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ore, p. 2 ^"^^ 



a cross section of the ocean technology industry- Most of the 

 companies in this sector are small, typically employing fewer than 

 50 people. A few - like Raytheon, an OTC member - are large, and 

 they frequently are (or have been) defense fizus. Ocean technology 

 companies as a group are entrepreneurial, creative, and aggressive, 

 and they produce world class products. A large proportion of their 

 sales - often more than half - are from outside the US. 



Given the makeup of our center, we have focused our R&D program on 

 two segments of the ocean technology spectrum: ocean acoustics and 

 marine environmental monitoring systems. In the two years of OTC's 

 existence, we have undertaken five "core" projects that are of 

 general interest to all our members, and we have also performed 

 several proprietary projects that have been funded separately by 

 members with specific interests in those projects. Two examples of 

 our core program are a project to develop a miniature winch that 

 sits on the ocean bottom and samples the water column from the 

 bottom to the surface by unreeling a small sensor package? and a 

 system kno%m as COASTMAP for collecting and analyzing marine data 

 from a network of sensors along the coast and then using the data 

 to forecast conditions in the future. We are in the midst of 

 developing a plan for a major expansion of our research program 

 into marine foods technologies" fishing, aquaculture, and seafood 

 processing- and we are seeking funding for the expanded Center from 

 the state of Rhode Island under its Research Centers of Excellence 

 Program. 



While the I/UCRC Program is very effective in terms of leveraging 

 NSF funds, the aggregate statistics mask some problems that are 

 specific to the ocean technology industry. These problems stem 

 from two factors: (1) the small size of many companies in this 

 industry and (2) the critical role that federal R&D funding - 

 specifically OoD and NSF - plays for all of them, even very large 

 firms. I have already pointed out that many of the companies in 

 the ocean technology sector are small, and their small sizes limit 

 the amount they can Invest in R&D. One suggestion I would make to 

 help small firms like those in our industry invest more in R&D is 

 estzUolishment of a federal tax credit for investments in 

 cooperative R&D partnerships like the OTC. 



Let me now turn to the second factor- the role of federal R&D 

 funding in ocean technology. It is no secret that federal funding 

 is extremely important for ocean R&D in general. The Navy plays an 

 especially Important role in supporting applied scientific research 

 and technology development in the ocean. The reason for that 

 support is obvious: the Navy has a need to understand the 

 environment in which it performs its mission. The collapse of the 

 Soviet Union has led some to conclude that the need for investment 

 in antisubmarine warfare - the mission area that drives much of the 

 Navy's oceanographic R&D program - has been greatly reduced. This 

 attitude results in reductions in funding related to ASW, and is 

 having a direct impact on the ocean technology Industry. 



