7
Comparisons of Efforts in Materials Science and Engineering of Selected Nations

The President’s Commission on Industrial Competitiveness noted in its 1985 report Global Competition: The New Reality (U.S. Government Printing Office, Washington, D.C., 1985), “For this entire century—until 1971—this Nation ran a positive balance of trade. Today, our merchandise trade deficit is at record levels.” There are many reasons for this decline, including economic, political, and social forces well beyond the scope of this report. But as previous chapters have demonstrated, materials science and engineering is a key determinant of manufacturing success, and efforts in the field will be crucial to recovering and retaining the U.S. competitive edge.

To assess international cooperation and competition in materials science and engineering, one of the committee’s panels gathered information through a questionnaire sent to materials science and engineering leaders in competitor countries and obtained additional data from the science attaches of foreign embassies, from case studies on representative industrial sectors, and from the open literature. The panel then compared the activities of other countries with practices in the United States. The countries surveyed included several traditional U.S. trading partners (Canada, West Germany, France, and the United Kingdom), a major economic competitor and strategic ally (Japan), a newly industrialized country (South Korea), and the principal U.S. strategic competitor (the Soviet Union).

The most striking observation supported by the gathered information is that all the major nations are strongly committed to industrial growth stimulated by coordinated R&D in which materials science and engineering is a featured element. In fact, of all the industrial areas in which growth is anticipated for the next decade, materials science and engineering, biotech-



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Materials Science and Engineering for the 1990s: Maintaining Competitiveness in the Age of Materials 7 Comparisons of Efforts in Materials Science and Engineering of Selected Nations The President’s Commission on Industrial Competitiveness noted in its 1985 report Global Competition: The New Reality (U.S. Government Printing Office, Washington, D.C., 1985), “For this entire century—until 1971—this Nation ran a positive balance of trade. Today, our merchandise trade deficit is at record levels.” There are many reasons for this decline, including economic, political, and social forces well beyond the scope of this report. But as previous chapters have demonstrated, materials science and engineering is a key determinant of manufacturing success, and efforts in the field will be crucial to recovering and retaining the U.S. competitive edge. To assess international cooperation and competition in materials science and engineering, one of the committee’s panels gathered information through a questionnaire sent to materials science and engineering leaders in competitor countries and obtained additional data from the science attaches of foreign embassies, from case studies on representative industrial sectors, and from the open literature. The panel then compared the activities of other countries with practices in the United States. The countries surveyed included several traditional U.S. trading partners (Canada, West Germany, France, and the United Kingdom), a major economic competitor and strategic ally (Japan), a newly industrialized country (South Korea), and the principal U.S. strategic competitor (the Soviet Union). The most striking observation supported by the gathered information is that all the major nations are strongly committed to industrial growth stimulated by coordinated R&D in which materials science and engineering is a featured element. In fact, of all the industrial areas in which growth is anticipated for the next decade, materials science and engineering, biotech-

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Materials Science and Engineering for the 1990s: Maintaining Competitiveness in the Age of Materials nology, and computer and information technology were targeted by all of the nations surveyed. Another significant observation is that cooperative mechanisms, fostered by government involvement, are being used increasingly by competitor nations to enhance industrial competitiveness. As demonstrated by the industry surveys in Chapter 2, materials science and engineering is rarely the driving force in industrial advancement, except in materials-producing industries, but it is crucial in areas of changing technologies. The complexity of modern manufacturing has led inevitably to interdependence among industries. This trend is on the upswing, taking the form of joint ventures, licensing and use of outside sources for manufacturing, and cooperation in the long-term R&D of technologies for improved manufacturing capability. Such cooperation is most advanced in Japan, where it is mediated by government funding and is often carried out in government laboratories in collaboration with industry. In the United States, cooperation among industries is accomplished through industry-sponsored research-granting organizations, R&D laboratories sponsored by industrial consortia, and various industry-university centers. Noticeably lacking in the United States, and found to a greater degree in all of the countries studied, is a national agency charged with stimulating and assisting industry and, when appropriate, with ensuring that cooperative activities are coordinated and their impact on industrial development optimized. Other important conclusions derived from the analysis of international competition and cooperation in materials science and engineering include the following: The views of industry, universities, and government are sought and received by the governments of foreign countries. In the United States, however, this input is informal. Most other nations set directions for materials science and engineering in a manner intended to target specific industrial markets. In the United States, there is no official materials science and engineering strategy. Foreign governments universally try to ensure the coupling of R&D with commercial exploitation of research results. The use of government laboratories to achieve this is common to most other nations, with the general lack of such activity in the United States a significant difference. The availability of adequate numbers of trained materials scientists and engineers is a concern of all nations, but control of the educational system varies greatly among the countries surveyed. The extremes on the spectrum of control are represented by the United States, with its vast decentralized system of higher education, and South Korea, where levels of educational funding are tied directly to the gross national product and technical training areas are emphasized as part of the national economic plan. All of the

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Materials Science and Engineering for the 1990s: Maintaining Competitiveness in the Age of Materials countries surveyed indicated that their educational emphasis in materials science and engineering had increased during the period 1976 to 1986 relative to other areas, with further emphasis expected in the next 10 years. As in the United States, materials science and engineering is taught academically in a variety of departmental settings in all of the nations surveyed. In all of the countries except Japan and South Korea, the trend is toward materials science and engineering becoming increasingly multidisciplinary. Research emphasis in academic departments is similar throughout the world: 30 to 50 percent is applied research, and the rest is basic research. South Korea is a striking exception, with 80 percent of the university research described as applied. There seems to be a general trend toward conducting more applied research at universities, although this is not the case in Japan (where university-industry links are traditionally not close), South Korea (where the links could hardly be closer), and West Germany (where the more applied work is carried out in the Fraunhofer laboratories, which are only loosely tied to the universities). Government policy and funding for materials science and engineering education are viewed as marginal to only moderate. Inattention to and lack of funding for education in materials science and engineering appear to be major oversights in all of the nations surveyed. Techniques for implementing national goals for materials science and engineering are similar throughout the world, with centralized planning and implementation, establishment of science and technology programs with definite objectives, and cooperative mechanisms being the favored tools of many countries. MATERIALS SCIENCE AND ENGINEERING ABROAD Canada Canada ranks seventh in the world in gross national product and sixth in trade after the United States, West Germany, the United Kingdom, France, and Japan. Since 1984 Canada has achieved one of the highest economic growth and job creation rates among the Western nations, due in part to its spectacular growth in manufacturing. Industry is now a leading component of the nation’s economy and employs about one-third of its work force. Government concentrates its research on areas to improve its industrial trading position through support of basic research, in tandem with providing inducements (e.g., R&D tax credits and capital gains exemptions) to industry for developmental efforts. The Canadian view is that their traditional industries and markets no longer can be counted on to fully sustain the nation’s economic growth, and new

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Materials Science and Engineering for the 1990s: Maintaining Competitiveness in the Age of Materials advanced technologies must be fostered through cooperative R&D efforts. A comprehensive federal science and technology policy has been under development that focuses on strategies for increased R&D expenditures by the private sector to complement federal and provincial initiatives. The Ministry of State for Science and Technology, the government organization most responsible for science policy and coordination, has identified three areas as strategically important to the country’s future: information technology, biotechnology, and advanced industrial materials. Current federally sponsored R&D provides a key network of activities; in the area of advanced industrial materials, government R&D amounted to about Can$29.7 million for the period 1985 to 1986. The organizational setting for these R&D programs is pluralistic and coordinated and is built around the federal-state system of government in which policy and programs must be in accord between the federal and provincial governments. Line departments—such as the Department of Regional Industrial Expansion, the Department of Energy, and the Department of Mines and Resources—and the Canadian National Research Council and the Natural Sciences and Engineering Research Council (NSERC) have the ultimate charter for implementing federal science and technology policy. Each manages the part of Canada’s research budget (about Can$2.9 billion in 1982– 1983) within its own jurisdiction. The Canadian National Research Council is among the top funding agencies for R&D (about Can$361 million in 1982– 1983); its charter mandates industrial expansion and regional development. The Canadian National Research Council operates its own laboratories, gives direct financial support to universities and industry for specific R&D projects, and sponsors coordinating research activities. The NSERC underwrites university research (Can$227 million in 1982–1983), supplementing provincial funding. Materials science and engineering projects focus primarily on metals, but studies of other materials such as advanced ceramics, composites, and polymers are increasing. West Germany The distinctive feature of West German industrial and economic policy, planning, and programs is their broad-based consensus-building process. This democratic process combines elements of decentralized decision making and regional implementation, with sectoral autonomy a key concept and representation by major interest groups a guiding premise. These characteristics also typify the science and technology system in West Germany and set it apart from the approaches used by other European countries. Materials science and engineering has received long-standing emphasis in many West German R&D programs. The lead organization for science and technology policy is the Ministry of Research and Technology (BFMT). The BFMT

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Materials Science and Engineering for the 1990s: Maintaining Competitiveness in the Age of Materials receives about 60 percent of all federal R&D funds (about DM 7 billion in 1984). About half of these funds go directly to industry on a 50:50 cost-shared basis. The remainder is used to support major national research centers, educational institutions, and private research organizations, many of which have an industrial focus. A significant fraction of research funding is channeled to a series of quasi-independent research institutes or laboratories through major nongovernmental research associations or societies, including the Max Planck Society (basic research), the Fraunhofer Society for Applied Research (industrial research), and the German Research Society (education). The research institutes of these societies are usually small, highly focused, and autocratically administered. The Fraunhofer Society for Applied Research, for example, consists of 34 separate institutes and employs about 4000 people, one-third of whom are scientists and engineers. Its institutes cover nine important industrial areas: microelectronics, information technology, automation, production technologies, materials and component behavior, process engineering, power and construction engineering, environmental research, and technological economic studies and technical information. The materials and component behavior area ranks first in terms of staff allocation (with approximately 500 employees) and second in budget (behind microelectronics, each with about DM 53 million in 1985). In 1985, the BFMT inaugurated a new 10-year materials research program with an annual budget of about DM 100 million. The BFMT has assigned the Nuclear Science Research Center at Julich to manage the new program, which encompasses the following areas: high-performance structural ceramics, powder metallurgy, high-temperature metals and special materials, high-performance polymers, and advanced composites. About 30 institutes, representing the Fraunhofer Society for Applied Research, the Max Planck Society, and West Germany’s large research centers, cooperatively participate with numerous industrial companies in this program. France France has developed a modern and highly diversified industrial enterprise that generates about one-third of its gross national product and employs about one-third of its work force. It is now a major exporter of steel, chemicals, motor vehicles, nuclear power, aircraft, electronics, telecommunication products, and weapons, with the latter five targeted by government for industrial advancement. National planning and policy making in France are unified for all areas, including R&D. They are highly centralized within a governmental system structured for maximum coordination and control of programs. Organizationally and operationally, the R&D system in France is enmeshed in an interministerial structure, each ministry covering different spheres such

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Materials Science and Engineering for the 1990s: Maintaining Competitiveness in the Age of Materials as defense, industry, and education. The Ministry of Research and Technology focuses government R&D on national industrial technology programs, as well as providing oversight and management of the nationalized industries. Within the ministerial system, the government operates a host of research establishments and laboratories. By far the most extensive and important agency for R&D is the Centre National de la Recherche Scientifique (CNRS). Attached to the Ministry of Education, it is organized along the lines of the traditional academic disciplines and supports primarily basic research. CNRS does not have a research directorate for materials science and engineering, but it has established crosscutting programs in communications science and new materials. In 1988, CNRS had a budget of about Fr 9.0 billion, about 24 percent of the total civilian R&D expenditures, and employed almost 10,000 scientists and 15,000 support staff in 1,350 laboratories or universities, other government agencies, and industry. As a complement to their internal research efforts, the French have sought to extend their technology base through international cooperative programs. For the most part these are geared toward industrial development and involve multination participation under the auspices of the European Communities. The two most notable programs are the European Strategic Program for Research in Information Technology (ESPRIT) and the European Research Coordinating Agency (EUREKA). The latter is the French equivalent of the U.S. Strategic Defense Initiative program but is oriented to technology, not defense. Both programs require industry participation in funding and conducting research. The United Kingdom Research and development in the United Kingdom is extremely pluralistic and decentralized and in many respects resembles the U.S. R&D system in that policy and planning are carried out by several government departments. Although new programs have been established in the United Kingdom and new approaches such as collaborative research are being tried, the elemental organization of R&D has remained fairly static over the years. On the whole, no group within government coordinates its $6.1 billion per year R&D program, and individual departments operate autonomously. Research and Development (ACARD) is the main body influencing coordination of applied R&D between government and external groups. However, it has no management function, nor does it allocate resources; it does provide the primary conduit for industry access to top government department heads. Most university research funds come from the government’s budget and are administered by the Department of Education and Science. In 1983 the department spent about $1 billion on university research, a sum that included major funding for four major research laboratories operated by the Advisory

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Materials Science and Engineering for the 1990s: Maintaining Competitiveness in the Age of Materials Board for the Research Councils. Defense R&D currently consumes more than 50 percent of the United Kingdom’s research budget. The Ministry of Defense provides this support primarily to industry via contracts and for operation of its own set of laboratories. Less than 2 percent of the ministry’s budget is used for basic research at the universities. The principal government agencies for civilian R&D are the Department of Trade and Industry and the Department of Education and Science, with some added activity by the Department of Energy. The Department of Trade and Industry supports industry in two ways: (1) by direct investment (e.g., loans and preproduction guarantees) in firms through its National Research Development Corporation and (2) by direct R&D contracts, usually on a cost-shared basis. In 1983, 61 percent of its funds were spent this way; the balance of the department’s resources went to support programs in other government departments and in its own laboratories. Today, there is a general redirection of the United Kingdom’s national research establishments to R&D more related to market-oriented needs. Research organizations such as the National Engineering Laboratory, the National Physical Laboratory, and Harwell Laboratory work with industry on a contract basis. Harwell, for example, operates essentially as an independent laboratory, serving industry in a self-sufficient fiscal mode. On the whole, industry contributes less of its own money to R&D than the government spends, a practice just the opposite of that in most other Western nations. British industry is a mixture of public and private firms, and to aid it, the major new 5-year, $500 million Alvey program was established in 1983, primarily to bolster the United Kingdom’s competitive position in microelectronics. The program follows a consortium model involving cooperative R&D, with the costs shared between industry and government on about a 50:50 basis. A follow-on Alvey program ($1.58 billion) is now under consideration, and initiation of still another major collaborative program aimed at developing high-technology products is anticipated. The $640 million Link program will make funding available for selected university projects, provided that the costs are shared equally with industrial sponsors. Projects will cover molecular electronics, transportation systems, food processing engineering, and materials technology. It is presumed that the basis for the projected R&D on materials technology under the Link program had its origin with the submission in 1985 to the Department of Trade and Industry of the Collyear report. The Collyear Committee proposed a 5-year, £120 million program for the wider application of new and improved materials and processes. Japan The Japanese materials science and engineering establishment is a highly structured enterprise that has been instrumental in many past technological

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Materials Science and Engineering for the 1990s: Maintaining Competitiveness in the Age of Materials successes. However, it is composed of conventional organizational elements and implementation and strategy instruments quite similar to those used throughout the world. What is atypical in Japan is its systems approach—its long-term and consistent policy, stimulated and coordinated by government but coupled to an effective communication link between the public and private sectors, including a multilevel advisory committee arrangement. In an orchestrated division of activities and responsibilities, the government acts as the catalyst, and industry takes the lead role as a funder and performer of R&D. Within government, the highest policy making body for R&D is the Office of the Prime Minister. Two advisory councils, the Science and Technology Council and the Science Council, provide guidance on technology and on pure science matters. The members of these councils are leading spokes-persons within and outside of government; the chairman is the Prime Minister of Japan. These councils establish national goals and provide broad directions for science and technology in general and materials science and engineering in particular. They have a great impact on Japan’s yearly federal R&D budget, which was about ¥ 1500 billion in FY1984. The Ministry of Trade and Industry (MITI), the Ministry of Education, Science, and Culture, and the Science and Technology Agency (STA) essentially share government operational responsibilities for materials science and engineering, including planning, funding, and oversight. The Science and Technology Agency is located within the Prime Minister’s office. It receives about 27 percent of government R&D funds for major national projects such as the space and the reactor programs. The agency also has a mandate to stimulate basic research within industry and, through its Japan Research Development Corporation, to support new technology developments, such as the Exploratory Research for Advanced Technology, using start-up companies as one mechanism of implementation. Attached to STA are six research institutes, two of which, the National Institute for Research in Inorganic Materials and the National Research Institute for Metals, are the principal laboratories most related to materials science and engineering. Under STA, they often perform R&D in cooperation with MITI, the industrially oriented ministry. The Ministry of Education, Science, and Culture administers about 47 percent of government research funds, all of which it provides to the universities and national centers for scientific research. The Ministry of Trade and Industry is the central government organization with industrial development as its primary charter. It receives only about 13 percent of government R&D funds and relies on cooperative mechanisms with industry to leverage considerably more R&D. MITI formulates industrial technology plans, determines and provides for subsidies and/or funding, and selects participating industrial R&D groups and associations to work with MITI’s 16 national laboratories. The national laboratories fall under the

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Materials Science and Engineering for the 1990s: Maintaining Competitiveness in the Age of Materials jurisdiction of one of MITI’s operational arms, the Agency of Industrial Technology and Science (AIST), which in FY1985 had a budget of ¥ 122 billion. A sister agency, the Japan Industrial Technology Association, functions as the licensing agency of AIST and provides regular information on foreign technology developments. Typical of MITI’s procedural mode is its program on advanced materials, the R&D Project on Basic Technology for Future Industries. This program, under the auspices of AIST, targets three general research areas—biotechnology, electronics, and advanced materials. Generally, AIST forms a non-governmental advisory committee for each project, and an industrial association is created to work cooperatively with all other members of the organization and of MITI’s national laboratories. To complement Japan’s already complex industry-government cooperative agenda, a new dimension has recently been added. In October 1985, the Diet established the Japan Key Technology Center to be run under the joint oversight of MITI and the Minister of Posts and Telecommunications. The Key-TEC program (estimated to cost about ¥31 billion) is viewed as part of a needed effort to bolster science by supporting long-range applied and fundamental research on key, but very new, advanced technologies. The focus of the program is to be about 10 years out in front of current knowledge and is supposed to result not so much in prototype products as in generic information on which later development of products can be based. Because of the advanced technology mission of Key-TEC, the program can be described as a Japanese civilian analog of the U.S. Department of Defense’s Defense Advanced Research Projects Agency. South Korea The rapid industrial development of South Korea matches or even surpasses that of Japan, and for many of the same reasons. Industrial developments proceed rapidly because of a strong government that places science and technology in a favored position and rewards the corporations and organizations that are most successful in promoting international trade. The Korean Advanced Institute of Science and Technology is the largest government supporter of materials science and engineering in South Korea. Overall, materials research in South Korea is divided into two major categories: (1) conventional materials (improvement and import reduction) and (2) technology development (advanced materials). The former category is supported primarily by industry, whereas research in the latter category is financed almost exclusively by the government in a public-private cooperative system. In 1985, there were about 29 advanced materials projects under way in South Korea that included efforts in metals, polymers, composites, and fine ceramics.

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Materials Science and Engineering for the 1990s: Maintaining Competitiveness in the Age of Materials There are about 3000 Ph.D.’s working in science and technology in South Korea, with about 10 percent of those involved in materials science and engineering. The Soviet Union Science and technology in the Soviet Union is intimately linked with the machinery of government. The Soviet science and technology effort is the most highly structured, centrally controlled system in the world. Five-year plans are formulated by the State Planning Committee (Gosplan) through a coordinated process involving the Academy of Sciences, the State Committee for Science and Technology, and the various other ministries. Within this organizational complex, the Academy of Sciences carries the most influence. Today, the academy is the scientific side of Soviet science and technology, and the ministries are the technological side. Higher science education is handled by both the academy and the Ministry of Higher and Secondary Education. The academy and other educational institutions, as well as all the ministries, operate an array of research establishments of varying size and sophistication, involving well over 1 million workers. Soviet science on the whole is highly rated and in some cases produces enviable results to be watched and built on, as, for example, the Japanese have done in advancing the published Soviet materials and processing developments in the areas of low-temperature diamond film deposition and electrodeposition of fibers for metal matrix composites. Soviet product design and manufacturing technology are inefficient and, more often than not, are characterized by reverse engineering of Western-made goods, a practice leading to a 5- to 10-year lag in Soviet marketing of products. There is no official tie between any major research groups; thus many of the basic, innovative ideas (including those in materials) generated by the academy’s research institutes are not developed in the Soviet Union because the ministries conduct about 90 percent of all engineering R&D and generally do not take an interest in academy business (and vice versa). Although there is superficial coordination, there is no incentive for collaboration, and Soviet industry opts for adaption of Western technology rather than developing its own. As a consequence of this division, materials science and engineering is treated as materials science on the one hand and as materials engineering on the other; the former is generally excellent, and the latter, duplicative. MATERIALS SCIENCE AND ENGINEERING IN THE UNITED STATES In the United States, government-sponsored materials R&D, because of its multifunctional and widespread impact, is diffused throughout a multitude

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Materials Science and Engineering for the 1990s: Maintaining Competitiveness in the Age of Materials of government programs. No single upper-level agency in the United States has the sole mandate for materials or materials science and engineering. As described in Chapter 2, materials R&D pervades the activities of the major government agencies, but always within the context of their specific missions. As a result, government-related materials science and engineering, and science and technology in general, are pluralistic and decentralized in the United States. The organizational framework for materials science and engineering in the United States is similar to that for other nations. However, unlike many of its competitors, the United States does not have a major agency charged with fostering industrial advancement and with coordinating and integrating the spectrum of materials R&D activities on which industry depends. In Japan, for instance, MITI is a strong force in industrial affairs and materials science and engineering; nothing comparable exists in the United States. Accordingly, the direction of materials R&D taken by the U.S. government is the sum of all the directions of the parts making up the R&D system. Coordination and control vary from agency to agency, and national priorities emerge from the perceptions of national needs and opportunities held by individual agencies, guided by cabinet-level policies and directions. For its overall planning, the U.S. government relies on formal and informal advisory groups and organizations at all levels within and outside government. For the most part, however, industry and universities provide science and technology policy advice only through informal communication links. Although many separate agencies have statutory advisory groups and Congress hears testimony from individuals and groups, there are no standing national councils involving industry-university-government participants for joint planning, coordination, and program evaluation. Dialog between the public and private sector, and within sectors generally, is not organized and does not occur on the scale found in competitor nations. During the 1970s the Office of Science and Technology Policy (OSTP) and the Office of Technology Assessment were created to advise the President and Congress, respectively, on R&D issues as a whole, including materials issues. In 1982 a science council reporting to OSTP was established to improve coordination of the national research effort. OSTP also chairs a coordinating Committee on Materials (COMAT), made up of representatives of government agencies engaged in materials R&D. The Office of Management and Budget provides further oversight through its budget review and approval process. The General Accounting Office, an analytical arm of Congress, furnishes additional assessments and advice. Major independent sources of advice to the government include the National Research Council. Important legislation affecting materials science and engineering includes the 1980 National Materials and Minerals Policy, Research and Development Act, which required coordination by the President of the government’s min-

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Materials Science and Engineering for the 1990s: Maintaining Competitiveness in the Age of Materials erals and materials activities. This was followed by the National Critical Materials Act of 1984, which called for the establishment of a National Critical Materials Council, the establishment of a national federal program for advanced materials research and technology, and the stimulation of innovation and technology application in the basic and advanced materials industries. As of this writing, implementation of the law by the executive branch is still in the early stages. Congress also enacted the Cooperative Research Act of 1984, which, along with proposed legislation modifying the Clayton Act, provides a more favorable environment for cooperative R&D between businesses, in part by reducing antitrust penalties. Government provides slightly more than one-half of the more than $120 billion currently devoted to all types of R&D in the United States; industry provides the balance. Definitive statistics are not available on industrial funding of R&D in materials science and engineering, but industrial funding is believed to be greater than the $ 1 billion spent by government. Government-sponsored R&D is carried out by contract in industrial, university, and independent laboratories and in university research centers; it is also carried out with funds from direct congressional appropriations in the government’s own departmental laboratories, in federally funded R&D laboratories—principally the national laboratories—and in research centers sponsored by the National Science Foundation (NSF). Most federal R&D funds go to defense-related research. For materials-related R&D, the Department of Energy sponsors more than 50 percent of the work; the balance of the funding is provided principally by the Department of Defense (DOD), the National Aeronautics and Space Administration (NASA), and NSF, with smaller efforts funded through the Department of Commerce [National Institute of Standards and Technology (NIST), formerly the National Bureau of Standards] and the Department of the Interior (Bureau of Mines). The specific research programs on materials are diverse, and they cover most of the materials classes and types, but usually in the context of broad efforts such as engine or very large scale integration (VLSI) development. Industry performs about 75 percent of all the R&D conducted in the United States. It spends most of its own R&D funds in its own laboratories and the rest at independent research centers and the universities. Corporate R&D expenditures are often reported and analyzed as a percentage of sales, so that R&D, particularly long-term R&D, may suffer from the vagaries of the near-term economic climate. MECHANISMS FOR COOPERATIVE RESEARCH Cooperative research entails the joining of technical and financial resources to pursue areas of collective interest to achieve specific individual goals. Recent times have seen the methodical creation and buildup of a plethora of new technical linkages among businesses and research organizations through-

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Materials Science and Engineering for the 1990s: Maintaining Competitiveness in the Age of Materials out the world, outstripping past efforts. These take many forms, and joint ventures, multinational corporations, national and international consortia, and an array of new types of collective industrial research associations now abound. However, both the concept and conduct of cooperative R&D involving private corporations are more common in Europe and Japan than in the United States. This difference derives partly from the smaller domestic or regional markets, and hence the smaller resources for R&D, in other countries and partly from distinct philosophical convictions regarding competitive behavior. Whatever the reasons, cooperative industrial R&D plays a more active and pivotal role in national affairs overseas than it does in the United States. Increasing numbers of nations rely heavily on government-orchestrated technology development programs in which collaborative arrangements between government, universities, and industry are integral to their strategic approach. In many European countries there is an extensive network of industry-specific collective associations with independent laboratory facilities, usually operating with a government subsidy along with some formal basis for industry funding. In addition to these strictly national efforts, R&D conducted under the auspices of the European Economic Communities (EEC) represents one of the most extensive collaborative efforts in existence. It involves more than 1 million workers, major research laboratory centers, and a multibillion dollar budget. Recent EEC programs have focused on cooperative R&D requiring direct participation and funding by private firms. Examples of programs relevant to materials science and engineering include ESPRIT, Basic Research in Industrial Technologies for Europe (BRITE), and European Research in Advanced Materials (EURAM). Japan probably has the most prolific system of cooperative research programs and organizations. Major categories consist of at least 18 government centers, 600 local centers, and many semipublic groupings. The major industry-specific cooperative R&D efforts are funded primarily by MITI and are conducted through more than 50 research associations as authorized by Japan’s Industrial Technology Law. Advanced materials for future industries are a featured item on MITI’s collaborative R&D agenda. A distinct feature of U.S. cooperative R&D activities is their diversity. There is no cohesive approach to R&D. Individual researchers, universities, private corporations, and all levels of government participate to different degrees and at different times to meet specific but individual needs. Although the United States has no direct cooperative system, organizational framework, or national policy comparable to those of its competitors, some marginal improvement in this direction is evident. Antitrust laws have been modified, and industrial consortia (e.g., Microelectronic and Computer Corporation, Semiconductor Research Corporation, and the new Sematech) are on the rise. Executive orders are in place to promote better use of the national

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Materials Science and Engineering for the 1990s: Maintaining Competitiveness in the Age of Materials laboratories by industry. New NSF-sponsored engineering research centers are being set up. State-initiated technology incubator programs are appearing with greater regularity. Still lacking, however, are government-sponsored national laboratories for applied industrial research, which have been seen to be so effective in Japan with its MITI laboratories and in West Germany at the Fraunhofer institutes. COMPARATIVE ANALYSIS OF U.S. COMPETITIVE STATUS IN MATERIALS SCIENCE AND ENGINEERING Table 7.1 compares the competitive status of materials science and engineering in the United States with that of materials science and engineering in other countries. It represents the views, as of early 1987, of a group of materials scientists, engineers, and industrialists familiar with the state of the field in the United States and abroad. The assessment was prepared by a Committee on Materials Science and Engineering panel and reviewed by materials science and engineering experts at NIST. The analysis presented here correlated favorably with a similar independent study conducted by NIST. The countries evaluated (Japan, France, the United Kingdom, West Germany, and South Korea) are representative trading partners of the United States viewed as having, or likely to have in the longer term, a competitive advantage in world markets influenced by materials science and engineering. China and the Soviet Union are not included because materials science and engineering operates under different political systems in those countries. Materials science and engineering in Canada and in some newly industrialized countries is typical of that carried out in nations covered in Table 7.1 (France, West Germany, Japan, South Korea, and the United Kingdom) and therefore is not separately assessed. The analysis is intended to illustrate different materials science and engineering systems and the efficacy with which each system works to enable a country to achieve a particular competitive status. Since general science and technology and materials science and engineering are closely related, a major fraction of the comparison is based on science and technology comparisons. The analysis in Table 7.1 has been grouped under three somewhat arbitrary headings that influence the U.S. competitive position in materials: (1) industry factors, (2) technology factors, and (3) government factors. Industry Factors Industry factors have been divided into seven categories: (1) comparative advantage in major markets, (2) comparative advantage in materials science and engineering, (3) productivity, (4) industry structure, (5) innovation to commercialization capacity, (6) resource factors, and (7) capital and financial

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Materials Science and Engineering for the 1990s: Maintaining Competitiveness in the Age of Materials TABLE 7.1 Comparative Analysis of U.S. Versus Foreign Competitive Positions (of France, West Germany, Japan, South Korea, and the United Kingdom) in Materials Science and Engineering in 1987   Trend in U.S. Competitive Positiona Current U.S. Competitive Positionb   Disadvantageous   Advantageous Factors Major Minor At Parity Minor Major Industry Factors   Comparative advantage in major markets   Aerospace dec.   F G,J,K Motor vehicles dec. J   G,F   K,UK Electrical/electronic dec.   J   F,G,UK Instruments n.c.   G,J F,K,UK Machinery dec.   J F,G,UK K   Chemical/allied products dec.   K F,G,J   UK Comparative advantage in materials science and engineering   Metals dec.   G,J,UK F,K   Ceramics dec.   J G,UK F   Polymers n.c.   G,UK   F,J Composites imp.   F,G,J   K,UK Productivity   Current dec.   G,J UK F,K Growth rate dec. J,K   F,G   UK Industry structure   Integrated imp.   F,G,J UK K Size (big, small niche) n.c.   F,G,J UK K Multinational n.c.   F,G,J   K,UK Innovation to commercialization capacity dec. J   G F,K UK Resource factors   Labor costs dec. K J F,G,UK   Labor quality dec.   G,J F,K UK   Capital and financial factors   Capital costs dec. J,K   F,G,UK   Long-term R&D investments dec.     J,K F,UK G   Financial/banking environment n.c. J,K F G,UK  

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Materials Science and Engineering for the 1990s: Maintaining Competitiveness in the Age of Materials   Trend in U.S. Competitive Positiona Current U.S. Competitive Positionb   Disadvantageous   Advantageous Factors Major Minor At Parity Minor Major Technology Factors   Materials sciences and engineering R&D emphasis by task   Basic n.c.   G F,J,UK K Applied dec.   J F,G UK K Developmental dec. J   F,G UK K Manufacturing dec. J K F,G UK   R&D emphasis by material   Metals dec.   G,J F,UK K Ceramics n.c.   J G,UK F K Polymers dec.   G,UK   F,J,K Composites imp.   F,G,J   K,UK Materials science and engineering resources   Funds   Metallurgy dec.   UK F,G,J K Ceramics imp.   J   F,G,UK K Polymers n.c.   G UK F J,K Composites imp.   F G,J   UK,K Electronic materials dec.   J   F,G,UK K Optical materials n.c.   J F,G,UK K Manpower education   Materials science and engineering imp.   J F,G,UK K Metallurgy dec.   G J,UK F,K Ceramics imp.   J F,UK G K Polymers n.c.   G   F,J,UK K Composites imp.   F UK G K Electronic materials imp.   G,J F,UK K Optical materials imp.   G,J F,UK K Facilities and equipment   National/user n.c.   F,K,UK J K Regional/local dec. J G F,K,UK   Funds   Government (nondefense) dec. J,K   G F,UK   Industrial investment n.c. J,K   F,G UK   Interactions and interfaces   Cooperation (science)   In-place mechanisms n.c.   F,G,J,UK   K Mechanism utilization n.c.   F,G,UK UK   K Cooperation (technology)   In-place mechanisms imp. G,J F,K UK   Mechanism utilization imp. G,J F,K UK  

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Materials Science and Engineering for the 1990s: Maintaining Competitiveness in the Age of Materials   Trend in U.S. Competitive Positiona Current U.S. Competitive Positionb   Disadvantageous   Advantageous Factors Major Minor At Parity Minor Major Government Factors   National industrial policy   Structure/organization dec. J,K F G UK   Government-industrial relations dec. G,J,K,UK   UK   Strategy dec. J,K F G   Industrial development   Financial incentives dec. F,J,K G UK   Defense-related barriers dec. G,J,K F UK   Government services (patents, information, statistics) n.c.   F,G,J,UK   K National factors   Exchange rate imp.   G,J,UK F,K   National debt dec. J F,G,UK   K   Employment n.c. J K,UK F,G   Inflation imp.   F,G,J,K,UK   Trade policy n.c. J,K F,G UK   Competitive attitude/national prestige n.c. J,K G F   UK aTrends are as follows: “dec.” is declining, “imp.” is improving, and “n.c.” is no change. bCountries are abbreviated as follows: F is France, G is West Germany, J is Japan, K is South Korea, and UK is United Kingdom. factors. In the first five of these categories, with a few exceptions (primarily involving Japan), the United States is seen either to be at parity with or to have a clear current advantage over the five countries compared. It is the perception of the experts, however, that in all but 2 of the 16 subcategories, the U.S. position is static or deteriorating. In categories 6 and 7, by contrast, the United States is seen as having an advantage in only one of five subcategories and as having a static or declining position in all of them. These perceptions are clearly related to some of the subcategories in the government factors section of Table 7.1. They are also important in themselves as guides to government policymakers and to technologists struggling with strategies that seek to reverse other declining trends through new investment in capital equipment. A major question is whether the needed capital will be available. Technology Factors The situation described by technology factors is more complex and includes four categories: (1) materials science and engineering R&D emphasis by

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Materials Science and Engineering for the 1990s: Maintaining Competitiveness in the Age of Materials task, (2) R&D emphasis by material, (3) materials science and engineering resources, and (4) interactions and interfaces. In the first category, the United States is seen to have a clear advantage (and to be holding it) in the area of basic research. In applications, development, and manufacturing—areas that presage the development of new products and processes—the United States is less well off. Japan leads in each of these areas, and the relative position of the United States in each is deteriorating. This situation is clearly related to the poor competitive position of the United States in the area of government-business relations. The United States has a long tradition of government support for basic research but essentially no tradition of direct support for nondefense industrial technology. The conclusions to be drawn about the second category, R&D emphasis by material, are less clear. The United States has advantages in each materials area and a clearly improving position in composites. In the other areas, despite apparently declining U.S. positions, the headings (metals, ceramics, and polymers) are too broad to reflect some of the more focused strategies within industry and government (e.g., rapid solidification, low-temperature cements, and electronic polymers). Nonetheless, perceptions of deteriorating U.S. leadership in these areas suggest a need for continued monitoring. The same comments apply to the third category, materials science and engineering resources, which include education, facilities and equipment, and funds. Declining or improving positions cannot be rated as either bad or good in the absolute. To be meaningful, they have to be compared to what would be appropriate under a U.S. materials strategy, and in this category there appears to be none. Government Factors Government factors have been divided into three categories: (1) national industrial policy, (2) industrial development, and (3) national factors. Under the first category, national industrial policy, all three subcategories (structure/ organization, government-industry relations, and strategy) show the United States in an increasingly disadvantageous position with respect to its competitors. The first two of these subcategories contribute to the third. The United States appears to have neither the structure nor the government-industry relationships that can lead to a national materials strategy that is respected by both business and government. The absence of an established U.S. materials science and engineering strategy raises fundamental questions. For instance, is the declining U.S. position in technology (e.g., in the steel industry) appropriate to a country at the stage of development that has been reached by the United States, or is it a result of a lack of strategic thinking? Although Table 7.1 does not represent a statistical survey, it has major significance as the combined perception of materials experts. These percep-

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Materials Science and Engineering for the 1990s: Maintaining Competitiveness in the Age of Materials tions contribute to decisions made in the field, even though they remain perceptions. The overall picture conveyed by Table 7.1 is that of an aging nation that has yet to develop the strategies, structures, or mechanisms to defend its decaying leadership in the world of materials. The “Summary, Conclusions, and Recommendations” chapter suggests ways in which materials science and engineering can be strengthened and applied to areas of national importance. FINDINGS For the past 40 years, the United States has been the world industrial leader because of its dominant position in science and technology. During the past decade this position has been deteriorating rapidly as Western Europe and Japan have assumed an aggressive role in technology development, both for domestic and for export markets. In many areas, including materials, these nations now are fully competitive, and in some cases, they have surpassed the United States. Their reemergence in materials science and engineering benefits the field as a whole, but the United States can and must regain its competitive edge. Without it, an essential factor in maintaining U.S. economic well-being will be lost. Foremost among the observations discussed in this study is the strong commitment to industrial growth by all major competitor nations, stimulated by coordinated R&D in which materials science and engineering is a featured element. Indeed, of all the industrial areas in which growth is anticipated for the next decade, materials science and engineering ranks in importance with biotechnology and computer and information technology as the areas targeted for development by all nations sampled. As demonstrated by the industry surveys discussed in Chapter 2, materials science and engineering is seen as critical to a wide range of technologies and industries. It is an enabling technology that permits or leads to advances in areas as diverse as aerospace, computers, communications, and automobile technology. In all these vital areas there is growing competition, and our major trading partners are catching up to or exceeding U.S. capabilities in the production of many materials and materials systems, that is, in the development of manufacturing technology. The principal driving forces in these competitive markets are specific industrial businesses rather than governments, but in general, coordinated government-sponsored R&D efforts can have a significant impact on industrial capabilities to compete. Notable examples in the history of U.S. development illustrate this impact; federal funding focused on aerospace-related R&D sponsored by the DOD and NASA and carried out in universities, government laboratories, and industry has been highly influential in the development of U.S. eminence in commercial aircraft manufacturing. Leadership in science does not guarantee leadership

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Materials Science and Engineering for the 1990s: Maintaining Competitiveness in the Age of Materials in engineering or technology. Cooperative mechanisms, fostered by government involvement, are being used increasingly throughout the world to enhance technology development and industrial competitiveness. The complexity of modern manufacturing has led inevitably to interdependence among industries. This trend is on the upswing and is taking the form of joint ventures, licensing and use of outside sources for manufacturing via long-term contractual agreements, and increasingly, cooperation in the long-term R&D of technologies for improved manufacturing capability. In Japan, such cooperation, which is very advanced, is mediated by government laboratories in collaboration with industry. In the United States, the earliest examples of such industrial cooperation in precompetitive research can be seen in the funding efforts of such industry-sponsored research-granting organizations as the Electric Power Research Institute, the Gas Research Institute, and the Semiconductor Research Corporation; in R&D laboratories such as those of the Microelectronic and Computer Corporation; and in numerous industry and university centers. Noticeably lacking in the United States, and found to a greater degree in all the other countries studied for this report, is a national agency charged with stimulating and assisting industry and, when appropriate, with ensuring that cooperative activities are coordinated and that their impact on industrial development is optimized. The recognition of materials science and engineering as a subject for focused national support is common to all the nations surveyed, but the organizational structure and funding mechanisms are as varied as the cultures and governments of those nations. There are, however, some important features to be noted in comparing the United States with Japan, and to a lesser degree, with West Germany. Japan and West Germany have been enormously successful in recent years in converting innovative concepts into technological advantage because of several factors operating in these countries: (1) education has been focused strongly on engineering rather than on science; (2) coordinated planning of targeted industrial development is stimulated by a government whose policies and expenditures are aimed at fostering the competitiveness of private industries; and (3) national laboratories are specifically charged with service to industry as a significant component in the complex process of transforming innovation to practices and products. These laboratories have almost no counterpart in the United States, because, with the exception of NIST, this country’s national laboratories are not charged with the mission of service to the commercial sector.

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