III
PROCEEDINGS



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--> III PROCEEDINGS

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--> Welcome Charles W. Wessner National Research Council On behalf of the National Research Council, Dr. Wessner welcomed the participants to the National Academy of Sciences for this ''Symposium on Industry-Laboratory Partnerships: The Role of S&T Parks.'' He noted that this event is one of a series of fact-finding meetings of the Science, Technology, and Economic Policy (STEP) Board's major project of "Government-Industry Partnerships for the Development of New Technologies," whose goal is to review different types of cooperative programs and sources of past successes and failures in government-industry cooperation. The project will also examine partnership practices abroad both as a point of comparison and to establish principles and mechanisms for sustainable international cooperation. The overall goal of the project is to develop "best-practice" principles and models for government-industry cooperation.32 In this context, transferring technology and promoting knowledge spillovers from the laboratories to the private sector are a key issues for the project. 32   There is considerable variety in government-industry partnership programs. The National Science Foundation and the Defense Department's Advanced Research Project Agency generally use research grants and contracts in the conduct of partnerships. CRAD As are partnerships that usually involve the participation of a government research laboratory. Even within partnership programs there can be considerable variation. In the Small Business Innovation Research Program, in which government agencies set aside R&D funds for small businesses, the Defense Department typically has research contracts with small businesses, while the National Institutes of Health often provides research grants to small business. For an overview of Federal and state partnerships, see Christopher Coburn and Dan Bergland, Partnerships: A Compendium of State and Federal Cooperative Technology Programs. Columbus, OH: Battelle, 1995.

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--> In his opening remarks, Dr. Wessner identified four primary objectives for the symposium. These are to: examine the question of what makes regional development efforts work. This effort is of particular importance insofar as national economic development tends to occur on a regional basis, usually through the emergence of clusters of technical expertise and commercial success that support the economy as a whole. review Sandia's proposals for a S&T park, focusing on Sandia's motivations for developing the park, as well as on Sandia's development plans. consider factors that might make Sandia's effort successful, drawing on U.S. experience with S&T parks and on expertise from a wide range of representatives from industry, academia, and labor. assess both operational and policy challenges that might be encountered as Sandia moves forward with its plans.

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--> Opening Remarks Robert Simon Office of Senator Jeff Bingaman On behalf of Senator Bingaman, Dr. Simon thanked the National Academy of Sciences for its work to date on government-industry partnerships, applauding its emphasis on operational issues, that is, on what works and what does not in this complex and sometimes divisive area of public policy. With respect to the specific topic of discussion, Dr. Simon noted that Senator Bingaman strongly supports the Sandia S&T park proposal. Government's Role in an Innovation-Based Society Concerning the broader question at hand, Dr. Simon observed that the park proposal captures the concept of S&T policy "beyond the budget": What should the federal government do in conjunction with state and local governments to foster the emergence of more clusters such as Silicon Valley or Route 128? He wondered whether the federal labs could act as catalysts in a world where some foreign governments, such as Taiwan, clearly see an expanding role for such institutions in the commercial sphere. Referring to a February 2, 1998, speech made by Senator Bingaman at the National Research Council's "Forum on Science and Technology and Economic Productivity," Dr. Simon observed that the critical question is whether progress is being made toward the reformulation of the United States as an innovation-based society for all of its citizens, a concept he defined as a society oriented toward the creation and distribution of new knowledge by a wide range of institutions. Understanding the national innovation system, a concept developed by Columbia University's Richard Nelson, is essential to that reformulation. 33 In that regard,

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--> Dr. Simon noted that the traditional linear model of innovation is completely inadequate for understanding the process of innovation today. In its place, he suggested that the concept of an ecosystem might be a more useful approach. Because increasing innovation will, over the long term, be the largest single determinant of the quality of life in the United States and abroad, Dr. Simon suggested that it is very important to determine the appropriate federal role in the U.S. innovation system. Promoting "Sticky Regions" In Senator Bingaman's view, a key question is how the federal government should encourage local and state efforts to use S&T parks to foster what he calls "sticky regions," that is, regions where clusters of technical resources, customers, suppliers, financial and management resources, and innovation combine to create economic growth and improve the national quality of life. Clearly, this would mean working through the traditional federalist approach, with federal, state, and local governments each focusing on their own areas of competence. Sticky regions share some important characteristics, which together encourage firms to remain within the region, Dr. Simon noted. These characteristics might include a highly skilled specialized labor force, vigorous open sources of new science and technology (e.g., research universities), networks of local venture capitalists who understand their industries, and a well-developed physical infrastructure. However, although all these ingredients are undoubtedly important, they are not sufficient to explain the growth of these regions. In addition, institutions in the area would need to be highly porous in order to create a vigorous network of horizontal links between firms, rather than vertically integrated stand-alone operations.34 The Potential of S&T Parks In some regions, S&T parks have already played an essential role in encouraging and facilitating this mixing between institutions, Dr. Simon remarked. In that connection, the government could play three key roles: bolster dynamic regions, manage federal resources effectively, and support the development of sticky regions such as Albuquerque, New Mexico. 33   See R. R. Nelson, ed., National Innovation Systems: A Comparative Study, Oxford University Press, New York, 1993. 34   For an elaboration of this view, see A. Saxenian, Regional Advantage: Culture and Competition in Silicon Valley and Route 128, Harvard University Press, Cambridge, Mass., 1994.

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--> Clearly, government efforts in this policy area will face many challenges, Dr. Simon continued. And although there are areas in northern New Mexico that have the potential to become sticky regions, it would be hard to duplicate Silicon Valley. It is, after all, much easier to identify sticky regions than to create them. Dr. Simon observed that the federal laboratories face some specific challenges in this process that university science parks do not. New relations with industry would have to be developed, which in an increasingly global world would also include relations with foreign-owned companies and their U.S. subsidiaries. Those problems have been, and will probably continue to be, somewhat vexing. In addition, Dr. Simon continued, the labs would have to remain closed for some purposes, in light of their nuclear defense responsibilities, even though S&T parks clearly require somewhat open relations between the tenants and the sponsoring research institution. Managing this dilemma will be an important responsibility of both the U.S. Department of Energy (DOE) and Congress. Resolving these issues will require considerable work from all participants in the process. Sandia has made significant progress in opening its resources to U.S. industry, Dr. Simon concluded. The proposals for a S&T park are very forward-looking, and he hoped that the remainder of the symposium would identify useful ways in which the U.S. government could support its development. In closing, he emphasized that Senator Bingaman would welcome any specific suggestions that might contribute to the creation of a sticky region around Sandia.

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--> Panel I Science and Technology Parks: An Overview of Recent Experience Moderator: Henry Kelly White House Office of Science and Technology Policy Dr. Kelly observed that the U.S. innovation system has been highly successful in the past. However, maintaining its health represents the largest challenge of the new millennium. Three new challenges in particular seem significant: the end of the Cold War, which had until recently underpinned almost all megascience projects both in the U.S. Department of Defense and NASA; deregulation of huge economic institutions (e.g., airlines, telecommunications) in which monopolies have long supported large centralized corporate R&D labs. That hidden subsidy has vanished, and, although deregulation would support innovation in the long run, there are some shorter-term problems to overcome; changes in the geography of innovation, which have become more internationalized, and where technology is already changing the way in which research is being conducted. Collaborative research is now conducted across large distances in ways that were unthinkable only a few years ago. Research partnerships could be a key tool for meeting these challenges, Dr. Kelly remarked, as the partners become better at integrating government research with industry needs. Clearly, the difficulties would be in detailed implementation and operations, and it would be very important to learn from experience. Dr. Kelly also noted that the nature of the partnership would depend very sensitively on the nature of the research being conducted, as several different types of projects currently receive public support. These include:

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--> health research at the National Institutes of Health, where federal support is crucial, and where the nature of collaboration is very different from, for example, manufacturing projects; environmental research, where partnerships with industry are likely to be a crucial part of any solution, but where the process is likely to be different with each industry (for example, R&D in the auto industry is likely to be conducted quite differently from that in construction); public safety research, such as airline safety, where numerous types of research often need to be coordinated; and research in information technology, where efforts to develop partnerships has been somewhat less successful, partly because expertise is scattered throughout the federal government. Dr. Kelly noted, however, that all of these research approaches create opportunities for local partnership development. He suggested that the key issues might be the logic driving sticky regions and the ways in which local communities can exploit the presence of major research institutions. From this perspective, he welcomed the symposium's review of the experience of two regions, Research Triangle Park and Austin, Texas, known for their concentration of high-technology industry and research facilities. The Research Triangle Experience Michael Luger University of North Carolina Dr. Luger presented the results of his research on the success and failure of S&T parks in the United States and abroad.35 He divided his research findings into four main areas: an overview of S&T parks, an examination of why some parks succeed and others fail, a case study of the Research Triangle Park (RTP) in North Carolina, and a look at the experience with S&T parks overseas. These findings reflect both research from his book Technology in the Garden and subsequent research that includes both his own academic research and research undertaken at the request of S&T parks and related institutions in the United States and abroad. 35   M. Luger and H. Goldstein, Technology in the Garden: Research Parks and Regional Economic Development, University of North Carolina Press, Chapel Hill, 1991.

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--> An Overview of S&T Parks Drawing on a series of charts (see Appendix C), Dr. Luger noted that there are more than 150 S&T parks in the United States. Some are growing, a few are stagnant or declining. Most of the growth in S&T parks took place during the late 1980s and early 1990s. Faster-growing parks tend to have more contact with research universities, Dr. Luger continued. S&T parks established in the 1990s appear to be specializing more in sectors such as biotechnology, software, medical devices and research, advanced materials, telecommunications, semiconductors, and optics. Defining Success In assessing S&T parks, it is very important to define success clearly at the outset, Dr. Luger remarked. He noted that there are multiple dimensions of success, and that parks can be seen as real estate projects, as parks have to attract a sufficient number of companies to survive (and a good number have not met this test); economic development programs, which are usually measured in terms of job creation; creators of new technology, whether or not it is associated with economic development; tools for national economic development, as parks can act as "growth poles" (e.g., Science City in Korea) to help transform former manufacturing regions into high-technology areas such as Scotland's Silicon Glen; and sources of net value in cost/benefit terms, based on the net present value of benefits generated by the parks. Dr. Luger said that his 1991 research covered more than 120 S&T parks in the United States. He concluded from interviews that economic development was the dominant motivation for the creation of these parks. As a result, he primarily defined success in terms of economic development for the local area: as the ability of a park to act as a local growth pole, helping companies to restructure and the area to redevelop, especially in former manufacturing areas that face the decline of traditional markets. Metrics for Success His primary indicator of success was net job creation, Dr. Luger continued. He operationalized this as the difference in job creation between regions with

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--> S&T parks and control regions without S&T parks for the approximately 70 regions with S&T parks for which he has data. On average, Dr. Luger noted, S&T parks are associated with a wide range of job growth rates. The Research Triangle Park showed the best results of all, with job growth 4.45 percent higher than control regions (a result that controlled for the impact of the business cycle on job growth). There is, however, considerable variation, with some regions actually experiencing negative growth vis-à-vis their control region. Dr. Luger emphasized that these effects became clear only over a very considerable period of time (on the order of two decades), and it was important to allow enough time for these large investments to pay off. He also pointed out that the results did not capture any positive effects on job growth outside the immediate region, and that it would be very difficult to measure the impact on new technology development. When considering the factors that accounted for success, Dr. Luger listed the following factors as critical: First is the ability of each park to develop a marketing strategy appropriate to the region in which it operates. This factor was clearly visible in the case studies developed in his research: The park tried to attract branch manufacturing plants, an approach that had not been adopted and probably would not have worked in Salt Lake City, Utah, for example. Similarly, a focus on particular disciplines should reflect the strengths of the local research community. Governance of the park by a research university seemed to make a difference, perhaps by connecting the park to university research in additional ways. The extent to which park personnel were adjunct professors, or park labs were located on university campuses, also seemed to increase the park's attractiveness. In each case, there was visionary leadership, such as that provided by the late Governor Terry Sanford in his support for RTP. Sponsors of each park displayed deep pockets and considerable patience. Payoffs emerged only after 10-20 years, when the park was well grounded. Good timing and good luck were also factors. Starting a park at the beginning of a long recession was not helpful. The Case of Research Triangle Park Dr. Luger stated that the Research Triangle Park was founded at a time when North Carolina was experiencing a substantial decline in manufacturing. Although there were research universities around the park, these universities were at the time suffering a significant outflow of talent, a brain drain. Graduates were not finding jobs in local high-technology companies and they were leaving. On

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--> Regional Planning Issues Beyond the local community, there are regional, state, and intra-state concerns, Dr. Yudken continued. In Pennsylvania, for example, the economy in some areas is being supported by old-line manufacturing companies that must adopt technology to remain competitive. How do investments in high-technology clusters around the research parks and universities help companies in more remote areas of the state economy? It is important to answer these questions to ensure that policy makers are not simply relying implicitly on a trickle-down model to ensure that economic benefits are more widely distributed; otherwise, it is possible that growing areas of the country will find themselves excluded from the emerging high-technology economy. At the local level, the AFL-CIO is increasingly interested in becoming involved at the planning stage in economic development projects such as S&T parks, Dr. Yudken added. In particular, the AFL-CIO is interested in projects that would help to transfer technology to the community. Projects rich with technology transfer to the community could help to stimulate economic development in low-income areas, provided that policy makers do not limit investments in S&T parks only to those areas that are already relatively well off.

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--> Panel IV Operational Challenges: Opportunities and Contributions, Funding and Governance, Cost-Sharing and Cost Recovery, Intellectual Property, and Facilities Access Moderator: W. Clark McFadden Dewey Ballantine Challenges to Successful Government-Industry Partnerships Mr. McFadden noted that, in his experience, putting together significant government-industry partnerships is very difficult. The main problem is that the government does not know how to do it very well. Companies such as Procter & Gamble have a great deal of experience, know clearly what they are looking for, use partnerships constantly in their business, and have clear goals for each partnership. Government officials find it harder to take the risks that are inherent in a R&D partnership. 42 Operational Issues Operational issues break down into a few reasonably well-known categories, Mr. McFadden continued. First, there are issues related to the technology that partners bring to the partnership; second, there are issues related to the structure of the partnership, which could range from actual cooperative research, to complementary activity, to sponsored activity. In addition, there are a number of key concerns that labs would have to address to satisfy commercial participants: 42   This reflects the uncertainty that is a part of any R&D undertaking. Kenneth Arrow first made this observation in ''Economic welfare and the allocation of resources for innovation,'' in Richard Nelson. Ed., The Rate and Direction of Inventive Activity, Princeton: Princeton University Press, 1962.

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--> justifying the cost of the partnership; specifying the deliverables; resolving problems related to intellectual property rights, which would require balancing commercial needs for exclusivity with government insistence on broad technology transfer (the latter might require something less than an exclusive license); and addressing specific issues related to public investment in background intellectual property and how it might be commercialized. Mr. McFadden wondered how partnerships could be brought together through the creation of common interests and how they could be sustained over time, a critical question especially when things do not go right. Finally, the political dimension has to be considered, Mr. McFadden concluded, and that could mean resolving questions related to the national benefits of activities focused at the state or regional level. The typical political view is to look for local manufacturing jobs when deciding whether these investments are appropriate. However, there are important questions about the national-level impact of technology development grounded in the United States. Searching for Appropriate Models for the Sandia S&T Park Michael Borrus University of California, Berkeley Mr. Borrus observed that there is a real opportunity to be strategic and selective in creating the Sandia S&T park. Rather than seeking to emulate Silicon Valley (which, although the recipient of careful thinking immediately after World War II, has more recently benefited from numerous factors including a considerable amount of serendipity), it might be better to look elsewhere for appropriate models. Foreign Models One possibility is the Economic Development Board (EDB) of Singapore, which has adopted a strategic and selective approach, Mr. Borrus observed. This approach is based first on a very clear vision of what the EDB wishes to accomplish inside or outside Singapore, in terms of which industries it wishes to help build, what value-added it is seeking, and which individual companies could help to accomplish these objectives. Second, the Singapore EDB has developed an excellent understanding of the industry dynamics for the firms that it is seeking to attract. For example, when it knew that GE was likely to need a new advanced materials plant, and would

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--> likely site it in Asia to meet booming regional demand, it tailored a presentation specifically to GE and specifically to advanced materials facilities. Strategic Assets Given that companies apparently need access to the specific technologies and facilities available at Sandia, Mr. Borrus observed, this creates a set of strategic assets for Sandia. However, these assets can only be exploited effectively if Sandia focuses on its strategic opportunities. Hence, his critical question is: Which three companies does Sandia wish to attract to the S&T park? The discussion has to be that specific and focused in order to capture the strategic possibilities available. Given that the bulk of R&D in the United States is undertaken by a handful of large firms, and that the Sandia S&T park would need to attract one or two of these firms to act as anchors for the park, it would be critical for Sandia to customize its pitch to specific firms and facilities. The False Dichotomy Between Large and Small Firms Mr. Borrus noted that the policy debate continually adopts a false dichotomy between small and large firms. Small firms are generally seen as more innovative than large firms. For example, much of Silicon Valley's economic success can be traced to the creation of new firms, some of which remain small or fail, and some of which grow into large ones. Yet the environment that generates a rapid pace of small business creation does depend, to a considerable extent, on the existence of successful large firms. Indeed, it is the interaction between small and large companies that really creates the innovation.43 Small firms are the suppliers of the skills, technologies, components, and subassemblies, etc. that are required by the large firms, depending on the specific industry concerned. Although bringing in large firms might help to create an environment in which to nurture smaller firms around them, large and small firms should not be seen as a dichotomy. It is the interaction between the two that creates long-term economic growth. Similarly, whereas most economic development plans focus on the producers of technology, users of technology play at least as important a role in defining the development trajectory of these industries, Mr. Borrus remarked. To take soft- 43   In describing the Silicon Valley case, Anna Lee Saxenian observes that these interactions "defy sectoral barriers: individuals move easily from semiconductor to disk drive firms or from computer to network makers. They move from established firms to startups (or vice versa) and even to market research or consulting firms, and from consulting firms back into startups." Saxenian, Regional Advantage, op. cit. pp. 96-97. For a discussion of Intel's evolution and the company's impact on the Silicon Valley region, see Michael S. Malone, The Microprocessor: A Biography. Springer Verlag/Telos, Hamburg, Germany 1995.

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--> ware, for example, although there are large clusters of software companies around the big producers such as Microsoft in Seattle, most software development is clustered around companies spun out by companies that use that software, in financial services, for example, or large manufacturers. In New York, for example, the software industry that is built around the financial services industry is a much larger employer than all of the software developers that are consciously built around the software companies of Silicon Valley. Hence, the search for companies needs to include the users of technology as well as technology producers. Potential International Synergies Several speakers have noted that technologies complementary to the commercialization of U.S. technology exist outside the United States as well, Mr. Borrus commented. Some technical specializations abroad are marginally or even completely different from those existing in the United States. It is also important to see that the overall success of the project would to some extent depend on the creation of local skill sets that could be projected globally, as for example in the case of Bangalore's software industry. Identifying the right foreign partners would bring several advantages, notably complementary capabilities that local firms do not yet have. This might also help to tap broader distribution networks in foreign markets that could not otherwise be accessed. Community Issues Mr. Borrus observed that there could be some negative externalities involved in the creation of S&T parks, for example the creation of two-tier income structures. Clearly, it would be important to involve the local community in order to address or mitigate those problems, without substantially burdening the project. If Silicon Valley ever grinds to a halt, it would do so because of externalities that had nothing to do with technology, such as housing costs, traffic congestion, or inadequate public infrastructure. Finally, as Mr. McFadden noted, having a consistent and predictable intellectual property licensing strategy, something the laboratories were not well known for, would be useful in the case of Sandia's S&T park. Mr. Borrus concluded by echoing the call from Dr. Feller and others for effective benchmarks and metrics with which to evaluate performance of the park over time.

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--> Getting the Most Out of Government-Industry Partnerships John Jennings Office of Senator Jeff Bingaman Mr. Jennings said that, on the basis of his past experience at the Defense Advanced Research Project Agency (DARPA), a number of principles need to be clearly understood: It is critical to start by defining the interests at stake for the agency, in relation to the agency's mission. Without a clear view of that self-interested perspective, it is hard to avoid confusion. Once clearly defined, the means of approaching these interests should then be more flexible, although flexibility remains a problem with most government bureaucracies. Whatever approach is adopted, it is critically important to choose sound projects using merit-based and not political selection criteria. The problem is that any large institution, especially a government institution, finds it hard to be flexible, Mr. Jennings noted. Government agencies like to have and to follow a set of rules. DARPA has been successful largely because it is small and hence much more flexible. In the U.S. system of government, questions are inevitably raised about private profits from taxpayer-funded R&D, Mr. Jennings observed, especially in publicly funded projects that are flexibly administered with few rules. The best protection against such questions is merit-based project selection. Cost Sharing, Intellectual Property, and Foreign Access As far as cost sharing is concerned, DARPA learned that it pays to be hard-nosed, Mr. Jennings concluded. It is in any agency's interest to know if its partners are at significant risk, which normally means financial risk. In-kind contributions are useful, but do not have the same impact as cash investments. With regard to intellectual property, Mr. Jennings noted that the agency's fundamental interest is to ensure that its inventions eventually reach the marketplace. To do so could require temporary time-limited exclusive licenses or other arrangements that could in some cases be outside the framework of the Bayh-Dole Act. The freedom to be flexible is important, as is thinking through these issues carefully. Foreign access is perhaps the hardest issue of all, Mr. Jennings stated. The agency's interests might help to define the degree of appropriate foreign access, so thinking through these interests very carefully is critically important. How-

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--> ever, it is often hard to do that effectively in the time available. Decision processes should be fast, and as simple as possible, Mr. Jennings said. It makes little sense to provide an incomprehensible solicitation that avoids telling recipients the actual technology being sought under the belief that this might be perceived as unfairly favoring one company over another. Finally, although Congress is not especially comfortable with the idea, government actors have to be poised to seize opportunities quickly, Mr. Jennings concluded. Discretionary funding is unpopular in Congress, and a one-year budget cycle is not best suited to partnerships with commercial enterprises. The Legislative Context of Sandia's S&T Park James Turner House Committee on Science From a congressional staff perspective, the Sandia S&T park initiative is part of a very positive trend. Twenty years ago, the most contentious element in the DOE authorization bill was the DOE patent clause, which exemplified the profound differences of opinion between those on the left who wished to maximize the return from every federal dollar and those on the right who criticized what is now called corporate welfare (i.e., the belief that the patenting of inventions subsidized by federal R&D funds gives an unwarranted government preference to the beneficiaries). In 1980, the Bayh-Dole Act changed the mainstream view 180 degrees, to the point that friends of government-industry cooperation have been on top, although sometimes only tenuously, ever since. The 1982 renewal of the Oak Ridge contract was another turning point, Mr. Turner observed, because for the first time the request for proposals insisted on an assessment of the impact of the operating contract on the local community. This changed how corporations and other institutions approached working with the labs. Perspectives on the Sandia Proposal Mr. Turner proposed that projects such as the Sandia S&T park initiative should be viewed from four perspectives: From an industrial perspective, it is critical to speed the decision-making process to match that of industry. From a national security perspective, we should recognize that Sandia would continue to be a national security lab for the foreseeable future. This role has significant implications for what Sandia could, and could not, do and sharply differentiates Sandia from other laboratories and universities. For example, security concerns would certainly condition any

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--> decision to bring in foreign companies if only because perceptions play a disproportionate role on security matters. From a domestic competitiveness perspective, there are necessarily only a limited number of opportunities to cooperate with Sandia. Hence, fairness and the perception of fairness would be critical for protecting the program from the complaints of excluded companies. From an international competitiveness perspective, if Sandia were to bring a foreign company into the S&T park, it would be necessary to show that the company brings some unique skill or resource needed for the project, one not easily available from domestic firms. Mr. Turner also outlined three perspectives that he hoped would not be used for assessing Sandia's S&T park activities, namely: the basic research or university perspective, in which the park may be expected to engage in a significant amount of curiosity-driven research. This is not nearly as helpful as the industrial model with its focus on commercialization; the Cold Warrior perspective, i.e., that the Sandia S&T park, simply because of its physical proximity to the Sandia National Laboratories, should have a national security focus; or the DOE bureaucratic perspective, i.e., that the S&T park be assessed using metrics (e.g., CRADAs) that DOE may use in evaluating its own activities. Discussion Dr. Hartley noted that there are indeed significant security concerns regarding laboratory employees finding projects outside the lab. In addition, during the long period in which AT&T operated the labs on a no-fee no-profit basis, management had no incentive at all to encourage spin-offs or other commercially oriented activities. When Lockheed Martin took over management of Sandia in 1993, Dr. Hartley continued, part of the negotiations concerned the need to focus on regional development. Lockheed Martin created the Technology Venture Corporation, which was designed to support spin-offs from the labs. Since starting the program, more than 20 companies have been spun off, generally quite successfully. Senior lab staff have also become much more involved in activities within the region and in Albuquerque, and cooperative activities are becoming more coordinated across the region.

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--> Partners Dr. Hartley agreed that the international issue is indeed difficult. Sandia is learning to differentiate between facilities at the core of the nuclear weapons mission—those that are intermediate and those that are outside the core mission. It is significant that all of Sandia's advanced research buildings are situated outside the lab's fence. With regard to the selection of companies for the park, Dr. Hartley agreed that it was necessary to target specific companies both as anchors for the project and as strategic partners in relation to Sandia's core missions. A process for doing so is already in operation within Sandia. One participant noted that the S&T park would generate serious political problems unless Sandia could clearly establish that the S&T park supported the lab's core mission. Although collaboration is common practice in industry, people in policy-making positions have to be convinced about its relevance to Sandia's core strategic mission. In response, Dr. Hartley noted that a recent Congressional Research Service report examining CRADAs had referenced two studies that supported the view that CRADAs contribute to the existing mission of the national labs. Dr. Narath stressed that the growth of laboratory partnerships with industry would be even more critical for helping to recruit competent staff in an era when nuclear weapons research was not a very attractive career choice. He also thought that many of the other reasons for supporting the S&T park, such as regional economic development, were powerful, although perhaps not sufficiently compelling at the political level. He agreed that strong political support would be required. Dr. Hartley observed, in answer to a question, that Sandia has taken an active role in a national network of research organizations and is now developing activities to help raise the organization's profile in the country's research universities. Marc Stanley, from the National Institute of Standards and Technology (NIST), remarked that NIST's Advanced Technology Program (ATP) has as part of its statute a set of criteria governing the participation of foreign-owned corporations. These criteria set out certain tests, which include national treatment and respect for intellectual property rights, while ensuring that first benefits and manufacturing from a patent accrues to the United States. He believed that adopting these criteria could help to defuse the foreign participation question for Sandia. Dr. Narath noted that the issue was harder for Sandia. For example, the Intel CRADA raised questions in relation to the transfer of weapons technologies to Japanese companies. Given these considerations, the tests to be passed for foreign participation might be more stringent for Sandia than for the ATP. Dr. Wessner commented that the ATP's criteria at least offered some transparency, which was often welcomed by foreigners and Americans alike, and that the ATP criteria could at least be used as a base, with precedent, for developing Sandia policy on foreign access. At the same time, given the security mission,

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--> both technical and policy considerations would suggest that a certain amount of flexibility be retained by Sandia's management. Mr. Borrus observed that spin-on, that is, how foreign participation in the Sandia park might benefit the mission of Sandia labs, would also become an important criterion. Dr. Wessner added that specific commitments about jobs and economic benefits to the United States could also be included in the list of criteria. In fact, absent these benefits, a proposed partnership might be ill-advised. Another participant observed that even where there is a net benefit to the United States, the existence of benefits for foreign participants raised questions in connection with federally funded research. Mr. Stanley observed that linking the partnership directly to the labs' mission was critical for deflecting these types of criticisms. Intellectual Property Protection Another participant noted that very specific intellectual property protections would be required before small firms would partner with the labs, as they face the risk that larger firms would subsequently partner with the labs and would then reap the intellectual benefits of the small firm's partnership. She noted that just such a case occurred recently at Sandia, in which a small company had been followed in a research area by a much larger partnership with Intel. Commenting on the issue of merit-based choices, Dr. Wessner noted that, although it was a worthy and perhaps critical objective to ensure that projects were merit based, the challenge is always to identify meritorious projects without the benefit of hindsight. Mr. Jennings answered that, although "merit based" did not always mean "peer reviewed," the experience at DARPA supported an approach that left funding decisions to civil servants who generally are not connected to the political environment, and hence tend not to be influenced by nonmerit factors. In general, observers accept that the project selection process at DARPA was a fair one that was broadly insulated from politics. This perception was important when DARPA was under political attack. Mr. Der Torossian said that, despite the delays imposed by the bureaucracy, partnerships with government remain important. However, the U.S. government's role should be to increase the global market share of U.S.-based products and services, just as foreign governments seek to aid their firms. One way to handle the issue of foreign participation might be for laboratories such as Sandia to share their technology with foreign corporations provided that the latter pay a licensing fee to compensate the American taxpayer for the costs of the completed research. U.S. firms would be exempt from that fee. The objective should be to create advanced technology jobs in manufacturing in the United States, even if that means Sandia staff leaving for more-remunerative positions in industry. Dr. Richard Thayer pointed out that, in an important way, the idea of the

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--> Sandia S&T Park emanates from Sandia's success over the past decade in reaching out to industry. Sandia has made an explicit effort to work closely with industry on technological R&D projects of mutual benefit to Sandia and the companies involved. Although there are risks in such endeavors, Dr. Thayer noted, R&D has inherent risks of failure, whether undertaken by a national laboratory alone or in concert with industry. Dr. Hartley noted that, from his perspective, one of the tests of Sandia's success is the extent to which staff find challenging jobs beyond the lab. Ironically, one indicator of the success of Sandia's partnerships with industry and the Sandia S&T park would be the private sector luring Sandia employees away.