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Since unveiling its technology policy on February 22, the Clinton-Gore Administration has followed up with concrete actions designed to create jobs, strengthen America's technological and industrial leadership, and boost our standard of living today and tomorrow. In the first 9 months, the Administration has:

Collectively, these initiatives will lead to economic growth, the creation of high-wage jobs, a cleaner environment, and a continuation of America's leadership in basic science goals established in the Administration's

February 22 statement on technology policy. As noted in that document, the Administration believes strongly that:

This document outlines the Administration's accomplishments and indicates its plans for the future. The President's technology policy is very much a "work in progress" and the Administration welcomes suggestions forenhancing and accelerating these initiatives.


A Checklist of Clinton Administration

Key Accomplishments

Establish clear policies for the Federal Government's role in civilian technology, including a shift in the Federal R&D balance for civilian technology toward a 50/50 ratio.

Developed within the Administration's first month an explicit, aggressive plan for using technology to support America's economic growth.

Submitted and advanced a budget for FY 1994 that included an additional $2.6 billion investment in civilian R&D, moving the government toward greater civilian-military balance in Federal R&D support.

Launch the Technology Reinvestment Project (TRP) to stimulate the transition from defense to civilian industrial capabilities.

Conducted a national outreach initiative to ensure maximum TRP participation by U.S. industry, generating 2,850 proposals for this unprecedented, ARPA-led multiagency program.

Selected 41 projects, accounting for $140 million in requested Federal matching funds the first wave of grants to projects designed to create jobs by promoting new, dual-use technologies.

Planned to announce remainder of awards in this $472 million merit-based program in November.

Expand dramatically the Advanced Technology Program (ATP) to spur industry's development of high-risk, high-payoff commercial technologies.

Strongly endorsed the tenet behind this cost-shared program with industry to support high-risk, high-potential commercial technologies, a major change in policy from previous Administrations.

Designed the scale-up of the ATP to ensure that it has major impact on the U.S. economy and won congressional support for dramatic funding expansion for this program to $200 million in FY 1994, up from $68 million at the Commerce Department's National Institute of Standards and Technology.

Planned to announce 60 new ATP awards to industry in FY 1994, plus three first-time strategic program competitions.

Increase access to commercially useful technology at Federal R&D agencies.

Made a clear break with prior Administrations by placing heavy emphasis on dual-use technology development by the Department of Defense to ensure that military and commercial sectors benefit mutually from technology advances and proposed an additional $260 million for this effort.

Declared goals and established a specific plan for strengthening and streamlining linkages between Department of Energy laboratories and U.S. industry.

Upgraded technology commercialization priorities at the National Aeronautics and Space Administration.

Mobilize Federal resources and policies to support the National Information Infrastructure (NII).

Set an ambitious action agenda for a National Information Infrastructure that clarifies private and public-sector responsibilities and makes clear the fundamental requirements for universal citizen access and commercial-sector benefits.

Organized a multiagency task force to coordinate the Federal Government's NII activities and to work closely with industry in carrying out the action agenda and in addressing specific policy issues.

President Clinton signed legislation to transfer to the private sector a portion (200 MHz) of the radio frequency spectrum now used by Federal agencies, and to allow competitive bidding in granting new licenses thereby promoting private investment in the National Information Infrastructure.

Initiated a grants program to ensure all Americans have access to the NII and won congressional approval for $26 million to begin the initiative.

Promote technology-based exports by revamping and liberalizing government export control and promotion programs, and by establishing and carrying out supportive trade policies.

Completed a major review of government's trade promotion and export policies and operations and developed a strategy to boost U.S. exports by 60 percent and generate 6 million new jobs by the year 2000.

Freed up $35 billion in exports by reducing controls on U.S. computer, supercomputer, and telecommunications products, raising the threshold for licensing computer exports, and proposing a dramatic change in the definition of a supercomputer and removal of prior export licensing requirements for most telecommunications exports.

Began to streamline and improve the government's export promotion programs, creating a pilot one-stop shop to eliminate the maze of Federal offices that exporters must now contact.

Advanced the NAFTA agreement, which is expected to bring substantial benefits for U.S. technology-based industries and workers.

Establish a network of manufacturing extension centers to assist small and medium-sized businesses to modernize.

Created a comprehensive plan to scale up from seven government-supported centers to a nationwide network of 100 centers in a Manufacturing Extension Partnership by 1997.

Jump-started this national network through the defense Technology Reinvestment Project, and gained congressional support to fund addi tional centers in FY 1994.

Make worker training and education more accessible and more productive to better prepare the American workers of tomorrow.

Established a new Office of the American Workplace in the Departmentof Labor to speed the adoption of high-performance work practices, including people-oriented technology strategies.

Initiated a thorough review of federally funded retraining and assistance programs with the aims of consolidating the patchwork of existing services and of improving program effectiveness.

Proposed creation of a national system of standards for occupational skills to improve the match between workers' skills and businesses' workforce needs. (Legislation is pending in Congress.)

Advocated an initiative to build an effective school-to-work system that prepares young people for high-skill, high-wage jobs.

Developed an aggressive and innovative program for investing in education and training technologies.

Create new Federal partnerships with industry to strengthen U.S. economy and create jobs through the development and commercialization of technology.

Established a partnership with the auto industry for a new generation of more energy-efficient vehicles, the Clean Car Initiative, and agreed upon aggressive, far-reaching goals.

Entered into a record number of Cooperative Research and Development Agreements between Federal technology agencies and U.S. industry, with an additional 1,600 new joint projects expected this year.

Began or strengthened collaborations with industry through consortia covering semiconductors, display technology, textiles, biosensors, aerospace alloys, polymer blends, and microelectromechanical systems.

Create a business environment that fosters innovation and forward-looking private-sector investments.

Won congressional approval of tax incentives for private-sector investment in R&D and new business formation, including a 3-year extension of the R&D credit and a targeted capital gains reduction for investments in small businesses.

Harmonize environmental and economic objectives and improve efficiency in the use of energy resources.

Developed a strategy for reducing the growth of greenhouse gases linked to global warming, including initiatives relying on increased energy efficiency that will stimulate technology investments and strengthen the U.S. position in the global environmental marketplace.

In addition to the Clean Car initiative, launched separate initiatives: to fund a long-term Federal R&D effort for natural gas and to develop environmentally sound technologies and to boost exports of these technologies.

Organize government technology efforts to perform more efficiently and effectively, and to work more closely with the private sector.

Created a strong, new system to better coordinate technology plans and programs across the government and with industry.

Championed key legislative proposals to increase coordination across government agencies and to improve the effectiveness of Federal technology programs.

Made advanced civilian technology a top priority at the Commerce Department for the first time and developed a department-wide strategy for meeting industry's technology-related development, commercialization, and trade needs.

Launched a wide-ranging effort to reinvent government, including the start of a major push to capitalize on new technologies to revamp Federal agency operations and better serve industry and the public.

Maintain U.S. leadership in basic science, mathematics, and engineering.

Worked with the Congress to increase the National Science Foundation's FY 1994 budget by 11 percent to a total of $3 billion, providing: strong support for fundamental research critical to manufacturing, advanced materials, environmental technologies, and biotechnology; establishment of a technical education program geared to community colleges; and doubled support for modernizing academic research facilities and instrumentation.

Putting Technology to Work for America's Future

On February 22, the Clinton Administration issued Technology for America's Economic Growth, A New Direction to Build Economic Strength, enunciating a technology policy that takes a realistic and comprehensive view of intensifying global economic competition. This policy recognizes that industry is the primary creator of new technology and the main engine of sustained economic growth. It assigns the Federal Government a supporting role, performing as partner to industry by facilitating technology development and application.

The February report provides a blueprint for a far-reaching set of specific actions. At its foundation are three central goals that provide touchstones for the government's overall role in science and technology:


As the pace of technological progress accelerates and other nations increase their mastery of technology development and application, the public and private sectors must confront together the challenge of devising and carrying out strategies that foster innovation and enable U.S. industry to realize the commercial benefits of new technology.

Challenges abound. One is to respond to the increasing complexity and uncertainty of technological innovation, engendering costs and risks that may be too great for even the largest of firms to undertake on their own. Another is to maintain a vigorously competitive high-technology sector, where average annual compensation exceeds by 20 percent the average for all manufacturing.

High-technology products account for a rapidly increasing share of world manufacturing output, nearly doubling to about 35 percent since 1980.

The United States, however, has not benefited fully from the boom in high-technology markets. Over the last decade, exports of high-technology products as a share of all U.S. merchandise exports increased only about 4 percentage points. Imports of high-technology goods grew much more rapidly, recording a 20 percentage-point jump in the share of all U.S. imports. Consequently, the U.S. share of global shipments of high-technology goods dropped by one-tenth, from 40 percent to 36 percent of the world total.

New technology also is vital to the health of conventional industries, leading the way to market-building improvements in existing products and services, manufacturing processes, and overall business performance. In the service sector, the tools of the Information Age with each new generation of technology growing in capability and flexibility help create new opportunities for business growth.

New technology also underpins productivity increases, job creation, and gains in wages. The real wage of the average American worker increased eightfold over the last century, the direct result of an eightfold increase in average productivity. Advances in technology better machines, organizational improvements, and more-skilled workers account for as much as three-fourths of this productivity growth. In recent decades, however, declining rates of investment in production technologies have contributed to sluggish productivity growth. At the same time, the educational system has not produced adequate numbers of workers prepared for the modern workplace, resulting in a large pool of low-skilled workers being relegated to low-wage jobs. Over time, lagging investment in new technology contributes to a less-skilled workforce and, in turn, to worsening employment opportunities (lower-quality jobs and lower wages).

Through direct, purposeful investments, leveraging of existing resources, and new programs, the Administration aims not only to strengthen the Nation's technological leadership but also to ensure that the Nation realizes the wealth- and job-creating benefits of innovation. A key component of its National Economic Strategy, the Administration's technology policy:


Competitive pressures in commercial markets drive innovation. Industrial and national economic growth depends not only on the ability of companies to develop new technologies, but also on the speed and efficiency with which they apply new technologies, regardless of where they originate. The Administration's technology initiatives aim both to prime the pump of commercial innovation and to help industry apply new technologies to production processes and commercial products. They also seek to develop an effective means of monitoring science and technology developments in other nations, enabling U.S. firms to identify advances they might exploit to their competitive advantage.

In fostering development and diffusion of strategically important new technologies, the Federal Government has begun to work more closely than ever before with U.S. industry to identify high-priority technology needs and opportunities and to determine the appropriate roles of the public and private sectors. For example, cost sharing between the Federal Government and the private sector will enable industry to pursue high-risk technologies anticipated to have a significant commercial impact. Federal funding will be used primarily to provide incentives to industry to undertake high-priority technology-development activities that have not attracted private-sector investment because of high technical risk, prohibitive costs, long pay-back horizons, or anticipated returns that are not appropriable to individual firms or distinct industrial sectors.


The Technology Reinvestment Project (TRP), launched in March to stimulate the transition to a "growing, integrated, national industrial capability," is devoting over 85 percent of its $472 million budget to technology development and deployment activities. Managed by the Defense Department's Advanced Research Projects Agency (ARPA) in cooperation with five other Federal agencies, the TRP elicited 2,850 proposals of projects seeking a total of $8.5 billion in Federal matching funds. The majority of proposals nearly 2,000 were in the category of technology development for creating new technologies with the potential for commercialization in 5 years. In late October, the President approved the first projects selected for funding. (See page 51.)


The Advanced Technology Program (ATP) works with U.S. industry to advance the Nation's competitiveness and economy by sharing part of the cost of developing high-risk but powerful new technologies that underlie a broad spectrum of potential new applications, commercial products, and services. Through cooperative agreements with individual companies or groups of companies, large and small, the ATP invests in industry-proposed projects to develop technologies with the potential to improve industrial performance and pay economic dividends to the Nation.

The ATP is explicitly focused on the objective of economic growth as its sole aim, not as a derivative spin-off benefit. Managed by the Commerce Department's National Institute of Standards and Technology (NIST), the program uses a rigorously competitive process free of political influence to select proposals for support, with both technology and business plans assessed.

For example, private-sector business experts are brought in to assure that business assessments are probing and complete.

New ATP Support and Directions. The ATP holds great potential to be an effective, highly productive element of the Nation's technology strategy.

The challenge is to scale the ATP to a major national program, while retaining its essential characteristics of objectivity, fairness, and efficiency.

The Clinton Administration has taken the first steps toward scale-up of the ATP. With the Administration's FY 1994 budget proposal of $199.5 million receiving congressional approval in October, the ATP is moving from a pilot-level to a national-scale program. To date the ATP has used general competitions open to proposals in all areas of technology as its sole investment mechanism. As it grows, the ATP will be able to deepen support in selected, well-defined program areas, while continuing to hold competitions open to promising ideas from any area of technology. While the Administration's target budget of $750 million in 1997 represents a significant increase for the ATP, it is still less than one-half of one percent of the Nation's R&D budget. The effect of the ATP will be diluted if it is spread evenly across every area of technology.

Each program will have well-defined technological and business goals.

Often these will involve the parallel development of a set of interlocking R&D projects. By managing groups of projects that will complement and reinforce each other, the ATP will be able to have the greatest possible impact on technology and the economy. Specific program areas will be selected based on ideas from industry to preserve the strongly industry-oriented outlook that has characterized the ATP from the start. For each program, the individual ATP projects will still be selected under the existing competitive process.

The Administration has decided that a typical program will run for 5 or more years and require about $20 million to $50 million per year from the ATP. The duration and level of funding will depend on the scope of each program as it is defined in cooperation with U.S. industry.

NIST is seeking industry input on the direction, scope, and content of the ATP program. The next round of competitions will begin in January 1994.

During FY 1994, NIST expects to announce about 60 awards in general competitions and to run three first-time competitions in the strategically redesigned ATP.


A central tenet of the Clinton-Gore Administration's technology policy is that industrial consortia will be preferred performers of commercially oriented R&D, helping to ensure that government-supported projects are driven by market needs. Examples of government-facilitated research alliances include:

The Administration is continuing to pursue and encourage research alliances in several other strategically important technology areas, such as new construction technologies, intelligent control and sensor technologies, rapid prototyping, and environmentally conscious manufacturing.


Since January, the number of cooperative research projects between U.S. companies and Federal laboratories has increased significantly, reflecting an increasing emphasis on aligning agencies' R&D with industry's technology needs. Within the Department of Energy's (DOE's) network of 30 laboratories, for example, the more than 271 new cooperative research projects initiated since January represents an 82-percent increase in the agency's total number of cooperative R&D agreements (CRADAs). Of DOE's 601 CRADAs, 29 percent are with small businesses and about 75 percent focus on information and communications, advanced materials, or manufacturing. At the Commerce Department's National Institute of Standards and Technology, the number of CRADAs has surged to 385, with more than 110 new agreements signed since February. About 50 percent are with small businesses. In the aeronautics program at NASA, the number of cooperative projects with industry and government users of aeronautics technology has increased to more than 400.

Examples of new collaborations include:

Increasing Access to Commercially Useful Technology On their own and together, Federal science and technology agencies are re-evaluating existing technology transfer mechanisms and experimenting with new methods for delivering commercially useful services and technologies to U.S. industry. At DOE, the agency's commitment to enhancing economic competitiveness was strengthened by a package of initiatives for working more closely with U.S. businesses. The initiatives were spelled out in DOE's Partnerships for Global Competitiveness, released in late July by Energy Secretary Hazel R. O'Leary. The strategic plan provides a blueprint for making the department's laboratory system user friendly, market driven, and consumer oriented. Among other things, the plan calls for cutting in half the average time for processing new CRADAs, and it permits laboratory directors to commit, at their own discretion, as much as $500,000 in DOE funds to help support cooperative research projects with industry. DOE laboratories are exploring new avenues for commercializing their

R&D. Several have developed venture capital funds and programs to "spin off" new companies. In August, the Los Alamos National Laboratory formed a partnership with the Microelectronics and Computer Technology Corporation (MCC), in which MCC, a 70-firm research consortium, will help the DOE lab to transfer technology to its member companies, spin off companies, and explore other commercialization approaches.

NASA has recently established several initiatives for cooperative work with industry. The Office of Advanced Concepts and Technology is charged with instilling technology transfer more directly into the fabric of the agency by ensuring that research is focused not only on the agency's needs but also on national needs. This office will work with all NASA Field Centers and NASA headquarters to ensure that the agency has explicit plans for making technology transfer a high priority.

In FY 1994, NASA will establish an Industry Technology Program in which industry-led teams adapt and develop new technologies to applications in aerospace and other commercial sectors. This program will support high-risk research and applications with a strong potential for yielding commercial benefits and strengthening the competitive posture of U.S. industry. Technology priorities will be set by industry, and winners of cost-shared grants will be competitively selected on the basis of technical and business merit.

In still another initiative, the Advanced Small Spacecraft Technology program, NASA will work with industry to develop and apply advance miniaturization technology for spacecraft design and instrumentation. Such technology promises to reduce space-mission costs and development times, potentially broadening the range of space-based commercial applications. Industry-ed "integrated product development teams" will define the content of the program and develop implementation plans. Projects will involve collaborators from industry, government, and universities.


The Administration is moving to correct chronic underinvestment in infrastructural technologies essential to innovation and improvements in manufacturing. Sometimes called generic technologies because of their broad industrial utility, infrastructural technologies underpin the Nation's economic competitiveness.

The market does not provide adequate incentives for investing in productivity-enhancing infrastructure technologies. Because returns on R&D devoted to the development of such technologies, which include measurement tools, evaluated technical data, and testing and processing methods, are not easily recovered by individual firms, companies are reluctant to invest on their own. Yet, these and related technologies are fundamental to innovation and manufacturing improvements. In the manufacture of complex integrated circuits, for example, testing is estimated to account for 30 percent of the cost.

To capture the economic benefits of innovation, the Nation also requires other elements of a broadly supporting infrastructure, which enhances industry's ability to assimilate and capitalize on new technologies and new technical and scientific information. These critical elements include a modern manufacturing base, an advanced transportation system, and, as the Nation and world proceed further into the Information Age, a National Information Infrastructure.

National Information Infrastructure. Facilitating the development of a National Information Infrastructure (NII) is a top Administration priority, a necessity for economic growth in the 21st century. A web of advanced communications networks that will put vast amounts of information in all its forms at users' fingertips, the NII will spawn a range of benefits and contribute directly to economic growth, U.S. technological strength, and the creation of productive jobs.

As explained on pages 41 to 47, the Administration released in September an agenda for action that assigns to the private sector the lead role in developing and deploying the NII. The Federal Government's role will be to complement and enhance private-sector activities by creating a favorable regulatory and policy environment, supporting advanced research, developing applications that improve access to government services, and procuring leading-edge NII hardware and software.

One such application-oriented activity under way at the Commerce Department is a program to establish an Advanced Manufacturing Systems and Networking Testbed (AMSANT). Working closely with industry groups, Commerce researchers at the National Institute of Standards and Technology will use the testbed to learn how with appropriate information and networking standards the NII could benefit large and small manufacturers alike through electronic product data exchange, electronic commerce, and flexible manufacturing.

The Administration's FY 1994 budget allocates $1 billion for R&D work on high-performance computing and communications, including a new $100 million program to develop information-technology applications in education, manufacturing, health care, and other areas.

Strengthening NIST Laboratory Programs. Responding to industry's needs, the Administration has strongly and successfully supported expansion of the industry-oriented laboratory research and services at the Commerce Department's National Institute of Standards and Technology (NIST). With a 21-percent increase in its FY 1994 budget for its laboratory programs (to $226 million), NIST will be able to broaden and deepen its emphasis on U.S. industry's infrastructural technology needs.

NIST, whose mission is to promote U.S. economic growth by working with industry to develop technology, measurements, and standards, will devote the majority of its additional laboratory resources to expanding efforts in high-performance computing and communications, advanced manufacturing, advanced materials and processing, electronics, and biotechnology.

Manufacturing Extension Partnership. The economic benefits of innovation flow most directly to nations with a strong, modern manufacturing base. However, the core of the U.S. manufacturing base the nation's 350,000 small and medium-sized manufacturers has been lagging international competitors in the adoption of productivity-enhancing equipment, production methods, and organizational practices. The Administration is progressing in its plans to build a national network of manufacturing extension centers a comprehensive industrial outreach program to help smaller firms modernize their operations and improve their competitive performance. Called the Manufacturing Extension Partnership, which is managed by NIST, the network is envisioned to grow to some 100 electronically linked service delivery centers by 1997.

Progress toward reaching this objective is discussed in the section on manufacturing initiatives.

Technology "Road Maps" and Competitive Benchmarks. In cooperation with industry, the Commerce Department's Technology Administration has committed to develop strategic technology road maps to help guide industry and government R&D efforts and to promote the efficient allocation of public and private-sector resources. In a complementary initiative, the Technology Administration now will carry out comparative quantitative assessments of how the U.S. technology sector is performing relative to international competition. Industry will set the agenda for these much-needed benchmarking evaluations.

Together, the technology road maps and the comparative assessments will provide essential information for guiding the formation of Federal policies and programs and for helping industry establish clear technology-development objectives.

Access to Foreign Science and Technology. The United States has not had a coherent approach to monitoring and reporting on science and technology developments in other nations, and, in general, U.S. firms have not exploited technologies developed elsewhere. Many foreign companies, in contrast, have been extremely successful in commercializing technologies that originated outside domestic borders.

To help increase U.S. industry's awareness of promising technologies and practices developed in other nations, the Commerce Department will expand its Japan Technology Program to broaden U.S. industry's access to Japanese technical and scientific information. By 1995, the department aims to have counterpart programs for translating and disseminating technical information originating in other Pacific Rim nations and the European Community.

Learning by Showcasing Successes. Administered by the Technology Administration in the Department of Commerce, the National Medal of Technology is an annual Presidential award that recognizes individuals, teams, or companies whose technological innovations have dramatically contributed to an improved standard of living, job creation, and economic growth. On September 27, Commerce Secretary Ronald H. Brown and President Clinton announced the nine 1993 National Medal of Technology recipients. On September 30, President Clinton and Vice President Gore awarded the National Medal of Technology to this year's medalists.

Beyond highlighting America's top technological innovators, the National Medal of Technology is an example of successful government/private-sector partnerships. All members of the judging committee are from the private sector; the Foundation of the National Medals of Science and Technology, a non-profit organization whose primary mission is to support the medal program, has a Board of Directors that is comprised of some of this country's leading technology executives.

The Malcolm Baldrige National Quality Award also demonstrates how effective government/private-sector partnerships can be. The President and Secretary Brown in October announced this year's two winners: Eastman Chemical Company and Ames Rubber Corporation. Each is a technology-intensive manufacturer that serves as a role model for quality management to achieve greater competitiveness. In another Clinton Administration initiative, NIST, which manages the program, now is reaching out to both the education and health care communities to assist them in applying quality management criteria to these areas.


The principle underlying the Administration's technology policy is that technology development is not an end in itself but rather a means to enhancing the standard of living of the American people and the competitiveness of American business. New and planned initiatives, led by the Departments of Labor and Education, are contributing to this aim by encouraging the creation of high performance workplaces and by helping to upgrade the skills of American workers.

In July, the President, Labor Secretary Robert Reich, and Commerce Secretary Ronald Brown convened a Conference on the Future of the American Workplace in Chicago. This conference brought together leaders from business, labor, government, and academia, as well as front-line workers, to highlight workplace success stories and the need for more widespread adoption of high-performance work practices, including people-based technology strategies.

Upgrading Training and Skills. The Labor Department is reviewing existing federally funded retraining and unemployment assistance programs. It is devising new plans for making effective, industrially relevant training programs accessible and affordable to all workers who need to upgrade their skills or acquire new skills in response to changing job-market demands. The Labor Department also has developed a proposal, now pending in Congress, to create a national system of standards for occupational skills to improve the match between workers' skills and businesses' workforce needs.

Office of the American Workplace. The Labor Department's newly created Office of the American Workplace (OAW) is charged with promoting the widespread adoption of high-performance work practices in both the private and public sectors. It will promote specific initiatives to encourage employee involvement in the development and deployment of new technologies, helping to ensure that technology enhances rather than demeans the skills of American workers. Another emphasis of OAW is enabling more cooperative worker-management relations and greater union involvement in efforts to introduce new technology and organizational practices into the workplace. This initiative will be aided by an enhanced Labor Department database of best-practice worksites and wide distribution of the information in the database.

Partnerships to Promote Worker Training. Working with other Federal agencies and State and local organizations, OAW and the Labor Department's Employment and Training Administration are helping technology extension services to develop programs that enable firms to adopt high-performance work practices, integrate new technologies with innovative work systems, and involve employees in technology development and deployment decisions.

Preparing Tomorrow's Workers. Championed by the Administration, the School-to-Work Opportunities Act would create partnerships of schools, businesses, local governments, and others to build an effective school-to-work system that prepares young people for high-skill, high-wage jobs. Managed by the Departments of Education and Labor, the proposed initiative, designed to correct a serious weakness in the Nation's education system, would use a flexible combination of grants and waivers that enable communities to develop programs tailored to local needs and responsive to changes in the local economy and job market. A portion of funding will go for direct grants to high-poverty areas, which confront unique challenges in implementing school-to-work systems.

Students who successfully complete a school-to-work program will receive a high school diploma, an occupational skill certificate, and, if appropriate, a certificate or diploma from a post-secondary institution. The skill certificate will be a portable, industry-recognized credential that certifies competency and mastery of specific occupational skills. Leadership in Basic Science, Mathematics, and Engineering Nothing speaks to the Clinton Administration's commitment to the Nation's future economic and social progress more than the priority it has assigned to basic research in science, mathematics, and engineering. The February technology strategy noted the inseparable links between fundamental scientific research and technological progress: "scientific advances are the wellspring of the technical innovations whose benefits are seen in economic growth, improved health care, and many other areas." The excellence and vitality of the U.S. scientific enterprise was demonstrated once again by the most recent Nobel Prize announcements, for American researchers received a majority of the awards in scientific areas.

The Administration aims to ensure that this comparative advantage works to the full benefit of the American people. For example, in keeping with the Administration's investment priorities and its commitment to basic research and education, the Congress recently increased the National Science Foundation's budget by 11 percent to a total of $3 billion.

A vigorous and healthy science and engineering research enterprise is essential if the Nation is to compete successfully in world markets both today and in the 21st century. The Administration is committed to providing strong, sustained support for basic research and education in science and engineering.

Environment for Innovation and Private-Sector Investment

The Administration is taking steps to create a regulatory and domestic economic environment that fosters capital formation and private-sector investment in R&D, new plant and equipment, and worker training. Most significant is the President's $496 billion deficit-reduction package, which will decrease Federal borrowing and promote national saving. Without compromising public safety, health, and environmental concerns, new initiatives will streamline regulatory and enforcement procedures, eliminate regulations rendered obsolete or ineffective by new information or by advances in scientific and technical capabilities, and minimize industry's cost of compliance.

Parallel activities are focusing on Federal procurement policies and regulations, particularly those of the Defense Department, with aims that include integrating defense and commercial production capabilities and creating markets for new advanced technology products.

Efforts also are under way to increase the amount of "patient capital" available to small technology companies that may be several years away from refining their research results and prototypes into marketable products. For example, on August 5, the Small Business Administration (SBA) published for comment new regulations intended to help match emerging technology companies with lenders willing to provide long-term financing.The proposed regulations are expected to increase the amount of patient capital available through the SBA's Small Business Investment Companies (SBICs), already a significant source of financing for small technology firms. During the 5-month period ending June 30, 1993, SBICs made nearly 700 financings totaling more than $300 million. About 1 in every 5 SBIC dollars went to a small technology firm. In addition, newly passed legislation provides tax incentives to promote SBIC investments in small businesses owned by persons who are socially or economically disadvantaged.

Other examples of new or planned initiatives include:


The initiatives and plans described here are complemented and strengthened by other technology-related measures advanced by the Administration, which are described later in this report. All of these activities are being coordinated across the Federal Government under the leadership of the White House.

A revitalized coordinating mechanism in the Office of Science and Technology Policy (OSTP) will provide a strong focal point within the Executive Branch for planning and overseeing Federal science and technology expenditures. It also will align R&D budget allocations to Federal agencies with national priorities, ranging from basic research to manufacturing to education. It will work closely with the National Economic Council (NEC), which is coordinating technology policy with other important elements of the Administration's economic strategy, including trade, tax, and regulatory policies.

For the first time, the Commerce Department, which is charged with helping to enhance the technological capabilities of American industry and business, is integrating its technology responsibilities with its overall mission of fostering, promoting, and developing the foreign and domestic commerce of the United States. Under the leadership of Commerce Secretary Brown, the Department's Technology Administration has developed an Advanced Civilian Technology Strategy, which it has just released for public and industry comment.

Within the Federal Government, there is a new spirit of cooperation. Agencies are forming partnerships to address U.S. industry's technology needs.

The ARPA-led Technology Reinvestment Project is a prime example. Over 300 personnel from six agencies participated in reviewing proposals submitted during the first round of applications. Another example is the collaboration between the Commerce Department's National Institute of Standards and Technology and DOE's Sandia National Laboratories, which are developing plans for joint projects in key areas of advanced manufacturing technology,including intelligent machines, modeling and simulation, and networking and communications. Likewise, the Departments of Commerce and Labor have developed a partnership to promote high-performance work and quality management.

The Clinton Administration has charged every Federal agency with linking up more closely with its customers. Government technology agencies have a special responsibility to better reach out and listen more closely to industry. Moreover, all agencies are being directed to better measure their performance and results.

As the Administration's technology initiatives break important new ground, they must be held to high standards to ensure a high rate of return on the public investment. Initiatives to accelerate technology development and application should spur private-sector commercialization efforts, which will necessitate follow-through efforts, including additional investment, on the part of industry. The public investment in technology should pay off in economic benefits to the Nation.

The Commerce Department's Technology Administration has organized an interagency working group to measure the impact of Federal technology commercialization programs. Initially, the group will focus on measuring the effectiveness of commercially oriented technology programs in the Federal laboratories.

Since it is often many years before the economic impact of technology commercialization can be determined, two types of measures will be needed:

     (1) process measures of technology transfer activity in the
     Federal labs, and 

     (2) results measures of impact on industry and the economy. 

     Process measures can include numbers of Cooperative Research

and Development Agreements, licensing revenues, industry investment in joint research, and employee exchanges with industry. Results measures would include jobs created, increased revenues and profits, reduced costs, and increased market share. This interagency group should provide some sorely needed "metrics" for the $70-billion-plus Federal R&D enterprise.

Technology and Trade:

Competing in a Global Economy

With the advent of the truly global marketplace, exports are a major determinant of national economic success. The nation that successfully markets its wares to the world while maintaining or raising the living standards of its citizens has by definition produced healthy, competitive companies that are the prerequisite for a healthy, growing economy. In contrast, the nation that fails to do so relegates its citizens to declining economic opportunities and a stagnant or falling standard of living. And if growing exports can lift a nation's economic prospects, then expanding high-technology exports are the strongest levers in a nation's goods and services basket.

The manufacture and sale of high-technology products produces disproportionate benefits in boosting national productivity, raising worker skill levels, advancing technology development, and creating high-wage, stable jobs.

Consequently, the Clinton Administration is committed to developing and implementing trade policies and programs that foster strong growth in high-technology exports consistent with the Nation's national security interests.

The Administration's policies and programs support this goal through two main approaches:

On September 29, the President released the first annual report to Congress of the Trade Promotion Coordinating Committee (TPCC), representing a substantial step toward producing results in the first of these approaches.

Chaired by Commerce Secretary Ronald H. Brown, the Committee includes 19 different Federal agencies with export promotion roles. Preparation of Toward a National Export Strategy involved an extensive 6-month collaboration by those 19 agencies, plus input from the National Security Council, the National Economic Council, and more than 2,000 representatives from small, medium, and large businesses, trade associations, academia,private-sector export service providers, labor unions, and State and local governments.

The report calls for more than 60 specific actions many targeted at high-technology products designed to strengthen U.S. export promotion efforts. According to the report, "as a direct consequence of the innovations,efficiencies, and other actions of the National Export Strategy, U.S. exports of goods and services can reach $1 trillion by the beginning of the next decade and can produce over 6 million new jobs. These achievements could mean that, in the year 2000, more than 13 million Americans will be earning their living as a direct consequence of exports. What is more, they will be paid better wages because, on average, export-related jobs pay almost one-fifth more than other American jobs."

Substantial progress on the second major trade front opening up foreign markets and strengthening international trading rules is also at hand.

On the multilateral level, the Office of the U.S. Trade Representative (USTR) is leading an Administration-wide effort to conclude the Uruguay Round of Multilateral Trade Negotiations by December 15. The goal of these negotiations is a major updating and strengthening of the General Agreement on Tariffs and Trade (GATT), which governs more than four-fifths of world trade.

At the regional level, the Administration has concluded negotiation of the North American Free Trade Agreement, designed to increase U.S. exports by eliminating barriers to trade between the United States, Canada, and Mexico and to improve the competitiveness of U.S. companies by creating the largest market in the world, with more than 370 million consumers and over $6.5 trillion in production. The Administration is making a major effort to win congressional approval for the agreement.

Other efforts include developing a trade strategy for the Asia-Pacific region and launching the U.S.-Japan Framework negotiations. In these and other initiatives, the Administration is working to reduce barriers to exports of U.S. technology-related goods and services and to restructure trade rules to ensure a level playing field for American companies. For example, the USTR and the Commerce Department's Office of Air and Space Commercialization and other agencies completed negotiations for the Commercial Space Launch Trade Agreement with Russia signed by Vice President Gore and Deputy Prime Minister Chernomyrdin this summer. The agreement allows Russian entry into the international commercial launch market, while encouraging market-oriented reforms in the Russian space launch sector, and preventing disruptions of the international commercial launch market. Similar negotiations are currently under way to renegotiate the U.S. commercial launch agreement with China.

Commerce is also working closely with industry to develop a commercial remote sensing policy that balances legitimate national security concerns with the desires of U.S. companies to extend America's lead in this important area. One issue is restrictions on U.S. operators facing foreign competition.

Another example is the recently concluded Memorandum of Understanding between the United States and Russia to develop expedited procedures whereby pharmaceuticals approved by the Food and Drug Administration can be marketed in Russia without having to undergo extensive recertification by the Russian government.

Toward a National Export Strategy Recommendations Now Being Implemented Specific Administration actions related to technology and trade include: