Future R&D Environments A Report for the National Institute of Standards and Technology (2002) / Chapter Skim
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Appendix F: Trends in the Economy and Industrial Strength
Appendix F: Trends in the Economy and Industrial Strength
Pages 129-142
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From page 129... ...
F Trends in the Economy and Industrial Strength Kevin Finneran CONTENTS INTRODUCTION INDUSTRY RESEARCH Internal Capital, 131 Venture Capital,133 Public Opinion, 134 Federal R&D Spending, 135 Regulation, 136 INTELLECTUAL PROPERTY HEALTH CARE FINANCE EDUCATION NEWS YOU CAN USE USEFUL READING INTRODUCTION 129 130 138 139 140 141 141 The view of technology's future is not very clear from the laboratory bench. Although progress in scientific and engineering research is the prime mover in the innovation trajectory, the pace and direction of innovation are also influenced by a number of nontechnological forces, including industry structure, capital markets, international politics, public opinion, and a variety of government policies on acquisition of products and services, research funding, regulation, intellectual property, education, trade, immigration, and a host of other areas.
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Chemical companies are moving into agricultural biotechnology. Many small medical biotechnology firms have been formed in the past two decades, and it is not yet clear if they will remain independent or be acquired by the giant pharmaceutical companies when they begin to make commercial products.
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When GDP grew by 4.3 percent a year in the latter half of the decade, capital investment soared to 1.3 percent of GDP. Much of this new capital spending went to information technology, stimulating growth and innovation in that sector.
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Business spending for information technology, which was rising at an annual rate of 31.4 percent in the first quarter of 2000, declined at an annual rate of 6.4 percent in the first quarter of 2001. Economists argue over how much overcapacity for computer hardware, software, and communications equipment exists in industry, but with estimates in the $100 billion range, few expect demand to rebound quickly.
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A biotech drug typically requires 10 to 15 years to develop, costs up to half a billion dollars, and must navigate a rigorous federal approval process. That's not the music most venture capitalists want to hear.
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Thus far, European opposition to agricultural biotechnology has not spread to medical biotechnology, but European industry is aware that it could. Paul Drayson, chairman of BioIndustry Britain, an industry association, has warned company leaders that they need to launch an ambitious public education program about the benefits of biotechnology or risk seeing medical biotechnology run into the same wall that has hampered progress in agriculture.
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For example, support for computer sciences and for metallurgy and materials engineering rose by about one-fourth. The increased support for the life sciences was not distributed evenly.
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The STEP board warns that although federal spending is contributing a declining share of the nation's total R&D expenditures, federally supported research is still a critical contributor to the nation's innovative capacity. Federal spending makes up 27 percent of all U.S.
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, the industry's research arm, has developed a roadmap of how technology might evolve if regulations are revised in ways that give utilities more flexibility. EPRI wants to enlist computer technology to develop a much more reliable, electronically controlled distribution grid that would make it possible to introduce enhanced consumer control of power use, superconducting transmission to increase capacity and efficiency, smaller and lower-cost distributed generation technology, and local power storage.
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Several European countries have already allocated and auctioned spectrum for 3G use, but in the United States the three bands of spectrum being considered for 3G use are already used by analog cellular phone providers, the Department of Defense, fixed wireless providers, satellite broadcasters, school systems, and private video teleconferences. Although some of the spectrum now allocated to digital wireless telephone service could be used by its owners for 3G, the CEA report considers this unlikely, because it would make this bandwidth more scarce and therefore more expensive for voice phone service and would require replacing billions of dollars in capital stock such as transmission equipment.
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The respondents said that the greatest barriers to use of Internet-enabled services are "a lack of uniform standards for health information and the inability of current health information applications to communicate among themselves." The vast majority believe that the federal Health Care Finance Administration and the private insurance companies must take the lead in removing these barriers by requiring physicians to use the Internet for claims processing. This would force the health-care system to develop uniform standards and protocols for communicating information.
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Computers and printers used for medical records will have to be physically secured, all software password protected, all transmissions encrypted, and electronic audit trails enabled that will identify everyone who has accessed the data. Health-care providers worry that the new requirements will be very expensive to implement and will undermine the information-sharing advantages of computerized patient records.
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NEWS YOU CAN USE One cannot draw a straight line from any of these nontechnological factors to an eventual technological development. The most powerful influences are the large national and international economic forces that are impossible to predict or to link directly to individual technologies.
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From page 142... ...
Competitiveness 2001, Council on Competitiveness, Washington, D.C., 2001. Winters, Jack, Report of the Workshop on Home Care Technologies for the 21st Century, Catholic University of America, Washington, D.C., 1999.
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