Welcome

Dale Jorgenson

Harvard University

On behalf of the Board on Science, Technology, and Economic Policy, it is my pleasure to welcome you to today’s conference on “Government-Industry Partnerships in Biotechnology and Computing.” This conference encompasses two of our most innovative industries—industries that are key to future economic growth and social advancement. We are delighted to have an especially distinguished group of speakers today. Indeed, the quality of the speakers participating underscores the importance of the topics we will discuss.

I chair the STEP Board, which was established in 1991 to improve policymakers’ understanding of the interconnections among science, technology, and economic policies and their importance to the U.S. economy. A distinctive feature of the Board is that it brings together economists, industrialists, and policymakers to explore policy issues of growing importance to economic growth.

Examples of recent STEP work include Securing America’s Industrial Strength and U.S. Industry in 2000: Studies in Competitive Performance. In these volumes, the STEP Board assesses the competitive performance of 11 sectors of the U.S. economy. We carried out the assessment recognizing that a decade ago, dire forecasts for the U.S. economy were quite pervasive. The picture has changed dramatically. We wanted to know how and why. And we wanted to determine what must we do to maintain our current era of strong growth. Our study also revealed imbalances in public-sector investment in R&D. Bill Bonvillian of Senator Lieberman’s staff will address this point later this morning.

Today, STEP is releasing two reports. The first is a summary of a workshop held this past March on the Advanced Technology Program (ATP). The volume is titled The Advanced Technology Program: Challenges and Opportunities, and



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Capitalizing on New Needs and New Opportunities: Government-Industry Partnerships in Biotechnology and Information Technologies Welcome Dale Jorgenson Harvard University On behalf of the Board on Science, Technology, and Economic Policy, it is my pleasure to welcome you to today’s conference on “Government-Industry Partnerships in Biotechnology and Computing.” This conference encompasses two of our most innovative industries—industries that are key to future economic growth and social advancement. We are delighted to have an especially distinguished group of speakers today. Indeed, the quality of the speakers participating underscores the importance of the topics we will discuss. I chair the STEP Board, which was established in 1991 to improve policymakers’ understanding of the interconnections among science, technology, and economic policies and their importance to the U.S. economy. A distinctive feature of the Board is that it brings together economists, industrialists, and policymakers to explore policy issues of growing importance to economic growth. Examples of recent STEP work include Securing America’s Industrial Strength and U.S. Industry in 2000: Studies in Competitive Performance. In these volumes, the STEP Board assesses the competitive performance of 11 sectors of the U.S. economy. We carried out the assessment recognizing that a decade ago, dire forecasts for the U.S. economy were quite pervasive. The picture has changed dramatically. We wanted to know how and why. And we wanted to determine what must we do to maintain our current era of strong growth. Our study also revealed imbalances in public-sector investment in R&D. Bill Bonvillian of Senator Lieberman’s staff will address this point later this morning. Today, STEP is releasing two reports. The first is a summary of a workshop held this past March on the Advanced Technology Program (ATP). The volume is titled The Advanced Technology Program: Challenges and Opportunities, and

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Capitalizing on New Needs and New Opportunities: Government-Industry Partnerships in Biotechnology and Information Technologies we are pleased to have it out just 6 months after the event. It represents one of the few efforts to examine closely the origins, objectives, and current operations of the ATP. As many of you may know, ATP attracts its share of controversy. Partly because of that, the program has commissioned a rigorous assessment effort in cooperation with the National Bureau of Economic Research. STEP plans to draw on this rich assessment program in its review of the program’s operations. We plan to produce a report next year with findings and recommendations concerning this innovative program. The second report is titled The Small Business Innovation Research Program: Challenges and Opportunities. Like the ATP volume, this report summarizes a workshop held to review the program’s origins and the current research on its operations. The workshop also explored operational challenges faced by SBIR, identified some SBIR successes, and discussed possible improvements in the program. The volume also includes papers by Roland Tibbetts, here today, and Josh Lerner of the Harvard Business School. One outcome of that workshop was a second symposium on SBIR, in which we looked at a specific effort within the Defense Department to improve the commercialization of SBIR-funded technologies. That effort is known as the Fast Track initiative. The STEP Board commissioned research assessing Fast Track’s role in encouraging commercialization of SBIR technologies funded by the Defense Department. That report should be available by the end of the year. The ATP and SBIR volumes are part of a larger project within STEP called “Government-Industry Partnerships for the Development of New Technologies.” Gordon Moore of Intel leads this project, and we are very fortunate to have him with us today and tomorrow. It is under the auspices of this project that our meeting today is being held, and I want to describe for you some of the “Government-Industry Partnership” project’s work. The basic good goal of the project is to identify “best practices” from the many government-industry partnerships underway in the United States and abroad. As a starting point, it is important to recognize the role that government has frequently played in supporting the development of new technologies in this country. Outlined in Alexander Hamilton’s 1791 Report on Manufacturers, federal initiatives provided Eli Whitney a contract in 1798 for interchangeable musket parts and Samuel Morse’s grant from Congress in 1842 for a demonstration project to run a telegraph line between Washington and Baltimore. Following World War I, the government-initiated Radio Corporation of America facilitated the development of radio. This initiative was privatized and became the RCA Corporation. In recent years, government-industry partnerships have continued to play a prominent role in the growth of the U.S. economy. The development of the Internet stands out as an example. Despite the success of many of these programs—and the failure of others—there has been relatively little effort to take a

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Capitalizing on New Needs and New Opportunities: Government-Industry Partnerships in Biotechnology and Information Technologies step back and see why some partnerships have been successful, why some have not, and objectively analyze the reasons underlying success and failure. To address this, the STEP Board has been holding a series of “fact-finding” workshops on a variety of partnership programs. As I have noted, the reports on ATP and SBIR are products of these “fact-finding” workshops. We also held a conference last year on international science and technology cooperation focused on the U.S.-E.U. Science and Technology Agreement. The conference resulted in specific agreements to enhance cooperation with our European friends. A summary of the conference with the agreement and an overview of the EU Fifth Framework Program are included in our volume, New Vistas in Transatlantic Science and Technology Cooperation. On September 17, 1999, we issued a workshop report on cooperation between industry and the national laboratories. Sandia National Laboratories asked STEP to gather economists and policymakers to discuss the labs’ plans to develop a science and technology park adjacent to Sandia. The S&T park is seen as a potentially effective instrument to enhance Sandia’s ability to fulfill its mission through partnerships with the private sector. The report summarizing the workshop is titled Industry-Laboratory Partnerships: A Review of the Sandia Science and Technology Park Initiative. All the publications I have mentioned have been published since June. All are available today at the conference table. Over the next day-and-a-half, we will talk a lot about biotechnology and computing, with an aim toward identifying synergies between the two sectors, future challenges, and perhaps most importantly, future challenges for policymakers. Based on the deliberations from this meeting, Dr. Moore’s Steering Committee will develop findings and recommendations about the issues discussed in the course of the conference. Your participation in this process is therefore especially welcome. In developing our report, the STEP Board is keeping with its tradition of providing a forum through which pragmatic policy recommendations are channeled to key decision makers in Congress and the Executive Branch. To be effective in doing this, we need the input of the many distinguished individuals on our program and present here in the audience. I am pleased to turn the podium over to Bill Spencer, Chairman of SEMATECH, who will describe in greater detail what we hope to accomplish today and tomorrow. Bill is the Vice Chair of the STEP Board and also serves as Vice Chair of the Steering Committee for the “Government-Industry Partnerships” project. As many of you know, Bill was CEO of SEMATECH from 1990 to 1996, and before that directed the R&D operations of Xerox. Bill has been instrumental in putting this conference together. It is with pleasure that I present him to you to describe more fully our goals for the next day-and-a-half.