Changing Structure of Governance in Research

Dr. Howard Tennant
President, University of Lethbridge

Criticizing health care systems and education has become a national pastime in Canada. We in the university sector have not been immune to this banter which, in my view, is caused as much by internal university discord as by externally generated comment. As society has changed in the post World War II scene, several factors emerge as key determinants in shaping universities at the end of the 1990's.

Government at the federal and provincial levels has dominated nearly every aspect of the university. It has become a banker to students, a funder of basic research and scholarship, and a regulator for the establishment and expansion of teaching programs. Government views the growth of university programs as a key to economic development, but at the same time is concerned with the plight of the over-taxed taxpayer.

No one will call the University of Saskatchewan, or similarly any other Canadian university, the "Autonomous University of Saskatchewan". Decision-making, in the main, is a process of continuous negotiation by segmented sectors of the academic community for what will be supported by various funding bodies. It is not what the institution wishes to do with resources under its control.

In the now famous comment in the September 19, 1988 New York Times editorial, "Oscar Wilde could resist everything except temptation. University presidents, it seems, can resist everything except money."

University research and scholarship has gone through many decades of separating clusters of academic disciplines, not by the nature of the interconnectedness of the work done, but rather by the varying proclivity of these large academic clusters to be steered by external funding organizations. Many such government and private sector organizations are not interested in the peer-reviewed processes of primary research and scholarship, but rather by the call to answer problems tied to economic development and the needs of the corporate world. Hence funding of engineering and science has developed differently from that of the social sciences and radically differently from the funding for the humanities and fine arts. Professional faculties such as education, law and commerce cater to the needs of the professions.

Universities are not now, and have not been for some time, institutions that operate "In the pursuit of truth" and with "dedication to the high ideals of the academy", but rather as quasi-independent corporations in pursuit of big bucks in a problem- and objective-driven world. It is my belief that government and industry have "purchased" the universities and their operations by directing their capital to buy those aspects of the institution that will serve them best.

I begin with these harsh comments lest we be under any illusion as to why we are here to talk about improving the research and scholarly activities of what is a very fine and successful university. Our discussions are about securing resources, operating with those resources that are gleaned, producing results which satisfy the funder so that more can be obtained, and transferring what we learn to our students. In this environment we struggle with strategic plans, governance issues, faculty workload and accountability measures.

The University of Saskatchewan is far from alone in dealing with these issues. Yet we observe that some Canadian universities have been more successful than others in attracting resources. Many others have very long-range funding difficulties that are not going to go away under present circumstances of external control. I have no magic answers, but I do have some thoughts about how institutions can be more competitive given the world in which they operate. These thoughts were developed in my years as faculty member and administrator at the University of Saskatchewan and in my 13 years as President at Lethbridge.

Granting councils are the backbone of the basic and fundamental research of Canadian universities. In the main, productivity is the key for success. It matters less what you propose to do as long as you were demonstratively productive with your last grant. These flows of dollars into a university are the most important ones; they represent the largest opportunity for the researcher to explore curiosity-driven ideas. It is truly appropriate funding for a university.

Aside from being productive with publications in the right journals, other clues to success include:

• Having institutional backing in the form of concrete matches of time and resources. At the University of Lethbridge, each year I meet separately with the sciences, social sciences, humanities, fine arts and our professional faculties to ask a question: "If I can find $250,000 to $500,000 to support research on a one-time injection, what would you agree that this should be spent on?" I do this approximately three months before granting council applications are due. Each year we agree on the purchase of a major piece of equipment, to be purchased and installed by the University — a nuclear magnetic resonance machine, a confocal microscope, a computing upgrade or facility. This injection of equipment or facility will be a part of NSERC, MRC or SSHRC applications. As a small university, we have been remarkably successful with NSERC and MRC, but regrettably this has not worked for SSHRC applications.
  Where does the money come from? In our three-year budgeting cycle, two things are inserted by the President at the beginning; an allocation for the next collective process that is adequate to the task, and one-time funding for research. The Board knows that this is a critical process for success at our institution.
   
• Making sure that a grant application is to be in front of the correct committee at the granting council is extremely important. At a time when research does not always fit into neat disciplinary bundles, close scrutiny of the correct committee is critical. Our Associate Vice President (Research) monitors Ottawa-based councils and checks applications as they leave the institution.
   
• Budgets are frequently adjusted to ensure adequate funding. Many young faculty members are afraid to ask for enough resources, fearing that if their proposal is too expensive it will not be funded. What counts is having a realistic budget prepared and ensuring that either the grant or the university will provide the necessary resources. If not, early modifications to the proposed work are undertaken.

Government agencies and the corporate sector bring us to the domain of research and scholarly contracting. In essence, this is the growing domain of testing and problem solving. Funds come to the university and the research, to do work that an outside body requires, generally within a budget which can be elastic, within a time frame determined by the funder, and with frequent attempts to curtail when and where results can be published. Universities have learned that such relationships and partnerships can be very useful, but problems can result:

• Graduate students' programs are frequently affected and this to my mind is one of the reasons why Canadian masters and Ph.D. programs have grown in length.
   
• Discussions about the ownership of intellectual property and know-how take long periods of time. Universities are not equipped to enter into such complex legal contracts and frequently give in too easily.
   
• Contracts often have an end with no contemplation of continued work once the question in focus has been answered or more importantly, a change in the market place has shifted the interest of the funding agency or company. Research groups do not come together easily and constant redirection causes focus problems and recruitment of graduate students and post doctoral fellows.

Perhaps the largest issue is that of overhead. Since the 1950's, the notion of overhead on research contracts has grown and developed as a result of study after study. Varying approaches have been taken including:

• The Supply and Services Agreement which ties the amount of overhead to a percentage of the direct labour cost;
• Cost-plus models which calculate overhead based on cost of equipment, materials and labor;
• Institutions that waive overhead or cut overhead to obtain cash flow for starved research budgets; and
• Price-bid research, largely in the U.S., where a statement of work is tendered and research teams bid for the work on a competitive basis.

Faculty and research groups frequently conspire with the contracting agency to reduce or eliminate overhead. The funds do not traditionally show in the research budget, and what researcher wants to pay for human resources, accountants, heat, light and water, and all the things that are there anyway?

To deal with this issue of trying to collect the overhead, we are conducting an interesting experiment at the University of Lethbridge. In our neuro-psychology group we are planning to give 100 per cent of all overhead collected to this group of scientists as they move into their new facility. Our notion is that they will be more interested in market-based pricing of their work if all the funds flow with them. These funds will have a 100 per cent carry forward and will be handled by trust accounts in the usual manner.

The model is based on how we do our budgets at the U of L. At my institution, for the last eight years tuition has been distributed to the unit that does the teaching course by course, on a 12-month basis with no administrative skim and 100 per cent carry forward at the end of the year. The budget process allocates government grants, investment income and donations for equipment and operations. This system has modified academic decision-making departments make academic decisions based on projected student demands, and competition with other institutions, for course and program offerings. Allocations are not based on internal politics, but related directly to the areas of the campus that are doing the teaching. It is our hope that keeping research overhead with the researcher and scholar will lead to different pricing of our contract work.

After years of negotiating research contracts, I am convinced that outside agencies will pay more for what we do. They need us. Frequently the university is the place that can do the work and the only place that has the credibility that is required to stamp "quality" on the final product.

Ancillary research operations in the form of special organizations, institutes and companies are extremely important creations for universities to work with and develop. The University of Saskatchewan has been an example of how these type of structures can be put together. VIDO, Biostar, the early SED Systems, the Toxicology Group and others have added greatly to the research capacity of the institution.

It is important to note however that while such creations add to building research capacity for a greater campus and the province, they add less and less to the university per se as they grow in independence and develop their own life cycle. While this campus has found some success with such ventures and such ventures are worth developing, the long run contribution is more to the province and the area than it is to the university.

SED Systems, with which I was associated for many years, is a good example. The Space Engineering Division of the Dept. of Physics was a research contract division of a fine department. After it spun out of the university in the 1960's, it eventually got into serious financial trouble. It was operating on university property, using university equipment and facilities and employing a staff of approximately 200 (who were not going to get paid one month), and with large accounts payable. The community was looking to the university to fix something in which it was a principal investor. Fortunately, the university was able to marshal its friends, pressure its banker and work its way out of this organization over a period of years. The risk of a multi-million dollar failure with great liability to the institution was very narrowly averted.

My point is that here is a lesson in how far a university should go to establish such private sector institutions and companies.

The temptation is to go into the business world that we as a university know very little about. There we incur the risks of undercapitalized ventures, experience the long reach to the channels of distribution that generate the sales required for success, and face the great temptation to use university resources that can be better applied to support research and scholarship on campus. Here are a few examples: Ontario universities are now using pension fund book surpluses to fund such ventures; the University of Alberta is moving to invest some of its endowments in venture capital; and numerous universities are launching companies using base operating dollars which are inadequate to the task. At my own institution we struggle with a company, belonging to two of our best faculty members, that operates in Lethbridge, the United States and now Europe.

Here are some positive suggestions:

• Ancillary companies and such organizations should be governed independently of the university and not draw on university budgets or personnel for their operations.
   
• Employees of such organizations should not be employees of the university.
   
• Liability issues are serious and difficult for the university, with its perceived deep pockets, to contract away.
   
• Such ventures have limited life cycles and few meet the test of operating for more than five years. The Canadian university landscape is littered with failures.
   
• Great care should be taken with ventures that are projects in nature. Project organizations frequently do their work with little difficulty, but run into major financial problems between projects.
   
• Product-venture organizations invariably fail on the way to market. Research is less than 3 per cent of the total cost of taking a product to market. Control of or access to channels of distribution is critical. For this reason such ventures are subject to having to surrender to market forces or die.

The University of Saskatchewan is looked at with envy for the way that it has managed many of its spin-off organizations and developed the research park. Future diligence will be required as the temptation to spin off more ventures arises. The rush of the 70's and 80's into the world of the university as a business was pushed by the resource constraints of the 90's. As institutions we are in a more vulnerable financial state now than we have been, and it is my belief that we do not have the hierarchical governance structure required to succeed in the world of business. In the main, our governance structures are collegially based and lack the focus that profit and the rate of return on investment bring to commercial organizations.

The most difficult thing about managing intellectual property is that it often takes a long time, unless you wake up one morning and discover that it has happened somewhere yesterday. The process of getting from lab to market is filled with problems and not many institutions have been lucky enough to have even a few successes. One thing we do know, nothing happens unless there is a critical mass of people in a common industry located in proximity to a major research university.

My suggestion to you is that research and those that work in research structures would be better off and more effective if a dual structure of governance for teaching and research existed. Whether we like it or not, undergraduate programs have become the product we produce as an institution with education as the goal. Products (undergraduate programs) and projects (research programs) should be organized differently. Different decisions are made, different timetables apply and the budget circumstances are radically different.

Perhaps in the long haul the University of Saskatchewan should examine some of the organizational models that exist in U.S. universities to offer the advantages of dual governance structure for teaching and research.

Faculty workload is a problem that is here now. Success in research is directly related to workload in the classroom. As university enrolments have grown, faculty resources have not grown in proportion. In Alberta, the post-secondary system will grow by another 10,000 FTEs (full-time equivalents) in the university sector in the next eight years. My own institution is growing at a compound rate of approximately 12 per cent per year and we are experiencing a much different market this year as we seek to hire 40 tenure track assistant professors before September. The market is getting dry in all disciplines including the humanities.

We will not be able to hire new assistant professors in the $40,000 range. It will be difficult to provide them with teaching loads that will let them get established as researchers and scholars and we will suffer as a result of the new federal program to establish 1,200 chairs across the country. The new federal funding will set off a set off a game of musical chairs as we seek to raid each other for key established and bright young potential candidates for chairs. Small and medium sized institutions will be training grounds for larger institutions to raid.

Key to institutional success will be our ability to deal with teaching workload issues and to provide sufficient start up money for faculty research and scholarship. Our intention is to review our curriculum to determine if a simpler one could be designed at the undergraduate level to meet our quality standards. For example, I have proposed to our faculty that we have too much computing and information technology buried in our curriculums and that too many high cost/quality faculty are involved in teaching this material. Our "what if" question is: "Could we hire a core of academic assistants and have them teach common sections of all computing courses on campus? " Savings would accrue to both dollar budgets and time commitments of faculty.

I believe that there is a lot of scope in looking to the curriculum for relief. The elective system introduced to universities by Harvard in the 1890's has blossomed to the point where North American education has been totally "coursified" at the undergraduate level. I note that today, when 14 to 16 years of basic education seems expected by society, it may be time to reduce the number of electives, develop more integrated curriculums, and save some time for the research and scholarship required to generate quality. With the best of intentions we offer undergraduates unparalleled choice in their programs and perhaps so much of this is not a necessary or desirable commitment of scarce faculty resources.

Closely related is the notion that came from the paper "Ten o'clock scholar" which studied the workload and time commitments of faculty at the University of Toronto and Stanford University. This study came out with an ideal division of labor as being:

• 40 per cent teaching,
• 40 per cent research and scholarship, and
• 20 per cent service and administration.

Based on empirical data, a more reasonable approach to what goes on in small to intermediate Canadian universities is:

• 60 per cent teaching,
• 30 per cent research and scholarship, and
• 10 per cent service and administration.

An open question to be asked is: "How much time is there for research and scholarship? " You can bet that the answer varies widely across the campus and is a major source of discontent.

Competition from new and evolving institutions will give universities a reason to examine how they will continue to glean resources from government, particularly provincial governments. There are two fundamental things happening in the world of advanced education:

• Community colleges, private colleges and technical institutes are moving toward degree-granting status. The first stage is here with applied degrees and the second stage is coming. Instruction in an institution without a research and scholarly base is an attractive notion to governments concerned with access and budgets.
   
• Private-sector companies are moving into Canada or being formed here to provide undergraduate and graduate degrees. In Calgary, the Devry Institute will be granting degrees within a year. The University of Phoenix (one of the largest U.S. private-sector degree-granting institutions) has set up in B.C. and has announced that it will be setting up in Edmonton and Calgary. Little private- sector organizations like Columbia College in Calgary are operating with cloned curriculum, obtaining government funding, and offering courses. They are seeking transfer for their students into the university system and to grant their own degrees.

To preserve our funding base we must speak with a louder voice about the benefits of an undergraduate or graduate education in a research-intensive institution. We assume that the quality differences are known and that it is self-evident that a university degree is better. A lot of governments around the world question that conclusion.

Research co-operation between Alberta and Saskatchewan is essential. For too many decades the two provinces and their universities, research councils and other research entities have operated in competition — to the frustration, amusement and benefit of those from whom we seek funding at the federal, provincial and private-sector level. Saskatchewan, particularly the University of Saskatchewan, has done well: the POS Facility, federal hydrology labs, the Western College of Veterinary Medicine, the Federal Biotech Institute and most recently, the large Canadian Light Source Synchrotron project. Alberta has not attracted a major NRC facility but has done well with federal agricultural research centers. Big money is being spent by the Western Diversification Fund but alas it tends to increase competition.

It seems trite to say, but research is a global game and two provinces landlocked in a small country would do better to act in concert rather than in competition. The politicians can't solve this one; they think within territorial limits. We in the university system have to take solutions to them that will create the critical research infrastructure required to do many of the large-scale projects in the next decades.

Here are some examples. Are two small provinces going to make a world impact with each struggling to attract biotechnology to their campuses, whereas they could jointly develop a center of excellence with linkages? Are two small provinces going to make an impact on Information and Computing Technology research on the world market by splitting resources and scarce human resources?

In Alberta we have made some amazing progress in developing support and funding that is not in the usual university sector:

• Alberta Heritage Foundation for Medical Research — a $1 billion endowment
• Alberta Science and Innovation — a new government department, spending of $100 million over three years
• Alberta Science and Research Authority — provides substantial funding for information technology as well as biotechnology
• Alberta Research Council

We talk of an Alberta Synchrotron Corporation to buy two beams from your facility.

We presented a proposal for a $1 billion endowment for science and engineering research that would perpetually provide $50 million for peer research.

And we are as frustrated as you are here about our lack of success in obtaining adequate funding for the social sciences and funding to help find solutions to the problems of our Native people.

I am sure that a series of initiatives with Alberta would pay great dividends for Saskatchewan and the University of Saskatchewan.

I arrive at the end of my comments with few concrete suggestions to improve research and scholarship at an institution that I care greatly for. My quandary comes from living and working in the morass for 34 years and only occasionally being able to put my head up to look around and see what is happening and spot an opportunity to do something. My compliments to President Peter MacKinnon for bringing us together, too many good things do not happen in universities because of inertia and an instinct to preserve past traditions. It is good to see an institution and its president prepared to take some risks and develop new focus and vision.