gy in combustion engineering R&D. Pre-commercial R&D programs can address deficiencies in the commercial marketplace in technologies with the potential for widespread industry application and long-term significance to the U.S. economy.

The decentralized nature of most government technology programs, which can serve to diversify federal investment in R&D, also increases the likelihood that uncoordinated programs will duplicate activities already under way in other federal agencies. In some cases, duplication of pre-commercial R&D projects is beneficial. Projects funded in a new program should not, however, duplicate related programs, particularly in the applied, mission-related R&D projects under way in federal agencies.

Diversification across projects by technology area is also essential to the success of an expanded federal program. A broad portfolio of investments in technical fields, including the biomedical sciences and biotechnology, materials sciences, manufacturing product and process technologies, and computer and telecommunications-related technologies, should help ensure that an expanded government role in pre-commercial R&D does not become captive to the interests of a particular technology champion or a set of companies.

Principle 5: Projects Open to Foreign Firms Characterized by Substantial Contribution to U.S. Gross Domestic Product (GDP)

Collaborative projects in pre-commercial R&D supported by the government under an expanded federal program should be open to foreign firms that contribute in a substantial manner to the U.S. gross domestic product (GDP). Barriers to foreign participation in U.S. government-funded cooperative R&D projects have recently been put in place. Foreign participation is restricted in collaborative R&D projects sponsored by NIST's Advanced Technology Program, as well as those undertaken by the National Center for Manufacturing Sciences, and SEMATECH, for example.9 In most instances where restrictions have been put in place, a U.S. firm is defined as one under the control of U.S. citizens or incorporated in the United States. In a few cases, such as the ATP program, foreign firms may participate if the project under consideration would enhance U.S. competitiveness over the long-term more than if foreign firms were excluded.

In an interconnected global economy where goods and services flow rapidly across national boundaries, the U.S. government should seek to ensure that technology and production capability of the most up-to-date and competitive kind flows to U.S.-based development and manufacturing facilities. There are significant benefits that accrue to the U.S. economy through the training, education, and skill enhancement offered by foreign-based corporations with U.S. affiliates. Many of the foreign-owned corporations



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