Tectonic Shift Expected in Civilian R&D

If new thinking prevails, research will be paid for by business, not government

TECHNOLOGY policy is out.

After a decade and a half of increasing effort, the federal government seems certain to pull back from funding civilian technology.

Congress's budget ax is poised over a range of programs that have brought Americans everything from more efficient car-part manufacturers to windows that block out the sun's harmful rays.

The result is likely to be a fundamental shift in the nation's approach to civilian research and development at a time when worldwide competition in the field is growing sharply.

Today, two federal agencies heavily involved in civilian technology projects are under particularly sharp scrutiny:

* Energy Department: Its $1 billion-a-year research and development efforts to increase energy efficiency and produce renewable energy would go by the board. The agency's 29 labs could also face consolidation and shrinkage.

* National Institute of Standards and Technology (NIST): Nearly two-thirds of its proposed $1 billion budget next year could be eliminated. The institute's parent - the Commerce Department - would be eliminated completely under the House and Senate budget resolutions. Funding for remaining NIST projects would come from a surviving agency, perhaps the National Science Foundation.

The Republican-controlled Congress wants to make large cuts in other science and technology efforts, such as NASA and the National Oceanic and Atmospheric Administration.

But these are largely budget-driven efforts. The move to cut civilian technology programs is ideological as much as it is fiscal.

Typical of the new Republican attitude is Rep. Todd Tiahrt (R) of Kansas. The congressman plans to introduce legislation soon that would set up a commission to look at closing the Energy Department's labs. The group would operate in much the same way a civilian commission has been closing military bases. "All research that can appropriately be done by the private sector shouldn't be done by the federal government," says a spokesman for the congressman, "because that's nothing more than corporate welfare."

Supporters of federal technology programs are appalled. "If this budget resolution takes effect - either the Senate or House versions - you'll see the lowest level of support for civilian R&D that we've had in at least four decades," says Sen. Jeff Bingaman (D) of New Mexico. "Over a period of decades, we have benefited greatly - our economy has benefited - from federal investment in research and development. I just hate to see us proceed in the next century on the assumption that we don't need to maintain that effort."

This partisan battle is an indication of how quickly the political ground has shifted in Washington. A year ago, federal technology programs enjoyed substantial bipartisan support. Many Republicans and Democrats shared the belief that the federal government had to play a role in bridging the gap between America's world-class labs and its struggling industrial base. The way to do that, according to this theory, was to help get that technology into the hands of entrepreneurs and companies.

Ever since 1980, when Congress passed the bipartisan Stevenson-Wydler Technology Innovation Act, the federal government has gotten increasingly involved in technology policy.

President Reagan's administration broadened patent protection for inventors, relaxed antitrust restrictions on research consortia, and launched Sematech, a public-private venture widely credited with saving the nation's semiconductor-equipment manufacturers from Japanese competition.

President Bush's administration launched the Advanced Technology Program in 1990 to fund high-risk research by businesses and industry-led joint ventures. It's a program that has led to major quality improvements by US car-part manufacturers.

Meanwhile, cooperative ventures between national labs and the private sector have become common- place, allowing, for example, US window manufacturers to turn low-emissive glass research at Lawrence Berkeley National Lab into a commercial product.

When the Clinton administration took office, it accelerated these programs and launched some of its own, boosting funding sharply. Next year's proposed NIST budget would have topped $1 billion, triple the amount set in Mr. Bush's final year. Such efforts now seem unlikely.

One factor behind the changed political behavior is America's view of Japan. Seen as a powerful threat to US industry five years ago, Japanese companies now face their own deep problems. By contrast, US companies have bounced back, driven by much more focused management and a much more favorable yen-dollar ratio.

Indeed, chief executives at many technologically-driven companies say the best technology program of all is deficit-cutting. That would reduce interest rates and give the private sector more incentive to invest in technology. Sematech recently ended government funding because its member companies wanted to go it alone.

But moves to streamline American businesses are having unintended effects. Corporate research is increasingly short-term and market-oriented. IBM and AT&T have cut back research unrelated to their primary businesses.

The regional Bell telephone companies are selling off their research arm, Bellcore. In a survey of companies with R&D budgets of $50 million or more, R&D magazine found that half expected to cut spending this year.

"Companies are not making those long-term investments," says Arati Prabhakar, director of NIST. "As they get more efficient, they focus on short-term R&D goals." Ms. Prabhakar hopes that Congress's proposed cuts represent only a hiccup in government's increasing role in supporting technology R&D. Most are more pessimistic.

"One program is not going to break us or make us," says Erich Bloch of the Council for Competitiveness in Washington. "I'm more concerned about the attitude [of the Republicans].... I think it puts us in a horrible position in a few years, if not tomorrow. The thing that got us into trouble in the first place was overconfidence - complacency and overconfidence. And we're getting right smack back to that."

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