Remarks by William R. Brody, President
The Johns Hopkins University "EXPERTS WILL BE WINNERS IN THE NEW ECONOMY"
HIGHER EDUCATION FORUM:
THE RESEARCH UNIVERSITY IN THE 21ST CENTURY
C.D. MOTE INAUGURAL
FRIDAY, APRIL 23, 1999 / 9:30 A.M. / VAN MUNCHING HALL
UNIVERSITY OF MARYLAND, COLLEGE PARK, MARYLAND It is already an overworked cliché, but the truth nonetheless: we are in the Knowledge Economy, and it will continue well into the next century. Though Y2K is not yet here, the 21st century has in fact begun, and the important characteristics of the new economy in the next decade are already apparent. They are Speed, Globalism, Innovation, and Consumerism. By consumerism I mean a consumer-centric market rather than a producer or vendor-centric market, which is the paradigm all of us have known in the past. Quality of goods and services at affordable prices is the mantra of the consumer in this new era. Perhaps the most important common denominator of the new economy is the ubiquitous access to information. Much emphasis has been placed on the Internet. Although it has captured the fascination of the general public, the Internet is simply another advance, in my view, in the access to information that began much earlier in the last century with Bell's invention of the telephone, and was followed by radio, television and satellite telecommunications. Equally important, but much less heralded, was a major sea change that occurred during World War II. Prior to the war, work in the manufacturing sector was performed by unionized tradespeople, virtually all of them men, who learned their trade through an apprenticeship program without need of a formal education. During World War II, when the men went off to fight the war, our nation was faced with the dilemma of needing to build ships, airplanes, trucks, and other instruments of defense without the having enough skilled tradesmen to do so. In response, we developed a system of educating others--many of them women--to become welders, riveters, electricians, carpenters and so forth. We were quickly able to ramp up the war production machine without need of the traditional apprenticeship training. Out of this effort was born the new emphasis on formal education and training. We learned that knowledge could be used to create expertise more efficiently and effectively through education rather than apprenticeship. The GI Bill in the post-war period was a boon to stimulate the development and expansion of our post-secondary educational system, which would use knowledge to impart expertise. From this process of generating and transferring knowledge were sown the seeds of the information revolution, and its unforeseen consequence, the demise of craft guilds and unions. Over time, the amount of knowledge required to manufacture goods or provide services has steadily increased, while the raw labor content has diminished. The systematic application of knowledge, therefore, has provided a significant economic advantage. What matters most: Expertise In the knowledge economy the winners will be the experts. Like the NBA, where superstars make orders of magnitude more than journeyman players, the compensation for knowledge experts will be far greater compared to those with average expertise. Why? It's because of the paradox of our time: although we are surrounded by information, we are nonetheless starved for knowledge. Knowledge is the compilation of information that is relevant to the user in order to provide insight and understanding about a problem or issue. Toyota uses knowledge to build high quality automobiles at lower and lower cost. ATM's use computer databases to facilitate convenient banking. This is knowledge, and as we all know, knowledge is power. My satellite dish, on the other hand, provides hundreds of channels of what to me is useless information. But bits of information that are useless to me may be knowledge to others. It's like the difference between flowers and weeds. We are choking on information. Jeffrey Dvorkin, vice president for news and information at National Public Radio, said that in 1978, when he was working as a journalist in the newsroom, they received on average 200 news stories a day by the teletype news feed. Today at the NPR newsroom, they receive more than 11,000 news stories daily on their computers. Sorting through those 11,000 items of information to produce roughly 25 daily knowledge stories is an increasingly difficult task. Knowledge is a tangible and highly valuable asset. Early securities markets sprang up around coffee shops near harbors, where brokers quickly took advantage of news from the arriving ships. According to Wall Street economist and author Peter Bernstein, "in 1790, speculators cashed in on Alexander Hamilton's proposal to restructure the federal debt by hiring sleek ships to outrace the spread of the news on land, enabling them to buy U.S. paper for as little as 20 cents on the dollar; they doubled their money in days." Bernstein also points out that Nathan Rothschild built his fortune in currency and bond arbitrage using carrier pigeons and couriers to speed the earliest news from Europe to him. Researchers in the 1950's who generated x-ray diffraction patterns of crystallized DNA created information but not understanding. It was James Watson and Francis Crick who transformed that information into knowledge of DNA structure. They had the expertise in x- ray crystallographic patterns that enabled them to recognize that those specific diffraction patterns resulted from a double-helix structure. Their knowledge began the genetic revolution. The Research University: a Net Producer of Knowledge The University of Maryland College Park and Johns Hopkins are members of a select group of fewer than 100 major research universities in the United States. They differ significantly from the other ten thousand or so colleges and universities in this country in that they are primarily generators of new knowledge. In the research university, learning takes place through discovery. As National Science Foundation director and former chancellor of UMD College Park John Slaughter once said, research is to learning as sin is to confession -- without the former, there is little to say in the latter. The paradigm of the research university was set in 1876 by Daniel Coit Gilman when he left Dr. Mote's former institution, the University of California at Berkeley, to become the founding president of Johns Hopkins. There he created the first American university dedicated to the proposition that learning takes place through the discovery of new knowledge as much as through the study of existing literature. In the new economy, organizations that can gather, assimilate, organize and validate information to create knowledge will be the winners, and will be handsomely rewarded for it. Those who can only acquire information but lack the expertise to process it into knowledge are doomed to be followers. To emphasize this point one need only read the recent report titled "The Global Innovation Index" produced by the Council on Competitiveness. This report is part of a larger study that examines what is happening in global R&D and how that affects the competitiveness of various countries. The Innovation Index report demonstrates that there are two major drivers in a country's capability to innovate: the first is the amount of spending on research and development; the second is the annual growth in the country's R&D workforce. Research universities perform both functions: on one hand they conduct research and generate knowledge, which they disseminate in publications and through technology transfer agreements; on the other, they train the scientists and engineers who generate future innovation. The report indicates that countries or regions with strong research universities will experience economic vitality. Those without such facilities can typically only hope to play follow-the- leader. It has been said that the best vehicle for technology transfer is the moving van. Universities promote the transfer of knowledge by training students, most of whom leave academia for the private sector, but take with them the expertise to advance the commercialization of new concepts derived from basic research done at the university. It matters more that the students learn how to conduct basic research than the specific field in which the research is conducted. The expectation that universities will create new jobs, new companies and new industries is a relatively new phenomenon, perhaps having its birth in the Bayh-Dole Act of 1980. That piece of legislation forever changed the face of university research and our funders' expectations of the outcome of our work. Under Bayh-Dole, universities are required to patent unique discoveries made through federally sponsored research in order to license them for commercial development, either by starting new companies, or as new products for existing corporations. I should point out that there is a mistaken impression, particularly among state and local government officials, that universities should be more focused on educating their students to have the skills required for the jobs of today. Your graduates need to be 'job-ready' they say (whatever that means!). The problem with following the 'job-ready' dictate is that we will create graduates who are trained, not educated. They cannot adapt when the skills they have acquired become obsolete. With the half life of knowledge approaching five years even less, in some fields -- we must impart in our students the basic skills of learning how to learn, so that they can continuously adapt to the rapidly changing needs of the marketplace and renew their expertise throughout their lifetime. The existence of world class research universities has become an important tool for regional development. Silicon Valley has Stanford and University of California, Berkeley. Boston has MIT and Harvard. Research Triangle Park has Duke and UNC. Flagship research universities will carry a regional economy far into the 21st century. Companies choose to locate in close proximity to the concentrations of expertise -- the so-called technoprenuers who will develop innovative new products for existing companies and start new companies where none exist. Clusters of expertise will make regions world class competitors for specific products semiconductors and computers in the Silicon Valley, financial services in New York City, medical devices in Minneapolis, wine in Bordeaux, France, leather goods in Italy, and watches in Switzerland. India produces more Ph.D.'s than any other country in the world, and despite its manifold problems, India has created a major software industry located in Bangalore, where the Indian Institute of Technology produces the software expertise that countries all over the world seek out. Expertise means the best of the lot. To become a flagship research university requires two things: focusing resources on a limited number of disciplines in which you can develop the critical mass to become world class, and to exercise what I characterize as a "ruthless commitment to excellence." The flagship university must recruit and train the very best and shed those who are not the academic equivalent of sub four-minute-milers. If resources are diluted and spread over multiple areas or multiple universities, you will end up with a collection of average departments and average universities, but average is not sufficient to ensure the economic success of the region. The regional version of this ruthless commitment to excellence requires considerable political will to say yes to some investments and no to others, and then to stay the course. Between 1950 and 1970, Stanford University transformed itself from a good university to a world class university by recruiting what the late provost of Stanford, Fred Terman, called the "pillars of excellence." In the 1950's Stanford recruited Nobel Laureate William Shockley, inventor of the transistor, to the faculty. Literally hundreds of graduate students flocked to Stanford to work for Professor Shockley and the other faculty who were attracted to work in his laboratory. Included among them were people like Bob Noyce, who went on to found Intel Semiconductor. Other graduate students started numerous semiconductor companies in the region. For his part in making Stanford a world class research university, Terman is known as the father of Silicon Valley. Around the same time, professor Owen Wangensteen at the University of Minnesota School of Medicine assembled a world class team of surgeons, lead by Dr. C. Walton Lillehei and colleagues who pioneered the techniques of open heart surgery. Their work attracted talent from all over the world. Dr. Lillehei's collaboration with a local engineer, Earl Bakken, led to the development of the first cardiac pacemaker and subsequently to the founding of Medtronic, St. Jude Medical, and more than several dozen medical device companies. Today Medical Alley in Minnesota is the leading region for the production of implantable medical devices in the world. The Quantum Physics Model of the University All this talk so far and only one sentence containing the word "Internet!" Won't the World Wide Web make universities obsolete? In the past, we thought of universities along the model of the classical physics idea of the atom a sphere with sharply demarcated boundaries. Faculty were tightly bound to the core of the university like electrons around the nucleus. The university was bounded by geography as well, with well-defined campus boundaries, faculty who were solely full-time, and fierce competition with other universities. The university of the 21st century -- actually the transformation is already well on its way -- will look more like the quantum physics model of the atom a cloud with fuzzy borders and electrons that may be shared between nuclei. Expertise is king, so to produce world class research you need a collection of world class experts often in multiple disciplines, and often requiring more talent than any single university can assemble. Research will therefore increasingly be conducted in multidisciplinary teams, composed of faculty not only from within a university, but from multiple universities. Faculty will be shared between universities like electrons loosely bound to the nucleus. A research team composed of faculty from Johns Hopkins, MIT, Carnegie Mellon and Harvard were recently awarded an NSF Center grant in surgical robotics. Several corporations are also collaborators on the project. What happened to the rigid boundaries of the university? They caved in to the need for expertise. Conversely, we see faculty, for example, who may teach fall semester at Johns Hopkins, spring semester at College Park and spend the summer conducting research in Australia. Our Center for Chinese/American Studies in Nanjing has more non-Hopkins faculty than Hopkins faculty in residence. Heisenberg's uncertainty principle applies to faculty affiliations in the new quantum physics model of higher education. The university is the second-to-last institution of lifetime employment, the last being the church. But universities have already begun moving away from lifetime contracts by hiring more and more non-tenured faculty. While the faculty view tenure as key to their success, the public looks at it with great skepticism. The conflict is a moot point however, because the need for rapid response and flexibility are steadily reducing the number of tenured faculty at universities. So the boundaries of the university are becoming very fuzzy, and the forces binding faculty to the university are loosening. The Internet is not driving this phenomenon, but rather facilitating it. The Internet allows rapid, low cost collaboration among research teams that are geographically disparate. It facilitates connecting expertise with those who need to use it. But it is the quest for expertise, not the Internet itself, that is the primary driver of change. Information technology will have an impact on how we teach Internet based distance learning, collaboration among students and between students and faculty, and the use of simulation tools to enhance laboratory experiments will all be important. But they will be important in the same way that the 35 mm slide projector helped improve classroom teaching, as aides to education, not a replacement for the essential teacher/student interaction that is the kernel of education in a research university. In closing, I cannot overemphasize that the key to the 21st century is expertise - that quality which transforms ubiquitous information into useful and economically valuable knowledge. Research universities are the engines that produce expertise, and no matter how different universities may look in the next century, I guarantee you that the successful ones will continue to maintain their focus on assuring excellence in their education and research. And successful research universities will act like magnets to attract clusters of talent that will make regional economies highly competitive in the global marketplace. Thank you. | 
