One in an occasional series of essays written by faculty members in their areas of academic expertise
At the turn of the millennium, Stanford finds itself, poised as it is at the foot of the dot-com rainbow, in an ambivalent situation. On the one hand, the endowment, rising on the tide of the "new economy," has gone from $4.5 billion in 1998 to $6.0 billion in 1999. On the other hand, costs are rising alarmingly. From the $20 million per year or so losses to Stanford Hospital in the UCSF-Stanford merger debacle, to the impossible growth in the costs of housing in the area leading to the need for a massive building program of graduate housing on campus and for substantial increases in faculty housing assistance, to the debt service and maintenance costs for Stanford's infrastructure and building renewal program, we are facing quite severe budgetary problems.
Perhaps the most troubling concern is the way the dot-com goldrush is draining away the pool of top talent who previously would have embarked on academic careers. This is perhaps too new a phenomenon to have generated reliable statistics, but anecdotal evidence abounds. It is just those kinds of people who have the drive to build programs so important to the renewal of the university's faculty lifeblood who are being attracted away by the seemingly infinite venture capital of the current dot-com era.
As chronicled in the 1997 book Challenges to Research Universities by Roger Noll and colleagues, federal funding for university science and engineering research has been steadily eroding since the end of the Cold War. Despite recent increases in National Institutes of Health funding and some hope for increases in National Science Foundation (NSF) funding, this downward trend is likely to continue. In this context Stanford's endowment, when measured on a per faculty-capita basis, seems quite respectable, at about 12 percent below that of MIT. Indeed, Gerhard Casper's Stanford Graduate Fellowships initiative provides a heartening step in compensating for eroding federal support. However, when Stanford's endowment level is compared to that at Harvard, where it is nearly a factor 2 smaller on a per capita basis, or to Princeton, where it is a whopping factor 2.75 per capita smaller, it is clear that the competition is intense.
Traditionally, places like Stanford and MIT have remained competitive in the face of superior endowment at the other leading schools by the entrepreneurial spirit. (Stanford faculty used to be referred to affectionately as "robber barons" by NSF staffers.) In many ways both Stanford and MIT provided the seeds for the new information-based economy, and this role has served them well in the intervening years. But this is becoming increasingly difficult at Stanford in the face of the dot-com environmental pressures. It is for precisely this reason that it is so important to try to attract and retain members of the faculty who will be the entrepreneurial leaders for the coming decades.
It will require an enormous act of collective will on the part of the Stanford trustees and administration to overcome these pressures. But if we fail to continue to attract the very best and brightest of the next generation to the faculty, we will surely carry the message of weakness to the competition. It's all too easy to pick off superstars from the ivory tower once the internal support and will to compete starts to erode. Stanford is at the focus of probably the most extreme economic and social change that has taken place in the last 100 years. These are extraordinary times that call for extraordinary foresight on the part of the Stanford community.
Sebastian Doniach is a professor
in the Applied Physics and Physics Departments and at