Bringing the benefits of new products, new processes, and new knowledge into the market is a key challenge for an innovation system. Partnerships facilitate the transfer of scientific knowledge to real products; they represent one means to improve the output of the U.S. innovation system. Partnerships help by bringing innovations to the point where private actors can introduce them to the market. Accelerated progress in obtaining the benefits of new products, new processes, and new knowledge into the market has positive consequences for economic growth and human welfare. The case of the semiconductor industry illustrates that partnerships have also contributed directly to furthering the global competitiveness of U.S. industry.

Partnerships are diverse in structure, mechanisms, and goals. This is one of their advantages. Partnerships as diverse as the Small Business Innovation Research program (SBIR) program, the Advanced Technology Program (ATP), and SEMATECH have all demonstrated positive results commensurate with their challenges and objectives. Indeed, the partnership concept is wider than a “one size fits all” solution to the challenges of technology development. Flexibility and experimentation are key elements in effective policymaking for public-private partnerships.

Successful partnerships tend to be characterized by industry initiation and leadership, public commitments that are limited and defined, clear objectives, cost sharing, and learning through sustained evaluations of measurable outcomes, as well as the application of the lessons to program operations.2 At the same time, it is important to recognize that although partnerships are a valuable policy instrument, they are not a panacea; their demonstrated utility does not imply that all partnerships will be successful. Indeed, the high risk—high payoff nature of innovation research and development assures some disappointment.

Partnerships focus on earlier stages of the innovation stream than many venture investments, and often concentrate on technologies that pose greater risks and offer broader returns than the private investor normally finds attractive.3 Moreover, the limited scale of most partnerships—compared to private institutional investments—and their sunset provisions tend to ensure early recourse to private funding or national procurement. In terms of project scale and timing in the innovation process, public-private partnerships do not displace private finance. Properly constructed research and development partnerships can actually elicit


Features associated with more successful partnerships are described in the Introduction to this report.


Some programs also support broadly applicable technologies that, while desirable for society as a whole, are difficult for individual firms to undertake because returns are difficult for individual firms to appropriate. A major example is the Advanced Technology Program.

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