The University of Private Enterprise 

The infusion of corporate cash at UC Berkeley has drastically changed the type of scientific research conducted on campus.

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However, between 1970 and 1995, government funding for research and development fell by more than 50 percent. While it rebounded slightly between 2001 and 2005, it has since resumed its long-term decline. And the recent automatic federal budget cuts known as sequestration could lead to a loss of an additional $8.6 billion in federal research grants in the coming year.

The impacts of the sequester can already be felt at UC Berkeley, where federal support for the sciences has dramatically shrunk for the 2012-2013 academic year. Some UC officials are asking Congress to reconsider these cuts, as they will have a devastating impact on research. "The UC is playing a leading role in our nation's economic recovery, and it's a critical engine of innovation," said Gary Falle, vice president for Federal Governmental Relations at UC. "We will ... continue to advocate for strong funding for basic research so that scientific discoveries can continue to move forward."

In the past three decades, privately funded applied research, however, has skyrocketed at US universities. Between 1985 and 2005, it increased by 250 percent, from $950 million to $2.4 billion.

This explosion of corporate dollars being directed to universities has also sparked controversy and raised concerns about scientific bias. A 2006 investigation by the San Jose Mercury News found that one-third of Stanford University's medical school administrators and department heads reported financial conflicts of interest related to their own research. And another report by the British Medical Journal in 2010 found that pharmaceu­tical-industry-funded research was four times more likely to reflect favorably on a drug than research not financed by said industry.


The first big public-private partnership came to UC Berkeley in 1997, when the Swiss biotech company Novartis entered a five-year, $25 million contract on GMO research with the biology department. It was the first time that nearly an entire academic department signed an agreement with a single firm.

At the time, Professor Chapela was the biology department's faculty representative, and he heard a plethora of concerns from professors regarding the agreement. Some disliked that Novartis would receive intellectual property rights to research results. Others worried that layers of confidentiality agreements went against the core principles of academia. "Still, the administration seemed ready to go ahead," said Chapela. "There was this feeling that there was nothing we could do about it because the decision had already been reached."

But the deal also generated widespread protest from students, faculty, and community members, who felt that the university's academic reputation was tainted by the partnership. "There are intellectual spaces that should be absolutely clean and protected from the influences of private partners," said Chapela, "and I don't see any way in which you can do that when you have money directly given to a program. ... Once you start working to promote the industrial sector, there are certain questions you're not allowed to ask."

Over the course of five years, the research deal produced no dramatic discoveries and Novartis didn't license any products. In other words, it was a financial bust for the corporation. Plus, it was a loss for the university. A 2004 UC-funded review of the Novartis agreement found that the damage done to Cal — including infighting among faculty and negative press coverage — didn't justify the money that it received.

Lawrence Bush, the study's principal investigator, wrote that the agreement was a "lightning rod for numerous concerns about the role and purpose of the university," and that before UC Berkeley embarks on future public-private partnerships, it should have an open dialogue about the goals of working alongside industry. "As a recognized national leader in higher education, with a strong and vibrant tradition of faculty governance, UCB is perhaps best situated as a place to begin a serious debate," concluded Bush, "and, as a leader, perhaps it has an obligation to do so as well."


The UC system is projecting a $2.5 billion structural shortfall by 2015, and the university's financial managers have no concrete plans to address the crisis. As a result, private money has continued to flow into Berkeley's hard science departments with little public input.

To deal with this new funding model, many professors are trying to ensure that academic integrity remains intact. And with the exception of the BP agreement, they have — by and large — been successful. Most public-private partnerships at Cal involve multiple companies, don't encompass entire departments, and include safeguards to ensure that the basic principles of academia are preserved. In turn, many professors believe that the situation has improved: "In the old days, there was an element of people doing superb research and then publishing it in the literature and then hoping something good would happen," said Paul Wright, director of the engineering department's CITRIS lab. "Now, organizations like ours have developed, and we can more easily take those brilliant research ideas and turn them into commercially oriented products."

CITRIS is a seven-story glass edifice in the middle of the engineering quadrant. The lab receives between $50 and $60 million a year in research grants, roughly a quarter of which comes from its 36 corporate partners, including IBM, Hewlett-Packard, and Intel. Despite being heavily funded by industry, CITRIS is a public good, Wright said. "Everything we do has to be a part of the open literature .... None of it is exclusive, it can be licensed by anybody."

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