GLOBALIZATION OF MATERIALS R&D

TIME FOR A NATIONAL STRATEGY

Committee on Globalization of Materials Research and Development

National Materials Advisory Board

Division on Engineering and Physical Sciences

NATIONAL RESEARCH COUNCIL OF THE NATIONAL ACADEMIES

THE NATIONAL ACADEMIES PRESS
Washington, D.C.
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Globalization of Materials R&D: Time for a National Strategy GLOBALIZATION OF MATERIALS R&D TIME FOR A NATIONAL STRATEGY Committee on Globalization of Materials Research and Development National Materials Advisory Board Division on Engineering and Physical Sciences NATIONAL RESEARCH COUNCIL OF THE NATIONAL ACADEMIES THE NATIONAL ACADEMIES PRESS Washington, D.C. www.nap.edu

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Globalization of Materials R&D: Time for a National Strategy THE NATIONAL ACADEMIES PRESS 500 Fifth Street, N.W. Washington, DC 20001 NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the report were chosen for their special competences and with regard for appropriate balance. This project was supported by the Department of Defense under Award No. MDA972-01-D-0001. Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the views of the sponsors. International Standard Book Number 0-309-09603-0 (Book) International Standard Book Number 0-309-54910-8 (PDF) Library of Congress Control Number: 2005924163 Additional copies of this report are available from: The National Academies Press, 500 Fifth Street, N.W., Washington, DC 20001; (800) 624-6242 or (202) 334-3313 (in the Washington metropolitan area); Internet <http://www.nap.edu>; and the National Materials Advisory Board, National Research Council, 500 Fifth Street, N.W., Washington, DC 20001; Internet <http://www.national-academies.org/nmab>. Copyright 2005 by the National Academy of Sciences. All rights reserved. Printed in the United States of America

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Globalization of Materials R&D: Time for a National Strategy THE NATIONAL ACADEMIES Advisers to the Nation on Science, Engineering, and Medicine The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. Upon the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Ralph J. Cicerone is president of the National Academy of Sciences. The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. Wm. A. Wulf is president of the National Academy of Engineering. The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, upon its own initiative, to identify issues of medical care, research, and education. Dr. Harvey V. Fineberg is president of the Institute of Medicine. The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy’s purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Ralph J. Cicerone and Dr. Wm. A. Wulf are chair and vice chair, respectively, of the National Research Council. www.national-academies.org

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Globalization of Materials R&D: Time for a National Strategy COMMITTEE ON GLOBALIZATION OF MATERIALS RESEARCH AND DEVELOPMENT PETER BRIDENBAUGH, Chair MILLER ADAMS, The Boeing Company ASHISH ARORA, Carnegie Mellon University GILBERT BENAVIDES, Sandia National Laboratories UMA CHOWDHRY, DuPont Company EDWARD DOWLING, DeBeers Group GORDON GEIGER, University of Arizona JENNIE HWANG, H-Technologies Group, Inc. MICHAEL JAFFE, Rutgers University ROBERT PFAHL, International Electronics Manufacturing Initiative NATALIA TAMIRISA, International Monetary Fund XISHAN XIE, University of Science and Technology Beijing Staff MICHAEL MOLONEY, Study Director (from September 2004) TONI MARECHAUX, Study Director (December 2003–September 2004) EMILY ANN MEYER, Research Associate (December 2003–April 2004) MARTA VORNBROCK, Research Associate LAURA TOTH, Senior Program Assistant

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Globalization of Materials R&D: Time for a National Strategy NATIONAL MATERIALS ADVISORY BOARD KATHARINE G. FRASE, Chair, IBM JOHN ALLISON, Ford Motor Company PAUL BECHER, Oak Ridge National Laboratory CHERYL R. BLANCHARD, Zimmer, Inc. BARBARA D. BOYAN, Georgia Institute of Technology L. CATHERINE BRINSON, Northwestern University DIANNE CHONG, The Boeing Company FIONA DOYLE, University of California, Berkeley HAMISH L. FRASER, Ohio State University JOHN J. GASSNER, U.S. Army Natick Soldier Center SOSSINA M. HAILE, California Institute of Technology THOMAS S. HARTWICK ARTHUR H. HEUER, Case Western Reserve University ELIZABETH HOLM, Sandia National Laboratories ANDREW T. HUNT, nGimat Company FRANK E. KARASZ, University of Massachusetts CONILEE G. KIRKPATRICK, HRL Laboratories TERRY LOWE, Los Alamos National Laboratory LINDA SCHADLER, Rensselaer Polytechnic Institute LYLE H. SCHWARTZ JAMES C. SEFERIS, University of Washington SHARON L. SMITH, Lockheed Martin Corporation T.S. SUDARSHAN, Materials Modification Inc. Staff GARY FISCHMAN, Director JAMES KILLIAN, Senior Program Officer MICHAEL MOLONEY, Senior Program Officer TAMAE MAEDA WONG, Senior Program Officer BONNIE SCARBOROUGH, Program Officer HEATHER LOZOWSKI, Financial Associate TERI THOROWGOOD, Administrative Coordinator EUGENE CHOI, Research Associate MARTA VORNBROCK, Research Associate COLLEEN BRENNAN, Senior Program Assistant LAURA TOTH, Senior Program Assistant

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Globalization of Materials R&D: Time for a National Strategy Preface The Committee on Globalization of Materials Research and Development was appointed by the National Research Council (NRC) in December 2003 to assess the status and impacts of the globalization of materials science and engineering (MSE) research and development (MSE R&D). The panel was charged to do the following: Evaluate existing benchmarks as appropriate to assess the current situation and trends in materials research and development in the global community. Identify reasons why U.S. companies may or may not choose to depend on materials research carried out abroad. Assess current laws, policies, and regulations that affect these decisions. Identify advances in technology that are driving globalization of materials R&D. Assess the impact of the factors mentioned above on the U.S. economy and national security. Include the effect of foreign participation in domestic R&D and the effect of U.S. participation in foreign R&D. In light of the above, recommend actions to ensure U.S. access to current materials research and development. The committee met four times during the course of the study to hear detailed presentations on the issues surrounding globalization and globalization’s impact on the current state of MSE R&D, the U.S. economy, and national security. In

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Globalization of Materials R&D: Time for a National Strategy addition, numerous private interviews were conducted with individuals and colleagues in academia, the federal research agencies, and industry. The committee also organized a poll of a self-selected sample of members of the materials community. The committee is grateful to several professional societies—the American Ceramic Society, the American Physical Society, the Federation of Materials Societies, the Materials Research Society, The Minerals, Metals and Materials Society, the Society for Biomaterials, and the Society of Manufacturing Engineers—for their assistance and to John Armor, Tia Benson-Tolle, Keith Bowman, James Daley, Duane B. Dimos, Robert Hawsey, Terry Lowe, John E. Marra, Ozden Ochoa, Greg Schoeppner, Robert Shull, and Kathleen Taylor for their valuable suggestions and their critical input to the committee’s report. Chapter 1 of this report defines MSE and globalization in the broadest sense and examines the history of globalization and R&D in general. Chapter 2 focuses on indicators for the emergence of global research activity in MSE. Chapter 3 updates the NRC report Experiments in International Benchmarking of U.S. Research Fields (2000) in some of the materials subfields. Chapter 4 examines various U.S. regulatory regimes—export, technology transfer, intellectual property, tax policy, immigration, environmental safety and health, and product approval—that might influence corporate R&D globalization decisions. Chapter 5 discusses the economic and national security impacts for the United States of the globalizing trends in MSE R&D. Chapter 6 presents a series of recommendations based on the conclusions drawn in each of the chapters and aimed at defining a strategy for maintaining access to critical, cutting-edge MSE R&D. Because this study was sponsored by the Department of Defense (DOD), the committee focused much of its attention on analyzing and recommending particular actions for DOD and its agencies. It is clear to the committee that the United States and other leading industrial nations are experiencing the globalization of MSE R&D. While R&D is moving offshore to support manufacturing facilities in central Europe and Asia, a much more important aspect of globalization is the massive and accelerating investments that foreign governments, most notably China and India, are making in their own R&D infrastructures, particularly education. This trend is occurring at a time when such investments in the United States are falling. The enrollment of foreign students in graduate science and engineering education at U.S. universities is dropping rapidly and that of U.S. students is in free fall. The Organisation for Economic Co-operation and Development (OECD) reports that in 2000, the share of students in China graduating with engineering degrees was about 40 percent while for the United States it was about 5 percent. Clearly, the United States has a serious problem in education that must be addressed at the national/ federal level if it is to maintain its leadership in innovation. The solution to this

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Globalization of Materials R&D: Time for a National Strategy problem is too important to our future to be left to local decision makers. Like much of U.S. commerce, the U.S. defense and intelligence communities have been successful because they have had access to a one- or two-generation lead in critical technologies. It is the committee’s hope that the conclusions and recommendations in this report will help prepare the United States to deal effectively with the globalization of MSE R&D, secure the nation from future threats, and ensure continued access to the best domestic or foreign MSE R&D in the world. Finally, I wish to thank all the committee members for their insights, inputs, and various contributions to this study. I also wish to thank the staff of the National Materials Advisory Board for their assistance in the development and execution of this study and in the production of this report. Peter Bridenbaugh, Chair Committee on Globalization of Materials Research and Development

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Globalization of Materials R&D: Time for a National Strategy Acknowledgment of Reviewers This report has been reviewed in draft form by individuals chosen for their diverse perspectives and technical expertise, in accordance with procedures approved by the National Research Council’s Report Review Committee. The purpose of this independent review is to provide candid and critical comments that will assist the institution in making its published report as sound as possible and to ensure that the report meets institutional standards for objectivity, evidence, and responsiveness to the study charge. The review comments and draft manuscript remain confidential to protect the integrity of the deliberative process. We wish to thank the following individuals for their review of this report: John Allison, Ford Motor Company, Siegfried S. Hecker, Los Alamos National Laboratory, Don Hillebrand, Argonne National Laboratory, Conilee G. Kirkpatrick, HRL Laboratories, Neil E. Paton, private consultant, Rustum Roy, Pennsylvania State University Lyle H. Schwartz, private consultant Richard S. Stein, University of Massachusetts, Ellen D. Williams, University of Maryland, Albert F. Yee, University of California, Irvine, and Joel S. Yudken, AFL-CIO.

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Globalization of Materials R&D: Time for a National Strategy Although the reviewers listed above have provided many constructive comments and suggestions, they were not asked to endorse the conclusions or recommendations, nor did they see the final draft of the report before its release. The review of this report was overseen by Elsa Garmire, Dartmouth College. Appointed by the National Research Council, she was responsible for making certain that an independent examination of this report was carried out in accordance with institutional procedures and that all review comments were carefully considered. Responsibility for the final content of this report rests entirely with the authoring committee and the institution.

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Globalization of Materials R&D: Time for a National Strategy Contents     EXECUTIVE SUMMARY   1 1   MATERIALS AS GLOBAL ACTIVITY: SETTING THE SCENE   11      Materials Science as a Priority for the United States,   16      Globalization and R&D,   19      What Is Globalization?,   19      What Is the Impact of Government?,   22      What Is the Impact of Industry?,   23 2   INDICATORS FOR TRENDS IN GLOBALIZATION   34      Is MSE R&D Becoming a Global Activity?,   34      The Use of Patent Indicators,   34      Global Trends in MSE Patent Data,   36      Global Trends in MSE Literature Data,   38      Globalization of the U.S. Materials Community,   40      Information Technology as an Enabler of Globalization,   43      Globalization of Corporate MSE R&D,   44      Some Trends in MSE Education,   52      Materials Education Today,   52      Conclusion on Education,   59      Summary Remarks,   62

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Globalization of Materials R&D: Time for a National Strategy 3   BENCHMARKING OF MATERIALS SCIENCE AND ENGINEERING R&D   63      The 2000 Benchmarking Report,   64      Snapshots of the Current Status of Materials Subfields,   66      Biomaterials,   66      Ceramics,   69      Composites,   70      Magnetic Materials,   73      Metals,   74      Electronic and Optical-Photonic Materials,   77      Superconducting Materials,   79      Polymers,   83      Catalysts,   84      Nanomaterials,   88      Current Status of MSE R&D,   92 4   THE REGULATORY REGIME AS A DRIVER   94      Export Regulation and Technology Transfer,   94      Bayh-Dole Act,   94      Export Regulations,   95      Export Regulation and Technology Transfer (Offsets),   97      Tariffs,   98      Intellectual Property Law,   98      Tax Policy,   100      Other Regulatory Regimes,   101      Immigration,   101      Environmental and Safety and Health Standards,   101      Product Approval Regulation,   102      Summary,   103 5   ASSESSING THE IMPACTS OF MATERIALS SCIENCE AND ENGINEERING R&D GLOBALIZATION   105      Economic Impact,   105      Background,   105      Some Key Economic Factors,   107      Some Key Trends,   109      Discussion,   110

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Globalization of Materials R&D: Time for a National Strategy      National Security Impact,   111      Background and Some Key Trends,   111      Discussion,   114      Access and Control,   117 6   CONCLUSIONS AND RECOMMENDATIONS   119      Overview: Some Conclusions About Globalization and Its Impacts,   119      Globalization and U.S. Leadership in MSE R&D,   120      Impacts of the Globalization of MSE R&D,   121      Maintaining Access,   123      Maintaining Access with Better Monitoring,   125      Maintaining Access with Better Benchmarking,   126      Maintaining Access with a Better Understanding of Long-Term Security Needs,   127      Maintaining Access with Better Management of Regulatory Regimes,   128      Maintaining Access by Remaining on the World Stage,   129      Maintaining Access by Managing the Education System and Maintaining an Infrastructure,   130      Final Remarks,   132     APPENDIXES         A   Committee Biographies   135     B   Presentations to the Committee at its Public Meetings   141     C   Global Trends in MSE Patents   143     D   Global Trends in Literature Authorship   160     E   Results of the Community Poll   170     F   Superalloy Case Study   178     G   Environmental and Safety and Health Regulations   189     H   Defining 21st Century Defense Needs   194

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