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II

OVERVIEW and SUMMARY OF THE WORKSHOP



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Page 13 II OVERVIEW and SUMMARY OF THE WORKSHOP

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Page 14

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Page 15 Overview and Summary OVERVIEW In order to perform its unique missions, NASA is seeking to capitalize on its existing assets and promising new technological trends in biotechnology, nanotechnology and information technology. As an integral part of the NASA infrastructure, the Ames Research Center, at Moffett Field, California, has developed a strategic plan to make use of its extensive human and physical resources in ways that are both consistent with NASA's overall mission goals and which are effective at leveraging its own particular research capabilities and exceptional location in the heart of Silicon Valley.1 The Ames Research Center is embarking on a program to develop a science and technology park bringing together leading high-technology companies and universities, such as the University of California at Santa Cruz and Carnegie Mellon, to contribute to Ames' exceptional mission and to the educational and research requirements of this unique American cluster of economic growth and invention. The park is to include shared research facilities and public-private cooperation in teaching and training with the goal of contributing to NASA's core missions of research, exploration, and discovery. An additional objective is to facilitate NASA's increased emphasis on commercializing technologies developed by agency scientists and engineers and contribute related national benefits such as higher computer dependability. Other initiatives under consideration 1 For an overview of the Ames proposal, see the White Paper submitted by NASA in Annex A. For additional information on the concept, see the presentations by NASA's Sam Venneri in Panel I, William Berry in Panel III, and Robert Norwood in Panel IV.

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Page 16 include the integration of SBIR grants with a planned on-site incubator, virtual or distance collaboration, and possibly a new public venture capital program. Given the scope and ambition of these objectives, the NASA Administrator, Daniel Goldin, asked the NRC's Board on Science, Technology and Economic Policy to review the Ames initiatives. The STEP Board, through its Chairman, Dale Jorgenson, and Vice-Chairman, Bill Spencer, accepted the NASA request and, after a series of preliminary meetings, convened a one-day workshop on 14 April 2000 at Ames Research Center. Although there was a broad range of issues to consider in a single workshop, the discussion did succeed in raising many of the issues that Ames might expect to encounter as it proceeds with its plan to “invent” the Ames Research Park. Workshop participants raised and debated a variety of issues affecting the management, operation, focus, and metrics of the proposed park: the advantages for Ames and NASA of participating in new and emerging technologies; the need for private sector participation to share costs, risks, and expertise; the potential gains from leveraging the assets of Ames to advance NASA missions; the potential contribution of expanded educational facilities to meeting the pressing need for graduate and postgraduate training and research; the challenge of addressing effectively multiple and sometimes competing objectives; the local challenges to development, including a tight labor supply, high housing costs relative to the rest of the nation, and growing environmental constraints;2 the opportunity for NASA and its partners to more fully capture the potential of current and future R&D investments; modified by the inherent complexity of public-private technological transfer, especially for fast-paced commercial applications, compared with longer-term NASA mission-oriented research. Outside Analysis To complement the Board's discussion of the NASA proposal, two papers were commissioned as part of the preparation of the report. The paper by Michael I. Luger, Science and Technology Parks at the Millennium: Concept, History, and Metrics, provides a comprehensive overview of the science and technology and related park developments around the world in order to give NASA a broader 2 While these issues are unquestionably relevant to the Ames initiative, the focus of the workshop was primarily on issues of national policy where the Board has substantial expertise.

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Page 17 context for its planning activities. The commissioned work by David B. Audretsch, The Prospects for a Technology Park at Ames: A New Economy Model for Industry-Government Partnership?, underscores the unique features of the Ames Research Park proposal. Rather than seeking to provide an engine of growth for the region via outward technology transfer, Audretsch observes that the goal of the Ames park is to enable NASA to achieve its mission by providing economical access to technological capabilities external to NASA. This would occur both through the inward transfer of technologies developed outside of NASA and through the joint development of new technologies by NASA in conjunction with its partners in private industry and the universities. Audretsch also proposes a series of metrics to monitor and measure the impact of the Ames Research Park. As both papers affirm, the creation of a successful S&T park requires effective cooperation by many parties. Both the participants in the discussion and the commissioned analysis highlighted that the management challenge for Ames will be to accomplish the multiple objectives of this initiative, in collaboration with the industry and university partners as well as the state and local governments, while keeping in mind the need for clear goals and appropriate metrics to measure progress in this innovative undertaking. SUMMARY OF THE WORKSHOP Representative Zoe Lofgren, who serves on the Space Subcommittee of the House Science Committee, welcomed the participants to her district in Silicon Valley and underscored the importance of federal funding both to advance the nation's research agenda and to educate the next generation of scientists and engineers. The workshop itself was divided into five main panels for presentations and discussion. Strategic Direction The first panel dealt with NASA's technology strategy, which will focus on three primary theme areas: nanotechnology, biotechnology, and information technology. The strategy is to integrate these three systems in the agency's search for evolvable, adaptable, extremely tough, self-repairing systems. Ideally, such systems would be able to create information and knowledge from data, perform self-diagnosis and repair, and make decisions – in effect, to “think for themselves.” Ames plans to pursue this strategy through research partnerships with both private firms and universities. Ames Advantages The second panel, led by Michael Luger of the University of North Carolina at Chapel Hill, discussed the concept, history, and metrics of research parks.

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Page 18 Dr. Luger described the difficulty of predicting the success of new parks and the absence of uniform standards by which to measure success. He cautioned that most parks do not generate tangible benefits that exceed their costs, and even those that are successful require long incubation periods. However, Dr. Luger also enumerated advantages an Ames research park would have, including preexisting intellectual prominence, available and essentially cost-free real estate, access to the exceptional technological and financial resources of Silicon Valley, a historic relationship with Lockheed Martin, the support of the local communities, and the considerable intellectual and institutional resources of its academic partners, the University of California and Carnegie Mellon University. These are substantial assets and, as Professor Audretsch's paper argues, they distinguish the Ames initiatives from more traditional S&T parks.3 Public-Private R&D Partnerships The third panel described in more detail the goals and metrics for the park. Dr. William Berry, Ames' Deputy Director, described the primary objective to extend and deepen the R&D capabilities of Ames through R&D partnerships that would focus primarily on the goals of information technology, nanotechnology, and biotechnology. Partners would create or renovate their own facilities on Ames property. In return for land and a unique relationship with NASA researchers, those partners would reinvest funds gained through partnership activities in collaborative activities at Ames. Although there would be no direct revenue stream for Ames, partnerships would be fueled primarily by nonappropriated funds. Private Management The discussion of goals and metrics was continued with a description by William Ballhaus of Lockheed Martin's role as partner. Lockheed Martin, which has collaborated with Ames on the strategic plan, already performs virtually all of its research in the context of government and industry partnerships, and Ames would benefit from this experience. At Ames, Lockheed would direct a Research Initiative Fund to support new programs, consult on human resources and regional development programs, and direct most of the large structural improvements to the facility. Expanded Research and Educational Outreach Dr. M.R.C. Greenwood, chancellor of the University of California at Santa Cruz, described her institution's primary objectives in forming a partnership with 3 See the papers by Michael Luger and David Audretsch in this volume.

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Page 19 Ames, emphasizing both the importance of common research objectives and the opportunity to meet pressing educational needs of the state. One new area of collaborative research, for example, will involve Santa Cruz taking the lead role in a new astrobiology facility. Collaboration will also enable Santa Cruz to expand its programs of educational outreach, K-12 teacher training, and technical retraining. Partners in Education and Research Drs. Duane Adams and James Morris from Carnegie Mellon described their university's goals in forming partnerships with Ames, including collaborative research in robotics, information technology, software engineering, human-computer systems, and “dependable computing,” involving both students and faculty. Moderator Edward Penhoet emphasized the difficulty of forming truly collaborative partnerships, in the sense of sharing insights, diversity of expertise, and leadership. An Innovative Investment Model On panel four, Gilman Louie, who directs an investment firm called In-Q-Tel on behalf of the Central Intelligence Agency, described the CIA's effort to form equity-based partnerships, rather than contractual relationships, with high-tech firms. In-Q-Tel believes that equity partnerships have several advantages over contracts. First, traditional contracts contain goals and metrics that must be known at the outset; with new technologies, it is seldom possible to know the outcome of a project in advance. Second, part of a traditional contractor's motive to succeed is to avoid penalties built into the contract. With an equity partnership, the partner is motivated by the hope of profiting from the success of a new technology. This more positive-sum approach was suggested as better suited to the requirements of rapidly changing technologies. An Enterprise Fund Taking up this theme, Robert Norwood of NASA described the prospect of a technology investment fund (an “enterprise fund”) for the space agency with the goals of 1) identifying NASA technologies with strong commercial potential, and 2) finding corporate partners capable of commercializing those technologies. The fund would operate as a nongovernmental entity, free of government rules and constraints. It would combine the research strength of NASA, which reduces technological risk, with the business strength of the investment community, which reduces business risk. Kathy Behrens, an investment banker, pointed out that the differences between the cultures and goals of government agencies and those of the private

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Page 20 investment world might bring difficulties to such partnerships. She cautioned that agencies should avoid the difficult job of “trying to find a home for our technologies.” Encouraging Entrepreneurial Activity On panel five, Carolina Blake of the Ames Research Center discussed entrepreneurial activity, beginning with the Commercial Technology Office at Ames, whose objectives include technology assessment, marketing, licensing intellectual property, and recruiting partners to work on technologies that are both critical to Ames' mission and potentially profitable for the companies. Elizabeth Downing, head of 3D Technology Laboratories, described the funding difficulties of her start-up company. Neither venture funds nor technology firms were interested in funding a technology that requires time to develop. She said that without government support in the form of NSF, DARPA, and DoD SBIR grants, as well as a recent ATP award, it would have been impossible to make progress with her promising technology. Cautious Encouragement In conclusion, Jim Turner of the House Science Committee praised the effort at Ames as an innovative use of the space program's resources. Turner also offered a word of caution, advising that Ames take special care to avoid the perception of “corporate favors.” Charles Wessner suggested that the flexibility of the Space Act, and its legitimacy, should be drawn on as the project goes forward. While the Space Act authority allows partnering, he cautioned that the technological and perhaps political risk associated with equity investments or venture activities should be kept in mind. Success rates, even for outstanding venture capital firms, are not always high enough to meet Washington's admittedly ill-defined standards. Nonetheless, he suggested that it is only fair to observe that, taken as a whole, this ambitious cooperative initiative does address needs central to the NASA mission and may provide a means of meeting educational needs which are equally central to the continued development of the region. As the reader can appreciate, this was a broad range of issues to consider in a single symposium. A principal goal of the workshop was to raise many of the issues that Ames might expect to encounter as it moves forward with its plan to create a center of instruction and collaborative research contributing to the NASA mission and the needs of the nation.