Government-Industry Partnerships for the Development of New Technologies (2003) / Chapter Skim
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IV. Federal Partnerships With Industry: Past, Present, and Future
IV. Federal Partnerships With Industry: Past, Present, and Future
Pages 45-74
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From page 47... ...
policy has largely reflected his belief in the need for an active federal role in the development of the U.S. economy.2 In fact, driven by the exigencies of national defense and the requirements of transportation and communication across the North American Continent, the federal government in that same decade played an instrumental role in developing new production techniques and technologies by turning to individual entrepreneurs with innovative ideas.
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From page 48... ...
During the nineteenth century, the federal government played an instrumental role in developing the U.S. railway network through the Pacific Railroad Act of 1862 and the Union Pacific Act of 1864.5 While not without abuse, these acts provided very substantial financial incentives to the development of the U.S.
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From page 49... ...
The inducements were on the scale of the enterprise and not without abuse but the fundamental policy objectives of economic growth and national unity were achieved. There were also major benefits in terms of management, organization, and market scale for many other American firms what economists today would call positive externalities created by the extension of a national railroad network.
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From page 50... ...
.~° The unprecedented challenges of World War II generated huge increases in the level of government procurement and support for high-technology industries.~i Today's computing industry has its origins in the government's wartime support for a program that resulted in the creation of the ENIAC, one of the earliest electronic digital computers, and the government' s steady encouragement of that fledgling industry in the postwar period. Following World War II the federal government began to fund basic research at universities on a significant scale.
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From page 51... ...
In the last decade of the twentieth century government support was essential to progress in such areas as microelectronics, robotics, biotechnology, nanotechnologies, and the investigation of the human genome. Patient government support also played a critical role in the development of the Internet (whose forerunners were funded by the Defense Department and the NSF)
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From page 52... ...
Changing Priorities and Funding Shifts in the composition of federal research support therefore remain important both in their own right and for the impact these shifts may have on the future development of our most innovative industries, such as biotechnology and computers, which promise to be a source of substantial innovation and growth. In both cases the role and impact of federal R&D funding is of great importance.
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From page 53... ...
Each point is addressed below. 2iFor a discussion of these shifts, see Michael McGeary, "Recent Trends in the Federal Funding of Research and Development Related to Health and Information Technology," in National Research Council, Capitalizing on New Needs and New Opportunities: Government-Industry Partnerships in Biotechnology and Information Technologies, op.
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From page 54... ...
While the equity market in the United States is among the most dynamic in the world, it does not equally address all phases of the innovation process. In fact, current trends in the venture industry particularly the increase in deal size make certain types of small, early-stage financing less likely, despite the overall increase in venture funding.24 Although private sector R&D has steadily increased in the United States in recent years, almost all of it has been product oriented rather than geared to basic research.25 In addition, the increase in corporate spending on research is concentrated in such sectors as the pharmaceutical industry and information technology.
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From page 55... ...
In practice, for example, the decline of the defense budget corresponded with a slowdown in real terms of military support for research in physics, chemistry, mathematics, and most fields of engineering. This STEP Board study showed that in 1997 several agencies were spending substantially less on research than in 1993, even though the overall level of federal research spending was nearly the same as it was in 1993.
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From page 56... ...
compared with 40 percent in 1993.32 This difference in funding trends between the physical sciences and engineering on the one hand and the life sciences on the other hand is worrying insofar as progress in one field can depend increasingly on progress in others. Recent shifts in federal investment in research across disciplines may therefore have major consequences.
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From page 57... ...
312. The authors note that national laboratories, under the purview of the Department of Energy, now have extensive cooperative agreements with industrial firms in the form of Cooperative Research and Development Agreements (CRADAs)
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From page 58... ...
i. MEETING TOMORROW'S CHALLENGES The semiconductor industry illustrates the important role public policy on ndustry partnerships has played in the genesis, resurgence, and continual rapid growth of this industry.36 The implications of current trends in the allocation of federal support, and the recognition of future technical challenges, highlight the need for expanded public support for research often through partnerships if the exceptional growth of the information technology industry and the extraordinary benefits related to this growth are to continue.37 Federal Support Public support played a significant role in the development and growth of the computer and semiconductor industr~es.38 The birth of the semiconductor industry can be dated with the invention of the first rudimentary transistor in 1947 at Bell Laboratories.
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From page 59... ...
See also Kenneth Flamm, Mismanaged Trade? Strategic Policy in the Semiconductor Industry, op.
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From page 62... ...
A series of trade agreements between Japan and the United States did not resolve trade frictions between the two countries, nor did the agreements redress the steadily declining U.S. market share.49 At the urging of the industry, the federal government took several significant policy initiatives designed to support the U.S.
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From page 63... ...
Michael Gadbaw, Conflict Among Nations: Trade Policies in the l990s, op.cit.. For additional discussion of the Semiconductor Trade Agreement, see National Research Council, Conflict and Cooperation in National Competition forHigh-Technology Industry, op.
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From page 64... ...
government and for the fiercely competitive U.S. semiconductor industry.55 The Silicon Valley entrepreneurs hesitated about cooperating with each other and were even more hesitant about cooperating with the government an attitude mirrored in some quarters in Washington.56 Industry Leadership From the outset, the industry took a leading role in setting its objectives, managing its resources, and measuring its accomplishments.57 The consortium showed substantial flexibility in its early years as its members and leadership struggled to define where it could make the maximum impact.
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From page 65... ...
Rodgers, "Silicon Valley Versus Corporate Welfare," CA TO Institute Briefing Papers, Briefing Paper No. 37, April 27, 1998.
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From page 66... ...
These include: · The SIA roadmap to determine the direction of research; · Planning of resource allocation by SIA and SRC; · Allocation of federal funding through Department of Defense, National Science Foundation, and the Defense Advanced Research Projects Agency; · The success of SEMATECH and International SEMATECH in supporting research on process, technology, design, and testing; and The Focus Center Research Project.66 . In addition to these informed opinions, the willingness of new firms such as Infineon (Germany)
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From page 67... ...
For a comprehensive statement of his views, see "Silicon Valley Versus Corporate Welfare," CA TO Institute Briefing Papers, Briefing Paper No. 37, April 27, 1998.
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From page 68... ...
semiconductor producers.7i Technical Challenges, Competitive Challenges, and Capacity Constraints For more than 30 years the growth of the semiconductor industry has been largely associated with the ability of researchers to shrink the transistor steadily and quickly and thereby increase its speed, without commensurate increases in costs (Moore's Law)
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From page 69... ...
semiconductor industry had regained strength in both the device-making and supplier markets, and voted to seek an end to matching federal funding after 1996. For a brief timeline and history of SEMATECH, see |
From page 70... ...
that have generated uncertainty about this form of cooperation, especially at the federal level.82 An effect of this irresolution has been a passive federal role in addressing the technical uncertainties central to the continued rapid evolution of information technologies. DARPA's annual funding of microelectronics R&D the pr~ncipal channel of direct federal financial support has declined, and is projected to decline further (See Figure 3~.83 As noted above, this trend runs counter to those in Europe and East Asia, where governments are providing substantial direct and indirect funding in this sector.
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From page 71... ...
semiconductor industry, the federal government, and universities work cooperatively on cuttingedge research deemed critical to the continued growth of the industry. This program is operated by the Semiconductor Research Corporation, which funds and operates university-based research centers in microelectronics.84 In cooperation with the government and leading universities, the industry plans to eventually establish six national focus centers and channel $60 million per year into new research activities.
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From page 72... ...
There are many models for government-industry collaboration cooperative research and development agreements, the NIST Advanced Technology Program, and the Small Business Research Innovation Program, to cite a few."86 Indeed, programs such as SBIR are being harnessed to bring new technologies to address urgent national missions. For example, the National Institute of Allergies and Infectious Diseases at the National Institutes of Health has rapidly expanded its efforts in support of research on possible big-terrorism in response to recent threats and attacks.
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From page 73... ...
See J Stowsky, "Politics and Policy: The Technology Reinvestment Program and the Dilemmas of Dual Use," Mimeo, University of California.
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