on the other hand, involves applied research, a commercial outlet for the r e s u l t s , and a framework for strong sponsor i n t e r a c t i o n , since the sponsor i s expecting competitive technology to r e s u l t . However, i t may, i n some cases, be too focused to take f u l l advantage of the academic's expertise or to address s t r a t egic technical issues. While i t solves a s p e c i f i c technical problem for the sponsor, i t does not usually add to the technology base of the u n i v e r s i t y . A currently popular means of combining the favorable aspects of both of these above types i s the University Center Program concept. A prominent example of this i s the NSF Engineering Research Center Program, but many other smaller departmental i n t e r d i s c i p l i n a r y centers now e x i s t . These programs usually fund applied research for generation of generic technology, which can attract multiple sponsorship, and i n many cases i s matched by federal or state d o l l a r s . These centers have provided a means for industry to gain access to large interdepartmental resources, whose infrastructures and f a c i l i t i e s are leveraged by public funds. The centers also provide a means of monitoring technology and access to students with m u l t i d i s c i p l i n ary t r a i n i n g . However, exclusive sponsorship usually requires addi t i o n a l arrangements and funding and the cost and bureaucracy associated with the center's overhead can be s i g n i f i c a n t . BP's Extramural Research (EMRA) Program BP Research p r t i c i p a t e s i n a l l of these programs through i t s Univers i t y Liaison Office at the Warrensville Research Center near Cleveland, Ohio. However, we also recognize that gaps s t i l l e x i s t , p a r t -


92


Table I


INDUSTRY-FUNDED UNIVERSITY RESEARCH

1977 2.7% 19%

As % of total industry research As % of basic industry research SOURCE:

1988 4% 27%

Reference!

Competitive

BP

Technology

Extramural

(proprietary)

Research

Research Expense Contract Research

(full overhead)

Award Funding

Expected Outcome

Unrestricted

Generic Technology (non-proprietary)

Fellowships, PYIs Other Grants

Research Centers (e.g., ERCs)

and/or Matched with Public Funds (no overhead)

Fundamental (knowledge seeking)

Applied (problem solving)

Nature of Research

Figure 3. Major types of University research partnerships and key parameters.


9.

BURRINGTON


93


i c u l a r l y i s s t r a t e g i c a r e a s where l o n g e r - t e r m b a s i c r e s e a r c h i s c r i t i c a l t o t h e g e n e r a t i o n o f c o m p e t i t i v e t e c h n o l o g y f o r one o r more of BP's b u s i n e s s e s . The EMRA program was d e s i g n e d t o p r o v i d e an i n t e g r a l component o f a r e s e a r c h base i n a r e a s o f s t r a t e g i c and business relevance. The EMRA program i s a p a r t n e r s h i p d e s i g n e d t o c a p t u r e t h e b e n e f i t s of academic freedom and commercial s i g n i f i c a n c e t o BP. While BP chooses t h e a r e a s where i t needs t o c o n c e n t r a t e , t h e EMRA p r i n c i p a l i n v e s t i g a t o r s a c t u a l l y w r i t e the p r o p o s a l s . In t h i s task, the academics a r e g i v e n t h e freedom t o pursue t h e approaches which w i l l take advantage o f t h e i r s t r e n g t h s i n a d v a n c i n g t h e s c i e n t i f i c unders t a n d i n g n e c e s s a r y t o overcome c r i t i c a l t e c h n i c a l b a r r i e r s which l i m i t t h e s t a t e o f t h e a r t . The r e s u l t i s t h e development o f s t r o n g c o n t a c t s which academics w o r k i n g i n a r e a s o f i n t e r e s t t o BP which enhance n o t o n l y t h e u n i v e r s i t y f u n d i n g base, b u t a l s o t h e awareness of t h e r e l e v a n c e o f i t s r e s e a r c h t o i n d u s t r y and o f i t s r e s e a r c h e r s to p r a c t i c a l , m u l t i d i s c i p l i n a r y problems. I n t u r n , these s t r o n g academic l i n k s p r o v i d e a key component o f B P s fundamental r e s e a r c h base and keep BP s c i e n t i s t s a t t h e " f r o n t i e r s " o f t h e i r d i s c i p l i n e . 1

The EMRA p r o p o s a l s a r e developed by a p r o c e d u r e i n which, a f t e r an i n t e r n a l review, s e l e c t e d p r o s p e c t i v e p r i n c i p a l i n v e s t i g a t o r s a r e asked t o p r o v i d e t h e i r p e r s p e c t i v e on how fundamental r e s e a r c h s h o u l d be advanced t o a d d r e s s a s i g n i f i c a n t t e c h n i c a l problem o f strategic significance. Thus, t h e EMRA n o t o n l y complements BP R e s e a r c h , b u t a l s o advances t h e r e s e a r c h g o a l s o f t h e p r i n c i p a l i n v e s t i g a t o r , and i s w r i t t e n by t h e p r i n c i p a l i n v e s t i g a t o r , w i t h g e n e r a l guidance on p o t e n t i a l a p p l i c a t i o n s . EMRA f u n d i n g i s i n t e n d e d t o c o v e r a t h r e e - y e a r at l e a s t one f u l l - t i m e r e s e a r c h e r , i n a d d i t i o n v e s t i g a t o r ' s time. The program r e c o g n i z e s t h e p u b l i s h and t o share i n t h e b e n e f i t s r e s u l t i n g e s t a b l i s h e s a mechanism f o r s t r o n g i n t e r a c t i o n the EMRA team and f o r r e v i e w o f r e s u l t s .

program and t o i n v o l v e to the p r i n c i p a l i n u n i v e r s i t y ' s need t o from EMRA's. I t a l s o o f BP s c i e n t i s t s w i t h

The program has been i n e f f e c t f o r about t e n y e a r s i n t h e U.K. I t was i n i t i a t e d l a s t y e a r i n t h e U.S. and has been r e c e i v e d w i t h e n t h u s i a s m by t h e academic community. A t t h e time o f t h i s w r i t i n g , 15 EMRA's have been p l a c e d i n t h e U.S. The EMRA concept p r o v i d e s a n o t h e r o p t i o n f o r u n i v e r s i t y - i n d u s t r y p a r t n e r s h i p s , where s p e c i f i c s t r a t e g i c t e c h n i c a l problems and where an a p p r o p r i a t e p r i n c i p a l i n v e s t i g a t o r and a r e l e v a n t a p p r o a c h t o a d v a n c i n g t h e u n d e r s t a n d i n g o f t h e u n d e r l y i n g phenomena c a n be i d e n t i fied. While BP i n America has t r a d i t i o n a l l y funded a l l t h e major types o f u n i v e r s i t y r e s e a r c h programs d i s c u s s e d above, t h e EMRA p r o gram has a l r e a d y become an i m p o r t a n t p a r t o f BP's U n i v e r s i t y R e s e a r c h p o r t f o l i o (Figure 4 ) .



94

PARTNERSHIPS IN C H E M I C A L R E S E A R C H A N D E D U C A T I O N

Figure 4. BP-University liaison, 1990 U.S. program distribution. Prospects While the spectrum o f o p i n i o n on the t o p i c o f u n i v e r s i t y - i n d u s t r y p a r t n e r s h i p s i s b r o a d , most p a r t i c i p a n t s and o b s e r v e r s agree t h a t t h e r e i s v a l u e i n these new c o l l a b o r a t i o n s . However, t h e r e i s l i t t l e c o n c r e t e e v i d e n c e t h a t the enhanced a c t i v i t y over the p a s t ten y e a r s has c r e a t e d r e a l v a l u e , improved our c o m p e t i t i v e n e s s as a n a t i o n , o r g e n e r a t e d new j o b s . While t h e s e a r e the u l t i m a t e meas u r e s o f the p a r t n e r s i n v e s t m e n t s , i t i s s t i l l too e a r l y t o a p p l y the c r i t e r i a t o most programs. 1

As t h e s e programs mature, t h e s e q u e s t i o n s w i l l i n t e n s i f y and become more f r e q u e n t . We s h o u l d thus now be working t o ensure t h a t t h e a p p r o p r i a t e d a t a a r e c o l l e c t e d which w i l l comprise a d e f i n i t i v e case. F o r now, t h e s e p a r t n e r s h i p s c a n c e r t a i n l y be j u d g e d a s u c c e s s i n terms o f t h e i n c r e a s i n g number o f s t u d e n t s a b l e t o d e a l w i t h i n t e r d i s c i p l i n a r y problems, the enhanced t e c h n i c a l i n t e r a c t i o n s among academics and i n d u s t r i a l s c i e n t i s t s , the d i f f u s i n g o f i s s u e s s u r r o u n d i n g the " i n c o m p a t i b i l i t y " o f t h e i r r e s p e c t i v e c u l t u r e s , and t h e renewed awareness o f o u r i n t e r d e p e n d e n c e i n the p r o c e s s o f i n n o v a tion.

Literature Cited 1. New Alliances and Partnerships in American Science and Engineering; The Government-University-Industry Research Roundtable, National Academy Press: Washington, DC; 1986. 2. Science, Technology and the Academic Enterprise: Status, Trends and Issues; The Government-University-Industry Research Roundtable, National Academy Press: Washington, DC; October, 1989. RECEIVED June 6,1991


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