competence or experience in this area. The creation of a CTA in one of the federal agencies would most likely do little to stimulate the establishment of such a group. Along with lack of experience, staff at a CTA would be subject to civil service rules that hinder recruitment of highly skilled, well-paid technical personnel from industry or universities.

A CTA would therefore have difficulty overcoming problems associated with post-employment restrictions for private sector scientists and engineers. Compensation rates that exceed government pay schedules would be impossible. Moreover, government procurement rules, which apply to most federal agencies, would limit the flexibility essential to establishing both internal and external R&D facilities and operations. A CTA created as a new agency outside existing departments would still be subject to these limitations. It is unlikely that a new and separate technology agency would be able to adopt the flexible personnel policies of agencies located in larger departments that have attracted motivated and highly qualified staff, such as the Office of the U.S. Trade Representative or DARPA, at least initially.17 In sum, the disadvantages of a Civilian Technology Agency outweigh its potential advantages. There is a more efficient way to structure an extension of the federal role in civilian technology.

The Civilian Technology Corporation

The second option considered is fundamentally different from the one envisioned above. The Civilian Technology Corporation would be a new, private, quasi-governmental institution intended to guide financial support for middle-ground, pre-commercial R&D in key technology areas of significance to the U.S. technology base. Financing for the CTC would be made available through a one-time appropriation by Congress of $5 billion. This funding might be expended over a five-year period, although the CTC board could take longer to fully invest these funds in R&D projects. The $5 billion, if invested at a relatively rapid rate, would provide the capital necessary for up to approximately $1 billion in program expenditures per year. Funds might be allocated to firms by direct investment, for example. They might also be distributed on a contract basis or, in the case of loans and loan guarantees, administered by the CTC through financial institutions selected by the board.

As noted, to invest this capital fully, the CTC board of directors might require more than five years. Decisions about the duration and rate of CTC investment would best be made by the individuals in charge of such a program, in consultation with industry, government, and academic advisory groups. The panel believes it is preferable to move with some dispatch in order to have the best possible chance of affecting long-term commercialization rates in the United States. Program expenditures at the level of $1

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