Terman Award Acceptance Speech
Prof. Theodore S. Rappaport, Nov. 7, 2002Frontiers in Education Conference, Boston, MA
"The Faculty Member as an Entrepreneur"
I. Introduction
I am most grateful and feel very honored to receive the 2002 Frederick E. Terman Award. As an educator, it is most humbling to be considered for an award that is dedicated to the life and example of Professor Terman, and I shall never forget this day for as long as I live. I am most grateful to Wayne Johnson, Rob Dowzon, Dan Marcek, and Rob Reed of the Hewlett-Packard Company for sponsoring this award, the Terman Award selection committee, my nominator, Prof. Jerry Gibson of University of California Santa Barbara, and the students and faculty that supported his nomination. Also, I wish to thank my publishers at Prentice-Hall: my friend Bernard Goodwin of the Professional and Technical Reference (PTR) Division, and Tom Robbins of the Academic Division. Of course, most of our spouses make sacrifices for us to pursue our profession of passion, and I am most grateful for the loving support of my wife, Brenda, throughout my career.
As I began graduate school, I recall reading Professor Terman's obituary and being astounded at what he had accomplished in his career. Most interesting to me was how he had, as a university professor, been a gifted teacher and a prolific author, an inspiring encourager, and a facilitator and matchmaker for talent, allowing his students and the faculty around him to succeed in transforming Stanford University from a regional university to a world-class institution with major high-tech companies in its back yard. Today, there are over 800 companies in Silicon Valley that can trace their roots to Stanford and the technical community that Professor Terman built.
Terman showed that academia is a truly remarkable place, where you can change the world. In addition to being able to see young people grow and do great things throughout their careers, we as academicians have the ability to make an impact, to "bend the world" through new thinking and collaborations. I saw this first hand at Purdue University, when, as a graduate student, I had the good fortune of being one of the first students involved with a new, interdisciplinary research center. In the early 1980's, America's economy was faltering, due in part to manufacturing capabilities that were far inferior to just-in-time methods perfected in Japan. To rectify the national engineering crisis, the National Science Foundation initiated the concept of Engineering Research Centers (ERCs), large academic centers that had the charter of inspiring new models for education and research to solve problems of national importance. I was in on the "ground floor" during the formation of Purdue's ERC on Intelligent Manufacturing Systems. When President Ronald Reagan flew to West Lafayette, IN to present the ERC award to Professor James Solberg and Dean Henry Yang, and stood a few feet from my master's thesis project during a laboratory tour, I knew then that I wanted to be a professor. It was incredible to see the birth of a major research center that changed our world at Purdue in just a few years! I will always be grateful for the experience of the ERC at Purdue, and for the faculty that created and implemented that vision. As a Ph.D. student there, I was able to pursue the research topic of wideband wireless communications in factory buildings, well before the Internet and wireless were part of our daily lives. Through the interdisciplinary experiences of the ERC, which involved dozens of faculty and students from all walks of engineering, and dozens of sponsoring company constituents, we students were inspired to create a work product greater than the sum of the parts. Many of us would spend time visioning what our industry would look like 10 or 20 years later, and we would debate the potential spin-off companies that could come from our research. Many of us, in fact, went on to start companies or pursue successful careers in academia. As I think about my personal experiences as a student, I have to believe that my colleagues and I at Purdue were exposed to a sampling of what it might have been like at Stanford, working with Prof. Terman as he pursued his vision for his university and his region of the country.
In 1988, I started as a professor at Virginia Tech, at a time when the cellular telephone industry was still in its infancy, and when agencies such as DARPA and NSF were funding very little, if any, wireless communications research. In fact, there were fewer than one million cellphone subscribers worldwide in 1988, and cellular service was not even installed in Blacksburg VA at that time. Today, there are more than 140 million cellphone subscribers in the US and close to 1 billion on the planet, all paying a monthly subscription for a service they don't expect to work very well! When I asked a freshman engineering class at University of Texas last month what other businesses could they think of that charge customers for service that is horribly intermittent, they quickly responded with two more - (a) software; and (b) internet connectivity! Times have changed remarkably since 1988, before cellular phones, the Internet, and the hand-held computer -- today we are happy to pay for access and mobility, even though it doesn't work all the time and it still has a long way to go. I encourage my students often with the observation that as long as there are dropped cell phone calls, wireless researchers have job security.
Academia, with its inherent respect for the creative process, is one of the few places where people can be inspired and empowered to initiate change that can have a global impact in a very rapid manner. In my career, I have come to know many faculty members who have experienced, as I have, the dramatically positive impact that an entrepreneurial academic approach provides to students, the corporate sponsors, the university, and the surrounding community. While not every faculty member should or could be an entrepreneur, nor should any faculty member be pressured to embrace an entrepreneurial approach in conducting their own faculty activities, I contend that it is in the best interest of our profession, and is, in fact, an evolving necessity for engineering programs of the 21st century, to foster an attitude and culture on campus that includes and openly encourages, as part of the creative process, the ability for our students and faculty to engage in entrepreneurial activities which bring corporate involvement, institutional and private investment, wealth creation, and a track-record of commercial innovation to the university, just as Terman was able to do at Stanford.
Terman's approach to academia was to build corporate constituencies, and to provide opportunities for his students to meet the needs of the constituencies, all the while striving for excellence. Terman, in a sense, really worked as the quintessential entrepreneur, inspiring his colleagues and students to think big, while thinking boldly himself by setting ambitious goals for his institution and his region of the country, and then enlisting others to help support the execution of the grand vision. Terman's textbooks influenced electrical engineering curricula throughout the world, and demonstrated his technical expertise and leadership. Yet, at the same time, he served as an advisor to many of the local companies which stemmed from Stanford, often helping them identify talented graduates or opportunities for business growth. In this process, Terman did not compromise the academic freedom of his students or faculty colleagues, nor did he dampen their abilities to pursue great discoveries and launch businesses, which led to the amazing result of Silicon Valley. When you surround yourself with great people and empower them - great things can and generally do happen, and Terman showed this time and time again.
II. The professor as an entrepreneur - a requirement for growth
It is probably fair to say that Terman was the leading promoter of academic spin-offs of his age. Not only did he encourage William Hewlett and David Packard to launch their famous test equipment company, but he also worked with the Varian brothers when they launched their manufacturing company, and he cultivated friendships with numerous major business leaders in California. Terman saw that a vital ingredient for rapidly transforming Stanford from a regional university to a major national leader was to create an economic landscape where his best students could stay in the region after graduation, to work and build high-tech companies, which would further generate other successful local business that could employ still more Stanford graduates. The participation of local business leaders was vital for the implementation of his vision.
Ironically, Terman's deep appreciation for, and involvement with, the local industries he helped spawn was probably the most important factor that led Stanford to preeminence as a research university. While federal funding certainly was a catalyst for Stanford's rise to prominence after WW II, it was the vast number of industrial spin-offs and the immense business leadership of the local industry that contributed to the great growth of talent and wealth creation in Silicon Valley. A great dividend has been returned to Stanford and the region ever since.
When one looks at Terman's impact at Stanford and considers that 60 years ago, Silicon Valley was nothing more than hundreds of acres of fruit trees, one could argue that the faculty member of the future, or at least the university administrators who make the faculty hiring decisions and who set the vision of the university, must see themselves as much, or perhaps more so, as entrepreneurial-minded economic development specialists than classical educators. With shrinking public funding for research and education, and greater competition to attract and retain top faculty and benefactors, it seems clear that it is incumbent upon us to expose our students to the experiences which are vital for developing skill-sets needed to succeed as an entrepreneur, so that we might, like Terman, keep our best and brightest close to home to help spawn economic development that can foster perpetual and renewed resources for the educational enterprise around the local engineering campus.
Consider today's rural public engineering program which faces problems similar to those that Terman faced 60 years earlier. In remote locations of the US, there is a huge need to create companies and local jobs that could enhance the community and the local university. This economic development approach is increasingly important, as such universities strive to maintain quality engineering programs in the face of decreasing state and federal support, few alternative employers, and poor airport access. In remote regions of the country, it is the local university that has the greatest ability, and perhaps the mandate, to bring about the industry growth which leads to jobs, improved transportation services, and an increasingly attractive business environment around its campus gates. Such growth is vital to attract future faculty, graduate students, and professional workers that can build a technical community. It would be fair to say that Terman was an entrepreneurial faculty member who was an extraordinary economic developer, and it is not unthinkable to view the future university professor or administrator as much as an economic developer as a traditional teacher or researcher.
Today, more than ever, academia needs to adopt and embrace Terman's way of thinking, throughout all aspects of our operations. Leaders in higher education are faced with an unprecedented economic landscape that is becoming increasingly difficult on many fronts, and the idea of aggressively cultivating local industrial support and interaction that can be built around local engineering programs is not only technically sound, but it also makes good business sense. Today, state budgets are under siege throughout the nation, and public universities, which typically rely on state support for organic growth, now face record shortfalls. In most states, public universities now receive less than 20% of their operating budgets from state allocations, and this is likely to decrease further with time. More and more, engineering programs are relying upon well-heeled benefactors or corporate gifts to fill the gap in revenues due to shrinking state support.
In addition to decreasing operational budgets, engineering programs are continually battling the retirement issue. Today, the average age of tenured engineering faculty in the US is probably in the mid to late 50's (down from the early 60's of a few years ago), meaning that as many as one-half to two-thirds of today's faculty will be eligible for retirement in 7 to 10 years. At the same time, the best, most qualified Ph.D.s are not applying for open faculty positions, as industrial opportunities provide more financial reward and a more tangible, clear-cut promotion structure than the university tenure system. However, encouragement and active participation by local industry makes an academic career choice much more enticing to a fresh-out Ph.D who may be straddling the fence between academia and industry, and it will be increasingly vital to have this partnership with industry as we strive to fill our universities with the best young professors. In fact, as universities vie for the best recruits, an active industry support base that helps with the recruiting mission of the college is an extremely powerful tool to attract top young faculty. For our profession to succeed in the new information age, we must expose our students and faculty to the merits of an entrepreneurial approach, and the tangible benefits such an approach can provide for all of the constituents of a university.
Today's engineering students are exposed, more and more, to team-based work and teambuilding exercises in the engineering curriculum, and this is a positive and necessary skill-set for creating entrepreneurial students and the future professoriate. We accomplish much more when we work as a group, together for the common good, than if we pursue our own self-interests above all other objectives. "A high tide rises all ships" is a common term I heard often from venture capitalists as they discussed the ever-increasing stock market of the late 1990's, and it certainly applies to the students and faculty in successful engineering programs as it does in business. To be an effective team, however, communications skills (written and aural) and the power of persuasion become essential - and this is an area that we must demand our students to excel in. To be an entrepreneur, it is not sufficient to merely do good research or solve meaningful problems. More importantly, I contend, we must instill in our students the passion and capabilities of communicating the persuasive argument that allows our graduates to secure resources and to instill a vision and passion in others. The ability to listen, integrate and form compromise solutions that meet the needs of many constituencies while meeting individual and team goals is a vital ingredient that is part of the communication skill-set that we must teach our engineering students.
Along with the power of persuasion, another skill, that of scavenging, is essential for future entrepreneurial-minded engineers, and our students learn from our example. We must instill in our students the respect for the value of resources, and help them gain the skills to garner resources from many different sources, in many different ways. The ability to barter and procure resources of many kinds, using many different methods, is extremely important for engineers today, especially following the dot-com implosion.
Perhaps most difficult, yet vital, for creating engineering excellence and equipping entrepreneurial engineers of the future, are the areas of intuition, trust, and ethics. Great engineering and entrepreneurial success often comes from great intuition, where large-scale problems can be envisioned intuitively, and then solved in exacting detail later. The tools we use to teach intuition continue to involve more computer-based, graphical methods, as the car engine and radio circuits of past decades become sub-miniaturized, and as students increasingly lack exposure to practical things like amateur radio and machine shop. It is intuition that often leads to great breakthroughs, and is critical for forming the basis of the most powerful and persuasive teaching methods. As educators, we must instill in our students the skills of intuitive thinking and experimentation -- the more we can expose our students to intuitive, big-picture thinking in the curriculum, the better.
Trust, ethics, and integrity are difficult, if not impossible, to teach, but academic programs must foster a culture where trust is built and earned, and high integrity, ethical behavior is expected and encouraged. An "all in this together" atmosphere, similar to a tight-knit team or start-up company, can help weed out undesired behavior and reinforce required ethical conduct. This must be constantly communicated, monitored, and corrective action taken when necessary. These issues relate to the characters of individuals in the program, and must be experienced and grown over time - yet trust and ethics remain the most important ingredients to building a successful team and accomplishing something much greater than the sum of the parts. Ethical conduct is critical for our profession, as society counts on our ability to engineer products that will not fail and that are ethically and properly crafted to compliance standards.
With so many cultures and backgrounds on today's campuses, and so many self-interests or competing visions that often become battlegrounds in an environment of shrinking resources in a university environment, the issue of trust and ethics is now more important than ever, both in the classroom and in faculty meetings. I am sure we all have witnessed the glorious accomplishments of an organization when trust is maintained and nurtured through ethical behavior and candid, honest discourse, and the destructive forces that are unleashed when trust is eroded or lost. We need to have ways of measuring, fostering, and building these desired intrinsic characteristics, and amplifying them within all aspects of the university culture.
By involving local industry and successful entrepreneurs directly with our students and faculty, and involving local industry and the business community in the university's efforts to build and keep accountable in the areas of trust-building and ethics, we gain a valuable external review system that can help advise us, and monitor and add value to our efforts. At the same time, we allow our students and faculty, and the outside local business community to participate directly as beneficiaries of the overall performance of the department or college, just like shareholders of a start-up company. We need local industry to help us maintain transparency, and to create an environment where all share in the upside performance fostered by a culture of excellence and expectancy, rather than a "zero-sum game" culture.
III. How can we make engineering programs more entrepreneurial?
Numerous engineering programs have cultivated highly successful relationships that have spawned local industries that continue to bring continually renewed resources to campus. Stanford, to date, is probably the most successful university to do so, thanks to Terman's foresight. Recent spin-offs such as Rambus, Yahoo, E-bay, and Aetheros are just a few examples of recent Stanford success stories. Other companies, such as National Instruments (University of Texas), Broadcom (UCLA), FORE Systems (Carnegie Mellon), Scientific Atlanta (Georgia Tech), Dell Computers (University of Texas), Bose (MIT), and Pritzker and Associates (Purdue) can all trace their roots to local universities, and have since been active participants in the growth of the engineering programs at their mother campuses. The resources available for further investments and the entrepreneurial capabilities of those same communities have grown substantially, and at a rapid rate, as a result of the successful business growth.
While some faculty may scoff at the thought of involving entrepreneurs and industrial leaders directly into the teaching and research missions of the university, the pervious arguments should demonstrate the value of having such resources close to campus. If one embraces the idea that public engineering programs must foster a culture that can promote local job growth and local wealth creation, just as Terman was able to do at Stanford, there are many things that can be done with relative ease, although it requires some novel relationship-building on campus and some new ways of thinking.
Already, many universities are taking aggressive actions to foster a culture of spin-off successes. At Princeton University, start-up companies are actively encouraged by the administration, and the university receives equity in exchange for a partnership with the faculty and student entrepreneurs. At Purdue University, a new program brings local and state venture funding agents to the campus on a regular basis to help spawn university spin-outs at a local research park. At Virginia Tech, an expanding Corporate Research Center provides a high-tech haven for local spin-off companies, and just recently, venture investors have been given offices and access to intellectual property disclosures on campus. At the University of California, Berkeley, UCLA, and the University of Texas at Austin, there are frequent workshops that expose engineering students and faculty to how businesses are launched, and a number of the region's successful entrepreneurs and venture capitalists make frequent visits to campus.
Many of these universities had to review and rewrite university regulations for faculty and student participation in companies. They undertook the process of crafting and ratifying university governance guidelines that allow for managing potential conflicts of interest, rather than prohibiting such conflicts. Generally, participating faculty and student entrepreneurs must disclose their external engagements and agree to reasonable limits of time for their participation in these enterprises, while receiving the university's open support for such activities. Some universities are even considering counting entrepreneurial pursuits as a positive activity in a professor's annual report, and most enlightened universities grant periods of leave for entrepreneurial faculty who are early in the start-up process.
The vision and commitment for the entrepreneurial culture of a university must come from the top-down, and must be an unwavering and active mandate, so that a change in administrative leadership or a personality conflict anywhere within the university does not diminish or dilute the focus of the entrepreneurial mandate. At today's leading entrepreneurial universities, it is commonplace for the Dean of Engineering or a department head to serve as a technical or business advisor on a start-up founded by faculty entrepreneurs. In fact, at University of Maryland and UCLA, electrical engineering department heads have successfully founded high-tech companies with the full and public blessing of the university administration.
Another way for engineering programs to become entrepreneurial-minded is to actively involve the successful alumni in the activities of the college. Having an advisory committee is necessary but not sufficient. Introducing motivated faculty and students to key alumni, and building a culture which aggressively brings the alumni on campus to help provide advice, input, and vision for the faculty and students is crucial. The basics of human-nature dictate "you cannot like what you do not know." Involving the acclaimed alumni with the detailed operations of the appropriate faculty and students will certainly lead to energy and ideas for the classroom, as well as spin-out activities that hold promise. This also brings a needed constituent, the successful business alumni, into the workings of the engineering program through meaningful personal involvement, just as Terman was able to do in the creation of Silicon Valley.
Other ways that universities can enlist alumni in their entrepreneurial pursuits is to solicit their active involvement through introductions to influential investors and corporate executives. Entrepreneurial alumni would likely be willing to exert their personal influence to help the meritorious entrepreneurial pursuits of their alma mater. In matters of recruiting faculty, finding external venture capital or angel investments, serving on boards of start-ups, and attracting executive talent, particularly in remote locations, these key university benefactors could provide huge benefit and influence, and they must be involved if the entrepreneurial mission is to be accomplished. The alumni office can identify graduates who have achieved business success and who might be interested in relocating back to their alma-mater. Since most professors are able to start, but not successfully grow, businesses while retaining their faculty position, proven alumni, serving as " entrepreneurs-in-residence" on campus, can jump-start the university's entrepreneurial activities and potentially build a legacy of successes.
At most public universities, hundreds of millions of dollars of endowment funding are often invested in a wide range of vehicles, some of which include venture capital (VC) investments. Many leading VC's attempt to secure investments from university endowments and this relationship provides a valuable window of opportunity for universities wishing to launch successful companies. When providing monies for investment, the participating university has an opportunity to develop a personal relationship with the VC, and from this relationship, it becomes possible to involve the VC, as an advisor, a constituent, and perhaps as an investor, in promising university start-up activities. Equally as important, the relationship provides the VC with an opportunity to become acquainted with faculty having areas of expertise vital for the VC's investments, which can lead to opportunities for faculty participation as an advisor and sometimes even as an investor in VC-led businesses. Such activities make an academic career more enticing, and create a more entrepreneurial faculty that can enhance the university's overall efforts.
IV. Conclusion
A number of engineering programs have created, or are beginning to create, an entrepreneurial culture on campus. This type of culture will be increasingly important to the academic process, and is vital for public engineering programs which face increasingly large budget shortfalls and intense competition in attracting talented faculty and students. Particularly for those programs located in remote areas, the ability to build local companies that can create wealth and become involved on campus will be key to maintaining academic quality. Throughout academia, entrepreneurial faculty have made a huge positive impact on their institutions and their region, and universities need to recognize, embrace, and foster these kinds of activities, just as Terman was able to do sixty years ago, when Stanford began the transformation from a regional program to Silicon Valley - a world leader in engineering.
