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//Hey, Siri: What’s the Deal With This Major University Research Gift by an Asian Corporate Giant?

Hey, Siri: What’s the Deal With This Major University Research Gift by an Asian Corporate Giant?

 UW-Madison Campus. Photo: TI/shutterstock

UW-Madison Campus. Photo: TI/shutterstock

As universities have turned to private funding sources via huge fundraising campaigns, there’s been a surge in corporate-campus research partnerships, and companies sending large sums to private and public schools alike. 

The latest example is a partnership between Taiwanese tech manufacturing company Foxconn and the University of Wisconsin-Madison, with the company giving $100 million toward joint science and technology research and a new engineering building. The agreement was recently announced—as the company is in the process of putting down deep roots in the state of Wisconsin, making big promises of jobs and hauling in $4 billion in tax subsidies in exchange. 

While they often involve large gifts, such partnerships tend to be transactional forms of philanthropy, with clear benefits being reaped by corporate donors in the form of research talent and workforce. This one also arrives against a backdrop of larger debate over the Foxconn deal itself, and more broadly, just how much public institutions should be catering to corporations promising financial windfalls. 

While it certainly isn’t chump change, the university partnership isn’t as dramatic as the $10 billion, 13,000-job manufacturing plant that Foxconn is planning for Wisconsin. It’s more of a side deal as the company prepares its substantial role in the state’s future economy, in line with a venture capital investment fund the company’s also partially funding to support startups in the area. Foxconn makes high-tech electronics around the world, probably best known for making Apple products and other personal devices, along with the repeat scandals over poor labor conditions and worker suicides at its factories.

The company is committing the funds to UW-Madison as a matching gift, which will set up collaborative science and technology research between the corporation and the school, and fund the construction of a new engineering facility. It’s being called the school’s largest industry research partnership and one of the largest gifts in its history. 

There are benefits for both parties. UW gets $100 million, obviously, and an expanded, interdisciplinary program that could be a potential draw for students and faculty interested in tech. Foxconn, meanwhile, gets credit for its commitment to the community it will soon call home. More materially, it gains potential R&D advancements and access to a worker pipeline. The company could have trouble finding staff for the size of factory its planning to build, based on low unemployment rates and the state’s hiring pool. 

That kind of mutual benefit has made research funding arrangements in many forms between industry and academia very popular, from individual grants to full-on institutional collaborations. We’ve seen them pop up around industries like oil and gas, pharmaceuticals, artificial intelligence, autonomous cars, even craft beer. They’re not new, but universities have had to become more aggressive in their fundraising, with institutions of every caliber setting out to raise billions from private sources. The Foxconn gift is part of UW-Madison’s own $3.2 billion campaign

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They can also be quite fruitful—the research partnership between Penn and Novartis around cancer therapies comes to mind. And they can help cultivate the kind of innovation hubs we see in Silicon Valley and Boston/Cambridge. Maybe that’s why they don’t raise more controversy than they do, which is honestly always kind of a surprise to me. 

In the case of this partnership, it’s especially eyebrow-raising in the context of the $4 billion tax incentive package going to Foxconn. The state alone won’t recoup that lost revenue until 2043, and it’s around 10 times the country’s average incentive package, per job created, according to one expert. And while Gov. Scott Walker and Donald Trump alike have patted themselves on the back, others are calling it a massive corporate welfare package that the state cannot afford, while raising concerns about Foxconn’s failure to deliver on promises in the past, and whether it will serve taxpayers’ interests in the long run.  

So there’s the serious question of whether it makes sense for Wisconsin to go all in courting Foxconn the way it is. But similarly, does it serve one of the state’s public institutions, with an educational mandate, to commit to such a large collaboration (it still has to raise $100 million of its own) with a multinational, profit-driven corporation? Even setting aside the company’s troubling labor record, how does something like that impact a school’s priorities and independence? 

We’ll have plenty more opportunities to ask such questions in the future. At the very least, Amazon has still yet to announce the location of its new headquarters, and I bet we’ll see an Amazon-funded research partnership pop up at the local university not long after it does. 

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2018-09-04T12:35:29+00:00 September 4th, 2018|Categories: Nonprofit News|