Cooperative R&D: Federal Efforts to Promote Industrial Competitiveness

[Excerpt] In response to the foreign challenge in the global marketplace, the United States Congress has explored ways to stimulate technological advancement in the private sector. The government has supported various efforts to promote cooperative research and development activities among industry, universities, and the federal R&D establishment designed to increase the competitiveness of American industry and to encourage the generation of new products, processes, and services. Collaborative ventures are intended to accommodate the strengths and responsibilities of all sectors involved in innovation and technology development. Academia, industry, and government often have complementary functions. Joint projects allow for the sharing of costs, risks, facilities, and expertise. Cooperative activity covers various institutional and legal arrangements including industry-industry, industry-university, and industry-government efforts. Proponents of joint ventures argue that they permit work to be done that is too expensive for one company to support and allow for R&D that crosses traditional boundaries of expertise and experience. Such arrangements make use of existing, and support the development of new, resources, facilities, knowledge, and skills. Opponents argue that these endeavors dampen competition necessary for innovation. Federal efforts to encourage cooperative activities include the National Cooperative Research Act; the National Cooperative Production Act; tax changes permitting credits for industry payments to universities for R&D and deductions for contributions of equipment used in academic research; and amendments to the patent laws vesting title to inventions made under federal funding in universities. Technology transfer from the government to the private sector is facilitated by several laws. In addition, there are various ongoing cooperative programs supported by multiple federal departments and agencies. Given the increased popularity of cooperative programs, questions might be raised as to whether they are meeting expectations. Among the issues before Congress are whether joint ventures contribute to industrial competitiveness and what role, if any, the government has in facilitating such arrangements

Manufacturing Extension Partnership Program: An Overview

[Excerpt] A program of regional centers to assist small and medium-sized manufacturing companies use knowledge and technologies developed under the auspices of the National Institute of Standards and Technology (NIST) was created by P.L.100-418. The Hollings Manufacturing Extension Partnership (MEP) has centers in all 50 states and Puerto Rico that provide technical and managerial assistance to firms. Federal funding is matched by non-federal sources. Funding increased until FY1999, when support declined reflecting a decrease in the federal portion of financing from one-half to one-third as individual centers operated longer than six years. Through FY2004, funding remained fairly constant despite the Administration’s FY2003 budget that proposed an 88% reduction in support such that MEP centers “with more than six years’ experience operate without federal contribution.” Financing was cut 63% in FY2004, but restored in FY2005. The President’s FY2006 and FY2007 budget again proposed funding reductions; however in FY2006 MEP was financed at $104.6 million (after mandated rescissions) and at$104.6 million in FY2007. A significant reduction in support for MEP to $46.3 million was included in the Administration’s FY2008 budget. The FY2008 Consolidated Appropriations Act, P.L. 110-161, finances the Partnership at$89.6 million, 14.4% less than the FY2007 figure. The President’s FY2009 budget request includes $4 million to close out the federally funded portion of the program. P.L. 110-69, the America COMPETES Act, authorizes funding for MEP through 2010 and creates several new manufacturing R&D programs. This report will be updated as events warrant

Industrial Competitiveness and Technological Advancement: Debate Over Government Policy

[Excerpt] There is ongoing interest in the pace of U.S. technological advancement due to its influence on U.S. economic growth, productivity, and international competitiveness. Because technology can contribute to economic growth and productivity increases, congressional attention has focused on how to augment private-sector technological development. Legislative activity over the past 25 or more years has created a policy for technology development, albeit an ad hoc one. Because of the lack of consensus on the scope and direction of a national policy, Congress has taken an incremental approach aimed at creating new mechanisms to facilitate technological advancement in particular areas and making changes and improvements as necessary. Congressional action has mandated specific technology development programs and obligations in federal agencies. Many programs were created based upon what individual committees judged appropriate within the agencies over which they had authorization or appropriation responsibilities. However, there has been recent legislative activity directed at eliminating or significantly curtailing many of these federal efforts. Although, for the most part, this approach has not been adopted, the budgets for several programs have declined. The proper role of the federal government in technology development and the competitiveness of U.S. industry continues to be a topic of congressional debate. Current legislation affecting the R&D environment have included both direct and indirect measures to facilitate technological innovation. In general, direct measures are those which involve budget outlays and the provision of services by government agencies. Indirect measures include financial incentives and legal changes (e.g., liability or regulatory reform; new antitrust arrangements). As the 111th Congress develops its budget priorities, the manner by which the government encourages technological progress in the private sector again may be explored and/or redefined

Industrial Competitiveness and Technological Advancement: Debate Over Government Policy

[Excerpt] There is ongoing interest in the pace of U.S. technological advancement due to its influence on U.S. economic growth, productivity, and international competitiveness. Because technology can contribute to economic growth and productivity increases, congressional attention has focused on how to augment private-sector technological development. Legislative activity over the past 25 or more years has created a policy for technology development, albeit an ad hoc one. Because of the lack of consensus on the scope and direction of a national policy, Congress has taken an incremental approach aimed at creating new mechanisms to facilitate technological advancement in particular areas and making changes and improvements as necessary. Congressional action has mandated specific technology development programs and obligations in federal agencies. Many programs were created based upon what individual committees judged appropriate within the agencies over which they had authorization or appropriation responsibilities. However, there has been recent legislative activity directed at eliminating or significantly curtailing many of these federal efforts. Although, for the most part, this approach has not been adopted, the budgets for several programs have declined. The proper role of the federal government in technology development and the competitiveness of U.S. industry continues to be a topic of congressional debate. Current legislation affecting the R&D environment have included both direct and indirect measures to facilitate technological innovation. In general, direct measures are those which involve budget outlays and the provision of services by government agencies. Indirect measures include financial incentives and legal changes (e.g., liability or regulatory reform; new antitrust arrangements). As the 111th Congress develops its budget priorities, the manner by which the government encourages technological progress in the private sector again may be explored and/or redefined

Industrial Competitiveness and Technological Advancement: Debate Over Government Policy

[Excerpt] There is ongoing interest in the pace of U.S. technological advancement due to its influence on U.S. economic growth, productivity, and international competitiveness. Because technology can contribute to economic growth and productivity increases, congressional attention has focused on how to augment private-sector technological development. Legislative activity over the past 25 or more years has created a policy for technology development, albeit an ad hoc one. Because of the lack of consensus on the scope and direction of a national policy, Congress has taken an incremental approach aimed at creating new mechanisms to facilitate technological advancement in particular areas and making changes and improvements as necessary. Congressional action has mandated specific technology development programs and obligations in federal agencies. Many programs were created based upon what individual committees judged appropriate within the agencies over which they had authorization or appropriation responsibilities. However, there has been recent legislative activity directed at eliminating or significantly curtailing many of these federal efforts. Several programs have been terminated and the budgets for other initiatives have declined. The proper role of the federal government in technology development and the competitiveness of U.S. industry continues to be a topic of congressional debate. Legislation affecting the research and development (R&D) environment has included both direct and indirect measures to facilitate technological innovation. In general, direct measures are those which involve budget outlays and the provision of services by government agencies. Indirect measures include financial incentives and legal changes (e.g., liability or regulatory reform; new antitrust arrangements). As the Congress develops its appropriation priorities, the manner by which the government encourages technological progress in the private sector again may be explored and/or redefined

Federal R&D, Drug Discovery, and Pricing: Insights from the NIH-University-Industry Relationship

Public interest in approaches that might provide prescription drugs at lower cost, particularly for the elderly, has rekindled discussion over the role the federal government plays in facilitating the creation of new pharmaceuticals for the marketplace. In the current debate, some argue that the government’s financial, scientific, and/or clinical support of health-related research and development (R&D) entitles the public to commensurate considerations in the prices charged for any resulting drugs. Others view government intervention in price decisions based upon initial federal funding as contrary to a long-term trend of government promotion of innovation, technological advancement, and the commercialization of technology by the business community leading to new products and processes for the marketplace. The government traditionally funds R&D to meet the mission requirements of the federal departments and agencies. It also supports work in areas where there is an identified need for research, primarily basic research, not being performed in the private sector. Over the past 25 years, congressional initiatives have expanded the government’s role to include the promotion of technological innovation to meet other national needs, particularly the economic growth that flows from the use of new and improved goods and services. Various laws facilitate commercialization of federallyfunded R&D through technology transfer, cooperative R&D, and intellectual property rights. The legislated incentives are intended to encourage additional private sector investments often necessary to further develop marketable products. The current approach to technology development attempts to balance the public sector’s interest in new and improved technologies with concerns over providing companies valuable benefits without adequate accountability or compensation. Some question whether or not the current balance is appropriate, particularly with respect to drug discovery. The particular nature and expense of health-related R&D has focused attention on the manner in which the National Institutes of Health (NIH) undertakes research activities. Critics maintain that the need for technology development incentives in the pharmaceutical and/or biotechnology sectors is mitigated by industry access to government-supported work at no cost, monopoly power through patent protection, and additional regulatory and tax advantages such as those conveyed through the Hatch-Waxman Act and the Orphan Drug Act. Supporters of the existing approach argue that these incentives are precisely what are required and have given rise to robust pharmaceutical and biotechnology industries. It remains to be seen whether or not decisions related to federal involvement in issues related to pharmaceutical R&D will change the nature of the current approach to government-industry-university cooperation. This report will be updated as events warrant

The National Institute of Standards and Technology: An Overview

The National Institute of Standards and Technology (NIST) has a mandate to increase the competitiveness of U.S. firms and provide the measurement, calibration, and quality assurance techniques that underpin U.S. commerce. Congressional debate has focused on the merits of NIST’s external R&D programs directed toward increased private sector commercialization, including the Advanced Technology Program (ATP) and the Manufacturing Extension Partnership (MEP). The level of funding for internal research efforts has also been scrutinized by Congress. FY2006 appropriations legislation provided $752 million for NIST, an increase of 8.2$675 million for FY2007. The President’s FY2008 budget request for NIST totals $640.7 million and includes a significant cut in support for MEP and no funding for ATP. This report will be updated as events warrant

The National Institute of Standards and Technology: An Overview

The National Institute of Standards and Technology (NIST) has a mandate to increase the competitiveness of U.S. firms and provide the measurement, calibration, and quality assurance techniques that underpin U.S. commerce. Congressional debate has focused on the merits of NIST’s external R&D programs directed toward increased private sector commercialization, including the Advanced Technology Program (ATP) and the Manufacturing Extension Partnership (MEP). The level of funding for internal research efforts has also been scrutinized by Congress. FY2006 appropriations legislation provided $752 million for NIST, an increase of 8.2$675 million for FY2007. The President’s FY2008 budget request for NIST totals $640.7 million and includes a significant cut in support for MEP and no funding for ATP. This report will be updated as events warrant

R&D Partnerships: Government-Industry Collaboration

Efforts by the 104th Congress to eliminate several government-industry-university research and development partnership programs reflected some opposition to federally funded programs designed to facilitate the commercialization of technology. Within the context of the budget decisions, the 106th Congress is expected to again debate the government's role in promoting collaborative ventures focused on generating new products and processes for the marketplace