Subject: Re: universities struggling to avoid making money
From: "David Kaufman" <david@gigawatt.com>
Date: Sat, 24 Aug 2002 14:20:31 -0400

Tom Lord <lord@regexps.com> wrote:
> Universities struggle to avoid making money because they consistently
> succeed at producing quality software, yet generally want to publicly
> license their creations.   The money managers wind up forced to insist
> that universities take out patents, restrict licenses, etc.

i don't think it is that the universities are struggling to *avoid*
making money.  private universities very much do want to make money, and
even state universities and other publicly funded educational
institutions need to maximize their revenue to meet their operating
expenses and maintain budgets.  i think the issue is one of reputation
and public perception.

while they certainly want to maximize their revenue from tuition, grants
and donations, they must avoid the appearance of impropriety, and making
money off of the work of students does appear improper.  a university,
whether it is operated by a state government, or private (esp.
religious) organization, wants to do whatever it can to increase it's
*reputation* as a center or academic and technical excellence, in order
to compete in the market for new students.  they don't want to be
perceived as engaging in direct commerce or competing with for-profit
businesses, because a) it makes them *appear* greedy and motivated by
profit instead of the loftier goals of pure research and learning, and
b) many of those businesses recruit their graduates, employ their
donating alumni, and can make or break the schools public reputation.

> FSB's struggle to find models that support software creation on modest
> revenues based on publicly licensed code.
>
> So -- is there a marriage possible there?  Or at least a borrowing of
> ideas?

it would seem so, wouldn't it?  the government (at least, the US gov't)
regularly uses the academic community for military research, and the
private sector may employ students as interns (cheap junior labor) but i
think they cannot do real competitive research using universities,
because the university's and the companies needs would conflict: the
university needs to *publish* their new discoveries and advancements in
order to increase their academic notoriety, while (closed-source)
software companies profit from unpublished techniques and actually list
their secrets as asets on the balance sheets!  but FSB's *share* the
goals of publishing discoveries and advancements, so it would seem to me
to be a good match.  the gotcha is, as always... show me the money.

universities do *private* work for the government because the government
gives them huge research grants that come with top-secret strings
attached.  universities and corporations do collaborate but again at the
expense of the corporation.  for a university + FSB collaboration both
sides would probably be seeking funding, and neither would be offering
the funding :-)  whither cometh the moolah?

> I don't think it's as simple as making FSBs the business arm of the
> university system.  Generally speaking, any excess revenue an
> engineering dept generates winds up, one way or another, in support of
> the liberal arts (etc :-) -- so a business superstructure over that
> would perpetually risk just being a leech.

perhaps, but not all institutions of higher learning are liberal arts
universities.  MIT, Stevens Institute do not have huge english and art
history departments to fund :-)  their focus is technology, as is ours.

> What's the essense of a university, from a purely business
> perspective?

selling education?  competing in an open marketplace to separate rich
parents from their kids' college funds?  it does seem to me that
universities may be missing an opportunity here, too.

most do have plenty of cash to spend directly on achieving their primary
goal of attracting a bigger share of the best students by building a
better reputation as a center of excellence in teaching and learning.

so if they were to fund promising private FSB start-ups (or just donate
space, servers and connectivity), and provide student programmers, they
would a) be preparing those student programmers for the real world by
giving them real work to do on real development projects and, b) be
increasing their reputations by (hopefully) sponsoring high-visibility
development projects that benefit the public good, and c) avoid the
danger of getting a reputation of doing greedy self-serving for-profit
work.

of course that scenario would require finding an institution with the
foresight to understand this (...), separating an educational
institution from its cash (not an easy sale) and convincing them to take
a financial risk (also semi-unheard of in the halls of academic
administration).


-dave