THE WHITE HOUSE
Office of Science and Technology Policy
STATEMENT OF THE HONORABLE JOHN H. GIBBONS, DIRECTOR OF THE OFFICE OF SCIENCE AND TECHNOLOGY POLICY before the Committee on Science U.S. House of Representatives January 6, 1995
Mr. Chairman, Members of the Committee, on behalf of the Clinton/Gore Administration, I thank you for this opportunity to present our vision of the future in science and technology. We wholeheartedly agree with you that the advancement of science and technology is a vital national goal which is absolutely essential for the future well being of our people and our Nation. And we believe government has a key role to play in working with industry and academia to achieve that goal.
As Peter Drucker has noted, "Long range planning does not deal with future decisions, but with the future of present decisions." So to start off the new dialogue between the Administration and Congress on present decisions about science and technology and their impacts on our Nation's future, I would like to focus on five things today:
GOALS FOR INVESTMENT IN SCIENCE AND TECHNOLOGY
As enunciated by the President in his first month in office, our science and technology policies and programs are directed toward three basic goals:
Long-term economic growth that creates jobs and protects the environment; Making government more efficient and more responsive; World leadership in basic science, mathematics, and engineering. Government is an essential actor in making sure science and
technology help us reach our goals. Many of the benefits science and technology confer are in areas that are either outside the market or imperfectly subject to market forces -- such things as a strong national defense, first-class education and training, improved environmental quality, and fundamental scientific research. In these areas, a strong government presence in R&D investments is essential.
A government role is also vital in promoting technologies that are critical to economic growth, the creation of good jobs, and meeting the common needs of the nation, but cannot attract adequate private investment. In our partnerships with business for pre-commercial technology development, our cardinal rule is to use government funds only where they are essential and where the payoff to society as a whole is large. We invest government funds, on a cost-shared basis, where private sector investment is not adequate to the job because of unacceptably high technical risks, prohibitive cost, long payback horizons, or where the returns cannot be captured by the investing firm but spill out to competitors, other firms, or society at large.
Experience teaches us that the likelihood is that the payoff on government investments in science and technology, if judicially made, will be enormous. It is our steadfast belief that thoughtful federal spending on science and technology is simply good economic policy. Many economic studies have shown that federal money invested in science and technology brings, on average, a 50 percent rate of return to U.S. society.
ANTICIPATING THE RESULTS OF S&T INVESTMENTS
The record of the past half-century clearly shows a high average rate of return on public and private investments in science and technology. Of course, we can only make educated guesses about which investments will catalyze revolutionary developments in science and technology, and we must expect some failures. One of my early mentors, Alvin Weinberg, always said "Never make a prediction until you're very old; otherwise you might live to see it not come true." But if the past is any predictor, our expectations for an excellent return on our investments are not misplaced.
Had you convened a hearing like today's in January 1975, you might, for instance, have received testimony concerning the Administration's belief that emerging computer and telecommunications technologies would soon change the conduct of warfare; that continued funding of molecular biology would yield revolutionary advances in medical diagnosis and treatments; that progress on environmental pollution required major additional Federal research attention; or that technology could both quiet the noise and cut fuel consumption in airplanes. Decisions made at that time to invest taxpayer dollars in those areas turned out to be wise, for predictable as well as for unforeseen reasons.
One could reasonably say that we got even more than we bargained for from the government's S&T investments of 20 years ago. They were strategic, meaning they were thoughtfully directed toward goals such as national security, high quality health care, and environmental quality. And, in hindsight, they were more than fully successful.
ADMINISTRATION INVESTMENTS IN THE FUTURE
I am confident our successors in governance in 2015 will be able to say the same about many current S&T investments -- if, that is, they receive adequate financial support, both public and private. The Administration's science and technology investments are focused on six priority areas:
Today I would like to describe a few of the initiatives we believe will ensure long term economic growth, a broader knowledge base to support that growth, and a better quality of life for Americans.
During the next twenty years, U.S. industries can significantly expand their share of what is presently a $300-billion global industry in environmental technologies. The potential public and private returns on investments in environmental technologies are tremendous. This vision of economic growth combined with protection of the environment is not unfounded fantasy. Let me give a couple of examples. Over the past 15 years, the Intel Corporation (at their Portland, Oregon, plant) has more than doubled its production of semiconductors with no increase in emissions, and no new investments in pollution emissions control technologies. Instead, they have redesigned their entire production process to make higher quality chips with less environmental impact. Also over the past 15 years, research into more efficient wind turbines and expanding markets have reduced the cost of wind-generated electricity by a factor of eight (from over $.40/kilowatt-hour to less than $.06/kilowatt-hour) and made the U.S. the leader in global wind energy production. These changes are indicative of what can happen within a time span of twenty years and give us a sense of what is possible as we look forward to the year 2015. Alan Kay at Apple Computer was right when he said, "The best way to predict the future is to make it happen." For this reason, it is necessary for us to create strategic alliances with industry, to set long-term goals, to stimulate innovation, and to make sure our industries move significantly beyond their global competitors. We are doing this, for example, with the Clean Car Initiative and our work with the U.S. construction industry. The Partnership for a New Generation of Vehicles, also known as the Clean Car Initiative, is one of our premiere ventures into cooperative civilian industrial technology development. In it, we are tackling a technological challenge as tough as putting a man on the moon -- that is, to develop within 10 years a car with 3 times the efficiency of today's automobiles with no sacrifice in cost, comfort, or safety. If the project succeeds, the payoff to the public will be huge in terms of less dependence on foreign oil and lower emissions of greenhouse gases. The project also holds the promise of an extremely attractive car for world markets in the 21st century and a thriving U.S. auto industry to produce them. The government (in this case, a consortium of Federal agencies) and industry (the Big 3 automakers and many suppliers of materials and equipment) are working closely together here to break highly challenging technological bottlenecks where the benefits are as much societal as commercial. In our Building and Construction Initiative, our goal is to develop better construction technologies to improve the competitive performance of the U.S. industry, raise the life cycle performance of buildings, and protect public safety and the environment. The initiative responds to a high level of industry interest and combines government and industry goals. Construction is one of the nation's largest industries, with employment of 6 million and a total yearly value of close to $800 billion, yet U.S. building technology lags behind that of foreign countries and the incidence of injury in construction work is among the highest of all industries. We are determined, in full cooperation with industry, to enable, by 2003, the following future: * Better constructed facilities, meaning: a 50 percent reduction in delivery time; a 50 percent reduction in operation, maintenance, and energy costs; a 30 percent improvement in productivity and comfort; 50 percent fewer occupant-related injuries and illnesses; 50 percent less waste and pollution; and 50 percent more durability and flexibility. * Improved health and safety of construction workers, meaning a 50 percent reduction in construction work injuries and illnesses. This initiative is dedicated to removing nontechnical barriers to innovation, as well as putting greater emphasis on research and development and aligning government programs appropriately with industry needs.
We have pledged (as described in Science in the National Interest) to: * maintain leadership across the frontiers of scientific knowledge; * enhance connections between fundamental research and national goals, such as economic prosperity, national security, health, and environmental responsibility; * stimulate partnerships that promote investments in fundamental science and engineering and effective use of physical, human, and financial resources; * produce the finest scientists and engineers for the twenty-first century; and * raise scientific and technological literacy of all Americans. Broad investment in basic research is essential to our national defense strategy. A strong domestic science base supporting a robust national security S&T program is critical to preserving the technological superiority that characterizes our military advantage. The Administration's strategy is to apply resources broadly at the basic research level and make further investment decisions as emerging technologies reveal the most effective payoff areas. Through these investments in fundamental science, we can continue our science and technology advances, position ourselves to take advantage of maturing technologies, and minimize our vulnerability to surprise. We have given particular emphasis in the first two years of this Administration to a human resources development strategy aimed at producing the cadre of experts necessary for the scientific enterprise of the future; for research and development; for applied fields and industries; and for competing in a global marketplace. We are reevaluating the breadth and nature of graduate training -- recognizing that we are not training our scientists merely to work in laboratories and universities. We are projecting the workforce needs of our future economy and developing methods for fostering the basic skills necessary for all workers. I cannot predict the science success stories of 2015. But our strong investment program for basic research sets the stage for the equivalent of: * Fiber optics -- which were a germ of an idea in 1966 but now carry most U.S. long-distance telecommunications; * The Hubble Space Telescope -- which has opened our eyes to distant galaxies in the same way the early space program opened our eyes to the wonders of our small planet and solar system; * Global positioning system -- a confluence of basic research in physics, software, communications, and high-speed electronics first tapped for military purposes and now rapidly expanding into commercial markets for navigation and air safety and monitoring Earth's large scale ecosystems; * Severe weather prediction -- which has emerged from the integration of space platforms, large computing power, and continued atmospheric science research. I am sure we will see equally impressive and revolutionary developments in the coming years -- provided we maintain our strong commitment to basic research. My confidence stems, at least in part, from the fact that the process of good science inherently contains a healthy degree of skepticism and willingness to weigh new evidence. For example, over the past two decades, researchers in the United States and other countries, particularly Brazil, have debated the rate of deforestation in the Amazon rainforest. The answer affects calculations of the amount of carbon dioxide present in the atmosphere. In a NASA-sponsored study using Landsat data, this debate was effectively resolved, with the study showing that the rate of deforestation was, in fact, lower than many thought. Our polar-orbiting satellites also provide information about the atmospheric cooling effects of volcanic emissions, specifically from the eruption of Mt. Pinatubo in the Phillipines. The extent and the duration of the effects of such natural phenomena on global warming must be considered in trying to understand fluctuations in the climate record. As a nation, we should take great pride in our ability to undertake policy-relevant scientific investigations designed to provide information necessary to, but not driven by, the policy debate.
The international space station is perhaps the Administration's most visible commitment to US leadership in aerospace technology. As you know, early in the Administration we undertook a redesign of the space station to reduce its cost, to improve its performance and safety, to accelerate its schedule, and to make it more relevant to today's economic and political climate. The inclusion of Russia as full partners in the station program reflects not only the benefits we believe can be derived from the incorporation of Russian space technology, but also the importance of broad international cooperation in the pursuit of fundamental scientific research. We expect that research on board the space station will provide important new scientific and technical insights and will lay the groundwork for mankind's next steps into space. This Administration is also committed to making investments that will allow industry to dramatically reduce the cost of space transportation. In August, the President directed NASA to begin development of a new generation of launch vehicle technologies that could eventually replace the expensive Space Shuttle. The President also directed the Department of Defense to develop a strategy for evolving the existing launch vehicles into a fleet of vehicles that is significantly more cost effective. These government actions, combined with the energy and creativity of the private sector, not only holds out the possibility for much less expensive access to space for science, exploration, and national security, but lays the foundation for a reemergence of US industry as the dominant player in the commercial space launch market. The Administration's commitment to space technology research has not lessened its commitment to space science and applications. Through its Global Change research program -- including NASA's Mission to Planet Earth program -- we will gain new insights into the fundamental processes of our planet. These insights can have a positive effect on our economy as we benefit from new knowledge of weather prediction, agriculture, disaster prediction, and other complex processes. Besides exploring out own planet, NASA is planning a new generation of small, low-cost spacecraft that will provide new opportunities for exploration and discovery elsewhere in the solar system. These new programs, combined with our sustained commitment to important facilities such as the Hubble Space Telescope, will expand our already significant efforts to understand the nature of the universe in which we live. The U.S. aeronautics industry has benefited greatly from its strong research and technology partnership with the Federal Government. U.S. firms lead the world in the manufacture of aircraft, engines, avionics, and air transportation system equipment. This leadership role has translated into hundreds of thousands of high-quality jobs and a significant contribution to our balance of trade -- more than $28 billion in 1993 on exports of $40 billion. The Administration's continued support for aeronautics technologies will help to ensure that U.S. industry remains a world leader in the development of new aircraft and engines. Federal R&D will also play an important role in helping to ensure the development and implementation of a new, efficient, safe, and affordable global air transportation system. In particular, new technologies such as the Global Positioning Systems (GPS) will play a significant role in this process and may result in billions of dollars in annual saving to the airlines and a significant global market for new U.S. products and services. Finally, Federal R&D will help to ensure the long-term environmental compatibility of the aviation system. New technologies hold the promise of even greater increases in energy efficiency and further significant reductions in noise and potentially harmful chemical emissions. PRINCIPLES OF THE FEDERAL S&T ENTERPRISE Science and technology are essential to the various missions of the
Federal departments and agencies. Looking to the future, our agencies must have a research and development base that will continually refresh and improve the ways in which we carry out our responsibilities.
Coordination and Streamlining
In order to confront the budgetary, scientific, and technological challenges of the 21st century, the Administration recognized that significant changes were needed in the way we plan and fund Federal R&D. The traditional single-agency, single-discipline approach to problem solving must be supplanted by a coordinated, multi-agency, interdisciplinary approach. Multi-dimensional problems can only be addressed by bringing together natural and social scientists, economists, engineers, and policymakers. For too long, science has been decoupled from informing policy decisions. Fixing this disconnect has been one of our highest priorities.
Over the past two years, the Administration has been working to improve the Federal R&D enterprise in many ways. For the first time, the United States has a comprehensive, coordinated Cabinet level body devoted to the Federal R&D enterprise. In November 1993, the President created the National Science and Technology Council (NSTC). The principal purpose of the NSTC is to:
Although each agency, to accomplish its missions, must have R&D directed to its particular needs, there are some commonalities in the science and technology needs of all the agencies. Put another way, overarching national goals typically cross agency boundaries. This is particularly true because of the highly interactive nature of research and development with its many feedback mechanisms. The NSTC provides a structure in which to prioritize the many legitimate demands on the public's R&D dollar. It assures a forum where critical national needs cannot be pushed aside by urgent and parochial agency needs. It can sensitize agencies to the advantage of symbiosis over isolated pursuit of objectives.
Through its nine standing committees, the NSTC has identified R&D priorities that link our S&T activities to critical national goals. Unprecedented cooperation among the member agencies plus a great deal of hard work in 1994 enabled these committees systematically to prepare research and development strategies to meet the goals. OSTP then worked with the Office of Management and Budget to ensure the priority areas received adequate attention -- all within a level R&D budget. The result is a coherent, efficient R&D agenda.
To meet the Nation's goals in the years ahead -- and to continue meeting them as the goals themselves evolve -- requires that we set priorities for R&D now, with a farsighted vision for the future because most of the S&T enterprise is inherently a multi-decade process. Even within the science community, it can take decades to recognize the significance of a scientific discovery. The NSTC provides the mechanism for providing the vision and deriving priorities. By creating a "virtual" S&T organization, the NSTC enables the Administration to maintain a productive research and development activity in each S&Tdependent agency while simultaneously achieving the efficiencies of a cross-linked system.
In addition to its beneficial impacts on the R&D budget, the NSTC has several important policy directives to its credit. For instance, the President has issued policy directives that will ensure continuity and efficiency in the Landsat and polar- orbiting satellite systems and ensure the appropriate agencies focus on the Nation's long term space launch needs.
All of the NSTC's work is undertaken in cooperation with the private sector. One of our key links to the private sector is the President's Committee of Advisors on Science and Technology whose members include eminent industry leaders and academic researchers, including Nobel Prize winners. Issues ranging from technology development to education and training to prevention of deadly conflict require close interaction between government and private sector experts to ensure ultimate success in our efforts.
Cooperation with the Private Sector
Technology is a powerful driver of economic growth. Over the past 50 years, at least a quarter of U.S. economic growth -- possibly as much as half -- came from new technology. These advances created millions of good new jobs, a cleaner environment, better health and longer lives, new opportunities for individuals, and enrichment of our lives in ways we couldn't imagine half a century ago. Superior technology, moreover, is vital to U.S. national security. In a world of ever tougher global competition, U.S. prosperity depends as never before on our ability to master new technology in areas like information, biotechnology, and advanced materials and to build on S&T advances made in other countries.
Private businesses are the principal actors in converting technology to goods and services, to profits and jobs, and they have supported much of the research needed to develop new technologies. But the public (government) has three indispensable roles to play in advancing technology: 1) ensuring a strong base of fundamental science; 2) providing a business environment that encourages innovation and investment; and 3) investing in research that is critical to the economic and social needs of the nation, but cannot attract adequate private support.
The accelerating pace of technological advance, ever shorter product cycles, and rapid worldwide diffusion of technologies mean that many companies are finding it harder to justify investment in risky or lower yield R&D than in the past. Today, the payback to the investing company is often less than half the spillover, or "social return," to society at large.
This means that government R&D partnerships with industry in growth-enhancing technologies are more important than ever. Without government to share the risk at the pre-commercial stage, individual companies are reluctant to take the plunge, especially where a substantial fraction of the total return cannot be captured by a company. The government partnership fosters technology advance that otherwise might not be made -- or would be made in foreign countries, with most of the benefit going to their citizens.
In general, where there are technological risks, R&D projects with a strong combination of potential public and commercial benefits merit a mix of government and industry support. For example, education and training technologies that challenge and reward all our children and bring lifelong learning within reach of everyone have multiple public and private benefits: a better educated citizenry, a world-class work force, opportunities for people to retrain themselves in response to changing technologies and jobs, and a rich commercial market for the learning technologies themselves. Government's role in creating the National Information Infrastructure is not only to share the costs of R&D for basic advances in computing and telecommunication. It is also to make sure that privately financed information superhighways are accessible to all Americans.
The problem of capturing returns on private sector R&D investments is especially great in widely dispersed and fragmented industries such as agriculture or building and construction. Government must support technology advance in these industries, at least on a cost-shared basis, or it won't get done. This has been long recognized in agriculture, where government support of R&D goes back to 1862, with the foundation of land grant colleges across the nation.
Today, many in industry are taking a new, forward-looking view of their R&D programs. Corporate cost-cutting drives have led to focusing in-house research on technologies that are close to commercialization, at the expense of more basic, longer term, or riskier research. The new model of best practice that is taking form is to create partnerships for riskier, generic, pre- commercial R&D -- teaming with other companies, with universities, and with the government.
We have re-invented these partnership programs to make sure that they are:
With the assistance of wise government policies, U.S. companies have recently regained a competitive edge in critical technologies, such as semiconductors, once thought lost to Japanese and other competitors. We must not return to the days when American scientists and inventors made breakthrough innovations, only to see the jobs and profits growing out of discoveries and inventions flow to overseas competitors. In a fiercely competitive world market place, it would be unwise to rely solely on those programs and policies that worked during the Cold War but are unsuited for today's needs.
THE LINK BETWEEN SCIENCE AND TECHNOLOGY
The Clinton/Gore Administration's science and technology initiatives are based on a recognition that science and technology are linked in a multitude of ways, each building constantly on the gains in the other domain. It is certainly true that all technological advance ultimately depends on fundamental science, and the highly trained people educated at our universities and colleges. But old distinctions between "basic" and "applied" science no longer make sense in today's laboratories, where, for instance, newly derived fundamental understanding of molecular biology quickly yields ideas for new products and manufacturing processes -- which, in turn, not only raise questions for further fundamental research but also give rise to new technologies that enable more effective research. And where progress in such fundamental fields as astronomy or elementary particles depend upon technological breakthroughs in optics, computing, or superconductors.
The relationship between basic research, applied research, technology development, and commercialization is not a linear progression. Rather, it is full of feedback loops. Often a technical or engineering advance will stimulate or enable scientific inquiry. For example, cars powered by internal combustion engines were running on the road before scientists began to understand, even imperfectly, some fundamental principles of combustion. Magnetic resonance imaging was founded on basic research in nuclear physics -- but it could not have been put to practical use in medical diagnostics without the separate but parallel development of a number of sophisticated technologies, especially the microprocessor, the "computer-on-a- chip" that could be built directly into the instrument. The cancer treatment drug taxol is derived from the yew tree of the Pacific Northwest, and without the research to classify and study the natural plants and animals it might never have been found. And most of today's experimental science has become totally dependent on the most recently developed technology.
The search for something practical often forces a new look at the scientific principles that underlie new phenomena; the prepared mind is ready to take a leap into the practical application. Ernest Shockley, an AT&T Bell Laboratory physicist, invented the transistor while engaged in a lab program to develop better switches -- but the scientific work of previous decades on solid state physics and quantum mechanics was absolutely essential to the invention. The early age of science provides equally interesting examples. Galileo, who developed fundamental knowledge of astronomy, was also an inventor who spent much of his time and energy demanding payment for his practical inventions.
The blending of discovery and application is repeated across virtually all science and engineering -- from biomedicine to environment to space exploration and aeronautics to materials and manufacturing. Basic research on materials results in stronger, long lasting roads and bridges and lighter, but safer airplanes and cars. Today's wonder drugs and tomorrow's bioremediation of chemical wastes are direct products of our continuing investments in biology, chemistry, physics, and earth science.
The fundamental point is that basic science, applied science, and technology, though different in approach, motivation, and scale, are profoundly interdependent.
Mr. Chairman, we welcome the opportunity to engage in a dialogue with Congress, with all Americans, about the value of our investments in science and technology. Like you, this Administration envisions a future of sustained and responsible growth of the U.S. economy based, in large part, on new discoveries and improved technologies derived from those discoveries.
There has been and will continue to be strenuous debate about the appropriate role for government in science and technology. Some people believe that fundamental science --basic research -- is the only area in which government belongs. As I have already said, this Administration does not believe it benefits the American people to try to draw that line in the sand. The Clinton/Gore Administration believes government has an essential role in technology development as well. Economic growth, quality of life, national security -- all these things depend on a comprehensive science and technology investment program. For our children and grandchildren to succeed in the knowledge-based, highly competitive global economy, the Federal government must maintain a strong commitment to investment in the future, in other words, to investment in science and technology linked to long term goals.
We are convinced that technology is the engine of economic growth that will ensure good jobs and a higher quality of life. We know that scientific knowledge is the key to the future . . . it is the fuel for the engine.
The Cabinet Secretaries and Agency Heads here today will all agree that the Federal Departments and Agencies are working together in unprecedented cooperation to provide essential science and technology services to the American taxpayer in an efficient and cost-effective manner. The "virtual agency" created by the NSTC eliminates duplication and waste and gets maximum advantage from each investment dollar. Budgetary constraints have made the workings of the NSTC absolutely essential, and we have succeeded in shifting resources to enable the S&T portion of the budget to be maintained and even slightly increased in key areas.
We know from your record, Mr. Chairman, that you, too, support science and technology and recognize the vital role they play in the future of our economic, environmental, and national security. But in looking at the Contract With America, along with the FY '94 and FY '95 Republican budgets and other proposals for paying for the Contract, we are concerned. The Clinton/Gore Administration shares your commitment to reduce budget deficits and the inefficiencies in government. We have worked, with great success, to bring the budget deficit down, to cut government employment and spending. But we have also taken great care not to sacrifice our investments in the future -- in the well being of our children and grandchildren -- in the process, by commiting ourselves to sustained support of science and technology.
Our initial interpretation of proposals to fund the Contract With America raises our concerns that we will not be able to develop and disseminate the education technologies our children will need to compete in the global, knowledge-based economy; that we will not be able to invest in research that could ensure this Nation's continued preeminence in industries dependent on biotechnology or information and communications technologies; that, in fact, between now and the end of the century this Nation may find itself in wholesale, devastating retreat from the investments on which our future depends -- investments in science and technology. This Administration will stand against that retreat because it cuts to the core of our guiding premise: we must invest in our children's future in ways that promise the highest payoff.
We are a nation of explorers. We need science and technology to nurture our national soul as well as our economic well being. The Clinton/Gore Administration wants to work with the Congress to achieve the goals of the American people, including long term economic growth, an efficient and responsive government, and world leadership in science, engineering, and mathematics.