This article uses events occurring between 1989 and 1994 at the University of California (UC) as a case study to illustrate the consequences to the university of the collision between two powerful public policy agendas for the university: (a) that it maintain its traditional independence, carrying out its roles of teaching and research untainted by the lures and demands of the marketplace, and (b) that it become more active in economic development activities, including the development and sale of its intellectual property and the establishment of companies to exploit university research. The unsuccessful attempts over these five years by the UC to establish a separate nonprofit foundation to manage its considerable portfolio of intellectual property and to form a for-profit company to fund development and start-up efforts have been plauged with controversy. UC's story offers parallels with the experiences of other universities and illustrates an emerging pattern in the responses of higher education to the new pressures on them to be more economically relevant. The lessons from the UC case are valuable for other universities and for policymakers involved in technology transfer activities.
