Improving industry-government cooperative R&D

Issues in Science and Technology, Summer 1995 by Ham, Rose Marie, Mowery, David C

The February 1995 report of the Energy Secretary's Task Force on Alternative Futures for the Department of Energy (DOE) National Laboratories--known widely as the Galvin committee report--challenged the laboratories' role in civilian technology development. Many of the issues in this debate first surfaced in discussions over the legislative initiatives of the 1980s, the Technology Transfer Acts and the Bayh-Dole Act, that restructured the relationships between private firms and these national research installations. That legislative foundation formed the basis for the Clinton administration's efforts to employ the federal laboratories to conduct research whose primary aim was the improvement of U.S. industrial competitiveness.

More recent developments have intensified scrutiny of federal technology programs, including those of DOE. The Clinton administration's attempt to "reinvent government" and the Government Performance and Results Act of 1993 have expanded DOE's efforts to evaluate its nascent experiments in technology collaboration with private firms. In addition, the recent political turnover in Congress has intensified pressure for spending reductions (especially in discretionary spending on R&D) and has increased congressional criticism of the DOE laboratories' role in civilian technology development.

Renewed scrutiny and even criticism of collaboration, however, are unlikely to end technology-development activities between the DOE laboratories and private firms in areas related to the laboratories' defense, environmental, and energy missions. Important questions remain as to the structure, management, and evaluation of these joint R&D activities, many of which rely on Cooperative Research and Development Agreements, or CRADAs, which are among the most widely used vehicles for technology collaboration with private firms.

Our recent study of CRADAs suggests that this instrument is most effective for a subset of the diverse array of projects for which it is currently employed, in large part because of the fundamental premise underpinning its design of the CRADA. This mechanism is based in large part on a view of DOE laboratories as "treasure chests," organizations with a great deal of technology that is directly applicable in private industry. According to this view, commercialization of these technologies requires primarily that their ownership be defined through the assignment of intellectual property rights and the transfer of these rights through an agreement between the firm and the laboratory--only modest additional development is required. But the treasure-chest model is an inaccurate characterization of the laboratories' technological assets and of the processes through which these assets can assist U.S. industry. Very few laboratory technologies are in fact "on the shelf", and the necessary codevelopment of these technologies is a far more uncertain and demanding task than this model implies.

This is not to say the laboratories have no useful technologies for industry or that CRADAs have no place in collaboration with the private sector.. The contrary is true--but the technologies, the capabilities of private firms, and the CRADA mechanism must be viewed realistically.

There are at least three broad areas of technology collaboration in which the DOE laboratories can contribute to the technological needs of industry. First, there are "transfer" projects, which concern technologies that with slight modification can be commercialized or incorporated (as in the case of process technologies) by a private firm. These most nearly fit the treasure chest model but are far less prevalent than many of the congressional architects of the CRADA and other federal policymakers recognize. A second category of projects, "codevelopment" projects, involves technologies developed by the laboratories as part of their mission-related research that require much more substantial modification and additional development for commercial introduction. These technologies, for which the specification of intellectual property rights may be of secondary importance, require an extended period of collaboration between the laboratories and private firms--in many instances the results of these projects will differ substantially from initial project goals. A third category, called "R&D services", involves the use by private firms of the unique facilities, expertise, and equipment of the laboratories for technology development or R&D activities that are defined by the private firm. These three project categories have very different requirements for management, organization, financing, and oversight, and all three are likely to remain important for the future of the DOE laboratory system. In its current form (and despite its name), the CRADA mechanism seems to be most effective for the transfer projects, although it is used for projects spanning all three categories of technology collaboration.

CRADAs in a post-Galvin world

CRADAs were created by the Federal Technology Transfer Act of 1986. Under the terms of a CRADA, federal laboratories are empowered to cooperate in R&D with private firms and may assign private firms the rights to any intellectual property resulting from the joint work (the federal government retains a nonexclusive license to the intellectual property). The act was amended in 1989 to allow contractor-operated federal laboratories, such as those of DOE, to participate in CRADAs, and by January 1995 DOE had signed more than 1,000 such agreements.