Introduction

Over the past decade there has been a remarkable shift in the division of labor among universities, industry, and the federal government. In our view, this transformation is most pronounced in the life sciences and the commercial fields of medicine, Pharmaceuticals, and biotechnology. The post–cold war focus of federal science and technology policy on “competitiveness” has been noted by many observers, and the intensified interest in basic research and collaborative product development by large private corporations in various high-technology fields has been widely studied. However, the accompanying change in the mandate of research universities toward a greater focus on commercializing research findings is much less understood. Our goal in this chapter is to enhance the understanding of the ways in which the relationship between universities and the private economy has changed, particularly in the life sciences. We highlight the primary forces that have blurred the traditionally distinct roles of the academy and industry, illustrating these trends with data from the life sciences. We review several explanations for this transformation, and conclude with a discussion of its consequences both for public policy and for the institutional role of universities as generators and disseminators of basic knowledge.

Throughout much of the post–World War II era there was a relatively clear distinction between basic and applied research, with the former the domain of the university and the latter the turf of business. The federal government, outside of defense-related research, supported the creation of an infrastructure for basic research and, through the National Science Foundation (NSF) and the National Institutes of Health (NIH), funded individual scientists as well.