Capitalizing on New Needs and New Opportunities Government-Industry Partnerships in Biotechnology and Information Technologies (2001) / Chapter Skim
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The Federal Partnership with U.S. Industry in U.S. Computer Research: History and Recent Concerns
The Federal Partnership with U.S. Industry in U.S. Computer Research: History and Recent Concerns
Pages 195-222
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From page 195... ...
, Information Technology Research: Investing in Our Future, Washington, D.C.: Government Printing Office, 1999; National Science and Technology Council, Subcommittee on Computing, Information, and Communications R&D, Committee on Technology, Information Technology: Frontiers for a New Millennium, Washington, D.C.: Government Printing Office, 1999; National Research Council, Making IT Better: Expanding Information Technology Research to Meet Society's Needs, Washington, D.C.: National Academy Press, 2000; Congressional Budget Office, Current Investments in Innovation in the Information Technology Sector: Statistical Background, Washington, D.C.: Congressional Budget Of lice, 1999. 2See Kenneth Flamm, Targeting the Computer, Washington, D.C.: The Brookings Institution, 1987.
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From page 196... ...
The United States government has been an important patron of information technology research throughout its history, beginning with the development of the first electronic digital computers during the Second World War, and continuing up through the present.3 Much has changed since the birth of this technology in the 1940s, however, and in the last several years prominent voices have articulated new concerns over changing relationships between government, industry, and information technology research. This paper surveys available empirical data on computer research activity with an eye to the legitimacy of these worries.
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From page 197... ...
, expert systems, speech recognition, advanced computer interfaces (like the mouse) , computer graphics, computer-based engineering design and productivity tools, advanced microelectronics design, manufacturing and test tools all drew significantly on results of an astounding portfolio of people and projects.
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From page 198... ...
Next, we briefly consider the other federal patrons of computer research. 5This Figure is based on official NSF data on federal obligations for research, by field of science and engineering, by fiscal year.
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200 70 60 50 8 4o30 20 10 O ,~9~ ~9~ ~9~ ~9~ ~9~ ~9~ ~9~ ~9~> ~9~ ~9~ ~99~ ~99~ ~99> ~99~ 99~ BIOTECHNOLOGY AND INFORMATION TECHNOLOGIES A\ ,~: _ _ - g j , , , , , , , , , , j , , , j , , , j , , , j Year 0 Universities ~ Non University Performers _ _ All Performers FIGURE 2 DoD share of federal math and CS basic research dollars. THE OTHERS Department of Energy/Atomic Energy Commission Historically, the second-largest federal funder of computer research and development has been the Department of Energy, and its predecessor agency, the Atomic Energy Commission.
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From page 201... ...
tems, and the focus shifted toward massively parallel supercomputing using large numbers of processors lashed together. In addition to funding the second-largest slug of computer research funding in the federal budget, Energy was particularly creative in supporting development and production of horrendously expensive new hardware.
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From page 202... ...
Computer science did not emerge as a separate academic discipline until the 1960s, and with its orientation toward academically defined disciplines, the NSF initially only funded problem-oriented computer applications in traditional academic disciplines. The first organized thrust into computing came in 1967, with a large facilities investment program designed to strengthen computing hardware resources available in the nations' universities and colleges.
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From page 203... ...
Based on NSF data, Figure 4 shows the share of federal funds in math and computer science research and development undertaken in universities, and in university-administered federally funded research and development centers (FFRDCs) .9 Though there has been some downward trend most recently, the federal share of all math and computer R&D funds in universities has fluctuated between 65 and 75 percent over the last fifteen years, and shows no sign of fundamental change.
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From page 204... ...
In the 1950s, the federal government paid for perhaps 60 percent of research and development undertaken by firms producing computer hardware. By the mid-1960s, the federal share had declined to roughly a third of total R&D.10 By 1975, NSF data show that firms 10See Flamm, Targeting the Computer, op.
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From page 205... ...
Adding university math and computer science research to computer hardware industry R&D, the federal share of the total went from 26 percent in 1975, hovered in the 16 to 22 percent range from 1980 through 1995, then dropped to 10 percent in 1997 (Figure 5~. Beginning in 1995, industrial R&D by computer software and service firms has been measured in NSF statistics, but folding in that, too, does not arrest a sharp decline from 1995 to 1997.
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Indeed, surprisingly and perhaps even shockingly, U.S. computer hardware industry R&D seems to have actually declined in real terms during the 1990s, according to NSF statistics!
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After some recovery in 1997, computer hardware industry R&D drops again in 1998. Even with increasing software and services industry R&D added on, the total again declines from 1997 to 1998.
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From page 208... ...
Industrial computer R&D seems to have not only fallen in absolute terms in the l990s, but also relative to sales by computer hardware producers. Figure 7 shows that the research intensity of computer hardware makers tracked by NSF statistics fell sharply in the l990s.
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From page 209... ...
However, even if IBM and other computer hardware firms had shifted out of OCAM and into software and services in the NSF classifications, the data would still seem to show an absolute decline from 1990 to 1995, even if a very large share of software and service R&D in 1995 had been coming from such "transferees." In order to not have declining R&D from 1990 to 1995 among firms classified as computer hardware producers in 1990, there would had to have been large-scale movement out of OCAM and into still other sectors, like communications equipment or scientific instruments. While not impossible, this seems unlikely.
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From page 210... ...
90001 8000 7000 (n `o 6000to 5000n o 40003000 2000 1 000OFIGURE 9 1997 Total R&D funds. Hardware Software and Services first 4 next 4 next 12 rest of industry Firms (by size of R&D programs)
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From page 211... ...
CHANGES IN COMPUTER INDUSTRY RESEARCH INTENSITY For this purpose, we turn to corporate financial data collected in Standard and Poor's Compustat database. Unlike the NSF data, only publicly traded company-funded R&D is included in these statistics, and foreign companies with ADR shares sold on American stock markets are included.
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From page 212... ...
This latter group includes firms like Cisco, 3Com, and Adaptec, and was excluded from our analysis of SIC 357, in order to ensure greater comparability to NSF statistics. It is also important to reaffirm that the NSF data, collected by the Census, cover all U.S.
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COMPUSTAT SIC 357 sales.
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From page 214... ...
Putting the above facts together, both flat or declining sales by firms focused on computer hardware, and declines in the research intensity of those sales, combined to produce the declining computer hardware R&D figures in the early 1990s in the earlier Figures showing the NSF data. In the Compustat data, by way of contrast, there are increasing sales over this period.
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From page 215... ...
All these much more R&D-intensive firms whether they failed, merged with other computer firms, or merged with non-computer firms are picked up in the early part of the l990s in the NSF sample. The subset that was acquired by other computer companies remaining in the business, or that failed, is picked up in the broad Compustat sample over the entire period.
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From page 216... ...
Declines in it&D-intensity in computers appear to be offset to a significant extent by increasing R&D intensity in I/O peripherals. More interestingly, this raises the issue of whether the decline in R&D intensity in computers, and the relative stagnation of computer hardware R&D in the late 1990s, really masks the fact that the leading edge of computer technology has moved out of traditional computer companies and into new and different kinds of firms.
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From page 217... ...
computer hardware manufacturers (SIC 357) and semiconductor producers (SIC 3674)
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, communications hardware expanded sharply in both real terms, and relative to OCAM R&D. With the rise of the Internet, the World Wide Web, and e-commerce, this is not surprising.
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From page 219... ...
SUMMARY AND CONCLUSIONS Government's role in the funding of computer R&D has declined greatly, in both relative and absolute terms. Virtually no government R&D funds now support projects at computer hardware companies, in marked contrast to the situation just two decades ago.
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From page 220... ...
After looking at a variety of data sets, we have tentatively concluded that the apparent decline in industrial R&D intensity in computer hardware is real. It is particularly pronounced in computer systems; less so in storage and peripherals.
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From page 221... ...
A serious review of the objectives and conceptual basis for surveys and statistics of R&D would seem useful given the apparent structural changes affecting these high-tech industries. In short, the scale of R&D investments in computers and computer architectures has dropped in both absolute and relative terms recently, and longer-term investments in basic and fundamental research are clearly falling short by historical standards.
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From page 222... ...
2000. Making ITBetter: Expanding Information Technology Research to Meet Society's Needs.
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