President Charles M. Vest's annual report to the MIT community, October 1994.
A state without the means of some change is without the means of its conservation.
Edmund Burke, Reflections on the Revolution in France (1790).
American higher education must address the challenges of a new era. This requires not only introspection regarding our mission and the changing environment in which we serve society, it requires rethinking our relationship and interaction with both industry and the federal government. Global economic competition and accelerating social and technological change have altered much of what is needed in our educational and research programs. Changing national priorities and attitudes, including an increasingly pervasive cynicism, are remaking the landscape of federal science and technology policy, with strong ramifications for our universities.
We must enthusiastically address the challenges of this new era, yet it is essential that fundamental values of the academy not become victims of short-term or localized thinking, despite the necessity for evolution and change within the system of higher education. Likewise, commitment to academic values must not imply rigidity and resistance to change.
Consideration of both the larger issues and specific instances of opportunity and challenge illuminate the new pathways we must pursue.
The end of the Cold War, the stunning advances in information technology, global economic competition, and the changing demography of America are rapidly creating new expectations, responsibilities, and opportunities for institutions of higher education, and especially research universities:
· The military needs of the Cold War era and the culture of superpower competition created a public and political climate of support for advanced education and research. Defense became the dominant driver of high technology and provided an underlying rationale for the support of much basic science as well. The benefits of this support extended far beyond our security, narrowly defined, to build new industries and national capabilities through an enhanced knowledge base and a more highly educated citizenry. This now has changed abruptly. The cold peace that we have won has eroded this supportive climate, and left the compass of national policy spinning, rather than locked onto new directions that would unite, inspire and advance us.
· In a generation, computers have grown from curious devices to a ubiquitous technology of unprecedented power and influence. Information technology now links us across time and space in a manner that is revolutionizing human organizations. How knowledge is acquired and operated upon, and how work is accomplished in the future are likely to be so influenced by information technology as to be unrecognizable in today's context.
· We already live in a global society. Most notably, our corporations buy, sell, produce, employ and compete in countries all over the world. They interact continuously across national, cultural and linguistic borders. Even so, most American citizens continue to lead rather isolated lives, particularly during their childhood years. Second languages are not acquired, and the experience of living in other countries, or even visiting them on more than a superficial plane, is rare. International leisure travel is beyond the financial grasp of most children as they grow up. Yet these young men and women will have to work in a highly global environment when they reach adulthood.
· The face of America is changing, and changing rapidly. Our minority populations will continue their rapid growth in the next generation. We are experiencing immigration from the east and south on a scale comparable to the waves of Europeans coming to our shores early in the century. The range and extent of professional activity and leadership accessible to women continues to expand.
From these changing realities and contexts, a new agenda for universities must emerge one that will emphasize their contributions to civilian issues: improving health and welfare, creating industries and societies that are sustainable in terms of energy and environment, increasing quality and productivity in both manufacturing and service industries, understanding the origin, development and reduction of violence, establishing and replenishing our physical and information infrastructures, and preparing students to live, work and exercise leadership in an increasingly international context.
The central mission of universities is to educate students. Drawing on the German model, America added to this mission the generation of new knowledge. In the period since the Second World War, we continued this evolution to create the uniquely American research university. At their best, these institutions are communities of learning that respect the intrinsic value of new knowledge and understanding, while at the same time emphasize the importance of interacting with and influencing the world beyond campus boundaries. The nature and raisons d'être of these communities are generally well understood and held in common by their members.
The external perception of universities' mission, however, is increasingly unclear. For many decades both the public and governments held a fairly common understanding that the underlying role of education in America at all levels was to prepare citizens to operate a democracy. This essentially Jeffersonian view has served the nation well, bringing a commitment to education for all citizens, and a healthy mingling of practical education with humanistic, artistic and scholarly endeavors. It provided the fertile soil that supported the growth of the post-Civil War land-grant universities and the post-World War II research universities. There now is a great sense of turbulence and uncertainty that suggests that some new educational form will emerge in this immediate post-Cold War era. At the least, the social contract among the taxpaying public, and the private, government, and academic sectors will be rewritten.
Nearly 50 years ago a confident America, seeking to build a strong future for its citizens, established an approach to advancing science, technology and education that is unique in the world. The government, noting the critical role that university faculty and researchers had played in World War II, turned to the universities to conduct the basic research that would undergird our national goals.
For half a century, federal agencies have funded research and graduate education programs that have been uncommonly successful. Federally supported university research has generated essential components of our technology base, produced new generations of scientists and engineers, and driven the economy in important ways.
Federal spending at research universities was viewed as an essential investment in the future. The economic payback on this investment is hard to determine, but in recent decades, the economic analysis of University of Pennsylvania economist Edwin Mansfield suggests that the annual rate of return on investment in academic research is on the order of 25 30 percent. The Congressional Budget Office reviewed this analysis and concurred with this estimate of the remarkable rate of economic payback to the country on its investment in academic research. Nonetheless, the public and the Congress now increasingly question the value, priority, and relevance of this investment. The sense of partnership between government and universities has decayed dramatically.
Establishing a renewed partnership and common vision requires that we look forward, not backward, and face the challenges of a new era. It requires that we set a good balance between immediate national needs and the long-term good of the country. It also requires that we recognize the increasing scale, cost and complexity of research. But above all, it requires that we establish a sense of common purpose.
A key mechanism for setting the tone of the evolving relationship and nature of federal support of higher education is the establishment of national research policy. Once the relatively clear domain of the executive branch, such policy is increasingly set in Congress through the appropriation process. This makes the job of establishing purpose and commitment much more difficult.
America knows better than any other nation how to do research, but we have lost our common understanding of why to do research.
Our national R&D pendulum swings fast and wide. We commit the nation to advance fundamental physics by constructing the Superconducting Supercollider, spend $2 billion, and then decide not to do it after all. We declare that industrial policy or even technology policy is verboten, then within a couple of years we commit to a national clean car initiative organized by the Department of Commerce. National laboratories, mostly dedicated to weapons production and accustomed to noncompetitive, steady funding, suddenly aim to become adept at assisting industry. And in industry itself, central research laboratories with a strong commitment to basic research have for the most part been transformed into organizations with entirely different missions.
These swings are manifestations of the vagaries of our political system, but they also are indicative of an unstable search for policy in a time of fundamental change. Synergy and common understanding among the universities, the federal government, and industry has been lost. It must be regained.
Balancing the Short and Long Views A major issue for the future of research universities will be the emerging federal view of the proper balance between clearly applicable research and the fundamental pursuit of the unknown. Ignoring fundamental research is just another way of living for the short term at the expense of future generations. How to develop this balance and how to continually renew and draw fully on the talents and expertise of our faculties is the essence of a set of questions that must be addressed by those who establish policy in America for science, technology and research. In the final analysis, establishing congruence between the driving passions of researchers and societal goals is the central issue of science and technology policy.
The last several years have seen considerable angst and strain among universities, the federal government and industry regarding the nation's research and development profile, policies, and in particular the role of academia. We have begun to think about research in new and often unfamiliar terms. Some would turn rapidly to highly applied research, redirect the activities of scientists and engineers, and increasingly foreordain the specific directions of scientific research and technological investigation. After all, the argument goes with considerable validity Congress and the American taxpayer expect a strong return on their investment, preferably in the form of measurable improvements in our economy, and especially in high-wage employment.
Such arguments and actions greatly worry those who understand the dynamics of science, its unpredictability, and its dependence on curiosity and sudden insight as well as on hard work and a supportive environment. In order to prosper, and to provide maximum long-term benefit to society, science needs flexibility, continuous support, and passion.
These conditions are endangered by the current state of federal/academic relations. The past few years have seen a continuing attempt on the part of both Congress and the Administration to shift substantial portions of the cost of conducting university research away from the federal sponsors of that research. Rather than reimbursing universities for the full cost of the research conducted on our campuses, the government has expected the universities to shoulder more of those costs. This means using our tuition, gift, and endowment revenues to cover unreimbursed costs of federally sponsored research. At MIT, such changes already account for a recurring, annual shortfall of $10 million in federal reimbursement of actual and legitimate costs of research. There is a continual stream of further actions to arbitrarily cap reimbursement or otherwise undermine the support of our nation's research.
For example, this year the House of Representatives passed an appropriations bill that would have instantaneously decreased Department of Defense support of research at universities to 40 percent of its current level. The potential damage of this was imponderable. This is the primary source of federal support of engineering graduate education and research in the United States. It supports over 75 percent of all electrical engineering research on our campuses, and it accounts for approximately 50 percent of research in other critical fields such as mechanical engineering, computer science, materials science and engineering. Only at the eleventh hour during a Senate-House conference was this cut modified, but we still were left with a destructive 14 percent cut a $200 million reduction in funding for DOD sponsored research on the nation's campuses.
Such instances have caused the university community to work with great intensity to promote understanding of the issues by members of Congress and their staffs. We have enlisted the help of leaders of American industry to explain the disastrous consequences to our economy and competitiveness. In the process of fighting each of these difficult, defensive political battles, the universities have had to divert enormous time and effort from our primary mission of education and research.
We are in the midst of an increasingly vicious cycle of Congressional attack followed by intense defensive efforts by universities to create withdrawal or compromise. As we try to make our case, however, we are increasingly chided for acting like lobbyists, a role with which we are distinctly uncomfortable. Yet when push comes to shove, a common complaint by members of the Congress when an issue arises is that we haven't been paying enough attention to them. This is not a stable way to conduct federal policy. This is a time of both change and financial stress that calls for reasoned development of policy.
Just as we are in the midst of change in our relations with the federal government, so too are our relations with private industry changing. Much of this is driven by the rapid changes in industry itself. The end of the Cold War, combined with the incredible rate at which electronic communication is expanding, and the irreversible globalization of competitive businesses has led to radical transformations of industries and organizations. This is accelerated by the expanding knowledge base that is giving rise to entire new industries such as biotechnology. Work is being accomplished in new ways as products are completely defined digitally before they exist physically, as so-called agile organizations are formed by electronic links among component groups throughout a company, or, more likely among large and small groups spread around the world. Although the emerging forms of organization are not yet clear, it is certain that students need different preparation to enter this new work environment.
For the research universities, this situation is full of opportunity and responsibility, but also of danger. I believe that the opportunity and responsibility greatly outweigh the danger, particularly for MIT, which was founded to create a strong, even unique, relationship with industry. The opportunities and responsibilities are clear: an exciting new, intellectual and educational agenda needs to be forged, especially in engineering and management. The dangers are equally clear: universities run the risk of assuming an overly utilitarian role, and the crucial openness of academic dialogue could be lost through ill-conceived policies regarding intellectual properties and dissemination of new knowledge.
The history of interaction of industry and academia has been mixed, and there have been major roadblocks of cultural differences and arrogance on both sides. We too often have passed as ships in the night, not really listening to or understanding each other. This is changing. Industrial issues have become intellectually challenging and exciting from the perspective of faculty and student interest, and, indeed, we need each other as never before.
The intellectual agenda of MIT and some other universities is evolving as new technological issues arise and as we attempt to understand and define new organizational structures. This can only be done by increasing the breadth and depth of dialogue and partnership with private industry, as well as with government. It can only be done if it is strongly supported both financially and intellectually.
Potential Clashes between Industrial and Academic Values We must take great care as we develop new relations with industry, however, that universities not assume a posture that is too utilitarian. In time this would erode their intellectual independence and their ability to serve as objective critics of society. Indeed, there is a paradox in that it is this very independence and objectivity that usually attracts industry to work jointly with academia. As we work together in areas such as the environment, energy, telecommunications and productivity that have policy implications, we must maintain our independence and objectivity. Thus it is in the best interests of both parties that these matters be addressed carefully and resolved.
Another area of potential clashes of industrial and academic values is intellectual property. Universities hold dear their role in discovering and disseminating knowledge. The underlying assumption is that what we do on our campuses is, or should be, of general value to society and should be shared openly to advance humankind. In addition, many universities maintain unrealistic expectations about "striking it rich" through patent royalties and have tended to be overly protective and difficult when it comes to negotiating sponsored research agreements. Companies, on the other hand, must compete to create value for their customers and financial gain for their stockholders. Therefore they have an interest in holding closely both the knowledge and techniques that give them a competitive advantage. Patent ownership is a tool both for protection of their competitive advantage and for maximizing profits, by charging for their use, and for avoiding having to pay royalties to others, including universities.
Why has the matter of proprietary knowledge and patent rights become so controversial? First, there are simplistic understandings of what constitutes technology transfer. This has been particularly visible in debates about university interactions with non-U.S. based companies, where it sometimes is assumed that university scientists and engineers generate highly specific devices and ideas that are the immediate "silver bullets" to create consumer products. Although this may be the case in rare instances, it generally is not. In fact, the most important mechanism for technology transfer from universities, and from companies for that matter, is educated and trained people and broad-based knowledge and know-how.
Second, the time from fundamental discovery to commercialization has decreased dramatically in many fields, and margins of competitive advantage have become very small and fleeting in many fast-paced industries. It also must be recognized that views on this topic seem to vary, largely based on the maturity and scale of the industry in question. It also generally is the case that discussions with industry leaders at the highest ranks within corporations seem to be much more flexible than with those at the operating level who are involved with making project level decisions.
MIT's current approach to patents is designed to encourage the transfer of technology to the private sector. This requires an ability to negotiate with industrial sponsors as equals, best accomplished in our view, by ownership of intellectual properties produced by campus researchers coupled with flexibility in reaching agreements with sponsors about licenses.
A final debate should be noted that may indeed prove to be much more complex than those discussed above intellectual properties and copyrights in the emerging world of digital information systems. The knowledge base used for both scholarly and commercial pursuits is rapidly becoming stored, disseminated and operated upon in digital form. Knowledge bases are increasingly created electronically by individuals and organizations dispersed both geographically and temporally. This raises very fundamental and difficult questions about ownership and access to knowledge It is made worse because our system of copyrights and patents is an archaic one based on a world in which the printed page was the only information carrier. When coupled with the regulatory environment within which the rapidly emerging world-wide "information highway" and distributed digital library must operate, we will face some very interesting questions, that again may place universities and industries in debate.
In an era in which economic, political, demographic, scientific, and technological changes occur at breathtaking speed, there are extraordinary opportunities for industry, government, and academia to regenerate themselves and to forge new alliances. Indeed, industry already is changing very rapidly; our federal government's R&D policy will change; and higher education, especially in engineering and management, must change.
Industry's Response As American industry has faced challenges of unprecedented intensity to its ability to compete in the world marketplace, the goal of its R&D establishment has changed to concentration on relevance to commercial interests and reduction of product cycle times. The great industrial research laboratories that primarily conducted relatively basic research in areas of long-range potential to their companies have nearly disappeared. Industrial R&D groups must now clearly and continuously justify their importance to the company's business. This has had some salutary effects. After radical restructuring and clarification of missions, many industrial R&D groups are showing renewed vigor, are developing vastly improved interdisciplinary capabilities to improve goods and services and are stimulating new commercial successes.
These changes create two potential problems. The first is a lack of investment in mid- to long-term research. The second is the danger that communication across company and campus boundaries will be choked off.
Today's technological advances are generally very complex, and we must have a broad understanding of how the entire system of research and development evolves and advances. A company that makes power generation equipment, to pick an example, depends upon an extended R&D infrastructure that, over time, has produced knowledge of combustion and fluid mechanics, computers and software for simulation and design, advanced materials, and many other techniques and entities largely developed under sponsorship by the government, often with long-range military needs in mind, or in industrial research laboratories of a type that hardly exist any longer. Much of the nation's traditional strength in industrial research that is relatively fundamental, yet has a strong potential for industrial applicability, is rapidly eroding, replaced with narrowly-defined, company-specific R&D. Despite the improvements in competitiveness of individual companies that their transformed R&D organizations have greatly aided, we must recognize that a system that emphasizes short-term gain, promotes local secretiveness and discourages open interaction across company and university boundaries, will lose the inertia needed for the long-run good of the nation.
As their economic positions improve, corporations will need to increase the fraction of earnings that is devoted to research, and they will need to direct some of this into mid-to long-term research. Once industries become productive, cost competitive and achieve high quality levels through concentration on process, they will enter a next round of competition that will require new levels of innovation and design. This, in turn, requires generation of, or access to, advancing scientific and technological knowledge. Companies have an obligation to produce some of this, but also to participate in a national, or perhaps global, R&D infrastructure. They no longer can take for granted either the extended system of federally sponsored, university-based research or the major industrial research laboratories that have provided this for the last four decades. It is essential that we experiment with substantial new forms of R&D partnerships among industry, universities and government. Joint projects, new forms of consortia, industrial laboratories adjacent to campuses, and new research agendas will be required to create a new R&D infrastructure for the post-Cold War era.
As industry establishes new research and educational partnerships with universities, "technology transfer" from universities to the private sector will continue to be an important concept. This has an honorable genesis in the land-grant universities that created agricultural experiment stations and county agent systems for the development and dissemination of applicable scientific knowledge to the nation's farmers. Openness of agricultural research results was central to this system, but contemporary technology-based partnerships pose significant issues about dissemination of research results.
We must carefully consider the matter of patents and openness. The situation requires thought from a systemic and long-range perspective. What, in the long run, will serve all parties well? Because of the need to maintain the extended R&D infrastructure, the issue of rebalancing competition and cooperation lies at the center of consideration of policy toward patents and proprietary research on campuses. We must minimize secretiveness and overly protective patent policies on the part of companies sponsoring research or otherwise working in partnership with research universities.
Government's Response Federal policy must respond in two ways. First, it must assure strong funding for truly fundamental research. This is the long term investment, the patient capital that is essential for the benefit of our children and their children. Second, the government should work in partnership with private industry and academia to identify those areas of technological advancement that are most critical to the well-being of the nation. Once identified, broad goals should be set for them. Tasks must not be dictated in detail, but general strategic directions should be set and wide bands or pathways in which research scientists and engineers can pursue their efforts should be defined. There must be room for the free market of ideas.
In order to be a great nation, we must press onward with our commitment to support fundamental research and the people and institutions that enable it. History shows that advancement of knowledge, beyond its intrinsic value, does indeed lead to advances in health, productivity, learning, and quality of life. It is the foundation on which progress is built. If we in America do not pursue fundamental research along uncharted pathways, others will. Indeed, others should. All nations that aspire to excellence and advancement of the human condition should strongly support basic science.
Yet, we also know the facts. There are identifiable, strategically important areas of science and technology that we must master and advance in order to improve or even maintain our industrial competitiveness. This is true, notwithstanding the fact that with greater freedom, scientists and engineers will discover and invent new, as yet undreamed of and even more important technologies.
It would be suicidal to dictate what all researchers should work on and to set simplistic goals for immediate commercial application of all that they do. It will not work. The futility of state planning brought down the Berlin Wall. But, it is entirely appropriate to foster a new commitment to solving the problems of our era the civilian concerns that the end of the Cold War frees us to address, and that are essential to the well-being of the next generation. This is challenging and exciting. Appropriate areas are rather easy to define: the environment, energy, transportation, our telecommunications and computing infrastructure, and more livable cities, to name a few.
Research Universities' Response The necessary response of universities lies partly in their research programs, but even more importantly in education per se. We must strive to be sure that research universities fulfill their promise as a learning environment that is remarkably well suited to the coming era one in which undergraduates, graduate students, and faculty alike share in the discipline, joy and continual renewal of original research and scholarship. Our research orientation enables us to lead the way in education, because society will ask much more of our graduates than that they know what others have accomplished in the past. If our students are to reach their full potential to contribute to society and, just as importantly, to enjoy fully the beauty and the adventure of creating and understanding, we have to teach them how to advance knowledge.
In addition, the increasing complexity of tasks that will face our graduates means that we must better prepare our students to understand how to draw on knowledge from many different disciplines, how to contribute as members of teams as well as individuals, and how to communicate with members of the public, government or business community as well as with their professional colleagues.
Beyond that, we must take greater responsibility for helping students to develop broader world views and the expertise required to live and work in a more global context. This responsibility extends beyond the classroom and laboratory to nature of our student body and faculty itself. We must be unflagging in our efforts to be accessible and inclusive of all of our talented young men and women. Indeed, most of us can point with considerable pride to the diversity of our undergraduate student bodies, accomplished through a great deal of hard work in the 1970's and 80's. Yet we still have much to do to build the diversity of our graduate student populations and our faculties, and to successfully draw together the increasingly diverse talents and cultural perspectives of our faculty and students around a common set of basic values and purposes.
This need to explore and understand "real word" complexities and organizations requires that we must work more in partnership with industry. Specifically, we need to bring engineering and management closer together in the education of industrial and societal leaders. Academia and industry should work together to bring about a greater common understanding of industry's needs and the university's educational role in fulfilling them. Of course, we should discount ideas that are relevant only to the current moment and keep focused on the long-term good. Researchers and engineers from industry and university faculty should spend significant time in each others' domains in order to undertake cooperative projects, both basic and applied. This could become a remarkably effective mechanism for technology transfer. There are substantial roadblocks to doing so. Faculty feel that they cannot leave their posts for a year because they will not be able to maintain the momentum of their research projects. Outstanding engineers in industry believe that they will fall off their career path if they leave their current responsibilities for a year. Surely this problem is solvable if companies and government funding agencies would make a concerted effort to enable such exchanges. Let's get serious about this. Every other country in the world seems to encourage and reward first-rate engineers and scientists for spending time as visiting researchers in American universities.
Another, further step, is for colleagues in university and industry to work closely together to design the engineering and management education programs of the future and to discuss research agendas. MIT has taken a number of steps to ensure a good dialogue among faculty and industrial leaders and to complement the ongoing activities of our Industrial Liaison Program and various research consortia. In September of 1993, MIT held, in conjunction with the World Economic Forum, an Industry Summit that attracted over 800 high-level leaders of industry and government from around the nation and world to discuss issues facing industry and to explore solutions to them. In addition, during the past academic year, an Institute Task Force on Industry Linkages has been considering and making recommendations regarding the appropriate relationships between MIT and industry for the coming decade.
At MIT we have a special obligation to educate engineers, managers and scientists who can lead in this changed milieu. Our greatest challenge in this regard is to develop in our students the attitudes, as well as the aptitudes, needed to translate new knowledge from research to practical ends.
Knowledge and a population educated and skilled in ways that permit its creative use are the capital resources of the emerging era. Knowledge, not natural resources or geographic location, will determine which nations and societies prosper. Knowledge is distributed throughout organizations and societies; and we must learn to utilize it collectively and effectively. Knowledge will increasingly be gleaned by computer networks from far-flung sources, shaped by collaborative efforts, moderated by information technology. Knowledge can only be generated and wisely used by educated and inspired people. The generation of new knowledge requires commitment to, and investment in research.
Universities are our primary vehicle for educating talented men and women and for producing new knowledge, insight, and techniques. In order to serve well, universities must balance continuity and change. Continuity of their deeper values, guiding principles, and commitment to intellectual excellence and the life of the mind are essential. Yet so is a willingness to change, experiment, and improve. America's colleges and universities are changing in response to the new era -- changing too slowly, perhaps, but profoundly. A walk across MIT's campus will disclose a student body radically different from that of twenty years ago, one increasingly rich in its racial and cultural makeup, reminding us again that our country is changing rapidly and that we still are a nation of immigrants, as we always have been.
Our curricula are shifting to meet new needs, challenges and opportunities. All MIT students now must learn cellular and molecular biology. Masters level education in our Schools of Engineering and Management is being altered and integrated. New, international, university/government/industry partnerships are being formed to conduct objective studies of environmental issues and create sound policy alternatives. New programs are emerging ranging from fundamental studies of mind and memory to new product development and manufacturing. New linkages to industry are forming. Yet much more remains to be done as the intellectual agenda for the post-Cold War era and a new economic citizenship emerge. We have only scratched the surface of using information technology and multi-media to create new and more effective ways of knowing and learning. We have only begun to understand what is required to prepare our students to cooperate and compete across national and cultural boundaries.
Universities like MIT must become more cost effective and improve the quality of all that they do as organizations and learning communities. Many view us as clinging to the past, unwilling to change and improve. We must regain the public trust if we are to realize our aspirations and serve the future as we always have. This requires that we change substantively, becoming organizationally still more lean and effective. We have started to re-engineer many of our administrative and service activities to become more cost effective, productive and efficient. We must lead in this effort just as we lead intellectually. Only in this way will we remain financially accessible to those we must educate.
But we cannot escape the fact that the nation must continue to invest in its system of higher education and research. The federal government must stop the trend of shifting the cost of research it sponsors to tuition, gift and endowment funds. Private industry must work with us, and invest in us, to ensure the health of the nation's research and development by supporting us intellectually and financially in new ways.
The dreams and visions of our institutions and our students will not be fully realized, and the nation and world will not fully benefit from our potential, unless a renewed commitment to education and research is forged and widely held by the public. This is not a matter of luxury it is a matter of regaining pride and belief in our people and their future.
Charles M. Vest
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