Innovation Policies for the 21st Century Report of a Symposium (2007) / Chapter Skim
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Panel IV: Evolution of Technology Partnerships in the United States
Panel IV: Evolution of Technology Partnerships in the United States
Pages 141-166
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From page 141... ...
And it's all about learning how to move fast and win in a brutally competitive economy such as we've never seen." About a quarter-century before, he recalled, industrial laboratories in the United States had become "very uncompetitive." No longer relevant to their businesses, they were in a position of having to change, and change a great deal, or else die; meanwhile, the new companies that arose were not forming research labs. The deciding factor was not so much the issue of applied versus basic research, or even the issue of short-term versus long-term research, but the fact that the old model just was not producing results.
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From page 142... ...
Some of the material he would present has already been published in an earlier version, having formed the basis for recommendations of a 2004 report on the future of supercomputing by a National Academies panel on which he served.14 He would begin with the field's early history, he said, in order to make sure that his listeners understood what is meant by the term "supercomputer" and where the supercomputer came from. The machines built to decrypt code traffic during World War II were the direct precursors of the modern electronic digital computer and the famous ENIAC machine, built for other purposes, appeared shortly thereafter.
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From page 143... ...
Very high performance supercomputers at that time offered very good price performance; doing an excellent job of providing raw computing capability, they were highly competitive with less powerful machines in cost/computing capacity. As a result, they were used by commercial customers after having been pioneered for government users.
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From page 144... ...
The move was in part an attempt at responding to the technological challenges of the time, including competitive challenges from foreign companies producing systems that threatened to narrow the gap between U.S. information technology and IT available on the open market overseas.
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From page 145... ...
Flamm noted that it was with the inauguration of Japan's Earth Simulator, referenced in Dr. Kahaner's presentation, that the United States fell out of the world leadership in computing that it had held since about 1950.
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From page 146... ...
Flamm specified that the small percentage of non-Japanese, non-U.S. machines indicated there represent products not from Europe but from China and India, the "new industrial powerhouses." He added that the picture differs little if looked at from the point of view of total computing capability, which is in fact a better proxy for value.
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From page 147... ...
Dr. Flamm next took up the thesis that the government-industry partnership formed to develop alternative methodologies for designing and building supercomputers has been quite a success and has transformed the nature of the supercomputer market over the previous decade.
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From page 148... ...
"The very last segment of the computer industry to be transformed by the microprocessor and the PC has indeed fig 28 been transformed," he declared, calling this "an extraordinary story." Commodity Supercomputers Taking Over The system performance of the custom and hybrid machines has improved almost in parallel since 1993, with that of commodity architecture tracing a similar slope since its advent in 1997, and there are no sign of any category's slowing down (Figure 28)
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From page 149... ...
fig 29 rather than units, and differs only slightly when consideration was narrowed to the Top 20 machines. Transforming a Market Restructures the Industry This transformation of the supercomputer market has completely restructured the computer industry as a whole.
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From page 150... ...
Cray's share of the market had plunged to 2 percent. Government-Only Demand for Traditional Technology Traditional custom supercomputers, still required by government users for some applications, are showing signs of becoming "a government-only island," as illustrated by a graph which indicates that around 60 percent of custom machines consistently go to purchasers in the government and research sectors (Figure 31)
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From page 151... ...
"A strategy started by the military has become so dramatically successful that some government users -- a minority, fortunately -- are essentially cut off from this whole new development in computing technology," observed Dr. Flamm, likening the current market for custom supercomputers to those for submarines and aircraft carriers.
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From page 152... ...
• The government's challenge is to maintain whatever capabilities it needs that are outside the commercial mainstream while leveraging developments in the industry it has so successfully transformed in such a way as to make cost-effective solutions linked to the mainstream accessible to government users. In closing, Dr.
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From page 153... ...
partnerships provides ample evidence of government involvement apart from that just supplied by Dr. Flamm in his discussion of the computer industry.
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From page 154... ...
He would attempt to reconcile these facts and, in the process, demonstrate that, under the proper circumstances, public-private partnerships can play a key role in helping countries anywhere in the world to compete. Private Investors Neglect Early Stage To begin, he raised a question: If the United States has large and welldeveloped early-stage capital markets -- indeed, the world's best -- thanks to broad angel markets and deep venture markets, what is the issue?
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From page 155... ...
Stanley displayed a comment by Elizabeth Downing, an official of the ATP award winner 3D Technology Laboratories: "Why should the government fund the development of enabling technologies? Because enabling technologies have the potential to bring enormous benefits to society as a whole, yet private investors will not adequately support the development of these technologies because profits are too uncertain or too distant." In a similar vein, the noted venture capitalist David Morgenthaler has remarked that "It does seem that early-stage help by the government in developing platform technologies and financing scientific discoveries is directed exactly at the areas where institutional venture capitalists cannot and will not go." And Jeffrey Schloss, when speaking on behalf of Dr.
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From page 156... ...
Senate Committee on Commerce, Science, and Transportation, "Entrepreneurs and private equity investors alike consistently state that there exists a financial ‘gap' facing early-stage technology ventures seeking funding in amounts ranging roughly from $200,000 to $2 million." Foreign competitors, meanwhile, have technology-support programs larger than those of the United States, and those programs employ a broad range of mea
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From page 157... ...
He supplied a list of attributes that he considers "pillars to develop a good publicprivate partnership," saying each contributes to success, both within ATP and abroad: These are • an emphasis on innovation for broad national economic benefit; • a strong industry leadership in the planning and implementation of projects; • project selection based on technical and economic merit; • a demonstrated need for funding; • a requirement that projects have well-defined goals; • provisions limiting the funding period; • a rigorous competition based on peer review; • encouragement of collaboration among small, medium-sized, and large companies; universities; and clusters and industry parks; and • evaluations, to be pursued both by presenting results to the granting agency and by establishing a baseline as an aid to proving success.
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From page 158... ...
"And then you should be able to speak not only of your successes but of your failures, because there are lessons to be learned from that." ATP used a number of methods to measure the activity of its awardees against the program's mission: • Inputs: ATP funding; industry cost-share; • Outputs: R&D partnering; risky, innovative technologies; S&T knowledge; • Outcomes: acceleration; commercial activity; and • Impacts: broad national economic benefits. The program had in the previous year published a book on its measurement tools, and the book had "become a very hot seller overseas." To conclude, Mr.
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From page 159... ...
. He said that he would also explain how technology partnerships support DoE in that function, discuss the competitive advantage to industry of collaborative research and licensing and, finally, proffer some closing remarks.
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From page 160... ...
The 1 National Technology Transfer Act guaranteed to industry the ability to negotiate for rights to CRADA inventions and increased the royalty distribution limit that had been placed on lab inventors, thereby increasing their motivation to invent. Assessing the Efficacy of Tech-Transfer Policies How well has this policy basis for GOCOs' participation in technology transfer worked?
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From page 161... ...
When the government participated as a "fundsproducing partner," CRADAs grew rapidly. "But when the economy recovered and there were other pressing needs for federal money," he said, "the federal matching dollars went away, and much of the CRADA activity did also." It has not, however, fallen to zero, because some robust partnerships were established during the years of upward growth and these industry participants provided the funding needed to sustain their CRADAs.
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From page 162... ...
12 INNOVATION POLICIES FOR THE 21ST CENTURY 2,000 1,800 Invention Disclosures 1,600 1,400 Number 1,200 1,000 800 Patent Applications 600 Patents 400 200 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 19 19 19 19 19 19 19 19 19 19 19 19 19 20 20 20 20 20 Year FIGURE 35 Invention disclosures and patents have plateaued under current policies and priorities. fig 35 5,000 4,500 Active CRADAS 4,000 WFO-NFE Agreements Total Licenses 3,500 Number of Activities User Facility Agreements 3,000 2,500 2,000 1,500 1,000 500 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Year FIGURE 36 Industry has preferred other vehicles over CRADAs without matching funds.
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From page 163... ...
needs." About 20 percent of the licensing income typically went to the inventors and the rest was put to a variety of uses, such as: • upgrading the Advanced Photon Source at Argonne National Laboratory; • establishing the Technology Maturation Fund used by many of the DoE labs; • supporting startups through the Center for Entrepreneurial Growth; • developing the fan airfoil for improved energy efficiency; and • reinvesting in teams that had developed and licensed the intellectual property. "Think of [the last use]
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From page 164... ...
• Lithium battery technologies with USABC and other industrial partners • Risk assessment of geologic carbon dioxide with BP AMOCO • Electric efficiency & reliability with California Energy Commission • Scientific Research • Advances in structural biology with various industrial partners • Environmentally Sound Energy Technologies • Advanced turbine systems with Siemens Westinghouse Power Corporation FIGURE 37 "Funds-in" agreements advance DoE/NNSA objectives. NOTE: Representative examples are cited.
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From page 165... ...
Sandia National Laboratories provides redundant power and state-of-the-art connectivity to the park, plus it helps tenants accelerate city approval processes. Tenants paid in $17 million to Sandia Labs while acquir ing contracts from the labs worth $85.6 million; "the government, Sandia, and industry," observed Dr.
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From page 166... ...
VanDevender affirmed that technology partnerships add significantly to the innovation capabilities of the DoE and NNSA labs, as well as to the innovation capabilities of their industrial partners. They expand the R&D capacity for both industry and the labs and contribute to the fulfillment of DoE's mission and goals while providing competitive advantage to those industry partners that have long-term relationships with the laboratories.
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