guidelines on how best to structure that involvement. The following summarizes some of the most important reasons why federal incentives to private sector technology efforts have been successful in the past.

  1. Close links between users of the technology and federally supported R&D projects: As in the case of federal support of biotechnology through the NIH, close involvement of researchers and industry in the design of collaborative projects is important to the success of R&D efforts.

  2. Investments by government and industry in diffusion of new technologies : The success of federal efforts in agriculture and civil aircraft development and the failure of synthetic fuels development projects suggest that government involvement in commercial technology should include an emphasis on support for technology adoption and diffusion. In some cases, such as CAB regulation and commercial aircraft, support for technology adoption may be indirect. Programs that attempt to ignore market signals, fail to provide incentives for adoption, or exclude the diffusion of technical knowledge and information are likely to be less successful in aiding commercialization efforts than those that include these characteristics.

  3. Stable program funding and long time horizons: A stable source of funding, either untied to or confident of annual appropriations, is one important component of successful government programs in civilian technology. The political process includes a bias against investments in programs that require long payback periods. Funding for agricultural extension programs, NACA project funding, and NIH support for research in biotechnology leading to improvements in product and process technologies, indicate the importance of stable program funding. In contrast, many of the alternative energy programs of the 1970s were hampered by demands for rapid success in untested technology areas.

  4. Limited political interference in program operation: Political decision making and interference in project operations damage the chances for successful investments in commercial technology. The synfuels program, and its problems associated with the location of demonstration projects and the interference of legislative objectives, played a role in reducing the potential effectiveness of the project.

  5. Government program managers’ avoidance of detailed decisions about specific commercial applications of the technologies developed: NACA’s success in facilitating the development of civil aircraft technologies was due, in part, to the agency’s lack of direct coordination of R&D agendas once commercial applications became evident. To a significant extent, problems in the synthetic fuels program of the late 1970s can be attributed to direct involvement of program managers in selection of specific technologies for further commercial development.

  6. Cost-sharing: Much of the past success of federal support for pre-commercial R&D and technology development can be attributed to cost-

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