Government-Industry Partnerships for the Development of New Technologies (2003) / Chapter Skim
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From page 47... ...
The exception to this was in the area of military procurement, with the contract to Eli Whitney's Springfield Arsenal. See William Diebold, Jr., "Past and Future Industrial Policy in the United States," in J
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In addition, right of way was to extend 200 feet on both sides of the road. The Pacific Railroad Act was supplemented in 1864 by the Union Pacific Act, which did not increase government funding but allowed the railroad companies to issue their own first-mortgage bonds.
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The inducements were on the scale of the enterprise and not without abuse but the fundamental policy objectives of economic growth and national unity were achieved. There were also major benefits in terms of management, organization, and market scale for many other American firms what economists today would call positive externalities created by the extension of a national railroad network.
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Before World War II NACA operated primarily as a test center for civilian and military users. NACA made a series of remarkable contributions regarding engine nacelle locations and the NACA cowl for radial air-cooled engines.
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economy continues to be distinguished by the extent to which individual entrepreneurs and researchers take the lead in developing innovations and starting new businesses. Yet in doing so they often harvest crops sown on fields made fertile by the government's long-term investments in research and development.~7 CURRENT TRENDS IN FEDERAL SUPPORT The federal government's role in supporting innovation through funding of R&D remains significant although non-federal entities have increased their share of national funding for R&D from 60 percent to 74 percent between 1990 and 2000 (see Figure 1~.
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This agreement has led, through two administrations, to major yearly increases in federal funding for biomedical research. This has raised concerns, even among the NIH leadership,20 that other areas of i9Progress in biomedicine and drug research, the development of such diagnostic tools as magnetic resonance imaging, and the rapidly expanding understanding of the human genome give credence to this promise.
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Each point is addressed below. 2iFor a discussion of these shifts, see Michael McGeary, "Recent Trends in the Federal Funding of Research and Development Related to Health and Information Technology," in National Research Council, Capitalizing on New Needs and New Opportunities: Government-Industry Partnerships in Biotechnology and Information Technologies, op.
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outsourcing more of their basic research work to small startups, independent research houses and contract research organizations, while also partnering with universities and national laborator~es."23 In light of these developments, the role of partnerships gains additional relevance. Private equity markets also influence the level and distribution of investment.
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In practice, for example, the decline of the defense budget corresponded with a slowdown in real terms of military support for research in physics, chemistry, mathematics, and most fields of engineering. This STEP Board study showed that in 1997 several agencies were spending substantially less on research than in 1993, even though the overall level of federal research spending was nearly the same as it was in 1993.
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Second, there is also growing concern over the cumulative impact the reduction in federal support for computing research and semiconductor technologies and the decline over several years in support for the disciplines that pro3iThe diagram shows that despite increasing (an aggregated measure) federal support for R&D to universities (e.g., ~$13.6 billion in 1995 up to ~$17.5 billion in 2000 current dollars which is of course large enough for a real increase)
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312. The authors note that national laboratories, under the purview of the Department of Energy, now have extensive cooperative agreements with industrial firms in the form of Cooperative Research and Development Agreements (CRADAs)
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i. MEETING TOMORROW'S CHALLENGES The semiconductor industry illustrates the important role public policy on ndustry partnerships has played in the genesis, resurgence, and continual rapid growth of this industry.36 The implications of current trends in the allocation of federal support, and the recognition of future technical challenges, highlight the need for expanded public support for research often through partnerships if the exceptional growth of the information technology industry and the extraordinary benefits related to this growth are to continue.37 Federal Support Public support played a significant role in the development and growth of the computer and semiconductor industr~es.38 The birth of the semiconductor industry can be dated with the invention of the first rudimentary transistor in 1947 at Bell Laboratories.
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See also Kenneth Flamm, Mismanaged Trade? Strategic Policy in the Semiconductor Industry, op.
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They included: Founding of the Semiconductor Research Corporation (1982~; Creation of the U.S.-Japan Working Group on High Technology (1983~; Passage of the National Cooperative Research Act (1984~; Passage of the Trade and Tariff Act (1984~; Passage of the Semiconductor Chip Protection Act (1984~; Signing of the Semiconductor Trade Agreement by the United States and Japan (1986~; Founding of SEMATECH (1987~; · Congressional approval of the formation of the National Advisory Comm~ttee on Semiconductors (1988~; · Renewal of the Semiconductor Trade Agreement (1990~; and · Beginning of the Semiconductor Roadmap process (1992~. Efforts to address issues in U.S.
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From page 63... ...
and other markets and succeeded in obtaining limited access to the Japanese market for foreign producers, in particular, Korean and later Taiwanese DRAM producers.52 A second major step was the industry's decision to seek a partnership between the government and a coalition of like-m~nded private firms to form the SEMATECH consortium, whose purpose was to revive a seriously weakened U.S. industry through collaborative research and pooling of manufacturing knowledge.53 A central element of the challenges facing the U.S.
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government and for the fiercely competitive U.S. semiconductor industry.55 The Silicon Valley entrepreneurs hesitated about cooperating with each other and were even more hesitant about cooperating with the government an attitude mirrored in some quarters in Washington.56 Industry Leadership From the outset, the industry took a leading role in setting its objectives, managing its resources, and measuring its accomplishments.57 The consortium showed substantial flexibility in its early years as its members and leadership struggled to define where it could make the maximum impact.
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266-267 and 277. 6iSee Kenneth Flamm and Qifei Wang, Sematech Revisited: Assessing Consortium Impacts on Semiconductor Industry R&D.
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was a U.S. national policy based around cooperation between industry, government, and academia." Hajime Susaki, Chairman of NEC Corporation, "Japanese Semiconductor Industry's Competitiveness: LSI Industry in Jeopardy," Nikkei Microdevices, December 2000.
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products and indirectly to the resurgence of the industry.70 The collective accomplishments and impact of the consortium may well have been an essential element contributing to the recovery of the U.S. industry, though it should be underscored that its contribution and other public policy initiatives were by no means suffi67See Kenneth Flamm and Qifei Wang, Sematech Revisited: Assessing Consortium Impacts on Semiconductor industry R&D, op.
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semiconductor producers.7i Technical Challenges, Competitive Challenges, and Capacity Constraints For more than 30 years the growth of the semiconductor industry has been largely associated with the ability of researchers to shrink the transistor steadily and quickly and thereby increase its speed, without commensurate increases in costs (Moore's Law)
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semiconductor industry had regained strength in both the device-making and supplier markets, and voted to seek an end to matching federal funding after 1996. For a brief timeline and history of SEMATECH, see |
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that have generated uncertainty about this form of cooperation, especially at the federal level.82 An effect of this irresolution has been a passive federal role in addressing the technical uncertainties central to the continued rapid evolution of information technologies. DARPA's annual funding of microelectronics R&D the pr~ncipal channel of direct federal financial support has declined, and is projected to decline further (See Figure 3~.83 As noted above, this trend runs counter to those in Europe and East Asia, where governments are providing substantial direct and indirect funding in this sector.
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semiconductor industry, the federal government, and universities work cooperatively on cuttingedge research deemed critical to the continued growth of the industry. This program is operated by the Semiconductor Research Corporation, which funds and operates university-based research centers in microelectronics.84 In cooperation with the government and leading universities, the industry plans to eventually establish six national focus centers and channel $60 million per year into new research activities.
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Specifically, NIAID has expanded research and development countermeasures including vaccines, therapeutics, and diagnostic tests needed to counter and control the release of agents of bio-terrorism.87 Appropriately structured partnerships can also serve as a policy instrument that aligns the incentives of private firms to achieve national missions without compelling them to do so. As the National Academy of Sciences report cited above further notes, "A more effective approach is to give the private sector the 85See National Research Council, Capitalizing on New Needs and New Opportunities: Government-Industry Partnerships in Biotechnology and Information Technologies, op.
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Additionally, joint interagency design and execution programs with a single source of funds and joint decisions on each dollar to be spent constitute one approach to address critically important national initiatives collaboratively. Partnerships, when properly structured and managed, can achieve more positive results than separately channeled funding.
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