AERONAUTICS INNOVATION

NASA’S CHALLENGES AND OPPORTUNITIES

Committee on Innovation Models for Aerospace Technologies

Board on Science, Technology, and Economic Policy

Policy and Global Affairs

Stephen A. Merrill, Editor

NATIONAL RESEARCH COUNCIL OF THE NATIONAL ACADEMIES

THE NATIONAL ACADEMIES PRESS
Washington, D.C.
www.nap.edu



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Aeronautics Innovation: NASA’s Challenges and Opportunities AERONAUTICS INNOVATION NASA’S CHALLENGES AND OPPORTUNITIES Committee on Innovation Models for Aerospace Technologies Board on Science, Technology, and Economic Policy Policy and Global Affairs Stephen A. Merrill, Editor NATIONAL RESEARCH COUNCIL OF THE NATIONAL ACADEMIES THE NATIONAL ACADEMIES PRESS Washington, D.C. www.nap.edu

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Aeronautics Innovation: NASA’s Challenges and Opportunities THE NATIONAL ACADEMIES PRESS 500 Fifth Street, N.W. Washington, DC 20001 NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the report were chosen for their special competences and with regard for appropriate balance. This study was supported by Contract # NASW-99037, Task Order #103 between the National Academy of Sciences and the National Aeronautics and Space Administration. Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the authors and do not necessarily reflect the views of the organizations or agencies that provided support for the project Additional copies of this report are available from the National Academies Press, 500 Fifth Street, N.W., Lockbox 285, Washington, DC 20055; (800) 624-6242 or (202) 334-3313 (in the Washington metropolitan area); http://www.nap.edu. International Standard Book Number 0-309-10188-3 Limited copies are available from: Board on Science, Technology, and Economic Policy National Research Council 500 Fifth Street, N.W. K574 Washington, DC 20001 Phone: 202-334-2200 Fax: 202-334-1505 The cover design incorporates an image from a simulation of airplane traffic over the United States at 6:30 p.m. EDT on September 6, 2001. The simulation was produced using Future ATM Concepts Evaluation Tool (FACET) by the Aviation Systems Division at the NASA Ames Research Center, Moffett Field, CA. Copyright 2006 by the National Academies. All rights reserved. Printed in the United States of America

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Aeronautics Innovation: NASA’s Challenges and Opportunities THE NATIONAL ACADEMIES Advisers to the Nation on Science, Engineering, and Medicine The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. Upon the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Ralph J. Cicerone is president of the National Academy of Sciences. The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. Wm. A. Wulf is president of the National Academy of Engineering. The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, upon its own initiative, to identify issues of medical care, research, and education. Dr. Harvey V. Fineberg is president of the Institute of Medicine. The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy’s purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Ralph J. Cicerone and Dr. Wm. A. Wulf are chair and vice chair, respectively, of the National Research Council. www.national-academies.org

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Aeronautics Innovation: NASA’s Challenges and Opportunities COMMITTEE ON INNOVATION MODELS FOR AEROSPACE TECHNOLOGIES ALAN SCHRIESHEIM (Chair), Director Emeritus, Argonne National Laboratory MEYER J. BENZAKEIN, Wright Brothers Institute Professor, Ohio State University WILLIAM E. COYNE, 3M (retired)* JEROME J. GASPAR, Senior Vice President, Engineering and Technology, Rockwell Collins STANLEY KANDEBO, Assistant Managing Editor, Aviation Week & Space Technology** GLENN MAZUR, College of Engineering, University of Michigan (ret.) HENRY MCDONALD, Distinguished Professor, Chair of Excellence in Computational Engineering, University of Tennessee at Chattanooga DUNCAN T. MOORE, Chief Executive Officer, Infotonics Technology Center, Rochester, NY JOSEPH MORONE, President, Albany International MARK MYERS, Visiting Executive Professor of Management, Wharton Business School, University of Pennsylvania NICHOLAS S. VONORTAS, Professor of Economics and International Affairs and Director, Center for International Science and Technology Policy, George Washington University TODD A. WATKINS, Professor, College of Business and Economics, Lehigh University DEBORAH L. WINCE-SMITH, President, Council on Competitiveness STEPHEN A. MERRILL, Study Director (from September 2004) RUSSELL MOY, Study Director (until September 2004) CRAIG SCHULTZ, Senior Research Associate (until September 2005) KENNETH JACOBSON, Consultant CYNTHIA GETNER, Financial Officer MARIZA SILVA, Project Assistant *   Resigned from the committee as of January 2005. **   Resigned from the committee as of November 2004.

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Aeronautics Innovation: NASA’s Challenges and Opportunities BOARD ON SCIENCE, TECHNOLOGY, AND ECONOMIC POLICY DALE JORGENSON (Chair), Samuel W. Morris University Professor, Harvard University BILL SPENCER (Vice-Chair), Chairman Emeritus, International SEMATECH M. KATHY BEHRENS, Managing Director for Medical Technology, Robertson Stephens Investment Management KENNETH FLAMM, Professor and Dean Rusk Chair in International Affairs, LBJ School of Public Affairs, University of Texas-Austin BRONWYN HALL, Professor of Economics, University of California, Berkeley JAMES HECKMAN, Henry Schultz Distinguished Service Professor of Economics, University of Chicago DAVID MORGENTHALER, Founding Partner, Morgenthaler Ventures MARK B. MYERS, Visiting Executive Professor of Management, Wharton School, University of Pennsylvania ROGER NOLL, Morris M. Doyle Centennial Professor of Economics and Director, Public Policy Program, Stanford University EDWARD E. PENHOET, Director, Science and Higher Education Programs, Gordon and Betty Moore Foundation ARATI PRABHAKAR, Partner, U.S. Venture Partners WILLIAM J. RADUCHEL, Chairman and Chief Executive Officer, Ruckus Network JACK SCHULER, Chairman of the Board of Directors, Ventana Medical Systems, Inc. SUZANNE SCOTCHMER, Professor of Economics and Public Policy, University of California, Berkeley STEPHEN A. MERRILL, Executive Director CHARLES WESSNER, Program Director SUJAI SHIVAKUMAR, Program Officer DAVID DIERKSHEIDE, Program Officer CRAIG SCHULTZ, Senior Research Associate (until September 2005) McALISTER CLABAUGH, Program Associate

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Aeronautics Innovation: NASA’s Challenges and Opportunities Preface The Aeronautics Research Mission Directorate (ARMD) of the National Aeronautics and Space Administration (NASA) seeks to create an environment that fosters the application of the results of its R&D program in advanced airframe, engine, emissions, air safety, and air traffic control technologies. Application of the technologies developed by NASA is dependent on a variety of government and private-sector clients or customers—the airframe and aircraft engine industries, the military services, and the regulatory and operational arms of the Federal Aviation Administration (FAA). To help produce a more robust innovation climate, ARMD asked the National Academies’ Science, Technology, and Economic Policy (STEP) Board to identify from the private and public sectors practices, tools, and methodologies that could maximize NASA’s ability to influence innovation outcomes positively. The National Academies assembled a committee composed of experts in private-sector technology management, public policy and administration, and economics. Included were people experienced not only in different areas of aeronautics technology development but also in information technology, optoelectronics, and materials. The committee organized two public workshops. Participants in the first workshop included experts from industry, government, and academia who discussed the application of modern innovation techniques to a broad range of entities. The second workshop focused more directly on the aviation sector. Participants included

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Aeronautics Innovation: NASA’s Challenges and Opportunities senior industry executives, academic experts and consultants, former high-level NASA and FAA officials, and representatives from the Air Force and the FAA-based interagency Joint Planning and Development Office, charged with coordinating federal agency efforts to plan and implement a 21st century air traffic control system in the United States. Committee members and staff also visited three of the NASA research establishments engaged in aeronautics R&D: the Ames Research Center in California, the Glenn Research Center in Ohio, and the Langley Research Center in Virginia. ARMD has direct administrative responsibility for Glenn and Langley as well as the Dryden Research Center in California; Ames was recently transferred to the NASA science program office. At each of the locations we visited, we interviewed top center managers as well as R&D program and project managers. These interviews were supplemented by in-person or telephone discussions with other individuals knowledgeable about NASA and the aerospace industry. Of course, NASA headquarters officials participated in the workshops and committee staff conferred with them throughout the project. The committee thoroughly reviewed the large volume of reports in the past few years on the aerospace industry and government policies affecting it. These efforts ranged from broad assessments of the future of the U.S. industry by government commissions and such private organizations as the Aerospace Industries Association to technical evaluations of the quality of NASA’s aeronautics program by committees assembled under the National Academies’ Aeronautics and Space Engineering Board. The reports conclude that the nation has pressing economic and security needs in aviation ranging from meeting increasing international competition in aircraft and engines to expanding air travel capacity while maintaining safety and reducing adverse environmental impacts. In addressing these needs, NASA can play an important role that is not served by other parties. Previous National Academies’ reports have found that NASA’s R&D portfolio generally exhibits high technical merit. Our committee accepted this judgment, as we lacked the breadth of expertise to make an independent evaluation of the technical merit of the agency’s activities. Finally, the committee reviewed the recent budget history and personnel profile of the NASA aeronautics program, including congressional testimony on the President’s FY 2006 budget request. A vivid picture emerged from the workshops, center visits, consultations, literature review, and budget analysis. Despite strong private-sector support for a broad and robust federal government role in civil aeronautics

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Aeronautics Innovation: NASA’s Challenges and Opportunities technology development, Congress and recent administrations have not come to terms on what are widely regarded as nationally important NASA aeronautics missions and the level of resources needed to address them effectively and in a timely fashion. On the contrary, the budget has declined steadily over a seven-year period. In response, ARMD and its predecessors have attempted to do as much or more with less, spreading resources too thinly to ensure their effectiveness and the application of the R&D results. This has been a growing problem for several years, but it was brought home most forcefully by the President’s FY 2006 request for a sharply reduced ARMD budget, forcing a radical scaling back of the Vehicle Systems Program (VSP) R&D to pursue only a few of the technology development activities in its portfolio. Furthermore, the administration’s out-year budget projections to 2010 showed a 50 percent decrease in the aeronautics R&D budget and personnel overall. Although arguably beyond our purview, these circumstances were too central to the viability of NASA’s aeronautics program for our committee to ignore, even though they occurred in the final stages of our deliberations. As described in the report’s first chapter, the budget proposal exposed the lack of agreement between government and the aeronautics community about the federal government’s role in civilian aviation generally and NASA’s role in aviation technology in particular. Former Associate Administrator Victor Lebacqz acknowledged as much in defending the President’s FY 2006 budget request before the House Science Committee in March 2005. He said that currently there are two contending points of view. One, reflected in the reports described earlier, is that the aviation sector is critically important to national welfare and merits government support to ensure future growth and market share despite fierce international competition. This implies an expansive public and private research and development program. The other, reflected in the White House’s budget submission, is that as the aviation industry approaches maturity and commoditization, the government can retrench and leave technology development to the private sector. Interestingly, he neglected to mention the public good objectives—mobility, safety, and environmental protection—served by NASA’s R&D involvement. The proposed retrenchment had a galvanizing effect. In the FY 2006 Appropriations Act, congressional appropriators rejected the proposed cut and restored the ARMD budget to its FY 2005 level or slightly above. At the same time, the authorizing committees secured passage of the NASA Authorization Act (P.L. 109-155) calling on the administration to prepare a

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Aeronautics Innovation: NASA’s Challenges and Opportunities policy statement on aeronautics as a basis for further discussion with Congress. Meanwhile, a new NASA administrator and associate administrator withdrew the proposed scaling back of the VSP program and set to work on a new plan for ARMD. These are encouraging signs that a policy consensus could emerge and a potentially fatal retrenchment be avoided. But in the near future there is unlikely to be a large infusion of new resources. Given that the program will probably continue to operate in a highly resource-constrained environment, the first principle of modern innovation management is highly relevant. It is that the highest priority projects need to be identified and the less important projects winnowed out. Beyond that, best practices and techniques for NASA’s aeronautics R&D management are needed in three areas—transition planning, financial management, and personnel management. These are elaborated in Chapter 2 of the report. We think that these principles and practices, if applied consistently to a more focused portfolio of activities, could facilitate the implementation of NASA-developed technologies. Our committee also heard suggestions for reorganization of the NASA aeronautics program. These included the creation of an agency operating in the mode of the Defense Advanced Research Projects Agency (DARPA)—that is, an expert staff of managers outsourcing projects to firms and universities. Another suggestion was to convert the research centers into contractor-operated institutions, as in the Department of Energy. A third proposal was to raise the stature and increase the independence of the aeronautics program within NASA, perhaps along the lines of the FAA’s relationship to the Department of Transportation. Evaluating these options was not our assigned task, although we observe some characteristics of DARPA that raise questions about whether it is an appropriate model for NASA. In any case, we concluded that they are distinctly secondary to the question of what the federal government’s role should be in developing new technologies for the nation’s air transportation system. Failing to answer that question puts the program on a glide path to irrelevance. This volume has been reviewed in draft form by individuals chosen for their diverse perspectives and technical expertise, in accordance with procedures approved by the National Academies’ Report Review Committee. The purpose of this independent review is to provide candid and critical comments that will assist the institution in making its published report as sound as possible and to ensure that the report meets institutional standards for objectivity, evidence, and responsiveness to the study charge. The re-

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Aeronautics Innovation: NASA’s Challenges and Opportunities view comments and draft manuscript remain confidential to protect the integrity of the process. We wish to thank the following individuals for their review of this report: Jeremiah Creedon, Old Dominion University; George Donohue, George Mason University; Steve Flajser, Loral Space Systems; Richard Golaszewski, GRA, Inc.; Michael Leahy, Air Force Research Laboratory; Earll Murman, Massachusetts Institute of Technology; Dorothy Robyn, The Brattle Group; and David Whelan; Phantom Works, Boeing. Although the reviewers listed above have provided many constructive comments and suggestions, they were not asked to endorse the conclusions or recommendations, nor did they see the final draft of the report before its release. The review of this report was overseen by John Ahearne, Sigma Xi, the Scientific Research Society, and Thomas Young, Lockheed Martin Corporation, retired. Appointed by the National Academies, they were responsible for making certain that an independent examination of this report was carried out in accordance with institutional procedures and that all review comments were carefully considered. Responsibility for the final content of this report rests entirely with the authoring committee and the institution. Alan Schriesheim, Chair Committee on Innovation Models for Aerospace Technologies

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Aeronautics Innovation: NASA’s Challenges and Opportunities List of Acronyms and Abbreviations AFRL Air Force Research Laboratory (DOD) AIA Aerospace Industries Association ARC Ames Research Center (NASA) ARMD Aeronautics Research Mission Directorate (NASA) ASME American Society of Mechanical Engineers ASP Airspace Systems Program (NASA/ARMD) ATC air traffic control ATM air traffic management ATO Air Traffic Organization (FAA) AvSSP Aviation Safety and Security Program (NASA/ARMD) COCO contractor-owned contractor-operated research center DARPA Defense Advanced Research Projects Agency (DOD) DFRC Dryden Flight Research Center (NASA) DHS U.S. Department of Homeland Security DOD U.S. Department of Defense DOT U.S. Department of Transportation EPA U.S. Environmental Protection Agency FAA U.S. Federal Aviation Administration (DOT) FFRDC federally funded research and development center FY fiscal year G&A general and administrative expenses GOCO government-owned contractor-operated research center GOGO government-owned government-operated research center GPS global positioning system GRC Glenn Research Center (NASA)

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Aeronautics Innovation: NASA’s Challenges and Opportunities HR human resources JPDO Joint Planning and Development Office (FAA) LRC Langley Research Center (NASA) MOA memorandum of agreement MOT management of technology MOU memorandum of understanding NACA National Advisory Committee on Aeronautics NASA National Aeronautics and Space Administration NIA National Institute of Aerospace NIH National Institutes of Health NOAA National Oceanographic and Atmospheric Administration NSF National Science Foundation NSTB National Transportation Safety Board OMB Office of Management and Budget (Executive Office of the President) OSTP Office of Science and Technology Policy (Executive Office of the President) PATCO Professional Air Traffic Controllers’ Association QFD quality function deployment R&D research and development RFP request for proposals ROA remotely operated aircraft RTP research transition plan SEWP science and engineering workstation procurement STEP Board on Science, Technology, and Economic Policy (The National Academies) TMA traffic management advisor TQM total quality management TRL technology readiness level TSA Transportation Security Administration (DHS) UARC university-affiliated research center UAV unmanned air vehicle USDA U.S. Department of Agriculture VSP Vehicle Systems Program (NASA/ARMD) WCF working capital fund

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Aeronautics Innovation: NASA’s Challenges and Opportunities Contents     SUMMARY   1 1   National Aviation Needs and the Federal Role   9      Private-Sector Perspective,   9      Technical Requirements,   13      The Federal Government’s Role in Technology,   15      Resources and National Policy,   24      Program Focus and Prioritization,   28 2   Innovation Facilitators and Accelerators for Aeronautics   41      Portfolio Approach and Coherent Alignment with Mission and Customers,   43      Management for Technology Transition,   52      Flexible Human Resource Practices and Incentives for Creativity,   63      Financial Management to Minimize the Disruptive Effects of External Demands,   68      Organization of NASA Aeronautics R&D,   76     APPENDIXES         A   Public Workshop Agendas   81     B   Biographies of Committee Members and Staff   85

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Aeronautics Innovation: NASA’s Challenges and Opportunities List of Boxes, Tables, and Figures BOX 1-1   Technical Needs of Aeronautics   16 TABLES 1-1   Administration Budget Request and Projections for NASA Aeronautics R&D, FY 2005-2010 ($ millions)   24 1-2   Projected NASA Aeronautics Research Centers’ Civil Service and Contractor Personnel, FY 2005-2010   29 FIGURES 1-1   NASA Aeronautics R&D Budget Requests and Actual Budgets, 1990-2000   25 1-2   NASA Aeronautics R&D Budgets, 1959-2003 (constant 2002 dollars)   26

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