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Views and Concerns of the
U.S. Science and Technology
Community
DR. PRESS: To give an American view of concerns and opportunities,
we have Erich Bloch, who since 1984 has been director of our National
Science Foundation. This is one of the key government agencies that supports
basic science and engineering in the United States. Mr. Bloch is an electrical
engineer. His entire career was spent at IBM, where he rose to the position
of corporate vice president. Two years ago he received the National Medal
of Technology from President Reagan for his work on the famous IBM 360
computer. He is a very important spokesman in the United States on issues
of science and technology policy, both domestic and international.
MR. BLOCH: My assignment is to offer a U.S. perspective on some of
the issues that are raised by European economic integration for science and
engineering, from the viewpoint and concerns of the science and technology
community.
This is a subject that the Committee on International Science, Engineer-
ing, and Technology in OSTP is examining in some detail. In addition, the
National Science Board has established a special committee to consider the
implications of European integration for our policy, and there are many
more committees and task forces in place to look at the same subject.
One reason the formation of the European Community is of significant
interest to the United States and to its science and technology communities
is that we have a tradition of strong ties with individual European countries
in these areas. We have, therefore, a natural interest in maintaining these
strong bilateral cooperative links in education and basic research as well as
in industry technology. The establishment of the European Community
raises a question as to whether these traditional ties are being disrupted or
at least changed substantially because of the EC or if, alternatively, the EC
constitutes for the United States just one more actor in a complex web of
13
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EUROPE 1992
relationships. Beyond that, however, the European integration is causing us
to take a close look at a series of science and technology issues that, far
from being uniquely European, are becoming pervasive in the era of global
technology.
Before I address any of these questions, I have a couple of more general
observations. We are, as is quite obvious, living in a time of extraordinary
change. The dramatic transformation of eastern European politics and eco-
nomics is just one aspect of this process; EC 1992 is another. The shift
from national economies to an integrated world economy is yet another. It
affects a global economic arena that has become fiercely and broadly com-
petitive for all nations. But important as these events are, they are unlikely
to define the essence of our age. I suggest that this role will fall to the
information and knowledge technologies that have contributed so heavily to
these and other social developments.
Knowledge, in fact, has become the critical resource, as important as
natural resources or access to low-cost skilled labor were in the past. It has
become the engine of economic growth and change, and, in the context of
the new global economy, new knowledge is the foundation of new industries
such as computers, biotechnology, semiconductors, new materials, and many
other things. New knowledge has revolutionized the workplace, education,
and even research itself, through computers and information science, and
has made it possible for us to address, on a joint basis, global issues like
environmental pollution, ozone depletion, and others.
The new information and knowledge technologies, because of the effect
they have on society and the competitive power they confer, have played a
significant role in reshaping political and economic relations. They are
responsible for the emergence of this country as a world technological and
economic leader after World War II and the emergence of the Pacific power
bloc. And while the reasons for European unification are complex and
many, one might well ask whether the process or the rapid pace that we are
witnessing today would have come about without the knowledge revolution
that is occurring at the same time.
The effect of the new knowledge economy is to underscore the critical
importance of investing in science and engineering research and of having a
well-educated technical work force. All industrial countries, and those that
aspire to join the ranks, are responding to these circumstances in similar
ways. Systematic innovation and effective commercialization of new products
and processes are key to economic leadership. This requires national investments
in research and technical infrastructure. While total U.S. R&D spending
continues to exceed the collective European total, European nations have
made significant progress in narrowing the gap, based on a higher growth
rate in their research investments.
This is particularly true in civilian R&D. In 1984, for example, U.S.
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15
spending for civilian R&D exceeded that of EC nations by 40 percent. By
1988 our lead declined to 10 percent, and it would not be unreasonable to
expect relative parity in civilian R&D as 1992 approaches. If the eastern
European countries are included, total European spending on civilian research
would exceed that of the United States for sure.
With regard to human resources, we face similar problems. In the United
States science and engineering employment has grown at twice the rate of
other professional employment. European countries, through their investment
in the human resource base, are beginning to shorten the once substantial
lead the United States enjoyed in technical personnel. The demand for a
highly educated technical work force is increasing on both sides of the
Atlantic, and because of demographics shortages are developing both here
and there.
Cooperation and open communication across international boundaries in
the sciences have always been critical to the vitality of scientific inquiry.
European integration and the importance of cooperation and communication
in the political arena attest to the fact that science and engineering research
is no longer unique in this regard. At the same time, because of the centrality
of research to the economic competitiveness of individual nations, cooperation
and competition in the sciences and engineering have a different meaning
today than they have had over the past 40 years. Not surprisingly, cooperation
in science and technology is becoming a political question. Despite the fact
that today open communication of research is more important than ever,
driven in part by the pace and richness of discoveries and capabilities, and
despite the fact that escalating costs make cooperation increasingly attractive
on major research issues and in the use of large capital-intensive facilities
like drill ships and accelerators, cooperation in science and technology is
being subjected to practical, political, and economic concerns.
With these general observations then, I would now like to talk about
Europe 1992 and its impact on the United States. Within this context,
dominated by the growing role of research and the need for cooperation and
sharing across national boundaries, European integration raises some very
important issues for all of us.
The first issue I want to look at is research investment. Generally stated,
the question is whether the Single Market momentum will lead European
researchers and their program administrators to look inward and inadvertently
disrupt the relationships that have been developed on the bilateral basis.
There is no doubt that in the past the scientific relationships of some coun-
tries with the United States were stronger than with their neighbors. How or
if the changes that we are seeing will change these relationships is the
important question. Currently, EC R&D spending constitutes less than 4
percent of all R&D spending in Europe, and EC cooperation has been primarily
in strategic technologies with commercial potential, that is, the Framework
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EUROPE 1992
Programs, as was pointed out before. However, the European Community
will focus on basic research as a matter of necessity. Contacts with the
principal investigators in our universities at the basic research level occur
mostly through public research facilities supported by national governments,
augmented by university researchers. This is the level of interaction that is
the focus of our bilateral arrangements with the individual countries. However,
budgets for basic research in most EC countries have been declining or are
stable, and funding increases have been directed principally at technology
development. To the extent that this trend continues, it could result in even
greater pressure on basic research and potentially diminish contacts be-
tween U.S. and European researchers.
The second issue is the European community of scientists. Until recently
a regular sharing of ideas and approaches among European and American
scientists was assured not only by contact among senior scientists but also
by the fact that many Europeans received at least a part of their training in
the United States. That is changing. Among European scientists aged 45 to
54, 21 percent obtained their doctorates in the United States, compared with
12 percent of those aged 30 to 35. This change is occurring simultaneously
with the emergence of a European community of scholars more oriented
toward intra-European communication. This could result in greater pressure
on research administrators to redirect resources including grants, fellowships,
and travel costs to European-centered activities, to the exclusion of coop-
eration with scientists and engineers from other countries. In all fairness I
need to add that my European colleagues have had the same concern about
the alteration of the U.S. relationship to their countries when we discovered
that the Pacific Rim was no longer an area that could be ignored, scientifi-
cally and otherwise.
The third issue is bilateralism. The EC process could also affect the
quality and richness of these relationships. For example, will intra-European
connections lessen the commitment of individual nations to interaction with
the U.S. science and engineering communities over time? Another question
is, what will be the role of the European Community on the research decisions
of individual nations, especially since the individual countries are the locus
of support for basic research? Or, a third question, will the momentum of
Framework-type programs begin to affect the allocation of resources, espe-
cially human resources, and with it the access of American researchers to
programs at the individual and national levels? Last, will there be a stron-
ger tendency toward large multinational projects at the expense of more
flexible research arrangements at the level of the individual investigator?
By the way, a similar question is being asked here when it comes to centers
and individual investigators. All in all then, is there an arrogation of power,
and by power I mean funding, at the EC level at the expense of the individual
country level over time?
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77
Another issue is the tripartite relationship. The nature of government-to-
government relations in science and technology is the area of concern. Our
contacts today are at the bilateral level. As the European Community be-
comes a larger factor in research funding, what should be the nature of U.S.
contacts with the integrated Community? There is some discussion already
of a U.S.-EC bilateralism, and rightly so. The prospects of a fruitful rela-
tionship in this area will no doubt be strongly influenced by funding and
policy choices for Europe-wide science and technology. The basic question
here is, will the U.S.-EC relationship emerge in place of bilaterals or in
addition to them?
Another area of concern is access to information. The competitive advan-
tage conferred by access to the newest ideas and processes and the prospect
of early commercialization give rise to pressures for limiting access to in-
formation. Current discussion of intellectual property rights is a case in
point. The tougher EC position on this issue raises questions with respect
to cross-licensing, protection of proprietary information, the assignment of
rights in personnel exchanges, and joint research endeavors, as well as the
geographic boundaries where intellectual property rights apply.
Standards have already been discussed, but let me say a word about
them. The adoption of a single system of standards is an issue of obvious
concern to industry, to the extent that standardization is not only a means to
further the integration but could also be used to exclude some American
products from European markets. However, standardization of products
and services will also affect research and development activities between
countries, in such areas as data processing, software, networking, telecom-
munications in general, environment, and biotechnology.
Technology transfer is another issue. The obvious interest of eastern
European countries in the rich markets and developmental possibilities of
the western European arrangement could also raise questions with respect to
technology transfer. Changes in the eastern European countries and in our
own relationship with them are rapid and dramatic. But the degree of
openness and sharing will remain an issue, and not only a scientific one but
also a political one in the foreseeable future. Stronger relations and greater
sharing within a planned European context will require further examination
of this topic.
To conclude, the process of European integration will undoubtedly in-
vigorate the science and engineering research base throughout Europe. But
the process also raises some important issues and could force major dislocations
in established relationships dictated by the economic climate within which
this integration is taking place. One thing is sure: we Americans, the U.S.
science and engineering community in particular, and maybe the European
Community itself and its member nations 'are underestimating the rapidity
with which these changes will occur and the far-reaching effects they will
=, —— —-——c' -
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8
EUROPE 1992
have. I want to expand a bit on Vice President Pandolfi's earlier remark.
Maybe the timing and the results will surprise us, but I want to be clearly
understood. These are positive forces at work, but they need to be under-
stood and not ignored or understood too late. The year 1992 is not a curtain
raiser; it is the end of the first or maybe even the second act of a drama of
historical proportions.
I am very much encouraged about the subject that Vice President Pandolfi
raised, with respect to putting actual program discussions ahead of Framework
discussions or a memorandum of understanding and other arcane instru-
ments that we normally deal with. In the interest of preserving mutually
beneficial relations across the Atlantic in the sciences and engineering, however,
we should bear in mind some basic principles as we discuss the details or
the generalities.
Some of these principles are very clear. We must ensure reciprocal
freedom of access to basic science and engineering programs and facilities
for all qualified researchers. We must make provision for sharing major
facilities and data bases. We must assure appropriate intellectual property
protection. There must be fair terms for private sector access to publicly
funded technology-based programs such as ESPRIT, EUREKA, and others.
And there must be a standards- and regulation-setting process that is open,
fair, and flexible without sacrificing the commonality that is so important
both to us and to the Common Market. There is every reason to believe that
the strong commitment to openness and cooperation that has characterized
our relations in the past will continue to inform our policies in the future. It
will surely help us all to deal with common concerns and to address an
increasingly complex research agenda. Such a commitment will also contribute
to the growth of the knowledge pool from which we all benefit.
DR. PRESS: We have 20 minutes or so for comments, discussion from
the floor, or questions to be addressed to our two speakers. Our speakers
may also wish to comment on each other's papers. I will start, just to begin
the discussion.
Between the European countries and the United States, there are differences
in style, in culture, in the way governments behave, and in their relationship
with industry. It's not to say that one is right or one is wrong. They simply
differ. I have the impression that in some European countries the governments
could go very easily from research and development support in the civilian
sector to seeing that whatever emerges in the form of new technology ends
up in a commercially successful product. In other words, the governments
might intrude more in the process of manufacturing investment or ownership
of corporations and in that way perhaps provide some degree of advantage
compared to our system where the support of basic sciences is as far as the
government goes. As I said before, it isn't a question of which tradition is
correct or which attitude is wrong, but it does lead to some degree of
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19
asymmetry that might end up in perceptions of unfair competition. This
may be the sort of issue that would be very difficult to resolve between
western Europe and the United States. Of course, it shows the advantage of
your recommendations that we cooperate in basic science in large projects
to mitigate this degree of difference, of competition, but these issues will
arise nevertheless. What is your picture of the future? Do you think that
these differences are serious? Are they manageable? How do you think
they could be reconciled?
MR. PANDOLFI: First an observation. You have mentioned the fact
that in Europe we have different styles and different traditions, legislative
traditions for example, in the various member states. Yes, this is clearly the
present situation, but I think that the increasing role of the Community as a
catalyst, beyond the small percentage of funding directly dedicated by the
Communities to our programs, will produce a more homogeneous situation
in the various member states. For example, one of the important policies of
the Community is the competition policy. And we have more and more
severe monitoring of, for example, state assistance, so I think that in the
future these differences will be reduced, but in line with a higher respect for
competition, free competition rules, avoiding, for example, a tendency in
certain member states to use some legislative provisions to directly support
competitive research, not just precompetitive research.
The future situation is probably advantageous as far as the relationship
between the United States and Europe is concerned, not only for the obvious
reason that it is easier to manage a bilateral relationship than a multilateral
one, but also because it will be possible to negotiate and to have mutual
monitoring. The United States, I think, will have a greater influence on the
Community compared with its influence on the individual member states.
That is why I have proposed to start immediately with this kind of joint
work, because I think working together will demonstrate the advantages of
direct bilateralism for removing obstacles, if they exist, ameliorating the
atmosphere, and also solving some of the problems you have rightly mentioned.
In any case, our policy is only to support precompetitive research, leaving
to the companies the responsibility to join the market with their production.
This is a clear line for the Community.
MR. BLOCH: Regarding your specific question of governments' influ-
ence on funding beyond basic research, I must point out that we are not as
pure as we sometimes appear to be. For example, there is heavy funding,
50 percent, from the federal government. So we have problems on both
sides, access to each other where we have a commingling of funds. But I
want to elevate your question to a more general one. I think we will have
asymmetries for a long time asymmetries in our institutions, in where the
funding is, and so forth. And we have lived with these asymmetries over
the last decades. We have to recognize from the beginning that things will
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EUROPE 1992
not be that simple, that access to an activity in one country and access to
one in another country mean two different things, involve two different
institutions. Most of the basic research in the United States 75 percent-
is done in universities. Seventy-five percent of the basic research in Europe
is not done in universities; it's done in government labs. It might even be
done in EC labs in the future. So I think we should be prepared to deal with
that issue, recognize that differences exist and then move forward and make
sure that we have access to similar kinds of activities on a similar kind of a
basis. But it will never be the same, and it will never be quite as easy to
determine what access means.
DR. PRESS: Those are two very good responses. Now let me turn to the
audience.
MR. COONEY: Stephen Cooney, National Association of Manufactur-
ers. My question is to Vice President Pandolfi: What are the approximate
levels of funding in each of the six major areas in the revised third Frame-
work Program? Can you give us those figures at this time? I know originally
it was 7.7 billion ECUs. That was changed to 5.7 billion ECUs, but what's
the distribution among the six program areas?
MR. PANDOLFI: In spite of the fact that I am the author of the proposal,
I do not have the exact figures in mind, but my associate, Professor Fasella,
does but first a preliminary remark. The original proposal of the Commission
was 7.7 billion ECUs, as you have mentioned, for the five-year period. We
had a lot of problems with the Council. The final result was 5.7 billion
ECUs, but with the possibility of obtaining additional money in 1992 for
the last two years of the program, 1993-1994. So I am confident of ameliorating
our situation and adding something to the figure already agreed to by the
Council. (See Figure 1.)
Of course, there is another element of novelty. It is a certain modifica-
tion inside the various actions. For example, for the first action, related to
information and communication technologies, we have a new research pro-
gram aimed at the interconnection of the various national networks, both of
public administrations and of systems supporting industries. And this is
one of the major necessities for the Community.
MR. BURLANT: Bill Burlant, GAP Chemicals. You mentioned the role
of the rather profound and pervasive areas, like environmental and life
sciences and biotechnology, but what impact, if any, do you project on the
smaller chemical companies that are involved in a variety of research projects
but not in those categories in the next five or 10 years?
MR. PANDOLFI: There is not in our programs a preliminary, a priori
distinction between big companies and small enterprises. Our goal is to
ameliorate the access of small and medium-size enterprises to our pro-
grams. Of course, it would be stupid to deny the driving force of big
companies, but one of the characteristics of the new Framework Program,
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40 -
35 -
30 -
au 25
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a'
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20 -
15 -
10 -
5—
o
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FIGURE 1 Distribution of Funds for the Third Framework Program.
3.6
the third one, is the utilization of some new mechanisms. One of these is a
new element of our Community law: it's a new kind of European consortium
whose name is European Economic Interest Grouping. Under the provisions
of this new consortium, it is more possible than before to associate small
laboratories, small industries why not your small chemical industries to
big companies, with some new and very interesting and effective formulas.
So we do hope that the new program will allow us to obtain much more
coordination of the activities of small and medium-sized enterprises and the
. .
g companies.
MR. BREMER: Mike Bremer, the Upjohn Company. Can you provide a
distinction between precompetitive and competitive research? And, Dr.
Bloch, would you tell us whether you would agree with that distinction?
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EUROPE 1992
MR. PANDOLFI: It's a very complicated question, as you know. It is a
dogmatic question, and there is some theology in these affairs.
First, it's a problem of common-sense evaluation. It is impossible to
establish a sharp demarcation line, absolutely impossible. But it is easy, on
the contrary, to distinguish a certain body of research that is clearly included
in the precompetitive area. And it is relatively easy to perceive the links
between a certain type of research and a final product to put in the markets.
Of course, there is an intermediate area. As far as the relationship between
the United States and the European Community on this point, it is a problem
of mutual confidence and better mutual knowledge. Therefore, I support
this method of working together and monitoring each other, to know better
what the respective activities are just to avoid misunderstanding, to in-
crease our common vision, especially on crucial points such as this one.
MR. BLOCH: Let me start from a set of definitions that are more
prevalent in this country. It's really where to draw the line between basic
research, advanced research, and development, if you want to structure it in
those three areas. And I'll draw the line of precompetitive somewhere
within this advanced research category certainly somewhat beyond basic
research but stopping well before what we call development. By the way,
let me focus on one aspect of it. Basic research applies to engineering
research as well as scientific research, and I think that's where we have a
problem once in a while, that everything that has the label engineering
somewhere is automatically advanced research, at best, development more
likely. It's being labeled that, and I think that is erroneous.
The line is somewhere within this advanced research area. I don't think
we should be that precise about it, however. I think a certain amount of
nonclarity and nonprecision is to our advantage, and I think that's what you
reflected on before. So let's not try to cut that particular definition so fine
that we have no room to maneuver. Many things that start off in develop-
ment, as you know very well, wind up in basic research and obviously vice
versa. I think we should not try to draw a line that is too fine, too narrow,
and too theological, by your definition.
MS. PLATZER: Michaela Platzer, U.S. Chamber of Commerce. You've
talked a lot about the European Community's Framework Program. Can
you talk about the connection between the EC's Framework Programs and
the EUREKA programs, which were obviously aimed at competitive re-
search?
MR. PANDOLFI: This is just the case to look at as far as this demarca-
tion line is concerned. But this is a very important question and one of the
crucial points of our activity. We have reflected and considered this prob-
lem deeply. Our final conclusion is the following. We can't afford in
Europe to disperse our resources. Where we have EUREKA projects, they
have a different nature than our pure precompetitive projects. But it is
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possible to have a certain combination of the two, if the Community partici-
pates only in a certain part of a EUREKA project: precisely the precompetitive
part of the overall project. For example, we have one of the well-known
EUREKA projects, Project JESSI. Our problem has been how to identify
precisely one part of this microelectronics program that is purely precompetitive
research not directly related to the final production of memories, etc. So
this is our formula. Probably there is something complicated in this exercise,
but it is inevitable, and now we have found, I think, a reasonable guideline
with a satisfactory solution for our member states. The same thing holds
true for another well-known project, HDTV. In this case, our participation
is absolutely small, and it is not related to the production of the final appa-
ratus.
Representative terms from entire chapter:
technology community
