Creating the Market University: How Academic Science Became an Economic Engine

Creating the Market University: How Academic Science Became an Economic Engine

Creating the Market University: How Academic Science Became an Economic Engine

Creating the Market University: How Academic Science Became an Economic Engine


American universities today serve as economic engines, performing the scientific research that will create new industries, drive economic growth, and keep the United States globally competitive. But only a few decades ago, these same universities self-consciously held themselves apart from the world of commerce. Creating the Market University is the first book to systematically examine why academic science made such a dramatic move toward the market. Drawing on extensive historical research, Elizabeth Popp Berman shows how the government--influenced by the argument that innovation drives the economy--brought about this transformation.

Americans have a long tradition of making heroes out of their inventors. But before the 1960s and '70s neither policymakers nor economists paid much attention to the critical economic role played by innovation. However, during the late 1970s, a confluence of events--industry concern with the perceived deterioration of innovation in the United States, a growing body of economic research on innovation's importance, and the stagnation of the larger economy--led to a broad political interest in fostering invention. The policy decisions shaped by this change were diverse, influencing arenas from patents and taxes to pensions and science policy, and encouraged practices that would focus specifically on the economic value of academic science. By the early 1980s, universities were nurturing the rapid growth of areas such as biotech entrepreneurship, patenting, and university-industry research centers.

Contributing to debates about the relationship between universities, government, and industry, Creating the Market University sheds light on how knowledge and politics intersect to structure the economy.


On 4 October 1961, the president of the University of Illinois received a letter from Illinois governor Otto Kerner. in the letter, Governor Kerner asked the flagship institution to study the impact of universities on economic growth, with an eye toward “insur[ing] that Illinois secures a favorable percentage of the highly desirable growth industries that will lead the economy of the future.”

In response, the university convened a committee that met for the next eighteen months to discuss the subject. But despite the university’s top-ten departments in industrially relevant fields like chemistry, physics, and various kinds of engineering, the committee was somewhat baffled by its mission. How, it asked, could the university contribute to economic growth? Illinois faculty could act as consultants to companies, as they had done for decades. the university could provide additional training for industrial scientists and engineers. Scholars could undertake research on the economy. But, the committee’s final report insisted, “certain basic factors are far more important in attracting industry and in plant location decisions, and therefore in stimulating regional economic growth, than the advantages offered by universities.” in 1963, the University of Illinois—like almost every university in the United States—had no way of thinking systematically about its role in the economy.

In 1999, thirty-six years later, the university faced a similar request. the Illinois Board of Higher Education declared that its number-one goal was to “help Illinois business and industry sustain strong economic growth.” This time, though, the university knew how to respond. It quickly created a Vice President for Economic Development and Corporate Relations and a Board of Trustees Committee on Economic Development. It titled its annual State of the University report “The University of Illinois: Engine of Economic Development.” It expanded its program for patenting and licensing faculty inventions, launched IllinoisVENTURES to provide services to startup companies based on university technologies, and substantially enlarged its research parks in Chicago and Urbana-Champaign. It planned to pour tens of millions of dollars into a PostGenomics Institute and tens more into the National Center for Supercomputing Applications.

What changed during this period that caused the university to react so differently to similar situations? That question is the puzzle driving this book. It has become common knowledge, at least on university campuses, that academic science is much more closely linked with the market today than it was a . . .

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