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A third factor is the recognition that there are limitations in the carrying capacity of global ecosystems. And this is giving rise, a bit slowly, to the need to reshape production, energy, transportation, and other systems to achieve sustainability.

And the fourth factor is the end of the Cold War and the implications for the defense industry, as well as the traditional sources of research funding for the university system.

Adding to these driving forces is the continuing view of governments that they have a role to play in engineering new comparative advantages for their economies. This view has given rise to a variety of public policies that may be the basis of frictions between countries.

Friction is not a new phenomenon. It has been going on since the early 1980s. A number of years ago, Sylvia Ostry wrote a paper on the policy-induced recession in the early 1980s. That was the time when a number of governments came to the view that all new emerging science and technology could be the basis of economic growth in the future, and that they should be positioning their countries to capture future markets for high-technology products. This is how technology came to be viewed as a strategic asset in global trade competition. Of course, that brings with it a cascading effect—when one country takes action to mobilize national resources, other countries follow. For example, when Japan launched the fifth-generation project, the United States came out with the Strategic Computing Initiative, and Britain launched the Alvey Program.

This session will deal with three aspects of this new paradigm, and we have a very distinguished panel which balances public and private sectors. The defense research area will be addressed by Anita Jones, Director of Defense Research and Engineering at the U.S. Department of Defense. The subject of public funding of research will be addressed by Charles Curtis, Undersecretary of the U.S. Department of Energy [DoE]. The role of other countries in sustaining the U.S. domestic research base will be addressed by Knut Merten, president and CEO of Siemens Corporate Research.

Defense Research and Technological Superiority

Anita K. Jones, Department of Defense

I would like to tackle the subject of research, economic growth, and competitiveness by discussing the two ends of it: defense research and military competitiveness.

Most of the discussions at this conference have revolved around economic competitiveness in which the metric is the bottom line in corporate and national strength. At Defense Research and Engineering we are the national security mission agency for the United States, and our report card for competitiveness success is written on the battlefield or the site where a security mission is executed.

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