Advisers to the Nation on Science, Engineering, and Medicine

The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. Upon the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Bruce M. Alberts is president of the National Academy of Sciences.

The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. Wm. A. Wulf is president of the National Academy of Engineering.

The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, upon its own initiative, to identify issues of medical care, research, and education. Dr. Harvey V. Fineberg is president of the Institute of Medicine.

The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy’s purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Bruce M. Alberts and Dr. Wm. A. Wulf are chair and vice chair, respectively, of the National Research Council.

www.national-academies.org

For the National Research Council (NRC), this project was overseen by the Board on Science, Technology, and Economic Policy (STEP), a standing board of the NRC established by the National Academies of Sciences and Engineering and the Institute of Medicine in 1991. The mandate of the STEP Board is to integrate understanding of scientific, technological, and economic elements in the formulation of national policies to promote the economic well-being of the United States. A distinctive characteristic of STEP’s approach is its frequent interactions with public and private-sector decision makers. STEP bridges the disciplines of business management, engineering, economics, and the social sciences to bring diverse expertise to bear on pressing public policy questions. The members of the STEP Board^* and the NRC staff are listed below.

The National Research Council gratefully acknowledges the support of the following sponsors:

National Aeronautics and Space Administration

Office of the Director, Defense Research & Engineering

National Science Foundation

U.S. Department of Energy

Office of Naval Research

National Institutes of Health

National Institute of Standards and Technology

Sandia National Laboratories

Electric Power Research Institute

International Business Machines

Kulicke and Soffa Industries

Merck and Company

Milliken Industries

Motorola

Nortel

Procter and Gamble

Silicon Valley Group, Incorporated

Advanced Micro Devices

Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the authors and do not necessarily reflect the views of the project sponsors.

Government-Industry Partnerships for the Development of New Technologies

New Vistas in Transatlantic Science and Technology Cooperation

Washington, D.C.: National Academy Press, 1999.

Industry-Laboratory Partnerships: A Review of the Sandia Science and Technology Park Initiative

Washington, D.C.: National Academy Press, 1999.

The Advanced Technology Program: Challenges and Opportunities

Washington, D.C.: National Academy Press, 1999.

The Small Business Innovation Research Program: Challenges and Opportunities

Washington, D.C.: National Academy Press, 1999.

The Small Business Innovation Research Program: An Assessment of the Department of Defense Fast Track Initiative

Washington, D.C.: National Academy Press, 2000.

A Review of the New Initiatives at the NASA Ames Research Center

Washington, D.C.: National Academy Press, 2001.

The Advanced Technology Program: Assessing Outcomes

Washington, D.C.: National Academy Press, 2001.

Capitalizing on New Needs and New Opportunities: Government-Industry Partnerships in Biotechnology and Information Technology

Washington, D.C.: National Academy Press, 2002.

Partnerships for Solid-State Lighting

Washington, D.C.: National Academy Press, 2002.

Securing the Future: Regional and National Programs to Support the Semiconductor Industry

Washington, D.C.: National Academy Press, (forthcoming).

The mission of the National Research Council’s Board on Science, Technology, and Economic Policy (STEP) is to improve policy makers’ understanding of the interconnections between science, technology, and economic policy, and their importance to the American economy. The STEP Board’s activities reflect the increased recognition of the importance of technology to economic growth. In recent years public-private partnerships to develop new technologies have played an increased role both in the United States and abroad. In the United States, partnerships are sometimes controversial. The premise of this study is that an objective analysis could lead to a better understanding of the contributions and limitations of partnerships.

To further our understanding of the motivations, operations, and policy challenges associated with public-private partnerships, the STEP Board launched a major review of U.S. and foreign programs. This program-based analysis is led by Gordon Moore, Chairman Emeritus of Intel, and Bill Spencer, Chairman Emeritus of International SEMATECH, and carried out by a distinguished multidisciplinary Steering Committee that includes members from academia, high-technology industries, venture capital firms, and the realm of public policy.¹ Topics taken up by the Committee on Government-Industry Partnerships for the Development of New Technologies include the drivers of cooperation among industry, government, and universities; operational assessments of current programs; emerging needs at the intersection of biotechnology and information technology; the current experience of foreign government partnerships and opportu-

nities for international cooperation; and the changing roles of government laboratories, universities, and other research organizations.

The Committee’s analysis has included a significant but necessarily limited portion of the variety of cooperative activity that takes place between the government and the private sector.² The Committee’s desire to carry out an analysis of current partnerships that is directly relevant to contemporary policy making has conditioned the selection of the specific programs reviewed. The study, in addition, has focused on “best practices” as a way of drawing out positive guidance for future public policy. Reports in the series, as well as this Summary Report, have therefore focused attention on conditions for success rather than on analyzing failures.

The Committee also recognizes the importance of placing each of the studies in the broader context of U.S. technology policy, which continues to employ a wide variety of ad hoc mechanisms that have evolved through the government’s decentralized decision-making and management process. To meet its objective of policy-relevant analysis, the Committee has focused on the assessment of current and proposed programs, drawing on the experience of previous U.S. initiatives, foreign practices, and emerging areas resulting from federal investments in advanced technologies.³

Finally, the Committee has chosen to make policy recommendations and not operational prescriptions regarding specific public-private partnerships. Given the enormous variety in the size and scope of partnerships found in the United States, a detailed list of recommendations is simply not feasible or appropriate. The specific standards of operational success vary with the technologies, goals, and participants. Recognizing the limits imposed by this diversity, the Committee has chosen to highlight general positive recommendations rather than to attempt to develop specific blueprints; there is no “one size fits all” approach.

The Committee’s analysis divides among four primary areas. These are current U.S. partnership programs, potential U.S. partnership programs, industry-national laboratory partnerships, and international collaboration and benchmarking. The analysis of current U.S. partnerships has focused on two innovation and award programs, the Small Business Innovation Research program and the Advanced Technology Program. The review of potential partnerships for specific technologies, based on the project’s extensive generic partnership analysis, has focused on needs in biotechnology, computing, and solid-state lighting. The industry-laboratory analysis has reviewed the potential and assessed policy challenges of science and technology parks at Sandia National Laboratories and the NASA Ames Research Center. The Committee’s focus on international collaboration and benchmarking has included a wide review of new opportunities resulting from the U.S.-E.U. Science and Technology Agreement. In addition, the Committee documented and collaboratively reviewed programs at the regional and national level that had been designed to support the semiconductor industry, with a focus on Japan, Europe, Taiwan, and the United States. The need to work together in addressing common challenges, even as national technology programs support competing firms, is an overarching theme of the Committee’s analysis.

Although interrelated, these analyses were self-contained and did not address the question of optimal allocation of funding among programs.⁴ Practical policy relevance has been a guiding principle. A series of 10 intermediate reports on these programs and topics has already been published by the National Academies.⁵ In general, the Committee’s analysis of partnerships has focused attention on the operation of partnerships—the lessons they offer and how to apply those lessons, both positive and negative—to make partnerships more effective. Given this pragmatic orientation, the study did not (and was not intended to) take up the issue of whether partnerships should exist (they do), and the study was not designed to make comparisons between different partnership programs. Instead, the Committee’s charge has been to take a pragmatic approach to address such issues as the rationale and organizing principles of public-private partnerships, current practices, sectoral differences, means of evaluation, the experience of foreign-based partnerships, and the roles of government laboratories, universities, and other non-profit organizations.

Given the depth, breadth, and complexity of this subject, and the number of intermediate reports already published as part of the STEP Board’s larger project,

an important purpose of this summary report is to explain, organize, and emphasize the key findings and recommendations of the earlier reports, and the Committee views on the project as a whole, for the benefit of policymakers. Most important to emphasize are the common threads that appear within the analysis of different partnerships.

The Committee’s desire to ensure that its deliberations and analysis are directly relevant to current policy making has allowed it to be responsive to requests from the Executive Branch and the U.S. Congress to examine various policies and programs of current policy relevance. Policy-relevant analyses include a response to the White House and State Department request for an evaluation of opportunities for greater transatlantic cooperation—in order to better capitalize on the U.S.-E.U. Agreement on Science and Technology Cooperation. It includes as well a response to a request by the Defense Department’s Under Secretary for Technology and Acquisitions to review the Small Business Innovation Research program’s Fast Track initiative at the Department of Defense. Also included in the Committee portfolio of activities is the assessment of the Advanced Technology Program (ATP), requested by the National Institute of Standards and Technology (NIST) in compliance with Senate Report 105-235. The ATP program was the subject of two Committee reports: The first describes the program’s goals, operations, and challenges. The second report assessed the operations and achievements of the program, and made suggestions on how to improve what was found to be an effective partnership program.⁶

There is broad support for this type of objective analysis among federal agencies and the private sector. Federal agencies that provided support for this analysis include the National Aeronautics and Space Administration, the U.S. Department of Defense, the U.S. Department of Energy, the National Science Foundation, the National Institutes of Health (especially the National Cancer Institute and the National Institute of General Medical Sciences), the Office of Naval Research, and the National Institute of Standards and Technology. Sandia National Laboratories and the Electric Power Research Institute (EPRI) have also provided important contributions. Support has also come from a diverse group of 10 private corporations.⁷

The conclusion of this intensive program-based study enables us to look at the multiple examples of public-private partnerships in the United States and elsewhere with informed perspective. The purpose of this final report is to highlight the larger issues and to summarize the insights gained through this analysis of partnerships, with the goal of generating a fuller, more informed appreciation

of past, current, and potential contributions of partnerships to the welfare, competitiveness, and security of the United States.

On behalf of the National Academies, we express our appreciation and recognition for the insights, experiences, and perspectives made available by the participants of various conferences.

A number of individuals deserve recognition for their contributions to the preparation of this summary report, the eleventh produced by the project. Among the STEP staff, Dr. Sujai Shivakumar played a major role in the preparation of this report, showing great skill in drawing together the disparate elements of this multifaceted assessment of public-private partnerships. He also frequently contributed original research and his own valuable insights. His colleague, Christopher Hayter, brought his enthusiasm, commitment, and considerable skill to the project to ensure the accuracy and quality of the report as well as its timely production. The study as a whole owes a great debt to McAlister Clabaugh and David Dierksheide, both of whom worked long, hard, and well over several years to hold the meetings and produce the reports required by this broad-based review. Their ability to master multiple priorities and provide uncompromising quality made the project possible. Without their collective efforts, among many other competing priorities, it would not have been possible to prepare this report in the required time frame.

This report has been reviewed in draft form by individuals chosen for their diverse perspectives and technical expertise, in accordance with procedures approved by the NRC’s Report Review Committee. The purpose of this independent review is to provide candid and critical comments that will assist the institution in making its published report as sound as possible and to ensure that the report meets institutional standards for objectivity, evidence, and responsiveness to the study charge. The review comments and draft manuscript remain confidential to protect the integrity of the deliberative process.

We wish to thank the following individuals for their review of this report: Philip Auerswald, Harvard University; Robert Carpenter, University of Maryland; Merton Flemings, Massachusetts Institute of Technology; Christina Gabriel, Carnegie Mellon University; Paul Horn, International Business Machines Corporation; Henry Kelly, Federation of American Scientists; Charles Kolb, Aerodyne Research, Inc.; Vernon Ruttan, University of Minnesota; Jeffrey Sohl, University of New Hampshire; and Nicholas Vonortas, George Washington University. Although the reviewers listed above have provided many constructive comments and suggestions, they were not asked to endorse the conclusions or recommenda-

tions, nor did they see the final draft of the report before its release. Responsibility for the final content of this report rests entirely with the authoring committee and the institution.

Gerry Dineen has overseen the Academies review process for this report. Appointed by the National Research Council, he was responsible for making certain that an independent examination of this report was carried out in accordance with institutional procedures and that all review comments were carefully considered. This multi-year study has produced 11 volumes, many of which have benefited from Gerry Dinneen’s guidance and good counsel. The STEP Board and Project Committee recognizes and are grateful for his contribution.

Following the Executive Summary listing core findings and recommendations, this volume summarizes the analysis of the Committee in eight sections. This Preface has set out the role of the Committee and the parameters of its work. The Introduction in Part I describes public-private partnerships, the motivation for partnerships, and the varieties of partnerships, and then identifies some core conditions contributing to successful partnerships. Part II contains the Committee’s findings and recommendations. Following Part III’s overview of the broader environment for innovation, Part IV looks more specifically at U.S. innovation policy, in both retrospect and prospect. It identifies some of the central challenges facing U.S. policy makers in this area. Part V provides an overview of the Committee’s review of selected U.S. public-private partnerships. These include a synopsis of the Committee’s analysis of the SEMATECH consortium, a summary of the assessments of the Small Business Innovation Research and ATP programs, as well as a précis of the scope and potential of science and technology parks associated with the Ames and Sandia national laboratories. Part VI takes up the issues of accountability and assessment, which the Committee identifies as key factors contributing to successful partnerships. In today’s interconnected world, partnerships have to be assessed in a global context; Part VII provides this important perspective. Finally, Part VIII sets out the Committee’s conclusions; suggests further directions for analysis; and outlines considerations for policy makers seeking to foster innovation through public-private partnerships.

Gordon Moore Bill Spencer Charles Wessner