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Board on Science, Technology, and Economic Policy
Policy Division
National Research Council

Workshop on a Research Agenda in Intellectual Property Rights,September 2, 1999, New Haven, CT

Government-Industry Partnerships in Biotechnology and Computing, October 25-26, 1999, Washington, DC

Workshop on Using Human Resources Data to Assess Innovation, November 23, 1999, Washington, DC

Conference on Intellectual Property Rights in the Knowledge-based Economy, February 2-3, 2000, Washington, DC

On June 30, 1999, the STEP Board held a public forum to discuss two new reports, U.S. Industry in 2000: Studies in Competitive Performance and Securing America's Industrial Strength. Featured speakers at the event included Dan Goldin, Administrator of NASA, and Rita Colwell, Director of the National Science Foundation, as well as Bill Wulf, President of the National Academy of Engineering, and Dale Jorgenson and Mark Myers of the STEP Board.

U.S. Industry in 2000 is a collection of original studies of 11 manufacturing and service industries commissioned by the STEP Board to determine the sources of improved U.S. industrial performance in the 1990s, in marked contrast to the late 1980s gloomy diagnosis of U.S. industrial decline and loss of technological leadership.

The industries examined include steel, chemicals, pharmaceuticals and biotechnology, banking, trucking, food retailing, powder metallurgy parts, apparel, computing, semiconductors, and computer disk drives.

In a companion report, Securing America's Industrial Strength, the STEP Board says that analysts in the 1980s mistook the high valuation of the dollar and other adverse economic conditions for signs of long-term structural deterioration. Nevertheless, performance on a variety of measures improved in the 1990s, reflecting changes in private sector strategies, applications of advanced information technologies, and broadly supportive public policies cautious fiscal and monetary policies, trade liberalization, deregulation, and research support, among others.

The report warns against assuming that this decade marks a long-lasting turnaround and raises five principal concerns bearing on future industrial performance:

the supply of highly skilled people to meet future workforce needs, especially in information technology;
the adequacy of public and private investment in long-term research, particularly in physical science and engineering fields;
the lack of consistency in federal tax policy governing corporate investment;
whether patent, copyright, and trade secret protection policies have struck the right balance between stimulating innovation and encouraging diffusion of technology and competition; and
the adequacy of industrial technology indicators and data to inform public policy.

A new analysis in the report, Securing America's Industrial Strength, shows in detail the changing composition of federal research support since 1992, when the total federal R&D budget began to fall as part of the effort to reduce the budget deficit.

As is well known, the trends in research budgets have not been uniform across the R&D-supporting agencies. The defense and energy research budgets have declined, NASA's has barely kept pace with inflation, while NSF and NIH have received significant increases. What is less well known is how research fields have fared in this environment. The STEP analysis shows that some fields (electrical and mechanical engineering, physics, chemistry, and mathematics) have suffered along with the budgets of their dominant funding agencies; but others (computer science and materials engineering) have prospered. NIH budget growth has chiefly benefited the medical sciences rather than the biological sciences. Data on federal obligations for 26 research fields are included as an appendix to the report and are posted here on the STEP home page.

U.S.-European S&T Cooperation: Opportunities Under the New Framework Agreement

On May 27 the STEP Board held a public forum to release New Vistas in Transatlantic S&T Cooperation. Speakers included European Union Ambassador Hugo Paemen, Tom Kalil of the White House National Economic Council, and STEP Board Chairman Dale Jorgenson. The report was the product of a June 1998 conference held to publicize a new U.S.-European Union science and technology agreement, identify opportunities for mutually beneficial cooperation in particular fields, and explore policy perspectives on international cooperation. The meeting, requested by the U.S. Department of State and the European Commission, focused on transatlantic cooperation in information technologies, climate change, human environmental health sciences with a focus on endocrine distruptors, and transportation research.

A follow-up meeting was held June 21-22 in Stuttgart, Germany, immediately after the release of the STEP report, and reviewed the year's progress, including the signing of implementing agreements in machine translation, materials, and metrology. Coordination of work on endocrine disruptors is also planned. The Stuttgart meeting also focused on information technology, materials, and sustainability.

The STEP Board continues its study of the policy issues associated with public-private collaboration in the development of pre-competitive technologies. The projects' mulitdiciplinary Steering Committee, chaired by Gordon Moore, chairman emeritus of Intel Corporation, is addressing such issues as the underlying rationale for industry-government cooperation to develop new technologies, current practices, sectoral differences, means of evaluation, the experience of foreign based partnerships, and the roles of government laboratories, universities, and other nonprofit research organizations. The study will recommend best practice principles of operation for both national programs and international collaboration. Recent meetings have examined the Advanced Technology Program of the National Institute of Standards and Technology, the Small Business Innovation Research program of the Department of Defense, and the plans of Sandia National Laboratory to develop a research park. A conference comparing partnerships in biotechnology and computing is scheduled for October 25-26, 1999.

In cooperation with the Computer Science and Telecommunications Board, the Office of Scientific and Engineering Personnel, and the Board on Testing and Assessment, the STEP Board is conducting a study of skilled workforce needs in information technology that will also include comparisons with biotechnology. The project will consider and make recommendations regarding all principal sources of supply—educational institutions, public and private training, immigration, and foreign outsourcing and investment. Alan Merten, President of George Mason University, is chairing the committee.

In light of questions raised in the STEP Board's report, Securing America's Industrial Strength, the Board has initiated an assessment of the effects of changes in intellectual property rights policies (i.e. patents, copyrights, and trade secret protection) over the past 25 years and domestic and international policy directions in the future. The study will consider the impact of IPR policies on performance and communication of academic research, mobility of highly trained personnel, initial and subsequent innovation, and competition and industry structure. Yale University President Richard Levin and Xerox Senior Vice President Mark Myers are leading the project for the Board.

Recent additions to the STEP Board include Edward Penhoet, former President and CEO of Chiron Corporation and current Dean of the School of Public Health at the University of California at Berkeley, and Bronwyn Hall, Associate Professor of Economics at the University of California at Berkeley and Visiting Professor of Economics at Oxford University. Retiring members include founding member Ruben Mettler, retired Chairman and CEO of TRW, Inc., and James Lynn, former Advisor, Lazard Freres.