Three Questions in Search of Answers

Report of the President
For the Academic Year 1998-99

President Charles M. Vest's annual report for 1998-99 discusses three important questions facing MIT and other universities: the impact of merit aid, the responsibility of the faculty to students, and the effects of industrial sponsorship of research.


© Copyright Massachusetts Institute of Technology, 1999. To reprint or excerpt for publication, please contact the MIT News Office at newsoffice@mit.edu, or (617) 253-2700.

Contents


During the last year I have traveled across the country to consult with a large number of MIT alumni and friends about the future of MIT, and its responses to a rapidly changing world. In these discussions, many questions of fundamental importance have been raised. Additionally, issues and experiences in campus life, and interactions with government and industry have also raised a number of questions. In this report, I offer a few thoughts and opinions on three such important questions:

Each of these questions deserves deeper analysis than is presented here. Nonetheless, I hope that these thoughts will stimulate further consideration of these matters.

DOES MERIT-BASED FINANCIAL AID SERVE THE COMMON GOOD?

For about fifty years, MIT, the Ivy League universities and many other outstanding private colleges and universities adhered to principles known as need-blind admission and need-based distribution of financial aid. "Need-blind" means that those making admissions decisions do not know the financial status of the applicants. "Need-based" means simply that we expect admitted students and their families to pay what they reasonably can of the cost of education, and we will make up the difference. These policies enable the institution to do the greatest good by distributing finite resources to those most in need.

Why did these colleges and universities follow the principles of need-blind admission and need-based distribution of financial aid?

First, they believed that they should select students from the richly talented pool of applicants on the basis of their capability, accomplishment, talents, fit to the institution, and contribution to the characteristics of the class as a whole. No preference would be given to wealthier students, and no discouragement would be given to needy students.

Second, the policies worked. Institutions like ours have been able not only to attract absolutely remarkable young men and women, but also to help them financially to pursue their education. Fortunately, by utilizing a combination of institutional and federal scholarships, loans, and remuneration for work, we have had sufficient financial resources to implement these idealistic policies.

There is a third motivation. Financial aid to undergraduate students in private universities largely comes from alumni donations. Almost all such donors to our financial aid programs tell me, often with considerable emotion, that they would not have been able to attend MIT if they had not been helped financially. They want to be sure that other bright but needy young people will be able to attend, just as they did.

During this same period, and today, public universities generally have taken a different approach. Most public institutions have less per student available through endowments to use as financial aid, and they encounter a wider range of talent among the students who apply. They try to be sure that any state resident admitted to their campus can somehow afford it, usually through charging relatively low tuition and offering scholarships and loans. Nonresident students usually are charged a much higher tuition. In an effort to increase the quality of the student body, public universities frequently use a part of their scholarship funds to create "merit-based financial aid." Merit-based aid is made available to students judged to have unusually high academic qualifications, and may well go to a student who has no strong need for financial assistance. Frequently it is targeted at bright nonresident students.

A Changing Environment for Financial Aid

During the past several years, the picture I have sketched here has begun to change, largely because of financial pressures on the institutions. Some colleges and universities that believed in need-blind admission and need-based distribution of financial aid were increasingly unable to afford the system, especially as they strove to restrain increases in tuition. Many families also felt increasing pressure, and the range of students needing financial assistance began to rise up well into the middle class.

Federal policy also is a large driver of the changing financial pressures and of the broad shift of financial aid away from the neediest families and toward those of somewhat greater means. The federal government is a major player in the financing of students' education.

Thirty years ago, the government primarily provided need-based grants, i.e. scholarships, to assist students and their families. In more recent years, the government has cut back dramatically on outright grants and moved toward federal loans, to be paid back with reasonable interest after graduation. In the last few years, government programs have begun to provide tax credit and deductions for educational expenses. These provisions do little to help those at the bottom of the economic scale, but are helpful to those in middle income ranges. They accrue to those in high tax brackets as well.

The result of these various pressures has been twofold. First there has been a substantial increase in the awarding of merit aid. Second, throughout higher education, there has been a substantial drift of financial resources away from the most needy students and families and into families who have less need. 1

But the picture is a bit more complicated than this. In addition to some shifting from need-based to merit-based aid, there has been a clear increase in bargaining between schools and families on a case by case basis. The squeaky wheel increasingly gets the financial oil, in the form of "discounting" for individual students and families. Discounting simply means charging less than the advertised price of tuition, room and board. To be sure, all financial aid is a form of discounting, but it has traditionally been applied across the board in accordance with guiding principles and rules. Discounting as overt bargaining or matching of offers from other schools is a relatively new phenomenon.

In some institutions all of this has been taken to an extreme through the application of so-called "enrollment management." Enrollment management basically is an optimization process, in which a school tries to maximize the quality of its student body given the fixed amount of funds available for financial aid or discounts. Enrollment management involves a combination of merit aid, a conscious attempt to attract a certain number of wealthy students and a certain pot of money with which to conduct bargaining and discounting. Indeed, there now is a web-based, for-profit company that intends to bargain among schools to drive the best financial deal for its clients.

A Primer on the Finances of Higher Education

Before addressing my own view of all of this, let me state some basics of the financing of private higher education that are so obvious that they are often not discussed.

If higher education is a business, it is a very strange business. The reason is bound up in the concept of subsidy. As Professor Gordon Winston of Williams College2, points out: In the world of business, companies produce a product at a cost and sell it for a price. If the price is less than the cost, the business does not survive for long. Colleges and universities are a different kettle of fish. Our "product" is education. The cost of that product is determined by the expenses of faculty and staff salaries, buildings, laboratories, equipment, computers, and services that support the learning environment inside and outside the classroom. The price of the product is called tuition, and it is invariably lower than the cost. The difference between tuition and the cost of education is made up by a subsidy. In a private college or university the subsidy is paid for by returns on an invested endowment and by annual gifts from alumni and other supporters. In the case of public institutions, the subsidy largely comes from funds allocated by the state legislature.

At MIT we calculate that tuition covers about 50 percent of the actual cost of educating a student. This is rather typical among private universities. Thus, as we contemplate the issue of financial aid, the context of a high-quality, subsidized undergraduate education must be kept in mind. The tuition, or "sticker price", is substantially less than the actual cost, so financial aid or any form of discounting is simply a variation in the level of subsidy the institution and its trustees believe they can afford.

What about MIT?

Given the great variety of public and private colleges and universities in this country, there is room and logic for many different approaches to financial aid. One shoe does not fit all, and I do not presume to know what is best for any other college or university. But I do have a strong view about MIT and other universities that share many of our characteristics.

The commitment of our most competitive private colleges and universities to need-blind admission and need-based distribution of financial aid served the nation and the world very well for several decades, and I believe continuation of such policies will serve us well. These policies open up our institutions to a broad range of bright students in a competitive and meritocratic context. As students choose among such universities, these policies enable them to base their decision primarily on what they believe to be the best fit in terms of their needs and aspirations, rather than simply where the best financial deal can be struck. This approach also enables us to maximize the good done with finite resources. I believe that our continued adherence to these principles will, at least in part, help to stem the flow of financial aid away from those who truly need it toward many who do not. And I believe that it honors the wishes of most donors to our financial aid coffers.

But why wouldn't MIT want to optimize the quality of its student body by providing extra financial incentives to the very best students to attend?

First, through the quality of our programs, our reputation and our recruiting efforts, we are able to admit and enroll classes of truly exceptional students. Indeed, it would be very difficult to differentiate among them in terms of talent, accomplishment and promise. We educators are notoriously inept at actually predicting which individual students will end up with the highest grades, make the greatest contributions to our intellectual community, be the most inventive, or be the most successful in life.

MIT's Dean of Admissions Marilee Jones has said, "A lot of schools offer merit awards, but we'd have to pay every kid who walked in the door. There is no Top 20. How would you pick 20? By what criteria? There are more than 20 gold medalists on the International Physics Olympiad alone in this pool. Three percent of the class we just admitted has 800s on every single test—in all that's five tests. Sixty percent of the class has at least one 800. By every measure we use, a full third of the entering class will have either national or international distinction in something. So that's hundreds of kids. How do you pick the Top 20?"

Second, if such a talented class is divided into merit aid "haves" and "have-nots", it creates unnecessary social tensions. Some of those deemed to be less meritorious when they are admitted would inevitably end up outperforming some of those who had achieved special status and financial reward based on high school achievements. The meritocracy we value so highly is based on accomplishments here at MIT, not on a prediction.

In summary, as long as we can garner the level of gifts and endowment to make it possible, we should remain true to our principles of need-blind admission and need-based distribution of financial aid. MIT has long been a place that attracts the best and brightest and is accessible to them regardless of their financial status. This should continue to be our goal.

WHAT IS THE FACULTY'S COLLECTIVE RESPONSIBILITY TO OUR STUDENTS?

The answer to this question may vary in detail, or even in the large, from campus to campus throughout the cornucopia of U.S. colleges and universities. This probably is good particularly if the fit of individual students to the institution at which they study is good.

At MIT the Faculty defines admission philosophy, criteria and procedures. They alone determine the curricular requirements for the various degrees, and they are responsible for the development and implementation of individual subjects. Few would wish it to be any other way.

But when we consider life beyond the formal classrooms and laboratories, the debate begins.

I recently had a discussion with an accomplished and respected young MIT alumnus about a somewhat controversial change in the residential options available to our students. I noted that the change had important origins in discussions and debates among our faculty. His reply was that such matters should be of no concern to the faculty, who have no relevant basis of experience or understanding to address them. I was told the same thing last spring by a group of 80 students who camped for a period in the hallway outside my office.

The 1998 Report of the Task Force on Student Life and Learning 3 takes a diametrically opposite view. This group of faculty and students proposes that MIT's educational philosophy be explicitly based on a triad of Academics, Research and Community. They state that "the ultimate goal is to bring students, faculty, and staff together in the pursuit of the common educational enterprise, and doing so entails recognizing the relationship between what happens within the classroom or laboratory and the informal learning that takes place outside."

More bluntly, the Task Force called for a cultural shift "from demanding separation of student life and learning to demanding they be inseparable, from focusing on formal education to emphasizing learning in both formal and informal settings, from a community divided by place, field and status to a community unified by its commitment to learning, from keeping research, academics, and community apart to unifying the educational value each provides."

Such notions are hardly radical, but the term "cultural shift" makes it clear that as life in our universities has become increasingly complex, intense and demanding, some ideas of the collective responsibility of faculties have changed as well. Any exploration of this matter must begin with an understanding that the deepest commitment of faculty members in research universities is to maintain an environment of academic excellence, and that their most precious resource is time.

American universities grew rapidly in size, scope and accessibility during the two decades following World War II. They were transformed further during the last three decades as their student bodies became enormously diversified in every dimension—by gender, age, economic status, geographical origin, life goals, race, religion, culture, experience, and so forth. These developments, as well as changes in societal expectations, funding patterns, legal requirements, and so forth have resulted in a shift of many duties from faculty members to professional staff and administrators.

Indeed, the modern university is in many ways a modest-sized city. In addition to its core mission of teaching and research, it provides housing, food services, medical care, counseling, financial services, a police force, transportation, computers and telecommunications, aid to individuals with disabilities, and much more. Though we may dream of a simpler time, the reality is that the demand for all of these services beyond the classroom continues to grow.

As a result, student services professionals have taken on many duties once performed by faculty—including aspects of personal, career and even academic counseling. Generally, this is more efficient and in many dimensions more effective. Still, the nagging internal voice suggests that the balance may have swung too far.

Not only has the balance shifted, but roles and responsibilities have become unclear. Indeed, the MIT Residence System Steering Committee4, composed of students, faculty and alumni, recently stated, "In our many discussions with hundreds of students, faculty, staff, and alumni/ae about our residence system, a fundamental issue is always one of authority, responsibility and accountability. Not only are our students unclear on these matters, so too are our staff and faculty. This must change." I suspect that this appropriately characterizes many other campuses as well.

My view is that faculty do have certain collective responsibilities to our students beyond their core duties in the formal classroom and laboratory. I suggest three critical duties—to visibly engage in responsible, moral and ethical action and decision making; to recognize the cumulative effect of incremental decisions; and to work toward better integration of life and learning within our campus community. I offer these views in full recognition of the demands on faculty time, and of the interaction between such duties and the quality of their personal and professional lives. Of course, many professors at MIT do far more than meet this minimum set of obligations I suggest below.

Responsible, Moral, and Ethical Actions and Decisions

Colleges and universities teach by their actions as well as through their curricula. Faculties and administrations alike owe it to their students to visibly deal with important discussions and decisions in a way that displays a conscious effort to act responsibly, morally and ethically. Much of the lesson will be contained in what we choose to think about, to do, and not to do. We owe our students open discussion, serious consideration of various points of view, and clear explanations of decisions made. All must realize, however, that timely and clear decisions are necessary.

MIT has an interesting advantage in this regard, because our institution rests so firmly on the strong foundation of science. Integrity is the only possible substrate upon which science can be built. In teaching, demonstrating and guiding our research by the rigorous methods of scientific inquiry, we set a tone of action and decision making that is very important. But this is not enough.

Let me cite a powerful example of appropriate decision making. In 1974, Professor David Baltimore and his colleagues on biology faculties here and in other universities led a national moratorium on the use of recombinant DNA technologies in their research. This very new, and obviously important, research tool struck an uneasy chord with the public. Were there terrible dangers of unleashing strange, unnatural mutants or new diseases into the human environment? Did we really understand the procedures needed to avoid contamination of the environment or gene pool? Rather than dismiss such concerns, they engaged the broader community, including scholars from non-science disciplines and political and religious leaders, in intense discourse and analysis of the issue. In a relatively short time, these discussions led to both increased understanding and broad consensus.

Although some others may disagree, I believe that our institution has worked hard to act in a responsible, ethical and moral manner in many other important though controversial instances: in acting to build the diversity of our community, in battling the Justice Department over the matter of implementing need-based financial aid, and, quite recently, in engaging students, faculty and alumni/ae in the redesign of our residential system.

In any event, it is incumbent upon us to act responsibly, ethically and morally, and to maintain an environment in which responsibility and accountability accompany the considerable freedom accorded to us.

Cumulative Effects of Incremental Decisions and Actions

Campuses are complicated systems. People and actions are interrelated in many ways. There is continual opportunity to make decisions or take actions without considering, or even recognizing how, in the aggregate, they affect our students.

A simple, but important example is the set of guidelines established by the Faculty for examinations or reports due at the end of each academic term. Each term the Chair of the Faculty receives many complaints from students about individual professors who have deviated from these rules. I suspect that in most cases, the faculty member's decision was made in order to reflect some particular element of the subject's nature or content. Nonetheless, such locally sensible changes can cause unresolvable conflicts for students who are balancing the demands of several subjects. This type of regulation is made collectively by the faculty and should be adhered to.

A more complex example of collective responsibility is that discussed in the Report on the Status of Women Faculty in Science at MIT5. This important report was authored by a group of distinguished women and men on the faculty of our School of Science. It portrayed a long-term pattern of bias or discrimination against senior women in the School, and also noted recent steps that had been taken by the School, and especially by Dean Robert Birgeneau to address the situation.

This report, and a more detailed, confidential document that supports it, presented many facts and figures, to be sure. But note how they described the essence of the matter:

While the reasons for discrimination are complex, a critical part of the explanation lies in our collective ignorance.... [The tenured women faculty] identified the forms that gender "discrimination" takes in this post-Civil-Rights era. They found that discrimination consists of powerful, but unrecognized assumptions and attitudes that work systematically against women faculty even in light of obvious goodwill. Like many discoveries, at first it is startling and unexpected.

The italics are mine; they emphasize that here again is an example of why we must understand the cumulative effects of individual decisions and actions. Furthermore, the ways in which we at MIT collectively think about and extend the work of this group, and address the issues it raises and the recommendations it makes, will be an implicit lesson to our students, as well as a determinant of our future excellence.

An Integrated Approach to Life and Learning in a Residential University

In a residential research university such as MIT, many dimensions must be integrated—teaching, research and living—so that the total experience of our students far exceeds the simple sum of their involvement in each individual element.

The MIT faculty has long been deeply dedicated to integrating the education of undergraduates with the superb research activity that surrounds them. They do this by continually renewing and enlivening undergraduate subjects with methods and results from their own and their colleagues' research. In an even more explicit manner, they provide, through the Undergraduate Research Opportunity Program (UROP), a direct involvement of undergraduates in research.

But—as noted by the Task Force on Student Life and Learning—the third element of the living environment and experience of our students needs to be better integrated. The concept of a true community of scholars adds an extra dimension to faculty life and goals. By engaging with students beyond the formal classroom and laboratory we can help to develop wisdom and understanding as well as knowledge and skill. We can display and enhance our humanity as well as intellectual expertise. I believe that students and faculty can benefit dramatically just from understanding more about each other's lives. Virtually all of us can point to encounters with specific faculty members that had a profound influence on the fulfillment of our potential in our personal and professional life.

Change need not be dramatic, but it needs to be systemic. A modest involvement with living groups, a few evenings or lunches spent in discussion with undergraduates, holding seminars in residence halls, teaching a freshman advising seminar, creating exciting field trips or other off-campus experiences for students, participating in a pre-term orientation program, conducting an informal IAP class, talking with students on the net, or simply stopping to chat in the hallway can have an amazingly positive influence on students. Many of these things happen quite naturally in graduate education, but not always for our undergraduates.

There are a number of our faculty colleagues who shoulder massive amounts of this responsibility, such as those who serve as housemasters in our residence halls. But each of us has a role. Our students came to MIT to engage with world-class professors. If we all devote ourselves to building campus community, the incremental time involved can be modest, but the consequent enhancement of our already vital and exciting student experience will be great. It is our responsibility to do so.

In sum, my response to the second question is that faculty, and administrators and staff as well, have a collective responsibility to our students that extends beyond meeting our basic duties in the classroom and laboratory. We must build community by integrating student life and learning into a more coherent whole. We must not only teach, but exemplify moral, ethical and responsible behavior. And we must understand the cumulative effects of our individual actions on our students, colleagues and others, and act accordingly. This is particularly important at MIT because of our strong tradition of being a single faculty—we are of a whole cloth, dedicated to the Institute, not just to our individual departments or schools. This is an important value in and of itself.

WILL INDUSTRY SPONSORSHIP OF RESEARCH DISTORT OUR MISSION?

Research universities are supported by society in a variety of ways because of the common good they serve: educating young men and women for responsible, productive lives, and generating new, fundamental knowledge that expands the human spirit, and increases our collective understanding of the physical, biological, social, and artistic aspects of our world. But increasingly, much of the knowledge generated through university research has quite immediate practical and economic value. This complicates the mechanisms by which the common good is promoted.

Since the close of World War II, the federal government has been the primary supporter of university research in the US, and universities have become nation's primary research. This relationship stemmed from recognition of the contributions that science and technology had made to the defense effort and of the promise that they held, in President Roosevelt's words, "for the improvement of the national health, the creation of new enterprises bringing new jobs, and the betterment of the national standard of living." The principles underlying this relationship were articulated by MI's Vannevar Bush, then Director of the Office of Scientific Research and Development, in his report Science—The Endless Frontier6

In short, these principles are that it is in the nation's long-term interest for the federal government to support scientific research and advanced education conducted in universities, and that the nature of such research should be determined by the scientists themselves and not guided toward particular applications. The assumption was that in due course, the new knowledge would find its way to improve our industry, commerce, medical practice and national defense.

The quality, vigor and societal contributions of the great research universities of this country are directly linked to the adoption of these principles by the federal government. This is certainly the case for MIT, which was able to leverage this support to build its world-class faculty and research enterprise.

Our reliance has been great: in 1965, sponsored research support, predominantly federal, accounted for over 60 percent of all of MIT's campus operating revenues. But now things are changing, as they should. Some would argue, and I am one, that MIT became overdependent on federal support. While the federal government will—properly in my view—remain the dominant source of research support, industry is starting to play a more substantial role at MIT. By Fiscal Year 1999, sponsored research had dropped to 45 percent of our campus operating revenues. Of this, approximately 70 percent came from the federal government, 20 percent from industry, and the remainder from private foundations and other sources. This is the age of the private sector, and such change is appropriate and, indeed necessary.

A Changing Scene

MIT has worked hard during the last few years to develop strong and appropriate research relations with private industry for three reasons: to improve our education; to diversify our sources of financial support; and to create new pathways for contributing to the common good.

The world of commerce and industry that our graduates now enter is very different than it was even a few years ago. Contemporary industry is fast-paced, knowledge-based, global, electronically interconnected and often created by entrepreneurs. It thrives on innovation. As a consequence, I believe that, especially in engineering and management, our education must change to better serve our students and their future employers. To accomplish this, some of our faculty and research students need to be engaged with contemporary industrial problems and environments. Such engagement will generate not only new types of academic research, but improvements in our curricula.

Conflicts and Responsibilities

Interactions with industry create new pathways to serve society. However, as with all paradigmatic change, questions of appropriateness and mission are properly raised. Faculty members interact with industry in a variety of ways. They do so as educators, as leaders of research programs, as consultants, as generators of intellectual property, and as entrepreneurs.

In each of these possible roles, money crosses boundaries and missions and objectives become intertwined. Thus we must examine the implications of these new relationships, raise questions, and set policies to address them.

With regard to any non-MIT activities, faculty, officers and staff have an obligation to avoid ethical, legal, or other conflicts of interest and to ensure that their activities do not conflict with their obligations to the Institute or its welfare.

The ability of professors to spend up to a day a week as consultants to business, government or industry has long been accepted as a valuable way of gaining new experience, which can lead to increased curricular vitality and can open new areas of research. MIT monitors consulting only to the extent necessary to assure that there is no conflict of commitment, i.e. that consulting faculty adhere to the time limits and that their outside activities do not interfere with meeting their professorial duties and responsibilities.

When faculty act as entrepreneurs, or when the intellectual property they generate is otherwise commercialized, further considerations and policies come into force —for them and for MIT as an institution. Our conflict of interest policies have two basic objectives—to ensure openness of information flow in our classrooms and laboratories, and to keep research agendas in our laboratories from being improperly affected by the personal financial interests of faculty or staff.

In today's world, we pay particular attention to the issues associated with ownership of intellectual properties and to potential conflicts arising from ownership of equity in companies. We have recently established new guidelines for avoiding and managing such conflicts. These guidelines are basically clear, but the complexity and pace of commercialization today require that we all be vigilant and thoughtful in this regard. Common sense, foresight, and thoughtful consultation are the most important vehicles for avoiding conflicts of interest and commitment.

Entrepreneurship

One of the most direct ways in which research-intensive universities serve the greater society is by moving new ideas and technologies into the commercial sector, thereby building wealth and creating jobs. Indeed, a now well-known 1997 study showed that MIT graduates had founded or co-founded over 4,000 companies employing over 1.1 million people, and having annual world sales of $232 billion. Other leading universities could tell similar positive stories. This represents a huge return on the investment made by the federal government through its sponsorship of research and graduate education, and by individuals and foundations that have helped support universities and students over the years.

Today, the movement of ideas, technologies and graduates from universities to the world of commerce occurs at a blinding speed. And the rapidity at which money can be made in conjunction with this movement is sometimes astounding. Entrepreneurial activities have always been a very important part of the culture of MIT, but their roles and importance have accelerated dramatically.

We foster this aspect of our culture in many ways. We have, for example, a growing Center for Entrepreneurship, located at the Sloan School of Management, that engages students and faculty from throughout the Institute; research and educational programs in electronic commerce and in new product and venture formation; and a variety of programs for mentoring students and alumni who are interested in starting new businesses.

These activities demonstrate an important aspect of MIT's nimbleness in responding to a rapidly and fundamentally changing world. I would have it no other way. It is exciting and important. Some people question whether this new strength of entrepreneurship and electronic commerce are fundamental transformations, or are a modern version of the Tulip Craze of early seventeenth century Holland. I believe that they are fundamental transformations, and that it is important for universities to play a major, though properly balanced, role in their development, and in preparing our students to participate.

However, there are three dangers, in my view:

Thus, we should vigorously develop our programs and contributions to this new world of innovation and commerce, but do so in the context of our fundamental values in scholarship and education.

Interaction with Companies

Research universities have a dual responsibility in relationship to contemporary industry, especially in the fields of engineering, management and, to a lesser extent, science.

To fulfill our educational mission we must bring some fraction of what we do closer to the contemporary and future world of industry. We need to teach new skills of collaboration and teamwork, a more integrated approach to design projects, a deeper involvement with multiple disciplines, and a better understanding of process, production and economic factors. In order to do so, some of our faculty members must be deeply engaged with industry in research and educational activities, because it is faculty interests, insights and experience that ultimately drive the learning experience of our students.

But we have an even greater responsibility for research that is, in a sense, at the opposite end of the spectrum. During the last fifteen years or so, large companies have adapted to a dramatically changing world market by increasing productivity and quality, while reducing product cycle times and costs. This required a major reorientation of corporate research toward product development and production. As a result, relatively little corporate research is now fundamental and long-term in nature and shared openly and broadly with the scientific community. Increasingly, universities are the only game in town when it comes to developing fundamental knowledge through research.

During the past few years, MIT has worked at both ends of this spectrum of research and education by forming new partnerships, alliances, consortia and centers involving industry collaboration and funding. Examples of path-breaking collaborations between the Institute and consortia of sponsoring industries include the Systems Design and Management Program, the Lean Aerospace Program, and the Center for Innovation in Product Development. These programs seek to discover new principles of industrial practice and build them into engineering and management education. There are numerous other exciting industry-sponsored consortia for pre-competitive research throughout the Institute.

In addition, we recently have pioneered a number of industry partnerships with individual corporations. These are major undertakings, funded at a substantial level for a period of at least five years. The research agendas of the partnerships have been hammered out by teams consisting of MIT faculty and research or technology leaders from the companies. For the most part, these partnerships explore advanced research into fundamental topics of strategic interest to the company and to MIT faculty. Examples of partnership topics include environmental research, fundamental biology, biotechnology, the uses of future information technologies, the engineering function in global corporations, improved information technology infrastructure and practice in higher education, and emerging financial technologies.

All of the partnerships include a strong component of support for graduate education. For the most part, they deal with long time horizon research. All result in open publication of research results after the usual modest period of time for review by the sponsoring company. Intellectual property agreements are fairly standard, with MIT owning the rights to most discoveries, and with clearly specified ground rules for the partner company to negotiate for exclusive or non-exclusive patent rights, depending on the royalty situation.

There is another form of exclusivity that is important to contemplate. Companies that engage with us at the partnership level should not be the sole company in their industry or sector to have a presence at MIT. So far, this has not emerged as a problem. Indeed, in some instances our partners have actively worked to engage other companies in the research efforts.

The most important characteristic of the industry partnerships is that they truly are partnerships. There is strong and essential intellectual involvement of industrial scientists, engineers and managers. They thrive only through trust, mutual respect and increased understanding of each others' cultures and working time scales. Both organizations expect to receive substantial intellectual value from the undertakings. All recognize that producing innovative, well-educated students who are knowledgeable about future-oriented fields, especially those that combine or cross traditional disciplines is a key goal of the partnership.

My view on the third question: Increased industry sponsorship of university research does not distort our mission; it widens and enables it. Indeed, done properly, it broadens the scope of our scholarship, improves education, creates opportunity, expands our infrastructure, diversifies our portfolio of revenue sources, and contributes to society in new ways. However, as with any other partner or patron, there are risks and potential conflicts to be directly confronted, especially when, as at MIT, we take bold new approaches. Above all, we must protect the overall freedom and flexibility of our faculty and students to pursue research and scholarship wherever it leads, and to serve society as objective critics.

IN CONCLUSION

The issues I have raised in this report—financial aid, the collective responsibility of our faculty, and our relations with industry—may still hold more questions than answers. I offer my views here in the hope of stimulating an ongoing discussion of matters that I believe to be of fundamental importance as MIT responds to a rapidly changing world.

They speak to the questions of who we educate, how we do so, and what principles we rely on to guide our future. They are quite interrelated.

We attract remarkably talented students to MIT. Through our financial aid policies, we seek to assure that they are selected because of their talent, accomplishments, and potential for benefiting from an MIT education and contributing to our academic endeavors with no regard to their financial status. While they are here, we as faculty have a growing obligation not only to provide them with an excellent and rigorous formal education, but also to create a more holistic experience of living and growth within a dedicated learning community. This community will increasingly interact with private industry, thereby expanding the scope of our scholarship and creating new pathways for the knowledge we generate to benefit society. In these interactions, as in those with our government patrons and partners, we must carefully avoid inappropriate conflicts of interest and commitment, and remain true to our fundamental mission and values.

The future is bright and challenging for MIT, and for our sister research universities. Our opportunities to contribute greatly to the common good in the century ahead are unlimited. I hope that this modest exploration of three issues we all must face will contribute to meeting our opportunities and responsibilities.

CHARLES M. VEST
November 1999


END NOTES

1. Michael S. McPherson and Morton Owen Schapiro, The Student Aid Game, Princeton University Press, Princeton, New Jersey, 1998.

2. Gordon Winston, College Costs: Subsidies, Intuition and Policy, Williams Project on the Economics of Higher Education. Discussion Paper 45, Williams College, Williamstown, Massachusetts, 1997.

3. Report of the Task Force on Student Life and Learning, Massachusetts Institute of Technology, Cambridge, Massachusetts, 1998.

4. Report of the Residence System Steering Committee, Massachusetts Institute of Technology, Cambridge, Massachusetts, 1999.

5. Report on the Status of Women Faculty in Science at MIT, Massachusetts Institute of Technology, Cambridge, Massachusetts, 1999.

6. Vannevar Bush, Science The Endless Frontier. A Report to the President. United States Printing Office, Washington, D.C., 1945.


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