In This Issue
Fall Issue of The Bridge on Engineering Partnerships
September 1, 1996 Volume 26 Issue 3/4
The 1996 NAE Annual Meeting symposium focused on cooperation among industry, universities, and government for U.S. technological leadership in the twenty-first century.

Government: What Kind of Partner

Sunday, September 1, 1996

Author: Richard F. Celeste

A new focus on industry relationships characterizes cooperative R&D initiatives at both the state and federal level.

I would like to share my thoughts about what kind of a partner government is, with industry and universities, in helping to create the extraordinary scientific and technological bounty we enjoy today. The history of government involvement certainly goes back far before Science, The Endless Frontier (U.S. Office of Scientific Research and Development, 1945). Clearly, the Morrill Act of 1862, the establishment of land-grant institutions, early relationships between scientific research, industry, and agricultural extension--all nurtured late in the last century and early in this century--predate but parallel in many ways the experience we have had in defense and space research and development (R&D) in the last 50 years.

What is interesting about the formulation of Science, The Endless Frontier is that it articulated clearly a set of goals, principally training world-class scientists and engineers, and nurturing discoveries of importance to the nation.

The successes have been remarkable. Perhaps the most powerful demonstration of this is that for all of those years we were a magnet to the best and brightest talent of other nations, individuals who came here to participate both in the education and the research enterprises, and in most cases elected to stay here with that knowledge. It was an incredible experience.

This partnership is now in flux. The end of the Cold War is one of the reasons, because it eliminated the implicit rationale that drove much of the R&D investment by the federal government. There are other forces that need to be acknowledged as we try to understand why the partnership is in flux. One is the constraint on public and private money. We will never, in my view, enjoy the bounty that characterized our earlier experience, especially in the 1960s. Making the partnership work smoothly is going to be a huge challenge, because resources are going to be constrained.

Another difference between where we were when the Vannevar Bush response to Roosevelt was written and today is the huge proliferation of research universities (from roughly 40 a half-century ago to several hundred currently). I also believe there are higher expectations of science and technology today, especially as drivers of our economy. Of course, we have an increasingly diverse student population that is concerned deeply about its employability, a fact that complicates matters for government, universities, and industry as they think about what they want out of the partnership.

There are some opportunities in this period of flux that I would also underscore. For instance, as a result of the economic downturn in the 1980s, many states that had not been active before began to invest in science and technology, especially projects focused on economic development. Whether it was in the creation of the Ben Franklin Program in Pennsylvania or the Thomas Edison Program in Ohio, there has been a proliferation of state initiatives. Now, virtually every state is investing in some aspect of the science and technology enterprise.

We have also seen, because of the pressure on resources and because of the changes in public agendas, major national laboratories in effect tearing down their walls, looking for opportunities to work in new ways with universities and especially with industry.

Finally, and most interesting, I think there is a new attitude developing among bench scientists. It is part of the necessary practice of large companies in this highly competitive arena: an understanding of the importance of cooperation in order to better compete.

It is no longer simply individuals competing, however. A great deal of science and engineering is practiced on a widely dispersed basis by teams that extend well beyond one university, one institution, or even one country. It is not uncommon to find companies that in the past have been very fierce competitors coming together to collaborate. So there is a changed attitude, which in the context of this evolving industry-university-government partnership offers an opportunity.

What are the characteristics of the new partnerships being generated by state and federal government initiative? First, they tend to be industry focused and, in most cases, industry driven. An example of this at the federal level is SEMATECH, which was begun with federal support although it is now going to be funded solely by industry. In the case of SEMATECH, the thrust of the enterprise comes from industry setting a target and articulating the agenda.

Crossing Traditional Boundaries
Let's look at what's happening at the state level. In Ohio, when we set up the Edison Technology Centers, they were not university-defined. Communities made proposals to the state based on an existing industrial strength--welding in Columbus or polymers in northeastern Ohio. Although each proposal had to embrace one or more universities, the center needed to be governed by a body in which industry predominated. Public money was to be matched always by private investment; at no time did we contemplate that an Edison center would survive simply with public money.

Second, these new partnerships tend to cross traditional boundaries, including those between educational institutions. In the Edison center example, we received proposals from both Akron and Cleveland to establish a polymer center. The Cleveland center would be based on work that was being done at Case Western Reserve; in Akron, the center would be based on work at the University of Akron.

From the state's perspective, it did not make sense to fund two centers. So, we rejected those proposals and asked the two groups to fashion a joint proposal, which we hoped would gain strength and quality by collaboration. They found ways to work together, and both the universities and the community at large have benefited.

Another, more interesting illustration of this boundary-crossing phenomenon occurred with establish of the Ohio Aerospace Institute (OAI). I discovered that the U.S. government was investing $350 million to $400 million in research at the NASA Lewis Laboratory, just outside of Cleveland. The laboratory had several billion dollars' worth of equipment that had accumulated over a period of almost 50 years. OAI was an effort to open this resource up in a way that would benefit communities across Ohio. The resulting consortium, organized under the auspices of the Ohio Board of Regents, included all of the engineering schools in Ohio. The institute offers engineers, whatever their home institution, the opportunity to study and to do research using the faculty and facilities of the NASA Lewis Laboratory.

OAI required a very modest investment by the board of regents. From that experience, which was focused on nurturing the state's scientific talent, we turned to the question of how to take this rich research capability at NASA Lewis and make it available to industry.

A Mix of Basic and Applied Research
The first step was to get the Lewis lab to describe on paper its core research competencies in a way that any company director of research, CEO, or head of product development could understand. These descriptions were circulated widely in the Ohio business community. Companies were invited to submit, in partnership with a university, research proposals based in one of those core research areas.

As a consequence, if you were a company working on certain problems that had to do with, for example, high-performance valves, you went to Case Western Reserve, found faculty with the same interest, and developed a research proposal. OAI then selected the proposals that seemed to be the most promising, and those were undertaken with the modest funds that had been generated by the member institutions. As a result of this initiative, there has been a dramatic enhancement of interest in developing working relationships with the NASA Lewis lab, and communication among a variety of folks in industry, in universities, and at NASA has increased.

The third characteristic of these new partnerships is that virtually every one of them tends to involve a mix of basic and applied research, as well as a component in which already-developed technology is shared with very small or medium-sized firms that don't have internal capability to define a research agenda but do have real needs.

Let me now share some thoughts about the emerging federal role in these new partnerships. I believe the federal commitment to basic research today is as strong as it ever was. In fact, I believe there is a stronger consensus in Congress today than ever before on the need to protect basic research. I believe also that there is a very strong commitment today to nurturing scientific talent. The danger comes in trying to build a barrier around this talent. Growing global competitiveness and the fact that many of the individuals who come here to study no longer stay makes this "intellectual protectionism" a dubious strategy. Indeed, we now have what amounts to global investment in the U.S. R&D enterprise.

If you ask companies about their investment in research and development, most will say that they are putting more money in R&D now than in the past. A major difference is that not all of the money is being invested in the United States. A good chunk of it--accounting perhaps for the majority of the growth in R&D activity in other parts of the world--is ending up in non-U.S. laboratories.

We should also note the important, if somewhat controversial, government role of identifying "enabling industries" and investing in the generic research needed to maintain U.S. leadership in those industries. The National Research Countil Committee on Science, Engineering, and Public Policy (1993) identified areas where the federal government ought to try to maintain U.S. industrial leadership, based on our research strength in various fields vis-?-vis our competitors around the world.

At the state level, this is happening as well. In Ohio in the 1980s, we decided to invest in clean-coal technology, figuring that if our coal resources--which were high in sulphur content--were going to be used at all, then clean-coal technology was vital. In fact, Ohio passed a $100 million bond issue in the mid-1980s to fund demonstration projects before there was a major clean-coal initiative in the Department of Energy. So, I believe there will continue to be substantial discussion and debate about how government at the federal level and at the state level identifies critical industries in which a public investment in generic research is necessary.

A second area where there is a strong government interest, and also controversy, relates to ensuring an adequate infrastructure for ongoing research. Part of this is a debate about big science: Who is going to build the facilities necessary to undertake the next generation of research? But I think the issue goes beyond that. Government needs to concern itself with not only maintaining the existing infrastructure, but also ensuring that new instrumentation that comes into university labs and research centers is as technologically state of the art as possible.

Let me now try to identify issues that I believe government policymakers need to wrestle with.

The first is how to involve practitioners, the principal investigators, the people on the front line in setting research investment priorities. Traditionally, we have involved the scientists or the engineers in the process through peer review, through committees that look retrospectively at R&D programs, or in oversight of ongoing R&D activities.

The question is, how can we invite in folks from the front line as we make investment decisions? The White House Office of Science and Technology Policy and others are discussing this, and it seems to me the answer to that question is very, very important. I also think we need to talk about improving public perceptions of science and technology.

The second issue for government policymakers as they look at these new partnerships is how to stretch resources. How do we take the resources that are finite, that are under increasing pressure, and use them more wisely? One way government can help is by reducing regulation, by simplifying the process of conducting R&D. One of the loudest complaints of young investigators today is that they spend too much time preparing grant applications. They may need to put in five or six in order to get one funded, and the paperwork involved in this process cuts considerably into time for research and education.

Reducing Grant-Related Paperwork
The Government-University-Industry Research Roundtable (GUIRR) jointly operated by the National Academies of Sciences and Engineering and the Institute of Medicine, is working with the Office of Management and Budget and others on something called the Federal Demonstration Partnership. The goal of the partnership is to reduce substantially the paperwork involved with grant application and administration while maintaining accountability, and to stretch resources by doing so.

A second area where I believe government can and should make a difference is in the now popular area of "risk assessment." One of the questions in my mind is how to translate that notion from rhetoric into reality as we apply it to a variety of public activities, including, for example, the environmental constraints we put on research. I believe that this is an area where the National Academy of Engineering and others could play a substantial role in helping us to turn risk assessment into a practical reality, again with the aim of stretching resources.

I am concerned about how the government as an R&D partner can, while investing in research grants or other forms of support of our science and technology enterprise, reward education as well as research. There is an enormous amount of rhetoric on this issue, but frequently the reality is that pressure from the sponsoring agency, the way in which the money is granted, and the way in which the results are measured pit the individual investigator's efforts in research against their investment of time and effort in education. We need practical ways to strike a balance, to create a win-win agenda for research and for education.

Similarly, how do we honestly encourage multidisciplinary work? There is an enormous amount of comment about the fact that most of the most interesting and exciting issues we confront today are at the boundaries of disciplines. We need multidisciplinary efforts to tackle these very tough and challenging problems. When you look at the way in which funding plays out, however, there is precious little real incentive for multidisciplinary work. In this regard, I think there is as big a challenge to universities as there is to the government. Frequently in academia, the reward system within the university works through the departmental structure, and it is very hard to create incentives for multidisciplinary work.

Another issue for government policymakers is how to handle intellectual property. I think universities have gotten very excited about getting into partnerships with industry, sometimes because they feel they may get a huge new revenue stream from licenses or patents. That expectation often is dashed when it comes time to enter into real agreements; in any case, it is rarely a complete reflection of the way the partnership works. GUIRR has tried to develop a model contract for university-industry interaction. What the roundtable has found is that most people who look at the model contract feel they can do better, and they spend a lot of time trying to. I think government needs to help universities and industry arrive at a common understanding of what each partner in this endeavor can reasonably expect.

A final challenge for government policymakers as well as for universities is to move quickly. Today, the time frame for business decision-makers is getting more and more compacted. Product planning and life cycles are shorter and shorter. Real value is now determined by the speed at which you can get something to market. I have a hunch that 5 or 10 years from now, whether markets are open or closed will not be an issue. The only issue will be who is quick enough on their feet to move new ideas to market. Period. The worry about protecting intellectual property is going to be secondary to the ability to move fast.

I point this out as a challenge, because government and universities are typically not fast. Therefore, I believe that in this effort to fashion new partnerships, we're going to have to develop a better cultural understanding of how we work together in an arena in which speed enhances value enormously.

To conclude, I believe there are enormous opportunities in this period of flux. I do not believe that the partnership among industry, universities, and government is in some kind of mortal danger, but I do believe there is no way it isn't going to change substantially in response to changing realities--in the economic market, in the social marketplace, and in the political sphere.

To me, the challenge for we who are engaged in the everyday work of shaping this partnership to invent new ways to work together that sustain investment in basic research and that nurture scientific talent, and to do that in a context of very constrained resources.

Committee on Science, Engineering, and Public Policy. 1993. Science, Technology, and the Federal Government: National Goals for a New Era. Washington, D.C.: National Academy Press.

U.S. Office of Scientific Research and Development. 1945. Science, The Endless Frontier. A report to the president. Co-authored by Vannevar Bush. Washington, D.C.: U.S. Government Printing Office.

About the Author:Richard F. Celeste is a partner with the consulting firm Celeste & Sabety Ltd. This paper is adapted from remarks he made 3 October during the symposium Industry-University-Government Cooperation for U.S. Technological Leadership in the 21st Century, part of the 1996 NAE Annual Meeting.