It is especially appropriate to hold this discussion about universities, industry and national laboratories here in San Diego. California is truly a national engine for our science and technology enterprise. With 12 percent of the American population, California performs over 20 percent of all the research and development (R&D) done in the United States. California's R&D fraction of its gross state product -- 4.3 percent -- is nearly double the national average, placing it among the top five states nationally.

The mother lode of California's R&D system is its incomparable array of research universities. Five of the top fifteen academic research institutions in the United States are here, with another five in the top 100. Impressively, seven of these ten are different campuses of the University of California. The record speaks for itself. These universities and the national laboratories in this state are an essential part of the Administration's strategy to secure America's future prosperity, health, security, environmental well-being, and sense of exploration at the frontier. Therefore, California is most appropriate for kicking off a national dialogue about the U.S. agenda for science and technology leadership.

Twenty-five years ago, a meeting such as this could hardly have been imagined. There was no legislative authority for government- university-industry partnerships and there was little activity. The primary focus of government R&D was on government missions. In fact, there was great doubt whether government capabilities could improve private sector performance.

Such doubt has dissipated. Today it is recognized that it is vital to have government, universities and industry linked together in both the design and conduct of research, and, indeed, sometimes co-venturing, in various ways down toward the marketplace.

Technology partnerships are based on a bipartisan foundation and are driven by forces of technology and history that began before the Clinton/Gore Administration and will continue into the future. The difference between this Administration and its recent predecessors is that it has recognized and embraced these changes [along with the need to be more fiscally responsible], rather than ignore or resist them. We have greatly expanded the tradition of technology partnerships with the private sector, and our National Science and Technology Council has also fostered new partnerships among Federal agencies. From the outset of the Clinton Administration, we have encouraged a new framework for research, making partnerships a cornerstone of our national S&T strategy, that intertwines the R&D resources of universities, government and the private sector to benefit our nation and our future. The point I wish to stress is this: we strongly believe that increasing collaboration among industry and government and universities is highly desirable when sensibly selected. But, to endure, it must have sustaining bipartisan support.

In that regard, we especially acknowledge the valuable contributions of the Council on Competitiveness and of its far-sighted leaders John Yochelson and Erich Bloch, who helped supervise preparation of the Endless Frontier, Limited Resources report.

This trailblazing document -- which I believe dovetails with Administration R&D policy -- goes beyond the traditional hand-wringing about constrained budgets, and accurately points out that greater collaboration, our national R&D enterprise is in danger of becoming "a disconnected set of hobbled institutions that cannot generate the bold advances on which the American standard of livi ng depends."

Most importantly, the report insists that we come to grips with several fundamental questions and address them systematically: "What research is necessary to maintain the nation's scientific and technological competitiveness?" and, "Which of those research endeavors will not be accomplished without government investment?"

Much of the Federal research and education investment portfolio enjoyed bipartisan support during the President's first term. However, investments in some critical areas such as studying the influence of human activity on global environmental systems, or innovative government-university-industry technology partnerships were sincerely challenged, partly for ideological reasons, sometimes because of lack of knowledge, and sometimes out of honest disagreement about the value to society of the programs. Whatever the causes, the innovation system, which accounts for so much of our national progress over the past half century, is in stress.

A major part of the strain results from the uncertainties of Federal research funding as we drive down the Federal budget deficit. However, on the other side of the ledger, the bipartisan commitment to deficit reduction is important for sustaining a business environment that encourages substantial investment in commercial R&D. Another part stems from the attempt to reshape and expand the research and education portfolio to meet some of the major new societal realities. Such changes do not come easily. As Francis Cornford, the late Cambridge University philosopher, sardonically observed near the turn of the last century, "Every public action which is not customary either is wrong or, if it is right, is a dangerous precedent. It follows that nothing should ever be done for the first time."

We, however, intend to escape this wry logic in framing today's science and technology and education agenda to meet tomorrow's demands. With the start of a new Administration and a new Congress, we look forward to working together in support of our entire research portfolio.

Let me give you just a thumbnail sketch of the President's S&T budget in the year ahead. The bottom line is that the President's FY1998 budget increases total Federal R&D funding by more than $1.6 billion over 1997, to roughly $75 billion. This marks the fifth year in a row that President Clinton has called for increases in science, technology and education. Funding for basic research and for university-based research is higher. Support for environmental research, as well as health, food and safety research also rises. Investments in computing and communications grow by 10 percent. There is significantly enlarged support for programs to bring modern information technology to American's classrooms to raise students' achievements to rigorous and challenging standards. Investment increases are also included for technologies essential for ensuring continued U.S. economic leadership and job creation.

Forecasting is always a dangerous game, perhaps especially so in areas driven by research, an activity that is all about the unknown. But as a noted economist, Paul MacAvoy, once observed, "If you don't forecast well, forecast often." Nonetheless, despite the yearly rumors of the imminent demise of our nation's R&D enterprise, the fact is that between the years 1998 and 2002, the President's plan will preserve civilian research funding while completing the job of balancing the budget. Our first guiding principle in formulating next year's budget is to protect or enhance funding levels for health research at NIH, fundamental research at NSF, and DOE's science, energy efficiency, and renewable energy programs, and NASA's science programs, along with the Administration's S&T initiatives. And above this base, I fully expect some increases -- including those required to launch unanticipated but exciting new initiatives -- to be presented each year, at the time that year's budget request is prepared and submitted to Congress. Our second guiding principle was to emphasize the association between research and higher education.

Third, we have worked hard over the past year to provide budgets in the out years that give continuity to research, ironing out the ups and downs that were projected for out years in the 1997 budget.

When you consider our S&T budget in toto, advancing the development of enabling technologies becomes increasingly significant as the time horizons of industrial research and development grow shorter. While a short-term research focus can sustain a globally competitive position for some time, it does not provide breakthrough technologies that generate new industries. That is why the Administration continues to place emphasis on government- university-industry partnership programs aimed at mid- to long-term technology development in both the public and private interest. Industry takes the lead in identifying promising directions and, after independent merit review, government shares the risk. Although these programs have experienced significant partisan differences, the Administration will work to actively pursue partnership programs in a pragmatic bipartisan spirit. In particular, I believe these programs are now achieving a level of experience that will permit detailed evaluation and optimization of future investments.

Above all, our leadership strategy must be a national -- not just a Federal -- strategy. The benefits of research are not fashioned in Washington, they are forged in factories, laboratories, and schools across America. We need a national program to address these national goals. To do so:

From planning to execution to evaluation, we must bring to the table all the players in science and technology the business community, research universities and institutions, educators, and state and federal governments.

We must foster international cooperation in science and technology, even as we compete with our global partners in an increasingly competitive world market. Such collaboration is critical, not only to share the burden of expensive programs, but to benefit from the expertise and know-how of others.

Strengthening partnerships among stakeholders in universities, industry, and the states is vital to such a national strategy. We have taken the initiative in a number of areas, all of which will be key to forging the effective partnerships we need. Let me give you a few examples:

Over the past year, the President has also listened carefully to leaders in government, universities, and industry, as well as the nation's governors, who have warned that the nation's universities are under stress. The President asked me to review the government-university partnership. Our principal goals are to identify areas of stress in research, education, and administrative regulations, and determine what the Federal government can do to address these problem areas. We expect to complete this study by the end of this summer.

As many of you already know, the White House and the nation's governors agreed earlier this month to work together in an Innovation Partnership to promote economic growth by stimulating the development and use of improved technologies in areas such as advanced manufacturing, education, health care and electronic commerce. We will also extend the capacity of the Manufacturing Extension Partnership to help modernize the nation's 380,000 small- and medium-sized manufacturers. We will continue the work we have begun to streamline the regulatory environment for research and technology.

The Advanced Technology Partnership program is an important part of our strategy for expediting emerging technologies into the marketplace to benefit U.S. consumers and to strengthen our overall competitive position internationally. As I said earlier, our philosophy is to let industry take the lead in identifying promising, market-relevant directions and, after merit review, government then shares a portion of the risk. These kinds of partnerships have always been part and parcel of the U.S. R&D portfolio, but the globalization of the economy and increasing international competition require a higher level of commitment to such programs. I see encouraging signs that the 105th Congress may well be more open to this viewpoint, and I hope you will also continue to speak out on behalf of these important public-private partnerships.

Finally, we need to continue our efforts to get our Federal agencies to work more closely together and with the private sector. We have had some notable successes, including the Partnership for a New Generation of Vehicles. PNGV is a cooperative effort among six government agencies and the U.S. automobile industry to produce a production prototype vehicle capable of 80 miles per gallon by 2004. We also have some other exciting initiatives, including the Global Climate Change Research Program, the High Performance Computing Initiative, convergence of civil and military weather satellites, and a major effort on Emerging and Re-emerging Infectious Diseases.

I cannot stress enough that bipartisan support will be critical for shaping a sustainable agenda. The American people want us to be partners, not partisans, and the vast majority in Congress support a strong Federal research program. The scientific and engineering communities also have the opportunity and the responsibility to help forge consensus about the future's requirements for America's research and education investments. History suggests that the cost of not making these key investments in technical and human resources will be far greater than that of moving ahead.

Let us return to the Agenda for National S&T leadership for a moment. First, remember that science and technology leadership, or the lack of it, in one deeply affects the other. The required elements necessary to focus our efforts are: an educated, well-informed, and open society that embraces thoughtful change and has an eye to the future; a long-term, deep commitment to research and higher education; and a fertile policy environment that encourages entrepreneurship, experimentation, and innovation.

In closing, I am reminded of the story of the great French military leader, General Lyautey, who once asked his gardener to plant a particular tree. The gardener protested that such a tree was very slow growing and would not reach maturity for a hundred years. The General replied, "In that case, there is no time to lose. Plant it this afternoon." We, too, have no time to lose -- we must continue to build the investment agenda that will shape America's success deep into the twenty-first century.

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