Abigail Barrow met Steven Shapin at the University of Edinburgh in the 1980s. Shapin, a New York native, was teaching the history of science; Barrow was an undergraduate mechanical engineering student who went on to earn a doctorate in technology transfer and international development, writing a dissertation on the development of the machine-tool industry in Asia.

Eventually, the pair married, moved to the U.S. and saw their careers swing in a kind of harmonic convergence around the subject of science, technology and economic development.

Since 2004 Shapin has been a professor of the history of science at Harvard University in Cambridge, Mass. He recently published "The Scientific Life: A Moral History of a Late Modern Vocation." Since 2003 Barrow has headed the Massachusetts Technology Transfer Center, which the commonwealth's legislature had just voted to establish as a way of fostering connections among scientists, companies and venture capitalists.

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Shapin made his academic reputation on the strength of his research into 17th-century English scientific culture. He left Edinburgh in 1989 for the University of California, San Diego. The same year, Barrow volunteered for a UCSD group that worked with early-stage biotech and high-tech companies. Shapin's move to the entrepreneurially focused UCSD and his wife's career pushed him to spend a decade researching how scientists ply their craft in corporate America, the subject of "The Scientific Life," tracing the rise of Big Science at pillars of the U.S. economy such as General Motors Corp., Eastman Kodak Co. and ATT Corp. before turning to the venture-focused biotech that emerged in the late 1970s.

Shapin and Barrow sat down with The Deal's ­David Marcus at a Cambridge café halfway between MIT and Harvard to discuss the history and practice of innovation in high-tech hotbeds like Boston and San Diego.

How would you characterize the competitive landscape that exists within a few miles of where we're sitting?

Abigail Barrow: This decade is a very interesting transition point for many companies. Biogen Idec Inc. and Pfizer Inc. are here and they're starting their own incubator programs. Biogen has a physical incubator within their offices here to house small companies, and they also invest in these startups. They like having small companies within their facilities because it makes their employees more entrepreneurial. If development goes the way both sides think it will, the small companies will have an easy exit.

Pfizer has an incubator in San Diego. Novartis AG is getting more interested in early-stage companies and has a venture fund in Cambridge. When Novartis looked at sites in Cambridge, the story goes that they wanted to be able to see the dome at the Massachusetts Institute of Technology. AstraZeneca plc continues to expand its facility here because they found a great work force and a supply of very productive scientists.

Steven, your book traces the shift in innovation in American business away from large companies such as General Electric Co. toward smaller ventures. How did that happen?

Steven Shapin: The conventional story is that big companies just got rigid because they got big, that being small means being agile and innovative, that you should want to be small. I think you need a more textured view of this. Yes, Bell Labs and big firms have in many cases substantially cut back on their commitment to fundamental research. Big Pharma is talking a lot these days about a "crisis in innovation," and the "biotech revolution" has, to some extent, brought about organizational tensions as the locus of innovation has shifted to large molecules and to the role of biologists (and bioinformaticians) over the traditional role of chemists.

In pharmaceutical innovation, you have to consider changes in science itself. Biotech brought into play sciences which had previously not featured in drug development and scientists -- molecular biologists -- who had in many cases come into their field without any awareness of commercial possibilities. Also in this area, the temporal trajectory from scientific ideas to drugs is a very long one, allowing for a different texture of connection between what counts as scientific research and what counts as work of direct commercial relevance. It's striking, here and elsewhere, the extent to which traditional talk of the differences between "science" and "technology" or between "basic" and "applied" research has disappeared from our contemporary vocabulary.

Attitudes and practices have changed a lot over the past century. When George Eastman set up the research lab at Eastman Kodak Co. in Rochester in 1912, inspired by patterns of industrial research he'd seen in Germany, the scientist he engaged to run the lab told him, in effect, that Eastman should write a large check and not expect commercial benefits for 10 years. This sort of thing doesn't ­really happen anymore, in part because of the relationships among shareholders and managers and Wall Street. Innovation continues to happen, but can a big American conglomerate run a research entity that cannot envisage commercial results in a much shorter time frame?

That said, it's not evidently true that there's a crisis in innovation across the commercial and quasi-commercial landscape -- that landscape has changed markedly in recent decades, including changes in what counts as belonging to the for-profit and non-profit sectors. And it's not true that there's something inherently problematic about large companies with respect to research and innovation -- Google being perhaps the most spectacular, but not the only, example.

What are the choices a governmental institution such as MTTC has in fostering economic development? How broad is their influence?

Barrow: I have a statewide function, working with 35 universities, research institutes and clinical research hospitals in Massachusetts. Part of [my job] is institutional culture and awareness of what's going on. At MIT, to a large extent their marketing effort is answering the phone. If you work at Boston College, or some of the University of Massachusetts campuses or Brandeis University, these are small institutions mainly with one-person technology transfer offices. Not a lot of people are going in to look at the technology your researchers are developing, so you have to market it more aggressively.

We developed a Web portal three years ago that's like a shopping mall for technology. You have the big anchor tenants of Harvard, MIT and Massachusetts General Hospital, and then you have smaller shops with boutique offerings. One product licensed came from Bay State Medical Center in Springfield, Mass. Because it was on the portal with all these other technologies, it was found. Part of it is size and awareness. Part of it is the culture within the institution. If you're thinking of starting a company and you're at MIT, someone down the hall has started one, there are programs to help you, and so on. If you're at Boston College, there's a small research budget and a limited number of researchers, so you can't just walk down the hall and talk to someone to introduce you to a VC.

Both of you worked in San Diego. How does the Massachusetts approach compare with San Diego's?

Barrow: The obvious thing is this is a lot bigger, and there's a much more embedded investment community here, so that makes a big difference. What you want is one or two successes within an institution, because that changes the culture. UCSD had two: Hybritech in the life sciences and Linkabit in telecommunications, and then Qualcomm Inc.

Shapin: In San Diego, it's about people and what they did. Begettings, they're called. It's very historically orientated. This is what Irwin Jacobs [a co-founder of Linkabit Corp. and then Qualcomm] did, and what Ivor Royston [Hybritech Inc.'s founder] did, and they're still around, and their begettings are still around.

Boston has a much bigger history. You have companies like Digital Equipment Corp. and Polaroid Corp., but the stories don't become talismanic. If you're a graduate student or a postgraduate at MIT, or even at Harvard, you'll probably know the Vertex Pharmaceuticals Inc. story, and at MIT you'll know a thousand stories.

Barrow: Hybritech is a Genentech story. Hybritech was founded in 1978 by Ivor Royston and Howard Birndorf, who were then at UCSD. Ivor had recently moved from Stanford and watched the formation of Genentech while he was there. Both Ivor and Howard went on to found many more companies. Ivor also set up his own cancer research institute and a venture fund. Many of the other early Hybritech employees also continued to be serial entrepreneurs. [Hybritech was acquired by Eli Lilly and Co. in 1986.]

Shapin: In San Diego, you can talk about a 30-year history. You can't do that in Boston.

How do you decide which scientists to ­introduce to VCs?

Barrow: We're mining $5.5 billion of federal research every year, which varies from cleantech to educational software, so there's no way we can be expert in all these technologies. There are a lot of people who interact with the technology as investors, lawyers, service providers, and they always want to see the next new thing. We work with [the scientists] before they meet with the VCs to get the answers to questions we know will come. We try to polish the candidate. ...

Shapin: ... housebreak them.

Barrow: We meet with them, we sometimes give them homework. We say, "These are the questions you need to be able to answer when you meet with an investor, because if you can't answer them, they won't give you any time. So you have to think through these answers before you meet with the investor." We're working with people who have never started a company before, but it's very much a supportive community. The high-tech community will help these people because maybe it is the next Qualcomm that you're talking to.

Shapin: It's part of the mythology of entrepreneurial science and venture capital that plausibility isn't a great guide to ideas that turn out to make everyone rich. One classic myth in this area concerns the 1997 encounter between the founder of eBay and a venture capitalist. Pierre Omidyar, as the story goes, was trying to build an online site to trade Pez dispensers, and when he went to show the Web site to the VC, the server went down. Bad idea? The story is told to indicate just how bad-seeming spectacularly good ideas can be. Part of the mythology of this whole thing is that it's the crazy ideas that will make everyone rich.

VCs like to think of themselves as having very good judgment of people as well as of plans. They know they are wrong a lot, but it's an area where judgment takes place under conditions of great uncertainty and where knowledge of people and their characteristics may be the most solid form of knowledge you can have.

Barrow: A lot of work we're doing is based on whether [the scientists] are excited by their technology. To some extent, what we do is screen out the people who aren't excited. They don't come back.

How important is a world-class university to the development of an economic zone such as Route 128 or Silicon Valley?

Barrow: You need great researchers as a base, but it doesn't have to be within an economic zone. We pulled out a biofuels company from UMass-Amherst, Qteros, that has raised $30 million. The University of Massachusetts at Lowell has [spawned] a solar company, Konarka, that was founded in 2001 and has raised over $100 million in VC funding. We worked with a group of former Pratt & Whitney engineers who were teaching at Western New England College School of Engineering. They had the idea of applying some of their jet engine knowledge to a new type of wind turbine. They have raised an initial round of funding from Kleiner Perkins Caufield & Byers.

You don't have to have an MIT or a Harvard. When UCSD was spinning off Hybritech and Linkabit, they weren't anything like MIT. You have to have someone who has the vision to pull it out.

What makes a scientist choose to work in ­academia or the corporate sector?

Shapin: I think most qualified scientists do not work for research universities; they work for government, industry and non-profits. The idea that universities are a natural place for science is contestable. I'm not comfortable with a hierarchy where top guys work for universities. I think starting up a company absorbs all the brain cells anyone has.

What we're seeing now is the increasing prominence of formally academic institutions which are both interdisciplinary research centers in science and engineering and which have close ties to industry and which are significantly oriented to commercial outcomes, again experiments in organizational form and purpose. Among these are the Whitehead and Broad institutes in Cambridge and the Institute for Systems Biology in Seattle.

Barrow: The Broad Whitehead Institute [an MIT-Harvard joint venture backed by at least $600 million from Eli Broad and his wife] hired someone out of Merck to run some of its screening programs. There are companies like Alnylam Pharmaceuticals Inc. here. They have an incredibly aggressive publishing mentor within the company. Everyone says companies don't want to publish, but they're really aggressive about getting research out.

How has the tightening of the IPO market affected the development of various tech sectors?

Barrow: What hasn't dried up is acquisitions, which were always a big exit route for VC-backed startups in biomedical and high tech. Earlier this week, I met with KPMG. They still believe that public markets will come back, and they have to because otherwise they'll have no business. What's interesting is that there's no decline in the number of startups. There's a new group of angel investors, Massachusetts Medical Angels, and they see all the stars aligning. There are a lot of people available who want to do a startup and will almost volunteer their time because there's less work. VCs have pushed down valuations, there are a lot of good technologies, and so it's a good time to start companies.