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Budget Realities Usher In New Era Of Research And Development Collaboration the nation's needs. The concern of re stitute for Advanced Study, Princeton, searchers who depend on government N.J., agrees that "the paths from scien largess for support is that "strategic" tific discovery to new technology are research will leave "basic" research be multiple, unevenly paced, and nonlin ear. Quoting Donald E. Stokes of the hind in favor of "applied" research. Science policy experts at the AAAS Woodrow Wilson School of Public & conference tried hard to persuade each International Affairs of Princeton Uni other this would not occur. Much strate versity, Griffiths says, "We will be more gic research will be very basic, they ar likely to meet essential societal needs, in David J. Hanson, C&EN Washington gued. More than one speaker pointed cluding competitiveness in the global out that the path from basic science and economy, if we creatively link the dual A lthough the phrase has become a experiment through developmental re trajectories of basic science and techno / % cliche, it is true that research in search to a completed commercial prod logical innovation." It is a fact, although one widely mis J L J L the U.S. is undergoing a para uct is not a straight line. "Fundamental digm shift. This shift is forced by a com science is a core component of an inte understood both by scientists and poli bination of world events and changing grated network, not a separable segment cymakers in Washington, that any pol federal government priorities. That such of a linear model," says M. R. C. Green icy based on strategic research will a shift has been approaching for several wood, associate director for science at have to include all research, from the years is argued and denied by research the Office of Science & Technology Poli most basic and fundamental to engi cy. "Today, the science and technology neering and applied research, says ers, but now it's here. Speakers at the latest annual Colloqui enterprise is more like an ecosystem John A. Armstrong, IBM vice president um on Science & Technology Policy held than it is like a production line. All parts for science and technology (retired). The danger that budget-conscious in Washington, D.C., earlier this month of the system are linked in multiple and sponsored by the American Associ ways, and changes to one component government agencies will move away from funding basic science is real, ation for the Advancement of Science have effects throughout the system." (AAAS), focused on the changing envi Philip A. Griffiths, director of the In- Armstrong contends. However, he be lieves "the danger can be confronted ronment for research and how it will and managed, though the argu affect individual researchers and in ments required are subtle and need stitutions. The heart of the issue, as constant explanation, illustration, always, is money. and repetition." This is a task scien Because research and develop tists will have to perform. ment is classified as discretionary spending in the federal budget, it Although it is possible to pick out was essentially frozen by the 1990 basic research that is a good bet to Budget Enforcement Act that is sup help meet society's goals, Armstrong posed to trim the federal spending says, it does not follow that we know deficit. AAAS reports the Adminis what areas of science are not relevant. tration's total proposed R&D budget If funds for long-shot research are cut for fiscal 1995 is $73.4 billion, an in off, "we would be voluntarily and crease of 0.5% from 1994. The cate perversely cutting ourselves off from gory of basic research is slated to re likely sources of assistance in reach ceive $14.2 billion, up 0.7%. ing our goals," he argues. The government's adoption of a Two themes emerged during col new technology policy that stresses loquium discussions of federal R&D strategic research is occurring at the spending. The first is an evolving same time as a fundamental change government policy to fund "strate in the relationships among research gic" research. This idea, espoused universities, industry, and the federal by Sen. Barbara A. Mikulski (D.government—the colloquium's sec Md.) and others, is seen as a way of ond major theme. Each of these insti moving scientists and engineers more toward work that will address Bloch: research costs lead to consortia tutions is changing on its own, and,
• Tight research budgets force universities and federal labs to work more closely with industry to meet national needs
APRIL 25,1994 C&EN 35
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GOVERNMENT as part of that change, each is trying somehow to make better use of the others. Industrial R&D "has been involved for some time now in a constant process of resizing, reengineering, and reorganizing, with little rejoicing," according to Charles F. Larson, executive director of the Industrial Research Institute (IRI) in Washington, D.C. He points out that IBM, one of the largest research companies in the world, cut its R&D budget by $1 billion, or 20%, last year. "Industrial R&D spending in the U.S. has been virtually flat since 1986," he adds. "The Tax Reform Act of 1986 may have had an impact on this dramatic change, but other factors, such as the threat of leveraged buyouts, a slowing in the rate of increase of corporate sales and profitability, and corporate restructuring also put the squeeze on operations." In a 1993 survey, IRI found that even more companies planned to decrease their basic research efforts than had planned to do so in a 1990 survey. Also, many companies expected their scientific professional staff either to remain unchanged or decrease in 1993. Larson contends that if the economic recovery the Administration has been touting was under way, those R&D numbers should be rising. Larson notes that many of the companies that have invested heavily in R&D may not have managed that investment well. "Seven of the top 10 R&D spenders in the country have had new chief executive officers in the past three years," he points out, including Kodak, AlliedSignal, Motorola, and Hewlett-Packard. "The general downsizing and rationalizing of enterprises caused in part by a swollen bureaucracy and the loss of strategic direction in many enterprises are the basis for many changes affecting R&D," Erich Bloch told the colloquium. Bloch, past director of the National Science Foundation and now a distinguished fellow on the Council on Competitiveness, says: "The increasing costs of doing research and increased complexity of research naturally leads to the establishment of consortia, alliances, and cooperative efforts." As industry diminishes the role of its central research laboratory, it is turning more to universities to provide basic research, notes Larson. Companies are forming consortia with universities, and 38
APRIL 25,1994 C&EN
maintaining it are no longer feasible. And we have neglected the educational mission of the universities in favor of research." Likewise, Bruce Smith, of the Brookings Institution's Center for Public Policy Education, in Washington, D.C, says: "We have a larger science and technology establishment than the country needs or can afford. We have a surplus of scientists and engineers. The university system has to find a way to function and yet change." Universities are trying to change, and in the process to become less dependent on federal research grants. Some are succeeding. Michael Crow, vice provost of Columbia University, points out that 35% of all patents issued to U.S. companies arise out of collaborative research efforts with universities. At Columbia, Crow says, up to Larson: little rejoicing in industrial R&D 600 faculty members work with industry as consultants, and the university universities are reaching out for in- has established nearly 25 industry adcreased support from technological com- visory groups. These and other induspanies. That support has been forthcom- try cooperative ventures demonstrate ing. From 1989 to 1993, industry support that universities are making a dynamic for academic R&D grew 50% to $1.5 bil- effort to change, he says. lion, according to NSF. However, these efforts are hindered The same reaching out is occurring at by a lack of understanding on the govfederal research labs. Thousands of col- ernment side of how industry uses patlaborative research agreements between ents. "In the chemical and pharmaceuticompanies and federal labs have been cal industries," Crow explains, "a patent made in the past few years, many by is seen as a legal monopoly, something companies trying to use the expertise to be used to make a profitable product. found at national laboratories. Much of But the electronic and semiconductor inthis activity has come under the govern- dustries have no interest in monopolistic use of a patent, they want to license it. ment label of technology transfer. "I am completely baffled by the at- Intellectual property also means differtention given to technology transfer by ent things to different universities." Anthe government," says IBM's Arm- other sticking point is the U.S.'s insisstrong. "It's an absolute myth that we tence on keeping its system of awarding have been slow to commercialize new a patent to the first inventor regardless technology. There is no problem with of when an application is filed. In most technology transfer in this country, other countries, a patent goes to the first inventor to file an application. there never has been." Having looked at the meshing of Signing new research agreements is not a very good method anyway of strategic research needs and budgetary transferring technology. "As every in- priorities in the 1995 Clinton budget dustrial director of research knows, the proposal, Robert E. Grady of the inmost effective mode of technology trans- vestment banking firm Robertson, Stefer is the movement of people," Arm- phens & Co., San Francisco, concludes, strong says. "Thus, the most effective "The bottom line is that the numbers mode of technology transfer from the simply do not match up to the rhetouniversities to the civilian economy is ric." There is no increase in contribuvia trained students, who each year tion for the biotechnology industry, he leave the university with new ideas, a contends. Nor is there support of the fresh view, and a desire to do great space programs; the National Aeronautics & Space Administration got its first things." Universities have their own problems, significant budget cut in 20 years. according to Bloch. "The size of the aca- There is flat support for basic research, demic research system and the cost of and there is no dividend to science
GOVERNMENT
HELP
from the cancellation of the Supercon ducting Super Collider. "Not a dollar from that program has found its way to another science program," Grady says. From the presentations, a few conclu sions are obvious. Industry and academia are becoming more reliant on each other. And, to some extent, the fed eral research establishment is also being forced to forge ties with these societal segments. But the government must think out more fully its new relationship with the private sector, and the scientific community as a whole must be more re sponsive to the nation's needs. Π
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APRIL 25,1994 C&EN 39
