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December 03, 2014


Mark Montgomery

A long complicated topic, starting with the obvious that the Academy is by definition biased so reform efforts need to be taken up by others. I've worked with the system for about 30 years now with several hats. While I agree with the conclusions, typically it's very soft on accountability and heavy on more funding.

A couple of quick points:

It is the failure of the basic research system that has substantially led to the decline of the American dream. If it had been more efficient and less corrupted with more accountability, less activism and more science--with more economic diversity, the structural foundation of the economy would have been stronger. Unfortunately now that the U.S. economy has been so weakened it is a much greater challenge to invest in federal research. For example, the national debt is more than 10x of the level cited in earlier times, which is frankly due less to partisanship (don't deny that is among our greatest challenges, but it's primarily a symptom of this, not the cause) than he culture of academia and lack of accountability throughout the federal system, including regulators, which is very closely aligned with academic institutions they fund. I know many and am often invited to attend four and five star hotel conferences, but of course since I pay my own way I stay down the street in budget lodging.

The biggest problems I see with the research system include extreme bias towards the academy itself rather than merit-based research (they fund themselves as part of the guild's unspoken rules), the state funded universities export most of the IP and IC to leading companies--much of which doesn't benefit the state citizens at all, a great many are gaining enormous wealth from this broken system--including some very highly paid administrators as well as start fundable researchers, majority of investment isn't an investment at all but rather a political statement supporting ideology, and of course the bureaucracy cited has become ludicrous. An example, I recently met with two of the leading researchers with institutions that are among top funded by fed R&D in their disciplines. They started their institutions roughly two and three decades ago, one of which said when he started he spent 10% of his time on administration and 90% on research. Today it has almost reversed- 15% to 85%. The other was so frustrated by the system the individual just wanted to discuss immediate plans for retirement.

Here in NM we have an extreme example, but it's also among the most pure cases to study. Despite ever increased basic R&D from primarily federal government sources--ranging now above $5 bn per year and representing most of the highly paid persons living in NM, and a mandate by the institutions and most of the agencies funding to grow NM tech businesses, the state has never enjoyed a single major business success from the vast federal investment in these institutions. Yes there have been many small successes for researchers, institutions, and investors, but like most of the flyover states they are acquired by the G500 or are forced to relocate from funding in major markets that have regional mandates as part of the partnership agreements in VC firms. The result is we have what has been described by one leading researcher as one of the most polar society's and economies in the world, with federally funded institutions at the top of the hierarchy and those they are charged with serving at the bottom.

Our friends at the Academy are not the appropriate source to be reporting on this as they are obviously extremely conflicted emotionally, financially, and in every other sense. The system needs to be completely re-invented, but given the power of this lobby in D.C. with corrupted political system I fear it's unlikely at best.

This is why we self-funded Kyield btw. It would almost certainly not have survived and matured in any other model.

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