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Strategic Planning Document -
Civilian Industrial Technology
Research and Development
II. STRATEGIC PLAN
A. Goals and Opportunities
For decades following World War II, U.S. Government science and
technology policy was focused on support for basic science and
government-mission R&D -- predominantly defense, followed by health,
aerospace, and energy. New discoveries in science laboratories were
assumed to move more or less automatically through a pipeline of applied
research, development, design, and commercialization.
R&D and procurements for defense and other government missions were
assumed to spin off into commercial products and services.
That approach worked well at a time when our Nation's top priority was
winning the Cold War, and when U.S. companies dominated world markets.
It does not answer the Nation's needs as well today. The
biggest challenges for our country now are to promote national economic
security, to regain our position as world leader in important
industries, to create good new jobs, and to raise living standards for
all Americans.
Of course, Federal policy must continue to fully support basic
scientific research -- the foundation for all technological advance --
and the technology required for vital agency missions, including national
security. But equally important in today's world is a government
technology policy that aims at promoting long-term economic growth while
protecting the environment, building a stronger, more competitive
private sector, and creating productive jobs.
Technology is a powerful driver of economic growth. Many economic
studies over the past four decades credit technology, or "the advance of
knowledge," with most of U.S. productivity growth in the postwar
period and at least one-quarter -- and perhaps as much of one-half -- of
overall economic growth [1].
As we near the turn of the 20th century, technology is even more
dominant in the economy. It is not just the "high-technology"
industries themselves, such as telecommunications and semiconductors, that
depend on rapid cycles of innovation. It is also their customer
industries, including very traditional ones. For example, the apparel
and textile industries in the United States depend to an increasing degree on
rapid, accurate communication all the way from fiber producers to
retailers. Bar coding at the point of sale and electronic ordering back
through the supply chain allow quick response to customers'
demands. For another example, the automobile industry is one of the
largest customers for semiconductors; as much as 20 percent of the value
of today's automobile is in its electronic systems.
While the private sector is the major actor in putting technology to
work for economic growth, the government has several clear responsibilities:
- Ensure a highly favorable climate for private investment in research
and development and in new ventures built around innovations by
limiting public borrowing, providing tax incentives, and ensuring open
and fair world markets;
- Ensure common sense regulation for protection of public health and
the environment that emphasizes performance, not prescription; promotes
innovation; and encourages private industry to combine public
safety and environmental goals with business goals of efficiency and
lower costs;
- Ensure that Americans have the education and training they need to
participate fully in a fast-paced technologically sophisticated workplace.
Another element can also be critical -- prudent government investment,
in partnership with industry, in the advance of civilian technology.
These partnerships are especially important in areas where the potential
rewards to society are large, but the costs of technology development
are high, risks are great, and payoffs are distant. In particular,
adequate private investment is unlikely in cases where no single firm can
expect to reap returns that justify the risk, because the rewards are
widely shared with competitors, firms in non-competing or follow-on
markets, and the general public. Economic studies over several decades
have found that the average private rate of return on R&D investments,
to the individual company making the investment, is 20 to 30 percent.
The total social rate of return -- to the investing firm, competitors,
other companies, and customers -- has averaged about 50 percent [2].
For many years, government has been a valued partner in developing
technologies that drive growth in some civilian sectors -- e.g.,
agriculture, starting with the Morrill Act in 1872, and civilian
aircraft, beginning with the creation of the National Advisory Committee
on Aeronautics in 1915. The laboratories of the National Institute of
Standards and Technology (NIST), working on more generic infrastructural
technologies in standards, metrology, and manufacturing and materials,
are over 90 years old and continue to enjoy widespread support.
More recently, government R&D has gained wider recognition as a
contributor of valuable technology to numerous industrial sectors. For
example, the Stevenson-Wydler and Bayh-Dole Acts of 1980 inaugurated a
decade of legislation encouraging technology transfer from Federal
laboratories to industry. NIST programs in manufacturing extension for
small and medium-sized firms, and cost-shared R&D with a variety
of industrial partners were created in 1988, and have since grown from
pilot-size to full-scale programs.
The Committee on Civilian Industrial Technology (CCIT) of the National
Science and Technology Council (NSTC) is responsible for coordination and
oversight of government-wide R&D and allied technology programs that can
help to promote industrial competitiveness and economic growth. CCIT is
chaired by the Under Secretary of Commerce for Technology with a
co-chair from the White House Office of Science and Technology Policy and
a vice-chair from the Department of Energy; the Departments of Defense,
Interior, and Transportation, and the Environmental Protection Agency,
the National Aeronautics and Space Administration, and the National
Science Foundation are also represented on CCIT. CCIT and its
subcommittees work with industry to set priorities for government R&D
that support economic growth and to align government R&D appropriately
with these priorities, while also meeting important public needs such as
environmental protection.
The major task for CCIT is to see that the government's R&D resources
relevant to industrial competitiveness are used efficiently and
effectively. In the face of a large Federal debt, fiscal constraints
are tight, and the R&D budget is virtually level. R&D investments must
be designed to get the best possible return on each dollar spent.
B. CCIT Principles
Several principles guide CCIT strategy:
- Work with industry, the principal actor in competitiveness, in
setting priorities for Federal technology investment and
selecting focus areas;
- Continue strong government support for R&D in infrastructural
technologies, such as standards and metrology, that are broadly
applicable to many industrial sectors;
- Require cost-sharing by industry in R&D programs with a technology
focus that is more industry-specific; this ensures that industry
has a stake in the program;
- In cost-shared R&D programs, select projects competitively in
evaluations by independent experts;
- Include public needs as important factors in selecting focus areas,
e.g., environmental protection or "sustainability" and potential for
creation of quality jobs;
- Work with state and local governments and academia on
infrastructural investments (e.g., manufacturing extension
services, education and training, workplace modernization), and share costs;
- Work within federal R&D budget caps and do not expect large
infusions of new money;
- Set goals and milestones for programs, hold them accountable, and
evaluate their effectiveness;
- Establish mechanism for ending programs when they have met their goals.
Close coordination 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 infrastructure that benefits 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.
Exchanges with other interested parties outside the Federal Government
also include labor organizations, universities and community colleges,
non-profit research organizations, State and local governmental bodies,
and regional economic development agencies.
C. Range of Activities in CCIT
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 of the
programs focus on enabling technologies that apply across a broad
range of industries. For example, one focus area in infrastructural
technologies is R&D for rapid prototyping, both virtual and real.
Another is technologies that enable virtual manufacturing, including the
standards and interfaces needed for electronic interchange of data among
distant industrial partners. Enabling programs also include
manufacturing extension centers and education and training for
manufacturing engineers and technicians.
Some CCIT activities are focused on specific industrial sectors in which
industry leaders see a clear need for cooperation with government R&D to
solve technology problems. An example is the Partnership for a New
Generation of Vehicles (PNGV). The goal is to develop a prototype
family-size car by 2003 that gets three times the fuel efficiency of
today's auto, with no sacrifice in comfort, convenience, cost, or
safety. The technology challenge is enormous, but the potential payoffs
are also huge: large, growing markets for U.S.-made cars in the
twenty-first century, the creation and maintenance of good jobs,
improved urban air quality and a lesser burden of greenhouse
gases on the world environment, and reduced dependence on foreign oil.
CCIT initiatives are achieved through several different mechanisms --
often by adjustment or realignment of existing agency programs directed
toward agency missions (e.g., energy science and technology, space and
aeronautics). Several industry-led, cost-shared cooperative
public-private R&D programs also make important contributions to the
priorities established by CCIT, as well as carrying out the
general goals of the Committee and Administration priorities. These
programs include NIST's Advanced Technology Program (ATP), designed to
promote the Nation's economic success; and, in the context of an
integrated military-civilian industrial base that can meet military needs
for leading-edge technologies at affordable cost, the Technology
Reinvestment Project (TRP). These two programs are industry-led,
cost-shared, high priority initiatives. In addition, Cooperative
Research and Development Agreements (CRADAs) and other kinds of
cooperative arrangements between the private sector and Federal labs
contribute to CCIT and Administration goals.
ATP, for example, concentrates much of its effort in well-defined
technology focus areas, as proposed by industry. Then, companies or
consortia submit proposals for individual projects in the focus areas, with
awards based on the technical and business merit of the project, as
judged by independent experts. Several of the focus areas chosen
through the ATP process have the potential for valuable contributions
to CCIT initiatives. For example, affordable manufacturing of strong,
lightweight composite structural materials, which is a linchpin for
success of the PNGV clean car initiative, is an ATP focus area. TRP
projects for advanced automotive technologies with major military as
well as civilian uses are also of potential value to PNGV. So are
several CRADAs between private companies, consortia, and the
Department of Energy laboratories.
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