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Technology Policy Reports One of the two main lines of activity in the latest round of public dialogue on U . S . technological capability and competitiveness has been a series of reports and statements prepared by prestigious groups on U . S . technology policy. The reports reviewed here are listed i n Table 1 . It i s impossible t o capture the full scope o f each report . Instead, the paper de scribes briefly the group which prepared the report, the purpose of the re port, and the nature of the recommendations made, as well as other note worthy aspects of the report. Some of these reports were prepared by federal government agencies in both the executive and legislative branches-and federal advisory com mittees . Others were prepared by private sector groups, some representing industry, others consisting of industry, academe, and labor working together (See Table 1 ). This broad participation of key sectors of American society reflects the recognition that industry, government, academe, and labor all have important roles to play in formulating and implementing national technology policy. In general, however, the reports address U . S . technology policy primari ly in terms of government policies and programs. As can be seen in Table 2, which categorizes the types of recommendations made in the reports, most of the recommendations in these reports call for action by the federal gov ernment. Many of the reports refer, at least in passing, to the importance of the industrial role. Some make specific recommendations for action by industry and academia, but government action is their primary focus . Therefore, this report also focuses primarily on the recommendations of the reports for action by government. OFFICE OF SCffiNCE AND TECHNOLOGY POLICY TECHNOLOGY POUCY STATEMENT Perhaps the most significant of the technology policy reports is the statement of the Bush Administration's technology policy, prepared by the White House Office of Science and Technology Policy (OSTP) . U. S. Tech nology Policy is the first official statement of technology policy ( as distin guished from science policy) issued by the Executive Office of the President. 6
TABLE 1 Technology Policy and Critical Technologies Reports Reviewed for this Paper Organization Report TECHNOLOGY POLICY REPORTS Carnegie Commission on Science, Technology, and New Thinking and American Defense Technology Government ( 1 990) Technology and Economic Performance: Organizing the Execu tive Branch for a Stronger National Technology Base ( 1 99 1 ) Council on Competitiveness Picking up the Pace: The Commercial Challenge to American Innovation ( 1 988) Gaining New Ground: Technology Priorities for America's Fu ture ( 1 99 1 ) National Advisory Committee on Semiconductors A Strategic Industry at Risk ( 1 989) Capital Investmen t in Semiconductors: The Lifeblood of the U.S. Semiconductor Indus try (nd) National Association of Manufacturers Technology Policy R ecommendations: Execu tive Summary ( 1 990) Office of Science and Technology Policy, U.S. Technology Policy ( 1 990) Executive Office of the President Economic Policy Institute Modernizing Manufacturing: New Policies to Build Indus trial Extension Services ( 1 990) U . S . Congress, Office of Technology Assessment Making Things Better: Competing in Manufacturing ( 1 990) Paying the Bill: Manufacturing and America's Trade Deficit ( 1 988) CRITICAL TECHNOLOGIES REPORTS Aerospace Industries Association Key Technologies for the 1990s: An Overview ( 1 987) Computer Systems Policy Project Perspectives: Success Factors in Critical Technologies ( 1 990) Perspectives on U.S. Technology Policy, Part 1: The Federal RI!VD Inves tment ( 1 99 1 ) Perspectives on U.S. Technology Policy, Part II: Increasing Industry Involvemen t ( 1 99 1 ) U.S. Department of Commerce Technology Em erging Technologies: A Survey of Technical Administration and Economic Opportunities ( 1 990) U . S . Department of Defense Critical Technologies Plan ( 1 989) Critical Technologies Plan ( 1 990) U . S . National Critical Technologies Panel R eport of the National Critical Technologies Panel ( 1 99 1 ) 7
TABLE 2 Categories of Technology Policy Recommendations Technology Leadership and Modernization Government R &D Government technology acquisition Government technology deployment Government support of critical generic technologies Federal laboratories and commercialization of federally funded technology Technology infrastructure Industrial extension /economic development Standards Cooperation Using foreign technology Financial Environment Fiscal policy Capital cost and patience Tax policy Incentives to save Leveraged buyouts and hostile takeovers Harmonizing U.S Policies With Competitiveness Goals Antitrust Intellectual property rights Regulation Product liability Voice for competitiveness Human Resources Environment Worker training Preschool Primary / secondary education Higher education Foreign students Using engineers better Multi-level International Trade Unfair trade practices Export controls Trade-related intellectual property S& T Policy Machinery White House advisory mechanisms Congress Coordination with States Commerce Defense Leadership and Consensus Private Sector Actions Knowledge Base 8
The policy statement discusses the role of the private sector in innova tion and competitiveness and recommends a broad range of government policies to establish an environment conducive to these industrial activities . It breaks ground by acknowledging federal responsibility to "participate with the private sector in precompetitive research on generic, enabling technolo gies that have the potential to contribute to a broad range of government and commercial applications . 11 In action terms, the new thrust is reflected chiefly in proposed funding for activities at the National Institute of Stan dards and Technology ( NIST), including research on advanced manufacturing technologies and the Advanced Technology Program. Whether the commitment to precompetitive research represents a sig nificant policy change is debatable. At a minimum it represents an exten sion of the historical federal policy of close cooperation between govern ment and industry in selected industries such as defense, aviation and space, agriculture, energy, and health care. The key to the apparent change of policy lies in the terms precompeti tive and generic. These terms were defined by Presidential Science and Technology Advisor D. Allan Bromley in a recent address: ⢠" A generic technology is simply one that has the potential to be applied to a wide variety of products and processes extending across many industries . A generic technology is typically not something that is sold commercially. Rather, it requires subsequent research and development, generally by the private sector, to result in com mercial application. 11 ⢠"Precompetitive refers to a particular part of the innovation process. It applies to activities before the point at which a company can tell whether a specific technology has commercial potential. It would not apply, for example, to the development of application-specific com mercial prototypes. 116 Supporting generic technologies is consistent with economists' argu ments that the government has a legitimate role in areas of economic activi ty where there are market failures. Advances in generic technologies give rise to extensive positive externalities affecting many other industries be yond the one in which the advances originate by contributing to a broad range of commercial and government applications. Supporting generic technologies spreads the return on the government's investment and reduces the danger of government decisionmaking being dominated by special interests. Simi larly, the appeal of limiting support to precompetitive R&D is that it avoids getting the government involved in actual market competition. Another notable feature of the Bush technology policy statement is that it includes not only elements that are inherently technological in nature, such as federal R&D funding and technology transfer, but also elements 9
such as education and training and the creation of a legal and economic environment conducive to investment and competitiveness. This makes the policy responsive to concerns that improvements in the nation's business climate and in the scientific and technological infrastructure are necessary to facilitate commercial technology development and application. OFFICE OF TECHNOLOGY A SSESSMENT REPORTS The congressional Office of Technology Assessment IOTA) has prepared a series of reports on technology, innovation and U . S . trade. The first in the series, Paying the Bill, relates the stubbornly high U . S . trade deficits of the 1980s to weakness in American manufacturing and lags in technology, in addition to the macroeconomic policies which are more often cited as the cause. It further argues that some of the pain of the inevitable adjustment of trade flows can be alleviated by improving U . S . manufacturing productivi ty and quality. The second in the series, Making Things Better, looks at the reasons for U.S. manufacturing weakness, and suggests corrective policies . The report makes specific recommendations that address issues in a broad range of areas-including the cost of capital, human resources, customer-supplier firm relationships, and the need to modernize U . S . manufacturing capabili ty-again underscoring the complexity of the necessary supporting policy relationships and the need for policy initiatives in many areas. NATIONAL A DVISORY COMMITTEE ON SEMICONDUCTORS REPORTS A series of reports on technology policy has also been published by the National Advisory Committee on Semiconductors INACS), a group of offi cials from companies and government agencies active in semiconductor research and technology, established by the Congress to devise a national semiconductor strategy. Unlike the previous two reports, the NACS reports focus on the problems faced by a single, albeit important, industry. Recommendations in the first NACS annual report, A Stra tegic Industry A t Risk, cover the range from government R &D funding !including support of commercial technologies ), capital formation, and human resources, to trade policy . 7 Of these, the NACS attaches most importance to the " avail ability, cost, and patience of capital. " A follow-up working paper, Capital Investmen t in Semiconductors, analyzes the capital formation recommenda tions in more detail . The NACS report calls for industry leadership in reversing the deterio ration of the U . S . semiconductor industry. It states that " the Nation must act now, with the industry itself taking the lead and government at all levels participating as a strong partner. " Its recommendations, however, are aimed at government action. 10
NATIONAL ASSOCIATION OF MANUFACTURERS REPORT The National Association of Manufacturers jNAMI published Technolo gy Policy R ecommen da tions to "improve the ability of industry to flourish in the United States . " The NAM's recommendations fall into three areas: industry-government relations, the federal laboratory system, and alternative means of support for technology development. Other areas such as fiscal, monetary, and education policies that are also relevant to technology capa bility are not addressed in the report because the NAM has separate, ongo ing policy thrusts in those areas. The NAM viewpoint is significant because NAM represents major U .S . manufacturing firms. This report is notable because it acknowledges that industrial success depends on a supportive government-"one that at a minimum nurtures an environment conducive to innovation. " The NAM report suggests that traditional U.S. industry-government relationships may need to be adjusted because of changes in the nature of international competition. In doing so, however, it cautions that technology policy should be distinguished from industrial policy: "This does not mean that existing paradigms should be discarded in favor of government-led industrial policies or 'technology-of-the-week' approaches. Rather, in light of anticipated international economic and competitive realities, alternate, industry-led means of promoting U . S . technological leadership in both defense and nondefense areas should be considered. " Several of its recommendations are aimed at industry-e.g., increasing inter industry cooperation and increasing industry cooperation with government. Consistent with the traditional industrial viewpoint, the NAM report emphasizes the importance of a sound fiscal and monetary environment in promoting commercial technology. The report goes further, however, in supporting the Advanced Technology Program at the National Institute of Standards and Technology and in recommending government funding of even further " downstream " precompetitive development of enabling tech nologies when necessary. COUNCIL ON COMPETITIVENESS REPORTS The Council on Competitiveness-an organization devoted to improving U.S . competitiveness and comprised of executives from industry, organized labor, and higher education-has prepared two reports of direct relevance to technology policy. The first of these, Picking Up the Pace, focuses on the role of the federal government in facilitating and removing impediments to the commercial application of technology and makes recommendations for how the federal government can create an environment that is more condu cive to the rapid commercialization of technology by the private sector. Its 11
recommendations center on four areas: 1) macroeconomic policies, 2) sci ence and technology policy-making machinery, 3) infrastructure, and 4) expanded national R&D efforts . Specific recommendations are made ad dressing key policy issues in each area. Among its key recommendations Picking Up the Pace calls for appoint ment of an Assistant to the President for Science and Technology. (This was done in 1989 via the appointment of Dr. Allan Bromley to simultaneous positions as director of OSTP, presidential science adviser, and special assis tant to the President. ) Other recommendations address the issues of federal support for commercial application of technology, the legal and regulatory environment for the commercial application of technology, science and engineering education, the role of the federal laboratories, federal support for cooperative generic manufacturing technology, and DOD efforts to strength en the U . S . industrial base. Picking Up the Pace also notes that corporate management and govern ment policymakers need to be guided by "a new understanding of the inno vation process. " It argues that adherence to the old research-driven, linear model of innovation, which has formed the basis for U . S . science policy since the end of World War II, has led to an overemphasis on research as the driver for technological innovation. This model has also reinforced a ten dency to conduct research, development, manufacturing, and marketing in isolation from each other. The report offers an alternative model which describes innovation as a " reiterative, interdependent process in which design, manufacturing and product development all drive research and, at the same time, are highly dependent on research. " The second Council on Competitiveness report, Gaining New Ground, appraises current U.S. technology policy and concludes that current national policies and priorities do not adequately address the commercial technology challenge facing the United States. The report argues that the nation must redefine its goals to include a priority focus on technology that supports economic growth. Gaining New Ground makes specific recommendations for action by government, industry, and academia, guided by the premise that government and the private sector must work together. Key recommendations for gov ernment action include a call for the President of the United States to make technological leadership a national priority and for federal and state govern ments to work together to strengthen the U.S. technology infrastructure. U . S . industry is called upon to establish more effective technology networks and to pursue best commercialization practices. Academia is challenged to develop closer ties to industry. Gaining New Ground also argues that the United States should support core technologies that cut across many different sectors of the economy and drive U . S . industrial productivity and economic growth . The core technolo gies identified in the report are discussed in the next section on critical technologies. 12
ECONOMIC POLICY INSTITUTE REPORT The need to modernize manufacturing capabilities among small- and mid-sized U . S . firms is addressed in Modernizing Manufacturing, written by Philip Shapira and published by the Economic Policy Institute, an economic policy think tank. The report argues that a more effective industrial exten sion program would strengthen U . S . manufacturing capabilities; provide high-quality, cost-effective inputs to other manufacturers; and contribute to reducing the U . S . trade deficit. The report makes recommendations for actions the federal government could take to strengthen industrial extension programs. It also calls on the federal government to improve coordination with state governments in this area. CARNEGIE COMMISSION REPORTS The Carnegie Commission on Science, Technology, and Government composed of individuals with broad experience in government and in sci ence and technology-was established in April 1 988 to assess the process by which the government incorporates scientific and technical knowledge into policy and decisionmaking. The Commission has published a series of reports, two of which are relevant to technology policy. The earlier report, New Thinking and American Defense Technology, focuses on defense technology needs . It notes that political, economic, and technological changes around the world call for creative adaptation by gov ernment. These changes include the momentous political changes in the Soviet Union and Eastern Europe, the loss of American dominance over many fields of technology, and the Department of Defense's increasing difficulty in selecting, procuring, and managing the technology upon which it depends . The report identifies adaptations in government organization and deci sionmaking processes that would help fundamental readjustment to occur. It makes recommendations on providing high-level attention and oversight of science and technology issues in the White House and in the Department of Defense. It also makes recommendations on strengthening the defense technology base, stimulating the diffusion of high-leverage technologies from the laboratory to the field, stimulating the diffusion of dual-use tech nologies into industry, and increasing defense use of commercial technology. The other report, Technology and Economic Perform ance, argues that in the future both economic performance and national defense will depend on commercially driven technology. The United States can no longer afford to have two technology bases-commercial and military-which are segregated from each other. Rather, the government must work deliberately to advance both civilian and military technology and create a truly na tional technology base. 13
Although the report recognizes that the primary responsibility for com mercial technology rests with private industry, it asserts that there is an important federal role in supporting generic technology, defined as technolo gy that can contribute to a broad spectrum of uses . Toward this end the report recommends that the DOD and other federal agencies should have programs that enable their technology developments to serve commercial industry needs as well as military needs . One of the key recommendations is that the Defense Advanced Research Projects Agency IDARPA) be trans formed into a National Advanced Research Projects Agency I NARPA) to provide stronger linkages between military needs and commercial industry. Technology and Economic Perform ance also recommends changes in government organization and decisionmaking to improve the contributions of technology to economic performance. It argues that national technology investments must be driven by a "policy broader than simply the support of federal missions, " one that "takes full account of the global nature of mod ern industrial technology. " The report also argues that there is a need for a structure in the Executive Office of the President and the White House that can "develop and review federal programs and initiatives for advancing and diffusing technology and can assure consistent and timely policy and pro gram decisions " and recommends new functions for OSTP and the National Security Council to achieve this. The report recommends that the President issue a directive defining federal responsibilities and roles in developing generic and precompetitive R&D to benefit U . S . economic performance. 14
