University of Washington president Michael Young gave a ten-minute talk in February 2012 at the opening of a business incubator on the UW campus. The talk is fascinating as a rationalization for the $100M effort to flip faculty and student startups to investors for UW profit. I am providing annotations to draw out the implications of the talk, in a series of posts. Here they are:
- A very exciting day for the university
- Who hoards technology in the Ivory Tower?
- Technemort, the name never to be spoken
- Who ya gonna call?
- Students, creating the value-added for investors
- If we build it you will pay
- We are delighted to help Stanford become a better university [laughter]
- Remarkable leadership
President Young’s talk is in purple and my comments follow in brown, in square brackets.
Here is a fourth installment:
What is challenging at universities is to figure out how to do that because one may be a brilliant physicist but developing a marketing plan, figuring out how to get IP protection, uh, moving from proof of concept to, uh, to prototype to first contract, uh talking that bizarre foreign language that investors seem to use, where they actually, uh, want a return on investment. Remember that great line in Ghostbusters where they are standing actually on Columbia’s campus, uh, and at some point they are kicked out of the lab and somebody says, “Well, let’s go to the private sector” and the other professor says, uh, “Oh, no, no, they expect you to produce.” [laughter] Uh, uh, but understanding to try to connect with that business community uh, um, are, are challenges. And the opportunity to think through, What are those challenges? How do we take what is really great and being done here at this university and use with a partnership with the business community, uh, that opportunity to take it out into the lives of real people?
[Comment: Mr. Young suggests that university faculty are incapable of doing business, building on his previous use of “ivory tower” to the same apparent effect. Not only that, but faculty are lazy, happy to be unproductive. If faculty are clueless about business, what about the faculty who have left universities and done quite well in company work? What about the faculty recruited from industry? Have they too lost all sense of what it takes to develop a company?
There is another point, however. Faculty do not have to do all things needed to form a company. Faculty partner, collaborate, outsource, delegate, and subcontract. They do this all the time in their research. There is no reason to assert that they cannot do this with any other aspect of developing their work. Faculty do not need to write business plans: there are specialists to do this (if a written business plan is even necessary). They do not need to sort out IP issues: there are attorneys and licensing professionals who do this (if IP is even necessary). Mr. Young presents a faulty dilemma–if faculty cannot fend for themselves, then they must rely on the university administration. The only reason university faculty have to deal with the university administration on matters of IP is because the university’s administration demands that they do so. Indeed, if faculty did not have to have a university bureaucrat touch every creative thing they do, they would be way ahead.
Again, consider: if the University is keen on starting companies, why then does it demand that the faculty inventors assign their inventions to the university, so that it then can negotiate a license with the inventors’ startup company? Why not just allow the inventors to assign their invention directly to the startup? Why not just ask for a cut of whatever the inventors make in their venture? That route would be direct, efficient, and would not require the university to maintain a stable of high-paid licensing officers. Funny that.
While the reference to Ghostbusters was good for a laugh, but it again paints faculty as unproductive. “Connecting with the business community” is not particularly difficult for faculty when it comes to personal consulting, sponsored research agreements, invited talks, collaboration on conferences, and the like. But Mr. Young apparently does not mean any of these forms of connecting. Mr. Young appears to be using “connecting” to mean “dealing with speculative investors.” There, Mr. Young does have a point: speculative investors do want to see a return, typically a big return, for as little exposure as they can get. But there is no particular reason why university faculty have to deal with speculative investors as the only way, or even the administratively preferred way, for their work to creep out of the university and do some good in the world.
Finally, there is a yet more salient point. Faculty, in undertaking research, do not need to see a financial return on investment. Nor does the university. Who is making an “investment” in the first place? An “investment” is the provision of money for financial gain. When the US government funds faculty research, the government is not seeking financial gain. The university administration may want financial gain, but the university administration is not putting up the risk capital, so it is not investing. Similarly, the taxpayers of the state are not investing. They do not support the university to make a profit. It may be in their enlightened self-interest to support education and research, but they do not contribute as investors. They contribute as citizens. Any effect of their contribution comes in the form of social goods: better trained citizens, discoveries, validated knowledge, sparks for the imagination. Taxpayers are not investing. The operations of university research may take place productively entirely without any investment. The business community generally also has no need to invest in university research. It may sponsor research. It may benefit from that research. It may hire faculty or students. Investment, however, the form of making monopoly IP positions worth more to investors is a specialized corner of a broader set of relationships between businesses and the people that work in university research.
The point, then, is about Mr. Young’s dedication of Fluke Hall to the interests of investors. Apparently, faculty should not do research to advance understanding, or to change practice, or to provide a context for graduate education, or even to get the next grant and keep a lab together. In the new university, Mr. Young suggests, such motivations are unproductive. By implication, the discovery of penicillin and the creation of the digital computer and the isolation of dicoumarol and the development of gene splicing could not have happened, since those involved were not seeking a return on investment. They were doing research, following their curiosity. They were not directed by investors. The thrust of Mr. Young’s remarks is that they would have done better if they had been first thing put under the control of investors.
So Mr Young dedicates Fluke Hall to the ghost of investment. Mr. Young announces an alliance between the administration and investors, a welfare program of sorts under which the state subsidizes wealthy investors in the hopes of getting a share of their action through stock or licensing arrangements. Whatever the faculty are doing–and Mr. Young persistently depicts the faculty as brilliant fools–Fluke Hall is offered as a gift to venture capitalists, in the hope of making a fortune from the research of work of faculty, staff, and students. That fortune-hope is made possible because the university administration has claimed ownership of anything that might interest speculative investors. The university administration creates investment value for such inventions and other assets by keeping them out of general practice through claims of ownership.
The technology hoard at the University of Washington created by administrators is hereby dedicated to speculative investors, that they might find in the monopoly positions things of value by which to make money for themselves, and for the university, and as they pursue their self-interest, the university by proxy ultimately achieves its research mission and does good in the world. That’s some re-dedication of the university, Mr. Young.
The next post is “Students, creating the value-added for investors.”