across different investment vehicles and technology areas, would produce a set rate of return. In any case, returns should not be expected to exceed those in private venture capital markets or even in corporate investment portfolios.

Evaluating the success of the CTC should not, therefore, be based primarily on the corporation's overall rate of financial return on investments. The most important criterion—long-term social (including overall economic) return—will be much harder to judge. After no more than 10 years, an evaluation of the CTC, conducted by an independent review panel of experts, might take into consideration the following: whether the CTC has had an overall positive impact on the ability of U.S. industry to commercialize and adopt new technologies; whether it has invested in projects that exhibited a high potential social rate of return if successful; and whether the CTC has elicited strong, continuing support in the private sector, particularly as reflected in the willingness of firms to fund cooperative R&D projects under its sponsorship.

Among the important advantages of the CTC are its freedom from operating under civil service guidelines. A highly skilled, motivated, and flexible staff is essential to any organization. The CTC, as an independent corporation, would be able to hire qualified scientists, engineers, business managers, academics, and administrative personnel by using competitive compensation packages. Clearly, a federal agency devoted to civilian technology would not be able to operate in this manner, pay nonfederal wages, and offer flexible, competitive benefit packages to attract the most highly qualified staff from the broadest possible labor pool. The CTC would be free of complex, slow, litigation-prone government procurement regulations. The CTC, unlike a new federal agency, would also be able to make direct loans and grants to ventures under terms acceptable to the board of directors. The CTC would have the flexibility to take direct equity ownership in R&D cooperative ventures, something not possible under current federal guidelines.

Finally, a CTC would be an efficient method of facilitating R&D investments by the federal government, over and above an across-the-board R&D tax credit. There are benefits associated with this tax credit, as noted above. Lowering the effective tax burden for corporations engaged in research and development is, however, insufficient to meet the objective of facilitating pre-commercial R&D in a wide range of technology areas and of increasing the rate of technology adoption by U.S. industry.

An organization to stimulate pre-commercial R&D investments would impact technology commercialization rates in a more systematic manner than current tax incentives for R&D. The board of the CTC would be charged with making investment decisions that narrow the possible portfolio of R&D projects in a manner that changes in the tax code cannot. In



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