extend beyond industry and government, to include multiple companies (of varying sizes) working together with the academic community, the national laboratory system, and not-for-profit organizations.

Through this workshop, we have heard a lot about the R&D challenges of the 21st century. We know the effects that global competition has had on the U.S. R&D enterprise. We heard that we no longer have the industrial research environment of a few decades ago. Industrial R&D has become increasingly less long-term and much more directed. Industry has less flexibility to do the type of innovative research that resulted in many of the broadly applicable innovations we enjoy today. Thus, the real challenge for the 21 st century is rapidly commercializing the fundamental innovations created in the universities and national labs. However, between the two ends of this spectrum there is a large gap, where an enormous amount of early-stage technology development work still needs to be done.

How do we bridge that gap? This is an important question, because there are few appropriate funding sources available. Although historically there has been a broad acceptance of federal funding for basic research, some policymakers question whether the government should fund industry to conduct R&D. From my perspective, I definitely see a role for government in filling this gap.

Many early-stage technologies are, by their nature, broadly enabling. Therefore, companies would not necessarily be able to capture all of the R&D benefits themselves if they were to invest in the research. In this competitive climate, with limited R&D budgets, companies focus strictly on what is going to benefit them and push them ahead of their competitors. Broadly enabling innovations are not likely to make the final cut of priority investments.

I am often told by industry that many of the ATP project ideas have been sitting on the back burner at the company for some time. Often, if a project was a priority of an individual researcher or group, it might have been bootstrapped along. This is exactly where ATP fits in, filling the gap. ATP is not the only government program that could fill this void, but it is the only one that sees filling this void as its primary mission.

I have been talking about the R&D process as a sort of continuum and have tried to capture this in Figure 9.1. ATP bridges that middle range of technology development. A number of ATP's projects still have some basic research components to complete when funding begins. Then the funding is halted at the point where the company has a prototype—ATP does not pay for product development or commercialization. The companies have to fund the last phase of manufacturing and commercialization on their own or seek funding from alternative sources.

Bridging the Gap

I believe that government-industry partnerships are one way to bridge the gap. Not only can they help to address the funding issues that I mentioned above, but they can also tackle another R&D challenge: the increasing need for interdisciplinary expertise. Successful R&D requires broad partnerships and broad expertise. At ATP, for example, there has been a great increase in university involvement. We are also seeing an increase in the number of companies working together in partnerships. Often, a company will get an award from the ATP, and it will subcontract a portion of the R&D to another company, a university, or a national laboratory. Although ATP projects operate under a number of different models, each still needs a wealth of expertise to complete the research. One company may be able to do it alone, but to truly accelerate the development of new technologies, this collaboration is crucial.

Partnerships help to spread the risk, and ATP helps by buying down the risk. Through cost sharing, a company can reduce the risk of its investment in what it considers to be a not-yet-possible technology—those technologies that look promising, but might not ever emerge.

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