New University Paradigms for Technological Innovation

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New University Paradigms for Technological Innovation

James J. Duderstadt
The University of Michigan
May 15, 2009


Abstract: A new paradigm is presented for translational research coupling fundamental
scientific research with technological innovation. This concept has been proposed as a
key component of federal energy research for both American research universities and
national laboratories.

In today’s global, knowledge-driven economy, leadership in innovation is
essential to a nation’s prosperity and security. In particular, technological innovation–
the transformation of new knowledge into products, processes, and services of value to
society–is critical to economic competitiveness, national security, and an improved
quality of life. The United States has long benefited from a fertile environment for
innovation, such as a diverse population continually renewed through immigration,
democratic values that encourage individual initiative, and free market practices that
drive the ongoing process of creative destruction (a la Schumpeter). But history has
shown that public investment is necessary to produce the key ingredients for
technological innovation including: new knowledge (research and development),
human capital (education, particularly at the advanced level), infrastructure (physical
and now cyber), and supportive policies (tax, intellectual property). (Augustine, 2005)

Although the flow of knowledge from scientific discovery through development
and technological innovation, commercialization, and deployment was once thought of
as a linear, vertical process, it is now viewed as far more complex, both vertical and
horizontal, and involving many interacting disciplines and participants (see Figure

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below). As Nam Suh has suggested in his paper for this Glion Colloquium (Suh, 2009),
for innovation to occur there cannot be any missing steps or elements in the continuum
of necessary activities.

Traditionally one thinks of the appropriate activities for each of the key actors in
the innovation continuum–namely, government, industry, and universities–in terms
such as basic research, applied research, development, commercialization, and
deployment. For example, basic research activities, usually speculative, long term, and
driven by scientific curiosity, are usually viewed as the proper role of research
universities, while use-driven basic research, applied research, and development are
more commonly roles for government or industrial laboratories. Commercialization and
deployment are similarly viewed most appropriate for industry (both established and
entrepreneurial).
Yet there are other types of research important to the innovation continuum. In
his theory of scientific revolution, Thomas Kuhn suggested that major progress was
achieved not through gradual evolution of conventional disciplinary research but rather
through revolutionary, unpredictable transformations after the intellectual content of a
field reaches saturation. (Kuhn, 1963) The National Science Foundation refers to such

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activities as transformative research, “research driven by ideas that stand a reasonable
success of radically changing our understanding of an important existing concept or
leading to the creation of a new paradigm or field of science. Such research is also
characterized by its challenge to current understanding or its pathway to new frontiers”.
(National Science Board, 2007) While it might be assumed that such transformative
research would most commonly occur in research universities, ironically the peer
pressure of merit review in both grant competition and faculty promotion can
discourage such high risk intellectual activities. In fact, transformative research occurs
just as frequently in some industrial research laboratories (e.g., Bell Laboratories in the
past and Google Research today) where unusually creative investigators are freed from
the burdens of grant seeking or commercial deadlines. It also occurs in a small number
of unique government agencies such as the Defense Advanced Research Project Agency
(and hopefully in its spinoffs of ARPA-E and IARPA) where path-breaking research is
shielded from the pressures of grant competition and application deadlines.
At the other end of the innovation continuum is translational research, aimed at
building the knowledge base necessary to link fundamental scientific discoveries with
the technological innovation necessary for the development of new products, processes,
and services. While translational research is both basic and applied in nature, it is
driven by intended application and commercial (or social) priorities rather than
scientific curiosity. Such translational research is a common feature of the biomedical
industry, moving “from bench to bedside” or from laboratory experiments through
clinical trials to actual point-of-care patient applications. While it is also a necessary
component of the innovation continuum in other areas, particularly in corporate and
federal R&D (with Bell Laboratories and the U.S. Department of Energy Laboratories as
prominent examples), it has generally not been identified as a specific activity of
research universities.


The spectrum of research paradigms

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Discovery-Innovation Institutes

Over the past several years there has been an increasing recognition that U.S.
leadership in innovation will require commitments and investments of resources by the
private sector, federal and state governments, and colleges and universities. In 2005, the
National Academies issued a series of reports suggesting that a bold, transformative
initiative, similar in character and scope to initiatives undertaken in response to other
difficult challenges (e.g., the Land Grant Acts, the G.I. Bill, and the government-
university research partnerships) will be necessary for the United States to maintain its
leadership in technological innovation. (Augustine, 2005) The United States will have to
reshape its research, education, and practices to respond to challenges in global markets,
national security, energy sustainability, and public health. The changes envisioned were
not only technological, but also cultural; they would affect the structure of organizations
and relationships between institutional sectors of the country.
To this end, it was the recommendation of the United States National Academy
of Engineering that a major federal initiative be launched to create translational research
centers aimed at building the knowledge base necessary for technological innovation in
areas of major national priority. (Duderstadt, 2005) These centers, referred to as
discovery-innovation institutes, would be established on the campuses of research
universities to link fundamental scientific discoveries with technological innovations to
create products, processes, and services to meet the needs of society. With the
participation of many scientific disciplines and professions, as well as various economic
sectors (industry, government, states, and institutions of higher education), discovery-
innovation institutes would be similar in character and scale to academic medical
centers and agricultural experiment stations that combine research, education, and
professional practice and drive transformative change. As experience with academic
medical centers and other large research initiatives has shown, discovery-innovation
institutes had the potential to stimulate significant regional economic activity, such as
the location nearby of clusters of start-up firms, private research organizations,
suppliers, and other complementary groups and businesses.
More specifically, discovery-innovation institutes would be characterized by
partnership, interdisciplinary research, education, and outreach:

Partnership: The federal government would provide core support for the discovery-
innovation institutes on a long-term basis (perhaps a decade or more, with

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possible renewal). States would be required to contribute to the institutes
(perhaps by providing capital facilities). Industry would provide challenging
research problems, systems knowledge, and real-life market knowledge, as well
as staff who would work with university faculty and students in the institutes.
Industry would also fund student internships and provide direct financial
support for facilities and equipment (or share its facilities and equipment).
Universities would commit to providing a policy framework (e.g., transparent
and efficient intellectual property policies, flexible faculty appointments,
responsible financial management, etc.), educational opportunities (e.g.,
integrated curricula, multifaceted student interaction), knowledge and
technology transfer (e.g., publications, industrial outreach), and additional
investments (e.g., in physical facilities and cyberinfrastructure). Finally, the
venture capital and investing community would contribute expertise in
licensing, spin-off companies, and other avenues of commercialization.

Interdisciplinary Research: Although most discovery-innovation institutes would
involve engineering schools (just as the agricultural experiment stations involve
schools of agriculture), they would require strong links with other academic
programs that generate fundamental new knowledge through basic research
(e.g., physical sciences, life sciences, and social sciences), as well as other
disciplines critical to the innovation process (e.g., business, medicine, and other
professional disciplines). These campus-based institutes would also attract the
participation (and possibly financial support) of established innovators and
entrepreneurs.

Education: Engineering schools and other programs related to the discovery-
innovation institutes would be stimulated to restructure their organizations,
research activities, and educational programs. Changes would reflect the
interdisciplinary team approaches for research that can convert new knowledge
into innovative products, processes, services, and systems and, at the same time,
provide graduates with the skills necessary for innovation. These changes would
also generate strategies for retaining undergraduates in engineering programs
and attracting and retaining students from diverse backgrounds. Discovery-
innovation institutes would provide a mechanism for developing and
implementing innovative curricula and teaching methods.

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Outreach: Just as the success of the agricultural experiment stations depended on
their ability to disseminate new technologies and methodologies to the farming
community through the cooperative extension service, a key factor in the success
of discovery-innovation institutes would be their ability to facilitate
implementation of their discoveries in the user community. Extensive outreach
efforts based on existing industry and manufacturing extension programs at
engineering schools would be an essential complement to the research and
educational activities of the institutes. Outreach should also include programs
for K–12 students and teachers that would build enthusiasm for the innovation
process and generate interest in math and science.

Research Priorities: This initiative would stimulate and support a very wide range of
discovery-innovation institutes, depending on the capacity and regional
characteristics of a university or consortium and on national priorities. Some
institutes would enter into partnerships directly with particular federal agencies
or national laboratories to address fairly specific technical challenges, but most
would address broad national priorities that would require relationships with
several federal agencies. Awards would be made based on (1) programs that
favor fundamental research driven by innovation in a focused area; (2) strong
industry commitment; (3) multidisciplinary participation; and (4) national need.
Periodic reviews would ensure that the institutes remain productive and
continue to progress on both short- and long-term deliverables.

Funding: To ensure that the discovery-innovation institutes lead to transformative
change, they should be funded at a level commensurate with past federal
initiatives and current investments in other areas of research, such as
biomedicine and manned spaceflight. Federal funding would ultimately increase
to several billion dollars per year distributed throughout the engineering
research and education enterprise; states, industry, foundations, and universities
would invest comparable amounts. To transform the technological innovation
capacity of the United States, the discovery-innovation institutes should be
implemented on a national scale and backed by a strong commitment to
excellence by all participants. Most of all, they would be engines of innovation
that would transform institutions, policies, and cultures and enable our nation to
solve critical problems and maintain its leadership in the global, knowledge-
driven society of the twenty-first century.

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The discovery-innovation institute: an R&D commons

A Case Study: Energy Research

Sustainability and security challenges plague the world’s energy production and
delivery system. The global economy currently relies on fossil fuels for nearly 85
percent of its energy. By 2030, global energy use is projected to grow by 50 percent over
2005 levels. At the same time, recent analyses of world petroleum production, known
reserves, and the impact of rapidly developing economies suggest that an increasing
imbalance between supply and demand will drive up global oil and gas prices, placing
the nation’s economy and security at risk. While the world has substantial reserves of
other fossil-fuel resources, such as coal, tar sands, and oil shale, the mining, processing,
and burning of these fossil fuels with current technologies is expensive and
characterized by increasingly unacceptable environmental impact in light of climate
change concerns and intensive land and water utilization. (Friedman, 2005, 2008)
Today’s energy challenges stem from an unsustainable energy infrastructure,
largely dependent on fossil fuels characterized by unacceptable environmental impact
and supply constraints, with clear implications for America’s economic, public health,
and national security. Addressing these challenges will require substantial investments
in clean and efficient energy technology, much of which has yet to be developed,
making innovation the centerpiece of successful energy policy. (Lewis, 2007)
Transformative innovation will be required to address fundamental energy
challenges. As Presidential Science Advisor John Holdren warns, the multiplicity of
challenges at the intersection of energy with the economy, the environment, and
national security–led by excessive dependence on petroleum and the dangerous

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consequences of energy’s environmental impact, particularly global climate change–
requires a major acceleration of energy-technology innovation that, over time, can
reduce the limitations of existing energy options, bring new options to fruition, and
reduce the tensions among energy-policy objectives and enable faster progress on the
most critical ones. (Holdren, 2006)
Immediate impact can be achieved from adopting existing technologies and
practices that improve the efficiency of energy utilization, bringing fuel savings and
creating new jobs. Yet, large and sustained efficiency investments will not be enough to
achieve global sustainability goals. New technologies and practices are needed to
mitigate the harmful impact and resource constraints of existing energy sources. Of
longer term importance is the deployment of affordable, carbon-free renewable energy
technologies, which will require energy storage technologies and an expanded electricity
grid. With today’s renewable technologies, a substantial gap remains in achieving the
scale and cost structures necessary for major impact.
Here innovation is needed not only through greatly increasing R&D in energy
technologies but to demonstrate these on a commercial scale and deploy them rapidly
into the marketplace. Yet over the past two decades, energy research in the United States
has actually been sharply curtailed by the federal government (75% decrease), the
electrical utility industry (50% decrease), and the domestic automobile industry (50%
decrease). The energy industry has the lowest level of R&D investment (relative to
revenues) of any industrial sector. In 2009 federal investment in energy R&D amounted
to less than $3 billion, compared to the federal R&D effort characterizing other national
priorities such as health care ($30 B/y) and defense ($80 B/y).

The erosion of both industrial and government energy R&D (Kammen, 2005)

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U.S. Department of Energy energy R&D (Galligher, 2008)

Furthermore, today’s United States energy research program does not have the
mission, capacity, or the organizational structure to equip the nation to meet the full run
of its challenges. It continues to be primarily conducted by national labs that are not
only fragmented and insulated from the marketplace, but fail to tap the considerable
resources of the nation’s research universities. Major innovation in research paradigms,
policy, and management will be necessary to bring about the needed pace of energy-
technology innovation:
• To provide the scale, continuity, and coordination of effort in energy R&D and
demonstration needed to bring an appropriate portfolio of improved options to
commercialized in a timely way;
• To tap the nation’s top scientific and engineering talent and facilities, which are
currently distributed throughout the nation’s research universities, corporate
R&D centers, and federal laboratories;
• To address adequately the unusually broad spectrum of issues involved in
building a sustainable energy infrastructure, including, in addition to science and
technology, attention to complex social, economic, legal, political, behavioral,
consumer, and market issues;
• To build strong partnerships among multiple players–federal agencies, research
universities, established industry, entrepreneurs and investors, and federal, state,
and local government;

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• And to launch robust efforts capable of producing the human capital and public
understanding required by the emerging energy sector at all education levels.

In view of these market and governance challenges, it is clear that the search for
breakthrough technologies and practices should be placed at the center of energy
research efforts. This will require a far more comprehensive and interactive engagement
of the entire national research enterprise: research universities, corporate R&D
laboratories, and federal laboratories.
To address these challenges, a recent report by the Brookings Institution made two
important recommendations (Duderstadt, 2009):

1. The United States should first commit itself to increasing federal investments in
energy R&D to a level appropriate to address the dangerous and complex
economic, environmental, and national security challenges presented by the
nation’s currently unsustainable energy infrastructure. Comparisons with federal
R&D investments addressing other national priorities such as public health,
national defense, and space exploration suggest an investment in federal energy
R&D an order of magnitude greater than current levels, growing to perhaps $20
to $30 billion per year, with most of this flowing to existing research players and
programs (e.g., national laboratories and industry).

2. A significant fraction of this increase should be directed toward a new research
paradigm consisting of a national network of regionally-based energy discovery-
innovation institutes (e-DIIs) that serve as hubs in a distributed research network
linked through spokes to concentrations of the nation’s best scientists, engineers,
and facilities.

Recall that the discovery-innovation institute concept is characterized by
institutional partnerships, interdisciplinary research, technology commercialization,
education, and outreach. In this sense, the e-DII paradigm would place a very high
priority on connection and collaboration rather than competition to achieve deeper
engagement of the nation’s scientific, technology, business, and policy resources in an
effort to achieve a sustainable energy infrastructure for America.
As envisioned here, therefore, the proposed e-DIIs would do the following:

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