Keynote Address at the Massachusetts Biotechnology Council Annual Meeting

Thursday, May 26, 2005

It is a pleasure to be here. I am grateful to Tom Finneran for offering me the chance to join you this morning. And I'm glad to have this occasion to salute the Massachusetts Biotechnology Council for its important work over the last twenty years to promote the development of new science, medicines, and technology. By strengthening our regional biotechnology industry, the Council benefits people worldwide.

And I really do mean, “worldwide.” Because if there's one undeniable reality about the economy today, it's globalization. Earlier this month, I had the good fortune to hear Thomas Friedman talk about his new book, The World is Flat . His remarks were a powerful reminder that our own innovation economy must accelerate if the United States is to compete effectively in the increasingly fast-paced and globally interconnected world.

Globalization obviously makes for some new challenges. But the good news is that, today, ideas and products generated in Massachusetts have the potential to improve health and the quality of life around the world more than they ever have before. To realize that promise, however, we'll have to work together – and universities, other not-for-profits, business, and government all have a role to play.

Before I begin, I'd like to emphasize that I very much look forward to hearing your thoughts, after my remarks today and in the coming months. Occasions like this provide a wonderful opportunity for us to strengthen the connections that support productive collaborations.

The Innovation Economy and MIT
Now, I hardly need to remind this audience that technology has been the most important single driver of economic growth since World War II. Robert Solow, one of MIT's Nobel Prize winners in economics, estimated that more than 50 percent of America 's economic growth over the last sixty years derives directly from technological innovation.

Today, universities play a vital role in fostering innovation. That was not true before the Civil War, when science had essentially no impact on the curriculum most college students followed. MIT was founded in response to this situation. Our first President, William Barton Rogers, envisioned a new kind of academic institution – one that could, as he put it, “serve the times and the nation's needs.”

His principles have served us well, and as a result, MIT has been an engine of innovation. MIT faculty and researchers have pioneered the development of countless new technologies, a nd we educate students in entrepreneurship, innovation, and leadership, through activities like the Deshpande Center, the Venture Mentoring Service, and countless courses and programs at the MIT Sloan School. As a result, our graduates, faculty, and students have had a tremendous economic impact – founding literally thousands of companies employing, at last count, well over 1 million people.

At the same time, our scientists explore the great unanswered questions about the human and physical universe, because we know that the answers to these questions will provide insight to the world's problems in ways we cannot yet predict. And we have a strong tradition of national service.

The Conditions for Success
MIT exemplifies the contributions that universities have made to technological development, economic growth, and national security over the last few decades. While we can justifiably claim to have had a uniquely powerful impact, many other private and public universities have made their own important contributions.

Our accomplishments have depended on some fundamental enabling conditions. Three have been especially critical: First, the foundation laid by public education; second, creative public investment; and, third, openness. Today, all three of these conditions are being challenged.

First: Public education – and, to be unabashedly specific, mathematic and scientific literacy.

When I was growing up – in the shadow of Sputnik – national policy, building on the enthusiasm of children, led to strong K-12 education in math and science. Today, we face a very different situation. In the year 2000, only 18 percent of American 12th-graders were working solidly at grade level in science, and only 16 percent in math.

Now, I hasten to reassure you that MIT still attracts truly exceptional students, and about 85 percent of our seniors graduate with degrees in science and engineering. But we are not typical. Across the United States, only about 17 percent of bachelors' degrees are awarded in science and engineering. In Singapore, that figure is 68 percent.

To keep the pipeline of the innovation economy flowing, American children have to get the message that science and math are exciting and important. And this requires that they get first-rate teaching in these fields. Universities can help. I do not believe that we are qualified to take on the core work of K-12 education. If it were easy for outsiders to solve the problems in our schools, it would have happened already. But there is much that universities can do.

At MIT, we have many successful examples of interaction with local schools. And our summer programs offer students from around the country – as well as area teachers –  opportunities for advanced exploration in science and technology. And just as universities have a role to play in strengthening K-12 education in math and science, so does industry. That's why the Council's work with MassBioEd is so important.

The second factor that was absolutely critical in building the innovation economy in the years after World War II was public investment in research and education. The federal government – following recommendations by MIT's Vannevar Bush – adopted a science policy that invested its research dollars in work at the nation's colleges and universities. At the same time, federal programs beginning with the G.I. Bill, and state investments in public universities, made it easier for students from lower- and middle-income groups to go to college.

These national investments created new knowledge, a more educated workforce, and new technologies and products. The return on that investment was enormous. But we have not followed through on that very effective investment strategy. Over the last four decades, the federal investment in research and development, as a percentage of GDP, has declined by over half – from almost 2 percent of GDP in the mid-1960s to about three-quarters of 1 percent today. And, just as significantly, it is becoming more difficult for students from lower and middle income groups to go to college. Nominally flat federal and state budgets for scholarship aid are really declining, and constraints on state support for public universities compound the problem.

The generation of new knowledge and the creation of an educated workforce are both essential to innovation and economic growth, and neither of them is possible without public investment. America 's system of higher education and research has been an engine of economic growth and individual opportunity. It needs the fuel of investments to run.

The third essential prerequisite for universities' contribution to an innovation economy is openness.

We must keep higher education open to the best and brightest young people in America, because it will take the talents of our whole population to sustain the innovation economy. At its best, American higher education is a meritocracy. At MIT, we welcome all those with the ability and ambition to make the most of what we have to offer. This is why we admit students without regard to their ability to pay, and award financial aid to our students only on the basis of their financial need. This is the best way of ensuring that educational opportunity is distributed fairly.

And while keeping education open to all Americans, we also need to continue to attract the best and brightest from around the world. Our universities and our industries have benefited enormously from the talents and skills of immigrants. Just one example from MIT: Of the 20 department heads and lab directors in our School of Engineering – widely regarded as the finest in America – fully three-quarters were born outside the United States.

Unfortunately, international students and scholars now find it difficult to enter the United States. As a result, our country is losing many excellent students. According to the Council of Graduate Schools, the number of students from overseas applying to American graduate schools dropped more than 30 percent over the last two years. (Here again, MIT is fortunate to be an exception to the general trends. Our graduate applications from international students have held steady over the same period.)

MIT strongly supports appropriate measures to ensure our national security, but we must make sure that they are no more burdensome than they need to be. Fortunately, the federal government, in consultation with the university community, has worked to ease some of the most burdensome restrictions. But we are still concerned about the long-term impact on American higher education.

If we are to address successfully these three challenges – K-12 education, public investment, and openness – we will have to bring together universities, the private sector, and government. If we can do that, we will be laying the groundwork for a new era of innovation and economic growth.

Collaboration – A Vision for the Future
I believe that this kind of collaboration across intellectual and institutional boundaries will be a condition for success in the next phase of the innovation economy. Science and engineering themselves are showing us the way. The most exciting new areas of teaching and research draw together specialists from multiple disciplines. In pooling their expertise, they create entirely new fields.

As you all know, this generation is bearing witness to a convergence of engineering and the life sciences. This convergence holds the promise of transforming our lives, but it is not unprecedented. In fact, at MIT, we know the precedent very well. Seventy years ago, President Karl Compton insisted that the physical sciences must play a critical role in education and research at MIT. The result was nothing less than a new era in engineering. Today, engineering is making the same kind of fertile connections with the life sciences, and I believe we can expect equally revolutionary results.

At MIT, we are combining our historic strength in engineering and our newer strengths in biology and the brain and cognitive sciences. Geographically and intellectually, we are bringing together our computer scientists and life scientists, our linguists, philosophers, and engineers. And together with the work of colleagues at the Broad and Whitehead Institutes, we are already seeing a torrent of new collaborations, insights, and results emerging from the labs at the intersection of Vassar and Main Streets in Kendall Square.

And this leads me to my next point: That collaborations across institutional boundaries are essential to the innovation economy.

I have been impressed by the volume of collaborative activity between MIT and other area universities, such as the exceptional joint program in Health Sciences and Technology established by MIT and Harvard 35 years ago. Structuring collaboration across departments within one school is a non-trivial task; building collaborations across institutions poses even greater challenges. But MIT will actively foster these collaborations because many of the most important opportunities before us require skills and resources that no single institution can deliver.

The Broad Institute, whose mission is to fulfill the promise of the Human Genome Project for new advances in medicine, is a perfect example. No one institution could have commanded the necessary expertise in molecular biology, genomics, chemistry and chemical biology, computational science, and engineering, together with the necessary breadth and depth in medicine. That is why MIT, Harvard and its affiliated hospitals, and the Whitehead Institute for Biomedical Research joined together in this effort. In its first year, the Broad has assembled a stunning team of scientists, physicians, and engineers who are already providing new insights into diseases and their cures.

I have drawn the circle of collaboration around departments and schools within MIT and then enlarged it to include MIT and our academic and medical colleagues. Of course, I must enlarge the circle further to include the critically important collaborations between the academy and industry. Partnerships between universities and industry benefit both sides. And they benefit society by facilitating the transfer of knowledge from the lab to the marketplace.

While forging creative links between universities and business was one of the founding principles of MIT, this is more important than ever in today's environment, when federal research support is so constrained, and when the opportunity for life-improving technologies is so great. As we look to the future, we all need to think creatively about how we can best work together to sustain the innovation economy by transferring the fruits of university research to society.

Now: A comment on the role of government. I've already mentioned some important public policy issues that affect universities in particular. But of course the impact of government is much broader. Those of you who belong to the MBC are well aware of the myriad ways that government at the federal, state, and local levels can help or hinder economic growth. State governments themselves are increasingly aware of the impact of their decisions; in some cases, they are working aggressively to gain a competitive advantage.

My own hope, is that the academy, industry, and our public officials can work together to make this area the nation's best environment in which to create the next generation of advances in life science . . . because I think that here in Massachusetts we have a unique opportunity to lead the nation and the world.

Biomedical Innovation
Regionally, we benefit from a unique constellation of assets. But we can't take our preeminence for granted. The MBC's Treasurer, Mark Trusheim, has made that point vividly in past presentations – reminding us that Henry Ford moved from 640 Memorial Drive to Detroit, that shoes and textiles moved South, then overseas, that President Johnson moved the NASA Space Center from Kendall Square to Houston, that California and Texas won in minicomputers and workstations, and that only time will tell how offshore operations will affect our IT and telecomm sectors. At MIT, we will do our part to make sure that this process does not repeat itself.

One of our responsibilities is to keep education at MIT relevant to changing intellectual, technological, and business conditions. That's why we have been developing new academic programs in fields such as biological engineering, computational and systems biology, and biomedical enterprise:

This morning, I'd like to highlight one especially important initiative we're launching this summer – one that I think will be of special interest to you. This is our new Center for Biomedical Innovation, known as CBI. The Center will develop ways to move advances in the life sciences from the laboratory to patient care more efficiently and safely. It will build on our special strengths across the sciences, engineering, and management, while also drawing upon expertise from Harvard Medical School. We aim to make CBI a safe harbor where major players across the biomedical spectrum will be able to better appreciate each other's concerns and needs.

The Center's executive director will be Frank Douglas, former executive vice president and chief scientific officer of Aventis. Frank, who is one of the most respected figures in pharmaceutical research, joins a faculty leadership team of co-directors representing Biological Engineering, Biology, Health Sciences and Technology, and Management. Frank himself has been appointed a Professor of the Practice in each of these four academic units.

We're launching CBI because it's clear that there are real changes on the horizon for the industry. The current system just isn't working well anymore. The productivity of large pharmaceutical innovation is declining. We can't predict properly the side effects of new compounds, and we don't have good ways to monitor and assess them once they are in the market. Pricing models, and the focus on blockbuster drugs, are untenable.

CBI will bring together stakeholders with the common objective to find solutions that will transform the industry. The Boston-Cambridge area is uniquely suited to tackle these problems, and we're working to make sure that CBI's research agenda meets real-world needs. The kind of issues CBI may work on include pre- and post-approval safety; redesigning R&D; managing economic, financial, and regulatory risks; and manufacturing and delivery systems.

In many ways, CBI exemplifies what I've been talking about this morning. The issues that the Center will tackle are interdisciplinary in their very nature. Making serious progress will require engineers with expertise in lean manufacturing, health-care economists, computational and systems biologists, and clinicians. And CBI's work will require collaboration across many sectors. That's why we're working to engage not just academics, doctors, biotech, and pharma, but also government regulators and a range of payers. We've been pleased by how positive the response has been to date.

We also think that CBI will be good for the region, by helping the Charles River Basin and Massachusetts retain and grow existing firms in the life sciences sector, and creating new businesses based on the tools, concepts, and technologies developed at the Center. It has the potential to extend the portion of the life sciences value chain located here, and make the area an even more important magnet for key decision makers. And it will strengthen the relationship between basic scientific research, clinical trials, and health-care delivery systems.

I'll just sketch out for you the next steps. In mid-June, we'll be holding a two-day “Stakeholder Summit.” This will bring together key players to begin validating specific topics where CBI research can have a transformational impact. We then expect to make a public launch in late summer, when CBI will hold a major symposium in conjunction with the fourth annual Celebration of Biotechnology in Kendall Square.

The faculty from across MIT and the Harvard Medical School who are involved in planning for CBI are very excited about working together. We believe that by integrating scientific, clinical, economic, and regulatory perspectives, CBI has the potential to transform biomedical innovation.

Since arriving in Cambridge, I have been struck by the tremendous excitement and energy in this area's life sciences sector. New ideas are emerging at an amazing rate in the labs at MIT, at other universities, at our great hospitals, and at biotech and pharmaceutical companies large and small. Now, our collective challenge is to harness those ideas: To make them work for business, for the region, and for consumers, patients, and their families worldwide.

That will take the efforts of all of us in this room, and of many others as well – people on Beacon Hill and in the Longwood medical area, in Harvard Square and at Boston City Hall . But I believe that we will succeed in this effort. Working together, we can build on nearly two centuries of technological innovation to strengthen America's economy and businesses in an increasingly competitive world. I hope that this morning marks the beginning of many fruitful conversations and collaborations.