The prominent role of defense expenditure and the American universities in the U.S. innovation system is undergoing a period of considerable change.27 With the increasing pressure on defense and university budgets presenting new challenges to traditional roles, the post-Cold War pressure on research and development (R&D) in the public sector and the realignment of R&D programs in the private sector have tightened R&D budgets and contributed to the expansion of collaborative research and development activities.28

Another element in this changing post-Cold War environment is the debate about the realignment of the missions of the U.S. national laboratories. However, despite the immense changes brought about by the end of the cold war, the traditional mission of Sandia National Laboratories remains paramount. At least for the foreseeable future, the national laboratories will retain major responsibilities for the nation's nuclear weapons stockpile. This task is infinitely more complex in the current test-free environment. To fulfill this unparalleled responsibility, the federal government has made and continues to make substantial investments in the laboratories, which have developed a tremendous store of technology and talent. In their role as a steward of the nation's nuclear weapons programs, the Sandia National Laboratories currently expend approximately $1.3 billion annually and employ over 7,000 people. Laboratories such as Sandia are seen as having unique capabilities, facilities, and equipment, such as the teraflops computer. In many cases, these government assets cannot be duplicated at a reasonable cost, or at all, by private firms. The laboratories are consequently seen as a unique national resource.

Just as the laboratories offer much to the private sector, the laboratories themselves recognize that they cannot fulfill their mission in isolation, especially given today's rapid pace of innovation. To remain effective, laboratories such as Sandia and others understand that they must stay abreast of the rapid technological change taking place within the commercial arena. This means building and maintaining ties to the private sector. One means of encouraging this mutually beneficial exchange is the proposal, put forward


See D. Mowery and N. Rosenberg, Paths of Innovation: Technological Change in 20th Century America, Cambridge University Press, New York, (pp. 11-12, chapter 2).


Ibid. Mowery and Rosenberg suggest that the U.S. R&D system has undergone profound structural change this century, first through "the rapid exploitation by U.S. firms of the 'invention of the art of invention'" pioneered in Germany and, secondly, as a result of the shifting roles of industry, government and universities as funders and performers of R&D. They suggest that the post-war R&D system with its large, well-funded research universities and federal research contracts with industry was internationally unique and is now facing a period of substantial evolution as a result of the changes since 1989 in the international political environment. See also Mowery's recent article "Collaborative R&D: how effective is it," Issues in Science and Technology, 1998, p. 37.

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