February 24, 2005

Jennifer Washburn exposes all the ways big business is intruding on your campus – from the Kmart Chair of Marketing to threats to U.S. Innovation.

Countdown, Jennifer Washburn, Feb. 24, 2005

All the ways big business is intruding on your campus – from the Kmart Chair of Marketing to threats to U.S. Innovation.

By Jennifer Washburn

Where are your tuition dollars going? Are universities wisely managing these funds? Are corporate donors and other commercial forces changing your universities’ priorities? Are student’s interests truly being served?

Here are 10 things that you—the students—might be interested to know…

1. Taxpayer Support For Higher Education Has Declined, Forcing Undergraduate Students And Their Families To Pay More For Higher Education Than Ever Before.
Since 1980, tuition and fees at public colleges have increased at three times the rate of inflation, rising over 50 percent in real terms over the past decade alone. At private colleges, tuition and fees rose by a corresponding 36 percent over the same decade. To pay for these price increases, more and more students have been forced to take out loans. Many slip into debt. The average cumulative debt burden for a graduating senior rose from $9,800 in the early 1990s to $18,000 in early 2000 (not including interest).

2. Students Are the Most Important “Assets” That Universities Produce, Yet Teaching is Rapidly Being Downsized
Universities have embraced a “cost-savings model” imported straight from the commercial sector. The idea is simple. Higher education is a labor-intensive industry. Teaching is, far and away, the most expensive line item in the university’s budget. The solution? Eliminate full-time teaching positions and replace them with part-time graduate students and adjuncts that are paid meager salaries and few (if any) benefits. Today, roughly 50 percent of the faculty in higher education work on a part-time, contingency basis. Sixty percent of new faculty hires are “off the tenure track”—meaning they are not eligible for tenure, and usually lack any job security.

3. Big Business Comes to the Academy:
At the same time teaching is being downsized, universities are courting money from private industry and pouring resources into commercial operations far removed from the universities’ primary teaching and academic-research missions. Universities now run their own industrial parks, venture capital funds, and industry-university cooperative research centers. They also operate expensive patenting and licensing offices to market their research to private companies in exchange for royalty revenues. In 2003, U.S. and Canadian universities pulled in an impressive $1 billion from these commercial licenses on taxpayer-funded research, but nearly all of the profits went to less than two dozen schools. The majority of the nation’s colleges and universities barely break even—or lose money—off of all this heightened commercial activity.

4. Industry Funding is Growing
Since 1980, industry funding of academic research has expanded 8 percent annually, rising to $2 billion in 2001 (the most recent year for which statistics are available).

5. Selling Off the University….Piece by Piece.
Buildings are now emblazoned with corporate names, faculty hold corporate-endowed professorships, and campus bookstores are run by Barnes and Noble. U.C. Berkeley anointed its former dean the “BankAmerica Dean of the Hass School of Business.” At Wayne State University, J. Patrick Kelley served for eleven years as the Kmart Chair of Marketing. South Carolina State University just announced that the dean of its College of Sciences, Mathematics, and Engineering will have his salary paid for by his former private-sector employer for two years. The dean’s former employer, a nuclear-engineering firm based in South Carolina, will also have unprecedented influence over the academic curriculum.

6. Conflicts of Interest Abound
The university has long served as a refuge for independent thought—a place dedicated to disinterested research, liberal education, and the advancement of knowledge for knowledge’s sake. Traditionally, universities were not governed by market forces. They were autonomous institutions that strove to remain free of outside influence, whether political, religious, or commercial. Today, universities are engaging in explicitly commercial activities that were unheard of only a generation ago, which seriously compromise their academic autonomy.

A critical change came about after Congress, in 1980, gave universities automatic intellectual property rights to all taxpayer financed research. Instead of giving their research away for free, as they used to do, universities now sought to patent and license their research to private industry in exchange for profits. They also encouraged professors to go into business themselves. As a result, universities and their professors now have extensive financial interests (patents, equity) in their own campus-based research. These professors now also frequently sit on corporate advisory boards, speaker’s bureaus and serve as consults for the companies funding their research.

Financial entanglements like these have proliferated to such a degree that journal editors complain it has become increasingly difficult to find an academic investigator to write a review of a new medical treatment who does not have a financial interest in the products they want to have examined.

7. Skewing The Research Agenda
In 2003, researchers at Yale University surveyed over 1,100 clinical studies and concluded that when research is funded by industry it is “significantly more likely to reach conclusions that [are] favorable to the sponsor” than research not funded by industry. At numerous schools, corporations have tried to muzzle professors who tried to publish research on public health threats that negatively impacted on the sponsors’ bottom line. The corporation, Syngenta, recently tried to prevent a biologist at UC Berkeley from publishing research showing that atrazine, a popular weed-killer, interfered with the sexual development of frogs, causing them to develop both female and male sex organs. In the past, universities conducted their research at arms length from their industry sponsors. Today, they frequently sign contracts that allow companies to delay publication, to review and edit manuscripts prior to publication, and to control the raw data from their professors’ research.

8. Who Benefits And Who Loses?
Internships and other exchanges with private companies can be highly beneficial for students. Often they can result in employment opportunities for students after they graduate. But when universities become commercially driven, students—and the broader society—lose out. Professors who try to walk the line between academia and business often wind up neglecting the educational needs of their students. Similarly, when universities become profit-driven, their commercial interests frequently conflict with the public interest.
In one incredible case, the University of South Florida actually pressed criminal charges against Peter Taborsky, a student working on his master’s thesis, after he discovered a commercially-promising way to remove ammonia from wastewater. Taborsky was convicted of stealing university property and wasforced to do time at a maximum security prison before then Governor Lawton Chiles stepped in to pardon him. Later the U.S. patent office determined that the student was, in fact, the sole inventor of his discovery.

9. Money Trumps Academics
Professors used to be rewarded based on the intellectual rigor and quality of the research they published—not the amount of money they could bring in. Little by little, however, money has assumed far greater importance in the university’s affairs. Salary levels are linked to how much revenue a faculty member can bring in. Disciplines that make money, study money, or attract money are lavished with institutional resources, space, and graduate students. Meanwhile, the humanities, physics, and other disciplines that have always had trouble financing themselves find themselves starved for resources and left to languish.

10. The Threat to U.S. Innovation:
Corporate control over the academic research culture also poses a threat to the U.S. innovation system. When academic research is profit driven there is a danger that basic, curiosity driven research will be crowded out by research that has more immediate commercial use. Growing numbers of economist, legal scholars, and business leaders worry that, instead of broadly disseminating their research inventions, universities have become so focused on extracting short-term profits that they stifling broad use of taxpayer-financed research. When a professor at the University of Utah discovered an important human gene responsible for hereditary breast cancer, for example, the university didn’t make it broadly available to the scientific community. It licensed the gene exclusively to the professor’s own start up company, Myriad Genetics. Afterwards, the company blocked other academic scientists from being able to use the gene in their own breast cancer research and diagnostic testing, generating enormous controversy worldwide.

Jennifer Washburn is the author of University Inc.: The Corporate Corruption of Higher Education, which hit the stands on February 15th.

Check Out University, Inc.
Download the introduction to Jennifer Washburn’s explosive new book.

Illustration: Luc Latulippe

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