Monday, June 6, 2011

Joe Francisco's solution to #chemjobs: entrepreneurship

Prof. Joe Francisco
Photo credit: purdue.edu
ACS immediate past president Joseph A. Francisco writes in this week's C&EN about jobs and his potential solution to chemistry unemployment problems:
During my presidential succession, I have focused on one overarching theme—to ensure that aspiring chemists and seasoned professionals in the U.S. have the skill sets, resources, and external environment to build and sustain a robust workforce in the U.S. Given the historic levels of job loss in our enterprise over the past few years, including thousands of R&D jobs for chemists, [emphasis CJ's] I felt this was one of my most important priorities. [snip]
I appointed a task force charged with providing recommendations for how the American Chemical Society can play a vital role in helping the chemical enterprise in the U.S. remain the most innovative and entrepreneurial in the world. This Task Force on Innovation was headed by Harvard University chemistry professor and entrepreneur George M. Whitesides and consisted of eminent individuals from industry, academia, and government, all with experience in entrepreneurship.[snip]
The task force noted that the nature of innovation is changing. Over the past 15 years, the process of transforming ideas into marketable innovations within the chemical enterprise has undergone dramatic change. Innovation that disrupts existing competitive markets and creates new customers has slowed.[snip]
Nevertheless, large companies want to rebuild proprietary positions in high-margin products. They may not be innovating fast enough to compete globally, however, and they now appear to be turning to others to develop innovative products. The source of that innovation could be universities and/or start-ups. The task force found no intrinsic reason why chemistry start-ups could not be commercially successful and, in fact, documented numerous such enterprises.
In light of these trends, the task force made recommendations that fall into four major categories.
  • First, it recommended that ACS develop a single organizational unit—a “technological farmers market.” ACS is already doing much to help entrepreneurs, and these activities will continue. The new unit is envisioned as a one-stop virtual portal, supporting entrepreneurs by facilitating more affordable access to resources that would foster the creation of small companies from start-ups. Relevant resources might include information about how to start a company, management expertise, links to key services, and a list of potential mentors. [snip]
  • Second, the task force recommended that ACS increase its advocacy of policies at the federal and state level to improve the business environment for entrepreneurs and start-up companies. The task force suggested that ACS urge and support reforms within the U.S. Patent & Trademark Office to ensure more accurate patents and faster issuance. Incidentally, ACS has suggested to PTO that the society’s talented unemployed members might be of assistance to patent examiners. [emphasis CJ's] The task force also outlined a number of financial policies that could encourage large companies to partner with small ones to promote entrepreneurship. These include preferential tax treatment for repatriated income invested in U.S.-based developers of technology and making the R&D tax credit simpler and permanent.
  • Third, the task force urged ACS to partner more vigorously with academic institutions and other relevant organizations to promote awareness of career pathways and educational opportunities that involve entrepreneurship. The task force had several interesting suggestions that will be pursued by staff and governance units.
  • Finally, the task force determined that ACS should increase public awareness of the value of early-stage entrepreneurship in the chemical enterprise with focused media coverage and information targeted to federal agencies that support chemistry. In addition, ACS should provide ways to recognize entrepreneurs publicly in order to increase their visibility and enhance their opportunities for success.
A couple of comments:

Entrepreneurship again? At some point in the near future, I should do a survey of all the different solutions that people have suggested to improve the chemistry employment situation. Among the top five must be this thought that chemists need to found their own companies and strike out on their own. While I think this might be a stopgap solution that might employ a small amount of very experienced chemists, and a moderate amount of mid-career professionals and young chemists, I just don't see this as a broad-based solution. I hope I'm wrong.

I hear the microwave in the kitchen!: I suspect that ACS' policy has always been to support the idea that we should support "preferential tax treatment for repatriated income invested in U.S.-based developers of technology and making the R&D tax credit simpler and permanent." While I suppose this might (in a bank-shot fashion) help chemical entrepreneurs, I suspect that the effects will be pretty minimal.

An unalloyed good: I sense from the occasional ACS comments in C&EN that the senior management of the Society is aware of the dissatisfaction of their members due to the extraordinary economic circumstances of the moment. That Prof. Francisco (or his staff) is writing about the issue and attempting address it is good news; perhaps this fall, the new ACS presidential candidates can address the issue full-force.

Best wishes to all of us. 

24 comments:

  1. I think that its unfortunate the entrepreneurship keeps coming up in all of this. But, I think that it's the right answer. Chemists keep saying that what we do is vital/important, yet we have loads of people who are unemployed. The best way that we can promote our science and those performing it is to create jobs for our own. It's sort of a put up or shut up sort of thing. @CJ, while I agree that we shouldn't have to be the ones to do this, it appears that we are the only ones who actually have the will to do it.

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  2. CJ: Just one word for Mr. Joe and that is he is a "moron". I mean people are really hurting and depressed and he wants chemist to be "entrepreneur". Sometime it is better to keep quite rather than evoking response from Joe's of the World.

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  3. Sorry, this suggestion is a complete non-starter for organic chemists. Becoming an entrepreneur is only feasible if there's a market for your products. With the collapse (the word is not too strong) of Pharma, who is going to buy the products and services?

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  4. "Entrepeneurship!" is the perfect answer from ACS because it offends none of its membership.

    Unfortunately, it also doesn't address any real problems.

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  5. If you have no family, prior obligations, beholden to a geographic location. Then start-up is an actual honest to god viability. If you have a life, a family to go home to, bills to pay, a mortgage, and even excessive student loans. The start-up world might be logistically inaccessible.

    Unfortunately, I think the real future is going to be in starting your own business, but it's more difficult with mortal and highly leveraged people. Basically, chemistry might have to start from scratch in this country to prove our worth again. To bad it will take a while.

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  6. Anon 12:52 makes a good point. We need people that can bear the risks and time it takes to be entrepreneurs. However, these youthful, unattached potential entrepreneurs are saddled with lots of student loan debt and many years in the academic training pipeline.

    By the time they get out, their time will be past. Unless many of them can obtain tenure, they may not have the ability to take on such risks. The academic pipeline mostly destroys scientific entrepreneurship and creates the belief that science must be government financed.

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  7. leftscienceawhileagoJune 6, 2011 at 5:13 PM

    I have no idea what type of startups anyone is talking about...

    Have you ever heard of anyone dropping out of their PhD program to startup a drug discovery/development company?

    Not only are capital and regulatory costs are too large and risks too large, VC funding is only given out to people like tenured professors, not to "garage" types (even those who may have PhDs).

    They are the ones who staff their startups with cheap labor (from their own labs, natch), use their own lab's materials and resources and make nice second salaries in addition to the one they get from their academic job. The previous paragraph isn't meant to scream foul, just to emphasize what a disadvantage the average PhD is at compared to the already venerable tenured professor.

    I'd love to hear a single story from someone who did a chemistry/bio startup that wasn't something like simple like a reagent supplier (i.e. fed directly off of the institutions that are doing so badly now that we need entrepreneurs).

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  8. I doubt that the start-ups referred to in the statement are referring to synthetic chemists.

    "Nevertheless, large companies want to rebuild proprietary positions in high-margin products. They may not be innovating fast enough to compete globally, however, and they now appear to be turning to others to develop innovative products."

    Translation: We do not need new chemicals to provide quick returns to Wall Street. Therefore we better start locally developing new products with the chemicals we currently have.

    " The source of that innovation could be universities and/or start-ups."

    Translation: When we need new chemicals we will get them from cheap university labor, further perpetuating the oversupply of synthetic chemists.

    "Over the past 15 years, the process of transforming ideas into marketable innovations within the chemical enterprise has undergone dramatic change. Innovation that disrupts existing competitive markets and creates new customers has slowed"

    Translation: We have a lot of chemicals now. The golden age of synthetic chemistry is now over. Look to the markets, see what they demand and develop the products now. Stop complaining about lab costs to synthesize new stuff, buy some raw materials from China and get to work. Hire your friends to help you!

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  9. If entrepreneurship is the answer, then I don't think we will be needing to go to school for so long. Get your BS and move on.

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  10. Last time I checked chemists need laboratories, hoods and the power to run them, chemicals, glassware, permits, proper chemical storage and waste disposal and neighbors who don't think you are creating a toxic menace or running meth lab.

    Maybe you can start a small chemical manufacturing operation (but definitely not in California) that is if someone is stupid enough these days give you the capital you will need to do so. However, you better have a line of clients standing outside your door so you can pay your big bills STAT.

    This is not basement stuff any more. If I had a lab on my property like I did as a kid 50 years ago, I surely would be in jail now having been raided by the ATF, DEA, EPA, local Fire Marshall, chemo-phobic county safety inspectors in bunny suits and the local police. Just having glassware on your property can get you in legal trouble. Have a sodium chloride spill, you will surely bring in the bunny suits.

    While you are scraping by on you unemployment checks, and praying that no one in your family gets sick or that the wheels don't fall off your car, maybe you can think about taking the advice of a federally funded lifetime tenured professor who never gave up his day job to actually run a company and begin saving part of those unemployment checks so you can follow the ACS' brilliant insight and start a chemistry business.

    Of course you can always do virtual chemistry and just maybe bring in lots of big virtual paychecks.

    The ACS just does not get it and never will until every US industrial chemist drops their membership! Even then since they are really a publishing company, they will not give two sh*ts unless we tell our congress people to strip them of their nonprofit status for which we members are responsible. Elsevier and Wiley don't get those breaks. The ACS management pays themselves like private executives using non profit tax breaks. What a worthless POS the ACS is when it comes to helping its industrial members and those you chemists who just want the life they trained so hard to attain.

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  11. JDF gave this talk awhile ago, and while I appreciate that he understood that there were problems with chemistry careers at least a little bit before others were trying to do so, there's still enough problems with entrepreneurship as primary job creation that it seems unlikely to work.

    1) There aren't that many people with the will to be entrepreneurs, much less the skills to be successful at starting and running their own business. The union of that set with the set of chemists probably isn't large. Skills may be teachable to some degree, but not will. Education can play a role, but ultimately, skills that take a long time to develop aren't going to be attractive if they also require significant acceptance of risk and don't have good enough payoffs to justify the risks.

    2) The cost of getting a chemistry degree make the risks of starting a business in chemistry harder to stomach. My wife has lots of student loans - five to seven years of school will only add to the costs if she wanted to be a chemist. If people want to start businesses, they are more likely to do so where they can do so with less sunk costs. Other countries have reduced costs to be a chemist, so the amount they have to make to be a chemist and cover those costs or missing monies is lower.

    3) If those businesses form, the costs for labor have to be low enough to get the entrepreneurs to keep the jobs here rather than farm them out to India and China. Wages low enough to do that will not likely be high enough to get any people to do so, at least for a relatively long term.

    4) Investors appear to want quicker gains, and probably most of them - this makes significant portions of chemistry difficult to start businesses in, and less worth it for the people who could start them.

    I don't know what anyone at the ACS could do to keep chemistry in the US. Protectionism doesn't seem like a good idea to me - I don't see any way to organize to force people to keep jobs here that won't do the opposite, and there doesn't seem to be enough value (despite continual productivity gains) to keep jobs in the US. (I still don't understand the repatriation issue - if people can make money elsewhere with cheap labor and bring it back with few strings attached, it will probably end up creating jobs elsewhere.)

    Both the US gov't and US business appear to have decided that long-term research is just not worth it, or rather, that they don't seem to think there'll be a long term here. No one is making enough money to afford the things that could fund research - I don't think most people have been beating inflation, even at its lows, for a long time - they just spent the housing bubble to cover it over.) At best, jobs will come back when they don't make enough money to attract people, or people have gotten used to the idea that their future is in service, not much money, and no retirement. I don't see the lid staying on when that happens.

    I'd like to think my grandparents would have seen a better way out of this, or have been more willing to work together and accept the pain necessary to make something livable here.

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  12. @Hap, @Anon1:35 - I was thinking about the entrepreneurship angle the other day, and speaking with a friend from Europe. He absolutely cannot believe that we in the US spend as much time and energy (and money) as we do on grad education.

    Consider: In many European nations, college (and healthcare!) are free, considered part of citizenship and (admittedly higher) taxes. After that, the PhD at many of the better schools in Europe runs 3-4 years. So, by my math, that places you ready for a postdoc by the time you're 25-26. Add to this that many host countries (including our Northern neighbor Canada with NSERC, and industry fellowships in Japan) offer money to directly finance postdoctoral fellowships, and you have a winning combination.

    Imagine being 27, having no school debt, and ideas for a company. You'd be in much better standing than most of the US grad students.

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  13. @Arr Oh
    Even more UK grad students often get more 'holiday' and better working hours than US grad students.

    This is why I cannot understand why UK PhDs are considered equal to US PhDs for jobs in the US.

    Do we really have that little faith in our education system? Do we really think UK grad schools are that much more efficient that any UK PhD should be granted a 3-4 year headstart on their career?

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  14. This is why I cannot understand why UK PhDs are considered equal to US PhDs for jobs in the US.

    I don't really think they are. I've never seen a person right out of graduate school from the UK come over and get a job in big pharma, but I've seen a lot of them with US PhDs.

    Most Brits I've ever seen hired did at least one post-doc with a big-name guy and had industry experience when we hired them.

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  15. @Anon 7:55, your last paragraph:

    "The ACS just does not get it and never will until every US industrial chemist drops their membership! Even then since they are really a publishing company, they will not give two sh*ts unless we tell our congress people to strip them of their nonprofit status for which we members are responsible. Elsevier and Wiley don't get those breaks. The ACS management pays themselves like private executives using non profit tax breaks. What a worthless POS the ACS is when it comes to helping its industrial members and those you chemists who just want the life they trained so hard to attain. "

    I completely agree...I've been saying this for years, ACS claims to represent the interests of all chemists, or "those in the chemical sciences," but it's tilted HUGELY in the direction of academia...there's little to no relevance for the industrial chemist (I am one), or anyone outside of academia. I'm not insulting academia...I got a good education and enjoyed 99% of my time in college/grad school/postdoc, but it seems awfully easy for ACS leadership, 99% of who tend to be culled from the ranks of academia, to toss out softball solutions to real-world problems that they have little or no understanding or experience with. Just as our elected officials have no idea how the private sector works, most academics have little or no understanding of how the chemical industry works (unless they themselves happened to work in it prior to their academic position).

    This, along with various other reasons, is why I stopped wasting my money and cancelled my ACS membership a few years ago. What's comical is I *still* get constant letters in the mail, emails, and phone calls asking me to rejoin...can they really need my $200/yr that badly?

    Is there a professional chemical society geared more toward industrial chemists? Anyone know?

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  16. @Dr. Blur. No they don't need your money. Annual membership fees come down to $12-15M. ACS top management takes home about $6+M, that is not including retirement, health insurance, and those extra days for visiting theaters and museums Ms. Jacobs so likes to set aside when she travels on your dime. Your value as a member is nevertheless huge - it allows ACS file taxes as a non-profit, while acting as a publishing house and lobbyist, and generating hundreds of millions in the process.

    As to good professor's solutions... well it figures that he is a physical chemist, the kind of guy who never made things, and probably does not understand why anyone would ever be interested in making anything with his own hands.

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  17. What leftscienceawhileago and Anon@7:55 said. The idea that anyone other than tenured professors with a LOT of clout can just go off and found a science/chemistry based startup is TOTAL bunk. Of course, you can find the one or two cases in which it happened (google Halcyon Molecular). But seriously, the Zuckerberg model of "start the company from your dorm room" works great for software, but once you realize that you need fume hoods, AFMs, TEM's, compliance with federal/state/municipal hazard laws, etc, the model falls apart real quick.

    What I think is more than a little ironic about this is that VC's are trawling the dorm room looking for the next Zuckerberg, but when it comes to biotech or "clean"tech, only top tenured professors need apply. Aren't these guys a little worried that they're only getting "the conventional wisdom"?

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  18. " only top tenured professors need apply. Aren't these guys a little worried that they're only getting "the conventional wisdom"

    I came from a top tier group. My professor could not commericialize a chemical if his life depended on it. I once heard my professor referred to as 'socially retarded'.

    God help us all if we are relying on the chronic academics to get us out of the hole we are in.

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  19. Unstable IsotopeJune 8, 2011 at 9:28 AM

    I hate interviews like this where there is general hand-waving and the advice to get broader/more education. In what, exactly? Many of us have terminal degrees - how many degrees do we need anyway?

    If we really want to encourage entrepreneurship, someone should create laboratory spaces that budding entrepreneurs can rent for low cost to start their businesses. I've heard of this being done in some places and I think it does help to encourage people to try start-ups.

    I'd love to see some kind of grant for people to try to start their own businesses. I think we've learned we can't rely on the big companies to create jobs. Why not start our own?

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  20. I hear such space exists in the Silicon Valley with all the permits to do chemistry, and landlord offers proper waste disposal in the rent which is about $5000 per month. They don’t provide chemicals, glassware or Scifinder access. Better have a client list with orders or a big bankroll.

    Maybe you can take a loan out on your big home equity or do the Visa card thing the way small business people typically do. Oh forgot the banks hate to lend money to small business people these days. Maybe there is TARP money still floating around.

    One note caution: watch out for the personal civil and criminal liability if you have a chemical event. Also be aware that the fines run $25,000 or more per incident if you run afoul of some chemo-phobic county inspector or the Fire Marshal.

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  21. Let's be honest here. Most chemistry start-ups are based upon research done at universities. So Francisco & friends are actually suggesting a scheme by which graduate students and post-docs continue working for their professors beyond the limits imposed by the academic world. And every entrepreneurial prof would have a "academic team" and a "start-up team"...a doubling of subordinates.

    I'm not sure how this changes anything.

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  22. "Most chemistry start-ups are based upon research done at universities"

    This is not true. Many start ups are started in incubators funded by private industry. The people working in these start ups have vast amounts of industry experience.

    Academics are good at developing new reactions, but you need someone with industry experience to be able to even begin designing a drug or other commerical product.

    The biggest problem with the downturn in industry is that many common people have the idea that drugs come from schools and big companies just rake in the profits.

    It does not help if clueless academics perpetuate this false assertion.

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  23. The start-up incubators you mention are, by and large, set up by universities to capitalize on the work done at those universities.

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  24. Spoken like a true 5th year postdoc.

    Only academics I know who actually did practical work were following proposals and money given to them by industry.

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