**PRIORITIES FOR FEDERAL INNOVATION REFORM**

**Making Ethical Dialogue a Part of the National Innovation System**

**Nicholas H. Steneck**

**University of Michigan**[^1]

The NSTC Committee on Technology call for issue papers seeks advice on
Federal policy and regulatory reforms that will *enhance* our national
innovation system (NIS). *It is argued in this paper that NIS would
benefit from the development of policy and regulatory reforms that make
specific provisions for the exploration of the ethical consequences of
technology transfer (TT).*

The belief that competitive advantage and economic development should
play a major role in science and technology policy has long engendered
differences of opinion. From early in this century through WW II, it was
commonly accepted that at the very least private ownership and market
forces were not appropriate for publicly generated innovations in the
biomedical sciences. Attitudes toward public versus private ownership of
publicly generated ideas and the appropriateness of linking scientific
funding to economic development still vary, especially on university
campuses.

Currently there are no formal government policies or regulations for
exploring the ethical implications of policy decisions relating to TT.
Opportunities exist for undertaking TT-related ethics research or for
commissioning reports on TT that can include ethical investigations, but
routine consideration of the ethical implications of TT and NIS is not
required. *It is proposed in this paper that policy-makers remedy this
situation by developing provisions for promoting ethical dialogue based
on the NIH/ADAMHA training-grant model*.

\* \* \*

Current discussions about TT and NIS frequently leave little room for
ethical dialogue. The argument that "technological innovation and the
science that enables it ... have been America's competitive edge for
improving health, prosperity, and quality of life and for providing
national security" is so common that it can be introduced without
documentation or qualifications. NIS itself is usually seen as a
straightforward and benignly efficient system.

+-----------------+---------------+----------------+------------------+
| **scientific**  | **te          | *              | **healthy        |
|                 | chnological** | *competitive** | economy**        |
| **discovery**   |               |                |                  |
|                 | *             | **edge**       | **& society**    |
|                 | *innovation** |                |                  |
+-----------------+---------------+----------------+------------------+

Any system can, of course, be refined or tuned to make it run more
efficiently, but the system itself is seldom questioned. Putting science
to work through technological innovation is in many ways the essence of
modern society.

Widespread acceptance of TT in the public sector is, however, a
relatively recently development. In 1920, Elihu Thomas, President of
MIT, argued vigorously for the ownership and commercialization of
academic research as a way of stimulating economic growth.

> I have known some well-meaning scientific men . . . to look askance at
> the patenting of inventions, as if it were a rather selfish and
> ungracious act, essentially unworthy. The answer is very simple.
> Publish an invention freely, and it will almost surely die from lack
> of interest in its development. It will not be developed, and the
> world will not be benefited. Patent it, and if valuable, it will be
> taken up and developed into a business (Thomas 1920; see also: Hoskins
> 1921, Hale 1922).

In the 1920s, this attitude toward the commercialization of ideas was
not universally accepted. Beginning in the later nineteenth century,
patents were increasingly used as tools for the restraint of economic
development and progress (Vaughan 1919; see also: Vaughan 1925; Morrow
1945) thereby raising questions about whether patenting and ownership
were truly in the public interest. This, plus the widely accepted belief
that scholars should not seek to own or profit from research (Flexner
1933), produced disagreement over the ethics of owning and
commercializing academic research.

This disagreement was partially resolved beginning in the mid-1920s when
major research universities formed or became associated with institutes
established specifically for the purpose of managing research profits
and simultaneously established policies on research ownership (Committee
on Patents 1934; Palmer 1934, Palmer 1948, Palmer 1952). As a
consequence, by the early 1930s, it became "increasingly common for
investigators in various fields to apply for patents on materials,
processes or apparatus which have resulted from their work" (Sevringhuas
1933, p. 233). Through these developments, researchers were by and large
protected from the presumed stigma of private ownership and private
profit while allowing funds to be "made available to many investigators
in the institutions where such organized control has been provided"
(Ibid.). At the start of WW II approximately two dozen major research
universities had established research foundations and adopted patent
policies. By the early 1950s, when the era of private support for
research was replaced by the era of government funding, the number of
research foundations had doubled and many more universities had adopted
patent policies (Palmer 1952).

In a few important ways, however, attitudes toward TT in the 1950s still
differed greatly from the attitudes that underlie TT today. In its
statements on TT made after WW II, the American Medical Association
argued that:

> It is unprofessional to receive remuneration from patents or
> copyrights on surgical instruments, appliances, medicines, foods,
> methods or procedures (Palmer 1948, p. 72).

Harvard University's post-WW II patent policy stipulated that:

> No patents primarily concerned with therapeutics or public health may
> be taken out by any member of the University, except with the consent
> of the President and Fellows; nor will such patents be taken out by
> the University itself *except for dedication to the public* (Palmer
> 1948, p. 75, emphasis added).

Yale University was on record as holding that:

> ... \[I\]t is, in general, undesirable and contrary to the best
> interests of medicine and the public to patent any discovery or
> invention applicable in the fields of public health or medicine; but
> if, at any time, any member of the faculty deems it necessary solely
> for the protection of the public*, without profit to himself or the
> University*, to control any invention or discovery by means of a
> patent, he shall bring the matter before the Prudential Committee
> (Palmer 1948, p. 76, emphasis added)

According to these policies, which were common on other university
campuses well into the 1950s, economic incentives had no place in the
biomedical sciences.

Changes in this attitude followed in the wake of the development of RDNA
technology in the early 1970s and became policy in December 1980 with
the adoption of the Bayh-Dole Amendment. Bayh-Dole clearly and
decisively answered the question whether academic researchers can own
and commercialize government-sponsored research. According to Bayh-Dole,
they not only can but are also obligated to do so. The Amendment, which
took shape during the late Carter administration, requires researchers
to report ideas that have potential for development to university
administrators, who are in turn required to develop these ideas in ways
that will stimulate economic development (AUTM 1997b). The justification
for the Amendment is straightforward, economically based, and
essentially echoes the view MIT''s Thomas expressed sixty years earlier:
"Publish an invention freely, and it will almost surely die from lack of
interest in its development. ... Patent it, and if valuable, it will be
taken up and developed into a business" (Thomas 1920).

Developments following the adoption of Bayh-Dole provide support the
argument that allowing researchers and universities to profit from
intellectual discoveries is one way to ensure that intellectual
discoveries are put to work for the good of society. Between 1980 and
1997, the number of patents issued to universities jump from less than
250 per year to more than 1500. Before 1980, only about 25 universities
had active TT programs\--probably less than in 1940. By 1997 this number
had jumped to more than 200. By 1997 the economic spin-offs from
university-based TT were estimated to be more than \$21B, supporting
180,000 jobs (AUTM 1997a). In sum, Bayh-Dole has apparently succeeded in
putting academic research to work for the larger public good, as its
proponents claimed would be the case.

As important as Bayh-Dole and the related development of a larger NIS
has been over the past two decades, the fact remains that there are
differences of opinion on the most appropriate ways to put science and
technology to work for the public good. More is not necessarily better.
Seeking to improve competitiveness by definition pits parties and
interests against one another, thereby producing "winners" and "losers."
"Enhancing" NIS requires judgements about "good" and "bad" that have not
routinely been explored as part of the policy-making process. Having an
aggressive NIS may make economic sense, but the ethics of the system
remain by and large unexplored.

The absence of formal mechanisms for fostering ethical dialogue exposes
NIS to the risk of loosing the support of the American electorate and/or
its main source of innovation---academic research institutions. In the
1960s and 1970s, support for science and technology diminished partially
as a consequence of the failure of policy makers to take into account
widespread ethical concerns about environmental issues, energy policy,
and the War in Vietnam. In the early 1970s, RNDA research was slowed
while safety and ethical issues were debated. There are already concerns
on university campuses that the increasing commercialization of and
calls for economic accountability in academic research are infringing on
academic freedom and undermining the collegiality that is so essential
to scientific development (Martin 1999). There are also concerns about
possible inequities in the ways in which the benefits of technology are
distributed. If concerns such as these are not addressed, support for TT
could erode, making it more difficult to recruit young people
(especially women and under-represented minorities) into careers in
science and engineering and to justify continued taxpayer support for
basic R&D.

To avoid having the deep divides of the 1960s and 70s return and NIS
undermined by a lack of public support, it is proposed in this paper
that policy makers develop provisions for promoting ethical dialogue
relating to public policies that influence and/or direct TT and NIS. At
the present time, such dialogue is unsystematically undertaken and
largely voluntary in origin.

1\. [Voluntary research programs]{.underline}. The NSF Societal
Dimension of Engineering, Science, and Technology Program and the
National Human Genome Research Institute Ethical, Legal, and Social
Implications of Human Genetics Research Program have over the years
provided support for research on the social and ethical consequences of
scientific and technological development. Together, these programs have
enriched ethical discussion on a national level through their support
for educational initiatives, meetings, and research. They have made it
possible for researchers to explore the ethical consequences of TT.
However, since there are no requirements for engaging in ethical
discussions, there are no guarantees that ethical investigation will be
timely or undertaken for particular projects or initiatives.

2\. [Special reports.]{.underline} Ethical dialogue regarding TT and NIS
is also fostered through the multifaceted system of generating reports
to advise federal policy making. During the years it was in existence,
the Congressional Office of Technology Assessment provided policy makers
with detailed analyses of the economic, social, *and ethical*
consequences of TT. NAS, NAE, and IOM reports provide policy makers with
similar analyses on an ongoing basis. However, the current system of
preparing advisory reports has no unified provision for the exploration
of ethical issues, resulting in a pattern of ethical analysis that is
largely voluntary, unsystematic, and of mixed quality.

To remedy this situation, it is proposed in this paper that policy
makers develop provisions for promoting ethical dialogue within the
context of TT and NIS policy, based on the NIH/ADAMHA training-grant
model developed in the late 1980s.

In the late 1980s, as a response to growing public concern about
integrity in biomedical research, NIH and ADAMHA required applicants for
training grants to develop plans for teaching trainees responsible
research practices (PHS, NIH & ADAMHA 1989; PHS, NIH & ADAMHA 1990). The
design of the responsible research programs was left to the training
grant directors. Policy simple directed that something had to be done.

Over the past decade, the NIH/ADAMHA training grant requirement has
stimulated considerable attention to research integrity and led to the
development of responsible research training programs on many university
campuses (Steneck 1999). The flexibility of the requirement allowed room
for a great deal of diversity and imagination in developing programs.
The fact that all training grant programs must have a responsible
research program means that at some basic level the discussion of
research ethics is now common to all training programs.

This model could easily be adapted to TT programs on university campuses
and built into policies relating to NIS. For example, as a provision for
benefiting from public support for or from public policies that effect
TT, the parties involved could be required to include in applications,
policies, and public documents a brief analysis of the ethical
implications of their work or policy. By \"ethical implication\" in this
case is meant the overall impact on public good and the specific
consequences for individuals who are significantly impacted by the
work*, viewed from different ethical perspectives* rather than simply
justified on economic grounds.

While such an approach to fostering ethical dialogue might seem simple
in design, considerable review would obviously be needed to develop
effective policies to promote the exploration of the ethical
consequences of (TT). However, to proceed with the enhancement NIS
without considering an enhanced role for ethical dialogue is in this
author\'s view both irresponsible and foolish. Overall, technological
advance may be in the best interest of society, but this does not mean
that every technological innovation or step taken to promote
technological innovation is good or beneficial. If as a society we do
not weigh each piece of NIS carefully, we run the risk of building a
complex and sophisticated machine that has one or more defective parts.
One defective part blew up the Challenger space shuttle and brought down
the Kansas City hotel skywalk. One ethically weak component of NIS could
at the very least weaken the system and perhaps cause more serious
damage to both NIS and the TT on which it has come to depend. An
investment in promoting ethical dialogue is a small price to pay to
ensure the development of an ethically responsible national innovation
system.

**Bibliography**

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[^1]: ^\*^ Nicholas H. Steneck is Professor of History, College of
    Literature, Science and Arts, and Professor of Ethics, College of
    Engineering, at the University of Michigan. Email:
    <nsteneck@umich.edu>. Fax: 734-647-4881.