The government's ability to transfer technology effectively to the private sector and promote technology development for the benefit of both government and commercial users is hampered by various administrative, legal, and other obstacles. Though the government maintains invaluable resources, both physical and intellectual, that can be of considerable benefit to industry and the general public, these resources are not being used to their fullest potential. Existing impediments provide disincentives for the private sector to invest in technology development, either independently or in conjunction with government researchers.
For example, the protection of commercially sensitive information and the preservation of intellectual property have been raised in many areas as an obstacle to industries' pursuit of cooperative research and development (R&D) with the government. For the National Aeronautics and Space Administration (NASA), the protection of these forms of property has been dealt with through the use of an untested contract clause which provides limited exclusive rights to private companies that work with NASA on specific technology projects.
Attorneys in NASA's Office of the General Counsel recognize that the protection under this clause may be subject to legal challenge. Consequently, some private companies have been hesitant to initiate agreements for fear of Freedom of Information Act (FOIA) requests for the information from outside groups, including foreign and domestic competitors. In private industry, compromising the results of R&D can have disastrous effects because those results often form the basis of a company's future plans. Other agencies, such as the Departments of Defense and Commerce, are granted the authority through their enabling legislation or the use of other statutes to withhold commercially sensitive information received during joint R&D with industry. NASA currently does not have such authority, but should.
Long delays and uncertainties in obtaining export licenses are considered two of the leading complaints of U.S. high-technology firms. This concerns NASA as it seeks to expand international cooperation in aeronautics and space. In high-tech international competition, the ability of the United States to compete effectively is directly related to its ability to export new technologies in a timely way. Currently, these complaints are directed at the State Department. In the past, similar complaints were lodged against the Commerce Department's Bureau of Export Administration. However, the implementation of National Security Decision Directive (NSDD)-53, which required Commerce to review technology export requests within a specific time period, streamlined that process and significantly reduced such criticism against Commerce. However, the State Department is not covered under NSDD-53, and it has been criticized by many groups for long delays in approving technology exports.[Endnote 1]
Since NASA's creation in 1958, its R&D efforts have resulted in innumerable technical spinoffs to the commercial sector in areas such as computer technology, health and medicine, and public safety. [Endnote 2] However, NASA's efforts to perform technology transfer activities have been hindered by funding restrictions, as well as an agency culture which results in disincentives for its own laboratories and contractors to consider such opportunities. This reluctance has been based, in part, on concern that NASA might implicitly develop a form of industrial policy that could be perceived as selecting winners and losers in a commercially competitive arena. The result has been the institutionalization of a research and development program at NASA which does not focus on commercial applications. In fact, NASA's official mission statement and Research and Technology Objectives Plan offer no commitment to working cooperatively with industry or conducting specific technology transfer activities. NASA also has few metrics (performance measures) by which to assess the success or failure of its technology transfer efforts.
In response to administration priorities, NASA has taken steps towards working more closely with industry. However, to solidify these activities as a necessary component of its mission, institutional changes are necessary to consider and pursue aggressively technology transfer opportunities.
NASA has planned $137.5 million in fiscal year 1994 for a New Technology Investments Program for the purpose of strengthening technology development for the U.S. space and aeronautics fields. In order to ensure that these funds are spent in the most efficient manner ensuring sufficient industry participation and direction, NASA will need to streamline its administration of this program through the use of new, innovative management practices.
Based on the above discussion, key findings include: (1) the private sector is inhibited from working cooperatively with government due to fears concerning the safety of intellectual property; (2) the State Department's review of technology export requests is unnecessarily lengthy; and (3) NASA's technology transfer mission should be clarified and the necessary incentives adopted, to pursue aggressively technology transfer opportunities.
1. NASA should enhance its protection of commercially sensitive information on joint NASA-industry technology projects by allowing temporary protection from FOIA disclosure.
NASA should develop a more permanent resolution to this issue based on the similar exemption currently afforded the Department of Defense (DOD). Under 10 U.S.C. 130, DOD is granted authority to withhold specific kinds of data from FOIA requests. NASA should develop a legislative proposal to amend its authorizing legislation in a manner which would allow for the temporary (five years) denial of FOIA requests for certain types of technical data. This proposal will strengthen NASA's ability to protect technical data generated in the performance of experimental, developmental, or research activities conducted in whole or in part by NASA. It is expected that industry may take increased interest in working cooperatively with NASA once they know that data developed during joint research efforts will not be subject to immediate disclosure to any interested party under FOIA. The legislative proposal drafted by NASA should be reviewed by the Justice Department, the Commerce Department's Patent and Trademark Office, and the Office of the United States Trade Representative prior to submission to Congress.
2. The State Department should publish a notice in the Federal Register to establish its goals for expediting the processing of export license applications.
Space and aeronautics are no longer a domestic concern confined to a few countries. If the United States is to advance its position in these areas, it should normalize its international trade in the associated technologies.
The Department of State should issue a notice in the Federal Register by December 30, 1993, to establish a policy to review all export applications within a fixed period. The review period should be set according to the various categories of applications. For applications not requiring review beyond the State Department's Office of Defense Trade Controls (DTC), the goal for a decision should be 10 days. For reviews requiring interagency review, the goal for a decision by DTC will be a total of 40 working days, beginning with the date the application is received in DTC.
If interagency resolution cannot be reached within a 40-day time period, the issue should be referred to the State Department's Deputy Assistant Secretary for Export Controls for prompt resolution. Agencies would have five working days to register an appeal to the Deputy Assistant Secretary's decision. Such a written appeal would be directed to the Assistant Secretary of State for Political Military Affairs. He/she should make a decision within 10 working days after receipt of the appeal. However, in keeping with the established government review process, the Assistant Secretary's decision could be appealed further and reviewed at an interagency meeting chaired by the Under Secretary of State for International Security Affairs. In the event that an interagency consensus still could not be reached, the Secretary of State would chair a cabinet-level meeting on the issue. The Secretary of State would make the final decision in accordance with Executive Order 11850, unless the President would decide to do so personally.
3. NASA's technology transfer activities should be expanded through implementation of the following measures:
--NASA centers should provide technology transfer training for all employees. This should include information regarding effective outreach to potential customers, partnership techniques and the construction of agreements, legal aspects, employee rights and responsibilities, and rewards and incentives.
--NASA should devote 10 to 20 percent of its budget to R&D partnerships with industry. This would require NASA to work cooperatively with trade associations, professional societies, and other organizations to identify opportunities and influence NASA's technology investment strategies.
--NASA's Research and Technology Objectives and Plans (RTOPs) should be modified to include a statement requesting that NASA centers give strong consideration to partnership arrangements with the commercial sector in conducting the NASA R&D program. These partnerships should result in commercial applications of the resulting R&D, creating new products, processes, and services.
--NASA should grant its centers and center directors and/or project managers more flexibility in funding technology transfer opportunities. One percent of each center's R&D project budget should be set aside by the center director to be used solely for technology transfer opportunities emanating from such projects or for funding activities leading to the commercial application of other technologies developed at the center. Alternatively, the center directors could use existing flexibility in reprogramming resources within or across their technology development programs, such as RTOPs, to achieve the same results, provided the overall level of technology transfer activity thus funded is commensurate with the 1 percent set aside.
--NASA should establish clear and sensible metrics to measure its technology transfer performance. They should focus on results, not just levels of activity, including new product sales, market penetration, new jobs, and other metrics to be defined by NASA.
--All NASA contracts should require clearly defined technology transfer plans for the commercial application of technologies developed for NASA missions. Appropriate procedures should be developed to evaluate and reward such contractor efforts to transfer these technologies to the broader economy.
--NASA programs offered through the Announcement of Opportunity (AO) process should state that mission objectives also include technology advancement and infusion into the private sector and that grant proposals should be evaluated on the basis of how such objectives would be achieved.
--NASA should significantly increase its efforts to secure alliances with state and local governments and provide small businesses with opportunities to spur technology transfer. A major goal should be to stimulate and accelerate the creation and competitiveness of small businesses, particularly through existing mechanisms such as the national and regional technology transfer centers. Another goal should be to make NASA facilities and expertise available to U.S. industry, especially its small and disadvantaged constituents.
--NASA's Vision-Mission-Values (VMV) document should be amended to state that technology transfer is a major mission objective of the agency.
4. NASA should implement its New Technology Investments Program through the use of industry-led efforts that will create and apply new technology to NASA programs as well as to the commercial marketplace.
These new programs should be implemented using designated NASA program managers with minimal staffs and in overall coordination with the Administrator's office. These offices should be charged with ensuring that projects initiated under this program are commercially relevant and that NASA funds expended on these programs are complemented by significant material commitments from industry. Furthermore, the success of each program will be measured through specific program metrics, and full and open competition will be used, where appropriate, during the NASA selection process.
Implementation of the above recommendations should enhance the public, private, and joint public-private efforts to pursue technology development and transfer and should increase U.S. global competitiveness.
The fiscal impact cannot be estimated. However, the recommended actions should result in increased technology transfer and development in both the public and private sectors, thereby strengthening the economy and increasing efficiency.
1. National Academy of Sciences, Finding Common Ground: U.S. Export Controls In A Changed Global Environment (Washington, D.C.: National Academy Press, 1991).
2. Gall, Sarah L. and Joseph T. Pramberger, NASA Spinoffs: 30 Year Commemorative Edition, prepared for the National Aeronautics and Space Administration (Washington, D.C., 1992).
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