Blazing New Trails to the Endless Frontiers: Transformation of America’s University Research

Mung Chiang 
April 1, 2025 

We are at an inflection point.  

For four score years or so, the research enterprise that fueled the American innovation engine was built on the Bell Labs model and the NSF model. In the latter, a social contract was implicitly agreed upon between the American people and their elected officials and the country’s top universities after the adoption of “Science: The Endless Frontier,” written by Vannevar Bush for President Truman in the concluding months of WWII. In this contract, much research would be carried out at universities, including private ones, and, through both federal/local tax benefits and government budgetary allocations, public resources would be used as the primary funding source for research at these universities. They would then carry out both the “knowledge dissemination” and the “knowledge creation” mission. The National Science Foundation was subsequently created in 1950, and the Sputnik moment accelerated the U.S. government’s investment across many funding agencies. The peace dividend of the 1990s was shared with these agencies, especially the National Institutes of Health. Both models were based on essentially a monopoly enjoyed by the funding source. Both were choices made, indeed well made, but these were not and are not the only choices.  

Now at the midpoint between the end of WWII and the end of the 21st century, the American public wants to explore a new social contract where federal tax dollars assume a smaller portion of the financing equation for research carried out in universities.  

Daily twists and turns aside, is this mostly a transient process, or will it be long-lasting? Academia might not be going back to the same good ride of the past 75 years. A new equilibrium for university research could emerge. This premise bounds the scope of the rest of my remarks, knowing that the arguments for resuming the last three-quarters of a century into the future centuries have already been articulated by wiser souls in passionate public advocacy.  

In this talk, we ask a practical question: “If fundamental changes are coming ashore anyway, what can we do to maximize the vitality of university research in the new situation? In particular, how should universities work with private capital, both profit-seeking and philanthropic ones, in future decades?” 

Now, private capital for university research is not new, but boosting its scale and scope requires a new culture and innovative mechanisms. There were legitimate reasons why the primary source of funding has comfortably been the government rather than companies and gifts. But today’s necessity might incentivize a revisit and reimagination. New arrangements and processes are required for all parties, because industry and academia are naturally misaligned and misfit in many dimensions:  

1. Objectives: Unlike tax dollars, a corporation’s financial decisions must align with shareholder interests. University research needs to help address pain points, reduce cost or expand revenue. Universities can offer a pathway of “innovating to profitability” and a special talent pool educated in a research environment. Conversely, industry reality can help sharpen research problem statements and facilitate translational impact.  

2. Interests: Key ones include institutional rights on intellectual property, faculty conflicts of interest, competitions among companies in the same sector, etc.  

3. Structures: Some standards taken for granted in U.S. academia have in fact been driven by the nature of federal funding, from discipline-based, instead of problem-based, departmental boundaries to the operation of core research infrastructure.  

4. Speed: Universities and governments match each other in bureaucratic speed, where an NDA might take six months instead of a day. Business moves faster. Conversely, the timescale of stable, dependable support from business typically lags government. 

5. Unintended consequences: Universities are not to become companies. We must ensure the curiosity-driven education of graduate students, continuation of intellectual independence, and preservation of fundamental research that most companies might not support. 

All industries would be incentivized if Congress would create a tax benefit for corporations’ funding of university research. With skin in the game, some might become a partner with, or even a distributor for, federal research funding.  

We also recognize that the university-industry relationship is a hexagon: research, recruiting, online learning, IP licensing, philanthropy and economic development. If we do well in one with a company, we should try to elevate the other five too, and synergize across all six. Purdue has started experimenting with “360 partnership task forces” with Eli Lilly and with SK hynix, with growth toward some of the other 400 companies we partner with.   

Purdue has always been one of the most industry-coupled universities in the country, and it’s getting even better each day as we build out America’s Hard-Tech Corridor in the heartland. Our semiconductor degrees program has an industry leadership advisory board. Our enterprise publicity campaign is carried out jointly with corporate partners. Our Daniels School of Business now requires AI literacy as a graduation requirement. Training workshops for faculty and staff new to the world of industry partnership started this semester. Collaborations among previous silos are building new muscles across the offices of Industry Partnerships, Sponsored Program Services, Entrepreneurship and Commercialization, Technology Commercialization, and fund-raising development.  

Just in the past few months, we have had numerous successes across various sectors. The following examples pilot key elements of an emerging playbook, one that favors scale, speed and agility:  

1. Creating consortia: Lilly and Merck founded a consortium with Purdue’s William D. and Sherry L. Young Institute for Advanced Manufacturing of Pharmaceuticals, on top of the Lilly-Purdue 360 partnership that includes $100M in support for collaborative research and $42.5M for workforce development through the Lilly Scholars model. 

2. Remixing public-private partnership, with “private first” and “private more”: Purdue leads the National Center for Digital Twins as part of the Semiconductor Research Corporation’s $1B public-private partnership, with a 3:1 ratio of private to public funding.  

3. Sharing talent: Microsoft’s lab on Purdue campus helped make the breakthrough in topological quantum computing last month, with physics professor Mike Manfra as a part-time consultant to Microsoft. 

4. Sharing space: The One Health Innovation District in Indianapolis is a joint effort by Elanco and Purdue, with other companies and future startups sharing wet-lab spaces. The primary goal is talent collision and translational impact, but the economy of scale in facility sharing is also helpful. 

5. Colocating co-op: Wabash is coming to Purdue campus with its new R&D center in autonomy and data platform for transportation, a home to grow funded research collaborations with Purdue faculty and “learning while working” internships with students. 

6. Deploying lab-to-life: Universities are also customers, procuring products and services from companies. We might as well turn the campus into a lab-to-life test bed for new product deployment. This is one of the goals of Discovery Park District at Purdue’s “learn-work-play-live” residential neighborhood.  

But a tough concern remains: how to support fundamental research (and those disciplines removed from industry)? That is the spring source of waterfall that cascades into new economic equations and, eventually, quarterly profits. Several ideas are worth exploring, though none are satisfactory yet: 

1. Any IP windfall, say defined as licensing revenue exceeding $100M, can have a provision that both the industry’s and university’s shares will route a percentage back to fundamental research untethered to any specific product.  

2. Online learning creates tangible value to the productivity of a company’s workforce. It is also a high-margin revenue source for the university when operating at scale. Industry research deals can include an online learning purchase that in turn finances some fundamental research back at the university.  

3. For-profit spinouts, or institutional startups: In occasional cases, a system created as a by-product of fundamental research has sufficient market appeal that it can be spun out as an independent entity, financed through a combination of sources and aimed at self-sufficiency. Part of the future profit can be prescribed to flow back to that fundamental research root.  

Now let’s briefly turn to philanthropy. A capital campaign covers all dimensions of the university, and research and innovation are often not the natural top priority. While this tendency can be improved through staff training and donor cultivation, especially in areas like the Purdue Institute for Cancer Research or the life sciences, additional models warrant exploration.  

One emerging model is for the benefactors to provide a gift that creates an affiliated research institute, where the affiliation is strong and clear, e.g., faculty joint appointment, patent agreement, etc. Donors might feel more in control via the resulting governance structure and mission specification. Universities can still benefit from research support and a translational pathway. Clearly, a whole set of parameters needs to be worked out: gift tax, intellectual property, conflicts of interest, financial terms and a slate of unintended consequences.    

Let’s not forget: The total wealth in America is not shrinking. Appreciation for research results still lingers in society. But universities need to get creative in architecting new pathways. Devils live in the details, but so did they when NSF was launched in the 1950s. Details can be created for a new mindset, as first movers enjoy timely advantages. 

Paraphrasing Vannevar Bush in 1945: The frontiers are still endless; we might just have to blaze some new trails to continue the worthy pursuit.