The NSF Engineering Research Centers and the University–Industry Research Revolution: A Brief History Featuring an Interview with Erich Bloch

The NSF engineering research centers (ERC) program served notice of a sea change in university research funding and institutional designs, representing a transition from department-based, principle investigator-oriented university science to a new center-based model encouraging universities to work with industry and to work beyond the strictures of academic disciplines. In our view, the past three decades of U.S. science and technology policy have not seen an institutional change of greater importance. This paper begins with a brief history of the ERC program, including discussion of the program’s origins, goals and research foci, growth, and influence as a model for other science center programs in the U.S. and abroad. Our “primary data” include an interview with Erich Bloch, former NSF director who was one of the chief architects and advocates for the ERC program. Because of the historical importance of this interview, we present the entire interview with the original material largely unaltered. We conclude with discussion of the managerial challenges that ERCs face within the context of traditional university structures.     

Ownership versus competition: Efficiency in public enterprise

Certainly the introduction of product market competition into potentially competitive or, at least contestable, markets can improve performance. To take just one example, Morrison and Whinston (1986, 1986) estimate that even in the imperfectly contestable U.S. airline industry, the annual U.S. welfare gains from deregulation have been around $6 billion.But this paper argues, and further buttresses empirically, that ownership also matters and matters a lot. This does not necessarily imply that private ownership is always preferable to public ownership. PCs also engage in rent-seeking where possible, but they will try to maximize realizable rents by (relatively) keeping down production costs. Of course, where there are massive economies of scale and scope, high entry barriers, or externalities, public ownership may be preferred. (see Vickers and Yarrow, 1988).     

Costs and benefits through bureaucratic lenses: Example of a highway project

This article characterizes the perceptions of government bureaucrats about cost-benefit analysis (CBA). The observations arise after working with government officials on various projects and leading many executive seminars for government employees over the last decade on the principles and practice of CBA. Government employees tend to adopt one of three conceptual lenses: Guardians, Spenders, and Analysts. These perspectives differ sharply from one another, resulting in completely different meanings to the words benefits and costs. The orientation of Guardians is to “revenue-expenditure” analysis, while Spenders are oriented to “constituency-support” analysis. Analysts are oriented to standard CBA. The differences in perspectives are illustrated using an ex ante CBA of a proposed toll highway project.