National Academies Press: OpenBook

Allocating Federal Funds for Science and Technology (1995)

Chapter: Part I: Improving the Allocation Process for Federal Science and Technology

« Previous: Front Matter
Suggested Citation:"Part I: Improving the Allocation Process for Federal Science and Technology." Institute of Medicine, National Academy of Sciences, National Academy of Engineering, and National Research Council. 1995. Allocating Federal Funds for Science and Technology. Washington, DC: The National Academies Press. doi: 10.17226/5040.
×
Page 1
Suggested Citation:"Part I: Improving the Allocation Process for Federal Science and Technology." Institute of Medicine, National Academy of Sciences, National Academy of Engineering, and National Research Council. 1995. Allocating Federal Funds for Science and Technology. Washington, DC: The National Academies Press. doi: 10.17226/5040.
×
Page 2
Suggested Citation:"Part I: Improving the Allocation Process for Federal Science and Technology." Institute of Medicine, National Academy of Sciences, National Academy of Engineering, and National Research Council. 1995. Allocating Federal Funds for Science and Technology. Washington, DC: The National Academies Press. doi: 10.17226/5040.
×
Page 3
Suggested Citation:"Part I: Improving the Allocation Process for Federal Science and Technology." Institute of Medicine, National Academy of Sciences, National Academy of Engineering, and National Research Council. 1995. Allocating Federal Funds for Science and Technology. Washington, DC: The National Academies Press. doi: 10.17226/5040.
×
Page 4
Suggested Citation:"Part I: Improving the Allocation Process for Federal Science and Technology." Institute of Medicine, National Academy of Sciences, National Academy of Engineering, and National Research Council. 1995. Allocating Federal Funds for Science and Technology. Washington, DC: The National Academies Press. doi: 10.17226/5040.
×
Page 5
Suggested Citation:"Part I: Improving the Allocation Process for Federal Science and Technology." Institute of Medicine, National Academy of Sciences, National Academy of Engineering, and National Research Council. 1995. Allocating Federal Funds for Science and Technology. Washington, DC: The National Academies Press. doi: 10.17226/5040.
×
Page 6
Suggested Citation:"Part I: Improving the Allocation Process for Federal Science and Technology." Institute of Medicine, National Academy of Sciences, National Academy of Engineering, and National Research Council. 1995. Allocating Federal Funds for Science and Technology. Washington, DC: The National Academies Press. doi: 10.17226/5040.
×
Page 7
Suggested Citation:"Part I: Improving the Allocation Process for Federal Science and Technology." Institute of Medicine, National Academy of Sciences, National Academy of Engineering, and National Research Council. 1995. Allocating Federal Funds for Science and Technology. Washington, DC: The National Academies Press. doi: 10.17226/5040.
×
Page 8
Suggested Citation:"Part I: Improving the Allocation Process for Federal Science and Technology." Institute of Medicine, National Academy of Sciences, National Academy of Engineering, and National Research Council. 1995. Allocating Federal Funds for Science and Technology. Washington, DC: The National Academies Press. doi: 10.17226/5040.
×
Page 9
Suggested Citation:"Part I: Improving the Allocation Process for Federal Science and Technology." Institute of Medicine, National Academy of Sciences, National Academy of Engineering, and National Research Council. 1995. Allocating Federal Funds for Science and Technology. Washington, DC: The National Academies Press. doi: 10.17226/5040.
×
Page 10
Suggested Citation:"Part I: Improving the Allocation Process for Federal Science and Technology." Institute of Medicine, National Academy of Sciences, National Academy of Engineering, and National Research Council. 1995. Allocating Federal Funds for Science and Technology. Washington, DC: The National Academies Press. doi: 10.17226/5040.
×
Page 11
Suggested Citation:"Part I: Improving the Allocation Process for Federal Science and Technology." Institute of Medicine, National Academy of Sciences, National Academy of Engineering, and National Research Council. 1995. Allocating Federal Funds for Science and Technology. Washington, DC: The National Academies Press. doi: 10.17226/5040.
×
Page 12
Suggested Citation:"Part I: Improving the Allocation Process for Federal Science and Technology." Institute of Medicine, National Academy of Sciences, National Academy of Engineering, and National Research Council. 1995. Allocating Federal Funds for Science and Technology. Washington, DC: The National Academies Press. doi: 10.17226/5040.
×
Page 13
Suggested Citation:"Part I: Improving the Allocation Process for Federal Science and Technology." Institute of Medicine, National Academy of Sciences, National Academy of Engineering, and National Research Council. 1995. Allocating Federal Funds for Science and Technology. Washington, DC: The National Academies Press. doi: 10.17226/5040.
×
Page 14
Suggested Citation:"Part I: Improving the Allocation Process for Federal Science and Technology." Institute of Medicine, National Academy of Sciences, National Academy of Engineering, and National Research Council. 1995. Allocating Federal Funds for Science and Technology. Washington, DC: The National Academies Press. doi: 10.17226/5040.
×
Page 15
Suggested Citation:"Part I: Improving the Allocation Process for Federal Science and Technology." Institute of Medicine, National Academy of Sciences, National Academy of Engineering, and National Research Council. 1995. Allocating Federal Funds for Science and Technology. Washington, DC: The National Academies Press. doi: 10.17226/5040.
×
Page 16
Suggested Citation:"Part I: Improving the Allocation Process for Federal Science and Technology." Institute of Medicine, National Academy of Sciences, National Academy of Engineering, and National Research Council. 1995. Allocating Federal Funds for Science and Technology. Washington, DC: The National Academies Press. doi: 10.17226/5040.
×
Page 17
Suggested Citation:"Part I: Improving the Allocation Process for Federal Science and Technology." Institute of Medicine, National Academy of Sciences, National Academy of Engineering, and National Research Council. 1995. Allocating Federal Funds for Science and Technology. Washington, DC: The National Academies Press. doi: 10.17226/5040.
×
Page 18
Suggested Citation:"Part I: Improving the Allocation Process for Federal Science and Technology." Institute of Medicine, National Academy of Sciences, National Academy of Engineering, and National Research Council. 1995. Allocating Federal Funds for Science and Technology. Washington, DC: The National Academies Press. doi: 10.17226/5040.
×
Page 19
Suggested Citation:"Part I: Improving the Allocation Process for Federal Science and Technology." Institute of Medicine, National Academy of Sciences, National Academy of Engineering, and National Research Council. 1995. Allocating Federal Funds for Science and Technology. Washington, DC: The National Academies Press. doi: 10.17226/5040.
×
Page 20
Suggested Citation:"Part I: Improving the Allocation Process for Federal Science and Technology." Institute of Medicine, National Academy of Sciences, National Academy of Engineering, and National Research Council. 1995. Allocating Federal Funds for Science and Technology. Washington, DC: The National Academies Press. doi: 10.17226/5040.
×
Page 21
Suggested Citation:"Part I: Improving the Allocation Process for Federal Science and Technology." Institute of Medicine, National Academy of Sciences, National Academy of Engineering, and National Research Council. 1995. Allocating Federal Funds for Science and Technology. Washington, DC: The National Academies Press. doi: 10.17226/5040.
×
Page 22
Suggested Citation:"Part I: Improving the Allocation Process for Federal Science and Technology." Institute of Medicine, National Academy of Sciences, National Academy of Engineering, and National Research Council. 1995. Allocating Federal Funds for Science and Technology. Washington, DC: The National Academies Press. doi: 10.17226/5040.
×
Page 23
Suggested Citation:"Part I: Improving the Allocation Process for Federal Science and Technology." Institute of Medicine, National Academy of Sciences, National Academy of Engineering, and National Research Council. 1995. Allocating Federal Funds for Science and Technology. Washington, DC: The National Academies Press. doi: 10.17226/5040.
×
Page 24
Suggested Citation:"Part I: Improving the Allocation Process for Federal Science and Technology." Institute of Medicine, National Academy of Sciences, National Academy of Engineering, and National Research Council. 1995. Allocating Federal Funds for Science and Technology. Washington, DC: The National Academies Press. doi: 10.17226/5040.
×
Page 25
Suggested Citation:"Part I: Improving the Allocation Process for Federal Science and Technology." Institute of Medicine, National Academy of Sciences, National Academy of Engineering, and National Research Council. 1995. Allocating Federal Funds for Science and Technology. Washington, DC: The National Academies Press. doi: 10.17226/5040.
×
Page 26
Suggested Citation:"Part I: Improving the Allocation Process for Federal Science and Technology." Institute of Medicine, National Academy of Sciences, National Academy of Engineering, and National Research Council. 1995. Allocating Federal Funds for Science and Technology. Washington, DC: The National Academies Press. doi: 10.17226/5040.
×
Page 27
Suggested Citation:"Part I: Improving the Allocation Process for Federal Science and Technology." Institute of Medicine, National Academy of Sciences, National Academy of Engineering, and National Research Council. 1995. Allocating Federal Funds for Science and Technology. Washington, DC: The National Academies Press. doi: 10.17226/5040.
×
Page 28
Suggested Citation:"Part I: Improving the Allocation Process for Federal Science and Technology." Institute of Medicine, National Academy of Sciences, National Academy of Engineering, and National Research Council. 1995. Allocating Federal Funds for Science and Technology. Washington, DC: The National Academies Press. doi: 10.17226/5040.
×
Page 29
Suggested Citation:"Part I: Improving the Allocation Process for Federal Science and Technology." Institute of Medicine, National Academy of Sciences, National Academy of Engineering, and National Research Council. 1995. Allocating Federal Funds for Science and Technology. Washington, DC: The National Academies Press. doi: 10.17226/5040.
×
Page 30
Suggested Citation:"Part I: Improving the Allocation Process for Federal Science and Technology." Institute of Medicine, National Academy of Sciences, National Academy of Engineering, and National Research Council. 1995. Allocating Federal Funds for Science and Technology. Washington, DC: The National Academies Press. doi: 10.17226/5040.
×
Page 31
Suggested Citation:"Part I: Improving the Allocation Process for Federal Science and Technology." Institute of Medicine, National Academy of Sciences, National Academy of Engineering, and National Research Council. 1995. Allocating Federal Funds for Science and Technology. Washington, DC: The National Academies Press. doi: 10.17226/5040.
×
Page 32
Suggested Citation:"Part I: Improving the Allocation Process for Federal Science and Technology." Institute of Medicine, National Academy of Sciences, National Academy of Engineering, and National Research Council. 1995. Allocating Federal Funds for Science and Technology. Washington, DC: The National Academies Press. doi: 10.17226/5040.
×
Page 33
Suggested Citation:"Part I: Improving the Allocation Process for Federal Science and Technology." Institute of Medicine, National Academy of Sciences, National Academy of Engineering, and National Research Council. 1995. Allocating Federal Funds for Science and Technology. Washington, DC: The National Academies Press. doi: 10.17226/5040.
×
Page 34
Suggested Citation:"Part I: Improving the Allocation Process for Federal Science and Technology." Institute of Medicine, National Academy of Sciences, National Academy of Engineering, and National Research Council. 1995. Allocating Federal Funds for Science and Technology. Washington, DC: The National Academies Press. doi: 10.17226/5040.
×
Page 35
Suggested Citation:"Part I: Improving the Allocation Process for Federal Science and Technology." Institute of Medicine, National Academy of Sciences, National Academy of Engineering, and National Research Council. 1995. Allocating Federal Funds for Science and Technology. Washington, DC: The National Academies Press. doi: 10.17226/5040.
×
Page 36
Suggested Citation:"Part I: Improving the Allocation Process for Federal Science and Technology." Institute of Medicine, National Academy of Sciences, National Academy of Engineering, and National Research Council. 1995. Allocating Federal Funds for Science and Technology. Washington, DC: The National Academies Press. doi: 10.17226/5040.
×
Page 37
Suggested Citation:"Part I: Improving the Allocation Process for Federal Science and Technology." Institute of Medicine, National Academy of Sciences, National Academy of Engineering, and National Research Council. 1995. Allocating Federal Funds for Science and Technology. Washington, DC: The National Academies Press. doi: 10.17226/5040.
×
Page 38

Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

IMPROVING THE ALLOCATION PROCESS / 1 Part I Improving the Allocation Process for Federal Science and Technology 1

Determining Principles for Allocating Federal Funds The federal government has played a pivotal role in developing the world’s most successful system of research and development. Over the past 5 decades the U.S. scientific and technical enterprise has expanded dramatically, and the federal investments in it have produced enormous benefits for the nation’s economy, na- tional defense, health, and social well-being. Science and technology will be at least as important for our nation’s future as they have been for our past, but further expansion of federal funding for research and development is unrealistic in the next several years. Both the current administration’s 10-year budget plan and the 7-year plans passed by the House and Senate propose significant reductions in federal dis- cretionary spending. Maintaining the vigor of research and development is impor- tant—indeed essential—to the nation’s future and will require the ability to increase funding for new opportunities selectively, even while reducing the overall budget. The Committee on Criteria for Federal Support of Research and Development believes that it will be possible to sustain this country’s scientific and technological preeminence and the strong federal role within current fiscal constraints if the recommendations in this report are adopted. Ensuring the nation’s future health, however, may well require augmented investments later—after the current period of reorganization and consolidation has helped control costs and sharpen focus. As we consider how to restructure federally funded research and development to meet today’s budget realities, it is important to recognize the considerable strengths of the current system (see Supplement 1 for historical background). Those strengths should not be lost. “Top-down” mission-oriented management and “bottom-up” investigator-initiated research projects have combined to create a powerful research and development engine that is the envy of the world. Computer science, surface science, molecular biology, and other fields have emerged in re- sponse to new opportunities, and widely disparate fields have been combined to create entirely new applications. Competitively funded research and development projects subject to national merit review and conducted in every state of our nation have proven particularly effective. Federally funded university science and engi- neering, in addition to yielding new discoveries, has produced new generations of scientists and engineers who serve in academia, industry, and government and also fill critical management positions there. Investments in science have dramatically expanded our knowledge of ourselves and our universe, and new technologies have improved our daily lives. The fruits of federally funded research and development have been applied effectively by U.S. industry. Drawing on the support provided by many sponsoring agencies and the results from a wide range of performing institu- tions, the American entrepreneurial spirit has tapped federally funded research and development to form entirely new industries in areas such as microelectronics, biotechnology, and communications and information technology, among others. The federal government invests in a portfolio of highly diversified activities in research and development in many disciplines—but there has not been an actively managed federal “budget.” With the exception of selected recent initiatives, the 3

4 / IMPROVING THE ALLOCATION PROCESS federal R&D budget has been tallied up after the fact—it is the sum of R&D expendi- tures from federal departments and agencies used mainly for comparison with other federal expenditures or with the R&D budgets of other industrialized nations. Be- cause it is added together after the individual budget and appropriations decisions have been made, it has never been “managed” as a coherent whole. Yet there is a federal process—one that engages a broad range of issues, complex interactions, and conflicts—from which de facto priorities emerge. Those priorities reflect contending goals, different performers (public or private; university, industry, or federal laboratories), multiple funding sources (almost every federal department and agency), competing jurisdictions (executive and legislative branches; budget, appro- priations, and authorization committees within Congress), and international eco- nomic competition (proprietary national investment or international cooperation). The extraordinary success of U.S. research and development can be continued within current budget constraints. However, ensuring continuing success will require rigorous discipline and a coherent and comprehensive approach for decid- ing how resources are used. This report proposes a new process for allocating and monitoring federal spending for science and technology across disciplines and government agencies. With an integrated view and a coherent federal science and technology budget, it will be possible to make selective reductions in some areas, so as to free badly needed resources for more productive investments and new oppor- tunities that arise. Defining a Federal Science and Technology Budget To obtain advice on an appropriate budget design, Congress asked this com- mittee to recommend criteria for federal support of research and development. Federal research and development expenditures are reported in current budget documents as being more than $70 billion annually.1 Almost half of this amount, however, is spent on such activities as testing and evaluation of new aircraft and weapons systems in the Department of Defense, nuclear weapons work in the Department of Energy, and missions operations and evaluation in the National Aeronautics and Space Administration. Those activities are very important, but they involve the demonstration, testing, and evaluation of current knowledge and exist- ing technologies. Even when they are technologically advanced, these functions do not involve the creation of new knowledge and the development of new technolo- gies. The federal research and development budget as currently reported is thus misleading, because it includes large items that do not conform to the usual mean- ing of research and development.2 In studying how to ensure the continuing vibrance of U.S. research and devel- opment, the committee focused on the $35 billion to $40 billion in federal research and development spent annually on expanding fundamental knowledge and creating new technologies (see Supplement 2). Those are the expenditures that constitute federal support for a national science and technology base that underlies not only defense and space programs, but also the advancement of scientific knowledge and new technology used in many fields and industries. To focus discussion and more clearly identify this investment component of the federal research and development budget, the committee developed the term federal science and technology (FS&T) and an accompanying budget index (for details, see Supplement 2, especially Boxes 4 II.3 and II.4). FS&T is used throughout this report to describe federal funding for

IMPROVING THE ALLOCATION PROCESS / 5 those science and technology activities that produce or expand the use of new knowledge and new or enabling technologies (for examples, see Table I.1). The committee recommends that, in the future, government support for basic and applied science and technology be presented, analyzed, and considered in terms of an FS&T budget. The current FS&T budget of $35 billion to $40 billion, including both training and research and development, represents about 0.5 percent of the nation’s gross domestic product (see Box II.3 for background and definition). The distribution of funds for research and development as traditionally reported, compared to FS&T, illustrates the difference between the two concepts. Private industry performs the largest share of federally funded research and development as traditionally reported, but most of this work is downstream product demonstration, testing, and evaluation that is excluded from the committee’s recommended new measure. When the FS&T measure is used instead, industry drops from first to third. Federal laboratories (both in-house and contractor-run) account for the largest share (39%) of FS&T, followed by academic institutions (31%), industry (21%), and non- profit and other institutions (9%). (See Supplement 2 for additional details.) The committee’s definition of FS&T deliberately blurs any distinction between basic and applied science or between science and technology (see Table I.1). A complex relationship has evolved between basic and applied science and technol- ogy. In most instances, the linear sequential view of innovation is simplistic and misleading. Basic and applied science and technology are treated here as one inter- related enterprise, as they are conducted in the science and engineering schools of our universities and in federal laboratories. For further explanation of why the com- mittee aggregates these activities within a single budget, see Supplements 1 and 4. Structure and Approach of This Report Part I of this report focuses on the committee’s 13 recommendations for improving the process of allocating federal funds for science and technology. The conclusions, recommendations, and discussion are organized and presented to serve the following five purposes: 1. Make the allocation process more coherent, systematic, and comprehensive; 2. Determine total federal spending for federal science and technology, based on a clear commitment to ensuring U.S. leadership; 3. Allocate funds to the best projects and people; 4. Ensure that sound scientific and technical advice guides allocation deci- sions; and 5. Improve federal management of research and development activities. Part II contains four supplements that provide critical background for and explain the rationale behind the committee’s recommendations. Supplement 1 briefly surveys science policy and the impact of federal support since World War II; Supplement 2 describes the derivation of the FS&T budget number; Supplement 3 outlines the existing process for allocating funds; and Supplement 4 treats the distinction between basic and applied research and the interplay between federal and industrial funding. Four appendixes give details that bear on committee pro- cess and background. A fifth lists the acronyms used in this report. 5

6 / IMPROVING THE ALLOCATION PROCESS TABLE I.1 Federal Science and Technology: Examples of Work That Enables Continuing U.S. Innovation Characteristics Examples (Funding Agencies) Basic Research Creates new knowledge; is Characterizing the mechanism of generic, non-appropriable, and Alzheimer’s disease—at many openly available; is often done universities and NIH (NIH) with no specific application in Studying the physics of cloud formation— mind; requires a long-term at universities and the National Center commitment for Atmospheric Research (NOAA, NSF) Exploring the chemistry of photo- synthesis—at many universities and federal laboratories (USDA, NSF) Elucidating basic components of matter through particle physics—at Fermi Laboratory and many universities (DOE, NSF) Understanding how earthquakes and volcanoes are related to plate tectonics— at universities and USGS laboratories (USGS, NSF) Exploring the changes in the universe over time through astronomy and cosmology— at universities, national laboratories, and NASA centers (NSF, NASA, DOE) Studying how language is acquired—at universities (NSF, NIH) Studying risk perception and methods of risk management—at universities and EPA, DOE, and DOD laboratories (EPA, DOE, DOD, NSF) Applied Research Uses research methods to address Predicting ground motion and landslides questions with a specific purpose; caused by earthquakes—at universities pays explicit attention to and federal laboratories (USGS) producing knowledge relevant Discovering flexible, non-brittle, to producing a technology or manufacturable, high-temperature service; overlaps extensively superconducting wire—at Los Alamos with basic research; can be National Laboratory and universities short- or long-term (DOE, DOD) Conducting clinical research on cancer chemotherapy and clinical trial methodology—at NIH, FDA, and academic health centers (NIH, FDA, CDC) Studying ethnography and sociology of drug abuse rituals related to AIDS transmission—at state health departments and universities (NIH, CDC) Studying econometric projection techniques—in universities and various 6 federal agencies (NSF, DHHS, USDA,DOD)

IMPROVING THE ALLOCATION PROCESS / 7 TABLE I.1 Continued Characteristics Examples (Funding Agencies) Applied Research (continued) Discovering diagnostics and vaccines to combat emerging infections—at universities, foreign research centers, and CDC, NIH, and DOD laboratories (DOD, CDC, NIH, USAID) Designing a new programming language— at universities and software companies (DOD, NSF) Fundamental Technology Development Develops prototypes; uses research Building an optical computer—at uni- findings to develop practical versities and computer firms (NSF, DOD) applications; is of general interest Developing new approaches to parallel to a sector or sectors, but full processing, software, and hardware—at returns cannot be captured by any FFRDCs, universities, and private firms one company; is usually short-term, (DOD, NSF) but can be long-term; is not Building a prototype DNA sequencing developed for one identifiable machine—at Caltech (NSF) commercial or military product; Conducting clinical trials of a drug to treat often makes use of new knowledge heroin addiction—at VA hospitals, NIH, from basic or applied research and academic health centers (DVA, NIH) Developing high-temperature ceramics for internal combustion engines—at universities and FFRDCs (NIST, DOD) Studying vitrification for storage of nuclear and hazardous waste—at national laboratories and some university engineering departments (DOE, EPA) Identifying a specific laser for use in guided missiles (before use in any one missile)— at DOD and university laboratories (DOD) Adapting cognitive science of language recognition for development of natural- language software—at universities and national laboratories (NSF, NIH, DOD) Developing strong, high-temperature alloys for engines, but not for a jet engine for a particular aircraft—at universities, NASA centers, DOD laboratories, and private firms (NASA, DOD) Breeding drought-resistant or saline-tolerant crop plants—at USDA centers and universities (USDA, USAID) Adapting fiber-optic laser surgery for prostate cancer—at universities and national laboratories (DOE, DOD, NIH) Developing a prototype for a walking robot —at FFRDCs, universities, and national laboratories (NASA, DOD, NSF, DOE) 7

8 / IMPROVING THE ALLOCATION PROCESS Conclusions, Recommendations, and Discussion The committee believes that the following 13 recommendations, as a set, will enable continuance of a strong federal research and development system at a time of change and stress. The United States Must Develop a More Coherent Budget Process for Science and Technology. (Recommendations 1-3) RECOMMENDATION 1. The President should present an annual comprehensive FS&T budget, including areas of increased and reduced emphasis. The budget should be sufficient to serve national priorities and foster a world-class scientific and techni- cal enterprise. Currently, the federal research and development budget is typically defined as the sum of the research and development funds obligated or proposed by federal departments and agencies for programs and facilities classified as R&D. The re- search and development budget is never considered as an integrated whole during the development of the President’s budget or given an overall review by Congress. Rather, the research and development budget is developed in the context of indi- vidual agency missions and programs. Recent administrations have attempted to introduce more coherence in fed- eral policy for R&D by creating an intergovernmental committee structure to coordi- nate budgeting for high-priority programs that involve more than one agency, for example, research on global change and on high-performance computing and com- munications. 3 The President may even single out certain programs or facilities as presidential initiatives. However, it has been difficult to shape those initiatives into integrated efforts that are more than an aggregation of agency programs that already exist. When the budget reaches Congress, it is disaggregated into the various appro- priations bills and considered by many authorizing committees and appropriations subcommittees; efforts to achieve integrated initiatives can be quickly undone. The existing approach works reasonably well during periods of growth, when new opportunities and shifts in emphasis can be accommodated within budget increases—without cutting back or closing down older activities that no longer rank as high priorities. But the disaggregated approach is less suitable when major cutbacks must be made. For example, the Department of Defense budget for re- search and development historically has supported the majority of federal funding for academic research and training in electrical engineering, metallurgy and materi- 8

IMPROVING THE ALLOCATION PROCESS / 9 als, and computer science;4 the Department of Energy is the largest contributor to other fields such as materials science (when national laboratories are included). All science and engineering depend critically on those fields, and cuts in Department of Defense and Department of Energy programs made for other purposes might well have significant and inadvertent impacts on diverse research and development programs conducted in many other agencies and having clear importance to the country. U.S. leadership in science and technology depends on more than the basic research supported by the National Science Foundation and the National Institutes of Health. It also depends on the science and engineering funded by the Depart- ment of Energy, Department of Defense, National Aeronautics and Space Administra- tion, National Institute of Standards and Technology, and other mission agencies. Budget cuts require an integrated consideration of their effects. Only in this way can the President and Congress determine the levels of investment for impor- tant, high-priority areas of research and development (especially those involving multiple agencies or reallocations among agencies), make the trade-offs needed to free up funds for new initiatives within the FS&T budget, and incorporate the results of systematic program and agency evaluations. Achieving such coordination will require significant changes in how the executive and legislative branches deal with the budget for federal science and technology. The requisite changes are discussed in Recommendations 2 and 3. Questions to Consider in the Executive Office of the President The President, the Office of Management and Budget, and the President’s Science and Technology Advisor should employ a process that explicitly and publicly addresses pertinent questions, such as those listed below, as a means of providing budget guidance to agencies and a rationale to Congress and the public (see Box I.1 for a description of how the process might work).5 • Is the aggregate FS&T budget adequate to support the human and material resources that will maintain the United States as one of the leading nations in re- search and development in accord with the overarching national goals proposed in Recommendation 4 below? • Does the FS&T budget recognize presidential initiatives, which might in- clude national security needs; technical training of personnel in areas of national need; promising scientific opportunities; human spaceflight; research and develop- ment of economic importance, such as materials science; emerging public health problems; environmental or disaster mitigation; international projects; or responses to policies of other countries? • Does the FS&T budget reflect overall federal budget constraints? • Does the FS&T budget maintain strength by reallocating funds effectively? • Are resources for laboratories, centers, and projects with obsolete missions or of insufficient quality being phased out, reduced, or redirected? • Are measures proposed for reducing costs and inefficiencies? • Is the FS&T budget appropriately balanced, and does it take account of the interdependencies of programs supported by different departments and agencies? 9

10 / IMPROVING THE ALLOCATION PROCESS BOX I.1 PRIORITY SETTING AND DETERMINING FS&T BUDGETS AT THE PRESIDENTIAL LEVEL: HOW IT MIGHT WORK At the beginning of the budget cycle, the President, with advice from the Director of the Office of Management and Budget and the President’s Science and Technology Advisor,1 de- cides on the aggregate level of funding for federal science and technology (FS&T) across the government that will maintain a leadership role for the United States and preserve the ability of agencies to perform their missions. Guidance is sent to agencies listing presidential priorities, including trade-offs and reallocations across agencies that reflect these priorities, as well as crises, opportunities, or evaluations. An extract of the President’s budget message to Congress might read: “The federal science and technology budget is $XX billion dollars. Although this represents a reduction of $X billion, international comparisons show that it will enable us to maintain a world-class position in fundamental science and technology and a leadership posi- tion in the select fields of A, B, and C. The budget reduction was achieved by beginning to close and merge X federal laboratories and federally funded research and development centers (FFRDCs) as recommended by the laboratory-closing commission, and shutting down other programs no longer necessary or of poor quality. Within this budget reduction, I am recom- mending increases in funding for the physical sciences at the National Science Foundation; material sciences at federal laboratories, FFRDCs, and university materials research centers; research on the causes of violence at the National Science Foundation and on interventions to prevent it at the National Institute of Mental Health; research on genetic origins of disease at the National Institutes of Health; and microelectronics and sensor development in the Depart- ment of Defense programs. These initiatives will meet mission needs and contribute to the nation’s overall strength in science and technology. . . . ” 1 The Science and Technology Advisor has a variety of mechanisms to learn about opportunities to in- crease or decrease program budgets: the President’s Committee of Advisors on Science and Technology, the National Science and Technology Council, and meetings with scientists and engineers from universi- ties, federal laboratories, and industry, as well as meetings with science ministers from other countries. RECOMMENDATION 2. Departments and agencies should make FS&T allocation decisions based on clearly articulated criteria that are congruent with those used by the Executive Office of the President and by Congress. Examples of important questions to be considered by federal departments and agencies in allocating FS&T funding include the following (see Box I.2 for a descrip- tion of how the process might work): • Does the program under consideration contribute significantly to the agency’s mission? • Are there major new opportunities for research and development within the purview of this agency that should be proposed? 10

IMPROVING THE ALLOCATION PROCESS / 11 BOX I.2 EVALUATION OF FS&T PROGRAMS AT THE DEPARTMENT AND AGENCY LEVEL: HOW IT MIGHT WORK Cabinet secretaries or agency directors respond to presidential priorities and guidance. The National Science and Technology Council is a vehicle for coordinating cross-agency pro- grams and assessing the adequacy of the entire FS&T budget. Budgets reflect federal fiscal realities, the results of performance evaluations, and the recommendations of special labora- tory-review commissions, and they allow for trade-offs to support new opportunities and new missions by closing out projects and laboratories with outmoded missions or poor evaluations. A response to the President’s stated priorities from the director of the National Institutes of Health and the secretary of Health and Human Services, for example, might look like the following: “Dear Mr. (or Ms.) President: “We recommend the termination of programs focused on A and the reduction of those focused on B, following an external review. The savings from those closings and reductions will total $XX million this year, but savings in future fiscal years will be larger, as shown in the accompanying projection. We propose to reallocate $X of those savings to high-priority items and emerging opportunities and problems. In response to your national priorities, we propose to increase funding for research by $X on the causes of violence and interventions to prevent it at the National Institute of Mental Health. In accord with your wishes to increase the na- tional investment in the genetic origins of disease, $X million has been allocated, with $X going to the National Center for Human Genome Research, and the remainder going to several relevant institutes of the National Institutes of Health (NIH), as shown in the accompanying chart. . . . “Since the time of initial budget planning, we have become aware of the alarming spread of the “alpha” virus, a new infectious agent. The agent was identified by the rapid response of investigators in the NIH intramural research program, working with the Centers for Disease Control and Prevention in an international collaboration. We have used a fraction of the NIH discretionary account from the current fiscal year to fund small grant supplements to several academic health centers, as well as several laboratories in the intramural program of the NIH. Given the public health risk to the American people, we believe this is an urgent national priority, and NIH needs to mount a much larger and more permanent research program, in- cluding an extramural research effort to accompany our new intramural commitments. We request an additional $X million for this purpose. . . .” • Does the allocation of budget reductions or increases recognize the highest- priority and highest-quality programs? Does it allow for new initiatives? • Does the agency’s external scientific and technical advisory body agree with the choices and priorities? • Are the procedures for evaluating quality and mechanisms for using such evaluations both satisfactory? • Does the peer or competitive merit review process used in recommended programs identify the best projects and performers, whether intramural or extramu- ral? How is this demonstrated? 11

12 / IMPROVING THE ALLOCATION PROCESS • Do programs recognize the importance of innovative and creative yet high- risk projects, interdisciplinary projects, and support for young scientists or engi- neers? • Have trade-offs been made, cutting inferior or outmoded programs or divi- sions to reduce budgets and to enable new initiatives? • Is the agency maintaining the infrastructure for research and development important to fulfilling its mission? Do decision makers recognize the importance of projects that both conduct research and train scientists and engineers? • Does the allocation process fund the best performers equitably? Does it allow for the aspirations of institutions to improve their ability to compete and contribute nationally? • Do reallocation decisions among classes of performers maintain a critical mass of expertise in federal agencies for effective priority setting, procurement, and public oversight? RECOMMENDATION 3. Congress should create a process that examines the entire FS&T budget before the total federal budget is disaggregated into allocations to appropriations committees and subcommittees. Decisions to allocate public funds are the prerogative of elected officials. The committee understands that members of Congress must address national needs but also represent the interests of constituents in their states or districts. In a time of severe fiscal constraints, public officials must decide among the many demands for government funds. The committee believes that the FS&T budget deserves special care because of its importance to the future of the country and because of the inter- dependence of its parts. Thus, the committee recommends that the FS&T budget be presented as a comprehensive whole in the President’s budget and similarly consid- ered as a whole at the beginning of the congressional budget process before the total federal budget is disaggregated and sent to the appropriations committees and subcommittees (see Box I.3 for a description of how the process might work). The committee recognizes that FS&T needs will be only one determinant of appropria- tions subcommittee allocations, but failure to take FS&T needs into account in advance risks harming the innovative enterprise that is key to the nation’s future. Within the FS&T budget, it is crucial to be able to make trade-offs among agencies, programs, and performers in order to allow for new initiatives with funds freed by reducing or closing projects no longer needed or of insufficient quality. The budget committees in both houses of Congress should take FS&T needs into account in the relevant budget function categories, such as defense, health, space, energy, agriculture, and general science. Budget resolutions do not deter- mine appropriations decisions, however, but only set overall caps.6 The appropria- tions committees therefore also must assess FS&T needs, both before and after deciding allocations to subcommittees, and when considering specific line items within agencies. Further, the subcommittees should consider research and develop- 12

IMPROVING THE ALLOCATION PROCESS / 13 BOX I.3 CONSIDERING AND EVALUATING A COMPREHENSIVE FS&T BUDGET IN CONGRESS: HOW IT MIGHT WORK The process of congressional evaluation begins with an assessment of the overall FS&T budget and the allocations to the departments and agencies. The chairs of the relevant autho- rization and appropriations committees are involved in a process that evaluates the proposed levels, trade-offs, reallocations, and cuts and increases across the government. The budget committees then assign funding levels to the several budget categories in which the FS&T budget is embedded. The Congressional Budget Office (CBO) tracks the FS&T pool as it is affected by the activities of the appropriations subcommittees and reports its status to the cognizant committee chairs. The committees and subcommittees undertake their process of hearings, consultations, and markups. One novel feature of this process is attention to the FS&T budget as a whole, and the trade- offs within it, before decisions are made about allocations to budget functions and to appro- priations subcommittees. Another new feature is the monitoring of the FS&T pool throughout the process. Members, with the help of the CBO, can track the FS&T pool as trade-offs are made across and within agencies for the multiple purposes of meeting budget constraints; maintaining S&T leadership; fulfilling agency missions; responding to changing missions, op- portunities, and crises; ensuring quality control and oversight; and accomplishing organiza- tional reform. ment needs and the FS&T budget as a whole as they allocate funds for agencies within their jurisdictions and make trade-offs against other spending. A more coherent FS&T budget process in the Executive Branch should help Congress as well. The Carnegie Commission on Science, Technology, and Govern- ment recommended reorganization of the congressional committee structure and other measures.7 Even without such reorganization, however, the current budget process could be improved by making it more open, soliciting better advice about research and development needs from outside experts, and assessing research and development needs early in the process. Recent administrations and Congresses have already taken steps in this direction, but further measures are needed. Questions for Budget and Full Appropriations Committees to Consider • Is the priority given to research and development adequate compared to the priority accorded other objectives in the government-wide discretionary budget? • Is the total FS&T budget adequate to maintain a world-class level of scien- tific and technical performance by the United States? • Does the President’s FS&T budget sufficiently reflect fiscal constraints? • Are the President’s research and development priorities, trade-offs (e.g., reductions, closures, transfers, increases), and reallocations among agencies and programs appropriate? • Are allocations to the various federal budget functions sufficient for agen- cies to perform their missions? 13

14 / IMPROVING THE ALLOCATION PROCESS • Are there problems or opportunities identified by Congress that are not adequately accommodated in the President’s FS&T budget? Questions for Authorization Committees and Appropriations Subcommittees to Consider • Do the priorities of the authorization committee or appropriations subcom- mittee agree with those of the budget committee? • Does the authorization committee or appropriations subcommittee agree with the programs and allocations proposed for the agencies under its jurisdiction? • Have the committees or subcommittees identified research areas, fields, or enabling technologies that are neglected or overfunded in the President’s budget? • Are items added to the FS&T budget by Congress intended to meet an important national need? Can the designated recipient institution make a national or regional contribution? Is the funding subject to external merit review? Has the item been aired in open hearings? Does it displace other FS&T investments of higher national priority? • Will changes made by the committee or subcommittee have an impact on research and development programs outside its jurisdiction, and, if so, have they been taken into account? Considering the FS&T budget as a coherent whole can improve the allocation process but cannot eliminate conflicts among agencies, among congressional com- mittees and subcommittees, between the Senate and the House of Representatives, and between the executive and legislative branches. Such conflict is a part of the decentralized system of checks and balances in the U.S. federal system. The commit- tee believes, however, that implementing Recommendations 1 through 3 will im- prove the budget process, better focusing the nation’s public investment in research and development on the most important and promising opportunities. The United States Should Strive to Continue as the World Leader in Science and Technology. (Recommendations 4 and 5) RECOMMENDATION 4. The President and Congress should ensure that the FS&T budget is sufficient to allow the United States to achieve preeminence in a select number of fields and to perform at a world-class level in the other major fields.8 The pool of approximately $35 billion to $40 billion in annual public support for FS&T is large and diverse. The committee believes that it is possible within that budget to reduce some programs, eliminate others, increase support of high-oppor- tunity fields, and restrain federal spending—all while maintaining our nation’s tradition of excellence in science and technology. To continue as a world leader, 14

IMPROVING THE ALLOCATION PROCESS / 15 BOX I.4 EVALUATING FS&T OPPORTUNITIES AND MAKING INTERNATIONAL COMPARISONS: HOW IT MIGHT WORK Every five years, panels are convened to evaluate the fields in each major area of science and technology (e.g., physics, biology, electrical engineering), their standing in the world, and the resources needed to reach and maintain world-class position. Evaluation focuses on out- puts, such as important discoveries, and also on certain benchmarks of best practice, such as number of scientists and engineers and their training or the current state of the laboratories and research facilities. To avoid conflicts of interest, at least half of the panel will include a few nonscientists plus experts from fields outside but related to the fields being evaluated. The panel will also include specialists in the evaluated fields who are recruited from the United States and foreign countries. If any field within a major area is performing below world stan- dards but is judged to be a national priority, the panel will recommend that its budget be augmented or other changes made to bring it up to par. At the same time, the panel will identify the other fields with declining scientific opportunities and obsolete federal missions from which resources should be reallocated. Opportunities for international cost-sharing will be examined to achieve optimal use of federal funds devoted to science and technology. Evaluations will be commissioned by the National Science and Technology Council or its equivalent. The selection of fields for clear U.S. leadership from among those recommended by the panels will be made by the President and presidential advisors as part of the budget process. As an example, an extract of the President’s budget message might read: “I propose that the United States need not be so far ahead in experimental particle physics, but should operate at world levels, in this case by contributing to construction of the particle accelerator in Geneva, sponsored by the CERN, and funding the participation of U.S. scientists in its design and research. On the advice of my Council of Advisors on Science and Technology, I propose that the United States should remain clearly preeminent in the molecular biology of plants and animals for the following reasons. . . . Accordingly, I will include the necessary additional funds in the FS&T budgets of the National Institutes of Health, the Department of Agriculture, and the National Science Foundation to achieve this goal. . . .” the United States should strive for clear leadership in the most promising areas of science and technology and those deemed most important to our national goals. In other major fields, the United States should perform on a par with other nations so that it is “poised to pounce” if future discoveries increase the importance of one of these fields. If the nation sets priorities in this way (see bulleted items below) and uses them in conjunction with the FS&T budget process, the result will be better decisions about reallocating and restructuring the U.S. research and development enterprise, preserving its core strengths, and positioning it well for strong future performance. The international comparisons needed to assess U.S. achievement of its goals for leadership in research and development should be conducted by panels of the nation’s leading experts under White House auspices. Reallocation decisions should be made with the advice and guidance of these expert panels, capable of determin- ing the appropriate scope of the fields to assess and to judge the international stature of U.S. efforts in each field (see Box I.4 above for a discussion of how inter- national comparisons might work). These panels would recommend to the Presi- dent, his advisors, and Congress: 15

16 / IMPROVING THE ALLOCATION PROCESS • Which fields must attain or maintain preeminence, based on goals such as economic importance, national security, unusual opportunity for significant discov- eries, global resource or environmental issues, control of disease, mitigation of natural disasters, food production, a presidential initiative (such as human space- flight), or an unanticipated crisis; • Which fields require increases in funding, changes in direction, restructur- ing, or other actions to achieve these goals; and • Which fields have excess capacity (e.g., are producing too many new inves- tigators, have more laboratories or facilities than needed) relative to national needs and international benchmarks. The committee believes that designing the budget process so as to secure an FS&T budget sufficient to ensure preeminence in select fields and world status in others will allow the United States to maintain continued world leadership. The FS&T budget process must be coupled to systematic review of investments by the nation’s best scientific and technical experts, reporting to the highest reaches of government, to produce an appropriately balanced mix of activities. The committee emphasizes that wise federal investments will lead to the creation of new wealth in the future to an even greater extent than they have in the past. As a result, these investments will help reduce the federal deficit in the long run. After a period of budget constraints, reconfiguration, and adjustment, national needs may justify increased investments in FS&T. RECOMMENDATION 5. The United States should pursue interna- tional cooperation to share costs, to tap into the world’s best science and technology, and to meet national goals. International cooperation is most clearly appropriate for large and expensive facilities such as high-energy accelerators and nuclear fusion facilities; for projects requiring coordinated research programs, such as many in oceanography as well as studies of global climate change; and for cross-national comparisons of health, education, and economic development. Science is a global enterprise in which the United States must participate, for its own benefit and for that of the world. The scientific and engineering communi- ties in the United States benefit from ideas and technologies developed all over the world; indeed, to remain world-class, the nation’s scientists and engineers must be in touch with researchers around the globe. The United States also has important contributions to make in addressing the major problems of developing countries, such as disease, malnutrition, and overpopulation. In contributing to international scientific and technical collaborations and exchanges, enhancing free trade in ideas, and addressing major problems, the United States can contribute to improvements in the quality of life and pace of development in many countries. Ultimately, these efforts should also help expand global economic markets. 16

IMPROVING THE ALLOCATION PROCESS / 17 Maintaining U.S. Leadership in Science and Technology Despite Budget Constraints Will Require Discipline in the Allocation of Resources for Federal Investments. (Recommendations 6-9) RECOMMENDATION 6. Research and development conducted in federal laboratories9 should focus on the objectives of the spon- soring agency and not expand beyond the assigned missions of the laboratories. The size and activities of each laboratory should correspond to changes in mission requirements. As described in Supplement 1, the present research and development system developed in the context of postwar economic expansion and the Cold War. Be- cause the world has changed, we must reexamine the system of performers, phasing out weak or obsolete institutions (see Supplement 2, Box II.5, for a description of R&D performers). Many reports on federal laboratories have been produced in recent years, including major reviews in the past year of Department of Defense, National Aero- nautics and Space Administration, Department of Energy, and National Institutes of Health laboratories.10 All conclude that federal laboratories have an important role in a balanced program of federal science and technology. Compared with extramu- ral programs supporting academic and industrial research and development projects, federal laboratories offer distinctive features: relatively long term and stable funding of research programs; availability of unique facilities; full-time re- search opportunities without other distractions for staff scientists and engineers; closer links to the missions of their agencies; the ability to sustain programs for longer periods than those specified in the terms of a typical grant; and a capacity for rapid response to emergencies and sudden opportunities.11 Many federal laborato- ries serve functions that, although they may not be at the frontiers of creating new knowledge, are nonetheless essential to science and technology, such as providing precise measurements and specification of standards or fulfilling specific program needs in health, defense, agriculture, the environment, forestry, and other areas. Federal laboratories, however, have significant limitations. Study after study has shown the unfavorable environment that the federal government provides for research and development, through excessive and inflexible rules governing person- nel, supplies, equipment, and facilities.12 Today, federal laboratories also must accommodate shrinking budgets. Unfortunately, when government agencies receive fewer resources in real terms, the natural tendency is “to retain as much existing staff and infrastructure as possible in the face of a reduced budget, pull some con- tract work in-house, defer mission plans, and hope that future budgets will improve sufficiently . . . to reinstate programs.”13 That tendency will be reinforced by pres- sures from local constituencies, because federal laboratories are major sources of employment and potential economic spin-offs. The committee believes that budget cuts provide a special impetus to a process that the federal laboratories should be 17

18 / IMPROVING THE ALLOCATION PROCESS following at all times: continual review of their success in meeting the missions of their agencies. In the committee’s view, some of the major reasons for supporting federal laboratories—both those the government operates directly and those operated by contractors—are less compelling than in the past. For some purposes, such as software system design and integration, private-sector firms increasingly have the highly sophisticated research and development capabilities that once justified unique arrangements with federally funded research and development centers (FFRDCs).14 In addition, an increasing burden of federal regulations on those federal laboratories operated by universities and private firms has reduced many of the advantages of operation by nongovernment contractors, such as freedom from federal civil service restrictions and procurement regulations. The damage and inefficiency induced by micromanagement from Washington emerge as major themes in the many reviews of federal laboratories.15 Intrusions that come from agencies and through congressional mandates and earmarks are counterproductive, because any successful R&D laboratory must retain great flex- ibility and substantial autonomy to respond to rapidly paced scientific and technical change. The end of the Cold War coupled with the pressures of the federal deficit have already affected the national laboratories and other FFRDCs significantly. National Science Foundation (NSF) reports estimate an 18 percent decrease for FFRDCs between 1992 and 1994,16 and subsequent budget proposals by the President and Congress promise to cut substantially more. There remain, however, superb FFRDCs that contribute uniquely to their agency’s missions.17 It would be unwise to weaken these excellent performers. The recent review of NASA laboratories in fact pointed to several educational and management advantages of linking federally funded research to universities, and pointed to one NASA-funded FFRDC as a model for other NASA laboratories to emulate.18 The general presumption, however, is against creating new federal laboratories when an alternative exists. Moreover, existing laboratories should undergo renewed scrutiny, with the possibility of redi- recting or eliminating resources when mission requirements have diminished or if external reviewers judge that investments in a particular laboratory under review are less effective than other alternatives. The February 1995 external review task force on the Department of Energy national laboratories concluded that they have clear expertise in their traditional mission areas of national security, energy, and environmental protection and in the fields of fundamental science underlying those missions (e.g., in basic research associated with high-energy, nuclear, and condensed-matter physics).19 The task force viewed the DOE national laboratories as having “a distinctive role in conduct- ing long-term, often high-risk R&D, frequently through the utilization of capital- intensive facilities which are beyond the financial reach of industry and academia, and generally through the application of multidisciplinary teams of scientists and engineers.” However, the task force discouraged efforts of the DOE national labora- tories to develop new missions, such as research and development in support of 18

IMPROVING THE ALLOCATION PROCESS / 19 U.S. industry and national competitiveness, arguing that other mechanisms were more effective or appropriate.20 As a result, it concluded that the DOE national laboratory system should be “downsized” by refocusing on specific missions require- ments, and it called for a more appropriate division of labor among the various performers—national laboratories, industrial research institutions, and research universities.21 The committee concurs with the general thrust of these recommendations. Federal laboratories should not seek new missions unless they offer both a critical advantage over other performers and the new mission better meets national needs. As with intramural laboratories, there is a natural tendency to maintain national laboratories and other FFRDCs with special relationships to their sponsoring agen- cies until the budget climate improves.22 Their size and location make several DOE national laboratories particularly important sources of employment. Local factors are important to take into account in a transition strategy, but the size of the labora- tories should in the long term be guided by mission requirements and national need. The best FFRDCs that serve the specialized needs of their sponsoring agencies should be sustained. Resizing of the national laboratory system should be balanced and appropriate within the larger division of labor among all federally funded per- formers of research and development. The National Science and Technology Council (NSTC) recently produced a set of recommendations for NASA, DOE, and DOD laboratories.23 NSTC noted “manage- ment problems that must be repaired” at NASA and DOE, particularly overstaffing within the agencies, overlap among missions of different laboratories, and excess micromanagement, especially at DOE. NSTC endorsed recent steps by NASA and DOE to reduce the size and simplify the management of their laboratories. NSTC judged management of DOD laboratories to be “generally effective,” but noted that DOD “missed an opportunity” to improve cross-service integration, reduce redun- dancy, and shrink existing laboratories.24 The NSTC review and the agencies’ own internal reviews, as well as the recent reviews of intramural research at NIH, are only now taking hold. The recom- mendations of the many reports, as well as oversight actions by Congress, should improve the effectiveness of the federal laboratory system, reducing its size and cost and improving its management. Federal laboratories will continue to play an impor- tant role in U.S. science and technology. The committee is concerned, however, that current reforms may bog down. The 1995 DOD review25 recommended only a few major closings, for example. Recent reports on NIH, DOE, and NASA laborato- ries have not recommended closure of specific laboratories; however, the reports on NASA and DOE noted that such closures may be necessary in the future,26 and a recent report on the largest NIH intramural program, the National Cancer Institute, recommended significant shrinkage.27 If current initiatives do not achieve sufficient reductions, so that the federal laboratory system matches mission requirements, further steps may be necessary. Given the scale of the laboratories and their local economic significance, a device like the Base Closure and Realignment Commission will probably be needed as a last resort.28 19

20 / IMPROVING THE ALLOCATION PROCESS RECOMMENDATION 7. FS&T funding should generally favor academic institutions because of their flexibility and inherent quality control, and because they directly link research to educa- tion and training in science and engineering. A distinctive feature underlying the excellence of the U.S. research and devel- opment system is the substantial reliance on university-based research (constituting nearly one-third of the FS&T budget for 1994; see Supplement 2). Most of that support is in the form of grants (or grant-like agreements) that support projects initiated by academic researchers and are awarded according to highly competitive merit review. Conducting FS&T at academic institutions has several major benefits: • It takes advantage of the originality and creativity that students—and their faculty advisors—bring to research; • It produces exceptionally well prepared scientists and engineers who not only will be the next generation of faculty, but also will work productively in, and transfer technology to, industry and government; • It allows for easy adjustment of the funding levels in a field because the funding commitment is for a specific project of limited duration; • It uses merit review to promote the highest quality of work regardless of overall funding levels; • It draws on academia’s own system of reward and recognition, which helps ensure the high quality of the researchers applying for federal grants and keeps them motivated; • It promotes rapid dissemination of new ideas through the tradition of open publishing and interchange among scholars in academic research (although such interchange is recognized as not being appropriate for classified research); • It makes research results and expertise widely available to many individuals and private firms, but allows for retention of intellectual property rights to promote commercialization;29 and • It builds on well-established and successful collaborations between universi- ties and industry and between universities and federal laboratories. The committee does not presume that academic research is always of higher quality than that conducted in industry, federal laboratories, or other nonacademic institutions. The committee believes, however, that for most federal science and engineering projects, the distinctive features noted above support a general prefer- ence for academic over nonacademic institutions. Although academic institutions offer many advantages, they can also benefit from a strengthening of their abilities to respond to evolving research opportunities, to maintain emphasis on their educational mission, and to reduce overall costs. For example, the organization of most universities into disciplinary departments can make truly interdisciplinary work difficult to conduct and manage. Projects that require collaboration across units within a university—between organic chemists in a chemistry department and pharmacologists in a medical school, for example—can 20

IMPROVING THE ALLOCATION PROCESS / 21 be more difficult than collaborations among colleagues located at different institu- tions but working in the same field. Those who pioneer new fields or attempt to bridge research interests among departments or whose work centers on collabora- tion with other universities, federal laboratories, or industry may risk not being funded or may encounter difficulties in securing space and other resources. In some research universities and centers, research has overshadowed the educational mission. In response, many universities are placing new emphasis on contributions to education as a criterion in promotion and tenure decisions and are creating interdisciplinary centers that cross traditional departmental boundaries. Indirect costs have been a source of contention between government and universi- ties for many years. Because of budgetary pressures and public concern, however, universities are working with government to reduce costs, including holding down indirect costs and modifying government regulations that can drive them higher. RECOMMENDATION 8. The federal government should encour- age, but not directly fund, private-sector commercial technology development, with two limited exceptions: • Development in pursuit of government missions, such as weapons development and spaceflight; or • Development of new enabling, or broadly applicable, tech- nologies for which government is the only funder available. The federal government has long sponsored research and education as a means of developing technologies for its own use and has also encouraged the development of state-of-the-art technologies in its capacity as a customer. The histories of the development of airframes and aircraft engines, missiles and satellites, advanced materials, semiconductors, and computers are replete with examples of federal procurement and research support that have contributed to the creation of commercially important technology. Indeed, the government was the first pur- chaser of key pieces of equipment used to build the components of what has be- come the Internet.30 Both FS&T funding and federal procurement will continue to be important in these and other emerging growth sectors linked to federal missions such as health and environmental cleanup. In the future, however, funding for the nation’s science and technology base may contribute more to stimulating new sectors of economic growth than will federal procurement and the “demand pull” on an emerging technology. Even before the end of the Cold War, high-technology spin-offs from federally funded R&D in defense and space had diminished. Efforts have been under way for some time to foster the development of dual-use technologies or to use off-the-shelf commercial technologies in federal programs that develop products for government use. In many cases, civilian applications have now surpassed military ones. As the Academies’ Committee on Science, Engineering, and Public Policy pointed out in its 1993 report, U.S. leadership in high-technology markets cannot be achieved or maintained primarily through federal actions.31 Commercial technology 21

22 / IMPROVING THE ALLOCATION PROCESS development will occur largely in the private sector. Firms motivated by market forces and judged by their performance in satisfying demand have a better record than governments of investing in new technologies with large commercial payoffs. As the presumptive owner of the results, the private sector should be the funder of such commercial technology development projects. The federal government’s main role in encouraging commercial technology development and ensuring economic success is to maintain an environment condu- cive to private-sector development and adoption of new technologies. Such an environment depends on a range of federal policies that influence taxation, macroeconomic stability, national savings, and the volume of international trade. Economic success also is determined by legislation concerned with unfair monopo- lies, patent protection, product liability, and environmental and consumer protec- tion. Although examination of these critical issues is beyond the scope of this report, the committee believes that government policies, such as those related to taxation, regulation, intellectual property rights protection, social mandates, and others, are usually more important to commercial outcomes than is direct govern- ment funding to industry. The government should not subsidize specific private firms for projects that they would undertake anyway.32 In a suitable economic context, a firm engaged in product or process innovation will capture or “appropriate” a large fraction of the benefits that it creates. If so, market incentives will guide firms to undertake the right kinds of innovations without any central planning or guidance. In many cases, however, no one firm can capture the full benefits of its invest- ment. This is generally the case for investment in basic research and can also apply in development related to emerging technologies. One approach to addressing this problem is represented by Sematech, an industry consortium created to improve semiconductor manufacturing, and for which the federal government provided some initial funding. Federal funding may help to establish such consortia in limited and highly specific areas and can be appropriate to support research in consortia formed by industry. In addition, the government may still have a role in fostering new enabling technologies. Many people believe that nanotechnology (i.e., at scales of one- billionth of a meter) and micromanufacturing, for example, offer exciting commer- cial opportunities. Government should support training and research that will establish the general scientific and technical principles that firms will ultimately exploit to develop new commercial products and processes. Such investments are appropriate for the federal government because they can generate large benefits that accrue to the nation but would not be captured by any one firm. For example, federal support for research as a component in the education of individuals entering careers in electrical engineering and computer science has helped to produce the skilled people who have developed our modern information technology industries. Support for the work at universities has resulted in the development of the proto- cols used to exchange information over computer networks, a crucial piece of intellectual capital that all firms have been able to exploit as they enter this new field. Transfer to industry of state-of-the-art technical knowledge produced at sci- ence and engineering schools occurs most effectively when faculty, graduate stu- dents, and postdoctoral fellows move to the private sector. 22

IMPROVING THE ALLOCATION PROCESS / 23 Federal funding that improves graduate and undergraduate education is an example of another way to encourage commercial development indirectly, while also supporting R&D in the national interest. In addition to helping stimulate the development and transfer of new enabling technologies into the private sector, the engineering research centers funded by NSF, for instance, have helped change the nature of graduate engineering education.33 By working in close collaboration with their counterparts in industry, graduate students and faculty have become more aware of the specific technology needs and practices of industry. As a consequence, engineering research programs are more focused and students are better prepared to work in industrial research and development laboratories. The government also sponsors research and development with potential commercial applications in its own laboratories, in FFRDCs, including the national laboratories, and in independent medical research institutes and other nonprofit organizations (almost half of FS&T funding goes to those organizations, the rest to universities and industrial laboratories). Education is not a central mission of those organizations—an important consideration given that movement of people is one of the most effective ways to transfer new ideas and technologies into the private sector. Several recent reports have noted other reasons that federal laboratories, whether operated by the government or contractors, generally have been less successful than they could be at transferring new enabling technologies to potential users in the private sector.34 New mechanisms such as cooperative research and development agreements (CRADAs) between firms and the government laboratories were introduced to address this problem. Many successful collaborations have been forged between federal laboratories and industry. Several recent reports argue, however, that CRADAs may be less effective than alternatives, that they are difficult to evaluate because of inadequate data, that ownership of intellectual property is often uncertain, and that they create few jobs.35,36 Under some CRADAs, the gov- ernment may be performing research that the partner firm would have done on its own in the absence of a cooperative research agreement. The committee believes that in many cases the government resources that support CRADA research could be better spent on other, more productive items in the FS&T budget. In addition to providing funds for research and graduate education at universi- ties and government laboratories, the federal government also supports a variety of other programs that promote the development of commercial technologies in the private sector. They include the Advanced Technology Program, the Technology Reinvestment Program, the Manufacturing Extension Partnerships program, Small Business Innovation Research grants and other small business set-asides, and direct government subsidy to private firms. Those programs have different goals and structures but share in their intention to cultivate industrial innovation. The ATP and the TRP involve funding of private-sector projects; the MEP program is modeled after the agricultural extension service program and primarily helps small businesses to incorporate new technologies (see Supplement 1). Most of these programs are too new to be carefully evaluated, and, because of inherent features in program design and prospects of unstable funding, we may never be able to tell whether some of them achieved their goals.37 At this time, the very concept of a government role in subsidizing the develop- ment of private-sector product and process development is controversial. Some 23

24 / IMPROVING THE ALLOCATION PROCESS difficult questions arise with subsidized partnership programs such as the ATP—will they succeed in fostering new, commercially relevant technologies that otherwise would not develop as quickly, and are they the most efficient uses of increasingly scarce federal R&D dollars? The committee is skeptical that the answer to these questions is yes. It therefore believes that these subsidized industrial partnership programs should be continued only if the case is convincingly made that the govern- ment is the funder of last resort for an important enabling technology, and they should be pursued only on an experimental basis, with careful attention to their goals, the distribution of proprietary rights, and how they will be evaluated. Where a new technology is needed to address a specific mission such as a military need, however, federal leadership is better justified, as noted in the first bulleted item under Recommendation 8. RECOMMENDATION 9. FS&T budget decisions should give preference to funding projects and people rather than institu- tions. That approach will increase the flexibility in responding to new opportunities and changing conditions. Compared to most other developed countries, the United States awards a higher fraction of its research and development funding to specific projects as opposed to distributing funds through institutional or formula grants. This mode of funding has several important advantages. It promotes the scientific and technical quality and originality of proposals; it permits awards to be made on the basis of competitive merit review procedures; and, by investing in projects and people rather than institutions, it makes the research and development system more flex- ible and responsive to changing scientific opportunities and national needs. To- gether those features have created a broad base of first-rank research institutions across the country that have adapted to major shifts in federal research and develop- ment priorities over time. The committee strongly endorses the principle of favoring the support of projects and people over institutions. The pace of scientific discovery has quick- ened and the time from discovery to innovation and commercialization is becoming shorter in many fields, which makes the flexibility and responsiveness of the re- search and development system increasingly crucial. To free up or reallocate re- sources to meet new opportunities and needs, it is much easier to cut back or eliminate a program of project grants than it is to disengage from support of institu- tions. If an agency’s budget is cut, there is a danger that funds will be taken auto- matically from its extramural program. Instead, the available funds should be allo- cated to those people and projects best able to accomplish the task—whether in universities, federal laboratories, or other institutions. In the future, there should be a presumption against establishing new perma- nent institutions. Moreover, the establishment of any such institutions and major programs or centers should include a time limit or “sunset” provision, along with periodic review. 24

IMPROVING THE ALLOCATION PROCESS / 25 Within the General Constraints Determined by National Priorities, the Selection of Individual Projects Must Reflect the Standards of the Scientific and Technical Community. (Recommendations 10 and 11) RECOMMENDATION 10. Because competition for funding is vital to maintain the high quality of FS&T programs, competitive merit review, especially that involving external reviewers, should be the preferred way to make awards. The highest-quality projects and people should be supported with FS&T funds. The best-known mechanism to accomplish that is some form of open compe- tition involving evaluation of merit by peers. Competitive merit review involves the use of criteria that include technical quality, the qualifications of the proposer, relevance and educational impacts of the proposed project, and other factors per- taining to research goals rather than to political or other nonresearch consider- ations.38 Open competition means that, at some level within the framework of an agency’s mission, researchers propose their best ideas and anyone may apply and be funded regardless of institution or geographic location. However, in the case of highly targeted missions, quality can also be maintained by knowledgeable program managers who have established external scientific and technical advisory groups to help assess quality and to help monitor whether agency needs are met (see Supple- ment 3 and Box II.8). The committee believes that the principle of merit review—which empha- sizes competition among ideas, diversity of funders and performers of research and development, and organizational flexibility—has been largely responsible for the remarkable quality, productivity, and originality of U.S. science and technology in the past. Competitive merit review should be the method of choice for making future decisions about FS&T funding. Many federal research and development agencies have developed some form of competitive merit review process to use in making extramural awards for re- search, training, and facilities. They have also worked to develop equivalent systems of review for allocating intramural funding, but merit review of in-house research is much more difficult because federal research scientists and engineers are in the civil service and still retain salary and benefits even if they are not productive or their area has lower priority or has become obsolete. That problem is a perennial one in the periodic reviews of federal laboratories.39 The FFRDCs, including the national laboratories, also have procedures for allocating research funding competitively based on performance. Some do it well, but overall the results have been uneven.40 There are other approaches to promoting high quality in federally supported research and development. Some programs try to identify top researchers and give them long-term support rather than require them to submit specific proposals to compete every few years. Some funding for agricultural research is allocated to state agricultural experiment stations and land-grant colleges on a formula basis, and 25

26 / IMPROVING THE ALLOCATION PROCESS the supported institutions choose the researchers and their projects. Evaluations of that system of formula-grant allocation have not given high marks to its responsive- ness or the quality of the resulting research.41 Other federal funding is awarded competitively to research centers, which in turn distribute the funding among individual researchers and groups. There is benefit to having a variety of approaches to supporting FS&T, espe- cially because mission agencies have specialized assignments to fulfill. However, the committee believes that fiscal constraint makes it important to level the playing field. Competitive merit review should therefore be increased relative to other mechanisms for awarding FS&T funds. Merit review is best exemplified by the processes used at the NSF and NIH, that is, the use of external peer review to iden- tify and select the best proposals for individual research projects as part of a review process based on competition and expert evaluation of merit criteria. That ap- proach enables those two agencies to choose the best performers. Accordingly, use of competitive merit review to allocate federal funding should be the default pre- sumption, supplemented with other mechanisms for inherently governmental functions that cannot be accomplished through competitive merit review. RECOMMENDATION 11. Evaluations of research and develop- ment programs and of those performing and sponsoring the work also should incorporate the views of outside evaluators. Technical merit, which is the primary criterion used in performance reviews of research agencies and programs as well as proposals, is best evaluated by inde- pendent scientific or engineering peers. Agency performance review systems differ in the extent to which they use external reviewers, but there are two compelling reasons to rely heavily (although not exclusively) on external reviews. First, because the federal government funds most research and development outside its own laborato- ries in industry, universities, and other nongovernment research institutions, most of the qualified reviewers are outside government. Second, external reviewers are a more diversified source of opinion and can bring a wider range of experiences to the review process compared with federal agency personnel. Where needs are highly specific, such as development of a stealth aircraft or rapid response to an emerging infection, external reviews are still useful, although they may have to be retrospec- tive rather than prospective. Government officials must make the final decision. Recent changes across the federal government emphasize improving perfor- mance review and program evaluation. Indeed, according to the Government Performance and Results Act (GPRA) of 1993 (Public Law 103-62), every federal agency must have performance goals and measures for its programs (including FS&T programs) by 1997 for its Fiscal Year 1999 budget submission. It will be difficult to apply GPRA requirements to research and development activities because, by their nature, they are long-term and their impacts are diffuse and hard to measure.42 Any system to allocate resources should be guided by explicit goals, express- ing the underlying philosophy and criteria for evaluating performance. But a clear 26

IMPROVING THE ALLOCATION PROCESS / 27 message emerges from the abundant recent writing on applying performance mea- sures to research and development: it is a complicated business. The science of metrics documents that most measures are incomplete, and mindless application actually can undermine the very functions such measures are intended to improve.43 Just as the tyranny of quarterly bottom lines can frustrate long-term corporate plan- ning, so also can science be distorted by simple indicators such as publication counts, citation counts, patent counts, doctorates produced, or user satisfaction ratings. These are useful, but incomplete, measures. Several recent assessments of such measures concluded that they must be augmented by expert judgment.44 One review observed that such measures may leave out “virtually all of what researchers themselves find important about their work. One could have a government full of programs that performed beautifully according to these indicators, and still be at the trailing edge of every scientific frontier.”45 It makes sense to track relevant measures, but they cannot supplant the essen- tial element of expert judgment that is the bedrock of quality assessment in research and development. Scientists and engineers seeking federal support should be accountable to the public, and the standards should capture what constitutes the best science and engineering. To the extent that performance review and program evaluation come into wider use in assessing FS&T funded activities, they will have to incorporate expert judgment of quality, impact, and other important aspects that will benefit from the use of outside reviewers.46 Ideally, in government as in the private sector, every organization should ask basic questions about the need for its continued existence on a regular basis. In one formulation, every department and agency and each subunit and activity should answer the following questions satisfactorily:47 What is our mission? Is it still the right mission? Is it still worth doing? If we were not already pursuing this mission, would we still choose it now? In most cases, agencies are responding to statutes, congressional report lan- guage, or presidential initiatives. These questions, therefore, may need to be raised at more than just the agency level. The Federal Government Must Implement a Structure Capable of Fostering, Not Hindering, the Management of Research and Development. (Recommendations 12 and 13) RECOMMENDATION 12. Research and development should be well managed and accountable but should not be micromanaged or hobbled by rules and regulations that have little social benefit. Science and technology must be managed well, particularly when public funds are at stake. Fraud, misuse of funds, violations of human subject protections, or other abuses should not be tolerated. Maintaining safeguards requires credible mechanisms for investigation and enforcement. At the same time, federal agencies must strike a balance between the need for accountability and the burden of regula- 27

28 / IMPROVING THE ALLOCATION PROCESS tion. Public dissemination of the results of federally funded research and develop- ment is an important element in achieving maximum return on public investment, and it also contributes to defining for the public the value of that investment. If there is no regulation, the risk of abuse will rise, but regulation imposes significant cost. In the past 2 decades, the trend has been toward increased paper- work to comply with procurement regulations, fair hiring practices, restrictions on drug use, and many other public concerns that are important but that impose con- straints on the conduct of federally funded research and development.48 Because procedures intended to enhance accountability have become increas- ingly burdensome, continued scrutiny of the purposes, effectiveness, costs, and alternatives to current practices would be welcome, beginning with a thorough overhaul of the regulations and followed by systematic, periodic reviews. The Office of Management and Budget and the Office of Science and Technology Policy should work together to target one or a few areas of regulation and accountability assessment each year and should encourage agency innovation to streamline or replace current practices. The effect of regulations and social mandates can be quite severe for perform- ers of federally funded research and development. If regulations are reviewed and either reduced, streamlined, or eliminated by the OMB-OSTP effort recommended, the committee believes that the productivity of the research and development system can be improved and costs can be reduced. For their part, universities and other performers should review their own procedures and regulations. The Federal Demonstration Project sponsored by the Academies’ Government-University-Indus- try Research Roundtable demonstrates that improvements can be made without sacrificing important goals.49 RECOMMENDATION 13. The federal government should retain the capacity to perform research and development within agen- cies whose missions require it. The nation should maintain its resulting flexible and pluralistic system of support. The execu- tive and legislative branches should implement the procedures outlined in the committee’s Recommendations 1 through 4 to ensure a more coherent FS&T budget process whether or not a Department of Science is established. Any changes in the structure of federal support for science and technology should take into account the linkage between research and development and agency missions and the benefits derived from a robust and pluralistic R&D system. Most federally funded research and development is conducted in pursuit of national goals such as a strong defense, better health, exploration of space, wiser use of natural resources, and greater agricultural production (see Supplements 1 and 2). This linkage to government agency missions is a strength of the U.S. research enterprise and has produced a robust and pluralistic R&D support system. Other than basic research programs at the National Science Foundation, few federal science and 28

IMPROVING THE ALLOCATION PROCESS / 29 technology programs have been set up to support research as an end in itself. Even the National Science Foundation has an educational mission in addition to its sup- port of science and engineering. Given their purpose, agency programs are and should be evaluated first for their contribution to their departments’ goals and only later for their place in a balanced national research and development system.50 Current proposals for a Department of Science in part follow this principle by leaving most militarily relevant research and development in the Department of Defense, health research in the Department of Health and Human Services, and agricultural research and development in the Department of Agriculture. While wisely retaining research and development in mission agencies, this approach would limit a Department of Science to activities that fall outside existing mission agencies. Such a Department of Science would have a smaller research budget than the National Institutes of Health and a significantly smaller development budget than the Department of Defense. Creating a Department of Science because cabinet departments are abolished or reconfigured, rather than as a result of applying criteria for allocating federal funds for research and development, involves considerations beyond the charge to this committee. Such a Department of Science, however, cannot fully address the need for review, coordination, and FS&T budget allocation among departments. The committee believes that its recommendations will contribute more to planning, coordinating, and evaluating federal science and technology than either the current system or a Department of Science. The growth of federal science and technology from multiple roots in mission agencies has resulted in a pluralistic research and development system. Although some may see needless overlap in such a system, in reality pluralism is a great source of strength, an advantage over the ways research and development are organized in many other countries. The diversity of performers fosters creativity and innovation. It increases the number of perspectives on a problem. It makes competition among proposals richer, and it induces competition to support the best work among funders, both public and private. At the same time, diverse funding alternatives give original ideas a better chance to find support than would a more centralized system. A pluralistic research and development system thus enhances quality and our na- tional capacity to respond to new opportunities and changing national needs. The challenge in the current period is to retain diversity and balance while cutting back in some areas to free resources for better or more important activities. As emphasized in Recommendation 1, integrating the needs of a pluralistic research and development system across multiple agencies and programs requires a comprehensive overview and careful planning. The federal budget process should take into account how interdependent different fields of science and technology have in fact become. The impact of cutbacks in one agency on major fields, on other agencies, and on national goals should be considered. Changing or scaling back an agency’s mission (e.g., to reduce and reorient the post-Cold War defense establishment) generally has implications for the type and scale of research and development it, and others, conduct. As noted above, for example, DOD provides most of the federal funding for academic research in several engineering fields and computer science. Computer-intensive biological research supported by NIH and NSF, such as genome research or structural analysis for drug design, could thus be 29

30 / IMPROVING THE ALLOCATION PROCESS affected by cuts in DOD computer science. Important advances and efficiencies enabled by increasingly powerful computation and by use of the Internet and global communications supported by many agencies could also be impeded by such cuts. Monitoring the impact of cuts in one part of the research and development system on another part is a function that the current budget process does not per- form systematically. Cross-program impacts are accommodated to some extent in the decentralized negotiations of budget line items in individual agencies, and special initiatives often identify items in multiple agencies. Cross-agency planning is not routine, however, even in the limited sense of “damage control” that is impor- tant when budget cuts are contemplated, and the FS&T budget is not monitored as a whole as the budget process unfolds. The committee’s Recommendations 1 through 3 in effect give the President’s Science and Technology Advisor and the Office of Management and Budget a strong integrative role, with the authority to effect trans- fers across departments and agencies that no cabinet official can perform. The recommendations also entail monitoring the FS&T budget as a whole in Congress, beyond that fraction that might be included in a Department of Science. If the recommended process is used in tandem with the principle of retaining world leadership embodied in Recommendation 4, the federal government will have a more coherent and effective research and development system. Looking to the Future A robust national system of innovation lies at the heart of our economy, our health, and our national security. That system of innovation depends on federal investments. The committee believes that its recommendations address a crucial need: maintaining the strength and vigor of U.S. research and development despite the prospect of declining federal discretionary spending over the next several years. Seeing the science and technology enterprise through the lens of a unified FS&T budget can help leaders in government and the American public to gauge its fiscal health. A carefully constructed comprehensive budget offers a unitary view, not artificially balkanized into agency budgets, but sensitive to the complexities and relationships among government programs vital to maintaining the United States at the forefront of world-class science and technology. The corollary proposals provide the basis for continuing excellence—emphasizing programs and people rather than institutions, subjecting all federal science and technology activities to competitive merit review, linking science and engineering research to education, and maintain- ing a pluralistic system of research and development tied to public missions. The committee’s recommendations are designed to help root out obsolete or noncom- petitive activities, allowing good programs to be replaced by even better ones. Science and technology have utterly transformed our world over the past 50 years, touching almost every aspect of our daily lives—from communication to transportation to health (Box I.5). They will be at least as important over the next half century. Preeminence in science and technology has become a national asset, at once a point of pride and an immensely practical investment. Prudent steward- ship of science and technology, as much as any other area of federal policy, will dictate how our children and our grandchildren live. 30

IMPROVING THE ALLOCATION PROCESS / 31 BOX I.5 LESSONS FROM THE PAST AND SOME OPPORTUNITIES FOR THE FUTURE Though enormously visionary, the scientists and political leaders who set the United States on its post-World War II research and development course could never have foreseen the ex- traordinary results. The computer was in its infancy in 1945 and seemed more a research tool than a revolutionary device that would profoundly affect industry, commerce, the financial world, government, science, education, communications, entertainment, and society as a whole. Accurate weather forecasting covered about a day in 1945; reliable 3- and 6-day forecasts, and the 90-day outlooks now relied on by farmers and utility companies, came only with years of research and the advent of supercomputers. Microelectronics, with all its implications for space exploration and utilization, national security, consumer electronics, medicine, and do- mestic and international communications, did not exist—nor did the equally revolutionary laser. Materials science, given a boost by the war, had yet to benefit from the studies that would yield the new metal alloys, high-strength steels, composite materials, silicon chips, glassy metals, optical fibers, and polymers so vital and so valued in 1995. Astronomy meant mostly optical telescopes at war’s end, and astronomers could only dream of the striking images now provided daily by the Hubble Space Telescope; the great advances provided by radio, infrared, ultraviolet, X-ray, and gamma-ray astronomy would come only with time. Though an early cosmological vision of the universe’s birth existed, it had yet to win its popular name,“The Big Bang,” or to gain the theoretical underpinnings and experimental back- ing that now make it the standard model for the cosmos’s origin. The Earth’s crust was ac- cepted as a solid shell, not the giant, separate blocks of rock portrayed by the theory of plate tectonics, which came together in the 1950s and 1960s and provided earth scientists with a general framework to explain the cause of most giant earthquakes, why volcanoes exist where they do, the birth of new oceans, and the timeless drifting of the continents around the globe. Few paid attention to or realized the economic, health, and social implications of a deteriorat- ing environment, the loss of biodiversity, or the potential for adverse climate change—vital world issues that researchers would identify, describe, and bring to public attention. The personal computer first appeared in the 1970s; the explosive growth of the Internet is a 1990s phenomenon. Electronic mail was until very recently the tool of a narrow slice of the scientific and technical community. Now, our national security depends heavily on the use of computers, networks, and telecommunications to assess, understand, and respond to poten- tial threats. Computer graphics provides the “vision” to design new materials and buildings, and to model, for example, the lethal process of an AIDS (HIV) virus entering a cell and co- opting its functions. There is virtually no industry that is not being transformed by the informa- tion revolution. And yet, the information revolution is still young and hardly over. The remarkable advances enabled by science and technology during the past 50 years will surely be extended in the next 50. We can see some of the outlines. Information technology, for example, is already transforming the operations of many of our basic institutions, offering new ways to educate our children and contributing new approaches and tools for research in science and technology. Less obvious is how a quickly widening range of challenges facing our nation and the world will be addressed. If history is a guide, the work now under way in universities and in federal and industrial laboratories will play a vital role. The health challenges to the nation are apparent. The population is aging, and with that the problems of heart disease, cancer, and degenerative illnesses such as Alzheimer’s disease appear in sharp relief. These illnesses require fundamental understanding not only of the un- derlying biology but also of effective prevention strategies to delay or block their onset. The problem of “emergent diseases” has gained full force in this decade, from the resurgence of tuberculosis to the appearance of “jet-age” scourges, such as AIDS and Ebola virus. We can rightly take comfort in the past victories over polio and smallpox and other infectious diseases. We should not forget, however, that the polio vaccine built on a century of microbiology, that continued on next page 31

32 / IMPROVING THE ALLOCATION PROCESS biotechnology is only now becoming central to drug discovery, and that the biology underly- ing many of today’s dread diseases is still almost wholly unknown. Further, science and tech- nology are essential to building on the effective campaigns to reduce infant mortality, smoking, and deaths and injuries from drunk driving. Perhaps less obvious but just as promising is the future potential for science and technol- ogy to address diverse national needs in transportation, public infrastructure, agriculture, and the environment. New materials, propulsion systems, and imaginative use of information tech- nologies to create “smart” highways and cars will map onto currently obvious transportation needs—from reducing pollution to improving traffic flow and highway design. Research has contributed, albeit considerably below its potential, to development of the national systems by which we get our drinking water, remove our wastes, and obtain electrical power. As these systems become more complex and the pressures on public funds intensify, research that re- duces costs and improves safety, such as non-destructive testing of bridges, tunnels, railroad tracks, and the like, will become even more urgent. U.S. agriculture has been a triumph. Now the advent of biotechnology has created major new opportunities to increase the quality of foods, raise the efficiency of crop production, and develop new industrial uses for crops, including biodegradable plastics and pharmaceutical products. The current U.S. export lead in agriculture builds on a century of public and private investments in agricultural research and development. Future research will surely offer ways to sustain the productivity of U.S. agriculture while also making it more environmentally benign. Finally, resource pressures will inexorably increase as we enter the next millennium—as populations, industrialization, and demand for energy and other resources increase. These pressures will increase debates about risks versus costs. Informing that debate will require a base of science and technology so that the problems are well understood, the impacts of alter- native remediation strategies are analyzed, risks are adequately assessed, and effective preven- tion strategies are put into place. A strong research and development capacity will be integral to dealing with future chal- lenges, whether environmental problems, medical emergencies, or national security threats— or crises that we cannot yet predict. We also know that solutions come in unexpected ways from what is the world’s premier research enterprise. With wise management, solutions to pressing problems—and innovations giving rise to now unimagined advances—will continue to come from many directions, for example, from the work of astronomers trying to under- stand the large-scale structure of the universe, or from mathematicians’ studies on improving the calculations of properties of alloys, or from the efforts of social scientists to devise new ways for institutions to manage public resources such as fisheries, grazing grounds, and water supplies, or from biologists’ investigations of the neural systems of invertebrates. New knowl- edge that enlarges our understanding will in time serve national needs. Science and technol- ogy, contributing a unique national capability for problem solving and creative discovery, will continue to be key in keeping the United States in its world leadership position—economi- cally, militarily, and intellectually. Endnotes 1. The Budget of the United States Government, Fiscal Year 1996, Chapter 7,“Investing in Science and Technology” (Washington, D.C.: U.S. Government Printing Office, 1995), p. 94. 2. The phrases research and development and science and technology are often used interchangeably. The committee has chosen to use research and development, except when it is explicitly referring to its proposed budget index, federal science and technology (FS&T), and the work encompassed by it. 32

IMPROVING THE ALLOCATION PROCESS / 33 3. The interdepartmental coordination mechanism was the Federal Coordinating Council for Science and Technology under Presidents Reagan and Bush, and now is the National Science and Technology Council under President Clinton. 4. Calculated from Tables C-61 and C-62 in National Science Foundation, Federal Funds for Research and Development, Fiscal Years 1993, 1994, and 1995, NSF 95-334 (Arlington, Va.: NSF/ Division of Science Resources Studies, forthcoming). In 1994, the Department of Defense funded 59 percent of academic research in electrical engineering, 69 percent in metallurgy and materials science, and 56 percent in computer science. 5. The Bush and Clinton administrations initiated structures and procedures that begin to implement several of the processes and criteria listed. The last budgets of the Bush administration included agency “cross-cuts” that took into account multiagency initiatives. The Clinton administra- tion continued this practice and also prepared a separate chapter on research and development as part of the President’s budget (The Budget of the United States Government, Fiscal Year 1996, Chapter 7, “Investing in Science and Technology,” 1995). The many activities of the National Science and Technology Council are summarized in its “Accomplishments Report, 1993-1995,” Office of Science and Technology Policy, Executive Office of the President, 1995. 6. Allen Schick, The Federal Budget: Politics, Policy, Process (Washington, D.C.: The Brookings Institution, 1995); Willis H. Shapley, The Budget Process and R&D (New York: Carnegie Commission on Science, Technology, and Government, 1992). 7. Carnegie Commission on Science, Technology, and Government, Science, Technology, and Congress: Organization and Procedural Reforms (New York: Carnegie Commission on Science, Technology, and Government, 1994). 8. These criteria are adapted from the Committee on Science, Engineering, and Public Policy (National Academy of Sciences, National Academy of Engineering, and Institute of Medicine), Science, Technology and the Federal Government: National Goals for a New Era (Washington, D.C.: National Academy Press, 1993). 9. Throughout this report, the term federal laboratories refers to laboratories owned and operated by the federal government (including intramural laboratories), laboratories owned by the federal government but operated by contractors (including the national laboratories administered by DOE), and other FFRDCs. See Box II.6 for an explanation. 10. Department of Defense, Department of Defense Response to NSTC/PRD #1, Presidential Review Directive on an Interagency Review of Federal Laboratories, February 24, 1995; Depart- ment of Defense, Draft Interim Report to the National Science and Technology Council, Presiden- tial Review Directive 1, October 12, 1994; Defense Science Board, Laboratory Management Interim Report, background for the Base Closure and Realignment 1995 (BRAC 95 Addendum), April 3, 1995. Collectively, these three reports are known as the Dorman Report. NASA Federal Laboratory Review Task Force, NASA Advisory Council, NASA Federal Laboratory Review (Foster Report) (Washington, D.C.: NASA, February 1995). Task Force on Alternative Futures for the DOE National Laboratories, Alternative Futures for the Department of Energy National Laboratories (Galvin Report) (Washington, D.C.: Department of Energy, February 1995). Ad Hoc Working Group of the National Cancer Advisory Board, A Review of the Intramural Program of the National Cancer Institute (Bishop/Calabresi Report) (Bethesda, Md.: National Institutes of Health, June 26, 1995); External Advisory Committee of the Director’s Advisory Commit- tee, The Intramural Research Program (Cassell/Marks Report) (Bethesda, Md.: National Institutes of Health, April 11, 1994). 33

34 / IMPROVING THE ALLOCATION PROCESS National Science and Technology Council, Interagency Federal Laboratory Review, Final Report (NSTC Report) (Washington, D.C.: Office of Science and Technology Policy, May 15, 1995). 11. Federal Laboratory Review Panel, Report of the White House Science Council (Packard Report) (Washington, D.C.: Office of Science and Technology Policy, May 1983); Bishop/Calabresi Report, 1995; Dorman Report, 1995. 12. Alan K. Campbell, Stephen J. Lukasik, and Michael G.H. McGeary, eds., Improving the Recruitment, Retention, and Utilization of Federal Scientists and Engineers (Washington, D.C.: National Academy Press, 1993); Foster Report, 1995; Dorman Report, 1995; Cassell/Marks Report, 1994; Alan L. Dean and Harold Seidman, Options for Organizational and Management Reform for the Intramural Research Program of the National Institutes of Health (Washington, D.C.: National Academy of Public Administration, July 1988); Institute of Medicine, A Healthy NIH Intramural Program: Structural Change or Administrative Remedies? (Washington, D.C.: National Academy Press, 1988). 13. Foster Report, 1995, p. 9. 14. Michael E. Davey, DOD’s Federally Funded Research and Development Centers, CRS Report for Congress 95-489, Science Policy Research Division, Library of Congress (Washington, D.C.: Congressional Research Service, April 13, 1995); Office of Technology Assessment, Department of Defense Federally Funded Research and Development Centers (Washington, D.C.: U.S. Government Printing Office, June 1995); Defense Science Board Task Force, The Role of Federally Funded Re- search & Development Centers in the Mission of the Department of Defense (Washington, D.C.: Office of the Under Secretary of Defense for Acquisition and Technology, April 1995). 15. Dorman Report, 1995; Foster Report, 1995; Galvin Report, 1995; Packard Report, 1983; NSTC Report, 1995. 16. Calculated from Table C-154a in National Science Foundation, Federal Funds for Research and Development: Fiscal Years 1992, 1993, and 1994, NSF 94-328 (Arlington, Va.: NSF/Division of Science Resources Studies, 1995). 17. Defense Science Board Task Force, The Role of Federally Funded Research & Development Centers in the Mission of the Department of Defense, 1995. 18. The Foster Report (1995) specifically recommends that NASA laboratories reduce their insularity, enhance ties with universities, and adopt the personnel and management practices of the only major NASA FFRDC, the Jet Propulsion Laboratory, which is associated with the California Institute of Technology. 19. Galvin Report, 1995, p. 4. 20. Galvin Report, 1995. Other analyses of the DOE-supported national laboratories and their futures have concluded that carefully planned diversification could be useful if done well. Barry Bozeman (Georgia Institute of Technology) and Michael Crow (Columbia University), who drew on a large body of past research in a report for the Department of Commerce on the role of all federal laboratories (Federal Laboratories in the National Innovation System: Policy Implications of the National Comparative Research and Development Project, May 1995), note that the purposes of various laboratories vary tremendously. Ann Markusen and colleagues at Rutgers University exam- ined Sandia and Los Alamos National Laboratories and concluded that there is a restricted stock of knowledge and technology that is no longer secret (Ann Markusen, James Raffel, Michael Oden, and Marlen Llanes, Coming in from the Cold: The Future of Los Alamos and Sandia National Labora- 34

IMPROVING THE ALLOCATION PROCESS / 35 tories, Piscataway, N.J.: Center for Urban Policy Research, 1995). Both the Bozeman/Crow and Markusen et al. reports are more open to consideration of new mission areas than is the Galvin Report, although Markusen et al. specifically note that the two DOE laboratories in New Mexico should be reduced in size. Markusen is quite critical of the Galvin task force recommendation that laboratories engaged in weapons design and nuclear cleanup activities be delegated to autonomous “corporatized” units. However, the Bozeman/Crow and Markusen reports both support the main thrust of the Galvin task force—that current methods of technology transfer are poorly understood and probably inefficient—and concur with the notion that national laboratories should compete with universities and private performers, rather than have unique access to funds, and should strengthen their ties to one another, to academia, and to industry. 21. Galvin Report, 1995, pp. 8-10, 55. 22. Federally funded research and development centers have a long-term contractual relation- ship with the government and are operated by contractors—see Boxes II.5 and II.6, Supplement 2. See also U.S. Congress, Office of Technology Assessment, A History of the Department of Defense Federally Funded Research and Development Centers (Washington, D.C.: Government Printing Office, July 1995 [GPO Stock No. 052-003-01420-3]). 23. National Science and Technology Council, Interagency Federal Laboratory Review, Final Report (NSTC Report), 1995. See especially pp. 9-19 and 21-22. 24. NSTC Report, 1995. 25. Dorman Report, 1995. 26. Foster Report, 1995; Galvin Report, 1995. Also, NSTC Report, 1995. 27. Bishop/Calabresi Report, 1995. 28. In 1990, Congress passed and the President signed the Defense Base Closure and Realign- ment Act, which was intended to protect the base-closing process from electoral politics and to insulate the President and members of Congress from difficult decisions that affect important political constituencies, particularly local groups adversely affected by closures and shrinkage. The act established an independent commission to hold public hearings, take recommendations from the Secretary of Defense, and make a list of recommended closures and reconfigurations. Under terms of the act, the President then may accept or reject the entire list but cannot add or delete specific items on it, and Congress has 45 days to veto his action. In the absence of action by the President or Congress, the commission’s list becomes the basis for closures and realignments by the Department of Defense. A total of 250 installations were closed or reduced through three rounds of closings—in 1991 and 1993, plus another round conducted in 1988 under a previous law. The final round, which included some laboratory facilities, was completed in 1995. The currently established BRAC process is conducted by a single cabinet-level department, and the commission’s sole responsibility is to make recommendations about closing and shrinking facilities, not about reallocation across departments. Depending on its purpose and scope, however, a laboratory closing commission might cut across departments and independent agencies, and might be asked to reallocate as well as close or reduce facilities, complicating its task and opening the question of the proper venue for organizing such actions. 29. Pursuant to the Bayh-Dole Act of 1980 and subsequent amendments and executive orders, academic centers retain patent rights and copyrights that result from federal funding, with certain restrictions. Those rights can be licensed to one or more firms, depending on the nature of the inventions or other results. Moreover, because they are held by universities, the licensing arrange- 35

36 / IMPROVING THE ALLOCATION PROCESS ments are subject to greater public scrutiny than is direct federal funding to private firms with patents held by those firms. 30. Computer Science and Telecommunications Board, National Research Council, Realizing the Information Future: The Internet and Beyond (Washington, D.C.: National Academy Press, 1994). 31. Committee on Science, Engineering, and Public Policy (National Academy of Sciences, National Academy of Engineering, and Institute of Medicine),“The Federal Role in the Development and Adoption of Technology,” Chapter 4 in Science, Technology and the Federal Government: National Goals for a New Era, 1993, pp. 31-44. 32. That principle is perhaps best exemplified in defense technologies developed with federal funding, which can now be more expensive and less advanced than commercial technologies. Recent attention to acquiring dual-use technologies from commercial sources and exploiting defense technologies in commercial markets stems from this reversal in the traditional flow of new technol- ogy. This circumstance is noted by the Committee for National Security of the National Science and Technology Council, in National Security Science and Technology Strategy (Washington, D.C.: Office of Science and Technology Policy, 1995). See also National Economic Council, National Security Council, and Office of Science and Technology Policy, Executive Office of the President, Second to None: Preserving America’s Military Advantage Through Dual-Use Technology, Doc. No. ADA 286-779 (Fort Belvoir, Va.: Defense Technical Information Center, February 1995). 33. Engineering Centers Division, Directorate for Engineering, National Science Foundation, The ERCs: A Partnership for Competitiveness, NSF 991-9, 1991; Highlights of Engineering Research Centers Technology Transfer, NSF 92-6, 1992; and Highlights of Engineering Research Centers Education Programs, NSF 95-56, 1995 (Arlington, Va.: National Science Foundation). 34. The Foster Report (1995) at several points notes that NASA laboratories are “insular” and that in many areas private firms have raced ahead of parallel NASA programs. Other reports also cited above, most notably the Galvin Report (1995) and those by Bozeman and Crow and by Markusen et al. (note 20), also point to difficulties in technology transfer from federal laboratories. 35. Start-up of new firms, for example, has been a major source of innovation. The importance of a “culture” that nurtures innovation has been stressed in several recent works, including that of Ann Markusen et al. (note 20); Susan Rosegrant and David R. Lampe, Route 128: Lessons from Boston’s High-Tech Community (New York: Basic Books, 1992); AnnaLee Saxenian, Regional Advantage: Culture and Competition in Silicon Valley and Route 128 (Cambridge, Mass.: Harvard University Press, 1994); and Economics Department, Bank of Boston, MIT: Growing Businesses for the Future (Boston: Bank of Boston, 1989). Markusen et al., in particular, suggest that policies to encourage movement of experts and technologies out of government laboratories might well be more effective than those, such as CRADAs, that retain talent and technology within laboratory walls. 36. The Galvin Report (1995) concludes that CRADAs may have distracted DOE’s major multipurpose national laboratories from their central missions. The report by Markusen et al. (note 20) suggests that CRADAs may be less effective than less expensive and more historically important means of technology transfer, and points out that evaluation is hampered by poor access to data. Bozeman and Crow (note 20) observe that 90 percent of CRADAs produce no jobs, and also note that a “one-size-fits-all” technology transfer policy for federal laboratories flies in the face of their diversity. The place of CRADAs in DOE national laboratories is an area of active controversy (see Colin Macilwain, “US Weapons Labs Face Curb on Civilian Role,” Nature 376 (July 13): 106-107, 1995). 36

IMPROVING THE ALLOCATION PROCESS / 37 37. Evaluation of investment programs to date has focused mainly on the question, Would this technology ever have developed or would it have been significantly delayed but for the federal funding? Most assessments have been based on queries to recipients and agency staff about judg- ments of success, and on limited measures of impact such as patent counts or financial measures that cannot answer the question. What is needed is rigorous assessment through comparison to appropri- ate control cases. Moreover, answering one question does not address several others that are equally important, such as: How effective is direct federal investment in specific firms or consortia com- pared to investment in R&D through other mechanisms, such as grants and contracts to do similar work at universities or federal laboratories? Would incentives to R&D performers to ease start-up of new firms or to encourage private investment through indirect means achieve the same ends at less cost or with less direct federal involvement? How can direct investments in firms or consortia confer proprietary advantage and yet ensure public accountability and fair access by other firms to data, results, and expertise? 38. NSF Advisory Committee on Merit Review, Final Report, NSF 86-93 (Washington, D.C.: National Science Foundation, 1986). 39. Dorman Report, 1995; Galvin Report, 1995; Foster Report, 1995; Bishop/Calabresi Report, 1995; and Cassell/Marks Report, 1994. 40. Reviews of federal laboratories consistently conclude that procedures for judging the quality of research are not adequate and in practice do not have much effect on the allocation of research funding. See, for example, Defense Science Board, Laboratory Management Interim Report, 1995 (note 10); Bishop/Calabresi Report, 1995; Foster Report, 1995; Cassell/Marks Report, 1994; National Research Council, Interim Report of the Committee on Research and Peer Review in EPA (Washington, D.C.: National Academy Press, 1995); Carnegie Commission on Science, Technology, and Government, Environmental Research and Development: Strengthening the Federal Infrastructure (New York: Carnegie Commission on Science, Technology, and Government, 1992); U.S. Environmental Protection Agency, Safeguarding the Future: Credible Science, Credible Decisions, EPA/600/9-91/050, Expert Panel on the Role of Science at EPA (Washington, D.C.: U.S. Government Printing Office, 1994). 41. See, for example, National Research Council, Investing in the National Research Initia- tive: An Update of the Competitive Grants Program in the U.S. Department of Agriculture (Washington, D.C.: National Academy Press, 1994). 42. Susan E. Cozzens,“Assessment of Fundamental Science Programs in the Context of the Government Performance and Results Act (GPRA),” RAND Project Memorandum PM-417-OSTP (Washington, D.C.: Critical Technologies Institute, 1995). 43. Thomas D. Cook and William R. Shadish, “Program Evaluation: The Worldly Science,” Annual Reviews of Psychology 37: 193-232, 1986; Robert K. Merton, The Sociology of Science: Theoretical and Empirical Investigations (Chicago: University of Chicago Press, 1973); P.H. Rossi, H.E. Freeman, and S. Rosenbaum, Evaluation: A Systematic Approach (Beverly Hills, Calif.: Sage Publications, 1982). 44. Cozzens, “Assessment of Fundamental Science Programs,” 1995; Commission on Physical Sciences, Mathematics, and Applications of the National Research Council, Quantitative Assessments of the Physical and Mathematical Sciences: A Summary of Lessons Learned (Washington, D.C.: National Academy Press, 1994); Susan E. Cozzens, rapporteur, Evaluation of Fundamental Research Programs: A Review of the Issues, discussion draft, Office of Science and Technology Policy, August 15, 1994; and Susan Cozzens, Steven Popper, James Bonomo, Kei Koizumi, and Ann Flanagan, 37

38 / IMPROVING THE ALLOCATION PROCESS Methods for Evaluating Fundamental Science, DRU-875/2-CTI, Critical Technologies Institute, RAND Corp., for the Office of Science and Technology Policy, October 1994. 45. Cozzens, “Assessment of Fundamental Science Programs,” 1995, p. 33. 46. Research programs should be evaluated at a fairly aggregate level by independent individu- als with the requisite scientific and technical expertise, who are capable of judging progress relative to resources invested. By “a fairly aggregate level,” the committee means including a fairly large set of projects and over a sufficient period to capture benefits, which are often long delayed; the more basic the science, the longer the gestation period. Scientists must also be allowed to fail occasionally, although not indefinitely or consistently. Evaluation of some applied research and most fundamental technology programs is more straightforward because the objectives are clearer and the causal chains more direct, although even here there are often surprises. For both science and technology, it takes astute and expert observers, and not bean counters, to tell how reasonable the gambles have been and how great the rewards should be, over appropriate periods. Successful programs should be rewarded for achieving or sustaining world-class leadership. Unsuccessful ones should be eliminated, cut back, or reorganized. All programs should present compelling reasons for continuation or expansion. Criteria for success should suit the particular area of science or technology. Science intended only to advance understanding (e.g., archaeology or cosmology) will have different measures than mission-oriented fields (e.g., pharmacology or materi- als science) or fundamental technology (e.g., instrumentation or engineering). Individuals working in the fields are best able to judge value and craft appropriate measures. 47. Peter F. Drucker, “Really Reinventing Government,” The Atlantic Monthly 275(2): 49, 1995. 48. One persistent theme of most reports on federal laboratories (note 10) is a strong need to free laboratories from “micromanagement” by federal agencies in Washington, D.C., and by Congress. This was a major concern of the Packard Report of 1983 (note 11). The Foster Report (1995) documents the number of task orders and NASA employees that oversee the Jet Propulsion Labora- tory contract and judges them to be excessive. The Galvin Report (1995) cites this bureaucratic layering as among its top concerns. In the university setting, concerns have centered on the inter- pretation of Office of Management and Budget circulars A-110 and A-21, which set rules and account- ing practices and in the judgment of many universities impose rigidities and induce inefficiencies, a concern addressed in the Federal Demonstration Project (see note 49). 49. The Federal Demonstration Project is described in annual reports of the Government- University-Industry-Research Roundtable (Washington, D.C.: National Academy of Sciences): 1993 Annual Report (published April 1994), pp. 12-14, and 1994 Annual Report (published 1995), pp. 9-10; and in the brochure “What Is the Federal Demonstration Project?” (August 1991), available from the Roundtable offices. 50. If functions of programs are shifted from federal responsibility, for example through block grants to states, the necessary R&D capacity must still be sustained. In transportation, state funding is channeled through a private national organization, whereas in public health, drug abuse, and health services most research remains funded by the federal government, with outreach to the states. 38

Next: Part II: Supplements: Background and Rationale »
Allocating Federal Funds for Science and Technology Get This Book
×
Buy Paperback | $47.00 Buy Ebook | $37.99
MyNAP members save 10% online.
Login or Register to save!
Download Free PDF

The United States faces a new challenge--maintaining the vitality of its system for supporting science and technology despite fiscal stringency during the next several years. To address this change, the Senate Appropriations Committee requested a report from the National Academies of Sciences and Engineering and the Institute of Medicine to address "the criteria that should be used in judging the appropriate allocation of funds to research and development activities; to examine the appropriate balance among different types of institutions that conduct such research; and to look at the means of assuring continued objectivity in the allocation process." In this eagerly-awaited book, a committee of experts selected by the National Academies and the Institute responds with 13 recommendations that propose a new budgeting process and formulates a series of questions to address during that process. The committee also makes corollary recommendations about merit review, government oversight, linking research and development to government missions, the synergy between research and education, and other topics. The recommendations are aimed at rooting out obsolete and inadequate activities to free resources from good programs for even better ones, in the belief that "science and technology will be at least as important in the future as they have been in the past in dealing with problems that confront the nation." The authoring committee of this book was chaired by Frank Press, former President of the National Academy of Sciences (1981-1993) and Presidential Science and Technology Advisor (1977-1981).

  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. ×

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

    « Back Next »
  6. ×

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

    « Back Next »
  7. ×

    View our suggested citation for this chapter.

    « Back Next »
  8. ×

    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!