The good deal: in a world where collaborations between higher education and industry draw criticism, how is it that Marco and Berkeley's Gigascale Center thrive? (Research & Business).

Gary Baldwin gets revved up when he shows off the brilliantly colored tubes of light that line the corridor of Cory Hall on the UC/Berkeley campus, where the Gigascale Silicon Research Center is housed. Though they look like neon lights, they're actually diodes, like those in your watch or calculator. What excites Baldwin is that, while they're as bright as ordinary incandescent tights, they are nearly 10 times more energy efficient.

It was the kind of visionary research that produced these power-saving colored tights that prompted Baldwin to leave Hewlett-Packard after a quarter-century and take a major pay cut to administer the Gigascale Center. At Berkeley, he says, people have a "fire in the belly" about doing this sort of work. The Gigascale Center aspires to revolutionize the science behind the silicon chip.

Yet, since its inception, immodesty has been the hallmark of the semiconductor field. Moore's law--the axiom proposed by Intel's founder, Gordon Moore, that the number of transistors on a chip will double every 18 months--has held up for more than a third of a century. But as transistors shrink in size below 50 nanometers, 1/20,000th the width of a pinhead, electron behavior becomes much harder to regulate. Still, gigascale proportions are essential if engineers are to build the smaller, cheaper, and more powerful semiconductors of the next generation. The goal is to reach gigascale--a billion transistors on a single chip, nearly 25 times more than is contained on Intel's Pentium 4 processor. It's an immodest goal, and nothing less than revolutionary research is needed to achieve it--"a moon shot," in the words of the 2000 Annual Report issued by MARCO--the Microelectronics Advanced Research Corporation.

But what is MARCO? The Gigascale Center, together with similar centers at three other campuses, represents a path-breaking partnership among the federal government, higher education, and Silicon Valley that is MARCO. MARCO links the research branch of the Department of Defense, 22 universities, and some two dozen firms in the semiconductor industry, including such Fortune 500 names as Intel, Motorola, and AMD.

Such collaborations between higher education and industry have gotten a good deal of press in recent years, much of it negative. "The Kept University," the cover story in Atlantic Monthly's March 2000 issue, paints an alarming picture of multimillion-dollar deals that put higher education in thrall to big business. Like scores of stories in the national and international press, "The Kept University" homes in on the $25-million, five year contract between Berkeley's College of Natural Resources and the biotechnology firm Novartis, which includes support for research on genetically engineered crops.

Nevertheless, such collaborations are necessary. Not even the richest university can afford to underwrite major science projects all on its own. Though government still funds the lion's share of research, industry pays an increasing portion of the bill--$2 billion of research money annually to colleges and universities nationwide, including $27.8 million to Berkeley in 2000.

BEHIND MARCO'S CONCEPTION

In the past, the kind of exploratory research now being done at the Gigascale Center was carried out at such storied places as AT&T's Bell Labs and Xerox PARC (Palo Alto Research Center). Yet while these think tanks made great advances--the transistor, the Xerox photocopier, the laser--the companies that fronted the costs often didn't reap the financial benefits. In the 1970s and '80s, cost-conscious managers radically shrunk the labs' budgets, and there was nothing to replace them.

In 1994, Peter Verhofstadt, then chief scientist at the Semiconductor Research Corporation, an industry-wide research group, became concerned that the knowledge needed to create the next generation of semiconductors simply wouldn't be available. Though his organization was ably handling short-term research problems, Verhofstadt believed that leading research universities were better equipped to do large-scale, basic research. At about the same time, the Congressionally created Semiconductor Technology Council, an advisory panel of senior officials from industry and government, was reaching a similar conclusion--that the public and private sectors should jointly fund university-based engineers to do basic research.

Verhofstadt set out to persuade semiconductor manufacturers and their suppliers that it was in their best interests to sign on to this new partnership. Craig Barrett, then chief operating officer and now CEO at Intel, needed no convincing. To kick-start the project, his company voluntarily made an outsized contribution. Verhofstadt also got in touch with his old friend Sonny Maynard, who'd spent 30 years administering microelectronics research for the Department of Defense and five years at McDonnell-Douglas. Maynard, too, was enthusiastic; he called his government contacts to drum up support, including his old employer, DARPA (the Defense Advanced Research Projects Agency). It was the logical government agency to be involved in the deal.

"Since the invention of the stirrup, the military has supported technology research," Maynard points out. "It's good at finding an idea whose time has come and shoving a lot of money at it." And so, by 1997, the idea for MARCO had taken shape--a national network of scientists working in university labs, engaged in long-term research projects that the industry and the federal government would underwrite.

WHY THE GIGASCALE CENTER THRIVES

It was a foregone conclusion that MARCO would look to Berkeley for both ideas and talent. Berkeley's graduate programs in engineering are currently ranked second by U.S. News & World Report, and its semiconductor research is widely regarded as without peer. And when MARCO was still on the drawing boards, says Dean of Engineering Richard Newton, Ph.D. '78, Berkeley's scientists were among the key figures doing the planning.

Yet despite the fact that the Gigascale Center received $7 million in industry money last year (about $2 million more than Novartis gave to the College of Natural Resources) and its corporate funders have at least as great a role in setting its agenda, the deal has gone virtually unnoticed outside a narrow circle of specialists. In part, that is because the Center has managed to avoid some of the risks associated with the Novartis agreement--that the university will depend too heavily on corporate funds or that a single company will have too much control over scientists' research.

By design, the Gigascale Center operates in an environment that minimizes intellectual secrecy. The sponsoring Silicon Valley companies are effectively paying membership dues to join an intellectual club where there are essentially no secrets and where everyone has a chance to learn from everyone else. The deal approximates what in high-tech circles is called "open source," a way of conducting research that has a long and fruitful history.

Take Berkeley's department of electrical engineering, says Newton. Its biggest successes have come from giving things away--most famously UNIX, the operating system upon which the Internet was built. Newton's favorite "giveaway" story concerns a program called SPICE. During the early 1970s, Berkeley's electrical engineers were developing circuit simulators to create a virtual chip that would obey all the rules of a real, physical chip, but at a fraction of the cost of actually building one. Graduate students in a class on circuit simulation devised a program that fit the bill. But because they feared the program might be used by the military, these pacifist students gave it an unappealing acronym: CANCER.

Fairchild Semiconductor secured an exclusive license to CANCER, but soon afterward the professor who launched the project decided to develop a similar program--one that anyone could use--and gave it the friendlier acronym SPICE. While companies could add proprietary material, SPICE's basic code had to remain public. The punch line is that while CANCER died at Fairchild, even today SPICE remains the basis for many circuit simulators.

This story, says Newton, demonstrates the value of keeping inventions in the public domain. This same approach permeates Silicon Valley. In her book Regional Advantage, Berkeley city planning professor Anna Lee Saxenian argues that this is precisely what made Silicon Valley such a success, even as Boston's Route 128 technology corridor, which 20 years ago looked equally promising, wound up collapsing. "Competitors [in Silicon Valley] consulted one another on technical matters with a frequency unheard of in other areas of the country," she writes. And then there is the special relationship that Berkeley's computer scientists and electrical engineers have with the computer industry.

When Newton joined the faculty in 1979, he helped raise nearly $8 million from the industry to enlarge Cory Hall, and the way he went about doing it illustrates the "one hand washes the other" character of Berkeley's ties to Silicon Valley. When the Digital Equipment Corporation (DEC), then one of the big computer makers, requested that Newton rewrite some source code, he didn't ask to be paid. Instead, he suggested that the firm donate some of its new minicomputers to the campus. Later, when Newton was raising money for the Cory Hall expansion, he went back to DEC. "The implication was, `I sort of think you owe us,'" he says. DEC's response? "Absolutely no problem." They appreciated what Berkeley had done for them and were happy to contribute.

Newton himself was Berkeley's first Ph.D. student whose studies were entirely funded by the computer industry, and the experience shaped his view of university-industry collaboration. He's no traditionalist in his beliefs about the sanctity of the academy. Nor is he adverse to making money--he's a millionaire several times over because of startups with which he's been associated. Newton believes that the purpose of science is to "maximize impact on the world," and so he is as committed to working with industry as he is to academic openness--a world without intellectual borders. And that's why he was excited by the chance to head the Gigascale Center.

THE WIN-WIN-WIN

Like most truly good deals, this arrangement is one from which all the parties potentially stand to benefit--Berkeley, the Defense Department, and the semiconductor industry. The university gets money to underwrite the research its scientists want to do anyway. As well, the campus can draw on the prodigious talents of nearly 150 researchers who have signed on for the rare chance to work collaboratively on a sky's-the-limit project. For its part, the semiconductor industry is being tutored by some of the smartest engineers in the country. And the Defense Department is betting that the results of the research, though generic and not classified, will be important in designing the next generation's instruments of war.

One reason why the Gigascale Center has managed to avoid the public scrutiny felt by the Novartis deal is that biotech and high tech are fundamentally different. The Novartis deal caused controversy primarily because it demanded that Berkeley researchers sign confidentiality agreements. In academic life, to keep secrets is to invite controversy; but money in biotech is made from secrets.

In the semiconductor industry, by contrast, nimbleness matters more than ownership. Though inventions do get patented, patents rarely generate much revenue. A new chip may use hundreds of patents, and if chipmakers had to license each one, they would never get anything else done. So most firms in the industry have cross-licensing agreements--You let me use your patents, I let you use mine. Besides, the technology changes so quickly that no single patent matters for very long.

Because of such fundamental differences, the Gigascale model can't simply be cut and pasted onto other kinds of university-corporate deals. But key elements can be appropriated by other Big Science projects. Paul Gray, formerly the dean of engineering and now Berkeley's executive vice chancellor, points to the value of having multiple sponsors for big research investigations. Not only does this prevent any one funder from exerting too much power, he says, but when the going gets rough for one of the sponsors, another can always step in.

RIDING THE ECONOMIC DOWNTURN

The current economic downturn has been a real test for this experiment. Companies' balance sheets mutate faster than higher education's research priorities, and the university that lives by the rules of the market, risks dying by those same rules. The semiconductor industry has been hard hit by the present recession, and MARCO has felt the pain. The plan had been to open six "big think" research centers on the Gigascale Center model, but for now, that number has been reduced to four. Companies that supply parts to the semiconductor manufacturers initially paid a quarter of the Center's budget, but with no cash to spare on industry's dreams of the future, many have dropped out, and so have several of the big manufacturers themselves. Consequently, while these firms can still use what's generated in the Berkeley labs, they can no longer participate in the researchers' salons. That has caused some hard feelings as, reluctantly, the other members of the Semiconductor Industry Association have taken up some of the slack.

The biotech industry has recently suffered similar financial setbacks. Yet because only a single company, Novartis, is party to the deal with the university, the campus will directly feel the pain. The division of Novartis that made the deal has since morphed into a leading agribusiness, Syngenta. That firm has taken a PR hit, but hasn't seen the blockbuster products it hoped would result from its generous funding. The market rules--and without a boost to its bottom line, it seems unlikely that Syngenta will renew the contract.

But the strength of the Gigascale arrangement is that it is truly diversified. When the project was in trouble, the Pentagon stepped in and upped its financial contribution. That enables the Center to operate at full tilt while its original backers recover economically and new backers are recruited. If government hadn't reasserted its historic role in underwriting scientific research, then Gary Baldwin might soon be looking for a new job.

The greatest strength of the Gigascale approach, according to Gray, has less to do with who pays for the research, than with the high-voltage community of learning that has been created. The Center gets researchers from many universities "out of their silos" and working together. Those who planned the Center are betting that this extraordinary commitment to collaboration will encourage an intellectual liveliness that characterizes academic life at its best--that this is the best way to achieve the "moon shot" they are hoping for. If they're right, they'll fulfill Rich Newton's dream to "maximize impact on the world."

David Kirp is professor of Public Policy at the Goldman School of Public Policy at Berkeley. A longer version of this article will appear in his book, Higher Education Goes to Market, which will be published by Harvard University Press next year. Elizabeth Popp Berman is a Ph.D. candidate in the Berkeley Sociology department.