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IMI'h'()\ I \ f , ////: M.KH.. I IK > \ I'KOCL.SS / J.i 



Federal funding tliat improNcs graduate and undergraduate education is an 

 example ot another \va>' to encourage commercial development indirectl\-. while 

 alM) supprting K&D in the national interest, hi addition to helping stimulate the 

 dc\e!i)pment and transfer ot new enabling technologies into the private sector, the 

 engineering research centers funded by NSF. for instance, have helped change the 

 natiiic of graduate engineering education." By working in close collaboration with 

 dieir counterparts in industry, graduate students and faculty have become more 

 aware of the specific technologx needs and practices of indu.stry. As a consequence, 

 engineering research programs are more focu.sed and students are better prepared 

 to work in industrial research and development laboratories. 



The government al.so sponsors research and development with i->otential 

 commercial applications in its own laboratories, in FFRDCs, including the national 

 laboratories, and in independent medical research institutes and other nonprofit 

 organizations (almost half of l-S&T funding goes to those organizations, the rest to 

 universities and industrial laboratories). Fducation is not a central mission of those 

 orgaiiizations — an important consideration given that movement of people is one of 

 the most effective wa\s to transfer new ideas and technologies into the private 

 -.ector. Several recent reports have noted other reasons that federal laboratories, 

 whether operated b\ the go\ernment or contractors, generally have been less 

 successful than tiie\ could be at transferring new enabling technologies to jiotential 

 users in the private sector'' New mechanisms such as cooperative research and 

 development agreements ((.UADAs) between firms and the government laboratories 

 were introduced to address this problem. .Many succes.sful collaborations have been 

 forged between federal laboratories and industry. .Several recent reports argue, 

 however, that CU.MXXs ma\ be less effective than alternatives, that the) are difficult 

 to evaluate because of inadequate data, that ownership of intellectual property is 

 often uncertain, and that they create few jobs.'" '" Under some (^Ili\DAs. the gov- 

 ernment may be performing research that the partner firm would have done on its 

 own in ihe absence of a cooperative research agreement. The committee believes 

 tliat in many cases the government resources that support CR.\DA research could be 

 better spent on other, more productive items in the FS&T budget. 



Iri addition to prov iding fimds for research and graduate educatii)n at universi- 

 ties and government laboratories, the federal government also supports a variety of 

 oilier |-;rograms that promote the development of commercial technologies in the 

 private sector They include the .Advanced Technology Program, the Technology 

 Reinvestment Program, the .Manufacturing Extension Partnerships program. Small 

 Uusincss Innovation Research grants and other small bu.siness set-asides, and direct 

 government subsidy to private firms. Those programs have different goals and 

 structures but share in their intention to cultivate industrial innovation. The ATP 

 and tlicTRP involve funding of private-sector projects; the MEP program is modeled 

 after the agricultural extension service program and primarily helps small businesses 

 to incorporate new technologies (.see Supplement 1). Mo.st of these programs are 

 loo new to be carefullv evaluated, and. becau.se of inherent features in program 

 design and prospects of unstable fimding, we may never be able to tell whether 

 some of them achieved their goals.'' 



At this time, the very concept of a government role in subsidizing the develop- 

 ment of private-sector product and process development is controversial. Some 



