National Academies Press: OpenBook

The Government Role in Civilian Technology: Building a New Alliance (1992)

Chapter: 2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY

« Previous: 1 THE ENVIRONMENT FOR THE TECHNOLOGY DEVELOPMENT
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

2
Government Support for Civilian Technology

This chapter examines several past and current federal programs to support private sector research, development, technology transfer, and adoption. It also summarizes the evidence on foreign governments’ sponsorship of pre-commercial technology development. We begin with a discussion of the rationale for government support of pre-commercial R&D and technology development. The structure of postwar federal support for basic research is then outlined, as well as the history of federal sponsorship of civilian technology development.

Federal technology programs have a long history and a diverse nature (in both structure and outcomes). Based on this history, the factors that appear to contribute to success in government-industry cooperation in civilian technology developments are discussed. This chapter then reviews the strengths and weaknesses of current federal programs to stimulate technology development, as well as programs aimed at the adoption and transfer of new technologies.

An important part of federal investment in technology development, much of which is defense related, involves R&D performed at the federal laboratories and work sponsored by the Defense Advanced Research Projects Agency (DARPA). This chapter accordingly discusses the current and prospective roles of these organizations in a modified federal technology policy. It concludes by presenting a framework for strengthening the capacity of the United States to support private sector technology development and

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

commercialization in “pre-commercial” areas. Pre-commercial R&D is a process that generates knowledge and technical information with a capability for application across a wide range of products and processes. It involves R&D before construction of the prototypes for commercial application but after indications of general commercial potential for the R&D work in progress.1

FEDERAL INVOLVEMENT IN RESEARCH AND TECHNOLOGY

For much of this century, the federal government has played an important role in the development of civilian, nonagricultural technology. In agriculture, federal and state programs for research and extension (support for technology adoption) date back to the nineteenth century.2 Another source of federal support for civilian technology development has been an indirect one—federal funding of basic research.

A major federal role in support of basic research has long been viewed as appropriate. It is recognized that technological progress through innovation, of which basic research efforts are a central part, provides for increases in productivity and economic growth.3 Government financing of research to support technological change stems, in part, from the recognition of the need to compensate for the ineffectiveness of private markets in this area. The economic returns on investments in basic research often lie far in the future. Moreover, the returns on investment in basic research are difficult for the investor to protect and capture with devices such as patents or copyrights. The returns to the investor from basic R&D activity are correspondingly low.

The returns to society as a whole, however, can be high, as numerous studies have shown.4 The difficulties in capturing the returns from basic research investments give rise, therefore, to a form of “market failure” in which private returns to the would-be investor are lower than the returns to society as a whole. Without some form of public intervention, market institutions will lead to underinvestment in this type of research activity.5

Federal support for civilian technology development has been confined primarily to support for basic research. Nonetheless, in several areas, the federal government has assumed a more direct role in supporting technology development downstream from basic research. Risk and uncertainty are inherent in any development project and, by themselves do not justify funding of projects by the federal government. Nevertheless, investments in ventures beyond basic research have been justified on the grounds that private firms, in some instances, are not able to “appropriate” or capture sufficient benefits from projects that serve specific missions of federal agencies or the general welfare. Public funds support research and technology development in technologies deemed essential to agency missions; in recent de-

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

cades, this rationale has led to large investments in defense, transportation, and space technologies.6 For historical and political reasons, federal and state funds have also supported a large research, technology development, and extension system in agriculture.

With several important exceptions, federal funding of civilian technology beyond the basic research stage is viewed as unjustified. This view of federal involvement in technology has held that public investments simply substitute for the investments that would be made by private firms in the absence of government incentives. Worse yet, it is feared that direct subsidies may distort private investment incentives, leading to the development of costly and commercially unsuccessful technology projects. (The federal Supersonic Transport program is frequently cited as an example of this type of problem.) In sum, because the returns from investments in civilian technology development can be captured by private firms, this theory suggests, there is no market failure, and public incentives to stimulate private activity are unnecessary.

Market failure, we believe, is not absent from the stages of technology development that lie “downstream” (i.e., closer to technology development and application) from basic research. Policies based on a framework that denies the existence of market failure in pre-commercial areas employ an unrealistic view of the innovation and technology development process. Basic research rarely yields results that can be translated swiftly and at low cost into commercially remunerative technologies. Moreover, the economic benefits of fundamental advances in R&D do not end at the basic research stage. Instead, investment incentives are often needed in pre-commercial research to improve theoretical understanding, and to test and explore potential technology applications and designs. In many cases, these activities include considerable “basic” research work. Therefore, technological innovation (after the invention of new product or process technologies) is characterized by high risks, high and rapidly increasing costs (indeed, for most technologies, the costs of development and application, as noted in Chapter 1, significantly exceed the costs of the basic research underpinning them), and great uncertainties.

Technology, as well as science, moves rapidly across international boundaries, and intellectual property protection does not completely prevent imitation, reverse engineering, or improvements of the basic technology. The returns from many investments in technology development, therefore, are often not easily appropriated by the investor. Moreover, changes in the global economic environment, including improved communications, rapid economic growth and strong technological capabilities overseas, and the importance of foreign trade and capital flows in the U.S. economy, may have further impaired the ability of U.S. firms to capture the returns from investments in technology development, as well as from basic research.

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

The argument that federal support should be confined to basic research also overlooks the possibility of market failure in the adoption of new technologies—an important area in which the United States needs to improve its performance, as noted in Chapter 1. The issue of nonappropriability, or the inability of firms to capture economic benefits of investment in basic research—long accepted as the rationale for public support—deals largely with a putative undersupply of that type of research. This view overlooks the fact that the transfer and utilization of new scientific or technological information generally involve significant appropriability problems for private firms. The organization of R&D capabilities in industry rests on the inability of firms to capture the returns of investment in technology transfer and adoption activities, as noted below. Public support for technology development, therefore, may legitimately include a role in supporting its utilization and diffusion, as well as the creation of technological knowledge.

In sum, an expanded federal role in supporting pre-commercial R&D and technology, as well as domestic technology adoption, is justified on the grounds that market mechanisms do not promote efficient levels of investment or performance in these areas. Moreover, to improve U.S. performance in technology commercialization and adoption, a better balance between support for basic research and investment in pre-commercial R&D and technology adoption is necessary.

Federal Support for Basic Research

Government involvement in the development of civilian technologies has a lengthy history and has assumed many forms. Many of the high-technology industries in which U.S. firms are now dominant or strong performers within the global economy benefitted from federal funding of basic research or from defense-related research, development, and procurement programs. Basic scientific research has played an important role in advances in telecommunications, environmental sciences, and many other areas. In biotechnology, the growth of start-up companies and advanced applications in genetic engineering have been made possible in part through federal funding of research at universities and medical institutes. Government funding of scientific research has also contributed both to the physical capital necessary to support the nation’s science and technology base—construction of scientific and engineering facilities, and equipment purchases—and to the education and training of the U.S. work force.

The role of the federal government has also included the education of scientific, engineering, and academic personnel employed in government, industry, and universities. As federal funding of research has increased, the number of scientists and engineers has also risen (more than 60 percent from 1977 to 1987 and 8 percent per year in the 1980s).7 Sponsorship of

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

academic fellowships and grants creates incentives for postsecondary students to enter science and engineering fields. The government currently supports, for example, more than 49,000 fellowships, traineeships, and research assistantships for graduate education in science and engineering.8

Federal support for basic scientific research remains important to the national welfare. It must be recognized, however, that an exclusive federal focus on basic research investment in order to sustain U.S. advantages in technology is no longer sufficient. Scientific research is increasingly an international public good. The growth of transnational corporate alliances, the increase in direct investment in the United States and abroad by foreign-based firms, the participation of scientists and engineers from one country in the laboratories of other countries (especially those of the United States), the emergence of new centers of technical and industrial prowess, and the swift dissemination of technological knowledge through advances in information processing and transportation have combined to diffuse new research findings rapidly around the globe.9 The pace as well as the amount of technology transferred through these transnational mechanisms is accelerating.10

The worldwide diffusion of new technical knowledge makes it difficult for U.S. firms to appropriate the benefits of research conducted in other countries. During the 1950s and 1960s the United States was able to translate innovations produced through this complex research system into marketable products with little challenge from commercial competitors. Today, not only are foreign firms more capable of absorbing the output of the U.S. scientific and engineering enterprise, they also challenge U.S. companies by quickly incorporating research results into commercializable products and processes, as well as rapidly adopting new technologies.

The openness and accessibility of the global research system and the free flow of information and ideas have contributed to this development. One response to the globalization of basic research is to maintain current federal research investment priorities and attempt to reduce transfer of the results of such research to foreign firms. This is likely to be both ineffective and, ultimately, profoundly counterproductive. The economic benefits and payoffs to U.S. industry and citizens from an exclusive government focus on federal investment in basic research may, we believe, have been reduced in recent years. The appropriate response, however, is not to attempt to restrict foreign access to U.S. basic research. Such an action would harm the global scientific enterprise, as well as reduce the effectiveness of our basic research system and, ultimately, impair the competitiveness of U.S. firms.

As a nation, it is likely that the United States has less to gain and more to lose by restricting foreign access to its research system. This is true today more than at any other time in the postwar period. Moreover, in some

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

cases, the United States (including federal laboratories and federally sponsored R&D projects) is less open to the participation of ''foreign'' firms than other industrialized nations and could be subject to retaliation in the future.11 The United States should seek to promote access to publicly funded research projects, both here and overseas.

Although post-war U.S. policy has emphasized funding of basic research, the government has acted to aid U.S. firms in commercial technology development and the adoption of new technologies. The next section outlines several examples of federal involvement in private sector activities beyond funding of basic research. As we show, the U.S. government clearly has the capacity to facilitate the commercialization and adoption of new technologies in important high-technology sectors. This success, we believe, indicates the capability of government to act in a manner consistent with support for downstream investments in pre-commercial R&D with a high rate of social return. It also shows federal capability to aid U.S. firms in technology adoption.

Government Support Beyond Basic Research

In agriculture, public health, computers, and civilian aeronautics technologies, among other fields, investments by federal agencies—the Department of Agriculture, National Institutes of Health, Department of Defense (DOD), and National Advisory Committee for Aeronautics (NACA)—contributed to technology commercialization and the adoption of new technology in private firms. Indeed, in aircraft, high-performance computers, and agriculture, the federal government had a direct role in the creation of industries that today dominate world commerce and generate export surpluses for the United States. Other less successful federal efforts, in areas such as synthetic fuels, provide insights into how to improve the organization and structure of publicly supported programs in civilian technology. The following sections detail lessons learned from past federal programs that can shape future policies and programs.

Agriculture

The land resources of the United States, its large farm population, and innovations—such as seed drills, reapers, and steel plows—contributed to the success of the nation’s agricultural sector, particularly in international markets in the late 1800s. Progress during the 1900s, however, was shaped by a series of legislative initiatives that provided government funds for R&D and agricultural extension services.12 Many studies of agricultural productivity growth and federal investment have documented a high rate of return from these types of investments in pre-commercial agricultural research and technology.13

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

One important legislative development during this period was the 1887 Hatch Act, which provided funds to the states for agricultural “experiment stations."14 In conjunction with agricultural colleges, the stations formed a system that “extended” agricultural knowledge and research findings to the farmer. The 1906 Adams Act encouraged mission-oriented, basic research at the local level through increased funding of state experiment stations, with the stipulation that they use funds for “conducting original researches.''15 The 1914 Smith-Lever Act provided grants for such activities as farmers’ institutes, demonstration farms, and vocational education.

The Department of Agriculture has placed much of its research locally in experiment stations managed by the states.16 County-based agents were essential to dissemination of technology from the federal, regional, and extension laboratories to the local farmer.17 This emphasis on government-sponsored technology extension is unique to agriculture (standing in sharp contrast to the lack of extension programs to support U.S. manufacturing). Agricultural research and extension programs are focused on servicing external “clients” (i.e., which reinforces the link between R&D and commercial markets).18 Extension agents provide both technical information on advances in agricultural technology and assistance with business management.

Agricultural extension programs have been a useful, although costly, mechanism for upgrading the technological capabilities of farmers and promoting the diffusion and adoption of new technologies. The agricultural program provides several important lessons on federal involvement in civilian technology development and adoption. The most important of these include (1) the need for a wide diversity of specific projects and flexibility in extension management; (2) the value of a continuing focus on the application of findings and technology adoption that affect a wide range of private sector actors; (3) the importance of a long-term, stable source of funding; and (4) the benefits of wide access to projects among private sector participants.

Computers and Microelectronics

Federal R&D support was essential to the creation of the U.S. computer and semiconductor industries. The first computers were constructed in military research and development projects during World War II. In the 1950s and early 1960s, government military purchases of semiconductors, largely for use in missile guidance systems, aided the development of the U.S. semiconductor industry. Through R&D and procurement programs, federal assistance to private R&D projects helped to lower production costs through subsidization of manufacturing test and production facilities. In addition, the SAGE air defense program required development of innovations to coordinate multiple computers operating continuously. (Additional contribu-

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

tions of the Department of Defense to the computer industry are addressed below in “Government Support of Dual-Use Technology: DARPA.") In fact, between 1945 and 1955, all major computer technology projects in the United States were supported by government or military users, or both.19

Although IBM funded early development work in electronics and computers during the 1940s and 1950s, sales of these products to the federal government generated a significant amount of revenue for the company.20 Direct government support for R&D work, special projects, and studies was received for defense-related purposes at IBM, including programs associated with the B-52 bomber and navigation system. In addition, from 1953 through 1955, 6 of the 18,701 computers (the company’s first-delivered computer) sold by IBM went to government agencies and laboratories. Other projects for the government, such as the SAGE and Stretch programs for the military, helped to advance the firm’s technological frontiers in commercial products, including the diffusion of transistor technology in IBM products.

Cray Research, Inc. developed supercomputers by working as a contractor for Los Alamos National Laboratory, which functioned as “the market” by defining specifications and evaluating the quality of machines installed at its facilities. At critical junctures, federal purchases of Cray supercomputers kept the company in business. In addition, extensive government investments in computer networks in the 1970s and early 1980s, reduced instruction set computing, and sophisticated graphics are now bearing fruit in commercial applications.

The federal government played an important, direct role in the commercial development of the computer industry. Clearly, much of the success of this involvement can be attributed to government procurement practices, which helped ensure a market for products supported through DOD and DARPA. Nevertheless, early federal support also included pre-commercial R&D and prototype development projects that assisted firms in moving beyond research into technology commercialization in civilian markets.

The Biomedical Industry

The growth of the U.S. biomedical industry—pharmaceuticals, medical equipment and devices, and more recently, biotechnology—was supported by government funding of medical research and the training of scientists and medical personnel by agencies such as the National Institutes of Health (NIH).21 Collaborative projects in biomedicine established a precedent for the expansion of cooperative R&D programs in subsequent decades. The dominant role of NIH in funding U.S. biomedical R&D evolved through the agency’s wartime programs. Prior to World War II, as part of the Public Health Service, NIH helped develop treatments for then prevalent ailments

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

such as malaria, tuberculosis, and venereal disease. The 1944 Public Health Service Act led to the establishment of new NIH research entities such as the National Heart Institute and the National Institute of Mental Health.22 In 1946, the Office of Research Grants was founded and became the primary grant-making body for medical research in the postwar era. Along with grants initiated by individual medical researchers, which still constitute the bulk of NIH allotments, funds for the construction of medical facilities and graduate and postdoctoral training fellowships were also disbursed.23

Biotechnology

Today, the federal government, largely through NIH, the National Science Foundation, and the Department of Agriculture, spends approximately $3.5 billion a year on biotechnology-related R&D. The private sector invests another $2.5 billion. NIH employs 4,184 scientists and physicians, and in 1990 allotted $5.2 billion of its total budget of $7.6 billion for more than 24,000 research grants. NIH spent $1.7 billion on research in biotechnology fields, such as genetics and molecular biology, and process technology work, such as DNA cloning. Funding in the second category rose sharply from $0.2 billion in 1986 to $1.2 billion in 1990.24 NIH laboratories test chemical compounds for use in biotechnology products and processes.25 In addition to NIH support for biotechnology, $195 million per year is spent on the human genome project, which is administered by the Department of Energy (DOE) and the Department of Health and Human Services.26

Several lessons that are evident from close examination of government support for biology may be helpful in redirecting federal science and technology policy. First, current federal policy on biotechnology recognizes that collaboration between firms and universities is essential.27 Cooperation between the private sector and government-supported universities often involves long-term agreements between individual firms and a university. Federal funding of research, particularly of university-industry collaborative projects, has helped support a strong, internationally competitive U.S. biotechnology industry.28 NIH research has led to breakthroughs such as gene therapy, the development of a test for the presence of the human immunodeficiency virus (HIV), and the drug AZT (azidothymidine) for AIDS treatment. The U.S. leadership in biological science has translated into a strong national position in world markets for U.S. biotechnology products.29

Second, NIH is the leading provider of R&D and training to the biomedical industry. Although direct support is primarily for basic research, the close relationship to industry and the short time to product development have blurred the distinction between support for basic research and for pre-commercial R&D. NIH labs have built strong relationships to the health care industry and its management. The links between researchers and in

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

dustrial users are an important element in the biomedical industry’s success in transforming laboratory R&D into commercial applications.

Finally, NIH’s historic tradition of decentralized peer review of research proposals has helped provide protection from political interference for the tens of thousands of research proposals examined each year by 139 review councils and panels. From the beginning, the Office of Research Grants emphasized the “integrity and independence of the research worker and his freedom from control, direction, regimentation and outside interference."30 As in other fields, independence from political interference has fostered continuity in research and helped preserve the independence of scientific inquiry and projects.

The Civil Aircraft Industry

The U.S. government played a strategic role in the development of a civilian aircraft sector. A central focus of this involvement was funding of applied research and construction of aircraft prototypes. The government conducted most R&D in aviation prior to World War II, at which time the growth in military and private sector aviation reduced the governmental role in civilian R&D.

From its founding in 1915 to its absorption by the National Aeronautics and Space Administration (NASA) in 1958, the National Advisory Committee for Aeronautics was the predominant government body supporting civil aircraft R&D. NACA was formed during World War I, when biplanes were used for reconnaissance and dirigibles were used in bombing.31 Beginning with work on a new wind tunnel at Langley, Virginia, NACA was responsible for a series of aeronautical innovations that helped foster the establishment of a U.S. aircraft industry. The development of an engine cowl reduced wind drag, research in aerodynamic efficiency assisted determination of optimal engine placement, and a new family of airfoils allowed engineers to test new shapes in wing design. Furthermore, by publishing technical documents on aviation engineering, NACA became recognized as a world-class authority on aeronautics. NACA appropriations through 1940 totaled $81 million (1972 dollars).32 The number of NACA employees did not exceed 100 until 1925 and was less than 300 as late as 1935.33 Experience with federal technology developments in this program shows that significant accomplishments in pre-commercial and applied R&D do not necessarily depend on large expenditures of funds for each research project.

Regulatory policies also had an impact on the development of the civil aviation industry. NACA-sponsored discussions on an industry-wide cross-licensing agreement led to the transfer of technology among companies. Under the accord, companies gave up exclusive patent rights that might have served to promote a single firm’s technological dominance.

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

From 1938 to 1978, the Civil Aeronautics Board (CAB), strictly regulated airline fares and market entry by air carriers. These regulatory policies had the effect of constraining market efficiencies while spurring technological innovation, because airlines were forced to compete on the basis of technology as opposed to cost. After World War II, spin-offs from military R&D and transfers to the private sector from military-based research and procurement had a decisive effect on the commercial sector. Manufacturers such as Boeing and General Electric that worked in both the military and the civilian jet-aircraft and jet-engine markets were able to leverage the cost of production and technology development across both areas.

NACA's efforts in technology diffusion and encouraging the adoption of new technology through dissemination of technical documents were successful in spurring technological advances in the United States. NACA (and later NASA) also encouraged companies of comparable technical ability to share R&D findings in large joint projects.34 In addition to support for R&D and the adoption of new, innovative technologies in the civil sector, NACA and NASA played a key role in support of the infrastructure underlying the commercial aviation industry.

There are several important lessons to be gained from the government's involvement in support of the commercial aircraft industry. First, NACA concentrated on areas of pre-commercial, applied R&D with broad application throughout the industry. Private companies then took the research results and specialized in technology commercialization. Program managers at NACA facilities were not involved in specific decisions on product applications. NACA generally limited its support to "generic, enabling technologies" from which current or future product design programs would benefit.

Second, NACA's research efforts were unstructured and minimized over-lapping responsibilities, in contrast to many current federal programs. Research projects were initiated after informal approval from staff supervisors or NACA's executive committee.35 The organization's relatively small size and single location contributed to close staff collaboration. NACA was also able to attract high-quality scientific and engineering talent. Staff was not restricted to narrow technical specialties, which promoted the wide transfer of technical information and expertise.

Synthetic Fuels

The government's attempt to develop a synthetic fuels industry in the late 1970s and early 1980s is a case study of unsuccessful federal involvement in technology development. In 1980, Congress established the Synthetic Fuels Corporation (SFC), a quasi-independent corporation, to develop large-scale projects in coal and shale liquefaction and gasification.36 Most

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

of the projects centered on basic and conceptual work that would contribute to demonstration programs in later stages, although funds were expended on several prototype and full-scale demonstration experiments.37 Formed in response to the 1970s energy crisis, the SFC was intended to support projects that industry was unable to support because of technical, environmental, or financial uncertainties.38 Federal loans, loan guarantees, price guarantees, and other financial incentives totaling $20 billion were authorized to spur industry action.39 Although SFC was designed to continue operating until at least 1992, the collapse in energy prices, environmental concerns, lack of support from the Reagan administration, and administrative problems ended the synthetic fuels program in 1986.

The failure of the federal government’s effort to create a synthetic fuels industry yields valuable lessons about the role of government in technology innovation. The synthetic fuels program was established without sufficient flexibility to meet changes in market conditions, such as the price of fuel. Public unwillingness to endure the environmental costs of some of the large-scale projects was an added complication. An emphasis on production targets reduced research and program flexibility.40 Rapid turnover among SFC’s high level officials slowed administrative actions. The synthetic fuels program did demonstrate, however, that large-scale synthetic energy projects could be built and operated within specified technical parameters.

Energy programs of that time were hindered by excessive political interference. Political influence on funding allocation decisions, selection of R&D projects, or the direction and conduct of scientific research is counterproductive and damaging to the success of federal technology efforts. Fuel-cell projects under the SFC, for example, were allotted to each of the 50 states, regardless of economic viability. Implementation of energy performance standards for buildings was held back by complex regulations.41 The clean coal technology project was hampered by congressional involvement in technical design and operational management. Although programs such as the tertiary oil recovery initiative and the R&D program in photovoltaic cells attained some success, these technologies were not widely adopted. In the case of photovoltaic energy, the government programs of the 1970s concentrated on research, as opposed to advanced development, in an immature technology.42

Assessing Federal Support

Changes in the international and domestic economic and technological environments have made the federal role in technology more important today than in past decades. As we have shown, the government can invest productively in civilian technology beyond basic scientific research. Factors that contributed to successful intervention in the past provide general

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

guidelines on how best to structure that involvement. The following summarizes some of the most important reasons why federal incentives to private sector technology efforts have been successful in the past.

  1. Close links between users of the technology and federally supported R&D projects: As in the case of federal support of biotechnology through the NIH, close involvement of researchers and industry in the design of collaborative projects is important to the success of R&D efforts.

  2. Investments by government and industry in diffusion of new technologies : The success of federal efforts in agriculture and civil aircraft development and the failure of synthetic fuels development projects suggest that government involvement in commercial technology should include an emphasis on support for technology adoption and diffusion. In some cases, such as CAB regulation and commercial aircraft, support for technology adoption may be indirect. Programs that attempt to ignore market signals, fail to provide incentives for adoption, or exclude the diffusion of technical knowledge and information are likely to be less successful in aiding commercialization efforts than those that include these characteristics.

  3. Stable program funding and long time horizons: A stable source of funding, either untied to or confident of annual appropriations, is one important component of successful government programs in civilian technology. The political process includes a bias against investments in programs that require long payback periods. Funding for agricultural extension programs, NACA project funding, and NIH support for research in biotechnology leading to improvements in product and process technologies, indicate the importance of stable program funding. In contrast, many of the alternative energy programs of the 1970s were hampered by demands for rapid success in untested technology areas.

  4. Limited political interference in program operation: Political decision making and interference in project operations damage the chances for successful investments in commercial technology. The synfuels program, and its problems associated with the location of demonstration projects and the interference of legislative objectives, played a role in reducing the potential effectiveness of the project.

  5. Government program managers’ avoidance of detailed decisions about specific commercial applications of the technologies developed: NACA’s success in facilitating the development of civil aircraft technologies was due, in part, to the agency’s lack of direct coordination of R&D agendas once commercial applications became evident. To a significant extent, problems in the synthetic fuels program of the late 1970s can be attributed to direct involvement of program managers in selection of specific technologies for further commercial development.

  6. Cost-sharing: Much of the past success of federal support for pre-commercial R&D and technology development can be attributed to cost-

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

sharing between the government and industry. Joint R&D, to which industry committed financial resources, served to link projects closely to market signals and in-house R&D efforts. Direct subsidization of technology projects by the government has had far less success in facilitating commercial R&D efforts.

  1. Avoiding excessive technological risk in time-constrained programs : Federal technology development programs must balance the risks of excessive technological conservatism against the risks associated with attempting to quickly develop and commercialize “blue-sky” technologies. Successful federal programs, such as agricultural research and commercial aircraft, have avoided excessive commitments to quick commercialization of immature technologies.

CURRENT GOVERNMENT PROGRAMS TO SUPPORT TECHNOLOGY DEVELOPMENT

In addition to the programs in civilian technology development outlined above, postwar science and technology policy has included a commitment to dual-use and military R&D and technology development programs. Although this report centers on civilian technology, programs to support the defense industrial base, particularly high-technology development for defense, cannot be disregarded in an assessment of the federal role in promoting commercial R&D and technology. More than 90 percent of federal R&D funds go to industrial firms for defense-related programs. This funding has important implications for civilian technology commercialization efforts.

In the 1950s and 1960s, funding of R&D for defense-related technologies produced important civilian technology spin-offs in areas such as computers, semiconductors, and commercial airframes and engines. More recently, however, defense-related R&D has proved less effective as a source of new commercial technologies. Indeed, the relationship between the civilian and military areas of so-called dual-use technologies has changed significantly. In many technologies (computer hardware and microelectronics are among the best-known examples), advances in military applications now depend on rapid incorporation of technological innovations and applications from commercial technologies. Moreover, the economic viability of many U.S. suppliers of defense technologies depends increasingly on their fortunes in civilian, rather than military, markets. In the view of the panel, this change has important implications for the operations and priorities of one of the most successful supporters of defense-related technology development: the Defense Advanced Research Projects Agency.

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

Government Support of Dual-Use Technology: DARPA

The Defense Advanced Research Projects Agency was established in 1958 after the Soviet Union’s launch of Sputnik. DARPA’s full-time staff of 132 manages a $1.43 billion annual budget that supports research and development in high-risk, advanced technology with potential applications to military systems.43 One of the primary motives for establishing DARPA was to develop technologies to serve missions in which no single uniformed service was interested or missions that spanned the needs of several of the services. Moreover, DARPA was primarily concerned with the “early-stage” development of new technologies. Their incorporation into specific weapons systems was the responsibility of the uniformed services’ research and technology development facilities.

DARPA-funded projects have developed many advances in military technology, including advanced materials able to withstand extreme conditions, such as carbon-carbon composites and complex ceramics, as well as absorbent and nonreflecting materials critical to stealth aircraft.44 Most significantly perhaps, the agency has been involved in funding R&D in computers, data communications, and computer networks. DARPA facilitated advances in artificial intelligence and packet-switched computer networks. It has also contributed to the development of both parallel processing and reduced instruction set computation (RISC). These types of investment have had not only a significant impact on U.S. military technology but also substantial “spillover” effects in commercial sectors.45

Although DARPA’s budget was reduced during the 1960s, primarily because of the transfer of space-related development projects to NASA, it has risen steadily since the 1970s.46 The agency’s budget increased from $235 million in 1977 to $579 million in 1981 and $1.294 billion in 1989. Along with the increase in funding, DARPA developed from a project-oriented agency into a technology-based organization. Most of DARPA’s work is now concentrated in the Pentagon’s research, technology, and advanced development programs, in contrast to full-scale weapons system engineering. DARPA funds $673 million in exploratory development, with $645 million devoted to advanced development. Approximately $91 million is spent on basic scientific research and $24 million is allocated for mission support.47 The agency often sponsors prototype development projects, such as for the Strategic Defense Initiative and the National Aerospace Plane, prior to the time the projects are transferred to one of the military services.48

Overall, DARPA is an efficient organization that has minimized bureaucratic obstacles to program success. It has been able to attract talented scientists and engineers from outside government. An important reason for DARPA’s successes is that the Defense Department serves as a test custom

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

er for the technologies developed by the agency. Projects benefit from feedback of user needs generated by a strong customer-client relationship. The agency has functioned as a ''technology broker” or venture capitalist within the Pentagon, monitoring and funding the early development of advanced technologies. DARPA does not carry out research in its own facilities but contracts work to industry, universities, and branches of the armed services. Organizationally, DARPA is separate from the military services of the Department of Defense. The director of DARPA is responsible to the director of Defense Research and Engineering and, through this line of reporting, to the Under Secretary for Acquisition in the Office of the Secretary of Defense. The administration and Congress have different views on the degree to which DARPA should support “emerging” technologies, such as high-resolution systems and advanced semiconductors. In November 1989, for example, Congress expanded DARPA’s authority by permitting it to serve as a venture capital bank for defense manufacturers.49 Programs in very high-speed integrated circuits (VHSIC), x-ray lithography, focal plane arrays, and the MIMIC program have also been moved to the agency. Moreover, public policy research groups have recently recommended that DARPA be given specific responsibility for transfer to industry of defense technologies having commercial relevance.50 The administration, however, has been concerned about extending DARPA’s involvement in dual-use areas, particularly in specific pre-commercial technology areas. The agency’s current policies and programs suggest that it is shifting its focus away from support of dual-use R&D and pre-competitive commercialization projects to an exclusive concern with military technologies.

The appropriate role for DARPA in commercial and dual-use technology markets should be reevaluated. Leading-edge military technology developments are increasingly “spun on” from the private sector to the defense manufacturing base. This trend has been accompanied by growth in private R&D spending relative to defense R&D expenditures, for example, in microelectronics, integrated circuits, data processing, telecommunications, and software.51 The civilian infrastructure and commercial technology base is now much larger than that in defense and is important to defense systems.

Therefore, the performance of U.S. military-related technology is challenged less by lack of innovation in defense sectors than by the performance of dual-use and commercial innovators in the private sector. Moreover, as the effectiveness of military-funded R&D and military procurement as sources of civilian applications declines, federal military agencies such as DARPA need to tailor programs to meet this new reality.

The panel recommends that DARPA’s traditional role in dual-use technology be reaffirmed. The agency’s mission explicitly includes support for dual-use R&D and technology development that extends beyond military and national

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

security needs alone. These dual-use programs should focus primarily on areas in information science and technology in which DARPA has had success in the past.

This is not to suggest that DARPA become involved in technology development focused exclusively on civilian applications. The long-term success of the agency and its mission, however, depend on positioning it to take advantage of critical dual-use technologies that can be spun on into military applications which requires DARPA to have some involvement in the support of civil technology development.

The agency’s experience in high-risk, cutting-edge military technologies makes it relevant in supporting research in dual-use technologies with similar characteristics. DARPA’s work has included investments in projects that have focused on pre-commercial technology—in electronics, data processing, networking, and materials, among other areas. These are the types of investments in dual-use technology that DARPA’s portfolio should include. Apart from the research and initial development stages of technology formulation, DARPA has also succeeded in building prototypes of new systems before they are transferred to the service branches. In semiconductor manufacturing and laser-based telecommunications, among other areas, DARPA has helped develop technology that was successfully transferred to the civilian sector by private companies.52

DARPA has not been successful in executing all of its objectives. The increasing complexity of Pentagon procurement policies has inhibited the agency’s success in some instances. In recent years, DARPA has been unable to prevent the attrition of many highly skilled personnel. Congressional oversight of the agency’s budget has been associated with considerable fluctuation in appropriations, reducing the stability of DARPA funding. These problems suggest that any federal entity established to support civilian technology development would benefit from insulation from congressional or executive branch micro-management, and would function more effectively if it could be exempt from complex federal procurement and civil service personnel regulations.

In strengthening DARPA’s role in dual-use technology, appropriate action should be taken to ensure adequate staff and financial resources devoted to these tasks.53 There are various options for strengthening the agency’s organizational effectiveness. The agency’s current structure could be retained even as its budget is increased and hiring restrictions are eased. Retention of high-quality staff is essential; however, regulations and restrictions on financial disclosure and future employment hinder DARPA’s ability to attract qualified personnel.54 Links to other federal technology agencies should be improved to avoid duplication of R&D efforts across federal agencies. Technology transfer to private industry should be given greater

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

emphasis. Most important, given the increasing overlap of military and civilian innovation, technology transfer among DARPA, other defense R&D organizations, and civilian agencies of the government should be a primary mission of the agency.55

The Small Business Innovation Research Program (SBIR)

The Small Business Administration administers an important program that supports civilian technology development: the Small Business Innovation Research (SBIR) program.56 SBIR was established in 1982 to fund R&D at small and medium-sized firms and to stimulate the commercialization of new products and processes.57 The program also provides small companies with managerial and technical advice as well as financial grants. The 11 federal agencies participating in the program set aside 1.25 percent of their research budgets each year to fund SBIR projects. Grants are awarded for R&D in three phases: (1) project feasibility, (2) development, and (3) commercialization. The SBIR program made 3,183 awards, valued at $460 million, in fiscal year (FY) 1990. Grants were concentrated in the biotechnology field, energy systems, and defense-related projects. This program has proved important in facilitating pre-commercial R&D in biotechnology, as well as providing a bridge across which companies can move from start-up to commercialization. We believe this program has significant merit.

Congress should consider legislation to increase the agency SBIR set-aside. The program should be expanded so that more companies can participate in it.

U.S. Commerce Department Programs: The National Institute of Standards and Technology (NIST) and the Advanced Technology Program (ATP)

The 1988 Omnibus Trade and Competitiveness Act established several new technology transfer and development programs under an office of Technology Administration in the Department of Commerce.58 Under the act, the National Bureau of Standards was renamed the National Institute of Standards and Technology (NIST) and placed within the Technology Administration. NIST encourages the competitiveness of U.S. firms in such areas as manufacturing modernization, enhanced process technology, and R&D commercialization. NIST’s total resources in FY 1992 amounted to $453 million.

NIST employs 3,000 scientists and engineers and is host to approximately 1,000 visiting researchers each year at its facilities in Gaithersburg, Maryland, and Boulder, Colorado.59 The institute’s in-house laboratories

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

conduct basic and applied R&D in the physical sciences and engineering to develop technical standards, calibration techniques, quality assurance methods, and technology generation. NIST’s traditional laboratory work is conducted through facilities that focus on eight areas: (1) electronics and electrical engineering, (2) manufacturing engineering, (3) chemical science and technology, (4) physics, (5) materials science and engineering, (6) building and fire research, (7) computer systems, and (8) computing and applied mathematics. These facilities are engaged both in cooperative R&D projects with industry and in work that supports NIST’s role of supplying data and information on standards and testing to U.S. firms. In addition to these activities, since 1988 NIST has sponsored the Malcolm Baldrige Quality Award Program for the Department of Commerce. Annual awards are made in manufacturing, services, and small business categories.

NIST also manages the Advanced Technology Program (ATP), one of several programs mandated by the 1988 Trade Act. The ATP funds businesses, especially small and medium-sized firms, in the research and development of ''generic,” “pre-competitive” technologies, to stimulate “high-risk, high-potential'' products, processes, and technologies.60 Under the ATP, a projected total of $229 million in federal grants will be expended over a five year period.

At the center of the ATP program are grants to cooperative research projects between industry and independent research organizations, including universities. All participants in these ventures must be U.S. entities. To ensure private sector commitment to a project, participating organizations must contribute a minimum of 50 percent of the total program costs, with NIST providing financial support for up to five years. Trade secrets, intellectual property, and information on the operations of businesses participating in ATP are to be kept confidential. The government is entitled to a proportion of licensing fees and royalties resulting from ATP projects.61 In addition to providing funds for cooperative R&D, the ATP will provide advisory services and will loan NIST equipment and facilities to support R&D ventures. The ATP is charged with coordinating its programs with other federal laboratories through cooperative research and development agreements.

In FY 1990, ATP awarded $9.2 million in grants. The budget authority for FY 1991 totaled $35.9 million, and for FY 1992 $47 million. The administration requested $67.9 million for the ATP in fiscal 1993. Most ATP grants made in FY 1990 were for process technologies, such as the production of flat panel displays and precision machine tools; five of the eleven awards were for joint ventures. A mix of consortia, large multinational U.S. firms, and many small and medium-sized companies were awarded grants during the first awards cycle. Most applicants in the first round of grants were firms in electronics or materials science.

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

It is premature to comment on the possible impact of ATP funding on technology development or on directions the program might take in the future. The panel has, however, considered the framework employed in the design of this initiative, as well as the first-year grant awards selection process.

NIST has established a promising selection process for the ATP program. Criteria for selecting grant recipients include not only the potential scientific and technical merits of each project, but also the possibilities for technology transfer and anticipated application of new technology in each industry sector. Applications are processed through a series of technical and business reviews. A board representing federal agency officials, charged with resolving differences of opinion among reviewers, serves an advisory function for ATP program officers. At present there is no structure in place to support evaluation of ATP’s performance by independent experts. Any such evaluation should avoid demanding immediate, tangible results or “deliverables,” lest an excessively short-term operating philosophy be imposed on the ATP. Nevertheless, we believe that some independent evaluation of the ATP is needed.

There are difficulties associated with conducting a business review prior to clear market signals of the potential for profit from these types of investments. The ATP review process does serve to bring expertise from the private sector into the evaluation of a proposal’s commercial potential.62 Like NIH grant programs, the ATP program is separate from NIST laboratory activities so as not to interfere with the agency’s primary mission.

The ATP program has had a promising start. It is not possible, at this early stage, to determine the program’s success; nor should congressional or executive branch policymakers expect to see immediate, dramatic results. The panel has concluded, however, that the ATP’s budget in the past has been insufficient to have a significant impact on U.S. technology commercialization efforts. An evaluation of ATP by an independent panel of experts, on an ongoing basis, would permit periodic determination of the desirable size of the program.

Role of Federal Laboratories in Commercial Technology Development and Transfer

The federal laboratories are an important part of the national science and technology infrastructure.63 There are approximately 700 federal laboratories, with an overall budget in FY 1991 of $20.9 billion.64 The laboratories’ potential for technology commercialization has, however, been over-estimated. Any discussion of the utility of R&D conducted at the federal laboratories must first consider the high proportion of total federal R&D

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

expenditures that the laboratories represent. Table 2–1 shows R&D funding for these facilities, including both intramural agency laboratories and federally funded research and development centers (FFRDCs).

Federal policy on technology transfer from the laboratories should also take into the account the fact that these facilities are diverse in character, quality, and objectives. It is misleading to characterize this diverse set of facilities as a federal laboratory “system.” The laboratories include single-office facilities operated by a handful of people, as well as large organizations with thousands of researchers, such as the Brookhaven National Laboratory in New York. Most government laboratories, however, are relatively small, staffed by five to ten full-time equivalent research employees. Moreover, most of these facilities are self-contained and are located within a federal agency or university. Although a few laboratories engage in activity related to commercial technology development, the majority are mission-oriented organizations that focus on research far “upstream” from applied R&D of commercial relevance or on systems specialized for military purposes. The federal government also supports large scientific user facilities that, because of their size and expense, would be difficult for any single firm or university to construct. Some of these installations perform important services for industry and provide a foundation for the training of scientists and engineers.

The primary mission of the federal laboratories will continue to be the fulfillment of traditional, agency-specific R&D objectives outlined above.

TABLE 2–1 Selected Federal Laboratory Obligated Expenditures, by Department, for FY 1991 (billion dollars)

Department/Agency

Total

Intramural

FFRDCs

Defense

10.212

8.988

1.224

Energy

4.443

0.427

4.016

National Aeronautics and Space Administration

3.278

2.573

0.705

Health and Human Services

1.940

1.879

0.061

National Institutes of Health

1.463

1.402

0.061

Agriculture

0.777

0.776

0.005

Commerce

0.350

0.349

0.001

Interior

0.469

0.435

0.029

National Science Foundation

0.299

0.187

0.112

Total

23.231

17.016

6.214

 

SOURCE: Calculated from data in National Science Foundation, Federal Funds for R&D: Fiscal Years 1989, 1990, 1991, 1991, Table C-9.

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

The ability of most federal laboratories to benefit the private sector is limited by this mission orientation. Only a few of the several hundred federal laboratories should be expected to support private sector technology commercialization efforts. This view contrasts with the perceived need for a larger role in technology transfer that has driven congressional and executive branch expectations and policies regarding the laboratories’ role in supporting private R&D and commercialization goals.

The work with the most potential to contribute to commercially relevant civilian R&D is performed at the government-owned, contractor-operated laboratories (GOCOs), administered by nonfederal organizations such as universities or private firms. Government-owned and government-operated (GOGO) laboratories are, as the term suggests, administered by the federal government and staffed by government employees. Most of these laboratories do not have significant potential to contribute to civilian technology development.

GOGO laboratories are hindered in their efforts to support civil technology development in at least three important ways. First, GOGO laboratories are subject to civil service guidelines that impede their flexibility to hire staff, or to bring private sector scientists and engineers into their facilities. Second, federal regulations on procurement are obstacles to building effective links to the private sector. Finally, the implementation of broad programs and policies is dictated directly from agency headquarters to GOGO laboratories.

Contractor-operated laboratories are generally better suited for technology transfer and commercialization than those operated by the government directly. GOCOs have more of the operational flexibility necessary to forge closer links with customers in the private sector. Increasingly, participation in commercially oriented ventures is an explicit part of the mission of these laboratories. In addition, unlike government-operated laboratories, GOCOs are not burdened by civil service rules that inhibit flexibility in personnel recruitment and practice. The technical expertise housed in GOCO laboratories is, therefore, generally higher than that found in other types of facilities. Finally, administrative obstacles (including the difficulty of hiring laboratory personnel) are fewer in GOCO facilities. This is true despite an unfortunate tendency in federal agencies, in some cases urged by Congress, to apply in-house rules and procedures to GOCOs.

Traditional Missions in a Time of Change

The missions and funding of federal laboratories largely reflect the national priorities that existed as the national R&D infrastructure took shape after World War II. Most federal R&D resources have been directed to national defense purposes or, as is the case with the Department of Energy,

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

to the development of nuclear weapons, reactors, and high-energy particle physics, for example. National needs, however, have changed.

Reflective of postwar science and technology policy, the largest proportion of federal laboratory spending continues to be directed to defense-related R&D. The Defense Department’s share of total federal laboratory spending in FY 1991 was $10.2 billion, or 49 percent. The Department of Energy’s share is $4.4 billion, or 21 percent. About half of DOE’s laboratory expenditures are for military-related R&D; much of the remainder is for basic energy research (nuclear and elementary particles). The ratio of DOE funding for defense and basic energy research, in contrast to applied energy research, is approximately 5:1. Most Department of Energy laboratories and the FFRDCs are GOCO facilities. The latter perform much of the commercially promising work of the laboratories.

The Department of Defense funds both GOGOs and GOCOs. Most of the department’s GOGOs do not have the potential to support technology transfer to the private sector. The highly specialized nature of the laboratories’ defense-related R&D work is, for the most part, not suitable for civilian technology commercialization efforts.65 In addition, DOD laboratories’ restrictions on procurement and their inability, in many cases, to rapidly apply technology to systems and end products lessen the prospect that significant progress will be made in the department’s commercialization efforts.66 The DOD Defense Advanced Research Projects Agency, however, has a number of dual-use R&D programs in areas such as semiconductors and high-temperature superconductivity.

NASA labs accounted for $3.3 billion of federal laboratory spending in FY 1991. NASA’s seven major research facilities focus on engineering development for space flight and space science. The Kennedy, Johnson, Marshall, and Stennis Space Flight Centers, and part of the Lewis Research Center, concentrate on manned space flight. The Jet Propulsion Laboratory (a GOCO) at the California Institute of Technology and the Goddard Space Flight Center are dedicated to space science. The Department of Agriculture spends $0.8 billion annually on laboratory programs, much of it through the Agricultural Research Service.67

Out of a total budget of $7.6 billion, NIH allots $5.2 billion a year to 24,900 research and training grants.68 In 1991, NIH devoted about $1.5 billion to activities in the federal laboratories. Much NIH-sponsored biomedical research works its way into commercial applications in the biomedical, pharmaceutical, and biotechnology industries.

Recent Efforts to Promote Transfer and Commercialization

A series of legislative and executive branch initiatives during the 1980s attempted to encourage technology transfer from the federal laboratories.

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

The Patent and Trademark Amendments (Bayh-Dole) Act permitted federal agencies to grant licenses to small businesses and nonprofit institutions, including universities, for inventions made at government-and contractor-operated laboratories.69 The Stevenson-Wydler Act, passed the same year, formally made technology transfer from the laboratories to private industry a policy of the federal government.70 The legislation mandated that 0.5 percent of each laboratory’s budget be allocated for technology transfer and established budgets for information offices on laboratory products and services—known as Offices of Research and Technology Applications—at every government-operated laboratory.71 The 1984 National Cooperative Research Act limited potential application of antitrust laws for cooperative projects to encourage companies to collaborate in R&D.72

In 1986, the Federal Technology Transfer Act authorized the establishment of cooperative research and development agreements (CRADAs) between government-operated laboratories and industry.73 A CRADA is an agreement under which a private organization provides personnel, equipment, or financing for specified R&D activity that complements the laboratory’s mission. CRADAs are contractual agreements that include provisions for sharing intellectual property rights on inventions arising from them. (Separately, NASA has continued to enter into long-standing collaborative arrangements under the pre-existing authority of the 1958 Space Act.74) The Technology Transfer Act also established the Federal Laboratory Consortium to provide an interagency framework for technology dissemination.75

Executive Order 12591, issued in 1987, attempted to encourage the use of CRADAs by directing agencies to delegate authority for entering into these agreements to the laboratory and by issuing guidelines for the granting of intellectual property rights under such agreements.76 More recently, the 1989 National Competitiveness Technology Transfer Act extended authority for entering into CRADAs to contractor-operated government laboratories.

Examples of Technology Transfer from the Federal Laboratories

Some examples of government-industry technology transfer have proved of wide benefit to private industry. Most of these incorporated the criteria for successful transfer discussed in Chapter 1. In the biomedical sciences, the close and long-standing ties of NIH laboratories to the medical and health care sectors have helped establish the commercial biotechnology industry. NASA work on R&D in remote sensing, earth-orbiting satellites, and characterization of mechanical properties of high-strength metal alloys, among other programs, has also had some modest impact on the civilian technology base.

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

Past experience with the NIH model of technology transfer, an outgrowth of R&D funding and collaborative work with the pharmaceutical and biotechnology industries, demonstrates that people from government and industry can work together successfully. Many of these joint projects have moved research results out of federal laboratories and into the marketplace. One important reason for this success has been the high degree of interaction between researchers in separate organizations in the biomedical field. The critical interface necessary for successful transfer and adoption of the technology involved is people-to-people contact.

The Department of Energy has the most extensive program in technology transfer to the commercial sector. The agency’s multidisciplinary, contractor-operated laboratories are widely considered to be among the most promising federal facilities for technology commercialization. There are nine multiprogram laboratories: Argonne, Brookhaven, Lawrence Berkeley, Oak Ridge, and Pacific Northwest emphasize energy R&D; Lawrence Livermore, Los Alamos, Sandia, and Idaho Engineering are weapons labs. There are also smaller laboratories noted for their work in energy research and applications, including the Solar Energy Research Institute (SERI), the department’s main laboratory for basic and applied R&D in solar and renewable energies. SERI’s R&D programs include close interaction with the private sector. The multidisciplinary nature of some DOE laboratories involves research and development in fields such as electronics and advanced materials. These are areas that rely increasingly on advances in crosscutting technologies. As noted earlier, almost all DOE laboratories are GOCOs: government-owned facilities that are operated by contracting firms and universities or other nonprofit institutions.

Potential Contributions of Federal Laboratories to Private Sector Technology Goals

Over the past decade, Congress and the executive branch have attempted to make civilian technology development an explicit mission of the federal laboratories. Yet, as measured by the number of patents or the amount of royalties resulting from laboratory transfer activities, this mission has not been fulfilled. In fact, few federal inventions are transferred out of these laboratories. A congressional committee investigating progress in meeting these goals found technology transfer efforts to be “under-staffed, under-directed, and only marginally focused."77 These problems may not be as important as the key requirement for effective transfer—a close customer relationship. They are, however, inhibiting laboratory-industry collaboration.

One indication of the lack of success in forging close relationships is the small output of technologies licensed to the private sector from federal

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

ly sponsored R&D performed at the laboratories. For FY 1989, 297 research-oriented federal laboratories surveyed by the General Accounting Office produced only $6.3 million in royalties and 676 patents. Approximately 31 percent of these laboratories had not received guidance for implementing the Federal Technology Transfer Act of 1986. “The major provisions [of the Act]," the agency concluded, “still have not been fully implemented."78

Table 2–2 provides an overview of one measure of federal output in technology transfer. The amount of technology transferred from the laboratories is strikingly meager, particularly when compared to the $23 billion per year in total federal laboratory R&D expenditures. There are other measures of output that indicate limited progress in linking federal laboratories to provide sector R&D—at least in the initial stages of the development process. Table 2–3 shows the total number of CRADAs that federal

TABLE 2–2 Summary of Patents, Licenses, and Royalties, Fiscal Year 1989

Department/Agency

Patents Pending

Patents Issued

Exclusive Licenses

Nonexclusive Licenses

Total Royalties ($)

Commerce

20

2

0

7

0

Defense

1,142

289

17

15

4,570,472

Energy

548

211

24

30

888,800

Interior

14

8

1

0

13,900

Transportation

0

0

0

0

0

Environmental Protection Agency

6

1

1

0

0

Health and Human Services

139

22

1

0

814,232

National Aeronautics and Space Administration

253

98

30

19

35,100

Agriculture

99

44

10

8

1,500

Veterans Administration

12

1

1

3

0

Total

2,233

679

85

82

6,324,004

Laboratories Responding

241

247

247

242

272

 

SOURCE: General Accounting Office, Program Evaluation and Methodology Division, Diffusing Innovations: Implementing the Technology Transfer Act of 1986, 1991.

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

TABLE 2–3 Cooperative Research and Development Agreements (CRADAs) in Selected Federal Agencies

Department/Agency

Number of Scientists

Number of CRADAs

CRADAs per Thousand Scientists

Laboratories

 

 

 

Army

25,000

104

4

Navy

10,000

40

4

Air Force

23,000

33

1.4

Agriculture

2,300

206

90

Commerce (includes NIST)

3,900

145

37

Energy

35,000

38

1.1

Environmental Protection Agency

850

35

41

Health and Human Services (includes NIH)

6,300

155

24.6

Interior

6,900

10

1.4

Transportation

500

7

14

Veterans Administration

2,500

15

6

 

SOURCE: Calculated from data in National Institute of Standards and Technology, Cooperative Technology RD&D Report, September 1991, Vol. 1, No. 2, pp. 10–15.

laboratories have entered into since enactment of the 1986 Technology Transfer Act. The number of contracts signed between laboratories and firms does not indicate the utility of these agreements to meet specific technology objectives. It does show some limited progress in linking a few federal agency laboratories to industry through CRADAs.

The primary difficulty with technology transfer from the federal laboratories to industry is that there is little organized, close collaboration between these various groups outside the defense area. In technology development programs for national defense, the government is the customer. The government writes the requirements and specifications and then receives the manufactured products and weapons systems for which it contracts. In civilian technology programs, however, the government is not the customer. It does not have the insight and detailed, critical knowledge of who the customers are.

Moreover, technology transfer from federal laboratories to civilian industry presents a set of problems with which the United States has had only limited experience. There are a few examples of successful collaboration, primarily in transferring basic results to industry and sponsorship of external R&D. Much of the R&D performed at the federal laboratories is either

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

directly related to defense R&D, centered on basic research tied to mission objectives of federal agencies, or not of the nature that most private firms find useful, given their timetables for commercial market objectives. As noted in Chapter 1, the process of technology development in many industries requires continual modifications and refinements of manufacturing products and processes that cannot be adapted to the laboratories’ R&D work.

Current models of the relationship between technology and research rely on timetables for technology transfer that are too long and are impractical for the majority of manufacturing product and process development work. They assume an intellectual hierarchy with pure research as the prime source of new ideas. This assumption, we believe, is incorrect. The goal for policymakers should be to replace both the linear technology transfer and the passive diffusion approaches with a more efficient, more effective, and more rapid method of creating innovative technologies and products.

Over the past decade, most of the technology transfer effort has centered on removing barriers at the federal agency level. Yet the federal government should recognize that improvements will not result from a simple, mechanistic attempt to apply a “supermarket” approach to the laboratories’ transfer activities. There is no concrete evidence to indicate any significant demand for commercially relevant federal laboratory technology in U.S. industry. Nor would the potential for this federally generated technology result in a dramatic increase in technology transfer if the laboratories simply provided easier access to their technology. The limited examples of instances in which technology has been of use to industry are characterized by a dynamic that has focused on a “market pull” model. In these instances, innovations developed by research facilities are incorporated over time into commercial products. This requires not only a substantial amount of time and resources devoted to a project at the laboratory level, but also large expenditures of resources by participating firms. Most companies, especially small and medium-sized firms, lack the requisite in-house expertise, R&D facilities, and funds to work effectively with the laboratories on commercially relevant technology.

In sum, it should be recognized that most government laboratory R&D is not relevant to industrial technology commercialization activities. In fact, the laboratories are both geographically and organizationally separate from their technology sources and potential collaborators in the private sector. Strong “cultural differences,” reflecting attitudes toward scheduling, quality, profits, customers, and other factors, differentiate the federal laboratories from external organizations.79 Even those few federal laboratories that perform R&D in civilian technology are neither regular customers for goods produced by private sector manufacturers nor their suppliers. They therefore lack critical knowledge of industry that is an integral part of any customer-client relationship in the commercial sector. Moreover, the

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

mission orientation, focus on basic research, and in many cases, national security-related restrictions on outflows of technology inhibit technology transfer potential.

This is not to say that in specific circumstances and under special conditions, benefits cannot or should not be extracted from the laboratories for the civilian sector. Certain laboratories, such as some of the Department of Energy’s multidisciplinary GOCO facilities, have greater potential to transfer commercially relevant technology than others. Some federal facilities, specializing in areas such as high-performance computing and electronics, energy development, advanced materials, space flight, and biomedical research, have much greater potential for civilian applications than others.

The most successful technology transfer and commercialization projects at the federal laboratories have been characterized by an effort to attract the active participation of industry, including greater protection for patent rights and solicitation of management advice on project design.80 For example, in 1988 three high-temperature superconductivity pilot centers were established in the DOE laboratories at Los Alamos, Oak Ridge, and Argonne. Designed to involve industry from the start of initial research through commercialization, the pilot centers engage in application-oriented research that businesses (some 40 to date) specifically request.81 The pilot centers work under contract with industry and provide significant intellectual property protection. Another innovator in this area has been Oak Ridge National Laboratory, which has an advisory council of business executives who offer recommendations for laboratory programs.82 A third example of a promising technology transfer program is the ARCH Development Corporation established by Argonne National Laboratory in conjunction with its operating agent, the University of Chicago. ARCH has licensed more than 30 inventions by Argonne scientists, who receive 25 percent of gross sales income. The corporation also has formed a venture capital fund and draws upon business school expertise at the University of Chicago to analyze the commercial potential of proposals.83

As noted below, however, the extent of technology transferred through these programs is small, especially when compared to the size of affected industries. It is important to note again that the potential for technology transfer will differ markedly from laboratory to laboratory. Perhaps most importantly, the channels for the transfer and diffusion of commercially relevant technologies will differ, depending on each laboratory under consideration.

Guidelines for Improving Technology Transfer

Improving U.S. performance in technology commercialization requires a reorientation of federal R&D priorities. This is particularly true in regard

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

to the allocation of resources at federal laboratories to meet technology transfer goals. Moreover, the basis for past legislative initiatives to spur technology commercialization in the federal laboratories appears to have been the conviction that a great wealth of commercially useful knowledge and know-how exists across the labs. We believe that this view is flawed. The resulting conclusion that technology transfer should be a priority mission for all federal laboratories has led to the imposition of an inappropriate standardized policy and set of regulations for technology transfer. This policy framework is not suited to the diverse set of R&D facilities represented by the laboratories.

Because only a few laboratories have the potential to contribute to private sector commercialization efforts, progress in strengthening the transfer process is ill served by agency-wide administrative decrees or by legislative mandates that require all federal laboratories to include technology transfer goals in their objectives. Furthermore, an increased role for the laboratories in private firms’ commercialization efforts must not lead to a situation in which technology transfer overtakes traditional missions in serving agency-specific needs. Traditional missions of continuing relevance should continue to constitute the core functions of the federal laboratories. CRADAs, although useful mechanisms in certain laboratories, especially to establish the basis for sharing of intellectual property rights, promise few benefits in laboratories where linkages to the private sector are weak.84 We believe, therefore, that laboratories with differing capabilities for technology transfer should be treated in a manner that reflects their varied potential. Efforts directed at strengthening technology transfer and meeting private sector commercialization needs must be aimed at a specific subset of the total federal laboratory establishment—those laboratories that possess the characteristics outlined earlier in this section.

The panel recommends that agencies whose activities could be closely linked to commercially relevant R&D, select one laboratory to focus on commercial technology development and transfer. These laboratories should serve as demonstration facilities, where efforts to transfer commercial technology have priority. The mission of these (few) laboratories should be changed explicitly to include civilian technology development and transfer. Laboratories with this new mandate must be able to conduct R&D programs consistent with a market-oriented framework and must have concrete ties to industrial partners.

The facilities referenced above are those, as identified by each agency, with the most potential for forming close links to commercial markets and with a high degree of current R&D work having potential commercial application. As the Office of Science and Technology Policy stated in a recent report, ''the Federal Government has a relatively poor track record where it

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

has invested in civilian technology without close involvement at the outset from potential users.''85 Furthermore, the federal government’s national laboratories have been successful in fulfilling traditional missions such as weapons development partly because the government itself has played the role of a true customer, that is, by specifying “product requirements” and evaluating the quality of its “deliverables.” The design, implementation, and review of projects undertaken at these selected laboratories should involve the direct participation of private sector advisory groups.

The Department of Energy has recently moved to make technology transfer one of the agency’s three primary missions (in addition to weapons development and energy research). It is noteworthy that consensus on the design and implementation of collaborative agreements with industry has been reached through extensive consultation between industry and agency personnel.

In many cases, laboratory personnel have been reluctant to work on civilian technology development and applications projects because of the lack of adequate funding for these projects. Overall annual budgets at some of the laboratories have been reduced as federal defense spending declines. As laboratories face increasing budgetary constraints, already limited resources for technology transfer become even more scarce.

If civilian technology work is to succeed, therefore, significant human, financial, and equipment resources will have to be allocated to meet specific technology transfer goals. In the case of federal financial support, as in any research and development program, such assistance will generate greater benefits when funding is allocated for multiyear programs. In addition, to ensure that resources are allocated specifically for technology transfer functions, funding devoted to technology commercialization should be earmarked for such purposes through line item appropriations by Congress.

The removal of regulations that discourage private sector application of laboratory technology would also assist technology transfer. Moreover, laboratory equipment cannot be expected to contribute to civilian technology development if it is designed explicitly for noncivilian applications. Thus, further progress at laboratories selected for transfer missions will require widespread changes in operational rules, as well as redesign of these facilities. The conversion of some government-operated labs to GOCOs is a potentially useful option. To convert all government labs to GOCOs, however, would be exceedingly difficult, requiring expenditures of federal resources in excess of potential gains.

Because of the need for additional resources for commercialization efforts, the funding constraints under which the laboratories operate, and the shift in national priorities from military to civilian challenges, it would appear appropriate to close some federal laboratories and redirect resources in other facilities. The closing of selected facilities and the reallocation of

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

resources from these facilities could provide sources of funding for new institutional approaches to technology transfer within and beyond the laboratory structure. (For institutional approaches outside the laboratory structure, see Chapter 3.) GOGO laboratories with outdated missions, or those that do not continue to serve mission agency needs, would be candidates for closure. Reforms to encourage technology commercialization must not jeopardize capabilities vital to national security needs.

Effective technology transfer, as noted previously, depends on the interaction of people from the laboratories and other organizations. New collaborative procedures should be formulated, and successful ones encouraged, to locate laboratory personnel at collaborating firms or universities and to draw the personnel of external organizations into collaborative work at federal facilities.

An essential feature of successful technology transfer is the participation of nongovernmental users in collaborative projects. Some federal programs have not been structured with this important characteristic. A survey of federal laboratories with the potential for technology transfer and “significant” R&D budgets found that 31 percent still lacked official guidance for implementing the 1986 Technology Transfer Act. One hundred and fifty-six laboratory directors were found to lack the authority to participate in CRADAs.86 These data suggest that a larger role for industrial affiliates in strategic planning, project selection, and program operation of the laboratories is necessary.

Finally, industry should be provided with sufficient incentives to commercialize federal technology. It should be clear that the primary responsibility for building relationships between federal laboratories and industry rests with the laboratories. Streamlined procedures and simplified contracts for laboratory-industry interaction should be encouraged to reduce the amount of procedural barriers to cooperation. In addition, creative mechanisms for the protection of intellectual property resulting from cooperative ventures should be developed. Manufacturers have been reluctant to commercialize federal laboratory technology, in some instances, due to inadequate mechanisms to protect intellectual property rights.

COOPERATION IN RESEARCH AND DEVELOPMENT

A central question facing Congress concerns the strengths and limitations of cooperative R&D. This section briefly examines the potential benefits and areas of application of cooperative R&D, with a particular focus on examples of Japanese and European ventures. Tentative lessons from several of those experiments are discussed. Although it has not generated extensive results or lessons, recent U.S. experience with collaborative R&D is also outlined in this section.

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

The U.S. experience with cooperative industrial R&D programs involving multiple firms extends to the early post-World War II era.87 Research ventures in large, military-related projects—supercomputers, aircraft development, and semiconductors—joined U.S. businesses in efforts to develop technologies for defense purposes. Most collaborative ventures without direct federal involvement prior to the 1970s included arrangements among companies in vertical industry sectors—automobile manufacturers and petrochemical firms collaborating to develop ceramics for use in auto bodies, for example. In other cases, horizontal associations of firms within a single industry formed cooperative research organizations. Many of these promoted technology adoption and the diffusion of information and technology within member firms and were not focused on basic research. Three well-known examples, involving firms that by and large are not direct competitors, are the Electric Power Research Institute (formed in 1973), Bell Communications Research (Bellcore, founded in 1984), and the Gas Research Institute (founded in 1976).

A number of private research consortia have been organized during the past decade in other sectors.88 These arrangements involve cooperation between companies without direct government encouragement or financial incentives. For example, the Semiconductor Research Corporation, formed in 1983, sponsors research at U.S. universities and includes 33 industrial members, such as AT&T, DuPont, and Eastman Kodak. The Microelectronics and Computer Technology Corporation operates in-house R&D facilities and sponsors research on semiconductors and advanced computer technology outside the consortium. The Software Productivity Consortium focuses on computer software for military applications. These are all cooperative efforts that join competitors in similar product markets. Although most recent assessments of cooperative R&D have focused on programs in high-technology industries, collaborative ventures have been established in “mature” industry sectors, as well. The Textile/Clothing Technology Corporation and National Apparel Technology Center, for example, were created to improve the technological capabilities of U.S. textile manufacturers.

Congress has attempted to promote the formation of these alliances through the elimination of perceived barriers to collective R&D. This was the purpose of the National Cooperative Research Act (NCRA) of 1984, which eliminated the threat of treble damages in private antitrust suits for cooperative ventures that register with the Justice Department under NCRA. (Even for ventures that file with the department, it may determine that projects have changed in a substantial manner, and thus protection is no longer warranted.) The law also states that cooperative R&D ventures should not automatically be judged anti-competitive but rather should be evaluated, if challenged in court, on a rule-of-reason basis.89

The U.S. government also has directly supported research collaboration

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

through the establishment of mixed public/private ventures aimed at developing advanced manufacturing technologies, such as the Semiconductor Manufacturing Technology Research Corporation (SEMATECH) and the National Center for Manufacturing Sciences (NCMS).

SEMATECH is a Texas-based consortium of 14 U.S. semiconductor manufacturers and the Department of Defense. The goal of SEMATECH is to provide U.S. manufacturers with the capability to achieve world leadership in semiconductor manufacturing technology by 1993.90 Since 1988 the Defense Department has provided half of SEMATECH’s $200 million operating budget. Congress has appropriated $100 million per year for five years for SEMATECH. Responsibility at DOD for oversight of SEMATECH was delegated to DARPA in 1988. Membership in SEMATECH is restricted to U.S. companies.

SEMATECH employs approximately 550 people. Half of the full-time staff are scientists and engineers assigned from member companies’ R&D facilities. The consortium initially constructed a wafer fabrication facility at its headquarters for the demonstration of advanced integrated circuit production equipment, processes, and methods. This facility was used for the production of both Dynamic Random Access Memory (DRAM) and Static Random Access Memory (SRAM) chips. SEMATECH has also concentrated on the development of advanced materials for semiconductor processing. Since 1990, SEMATECH has devoted a significant share of its total resources to R&D contracts with producers of semiconductor manufacturing equipment and materials, and with universities. It is also helping build relationships between U.S. semiconductor manufacturing equipment producers and manufacturers, in part through the purchase of advanced equipment for distribution to member firms for testing, evaluation, and improvement.

The Michigan-based NCMS is a research consortium of approximately 150 U.S. companies established to promote cooperative R&D projects in advanced manufacturing. NCMS was established in 1986 to assist the machine tool industry. The center’s mission has expanded to include “batch manufacturers” in the automobile, composite materials, and telecommunications industries.91 The NCMS budget in 1991 was approximately $90 million, with $32 million provided by the Air Force Mantech program and the rest coming from member companies.92

The center’s 60 full-time staff select R&D projects and research facilities, and distribute findings to member companies.93 NCMS also supports “teaching factories” that use demonstration projects to foster employee education in computer-integrated manufacturing. With the exception of Canadian companies, NCMS excludes foreign firms from membership. NCMS reviews, on a case-by-case basis, requests to transfer R&D results to foreign subsidiaries of member firms.

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

In addition to efforts to increase technology links between private companies in collaborative R&D projects, such as SEMATECH and NCMS, a growing number of university-industry ventures have been established over the past two decades. Many of these involve federal funds. The National Science Foundation (NSF) University-Industry Cooperative Research Centers program was an experiment in building private joint ventures but using public matching funds during the start-up phase. A more recent program, the Engineering Research Centers (ERCs), also supported by NSF, has established multidisciplinary university R&D centers.94 A similar initiative, the Superconductivity Pilot Centers, has been funded by the Department of Energy. State funds support cooperation between industry and academia in the North Carolina Microelectronics Center, which fosters cooperation between semiconductor manufacturing firms and faculty from colleges and universities located near Research Triangle Park in North Carolina. Many of these university-based cooperative R&D ventures focus on basic scientific research that is far from the commercialization stage of technology development.

There are many reasons for the increase in use of collaborative R&D to meet technology objectives. A primary reason is the lack of sufficient economic incentive for firms to invest in R&D. Research cooperation between firms can lower the cost of R&D whose results are not easily captured, or appropriated, by a single firm.95 As noted elsewhere and as the research agendas of many of these cooperative ventures suggest, such R&D often extends beyond basic research.

Other motives for R&D cooperation include reducing duplication of R&D efforts within technology fields, the desire of firms to complement in-house research agendas, and an increasing need to monitor research in a broad array of scientific and engineering fields. The high costs of specialized equipment can be shared among a larger number of firms, and industry standards can also be developed through collaborative ventures. The potential benefits of cooperation can be substantial. There are barriers to successful cooperation, however, including determining the allocation of intellectual property rights, deciding on an optimal division of financial and R&D risks, and designing effective technology transfer mechanisms.

Just as there are many reasons for firms to cooperate in R&D, they are also organized in many different ways. Some cooperative ventures establish organizations with extensive, in-house R&D facilities. Others do not conduct in-house R&D but, rather, fund R&D performed in university laboratories. There is also considerable diversity in the technical objectives and agendas of individual collaborative R&D programs. It should be clear, therefore, that cooperative R&D projects are not a standard or simple form of executing technical alliances but include a complex array of different organizational structures and approaches.

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

Foreign Support for Collaborative R&D

Japanese Collaborative R&D Programs: Selected Examples

European and Japanese experiences with cooperative R&D ventures have stimulated considerable interest in the role of R&D collaboration in strengthening technological performance. Foreign governments, with varying degrees of success, have expanded their financial support for civilian technology development programs. The most prominent example of central government support for collective R&D efforts is Japan. The Japanese government not only has provided subsidies to industry-led programs in R&D but also has provided low-cost loans to companies for business development and equipment leasing.96 In response to the perceived success of Japanese efforts and as a means of promoting economic integration, the Commission of the European Communities and a number of its member governments have also moved to promote collaborative R&D during the past decade.

The Japanese experience with collective research efforts dates to the 1961 Research Association for the Promotion of Mining and Industrial Technology Act. The act established Engineering Research Associations (ERAs) to increase the technical expertise of small and medium-sized companies. Ventures sponsored under the act are incorporated as nonprofit entities, with the government providing partial funding to the ERA.

Prior to the 1970s, ERAs did not focus on large-scale R&D projects involving advanced research on the cutting edge of science. In most instances they concentrated on a single technical barrier or technology-generation problem, with the objective of diffusing best-practice information on manufacturing product and process technologies. This information and much of the technological know-how diffused through collaborative ventures was based on technological advances outside Japan.97 Collaborative R&D projects changed focus after 1970, however, under the general direction of the Ministry of Industrial Trade and Industry (MITI). New sets of “large-scale projects,” including several well known in the United States—the Very High Performance Computer Systems, and Fourth Generation Computer Systems, among others—were started. It should be noted that not all collective research efforts in Japan, particularly those subsidized by the central government, have been successful in meeting their technical objectives.

Overall, 59 ERAs were established between 1971 and 1983 in fields including microelectronics, ceramics, and biotechnology.98 By 1985, there were 50 ERAs still actively engaged in R&D.99 Most projects aimed at advancing Japan toward technical parity with its major competitors. These ventures typically last from seven to ten years and have budgets of $100 million for the life of the ERA. Research work is performed at a member company or in one of the Japanese national laboratories. The results of any

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

successful project are then licensed by the government to participants through the Japan Industrial Technology Association.

Through MITI and other Japanese ministries, the central government has provided financial support for R&D in several high-technology areas, including integrated circuits for television equipment, semiconductor research in the mid-1970s as part of the Very Large Scale Integration (VLSI) program, and computer-related technologies.100 In some instances, the government provided grants and loans for private, joint R&D projects with the goal of bringing Japanese corporations up to world standards in technology. Along with this objective, the government has supported R&D in areas where generic, pre-commercial research has not been funded by the private sector. This type of R&D was supported by the government in order to strengthen the science and technology base, as well as to diffuse new, state-of-the-art technology.

Government funding of cooperative R&D projects through ERAs and large-scale “national projects,” such as the VLSI program, undoubtedly played a part in Japanese industrial success in technological innovation.101 Historically, however, few of these collaborative projects, including the large national projects, focused on research that could be characterized as “basic” in nature. In many cases, as in the VLSI project, research collaboration was employed as a means of supporting the diffusion of state-of-the-art industrial technology and practice among competing Japanese firms. Research and technology cooperation within Japan typically has been coupled with fierce competition among participants in the commercialization and application of the results of the collaborative research. Most of the research programs that received government funds have been closed to foreign participation. Some of these restrictions, however, have been removed in recent years. Many publicly supported cooperative research projects now appear to be open to foreign participation, subject to the payment of a share of project costs.

A considerable part of the Japanese government effort in collaborative R&D has focused on efforts “downstream” from basic research activities. Manufacturing extension services, capital subsidies, and accelerated depreciation for equipment have been used to promote technology development and, perhaps most important, the diffusion of new technologies in specific firms or industries, such as the machine-tool industry. Small and medium-sized companies benefit from programs funded by the government to provide technical assistance, grants for equipment leasing, and management assistance.

A relatively new mode of technology collaboration in Japan involves projects with government funding aimed at advanced research in technical fields with few technology leaders. One of the most visible and potentially important programs under way in Japan is the Key Technology Center pro-

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

gram.102 The program objective centers on strengthening fundamental research within Japanese industry.

The Key Technology Center Program

The Japan Key Technology Center (KTC) program was established in October 1985 to promote research and development in advanced technologies. Its name is reflective of the Japanese government’s belief that the stimulation of basic R&D in key technology areas is necessary to further economic development.103

The capital available for investment through the KTC program is provided by the sale of government holdings in the Japanese Tobacco Company (JNR) and Nippon Telephone and Telegraph Company (NTT).104 Along with funds generated through the sale of stock in these companies, revenue generated by dividends of stock still held by the government flows to the KTC. Partial support is also drawn from the Japan Development Bank (JDB) and private sector sources.

There are two primary modes of operation for the KTC program: direct capital investment in consortia formed under KTC sponsorship and conditional loans offered at below-market interest rates to companies performing joint R&D. The KTC’s loan program is targeted at applied R&D and prototype development projects. Loans are granted to companies engaged in joint ventures for five years. Proposals for joint projects that originate in the private sector include on average between eight and ten member companies.

As of the end of Japan fiscal year 1989, funds for the KTC investment programs totaled 20.2 billion yen (about $150 million), with approximately 47 percent contributed by the government, 23 percent by the JDB, and 28 percent by private companies.105 The loan program operated with an additional 6.4 billion yen. A total of 77 capital investment projects had been started as of Japan fiscal year 1989.

The KTC also provides seed capital to consortia formed by two or more companies engaged in fundamental research or development projects. The KTC provides up to 70 percent of the capital requirements of any project for seven years. A second form of capital investment sponsored by the KTC provides up to 50 percent of the capital costs for “new media community” or “teletopia” development projects for a five-year period. All consortia formed specifically to engage in R&D, including foreign-based companies operating in Japan, are eligible for KTC funds. Each consortium formed under the KTC is a private company in which the KTC holds shares equal to its investment. Selection of the projects for both the loan and the investment parts of the program is made by a panel of experts, most often MITI officers, NTT, or the Ministry of Post and Telecommunications.

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

One KTC project is the Optoelectronics Technology Research Corporation (OTRC) established in 1986. It had its beginnings in a 1980 MITI-sponsored research project “Optical Measurement and Control System.” This project produced the first-generation optoelectronic integrated circuits in Japan and demonstrated the capabilities of gallium arsenide devices. As is the case with other cooperative projects in Japan, successive generations of R&D projects are often built on past programs.

The OTRC’s research agenda, formal planning mechanisms, and dialogue among industry, government, and academic researchers began early on in this first attempt at collective work. Lines between generic and proprietary R&D, a common framework for working together, and the division of labor are all decided over an extended tryout period. If successful, the venture may continue in other forms, as was the case for OTRC.

The OTRC has a total budget of 10 billion yen ($77 million; $1=130 yen), 7 billion of which is contributed by the KTC and 3 billion from member companies. The participants include Fujijura Ltd., Fujitsu, Hitachi, Matsushita, Mitsubishi, NEC, Nippon Sheet Glass Company, Oki Electric, Sanyo, Sharp, Sumitomo Electric Industries Ltd., Furukawa Electric, and Toshiba. The corporation is open to foreign membership.

The OTRC and its affiliated laboratory (OTRL) perform research on optoelectronic integrated circuits, which are a union of optical and photonic devices with electronics technology. This includes a major emphasis on atomic-scale controlled epitaxy and maskless fine pattern formation to produce multidimensional superlattice structures. Research is divided into programs on atomic-scale epitaxy, beam-assisted pattern formation, the characterization of surfaces and interfaces with the atomic scale, and quantum solid-state physics.

The main OTRC laboratory is located in Tsukuba Science City outside Tokyo. The 14 member companies each operate “shadow” projects at their corporate facilities. These focus on device research and are divided into 14 individual groups. The head office of the OTRC includes a president and a vice president, both former MITI officials. The day-to-day operation of the laboratory is under the direction of a managing director and senior researcher on leave from Toshiba. Technologies developed by OTRC will be owned by member companies. Intellectual property rights in other MITI-sponsored projects, such as research at the Institute for New Generation Computer Technology (ICOT), the VLSI Project, or other large-scale R&D programs are owned by the government.

Like other KTC projects, the OTRC is evaluated every year by a panel of independent university professors. The review process is coordinated under MITI direction. The technical program at OTRC is not under the control of any government employees, but rather is directed in a consultative way by staff at member companies.

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

It is premature to provide an assessment of OTRC’s success in support of Japanese commercialization efforts. Its programs have been in operation for only several years. There are characteristics of the program that, however, provide insight into the utility and potential barriers to cooperative R&D. First, member companies have been hesitant to send senior-level, qualified staff to the laboratory in Tsukuba. Although this may inhibit the technology transfer process if technologies are successfully developed at OTRL, the director of the laboratory believes that the ''quality of staff” issue has been overstated in both Japan and the United States, at least as it relates to cooperative R&D ventures.106

Although most member companies apparently do not send their senior researchers, managers of the program do not believe this is critical to the success of the venture. They stress the importance of R&D investments and quality of staff in the company laboratories as key to the success of the project. It is at the point of contact in the “shadow” project in each member’s corporate laboratory that qualified staff and other investments may be most important. One of the most pressing concerns of management is that the coordinating researchers at member laboratories be able to tailor research results from OTRL to applied R&D and prototype development in the commercialization stages.

The emphasis on in-house R&D investments to complement the cooperative R&D effort and industry commitment of quality staff in corporate laboratories is often overlooked in evaluations of the factors contributing to success or failure in cooperative R&D. In fact, the Japanese experience strongly suggests that cooperative R&D can rarely serve as a substitute for, but should more properly be seen as a complement to, in-house research. Moreover, the importance of technology diffusion objectives in Japanese programs, including those targeted at research in generic R&D, is critical to understanding the utility of cooperative programs. In many cases, as the Japanese experience suggests, cooperative R&D may support technology adoption and dissemination as effectively as it supports technology creation.

Any insights into collaborative R&D or the appropriate government role in supporting technology advancement gained from the Japanese experience must take into account fundamental differences in the structure of industrial R&D in different countries.107 Japanese industry funds a relatively higher percentage of total R&D than does industry in the United States (70 versus 50 percent).108 Moreover, the larger share of resources devoted to defense-related R&D in the United States and different perspectives on the division between pre-commercial and proprietary R&D complicate comparisons of projects in the United States and Japan.

Cooperative ventures certainly contributed to postwar technical advances in Japan, especially during recent decades. They did so in conjunction

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

with policies that supported high levels of domestic savings and investment, stable fiscal and monetary policies, high rates of investment by firms in in-house R&D, and a willingness by the Japanese government and industry to invest in human capital. Collaborative R&D projects provided incentives to pre-commercial R&D investment, as well as advanced Japanese applied R&D capabilities. They also encouraged the adoption and diffusion of new technologies in Japanese firms. It is particularly in this last area—technology diffusion—that some of the most important contributions have been made.109

Government-and nongovernment-sponsored projects in Japan center primarily on raising the technical standards of Japanese firms to international levels. They most often focus on improving the capabilities of firms to absorb, adapt, and incorporate new knowledge and technology into commercial products and processes. Cooperation in research is complemented by strong competition in the application of results.

The fact that management of most cooperative R&D programs in Japan is the direct responsibility of corporate R&D affiliates and program personnel may also contribute to successful execution of R&D programs. Government agency oversight or management is usually indirect and serves only as a channel through which the private sector actors communicate in a neutral forum. MITI and other Japanese government agencies generally do not provide direct guidance on research agendas, personnel and staffing decisions, or follow-on work plans.

Moreover, cooperative R&D in Japan is often conducted through an independent quasi-governmental organization. A separate, for-profit venture, like the KTC, is set up to arbitrate disputes and serve as the mechanism through which participants share the risks and rewards of joint effort. In addition, collaborative R&D projects in Japan have promoted private sector investment in basic, nonproprietary R&D. In certain instances, in selected industry sectors, they could serve a similar purpose in other countries. Japanese collaborative R&D projects also appear to have strengthened the ties between government and industry through consultative mechanisms set up to promote, monitor, and evaluate cooperative ventures. Most of these programs are not direct technology subsidies, but rather cost-sharing partnerships that are evaluated at regular intervals.

There is also considerable anecdotal and other evidence suggesting that collaboration among otherwise fiercely competitive Japanese firms in a given industry has rarely been easy. Many of the tensions that have arisen in recent U.S. efforts at R&D cooperation have also been present in Japanese collaborative ventures. Indeed, as the direct influence of MITI and other government agencies over Japanese firms has declined, and as many of these firms reach positions of considerable technological strength, collabo-

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

ration among Japanese firms may become a less common and important element of Japanese technology policy.

European Cooperative R&D Projects: Selected Examples

European governments have also sought to promote industrial research, development, and technology commercialization through financial incentives for collaborative R&D. During the 1970s, European governments devoted significant attention to joint industry-government projects involving small and medium-sized firms. They also worked to build links between universities and industries in R&D, most often in early-stage research.110 Beginning in the early 1980s, government science and technology policies increasingly focused on emerging technologies and large-scale, pan-European collaborative R&D projects. This has been particularly true in areas such as information technology and biotechnology. As in the United States, a major objective of recent European technology initiatives has been forging technical alliances in pre-competitive research. The planned economic union of the European Community (EC) in 1992 has generated interest in standard setting and economic integration as methods of promoting technological advance. The need to blend economic, technological, and political goals in the organization and focus of many EC projects may have contributed to their organizational complexity and multiple objectives.

The most notable efforts in collaborative R&D in Europe have been managed under the Framework R&D Programs of the European Community.111 The Framework Programs will allocate approximately $8.4 billion from 1990 through 1994 for programs in information processing, communications, materials, measurements and testing, biotechnology, and energy, among others.112 The ESPRIT (European Strategic Programme for Research and Development in Information Technology) programs are aimed at pre-competitive research and economic integration113 in flexible manufacturing, information processing, microelectronics, office automation, and software.114 ESPRIT received funding of $1.8 billion during its initial phase (1984–1989) and will spend more than $2 billion in 1990–1995. Government funds are matched by industry participants. The aim of RACE (Research and Development in Advanced Communications Technology for Europe) is to standardize telecommunications technologies into a digitized broadband network.115 The BRITE (Basic Research in Industrial Technology) program is developing technologies in advanced manufacturing. A collaborative program in biotechnology is attempting to coordinate R&D programs and standard setting of various countries.116

Europe has a number of collaborative R&D programs in operation outside the Framework Programs structure. The EUREKA project, begun in

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

1985 (partly as a response to technology developments expected to emerge from the U.S. Strategic Defense Initiative), is targeted at cross-national links between research institutes and private industry. EUREKA’s $6.5 billion budget supports approximately 300 projects in 19 countries in robotics, microelectronics, telecommunications, and other advanced technologies. EUREKA’s most significant initiative may be JESSI, an eight-year, $4.4 billion project to manufacture 64-megabyte semiconductors.117

In addition, companies in Germany, France, the United Kingdom, and Spain have received several billion dollars in government subsidies to develop jet aircraft through the Airbus consortium.118 There have also been a number of national science and technology projects. Prominent among these in the 1980s was the United Kingdom’s five-year, £200 million Alvey program to improve university-industry collaboration in pre-commercial R&D in information technologies.119

The tangible benefits of many of these efforts are far from evident. Most large-scale R&D programs under the European Community’s sponsorship, in particular, have been in operation for less than 10 years. One potential problem with EC R&D efforts, however, is the wide dispersion of technical and financial resources among many participants. Many R&D projects involve 40 to 50 individual partners. Other characteristics of European programs may also contribute to less than successful results. Collaborative programs have, in some cases, employed direct subsidies without requirements for matching industry contributions, which provides a weak link to market signals on promising technology applications. The complex administrative structure of EC programs may further contribute to uncoordinated program goals and a lack of clarity in technical agendas.

In addition, as evident in the telecommunications field, for example, a lack of regulatory and technical standards may complicate EC R&D efforts.120 In general, both the EC and the EUREKA projects have restricted the participation of foreign firms. IBM-Europe participates in part of the ESPRIT and EUREKA programs (within the latter, primarily the JESSI project). There are few other examples of foreign participation in these programs and none of full membership in a consortium. For example, after its acquisition by Fujitsu, ICL, a British computer firm, had its role in EUREKA and ESPRIT considerably restricted.

Regional European programs in collaborative R&D coexist with a number of initiatives in domestic R&D collaboration within member states. The French Filiere Electronique and the British Alvey programs are among the best-known examples of these. Recent evaluations of the Alvey program in Britain (which was terminated in 1989) provide further insight into the possibilities and potential weaknesses of cooperative R&D programs, as developed in Europe.121

Alvey was centered on pre-commercial R&D in the telecommunications

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

sector and involved computer manufacturers, universities, and electronics firms in multiple R&D consortia. Although the emphasis on pre-commercial R&D may have been appropriate and many of the technical goals were accomplished, the program failed to effectively promote the adoption of new knowledge generated through the venture. Success in meeting technology development and research goals does not, therefore, guarantee project success. Moreover, one assessment found that firms participating in the software engineering ventures sponsored under Alvey neglected to devote sufficient attention to in-house R&D projects linked to the consortia’s agenda.122 Cooperation cannot substitute for investment by firms in in-house R&D capacities. Finally, although valuable research results were generated, the lack of government support for diffusing the technology among participating firms and of incentives to bridge the R&D phases to commercialization efforts may have hindered the program’s impact on the United Kingdom’s information technology base.

Summary

Most private and mixed public-private cooperative R&D programs established over the past decade are, in the broadest context, attempts to address apparent weaknesses in a nation’s scientific and technological infrastructure. Cooperative R&D ventures can play a role in support of this objective. One of the most important potential benefits of cooperative R&D is the promotion of technology diffusion and adoption, a weakness in recent U.S. technological performance. Japanese cooperative R&D programs, in particular, have been established with this objective and have exhibited success in raising the technical standards of Japanese industry. The Japanese government has also acted to promote the transfer of information on best practice and the introduction of new process technologies. In the United States, SEMATECH may play a role in the diffusion and adoption of semiconductor manufacturing equipment. Collaborative R&D may also be useful in projects beyond basic research, in pre-commercial technology development. Chapter 3 outlines areas in which federal support of collaborative projects at this stage merits attention and there may be a legitimate federal role in providing financial incentives to industry-government partnerships.

Collaboration in R&D is successful when technology is transferred to member firms and adopted as a result of the collaborative effort. This typically requires a significant commitment of resources by private firms, both to the cooperative venture and to the support of parallel research within member firms. Coordination of in-house R&D capabilities, personnel, and strategic plans with the management of collective projects is necessary. Establishing channels for assigning high-quality researchers to the coopera-

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

tive venture, and rotating them to and from member firms, is also critical to the success of technology transfer. Collaborative ventures should be administered as profit-making ventures, complete with budgets, schedules, and project milestones, as well as clear guidelines on intellectual property rights. The mission and goals of these projects must be clearly established from the start. In many cases, the Japanese experience suggests that the most appropriate objectives may be those that focus on technology adoption, and on the dissemination and refinement of new concepts, rather than frontier basic research. Cost-sharing provisions are also important in these projects. They strengthen links between the collaborative R&D programs and the research efforts of participants, as well as improve the ties to potential commercial market applications (Chapter 3 discusses these issues in greater detail). Government funds should not be the sole source of support for cooperative research ventures.

Several of the European experiments in collaborative R&D are especially informative in this regard. Direct subsidies to inefficient industries or R&D grants through cooperative projects to meet political agendas dilute the effectiveness of government leverage of technology strengths in private industry. Finally, as the Japanese experience with government-industry collaborative R&D indicates, independent program evaluation and termination of unsuccessful collective projects are important.

Finally, it is important to note that cooperative R&D projects are not the only methods of promoting national technology policy goals. The Japanese experience suggests that such projects supplement innovative efforts and investments made in a stable economic environment with a relatively low cost of capital and a highly skilled labor force.

Technology Adoption

As noted in Chapter 1, the adoption of new technologies is an important part of the processes through which innovation contributes to economic growth and rising standards of living. The limited data available on rates of adoption in the United States in new manufacturing processes, such as numerically controlled machine tools and robotics, however, show that U.S. firms have been relatively slow to incorporate these technological advances.123 The dissemination and use of office automation equipment have, in contrast, been relatively swift compared to other nations.

In general, nations whose manufacturing firms adopt new technologies have policies that favor adoption. In the United States, the federal role has centered almost exclusively on basic research and development. Initiatives to promote adoption and diffusion have been rare. Although the United States often has an advantage in leading-edge technology, it has suffered

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

from an inability to apply technology appropriate to the actual needs of its manufacturers.124

As noted earlier in this chapter, federal support for agricultural research and technology development included substantial funding for programs in the adoption of new agricultural technologies. Much less funding has been provided by federal and state government sources to support industrial technology extension and adoption. Industrial extension policies have received greater attention and small increases in state and federal funding during the past 10 years. Funding for industrial extension remains modest, however, especially when compared to the estimated $1.3 billion invested in agriculture extension activities in the United States ($398 million of which comes from federal sources).125 The United States has devoted limited resources to technology diffusion and assistance to firms to adopt new or existing manufacturing technologies.

Over the past two decades, state governments have moved to establish a dominant role in programs to facilitate technology adoption and diffusion.126 State governments design and administer most industrial extension programs and are collectively the largest provider of funds for extension activities. Technology-related programs at the state level range from business and technology assistance to provision of capital and support for research centers.127 In particular, several states have established networks of local agents through which assistance is offered to firms hoping to incorporate new technology in manufacturing processes. Among the most comprehensive state-based extension programs is the Georgia Institute of Technology’s Research Institute (GTRI). Programs administered by GTRI include industrial extension services, and in-house R&D facilities and demonstration projects—all geared to small and medium-sized firms in Georgia.128 There are other examples of state-based extension programs that could serve as mechanisms through which federal assistance to firms in technology adoption might be facilitated.

To date, however, there have been only limited experiments with federal industrial extension programs. The 1988 Omnibus Trade and Competitiveness Act authorized new federal programs in industrial extension and demonstration projects in manufacturing technology. The five state-based Manufacturing Technology Centers (MTCs) of the National Institute of Standards and Technology, which stress technology transfer and incorporation of existing technology in manufacturing processes, received federal appropriations of $12.4 million in FY 1991. In January 1992, NIST announced the competition for the establishment of two new centers.

The MTC program’s objective is to ''enhance the productivity and technological performance in United States manufacturing."129 MTCs work by transferring manufacturing technology and technical information developed

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

at NIST and other federal facilities to small and medium-sized firms. The MTCs, established to serve specific regions of the country, include the Great Lakes Manufacturing Technology Center in Cleveland, Ohio; the Northeast Manufacturing Technology Center at Rensselaer Polytechnic Institute in Troy, New York; the Southeast Manufacturing Technology Center at the University of South Carolina in Columbia, South Carolina; a center in Ann Arbor, Michigan, located at the Industrial Technology Institute; and one at the Kansas Technology Enterprise Corporation in Topeka, Kansas.

The nonprofit organizations selected to operate the MTCs provide 50 percent of the operating funds for the centers for three years. NIST provides the remaining 50 percent of each center’s operating funds, with contributions declining each year to 20 percent in the sixth (final) year of federal funding. Each center is expected to be financially independent after six years. The National Research Council reviews applications for the centers for technical merit, and the NIST director selects the awardees.

On average, each MTC receives approximately $3 million per year. There are no guarantees of continued funding past the first-year grants; each center is reviewed annually by NIST, with a third-year comprehensive review mandated by the 1988 Trade Act.130 A review panel is appointed by the director of NIST and chaired by an official from the institute. The final report on each center is delivered to the Secretary of Commerce.

The MTC program has been in operation for only three years, and its impact on small and medium-sized firms in technology adoption and transfer remains uncertain. The panel that conducted the third-year review concluded that the centers were meeting general technical objectives and recommended continued funding.131

In addition to the MTC program, $1.3 million in federal funds was appropriated in FY 1991 for the State and Local Extension Initiatives programs.132 The remainder of the current federal effort in technology extension includes the Trade Adjustment Assistance program funded at $12.9 million, which is designed to help firms adversely affected by imports.133

There are few examples of U.S. government program to diffuse manufacturing technologies. However, there have been federal projects to diffuse agricultural R&D and energy-related technologies. Agricultural extension programs have assisted in the strong rate of growth in agricultural productivity.134 Energy demonstration projects of the 1970s constituted one of the few other federal programs in technology diffusion. (In many cases, these projects were not designed to facilitate the adoption of a well-understood and “debugged” technology. They were targeted at advancing technology development while also accelerating adoption.) The energy projects apparently did little, however, to accelerate technology adoption.

Lessons from small-scale efforts to support technology adoption by

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

U.S. firms indicate several areas for improvement in program design. High costs and limited results of the energy demonstration projects suggest the importance of diversifying federal support for technology diffusion and development across a broad range of technological possibilities. Other factors that contribute to program success are stable sources of long-term financial support, decentralized control over program design, and outreach to firms. The latter is necessary to ensure that those who develop technology are responsive to user needs.

Some foreign governments invest in industrial extension services designed to help small and medium-sized firms collect and apply new technologies. Some of these programs have exhibited success in raising the technical competence of workers and firms. An important goal of cooperative research supported by Japanese industry and government, as noted, is the dissemination of new technology, rather than extension of the technological frontier. The Japanese federal and prefectural governments devote significant funds to testing and consultation centers for small and medium-sized manufacturing firms. This effort is part of larger programs in technical and financial assistance for technology adoption. Japan fostered the use of numerically controlled machine tools, for example, through technology extension services, low-cost leasing arrangements, and rapid depreciation of equipment. Similar programs are administered by provincial governments in Germany.

The adoption of most new technologies is directly linked to investment decisions, as well as to the rate of gross domestic capital formation. Economic factors affecting capital formation, therefore, may influence international differences in the rate of adoption of new technologies. When compared to manufacturing sectors of other industrial economies, the slower rate of growth of U.S. labor productivity in manufacturing may explain part of the relatively weak U.S. performance in technology adoption. The U.S. shortcomings in primary and secondary education, discussed in Chapter 1, and in work force training and retraining, are also important factors. As to the latter, U.S. programs for training and retraining workers are quite modest. Most employee technical training assistance provided by firms is directed at white-collar workers.135

Summary

An important way in which the economic benefits of technology are realized is through their adoption by industry. For several reasons, the United States can no longer depend on its advantage in technical innovation and basic research to translate into a lead in commercial competitiveness. Scientific and technological progress in other countries challenges U.S. lead-

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

ership in technology and innovation. The globalization of industrial production and rapid improvements in international communication and transportation systems have reduced the advantage gained by the firm or nation that develops new technology. The rate at which innovations flow across international boundaries has sharply increased.136

Difficulties faced by firms in commercialization are often associated with incremental improvements to products and processes (in contrast to revolutionary technical breakthroughs) in modern manufacturing facilities. The time frame during which research findings can be effectively utilized in commercial products is narrowing. This places higher premiums on the ability of firms to quickly apply knowledge and adopt new technology.

Furthermore, the “window” during which the early commercializer of a new technology reaps economic benefits has diminished, particularly in industries such as microelectronics, automobiles, and consumer electronics. The effects of rapid technology adoption on productivity, product quality, and ultimately, living standards are likely to be much greater in the competitive environment in which U.S. firms now find themselves. The firm or firms that successfully commercialize or adopt new technology may gain a significant lead over competitors, whether or not those competitors are responsible for the generation of the new technology. The United States, therefore, needs a better balance in civilian technology policy, one that takes into consideration the importance of diffusing best-practice information and the adoption of new technology.

Better information, data, and independent analysis on technology adoption are necessary. An evaluation of rates of adoption in the United States and overseas, factors affecting the ability of U.S. and foreign firms to incorporate new technologies into the production process, and a comparative analysis of public policies that might support adoption should be undertaken. Studies to inform public policy should be conducted on technology adoption, focusing on data about rates of technological diffusion throughout the economy.137Better analysis of factors that may contribute to different rates of adoption in the industrialized nations, such as the cost of capital and labor, is necessary.138A clearer consensus on reasons for international differences in the rate of technology adoption would help tailor U.S. policies to meet the needs of industry.

Although there is a need for specific information on and analysis of technology adoption and diffusion, the federal government does have a legitimate role in support of U.S. firms in this area—one that should take shape in the short term. Increased federal government support for programs that facilitate the rapid adoption of new technologies in U.S. industry is necessary.

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

The panel, therefore, recommends the establishment of a national program in industrial extension. The Department of Commerce is the most appropriate agency for any new federal initiative to assist U.S. firms in adopting new manufacturing process and product technologies.

The Technology Administration at the Department of Commerce is currently charged with the responsibility to aid industry in a wide range of areas, including the transfer of technology, the commercialization of federally funded R&D to industry, and the adoption of advanced manufacturing techniques by small and medium-sized firms. The National Institute of Standards and Technology also manages programs in technology adoption. These programs are, however, small-scale efforts that have suffered from inadequate funding and staff resources. Specifically, although the MTC program at NIST has the potential to serve a limited client base in regions where it is established, a more comprehensive, nationwide service for the 350,000 small and medium-sized firms is necessary to impact technology adoption rates in the United States in a significant manner. This new program could leverage the resources available through the MTCs, as well as state-based programs, to better accomplish technology adoption and extension goals.

The panel recommends the establishment of an Industrial Extension Program (IES) at the Department of Commerce. The IES would assist industry to absorb technical information on best practice in manufacturing systems from both foreign and domestic science and engineering sources, and would disseminate information on new technologies through regional offices managed by the Department of Commerce.

CONCLUSION

This chapter outlines selected federal programs that support civilian technology development. It assesses both strengths and weaknesses in the current national system to support private sector technology. The panel concentrated its efforts on those programs that, in its judgment, both require significant changes and have the potential to contribute in a substantial manner to U.S. performance in technological innovation. Additional material on federal agencies and their role in pre-commercial R&D is presented in the following chapter.

There need to be substantial changes in the framework that supports civilian technology development in the United States. This conclusion is based on our assessment that post-war federal science and technology policy needs to be reevaluated. There have been fundamental changes in the economic and technological environment in which U.S. companies compete. There have been great benefits from federal support of basic scientific

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

research, and a strong rationale continues for that public funding. We believe, however, that the almost exclusive focus of federal technology policy on investments in basic R&D should be modified.

There is a strong case for extending the federal role beyond the funding of basic R&D. This is true both on economic grounds and because government programs have had some success in the past in stimulating civil technology development and commercialization. A new federal role in support of private technology efforts should be shaped through investments in pre-commercial R&D, as well as projects to increase the rate of technology adoption in U.S. firms. These are the areas, as we have shown, in which the potential exists for great public benefit, and U.S. firms cannot appropriate sufficient economic benefits from private investment.

To strengthen U.S. comparative advantages, a reorientation of priorities in the system that provides long-term support for military technology development is necessary. This change would benefit both the nation’s military and its civilian technology infrastructure. Specifically, we believe that the mandate and objectives of the Defense Advanced Research Projects Agency should include the explicit support of dual-use technology to bolster commercialization efforts in the civilian sector.

The U.S. approach to stimulating transfer from government laboratories that has characterized technology transfer policies and congressional initiatives over the past decade is misguided. Although the laboratories constitute a significant public good, most of the work at these facilities is unlikely to serve the commercial needs of the civilian sector. The administration should therefore select only a few of the several hundred government laboratories to be involved in technology transfer activities. Changes in the mission and objectives of these laboratories will require significant additional funding and personnel. In the few laboratories with the potential to serve commercial needs, it will be necessary to commit resources, over and above current appropriations, in order to meet technology transfer goals set under this new framework.

A strengthened federal role in civilian technology and reorientation of government policies beyond investment in basic scientific research will require more than simply changes in technology transfer policies or additional federal funding for pre-commercial activities. A significant new emphasis is needed on the performance and ability of U.S. firms to adopt new technologies. We have shown that although U.S. performance in technology generation remains strong, the nation’s industries are having increasing difficulty incorporating new technology into the production process, particularly the rapid introduction of incremental improvements in product and process technologies. Better information and analysis are necessary on technology adoption in the United States and overseas, with the goal of providing a basis upon which new federal responsibilities in this area can be determined.

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

NOTES

1.  

U.S. Department of Commerce, Advanced Technology Program, Proposal Preparation Guidelines (National Institute of Standards and Technology, Gaithersburg, Md., 1990), 2.

2.  

An early study of the returns from investment in agricultural R&D, as well as extension services, found a marginal rate of return on investment in R&D of 53 percent; see Zvi Griliches, ''Returns Expenditures, Education, and the Aggregate Agricultural Production Function,” American Economic Review (1964), as cited in Edwin Mansfield, “Microeconomics of Technological Innovation,” in The Positive Sum Strategy, eds. Ralph Landau and Nathan Rosenberg (Washington, D.C.: National Academy Press, 1986), 308.

3.  

Technical change and technological innovation constitute a primary source of economic growth. The contribution of technical change to growth was first examined in the work of Robert Solow, “Technical Change and the Aggregate Production Function,” Review of Economics and Statistics 23 (August 1957):101–108 and Moses Abramovitz, “Resource and Output Trends in the U.S. since 1870," American Economic Review 46 (May 1956). See also Martin N. Baily and Alok K. Chakrabarti, Innovation and the Productivity Crisis (Washington, D.C.: The Brookings Institution, 1988); John Kendrick, “Productivity Trends in the United States,” in Lagging Productivity Growth, eds. Shlomo Maital and Noah M. Meltz (Cambridge, Mass.: Ballinger Publishing Co., 1980); and Edwin W. Mansfield, “Economic Effects of Research and Development: The Diffusion Process and Public Policy,'' in Planning for National Technology Policy, eds. Richard A. Goodman and Julian Pavon, (New York: Praeger, 1984), 104–120, among others.

4.  

For estimates of the social and private rates of return on investment in specific innovations, see Edwin Mansfield et al., “Social and Private Rates of Return from Industrial Innovations,” Quarterly Journal of Economics (1977); Robert R. Nathan Associates, Net Rates of Returns on Innovations, Vol. 1 and 2 (Report prepared for the National Science Foundation, Washington, D.C., 1978); and Foster Associates, A Survey on the Net Rates of Return on Innovations, 3 volumes (Report prepared for the National Science Foundation, Washington, D.C., 1978).

5.  

For an overview of analyses of the rationale for federal investment and social returns on R&D investment that accompany lack of private sector incentives for investment, see U.S. Congress, Congressional Budget Office, Federal Support for R&D and Innovation (Washington, D.C.: U.S. Government Printing Office, 1984).

6.  

For a discussion of these policies, see Harvey Brooks, “National Science Policy and Technological Innovation,” in The Positive Sum Strategy, eds. Ralph Landau and Nathan Rosenberg (Washington, D.C.: National Academy Press, 1986), 119–167.

7.  

U.S. Congress, Office of Technology Assessment, Federally Funded Research: Decisions for a Decade (Washington, D.C.: U.S. Government Printing Office, 1991), 3; and National Science Board, Science and Engineering Indicators—1989 (Washington, D.C.: National Science Board, 1989), appendix table 5–17.

8.  

National Science Board, Science and Engineering Indicators—1989 , 231. Figures are for 1988.

9.  

Thomas H. Lee and Proctor P. Reid, eds., National Interests in an Age of Global Technology (Washington, D.C.: National Academy Press, 1991), 23–24, 27–29.

10.  

David C. Mowery and Nathan Rosenberg, Technology and the Pursuit of Economic Growth (New York: Cambridge University Press, 1989), 209–210.

11.  

For example, there are restrictions on “foreign participation” in SEMATECH, the National Center for Manufacturing Sciences, federal laboratory R&D programs, and the Advanced Technology Program at the National Institute of Standards and Technology. In Japan, however, there is a current emphasis on the inclusion of foreign multinational corporations and affiliates of U.S. firms based in Japan in Japanese government-sponsored R&D projects. See Chapter 3 for further discussion of this point.

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

12.  

The Homestead Act of 1862 granted 160 acres of soil to persons settling on and cultivating land for five years. The Morrill Land-Grant Act of the same year gave every state and territory 30,000 acres of public land for each congressional representative. The allotments of land, for use by agricultural and mechanical colleges, spurred the development of a system of land grant colleges that provided the framework for a U.S. research system in agriculture. In addition, a “Commission” (later Department) of Agriculture was established during the Civil War to guide federal investments in agriculture. Outbreaks of Texas fever and pleuropneumonia and European restrictions on the import of U.S. meat suspected of carrying disease prompted Congress to establish a Bureau of Animal Industry within the new Department of Agriculture in the early 1900s. Research conducted by the bureau was instrumental in finding technical solutions for reform of the meat packing industry.

13.  

See, for example, Robert E. Evenson and Wallace E. Huffman, “Supply and Demand Functions for Multiproduct U.S. Cash Grain Farms: Biases Caused by Research and Other Policies,” American Journal of Agricultural Economics 71 (August 1989):761–773.

14.  

The Hatch Act remains the principal mechanism for federal funding of agricultural research.

15.  

Act of 1906 for the Further Endowment of Agricultural Experiment Stations (Adams Act).

16.  

Norwood Allen Kerr, The Legacy, A Centennial History of the State Agricultural Experiment Stations, 1887–1987 (Columbia: University of Missouri, 1987).

17.  

John S. Wilson, Productivity and Competitiveness: Industrial Extension Services and Technology Transfer Programs in the U.S. (Washington, D.C.: The World Bank), 8.

18.  

Richard R. Nelson, ed., Government and Technical Progress (New York: Pergamon Press, 1982), 269.

19.  

Kenneth Flamm and Thomas L. McNaugher, “Rationalizing Technology Investments,” in Restructuring American Foreign Policy, ed. John D. Steinbruner (Washington, D.C.: The Brookings Institution, 1989), 126.

20.  

Information provided by the IBM Corporation, Armonk, New York.

21.  

Prior to the 1950s, federal support of the industry—typically involving collaboration of government, industry, or universities—was essential in medical discoveries. Pharmaceutical companies, the Department of Agriculture, the Rockefeller Foundation, and the Office of Scientific Research and Development (OSRD) pooled resources during World War II to make penicillin, first discovered in 1928, widely available for the armed services. OSRD produced the antimalarial drug quinacrine through an analysis of substances developed by university and pharmaceutical company researchers. During this period, the OSRD Committee on Medical Research awarded $25 million in contracts to universities, hospitals, and companies.

22.  

P.L. 78–410.

23.  

Stephen P. Strickland, The Story of the NIH Grants Program (Lanham, Md.: University Press of America, 1989), 44.

24.  

NIH Budget Office. Figures are for dollars actually spent.

25.  

Michael R. Pollard, “Selected Examples of Government and Industry Collaboration in Pharmaceutical Research and Development,” in Government and Independent Collaboration in Biomedical Research and Education: Report of a Workshop (Washington, D.C.: National Academy Press, 1989), 4.

26.  

Figures are for fiscal year 1991. NIH’s share of the genome project is $87 million; DOE’s share is $47 million. See “DoE’s Genome Project Comes of Age,” Science (April 26, 1991):498.

27.  

David C. Mowery, Collaborative Research: An Assessment of Its Potential Role in the Development of High Temperature Superconductivity (Paper prepared for the Office of Technology Assessment, U.S. Congress, Washington, D.C., 1988), 47.

28.  

Industrial Biotechnology Association.

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

29.  

Wendy Schacht, Commercialization of Technology and Issues in the Competitiveness of Selected U.S. Industries: Semiconductors, Biotechnology, and Superconductors (Paper prepared for the Congressional Research Service, Washington, D.C., 1988), 33.

30.  

Cassius J. Van Slyke, "New Horizons in Medical Research," Science 104 (December 13, 1946):561.

31.  

Roger E. Bilstein, Orders of Magnitude: A History of the NACA and NASA, 1915-1990 (Washington, D.C.: National Aeronautics and Space Administration, 1989), 3.

32.  

David C. Mowery, "Federal Funding of R&D in Transportation: The Case of Aviation" (Paper presented at the COSEPUP Workshop on the Federal Role in Research and Development, National Academy of Sciences, Washington, D.C., 1985), 315.

33.  

Alex Roland, Model Research, the National Advisory Committee for Aeronautics, vol. 2 (Washington, D.C.: National Aeronautics and Space Administration, 1985), 489.

34.  

Mowery, Collaborative Research, 71.

35.  

John V. Becker, The High-Speed Frontier, Case Histories of Four NACA Programs, 1920-1950 (Washington, D.C.: National Aeronautics and Space Administration, 1980), 117-118.

36.  

Energy Security Act of 1980.

37.  

Roger G. Noll and Linda R. Cohen, Economics, Politics, and Government Research and Development (Paper commissioned for a Workshop on The Federal Role in Research and Development, Committee on Science, Engineering, and Public Policy, National Academy of Sciences, Washington, D.C., November 21-22, 1985), 11.

38.  

John Deutch, Commercializing Technology: What Should DoD Learn from DoE? (Center for International Security and Arms Control, Stanford University, 1990), 6.

39.  

U.S. Congress, Congressional Research Service, "Synthetic Fuels Corporation," Congressional Research Service Review (September 1984), 23.

40.  

Hans H. Landsberg, "The Death of Synfuels," Resources 82 (Winter 1986): 7.

41.  

Deutch, Commercializing Technology, 5, 8.

42.  

This policy contrasted with the production and purchasing subsidies granted synthetic fuels and solar heating, despite the fact that these industries were also at an early stage of technology maturation.

43.  

"Systems vs. Technology: DARPA at a Crossroads?" Armed Forces Journal International 127 (November 1989): 71.

44.  

Burton I. Edelson and Robert L. Stern, The Operations of DARPA and Its Utility as a Model for a Civilian ARPA (The Paul H. Nitze School for Advanced International Studies, Washington, D.C., 1989), F1-2.

45.  

For an overview of DARPA and its role in dual-use technology development, see Mowery and Rosenberg, Technology and the Pursuit of Economic Growth, 137-156. It should be noted that DARPA has had a limited role in microelectronics R&D. Government procurement policies provided primary incentives for the formation of the computer industry in the 1950s and early 1960s, with advanced R&D work playing a much less important part. In the late 1960s and since, DARPA's R&D work has had a major role in new technology, and government procurement has shrunk as a fraction of the industry.

46.  

John A. Alic and Dorothy Robyn, "Designing a Civilian DARPA," Optics and Photonics News 1 (May 1990): 19.

47.  

DARPA. Figures are direct appropriations for FY 1991.

48.  

Edelson and Stern, The Operations of DARPA and Its Utility as a Model for a Civilian ARPA, 6-7, 18.

49.  

"A New Government Role in Key Industries," The Washington Post , April 26, 1990.

50.  

Carnegie Commission, New Thinking and American Defense Technology (Washington, D.C.: Carnegie Commission, 1990), 24-25.

51.  

Ibid., 26.

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

52.  

Edelson and Stern, The Operations of DARPA, 22-23.

53.  

Alic and Robyn, "Designing a Civilian DARPA," 21.

54.  

Edelson and Stern, The Operations of DARPA, 16.

55.  

For specific suggestions on improving technology flow between defense agencies and the private sector, see Carnegie Commission, New Thinking, 24-25.

56.  

See U.S. Congress, General Accounting Office (GAO), Federal Research: Small Business Innovation Research Program Shows Success, but Could Be Strengthened, T-RCED-92-3 (Washington, D.C.: U.S. Government Printing Office, 1991); and Small Business Administration (SBA), Testimony of Richard Shane, Assistant Administrator, Office of Innovation, Research and Technology, before the House Small Business Committee, U.S. House of Representatives on the Small Business Innovation Research Program, U.S. Congress, October 3, 1991. Both GAO and SBA will be releasing reports on the SBIR program and technology commercialization in early 1992.

57.  

Small Business Innovation Development Act.

58.  

Along with NIST, other agencies within the Technology Administration whose functions relate to industrial competitiveness include the Clearinghouse on State and Local Initiatives, the Japanese Technical Literature Program, the National Technical Information Service, the Office of Technology Policy, and the Office of Commercial Policy.

59.  

U.S. Department of Commerce, Research, Services, Facilities: National Institute of Standards and Technology (Gaithersburg, Md.: National Institute of Standards and Technology, Technology Administration, 1991).

60.  

Section 5131 of the Omnibus Trade and Competitiveness Act (P.L. 100-418) authorized ATP.

61.  

U.S. Department of Commerce, Advanced Technology Program, Proposal Preparation Guidelines (U.S. Department of Commerce, Washington, D.C., 1990).

62.  

Personal communication from George Uriano, director of Advanced Technology Program, to Ed Moser, Committee on Science, Engineering, and Public Policy, National Academy of Sciences, National Academy of Engineering, and Institute of Medicine, Washington, D.C., February 22, 1991.

63.  

For the purposes of this discussion, the term federal laboratories refers to all scientific and engineering laboratories operated under contract by the federal government (GOCOs) or under the direct management of the government (GOGOs). The term national laboratories is often used to refer to the Department of Energy's large, multidisciplinary R&D facilities, including weapons laboratories, such as Los Alamos, Lawrence Livermore, and Sandia, and laboratories that focus on basic energy research, such as Argonne, Brookhaven, Lawrence Berkeley, and Oak Ridge National Laboratories. The federally funded research and development centers, operated under contract for the government, span a diverse spectrum from systems engineering and technical assistance, to "think-tank" research organizations.

64.  

National Science Foundation, Federal Funds for R&D: Fiscal Years 1989, 1990, 1991 (Washington, D.C.: National Science Foundation, 1991); dollar amount in obligations.

65.  

Most development of military systems for the Department of Defense is done by private firms, or COCOs, operating outside the laboratory structure. U.S. Congress, House Committee on Small Business, Subcommittee on Regulation, Business Opportunities, and Energy, Technology Transfer Obstacles in Federal Laboratories: Key Agencies Respond to Subcommittee Survey (Hearing, March 1990), 7.

66.  

Defense Science Board, Technology Base Management (Washington, D.C.: U.S. Department of Defense, 1987), 13, 22.

67.  

U.S. Congress, Office of Technology Assessment, Making Things Better: Competing in Manufacturing (Washington, D.C.: U.S. Government Printing Office, 1990), 185.

68.  

NIH Budget Office. Figures are for 1990.

69.  

P.L. 96-517.

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

70.  

P.L. 96-480.

71.  

P.L. 96-480.

72.  

P.L. 98-462.

73.  

P.L. 99-502.

74.  

Letter from NASA to Representative Ron Wyden, January 12, 1990, p. 2.

75.  

For a detailed discussion of technology transfer legislation passed during the period 1980-1987 see John S. Wilson, Productivity and Competitiveness: Industrial Extension Services and Technology Transfer Programs in the U.S. (Washington, D.C.: The World Bank, 1987).

76.  

U.S. Department of Energy, Technology Transfer: A DoE and Industry Partnership for the Future (U.S. Department of Energy, Washington, D.C., 1991), A-7, A-8.

77.  

U.S. Congress, House of Representatives, Technology Transfer Obstacles in Federal Laboratories: Key Agencies Respond to Subcommittee Survey (Washington, D.C., March 1990), 1-2.

78.  

U.S. Congress, General Accounting Office, Diffusing Innovations: Implementing the Technology Transfer Act of 1986 (Washington, D.C.: U.S. Government Printing Office, 1991), 4-5, 11, 106-107.

79.  

For an interesting general discussion of cultural and other factors in technology R&D, see Ralph E. Gomory, "Technology Development," Science, 220 (May 6, 1983):576-580.

80.  

U.S. Congress, Office of Technology Assessment, Making Things Better, 189-190.

81.  

"Roundtable: New Challenges for the Federal Labs," Physics Today (February 1991), 28.

82.  

Ibid., 29-30.

83.  

Alan Schriesheim, "Toward a Golden Age of Technology Transfer," Issues in Science and Technology 7 (Winter 1990), 54.

84.  

A 1991 survey conducted by the General Accounting Office found that 685 CRADAs had been completed or drafted by 297 research-oriented federal laboratories.

85.  

D. Allan Bromley, Director, Office of Science and Technology Policy (Testimony before the Senate Committee on Commerce, Science, and Transportation, Washington, D.C., May 23, 1990), 7.

86.  

U.S. Congress, General Accounting Office, Diffusing Innovations: Implementing the Technology Transfer Act of 1986 (Washington, D.C.: U.S. Government Printing Office, 1991), 3-5. Along similar lines, a 1990 report of the House Science, Space, and Technology Committee, for example, found that 61 percent of 180 laboratories surveyed had not received the authority from their agencies to undertake CRADAs, even though four years had passed from the time of the authorizing legislation. Similarly, although the Stevenson-Wydler Act calls for the establishment within each laboratory of a technology transfer office, or Office of Research and Technology Applications, the report found this to be so for only 20 percent of the laboratories examined. U.S. Congress, House of Representatives, Committee on Science, Space, and Technology, Subcommittee on Science, Research, and Technology, "Transfer of Technology from the Federal Laboratories" (Hearing, Washington, D.C., May 3, 1990), 8-9.

87.  

For an overview of the history of collaborative R&D, see Center for Social and Economic Issues, Industrial Technology Institute, Solomon Associates, and J. D. Eveland, The Literature of Collaborative Research and Development: An Analytic Overview (Report submitted to the Office of Technology Assessment, U.S. Congress, Washington, D.C., December 18, 1986).

88.  

See David C. Mowery, ed., International Collaborative Ventures in U.S. Manufacturing (Cambridge, Mass.: Ballinger Publishing Company, 1988); John Hagedoorn and Jos Schakenraad, Strategic Partnering and Technological Cooperation, (Maastricht Economic Research Institute on Innovation and Technology, The Netherlands, 1989). For an overview of alliances in the semiconductor industry, see, for example, Carmela Haklisch, Technical Alliances in the Semiconductor Industry (New York University, Center for Science and Technology Policy,

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

   

1986) and Nicholas S. Vonortas, The Changing Economic Context: Strategic Alliances Among Multinationals (Center for Science and Technology Policy, Rensselaer Polytechnic Institute, Troy, New York, 1989).

89.  

The evidence on whether or not the NCRA has promoted R&D ventures is inconclusive. See U.S. Congress, Congressional Budget Office, Using R&D Consortia for Commercial Innovation: SEMATECH, X-Ray Lithography, and High-Resolution Systems (Washington, D.C.: U.S. Government Printing Office, 1990) for a discussion of the NCRA and its impact on the formation of joint ventures.

90.  

For an overview of SEMATECH, see U.S. Congress, Congressional Budget Office, Using R&D Consortia; U.S. Congress, General Accounting Office, Federal Research: SEMATECH's Efforts to Strengthen the U.S. Semiconductor Industry (Report to the Committee on Science, Space, and Technology, U.S. House of Representatives, GAO/RECE-90-236, Washington, D.C., September 1990); U.S. Department of Commerce, Advisory Council on Federal Participation in SEMATECH, SEMATECH 1990 (A Report to the Congress, Washington, D.C., May 1990); and U.S. Congress, General Accounting Office, Federal Research: SEMATECH's Efforts to Develop and Transfer Manufacturing Technology (Fact Sheet for the Committee on Science, Space, and Technology, U.S. House of Representatives, GAO/RCED-91-139FS, Washington, D.C., May 1991).

91.  

Personal communication from Rebecca Racosky, manager for government relations, NCMS, October 3, 1991.

92.  

Personal communication from Lee Kennard, chief of business integration, Mantech program, Department of the Air Force, U.S. Department of Defense, October 2, 1991. Figures are for FY 1991. In FY 1990, Mantech funding for NMCS totaled $8 million.

93.  

There have been no independent reviews of NCMS progress in meeting the consortium's objectives. Information available through telephone interviews with NCMS personnel, congressional staff, DOD officials, member companies, and other R&D organizations, presents a mixed assessment of progress to date at NCMS. Apparently, small manufacturers that typify the U.S. machine-tool industry delegate only limited staff resources to tasks associated with NCMS projects. NCMS, like other collaborative R&D ventures, continually works to balance the desires of member companies to target research to specific company needs, against the goal of producing and disseminating R&D results useful to other member firms. Indeed, officials of several member companies contacted for information about NCMS report benefits from NCMS projects to in-house R&D objectives. They cite especially the leveraging of internal R&D resources in projects in support of manufacturing technology, such as a computer-integrated factory, next-generation controllers, and improved manufacturing techniques for fabrication of printed wiring boards.

94.  

For an overview of the ERC program, see National Science Foundation and American Association of Engineering Societies, The ERCs: A Partnership for Competitiveness, Report of a Symposium (Engineering Centers Division, Directorate for Engineering, National Science Foundation, Washington, D.C., March 1990); and National Academy of Engineering, Assessment of the National Science Foundation's Engineering Research Centers Program (Washington, D.C.: National Academy of Engineering, 1989).

95.  

See, for example, Barry Bozeman, Albert N. Link, and A. Zardkoohi, "An Economic Analysis of Joint R&D Ventures," Managerial and Decision Economics 7 (1986):263-266, as cited in David C. Mowery, "Collaborative Research: An Assessment of Its Potential Role in the Development of High Temperature Superconductivity (Report prepared for the Office of Technology Assessment, U.S. Congress, Washington, D.C., 1988), 4.

96.  

See, Richard J. Samuels, Research Collaboration in Japan (Massachusetts Institute of Technology, Cambridge, Mass., 1987), 36; and U.S. Congress, Office of Technology Assessment, Making Things Better.

97.  

For a discussion of the ERA system and its history in Japan, see Samuels, Research Collaboration in Japan.

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

98.  

Jonah D. Levy and Richard J. Samuels, The MIT Japan Program (Paper prepared for the Conference on Oligopolies and Hierarchies: Strategic Partnerships and International Competition, Fondation de Royaumont, Asnière-sur-Oise, France, April 20-23, 1989. Available from Center for International Studies, MIT, Cambridge, Mass.), 32.

99.  

Fumio Kodama, "Rival's Participating in Collective Research: Its Economic and Technological Rationale" (Paper presented to the NISTEP International Conference on Science and Technology Policy Research, Shimoda, Japan, February 2-4, 1990), 8-9.

100.  

See Richard R. Nelson, High-Technology Policies: A Five Nation Comparison (Washington, D.C.: American Enterprise Institute, 1984), 48-50.

101.  

For an overview of collaborative R&D in Japan see reports of the National Research Council, Office of Japan Affairs, including R&D Consortia and U.S.-Japan Collaboration: Report of a Workshop (Washington, D.C.: National Academy Press, 1991).

102.  

This section draws on interviews conducted in Tsukuba, Science City, Japan in July 1990 by the project director. Included in the discussions were officials of the Optoelectronic Technology Research Corporation and Optoelectronics Technology Research Laboratory. See also The Japan Key Technology Center, Program Prospectus (Tokyo, Japan, 1989), and Key Technology for the 21st Century, Program Description (Optoelectronics Technology Research Laboratory, Tsukuba, Science City, Japan, 1990).

103.  

Interview by John S. Wilson, National Academy of Sciences, with Takeshi Furutani, Deputy Director, Electronics Policy Division, Ministry of International Trade and Industry and other MITI staff, Tokyo, Japan, July 1990. For an overview of resources devoted to research and development in Japan through Japan fiscal year 1987, see 1988 Survey of Research and Development in Japan, January 11, 1989, National Science Foundation, Tokyo Office, Tokyo, Japan. See also National Science Foundation, Tokyo Office, JFY 1988 R&D Budget of Japan's Ministry of International Trade and Industry (MITI) (Tokyo, Japan, 1989) for a description of MITI projects in basic R&D.

104.  

G. J. Hane, Government-Promoted Collective Research and Development in Japan—Analyses of the Organization Through Case Studies (Washington, D.C.: Pacific Northwest Laboratory, Battelle Memorial Institute, 1990), 2-5.

105.  

Data provided by the Japan Key Technology Center, Ark Mori Building, Akasaka, Minato-ku, Tokyo, Japan.

106.  

Interview with Izui Hayashi, Director, Optoelectronics Technology Research Laboratory, Tokyo, Japan, by John S. Wilson, National Academy of Sciences, July 1990.

107.  

See, for example, National Research Council, Learning the R&D System: Industrial R&D in Japan and the United States (Washington, D.C.: National Academy Press, 1990).

108.  

For an overview of U.S. and Japanese spending on R&D and technology development, see National Science Foundation, The Science and Technology Resources of Japan: A Comparison with the United States, NSF 88-318 (National Science Foundation, Washington, D.C., 1988).

109.  

See Mowery and Rosenberg, Technology and the Pursuit of Economic Growth, 227.

110.  

Roy Rothwell and Mark Dodgson, "Technology Policy in Europe: Trends and Impacts," in Science, Technology, and Free Trade, eds. J. de la Mothe and L. M. Ducharme (London: Pintner Publishers, 1990).

111.  

Official Journal of the European Communities, Council Decision of April 23, 1990, no. L 117/28.

112.  

Delegation of the Commission of the European Communities, Important Progress for European Community Research (May 18, 1990), 1.

113.  

An evaluation of ESPRIT appears in John A. Alic, Cooperation in R&D (Paper prepared for the Office of Technology Assessment, U.S. Congress, Washington, D.C., 1988).

114.  

Rothwell and Dodgson, "Technology Policy in Europe," 2.

115.  

Glennon J. Harrison, European Community: Issues Raised by 1992 Integration (U.S. Congress, Congressional Research Service, Washington, D.C., 1989), 100.

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

116.  

Glenn J. McLoughlin, The Europe 1992 Plan: Science an Technology Issues (U.S. Congress, Congressional Research Service, Washington, 1989), 14.

117.  

Kirkor Bozdogan, The Eureka Initiative in Europe, Implications for Technology Policy in the U.S. (Massachusetts Institute of Technology, Cambridge, Mass., 1990), 5.

118.  

National Academy of Sciences, National Academy of Engineering, and Institute of Medicine, Finding Common Ground: U.S. Exports Controls in a Changed Global Environment (Washington, D.C.: National Academy Press, 1991), 227.

119.  

Rothwell and Dodgson, "Technology Policy in Europe," 8.

120.  

Ibid., 24.

121.  

Ken Guy, Paul Quintas, and Michael Hobday, Evaluation of the Alvey Software Engineering Programme (Science Policy Research Unit, University of Sussex, Falmer, Brighton, Sussex, United Kingdom, 1990). See also Ken Guy and Paul Quintas, Alvey in Industry: Corporate Strategy and the Alvey Program (Science Policy Research Unit, University of Sussex, Falmer, Brighton, Sussex, United Kingdom, 1989).

122.  

Guy, Quintas, and Hobday, Alvey Software Engineering Program.

123.  

See, for example, Maryellen R. Kelley and Harvey Brooks, The State of Computerized Automation in U.S. Manufacturing (Center for Business and Government, JFK School of Government, Harvard University, Cambridge, Mass., 1988); National Academy of Sciences, National Academy of Engineering, and Institute of Medicine, Technology and Employment: Innovation and Growth in the U.S. Economy (Washington, D.C.: National Academy Press, 1987); Technology Management Center, The Use of Advanced Manufacturing Technology in Industries Impacted by Import Competition: An Analysis of Three Pennsylvania Industries (Philadelphia, 1985); and David C. Mowery, "The Diffusion of New Manufacturing Technologies," in The Impact of Technological Change on Employment and Economic Growth, eds. Richard M. Cyert and David C. Mowery (Washington, D.C.: National Academy Press, 1987).

124.  

Mowery, "The Diffusion of New Manufacturing Technologies."

125.  

U.S. Department of Agriculture. Federal figures are appropriations for FY 1991.

126.  

For an overview of state technology extension services, see Robert E. Chapman, Marianne K. Clark, and Eric Dobson, National Institute of Standards and Technology, U.S. Department of Commerce, Technology-Based Economic Development: A Study of State and Federal Technical Extension Services, NIST Special Publication 786 (Washington, D.C.: U.S. Government Printing Office, June 1990).

127.  

Figures are for 1988. Marianne K. Clarke and Eric N. Dobson, Promoting Technology Excellence: The Role of State and Federal Extension Activities (National Governors' Association, Washington, D.C., 1989), 5, 8-9.

128.  

For a more detailed description of GTRI and other state-based programs in industrial extension, see John Wilson, Productivity and Competitiveness: Industrial Extension Services and Technology Transfer Programs in the United States (Washington, D.C.: Industrial Development Division, Industry and Energy Department, Policy, Planning, and Research, The World Bank, 1987).

129.  

Procedures for the Selection and Establishment of NIST Manufacturing Technology Centers, Part 290, Title 15 of the Code of Federal Regulations, as published in the Federal Register (September 17, 1990), 8.

130.  

U.S. Department of Commerce, National Institute of Standards and Technology, NIST Manufacturing Technology Centers Program: Questions and Answers, (U.S. Department of Commerce, Washington, D.C., June 17, 1991), 3.

131.  

Letter of Samuel Krammer, Chairman MTC Review Panel to Dr. John W. Lyons, Director, National Institute of Standards and Technology, September 19, 1991. For additional information on the MTC program, see National Institute of Standards and Technology, The Manufacturing Technology Centers Program: A Report to the Secretary of Commerce by Visiting Committee on Advanced Technology (Gaithersburg, Md.: NIST, 1990).

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

132.  

Source: U.S. Department of Commerce, National Institute of Standards and Technology.

133.  

Source: U.S. Department of Commerce. Figures are for funds appropriated for grants in FY 1991.

134.  

There is evidence, however, that extension activities have conflicted with the demands of topflight scientific research. The decentralized, extensive, and "user-friendly" structure of the agricultural research and extension services has made it difficult for federal policymakers to redirect and improve the quality of agricultural research, especially in cutting-edge areas such as biotechnology. An integrated research and extension organization in agriculture may have important costs, therefore, as well as some important advantages.

135.  

Mowery, "The Diffusion of New Manufacturing Technologies," 498.

136.  

See Gerald P. Dineen, "Trends in International Technological Cooperation," in Globalization of Technology: International Perspectives , Proceedings from the Sixth Convocation of the Council of Academies of Engineering and Technological Sciences (Washington, D.C.: National Academy Press, 1988).

137.  

David C. Mowery and Richard M. Cyert, eds., Technology and Employment: Innovation and Growth in the U.S. Economy (Washington, D.C.: National Academy Press, 1987), 43.

138.  

Ken Flamm, "The Changing Pattern of Industrial Robot Use," in The Impact of Technological Change on Employment and Economic Growth , eds. R. M. Cyert and D. C. Mowery (Cambridge, Mass.: Ballinger, 1988).

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×

3
A New Strategy to Facilitate Government Support of Technology

This report has examined the changing environment for research and technology development, with particular emphasis on the role and responsibility of the federal government in R&D and technology policy. In addition, the previous chapters provide an assessment of the strengths and weaknesses in current federal programs to assist industry in civilian technology development, transfer, and adoption.

As we have seen, the economic and technological environment in which private firms develop and commercialize new technologies has been altered in a fundamental manner since World War II. Over the past 25 years, the world economy has changed dramatically. It is characterized by improved communication systems, the international flow of capital and trade, the rapid diffusion of information and technology across national borders, and advances in technology utilization. All of these factors have improved the capacities of firms outside the United States to commercialize products and services.

The United States continues to exhibit great strength in technology, especially in the generation of new and innovative products and processes. U.S. performance in technology commercialization, however, is being challenged more strongly than ever before as a result of improvements in the capabilities of foreign firms. We believe, therefore, that the federal government needs to promote a higher rate of technological performance in the United States. We should build on the nation’s strengths in research and advanced technology. It is sensible and appropriate to capitalize on U.S.

Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 48
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 49
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 50
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 51
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 52
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 53
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 54
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 55
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 56
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 57
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 58
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 59
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 60
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 61
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 62
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 63
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 64
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 65
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 66
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 67
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 68
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 69
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 70
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 71
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 72
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 73
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 74
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 75
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 76
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 77
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 78
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 79
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 80
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 81
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 82
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 83
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 84
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 85
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 86
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 87
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 88
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 89
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 90
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 91
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 92
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 93
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 94
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 95
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 96
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 97
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 98
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 99
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 100
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 101
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 102
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 103
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 104
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 105
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 106
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 107
Suggested Citation:"2 GOVERNMENT SUPPORT FOR CIVILIAN TECHNOLOGY." National Academy of Sciences, National Academy of Engineering, and Institute of Medicine. 1992. The Government Role in Civilian Technology: Building a New Alliance. Washington, DC: The National Academies Press. doi: 10.17226/1998.
×
Page 108
Next: 3 A NEW STRATEGY TO FACILITATE GOVERNMENT SUPPORT OF TECHNOLOGY »
The Government Role in Civilian Technology: Building a New Alliance Get This Book
×
Buy Paperback | $50.00
MyNAP members save 10% online.
Login or Register to save!
Download Free PDF

As U.S. industry faces worldwide challenges, policymakers are asking questions about the role of the federal government--not only in promoting basic research but also in ushering new innovations to the marketplace. This book offers an expert consensus on how government and industry together can respond to the new realities of a global marketplace.

The volume offers firm conclusions about policy and organizational changes with the greatest potential to improve our technological competitiveness--and presents three alternative approaches for a new federal role.

The volume examines

  • How federal involvement in technology development affects the nation's economic well-being.
  • What we can learn from past federal efforts to stimulate civilian technology development--in the United States and among our major industrial competitors.
  • How trends in productivity, R&D, and other key areas have affected U.S. performance, and how we compare to the world's rising industrial economies.

Offering guidance on one of the 1990s most important issues, this volume will be indispensible to federal policymakers, executives in industry and technology, and researchers.

  1. ×

    Welcome to OpenBook!

    You're looking at OpenBook, NAP.edu's online reading room since 1999. Based on feedback from you, our users, we've made some improvements that make it easier than ever to read thousands of publications on our website.

    Do you want to take a quick tour of the OpenBook's features?

    No Thanks Take a Tour »
  2. ×

    Show this book's table of contents, where you can jump to any chapter by name.

    « Back Next »
  3. ×

    ...or use these buttons to go back to the previous chapter or skip to the next one.

    « Back Next »
  4. ×

    Jump up to the previous page or down to the next one. Also, you can type in a page number and press Enter to go directly to that page in the book.

    « Back Next »
  5. ×

    Switch between the Original Pages, where you can read the report as it appeared in print, and Text Pages for the web version, where you can highlight and search the text.

    « Back Next »
  6. ×

    To search the entire text of this book, type in your search term here and press Enter.

    « Back Next »
  7. ×

    Share a link to this book page on your preferred social network or via email.

    « Back Next »
  8. ×

    View our suggested citation for this chapter.

    « Back Next »
  9. ×

    Ready to take your reading offline? Click here to buy this book in print or download it as a free PDF, if available.

    « Back Next »
Stay Connected!