San Francisco — Never before in the history of organized higher education has knowledge been worth so much in the marketplace - and, in some cases, so quickly transferable into the realm of private enterprise.
This is especially true in electronics and biology. In these fields, painstaking research over many years has climaxed within the last few years in a great number of actual or tantalizingly possible practical applications, notably in computer technology and genetic engineering.
These practical applications have made business increasingly eager to ''invest'' in academia, especially in certain fields of research. At the same time, the academic community has turned to private industry for funding to replace the shrinking pool of federal dollars available to researchers in American universities.
At first, few in this capitalist society voiced doubts about such arrangements. But as this industry-university relationship has grown in both size and complexity this question has been raised on campuses across the United States: Is there a need for general guidelines, perhaps even legislation, to protect the huge public investment in research, the integrity of individual scientists and the academic community, and the welfare of students caught up in this process?
Industry contributions to academic research are not expected ever to equal the government outlay of some $5 billion annually. Industry at present ''invests'' on campuses each year about $200 million. Some industrial leaders foresee that growing to perhaps $600 million in the next few years.
But Dr. Kenneth A. Smith, associate provost and vice-president for research at the Massachusetts Institute of Technology (MIT), says: ''I don't think there's going to be an enormous increase in the amount of private money going into university research. I think the increase will be substantial - approaching a doubling of the present level. In the total context that remains quite modest.''
Dr. Smith, pointing out that most individual research grants from private sources are also modest in size, says he feels the ''bona fide intellectual connection between universities and industries,'' especially in applied-science fields like engineering, is ''very important'' and has been too weak over the last 20 years.
Although the private contribution is only 3 to 4 percent of what the government provides, some suggest that it has a greater proportional impact on research itself because much of the federal funding goes for equipment, salaries , and other administrative expenses.
But many people apparently reason: Let industry bear some of the cost of research, and maybe society will see a quicker return on the overall investment in basic research.
It has not proved that simple. In March, leaders of five major research universities, some faculty members, and the heads of 11 corporations met at Pajaro Dunes near Watsonville, Calif., privately to explore problems and policies associated with the industry-university relationship.
The meeting was limited to the ''big five'' of university research. Besides the host, Dr. Donald Kennedy, president of Stanford University, the university presidents invited were Derek Bok of Harvard, Paul Gray of MIT, David Saxon of the University of California, Berkeley, and Marvin Goldberger of the California Institute of Technology. Each brought a few staff members, faculty members, or both, and each invited two industry guests. Most of the 11 industry guests represented companies in the gene-splicing and biomedical fields. Among them were Damon Corporation, Eli Lilly, Cetus Corporation, Applied Biosystems, Genentech, E.I. du Pont de Nemours, and Syntex.
The nature of the meeting and the resulting statement have been the subject of much controversy. But the preamble of the Pajaro Dunes statement put the basic issue succinctly:
''Serious problems are involved. These problems center on the preservation of the independence and integrity of the university and its faculty, both faced with unprecedented financial pressures and complex commercial relationships. Universities are a repository of public trust, and, in many cases, of public funds as well, and they have an obligation to the public as well as to their students and faculty to ensure that they remain devoted to their primary goals of education and research, and that their resources be properly used in their pursuit of these goals.''
The participants cited the need to construct ''research agreements and other arrangements with industry (so) as not to promote a secrecy that will harm the progress of science; impair the education experience of students and postdoctoral fellows; diminish the role of the university as a credible and impartial resource; interfere with the choice by faculty members of the scientific questions they pursue; or divert the energies of faculty members and the resources of the university from primary educational and research missions.''
University-industry relationships are by no means a new concern or one with which only the heads of institutions have been wrestling. In recent years books, journal articles, addresses, seminars for faculty and students, and congressional hearings have produced charges, criticism, complaints, and suggestions for reform.
Consulting by academicians - for private companies and for the government - is widespread and has long been a major source of supplemental income. Most universities limit the proportion of faculty time that can be spent in such activity and try to prevent conflicts of interest. In fact, concern that ''moonlighting'' professors might jeopardize the image of universities as impartial repositories of expertise is not new.
The kind of industry-university links forged in the past five years has resulted in highly vocal campus controversies over possible conflicts of interest.
Has the public been listening? Activist academicians, particularly those critical of university policies, lament the lack of mass-media attention to issues in which they feel the public has a vital stake.
US Rep. Albert A. Gore Jr. (D) of Tennessee feels the same way. He is chairman of the subcommittee on investigations and oversight of the House Committee on Science and Technology. Within the past year, Mr. Gore has staged two hearings on industry-university relations, and he plans another soon.
What kind of relationships between the corporate world and the halls of ivy cause such concern?
Large-scale industry-university ties at the institutional level have attracted much attention recently. But research grants to individual faculty members by private companies and consulting arrangements are far more common. Also, there are increasing instances of professors who are employed on a regular basis by companies, hold stock in companies that benefit from their campus research, and are themselves entrepreneurs - forming companies to market inventions which are often the result of government-funded research.
MIT and Stanford have produced more ''spinoff'' industries than any other American universities, chiefly in electronics. The founders of those companies have usually dropped any direct connection with the universities and in fact, they must, under university rules, if they hold ''line offices'' in the companies.
In the last few years, research in recombinant DNA, stemming from the ''breaking'' of the genetic code, has produced a new kind of campus-spawned industry. Chiefly in the biomedical field, these companies often have been formed by a few academicians who tend to keep their faculty status. Recently, however, pressures of one kind or another have been forcing more of these scientists to choose between ''town and gown.''
A recent situation at the University of California at Davis embodied two major elements involved in the current debate on industry-university ties - the quest for private funding to make up for federal cutbacks and a professor's involvement in establishing a private research corporation, resulting in apparent conflict of interest.
Research in biological nitrogen fixation (a process by which certain plants might be able to manufacture their own nutrient) was funded in the late 1970s by a federal grant through the National Science Foundation. When it became evident that funds would be cut in the 1980s, the UC-Davis College of Agricultural and Environmental Sciences began looking for a private source. It found such a backer in the Allied Corporation.
Before the university-Allied agreement, one of the leading scientists involved in the research, Dr. Ray Valentine, and several academicians from UC-Davis and other institutions incorporated a private, off-campus research laboratory in Davis which they named ''Calgene.'' Not long after the university and Allied had signed a carefully worked-out contract, it was disclosed that Allied had purchased a 20 percent interest in Calgene.
Charles E. Hess, dean of the College of Agricultural and Environmental Sciences, told the House Committee on Science and Technology at a hearing in Washington in June: ''Although there was no proven conflict of interest between the Allied contract and Professor Valentine's involvement in it, and Allied's subsequent purchase of an interest in Calgene, I believed that the public perception of or the potential for a conflict of interest was so great that action by my office was required. . . .
''I offered Professor Valentine three options: one, dissociate himself from Calgene; two, not be a principal co-investigator on the Allied grant; and three, resign from the portion of his position (involved in research under the Allied grant). Professor Valentine then notified me that he would not be a co-investigator on the Allied grant.''
Since Valentine's research accounted for $1 million of a $2.5 million grant, his situation cost the college a major portion of the funding for what it clearly considered an important research effort. It was also costly to a number of graduate students.
Dean Hess told the committee: ''I met with some of his (Valentine's) graduate students who were concerned about what their future source of support might be, because they had relied on . . . the Allied grant. I told them . . . we would work with them to provide rsearch support and, if necessary, relocate their programs. . . . Some students indicated that they wished not to remain in Professor Valentine's laboratory. Faculty from the Bacteriology Graduate Group helped find other faculty who would be willing to accept Professor Valentine's students, and in a number of cases we did provide support to allow them to continue their research.''
Some of the students, however, publicly complained that loss of financial support was not their only problem. Four of five graduate students charged that Valentine had told them it was their responsibility to clear their research projects with Calgene. One was reportedly ordered to switch his thesis topic after spending 2 1/2 years on it.
Professor Valentine has denied putting such pressure on the students.
An industry-university agreement of a different type and scale is the new arrangement between the Massachusetts General Hospital (MGH) and Hoechst AG, a West German chemical company. MGH is affiliated with Harvard Medical School as a teaching hospital but is independent of Harvard University.
The 10-year, $70 million pact enables a foreign company to profit ultimately from research that not only is conducted in an American institution but also grows out of years of US government-funded research. It also illustrates an increasingly familiar academic phenomenon - the influence and power an outstanding research scientist can wield.
Howard M. Goodman, a biochemist whose research was basic to the process of recombinant DNA, was a professor at the University of California at San Francisco in 1980 when he proposed to Hoechst the establishment of a well-staffed and equipped center for research in molecular biology with assured funding for at least 10 years. When Dr. Goodman was lured to MGH (and the Harvard Medical School faculty), he, in effect, brought Hoechst with him as the sole funder of the new Department of Molecular Biology.
Although Harvard was not a party to the negotiations with Hoechst and the university's rules do not apply to the agreement, scientists on the new department's staff, according to the contract, ''shall be . . . nominated for membership on the faculty of the Harvard Medical School,'' and doubtless accepted in most cases.
The contract with MGH goes to great lengths to protect such academic prerogatives as the right to decide what research to pursue and the freedom of scientists to collaborate with others and publish research results.
But it also provides that the company can ''send up to four individuals to work and be trained at the department at any one time,'' that ''research collaborations funded in part by the company and in part by others shall take into account the interest of the company in obtaining exclusive, worldwide licenses,'' and that scientists whose research is funded by Hoechst ''will submit to the company early drafts of all manuscripts not less than 30 days prior to the submission of the manuscript for publication.''
Most of these provisions are not unusual, either in departmental or individual facutly members' contracts for funding of research. What is unusual is that the terms were made public. That happened because of pressure from members of the Harvard faculty, from other universities interested in the terms, and from Representative Gore, who had the document analyzed by the US Office of the Comptroller General. (In its report to the congressman, that office indicated that the MGH-Hoechst contract appears to protect US interests.)