Robert Birgeneau, former president of the University of Toronto and chancellor of the University of California, Berkeley, and John Evans, founding chairman of the Canadian Foundation for Innovation and chairman of the Medical and Related Sciences Discovery District in Toronto and Torstar Corporation, have something in common — they share an unswerving faith in corporations and the need for their partnership with universities.

Birgeneau’s foreword in this collection of papers presented at the 2002 U of T symposium, Creating Knowledge, Strengthening Nations, includes three propositions that provide a general framework for much of this volume. For one, “investment in university-based basic research is in large measure responsible for the phenomenal increase in output of the North American economy over the past five decades.” Second, this basic research must be mixed with technology and venture capital. And third, “there is no evidence that academic autonomy is compromised when universities enter into mutually beneficial and carefully considered relationships with the private sector.”

But why should the university have to do the basic research? Because according to Birgeneau even “great” corporations like Merck, committed as they are to fundamental research, have “a time horizon of between twelve and eighteen months” on their research projects. The basic research that gave rise to industries like biotechnology and the World Wide Web most often can only happen at a university where long time frames are the norm.

As well, it would be interesting to know just what Birgeneau means by not “compromised” and “beneficial” in university-corporate partnerships. Partly in response to the Bayh-Dole Act of 1980, which gives American universities the intellectual property rights to federally-funded discoveries, he assures us the pattern of basic research “has not changed one iota,” “the process of technology transfer has in no way blemished the purity of basic research,” and “just added to the richness and fullness of their impact on the economy.” He refers to studies done at Stanford and California and concludes that “tremendously positive” technology transfers and a “marvellous number of jobs” are the results. No citations of the studies are provided.

In his chapter — the penultimate one in this collection — John Evans cites the Canadian Federation of Independent Business which argues that Canada’s technology and health science fields suffer because “venture capital markets in Canada are a decade behind the United States, in part because of past regulatory restrictions on banks and pension plan investments.”

What of the almost 300 pages in between Birgeneau’s forward and Evans’ chapter? Bookends to the Birgeneau-Evans perspective are two chapters. One by Louis Tornatzky, vice-president for business planning and development of Select University Technologies in California, titled Innovation U, recommends that new language in promotion and tenure formally legitimate the role of partnering activity. The second, by Calvin Stiller, chair of the Ontario Research and Development Challenge Fund, director of the Ontario Innovation Trust and professor of medicine at the University of Western Ontario, tells us that science is critical but venture capital is the fuel. What we need is a new hybrid public-private vehicle to lead us to the Promised Land of new opportunities.

This theme is repeated in an article by Abdallah S. Daar, director of the applied ethics and biotechnology program at the University of Toronto Joint Centre for Bioethics and Peter A. Singer, director of the centre and Sun Life Financial chair in bioethics. They argue that industry, as a key stakeholder in the unfolding of the genomic revolution, should not be demonized, but engaged constructively.

One has to reach beyond this volume to find the substantial research that runs counter to this book’s overwhelmingly positive propositions about commercialization, research and development.

Lester Thurow, an economist and former dean of management at MIT, provides perspective on corporate research. In addition to the issue of spending too little because society will benefit more than the individual firm, is the issue of the time frame that often dominates the competitive firm’s decision-making. The private sector, with its preoccupation with shareholders’ rates of return and competition, has a short-run time frame and therefore tends not to invest in advancing basic knowledge. Because governments tend to be indifferent about who reaps the benefits from investments in research and development they play an essential role in the long-term investment in capitalist economies.

In the United States, everything from Eli Whitney’s invention of interchangeable parts, to the National Road, the cross-continental railroads, public airports, atomic energy, the exploration of space, to the Internet and biotechnology, owes its origins to government investment. “The only private labs that have ever focused on anything other than short-run results are those such as Bell Labs and the IBM labs that were run by quasi-monopolies.” The minute AT&T (forced by government) and IBM (forced by the market) joined the normal, competitive, capitalistic world they cut long-term research out of their laboratory budgets.

There does appear to be significant evidence that publicly-funded research is essential to capitalist growth and that universities are an important part of this process.

According to the accounting firm KPMG, Canada’s tax incentives for R&D were the most generous of 11 countries it surveyed for its report on competitiveness. In spite of this, Canadian corporations invest only half as much as their U.S. counterparts in research and development, which often determines productivity growth and the invention of industries and products. If more deregulation is to be entertained, it must be done with great care and an emphasis on the public interest. Uncritical lobbying for the private sector, as Birgeneau and Evans do, would not seem to be in the public interest.

According to Donald Light, the best-kept secret in America is that American taxpayers pay for most of the basic research for new drugs and not the drug companies. Among the 21 drugs that had the most impact on therapeutic practice between 1965 and 1992, publicly-funded research was instrumental in the development of 16 and is becoming more important over time. There are many instances of new drugs being developed almost entirely through the National Institutes of Health and then handed to the private sector for production, distribution and marketing at monopoly (patent) prices. Neither Birgeneau nor Evans raises the potential free rider problem where companies use the public purse to pay for the risks while they reap the rewards.

One has to wonder what the response to this celebratory approach to the corporate contribution to the economy and the university would have been if critics had been invited to the conference. Dr. Marcia Angell, Harvard professor and former editor-in-chief of the New England Journal of Medicine argues that, “to a remarkable extent academic medical centers have become supplicants to drug companies.”

Birgeneau’s chosen “great” corporation, Merck, sold the painkiller Vioxx, which is estimated to have caused 100,000 heart attacks and 50,000 deaths in the U.S. alone. Almost four years before Merck removed the drug from the market in 2004 a randomized trial found Vioxx caused a four- to five-fold increase in heart attacks. Merck had received a warning letter from the U.S. Food and Drug Administration because of Vioxx ads that failed to mention this increased risk of heart attacks. At the same time Public Citizen warned its readers Vioxx was a “do not use” drug.

More recently the New England Journal of Medicine (2005) accused Merck of misrepresenting the results of a crucial clinical trial of Vioxx to play down its heart risks. They may not be willing to risk their capital on projects that don’t return profits in 18 months, but it appears they are willing to risk the public’s health for as long as they can get away with it for profit. In her book, The Truth About the Drug Companies, Angell writes that the drug industry “uses its immense wealth and power to co-opt nearly every institution that might stand in its way.”

No doubt Vioxx added to our GDP and created jobs. And it will continue to do so as the health care systems in both the U.S. and Canada care for the resulting sick and dying, while the legal sector creates jobs deciding how much the victims, and for the deceased, their families, will receive in compensation.

Tufts University professor Sheldon Krimsky points to the following from the now defunct U.S. Office of Technology Assessment: “it is possible that the university-industry relationships could adversely affect the academic environment of universities by inhibiting the free exchange of scientific information, undermining interdepartmental co-operation, creating conflict among peers, or delaying or impeding publication results.” Proponents of university-industry partnerships suggest these new relationships might help to produce the soulful corporation and therefore a “leveling up” rather than a “leveling down” of research integrity. However, Arthur Schafer at the University of Manitoba argues the available evidence shows the partnership has had a corrosive effect on universities and researchers.

Bekelman et al. found a “significant association between industry sponsorship and pro-industry conclusions” in biomedical research and Lexchin et al. showed studies sponsored by pharmaceutical companies were four times more likely to have outcomes favouring the sponsors’ products than studies funded by other sources. Importantly, there is no evidence that industry funding produces studies of lower methodological quality. Rather, the authors of these reviews speculate that industry influence can affect both the research agenda and the trial design, as well as suppress or delay unfavourable findings.

In a Harvard study published in 1997 the evidence suggests that faculty who engage in commercialization were almost three times as likely to report publication delays longer than six months. They were also more likely to have denied other scientists’ research results. The protection of trade secrets among academic scholars whose labs were across the hall from one another was becoming a common practice.

Glen Jones and his fellow editors inform us that this volume seeks to deepen the understanding of higher education as advancing not merely the goals of economic growth and entrepreneurialism but also strategic societal goals of equity and redistributive justice. While this agenda is a limited one, given the larger effects of corporations on the economy as suggested by the discussion above, there is a lot of loose talk in the book about the imperatives of globalization.

For the editors this volume addresses the need to understand the precise functions that universities perform in contributing to economic growth and development and insight into the relationship between the university and industry. There is a lot of not so precise, banal discussion of eliminating poverty by education, technology and markets.

The editors say their authors take the middle path between those who view globalization as inevitable, requiring institutional adaptation, and those who view it as an unnecessary evil where economic interests have displaced social, human and democratic concerns.

Towards this goal there is the occasional serious discussion in the volume. Editor Michael Skolnik provides a balanced account of the empirical and institutional trends for contemporary Canadian higher education.

For those interested in the relationship between economic growth and universities, David Wolfe, a professor of political science at the University of Toronto, explores the institutional basis for success and failure in research, knowledge innovation and cluster formation. He’s interested in what does and doesn’t work in the connections that government, universities and the private sector make in economic development.

There is also the occasional voice of opposition that identifies the problem as the neoliberal consensus. George Subotzky, director of the Centre for the Study of Higher Education at the University of the Western Cape, in Cape Town, South Africa, identifies neoliberal economic orthodoxy as the driving force behind the policy changes taking place that have contributed to inequality and exacerbated the already tragic economic and social problems of South Africa. According to Subotzky, the neoliberal benchmark — the market-oriented “entrepreneurial” university — diverts higher education institutions from performing their multiple roles and purposes. Instead of contributing to the public good it serves the economic needs of the private sector at the expense of equity, redistribution, independent critical inquiry, social jus- tice and human rights.

With few exceptions, this book is an uncritical homage to the corporation and its derivative, venture capital. Little consideration is given to the limits of private investment or the importance of autonomous state funding of research. Similarly, the conflicts that would inevitably result from private sector involvement in universities are glossed over, as is any serious discussion of the causes and solutions to poverty and inequality.


Angell, Marcia. The Truth About the Drug Companies. Random House, 2005.

Bekelman et al. “Effect of Industry Sponsorship on the Results of Biomedical Research — Reply,” JAMA 2003; 289: 2503– 2503.

Blumenthal, D. et al. “Withholding Research Results in Academic Life Science: Evidence from a National Survey of Faculty,” JAMA 1997; 277: 1224–1228.

Krimsky, Sheldon. Science in the Private Interest. Rowman & Littlefield Publishing, 2003; 31.

Lexchin, J. et al. “Pharmaceutical Industry Sponsorship Research Outcomes and Quality: Systematic Review,” BMJ 2003; 326: 1167–1170.

Light, Donald. Does Big Farmer Need More Money? Unpublished, 2003.

Editorial. “Expression of Concern,” NEJM 2005; 353: 2813–2814.

Schafer, Arthur. “Biomedical Conflicts of Interest: A Defence of the Sequestration Thesis,” Journal of Medical Ethics 2004; 30: 8–24.

Thurow, Lester C. The Future of Capitalism. William Morrow, 1996; 290–291.

Robert Chernomas is a professor of economics at the University of Manitoba. He has published in both the academic and popular literature in the areas of macroeconomics, history of economic thought, health care economics, post-secondary education and social economic determinants of health. He has lectured in Canada, the United States, China, Africa and Europe. He is a former co-chair of the Alternative Federal Budget and is currently a board member of the Council of Canadians.