"American Universities and Businesses: New Opportunities and Challenges"

Zhejiang University Symposium
Zhejiang University Science Park
Hangzhou, China
November 28, 2007


First, thank you very much for hosting this exciting symposium. And thank you, President Yang Wei for your inspirational words about partnerships and opportunities. I think those two elements are at the heart of our visit.

As great research universities, Indiana University and Zhejiang University have two fundamental missions: education and research. We seek to provide the best possible education to all of our students, both undergraduate and graduate. It is an education in both breadth and depth, grounded in both the practical and the transcendent, and providing a command of the analytical and the expressive. We also seek to conduct path-breaking research and scholarship of the highest international standards from the most theoretical to the most applied.

Excellence in both of these areas, then, enables us both to engage in the economic development of our state or province, and of our nations. We do this in a number of ways - in line with our first mission, through the training of highly educated graduates in essential areas such as technology, medicine, business, law and many others; and in line with our second mission, by attracting funding to support research projects that employ graduate students and technicians, and to acquire sophisticated equipment and facilities.

A third mission in which we engage, and which is necessarily dependent on excellence in the first two missions, is economic development through technology transfer and the commercialization of university-developed intellectual property. This is the subject of today's symposium.

Great research universities like Indiana University and Zhejiang University are competing with many other fine universities around the globe for the best students and faculty in the world. This is as it should be. These free market forces are essential in preserving the excellence of our institutions by placing a premium on the best intellectual talent no matter where it comes from.

But we should also ask, are there opportunities for us to cooperate and collaborate? The answer to this question, in my view, is a resounding yes.

Certainly IU and ZU have had an excellent relationship going back to 1982, just four years after the start of China’s open door policy. It is fitting then, that we are holding this Symposium to celebrate the 25th anniversary of this relationship. This year as well, the State of Indiana and the Province of Zhejiang, celebrate 20 years of a "sister" relationship between our State and your Province.

We both recognize that it is essential that our students be educated for a world without boundaries, a world where there is hardly any area of the economies of any country that is not affected by globalization. This is especially true of the United States and China, where our economies are so intertwined. Hence, we both have a very strong interest in ensuring that our students be able to spend a period of time studying abroad, and in particular studying abroad in each other's countries before they graduate. By enabling young Chinese and American students to understand each others countries and cultures better, we prepare them better for the world in which they will all be working. There have been some activities in this area between IU and ZU in the past. But with the signing of the agreement today that renews the relationship between our institutions, I believe there is an opportunity for us to initiate a major expansion of study abroad activities between IU and ZU. This is a topic I hope Vice President O'Meara and Vice President Ding Zhu Jun can pursue.

We also both recognize that research, especially in the age of the Internet, is truly international. Every area of research from anthropology to zoology takes place in a global context where the Internet has democratized scholarship and learning. Again, the academic strengths of our institutions both match and complement each other well and over the 25 years of our relationship, IU and ZU faculty have traveled to each others institutions to pursue their research and scholarly projects. But again, with the signing of the agreement today, I believe there is the opportunity for us to significantly expand research and scholarly activities, especially in the form of faculty exchanges, between our institutions. Again, these are topics I hope Deans Robel, Schnabel and Associate Dean McDougall can pursue with Dean Sun, Professor Yang, and Executive Dean Wang.

One of the most intriguing potential areas for cooperation and collaboration is the focus of this symposium, which is the third mission of great research universities and which I described before. In the United States this is generally called engagement. This area includes technology transfer and the commercialization of university-developed intellectual property. So are there ways in which IU and ZU can work together in the area of engagement to generate new opportunities for each other by bringing to bear the unique strengths and capabilities of each other’s business and academic cultures? This is a question that we might be able to begin to answer today.

At Indiana University we have identified two key areas for engagement - the life (by which I mean medical) and health sciences, and information technology. And in turn, if our research in these areas is to contribute to economic development, it requires structures within our universities to take the innovations of our researchers and scientists and transform and translate them ultimately into products or services. Accomplishing this, in turn, requires trained entrepreneurs and lawyers who understand this process of translation and transformation, and how to accomplish it rapidly and effectively.

In the sessions this afternoon Vice President Stephan, Deans Schnabel and Robel, and Associate Dean McDougall will describe IU's activities in all these areas and indicate where there may be ways we can begin to build cooperation and collaboration.

For the rest of my address, I will discuss the importance of engagement to American universities and provide an overview of IU's strategy in this area.

A Very Brief Overview of Basic Research in America

During the last century, American industry laboratories often were at the vanguard of basic research. Labs associated with technical giants such as Bell, General Electric, IBM, and Xerox performed basic as well as applied research that led to such revolutionary innovations as the transistor, the tunneling electron microscope, and Ethernet technology. However the short-term demands of the marketplace have reduced the commitment to long-term basic science research that these companies used to have. Most famously maybe, is the demise of Bell Labs, once the powerhouse laboratory in communications research in the 50s, 60s and 70s.

A second engine driving basic research in the United States in the last century was the government laboratory. These laboratories developed innovative technologies with broad-ranging impact. In fact, the first large-scale, electronic, reprogrammable, digital computer was developed by researchers associated with the United States Army. Although they have made many contributions in areas such as medical, information, and transportation technologies, their commitment to basic scientific research is less robust than it has been in the past as they focus even more on national security focused research that is usually closed to broader collaboration with the academic sector. In the United States at least, the research university is now the principal place where basic scientific research is carried out, fueled by intellectual collaboration and academic freedom.

In his famous 1945 report “Science: The Endless Frontier,” Vannevar Bush asserted that research universities “provide the environment, which is most conducive to the creation of new scientific knowledge and least under pressure for immediate, tangible results. With some notable exceptions, most research in industry and government involves application of existing scientific knowledge to practical problems. It is only the colleges, universities, and a few research institutes that devote most of their research efforts to expanding the frontiers of knowledge.” But the problem most great research universities struggle with is how to best establish partnerships with industry that enable this research to be translated into new products and services.

Stanford University and Silicon Valley

The classic partnership of this kind is that between Stanford University and Silicon Valley. It is the kind of partnership to which I am sure both our institutions aspire. In fact this partnership may be said to have created Silicon Valley.

Over the past fifty years, Stanford has grown into maybe the premier center in the world for technological innovation especially in information technology. “In the last 50-odd years, university faculty, staff and graduates alone have created some 1,200 companies. Today, more than 50 percent of Silicon Valley’s products come from companies of Stanford alumni—and that excludes Hewlett-Packard, one of the Valley’s largest firms.” Currently, Stanford has one of the most active tech transfer offices in the country if not the world. In 2005-06 alone, Stanford received $61.3M in gross royalty revenue from 470 inventions. They also concluded 109 new license agreements.

These numbers tell only part of the story. They are the result of a vigorous cycle of education and entrepreneurship that involves students, alumni, the university, and area industry and that affects the national economy. Students graduate to become next-generation entrepreneurs with great loyalty to their alma mater. Their companies partner with Stanford University to draw upon faculty expertise. That partnership enhances Stanford’s educational and research programs, producing even more highly trained graduates. This cycle of education and entrepreneurship enhances the local, national, and global economies and generates prosperity at many different levels.

And it is this cycle which has served as a model for research universities all over the world. The year 1980 marked a watershed moment in university/industry relations in the United States. In 1980, the Bayh-Dole Act was passed. This act “allowed universities and small businesses to retain [legal] title to inventions made with federal research and development monies” (Slaughter and Rhodes 496). It enabled universities to more easily transform research into real products that would benefit society while also protecting intellectual property rights. It has transformed universities’ relationship to the marketplace in the United States.

This act has a strong connection to the state of Indiana. Then Indiana Senator Birch Bayh was a co-sponsor of the act.

Indiana University: Overview

In Indiana, Indiana University plays a central role in the state’s economy.

The university was founded in 1820. Our first class included just 12 students taught by one professor who earned $250 a year. We had one classroom building that cost $2,400 to construct.

Now Indiana University has eight campuses across the state. We have nearly 100,000 students. Nearly 700 of them are from China (mainly grad students [557 out of 685]). We have over 18,000 full and part-time faculty and staff. And our operating budget is nearly $2.5 billion. Our flagship AAU campus is located in Bloomington, and our medical school based in Indianapolis is the second largest in the United States. We rank in the top 30 public universities in the United States and have over 70 top ranking programs.

Indiana University: Research Productivity

Last year, IU faculty were awarded over $433 million in sponsored funding in support of their research and service activities – more than any other university in the state.

Faculty inventions have generated nearly $30 million since 2000. We have seen tremendous growth in technology transfer over the last decade:

  • 304% more patents (from 37 to 315)
  • 272% more invention disclosures (from 58 to 216)
  • 157% more patent applications (from 46 to 118)
  • 126% more intellectual property licenses (from 31 to 70)
  • Approximately 30 new companies formed or in the early stages of development

Indiana University Priorities for Engagement and Economic Development

At Indiana University we have identified two areas of strategic priority for our engagement and economic development activities – the life and health sciences, and information technology.

Throughout the university’s history, the life and health sciences have been one of the research strengths of Indiana University. IU has been associated with seven Nobel Prize winners including James Watson, who discovered the double-helix structure of DNA. Four of these researchers worked in the life sciences.

In 2005 we published our first Life Sciences Strategic Plan. It focuses our research in a number of key areas including evolutionary biology, cancer, diabetes and the neurosciences.

In the last 10 years we have invested or are investing, almost $1 billion in new buildings and facilities in the life and health sciences on our two principal campuses in Bloomington and Indianapolis. This includes about 10 major new buildings, a number of which have been build in collaboration with our jointly owned hospital system Clarian Health - one of the largest hospital systems in the United States.

In addition over the same period, we have created nearly 500 new faculty and other positions in the life and health sciences. About 300 of these have been in our Medical School which is the second largest in the United States.

The economic environment of the State of Indiana makes it ideal for university/industry partnerships and technology transfer activity in the life and health sciences.

  • In total, more than 578,000 Indiana jobs are directly or indirectly tied to the health industry and account for more than $21B in wages and $8B in federal and state taxes paid — just over 20% of Indiana’s tax base.
  • 18% or $69B of Indiana’s economic output is tied to the health industry.
  • Indiana has the 2nd highest concentration of biopharmaceutical jobs in the nation.
  • A recent Battelle Report ranked Indiana in the top 3 states nationwide for life sciences industry, and Indiana’s capital Indianapolis in the top 10 metro areas.

Indiana University’s other area of strategic priority is information technology. Here we started to earlier to build our capabilities and expertise earlier. In 1998 we published our Information Technology Strategic Plan. This lead over the following years to IU becoming one of America’s leading “wired and unwired” universities.

Last year, IU was ranked first among public universities in the United States, and third only behind MIT and one other university for the excellence of its IT environment, infrastructure and services.

 Some of the key achievements under this plan include:

  • Installation of I-Light - the first higher education-owned optical fiber infrastructure in the United States.
  • Management and implementation of both the Internet2 Abilene and National Lambda Rail (NLR) national research and education networks (the equivalents in China are CERNet and CSTNet)
  • Operation of the Research and Education Network Information Sharing and Analysis Center (REN-ISAC) which provides cybersecurity capabilities to various high speed research networks.
  • Acquisition of one of the most powerful university-owned supercomputers – the system we call Big Red, rated at 40 TFlops peak power
  • Installation of the largest university research data store in the US with over 2 PBytes of fast on line storage
  • Leadership of the global academic initiative to build open source administrative systems such as the Sakai course management system and Kuali financial management system.

In addition in 2000, IU formed the first School of Informatics in the United States which leveraged in part the wide range of initiatives that grew out of the IT Strategic Plan. Dean Bobby Schnabel will talk more about the School later today.

Indiana University: Tech Transfer and a History of Innovation

A key issue for us then has been how to commercialize the innovations and intellectual property that are developed by our life scientists and information technologists.

In 1996, IU established what is now called the IU Research and Technology Corporation (IURTC) whose role is to do precisely this. It has been essential to our technology transfer and commercialization activities. My colleague Vice President Bill Stephan will speak more about this organization this afternoon. But let me at this point return to one of my opening comments.

As I mentioned, one of the most intriguing potential areas for cooperation and collaboration between IU and Zhejiang University, is in the broad area of technology transfer and the commercialization of intellectual property developed by our researchers.

When we think about this kind of activity on a global scale, of course, the questions necessarily become much more complicated. As global partners, we must also understand each other’s research and technology transfer strengths and use those to both of our advantage. And we must imagine what a global partnership focused on university research commercialization activities might actually look like. But such a partnership has the potential to provide a unique and possibly richly rewarding window on the business environment of each other’s countries. It has the potential to maximize both institutions’ resources while extending the marketplace for products growing out of basic research. Together we have the opportunity to imagine what that partnership might do and then make that partnership a reality.

Conclusion: Building on Global Partnerships

I mentioned earlier that I strongly believe that there are opportunities for cooperation and collaboration between our two universities. We have had a long and productive partnership that has been further strengthened today. But I believe in many ways we have only begun to realize the possibilities that our partnership can offer. The potential for expanded cooperation in many areas such as the life and health sciences, entrepreneurship and law is tremendous.

Conducting pure research is one of the most gratifying activities scholars and scientists do. It generates ideas, strengthens communities, and builds on the great scholarly and scientific traditions that preceded us. It leads us toward a better understanding of our world.

But technology transfer and commercialization activities connect the university to the world, transforming ideas into products that can improve the world around us and save lives. These are goals that everyone can understand. This requires a global network of connections and relationships that will lead us toward a better world.