Strategic Planning Document -
Civilian Industrial Technology
Research and Development

I. EXECUTIVE SUMMARY

While the private sector plays the major role in applying technology to economic growth, the government also has an indispensable part to play. Three fundamentals for technology-based growth are first-class education and training for all Americans, a strong fundamental science base, and a business environment conducive to investment in research and innovation. All require effective government policy. But they must be augmented by an innovation system that moves emerging and enabling technologies from the science base to products and services in a timely and effective manner. In some instances, government investment in partnership with industry can be critical to the early pre-competitive development of civilian technology. Where the costs of investing in new technologies are very high and the rewards distant -- and especially where benefits to other firms and society at large are likely to outstrip returns to the individual investing company -- private investment is usually inadequate. For advances in this kind of high-risk, high-payoff technology, government can share the risk and create benefits that reach beyond individual firms. In addition, government can provide connections between the science establishment, the education community, government science and technology programs, and private industry.

For half a century after World War II, federal science and technology policy was mostly limited to support of fundamental science and traditional government missions -- chiefly national security, health, and space. These investments benefited American industry, and seemed adequate at a time when U.S. firms dominated the world economy. Today we live in a different world. Tough international competition has forced corporate cost-cutting drives, leading companies to target in-house research on technologies that are close to commercialization at the expense of longer term or riskier research. Moreover, the accelerating pace of technological advance, ever shorter product cycles, and rapid worldwide diffusion of technologies make it still harder for many companies to invest adequately in risky or long-term R&D. The new model of best practice that is taking form is to create partnerships for riskier or more generic R&D -- teaming with other companies, with universities, and with the government.

The Committee on Civilian Industrial Technology (CCIT) of the National Science and Technology Council (NSTC) is responsible for oversight and coordination of government-wide R&D and allied technology programs that promote industrial competitiveness and economic growth. This document describes the purpose and activities of CCIT.

The major purpose of the CCIT is to ensure that the government's R&D resources relevant to industrial competitiveness are used efficiently and effectively. To meet the dual goals of deficit reduction and investment in the Nation's future, R&D investments must be designed to get the greatest possible leverage. Better coordination and management to see that priority areas receive proper attention is the way to reach these goals.

Collaboration with private industry is central to CCIT activities. Industry brings to the table crucial market experience in selecting areas for technology investment. For its part, government can provide a long-term outlook, support for enabling technologies (such as standards and measurement) that benefit industry broadly, and reduction of risk in investments with potentially high social payoffs but questionable returns to individual companies. In addition, government can act as convener in bringing together efforts that individual companies cannot accomplish on their own. Government-industry partnerships for these purposes have had broad support for many years in several areas (agriculture, civilian aircraft, and standards and metrology). And since 1980, bipartisan legislation has encouraged R&D partnerships in wider areas, including technology transfer from federal laboratories to industry and collaborative R&D for pre-commercial technology development.

Principles governing industry-government civilian technology partnerships include:

• industry leadership
• cost-sharing
• competitive selection, on the basis of merit, of cost-sharedprojects
• evaluation of partnership programs to determine their success
• mechanisms for ending programs when goals are accomplished

While all the programs coordinated by CCIT have the central purpose of promoting economic growth, they also include public benefits that are external to the market, and they differ in emphasis. Some activities focus on enabling technologies that apply across a broad range of industries. CCIT's subcommittees on Manufacturing Infrastructure and Materials Technology are in this category; included here are programs to diffuse best-practice technologies broadly to small and medium-sized firms. Other activities are more focused on technologies of interest to particular industrial sectors, where industry leaders see a clear need for cooperation with government R&D to solve technology problems. These include: the Partnership for a Next Generation Vehicle, the National Electronics Manufacturing Initiative, and the Building and Construction Initiative.

In addition, the Advanced Technology Program (ATP) is an industry-led, cost-shared, merit-based partnership program that supports a range of technologies relevant to the health and growth of several important industrial sectors, including those that are the focus of CCIT initiatives. The Technology Reinvestment Project (TRP) also relies on industry leadership, cost sharing, and competitive selection in a partnership aimed at making the most advanced and affordable commercial technologies available to the military. Both ATP and TRP are high-priority programs for the Clinton Administration.

CCIT also joins with other NSTC Committees in coordinating activities that cut across several committee responsibilities, including environmental technologies, biotechnologies, and dual-use technologies that have important applications in both military and civilian spheres.

Government partnerships with industry for technology advance are of course just one element in what is needed for the United States to take and hold world leadership in important industries that add to the national wealth, create good jobs, and enrich our lives. The "environment conducive to private investment," alluded to above, includes some overarching policy areas. At the top of the list is reduction of the federal deficit, so that massive government borrowing does not push up the cost of capital and crowd out private investment. Other important elements are tax policies with appropriate incentives for private investment; trade and export policies that open foreign markets to U.S. goods; and regulation by performance, not prescription, for protecting public health and the environment. The Clinton Administration has accomplished a great deal in these areas, but significant challenges still lie ahead.

Equally important is first-class education that challenges and rewards all our children, and lifelong learning opportunities for adults. Although these activities are outside the scope of CCIT (they are covered in the NSTC Committee on Education and Training), they are closely linked to the success of civilian industrial technology efforts. The Clinton Administration has made strides in this direction; e.g., in the School-to-Work Transition program, for young people who do not choose a straight path to college. Clearly, however, further progress is needed toward world-class education and training in the United States. New, more collaborative approaches can contribute to the adoption of new technologies. In addition to training workers to use and operate new technologies, industry should involve workers in new technology design, purchasing, and the integration of technologies into innovative work systems. These are major challenges for improving competitiveness, and bringing home to all Americans the benefits of technology advance.

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