Q&A WITH HUGO SONNENSCHEIN

Hugo F. Sonnenschein became president of the University of Chicago in 1993, after a two-year stint as provsot at Princeton University. With its rich history, a legacy of founder John D. Rockefeller, in the pure pursuit of research, Chicago became a pioneer in fields ranging from education and archaelogy to sociology and political science -- and has turned out more Nobel Prize winners than any other school. On the brink of a new century, one that's likely to be driven in large part by the life sciences and biotechnology, Chicago, like most research universities, is now wrestling to recast itself, blending its rich history in basic study with the imperatives of the marketplace. It's a role fraught with tensions, as Sonnenschein, a former economics professor, readily admits. Business Week Chicago Bureau Manager Richard A. Melcher recently spoke with him about the role of the research university in the 21st Century Economy. Here are excerpts of their conversation:

Q: What is the mission of the research unviersity?
A: Our main business is the creation of new knowledge at the highest levels. The work we've been engaged in here is to encourage people to learn the basic material from the very best faculty. When you put together these bright young minds with people at the cutting edge of discovery, this is the formula that led to the New Economy. When I asked [former Secretary of State and former dean of the business school] George Schultz who were the most influential people in his career, out of all the people he has met, he mentioned [economists and Nobel Laureates] Milton Friedman and George Stigler.

Q: But doesn't the role need to change, given funding pressures from federal sources, and the race by many other research universities to commercialize developments?

A:The university has had an extraordinary heritage in physics, medicine, and economic thought. But it's also been a place that's tried to concentrate on the things most basic. What we found out is that what we produce is extraordinarily valuable -- and extraordinarily expensive. We are not willing, and we cannot afford, to sit idly by. We need to really pay attention to see that the knoweledge we create is brought to market and that we can benefit.

There has never been as much difference between basic and applied science as some people pretend. Good ideas and good thinking are important to [commercial] applications. The university is not fundamentally about applications, it is about the creation of new knowledge.

Q: There seems to have been a feeling in the academic community and even here among some at Chicago that the university had retreated too much into an ivory tower.

A: To stand apart and to be arrogant and stand-offish is wrong. There was more of this attitude in years past that we are above close communication with the world. Still, Chicago has been particularly focused on scholarship and education, first, second, and third. We don't think of it as a place to come to get a finishing-school experience. It is important to connect with the world around us, and that in no way diminishes the idea of creating the best new knowledge. Faculty wants to be at a university that allows absolutely free inquiry and is not a job shop. There is nothing wrong with pursuing ideas when they have application, as long as the scholar is in the business of free inquiry.

Q: How will you measure the success of Chicago in the next century?

A: Part of it will be economic [in terms of new grants and licensed technology]. But, it's not the part we emphasize. We look at the creation of new knowledge: It's like DNA, when you see it, you know it and understand it. But we're also going to much more competitively explore the commercial value of the knowledge. We are resource hungry. But are the lists of royalty income the bottom line? No.