Chapter 2

The Foundation for Our Future
Economic Growth and Prosperity

"Investing in technology is investing in America's future: a growing economy with more high-skill, high-wage jobs for American workers; a cleaner environment where energy efficiency increases profits and reduces pollution; a stronger, more competitive private sector able to maintain U.S. leadership in critical world markets; an education system where every student is challenged; and an inspired scientific and technological research community focused on ensuring not just our national security, but our very quality of life."

--President Bill Clinton

Technological leadership is vital to the national interests of the United States. As we enter the twenty-first century, our ability to harness the power and promise of leading-edge advances in technology will determine, in large measure, our national prosperity, security, and global influence, and with them the standard of living and quality of life of our people.

The United States has an unmatched capability for technological innovation - an unparalleled R&D enterprise; a world-class cadre of scientists and engineers; the world's most diverse manufacturing base and productive workforce; a broad and technologically sophisticated service sector; and a climate and culture that encourage competition, risk-taking, and entrepreneurship. These assets have positioned the United States to maintain its global technological leadership in the 21st century.


Technology is the single most important determining factor in sustained economic growth, estimated to account for as much as half the nation's growth over the past 50 years. In fact, America's research-intensive industries - aerospace, chemicals, communications equipment, computers and office equipment, pharmaceuticals, scientific instruments, semiconductors, and software - have been growing at about twice the rate of the economy as a whole over the past two decades.
The performance of individual companies - the agents through which economic growth occurs - is strongly linked to their use of technology. A recent Department of Commerce analysis shows that the use of advanced technologies enhances manufacturing in virtually every important performance category. Firms that use advanced technologies are more productive, profitable, and pay higher wages. Between 1987 and 1991, employment at plants that used eight or more advanced technologies grew 14.4 percent more than plants that used no advanced technologies, and production workers' wages were more than 14 percent higher.
Technology is transforming the very basis of competition - enabling small businesses to perform high-quality design and manufacturing work that previously required the resources of big business, while allowing big businesses to achieve the speed, flexibility, and proximity to customers that were once the sole domain of smaller firms. Technology provides the tools for creating a spectacular array of new products and new services. It is creating new industries - advanced materials, mobile cellular communications, electronic commerce - and revitalizing old ones like steel, automobiles, and textiles.
In today's highly competitive global marketplace, technological leadership often means the difference between success and failure for companies and countries alike.


New technologies are improving the quality of life for all Americans. Medical research in pharmaceuticals, biotechnology, and medical devices helps us lead healthier lives and offers new hope for the sick. Environmental research brings better monitoring, prevention, and remediation technologies. Advanced monitoring and forecasting technologies - from satellites to simulation - are helping to save lives and minimize property damage caused by hurricanes, blizzards, microbursts, and other severe weather. Sophisticated traffic management systems for land, sea, and air transportation enable the smooth and timely movement of more people and goods.
Agricultural research is producing safer, healthier, and tastier food products. Automobile research is providing safer, cleaner, energy efficient, and more intelligent vehicles. Aeronautical technology is making air travel safer, less costly, and more environmentally compatible. Energy research is helping to deliver cleaner, renewable, and less expensive fuels. And information and telecommunications technologies have enabled instantaneous communications around the globe.


For more than 200 years, the Federal government has played a vital role in developing a scientific and technological infrastructure that has substantially contributed to U.S. economic growth and to the competitive success of American industry. Federal research has given birth to new industries, such as computers and biotechnology, and propelled U.S. firms into a leadership position in other industries, including agriculture, aerospace, telecommunications, and pharmaceuticals. Federal research has also made possible many other contributions to American life - from better tasting frozen orange juice and highly absorbent disposable diapers to vaccines for malaria and closed-captioned television for the deaf.
In addition, Federally funded technology has played - and continues to play - a central role in meeting vital Federal missions. It has protected our shores and the soldiers, sailors, and airmen who defend them; it has taken Americans to the moon and brought them safely home again; and it is increasingly vital to the delivery of government services to our citizens.


The Administration's technology programs reflect the challenges and opportunities as a new century begins.


No technology promises to affect our world more profoundly than the rapid sweep of digital technology. Every sector of our economy - manufacturing and services, transportation, health care, education, and government - is being transformed by the power of information technologies to create new products and services and new ways to communicate, resulting in significant improvements in productivity and knowledge sharing.
For most of this century, our competitiveness and ability to create wealth have been based on how well we manipulate our human, technological, and material resources. Today, however, our global competitive standing depends increasingly on our ability to create knowledge and the speed with which we put that knowledge to work.
The emergence of the Information Age has created new challenges that are pressing at the forefront of government policy. Important issues include: fair rules of competition, the protection of intellectual property, the security of business transactions in electronic commerce, individual rights to privacy, law enforcement investigation, upgrading the skills of the American workforce, and integrating information technologies into the education system and the delivery of government services. The Clinton Administration has actively addressed these issues and enabled Americans to enjoy the benefits of rapid and full use of information technologies - economic growth and job creation, higher standards of living, and improved quality of life.


Technology has become a global enterprise and the United States faces tough competitors worldwide. Support for research and technology development remains strong in the advanced industrial nations, such as Japan and countries of the European Union. In July 1996, for example, the Japanese Cabinet approved a proposal to spend $155 billion on government science and technology programs over the next five years - of this sum, 95 percent is targeted at civilian technologies. If these plans are implemented, Japanese government expenditures on civilian R&D will soon exceed U.S. funding in absolute terms.
While science and technology in Europe and Japan will continue to be important to the United States, a number of rapidly growing, newly industrializing countries have set their sights on joining the ranks of the world's technological leaders. Several Asian countries - including South Korea, Taiwan, China, Malaysia, and Indonesia - are rapidly developing technical capabilities that will enhance their competitive position in global markets. Many industrializing countries are emphasizing the development of indigenous technological capabilities - increasing R&D investments, establishing research institutes and key technology programs, forming government-industry partnerships, boosting technical manpower development programs, modernizing key manufacturing sectors, and planning for information superhighways.
For the last 50 years, America's view of competition in high technology focused primarily on Europe and Japan. We must now account for a more dynamic global technology enterprise in which many nations are increasingly able to participate.


For much of this century, America's premiere private sector laboratories played a major role in the advancement of new technologies in their early stages. Today, however, competitive pressures have driven many companies to emphasize near-term product development and process improvements that support their market strategies and the bottom lines of their business units. This kind of R&D focus has proven successful for many companies in the short term, however, it comes at the expense of basic and applied research, and threatens to reduce the pool of enabling and emerging technologies from which our country must draw in the future to remain competitive.
The Federal government's technology partnerships with industry are designed to ensure that the United States has a rich base of key technologies to serve as building blocks for new products and services, new industries, and technology-driven productivity gains in the twenty-first century.


The Administration has taken care to develop plans to balance the Federal budget without compromising our nation's investments in the future. We recognize that our ability to achieve an array of social goals and maintain our standard of living requires a strong economy that depends on sustaining the Federal investment in R&D. Historically, these investments have led to many of the new ideas, insights, and innovations the private sector needs to generate growth and jobs.
While the FY 1996 Federal R&D budget is conventionally reported as $71 billion, this figure includes approximately $31 billion which the Department of Defense (DOD) spends on highly specialized development of specific weapons systems. Federal investment in research and development - that could accurately be termed the science and technology base - is only about $40 billion. Of this $40 billion Federal investment in science and technology, more than a fourth ($12 billion) is spent for health-related R&D, leaving $28 billion to invest in research and development to support every other field of science and technology - physics, environment, energy, mathematics, aerospace, electronics, computing, communications, materials, software, simulation and modeling, agriculture, and more.
The Administration recognizes that this part of the nation's R&D investment is most likely to yield economic benefits and meet a wide range of social goals beyond health and defense.


In February 1993, President Clinton set forth his vision for a national technology policy in Technology for America's Economic Growth: A New Direction to Build Economic Strength. This policy - a core element of the Administration's strategy for long-term economic growth - outlines measures to ensure America's global technological leadership into the next century.
The technology policy set forth by the Administration is guided by these principles:

  • We must retain a long-term commitment to research, education, and innovation even in this period of budgetary constraint.
  • The primary role of the Federal government in technology policy is to create a business environment in which the innovative and competitive efforts of the private sector can flourish.
  • The Federal government must encourage the development, commercialization, and the use of civilian technology.
  • The Federal government must help create a world-class infrastructure for the twenty-first century to support U.S. industry and promote commerce.
  • The United States must develop a world-class workforce capable of participating in a rapidly changing, knowledge-based economy. This goal is addressed in the chapter entitled "Human Resources."

These initiatives will help ensure that technology remains our engine of economic growth, creating high-wage jobs in the United States and improving the standard of living and quality of life for our people.


The primary role of the Federal government in technology policy is to create a business environment in which the innovative and competitive efforts of the private sector can flourish. This role includes eliminating unnecessary legal, regulatory, and economic barriers to the development and commercialization of new technologies; assessing the impact of proposed laws and regulations on U.S. competitiveness; and developing new policies that foster innovation.

ECONOMIC POLICY. Fiscal policies affect the cost and availability of capital that firms need to invest in technology, product development, and manufacturing. By cutting the deficit and balancing the budget, government borrows less, freeing capital for these private sector investments. The Clinton Administration has made great strides in reducing the Federal budget deficit and has proposed a viable plan to balance the budget while maintaining our investments for the future in areas such as science, technology, training, and modern infrastructure. The Administration proposed permanently extending the research and experimentation tax credit in 1993 to provide an incentive for American firms to invest in the new technologies that will underpin tomorrow's products and services. The Administration continues to support the credit and has proposed working with Congress to extend it.

REGULATORY POLICY. The Administration has taken care to reform Federal regulations in a way that achieves goals in the environment, public health and safety, consumer protection and other areas with the lowest possible burden to businesses. The Administration has already instituted reforms that streamlined regulatory paperwork and eliminated unnecessary regulatory barriers. It has worked to ensure that regulations encourage, instead of stifle, the development of innovative technologies which can meet both public and business objectives.
For example:

  • In 1993, President Clinton signed legislation amending the 1984 National Cooperative Research Act to reduce antitrust barriers to joint production ventures, offering U.S. firms a new way to cope with the escalating cost of establishing production facilities.
  • In March 1995, the President and Vice President launched the "Reinventing Environmental Regulation" initiative to make environmental protection work better and cost less. The initiative contains 25 priority actions to both improve the existing environmental protection system and build the foundation for a fundamentally new performance-based system.
  • In April 1995, the National Institutes of Health (NIH) dropped the "reasonable pricing" clause from its cooperative research and development agreements, a provision seen by industry as a significant barrier to partnership with NIH.
  • With the passage of the Telecommunications Act of 1996, the United States took a bold step into the future. These reforms will unleash a wave of investment, creativity, and new technology that will spur growth, create jobs, and revolutionize our lives in ways we cannot imagine today.

TRADE POLICY. The Administration has also placed heavy emphasis on ensuring fair competition for U.S. technology products in international markets. Fair access to world markets is essential for most technologically innovative U.S. firms. Export controls on key telecommunication, supercomputer, and other products have been rewritten in ways that open billions of dollars worth of international markets to U.S. high-technology firms.
The North American Free Trade Agreement (NAFTA) and the General Agreement on Tariffs and Trade (GATT) play critical roles in ensuring fair treatment for U.S. technologies in global markets. NAFTA creates the highest standard any international agreement has provided for protection of patents and other intellectual property. The Trade Related Aspects of Intellectual Property, an accord reached under GATT, raised the standard of protection for copyrights, trademarks, patents, industrial designs, and trade secrets for members of the World Trade Organization.
GATT also provides protection against foreign governments that attempt to give their companies an unfair advantage by directly subsidizing late-stage technology development. It ensures efficient operation of free international markets by permitting government support of industrial R&D only through the pre-competitive stage of non-manufactured prototypes.


The Federal government must encourage the development, commercialization, and use of technology. It must invest in nascent technologies that offer large economic and social returns to the nation. Federal policy must ensure that the fruits of Federal research extend beyond government and help U.S. firms create high-wage jobs and national economic growth. And the Federal government -in partnership with state and local governments, the academic community, and the private sector -can continue to cultivate a range of mechanisms that encourage widespread deployment and use of technology.

FEDERAL TECHNOLOGY PARTNERSHIPS. During the past decade, the process by which Federally funded technology makes its way to the private sector for commercial use has been substantially improved. In addition to technology spin-off - in which technology developed to meet Federal mission requirements is later adapted for commercial markets - the Federal government is now working hand-in-hand with industry, combining resources to achieve common technology objectives.
The 1986 Federal Technology Transfer Act established the framework for partnerships between Federal laboratories and the private sector. In 1996, Congress gave private sector partners greater assurances about retaining the intellectual property rights from these partnerships. Federal agencies and their laboratories have worked diligently to make technology transfer to the private sector an integral part of their laboratory functions. These efforts have paid off. Today, 13 Federal agencies are engaged in more than 3,500 cooperative research and development agreements (CRADAs) with the private sector, an increase of 177 percent since 1992. Between 1992 and 1994, the number of licenses on Federal patents granted to industry nearly doubled, and licensing royalties paid to the Federal government jumped 77 percent to a record $24.5 million annually.
Federal laboratories have reached out aggressively to the private sector, forming alliances that allow industry and government to bring complementary assets to bear on research in areas of mutual interest. Although enabling and emerging technologies are the fundamental building blocks for future economic growth, individual companies may be unable to develop them in a competitive time frame (if at all) due to their high cost, high risk, and delayed returns on investment. Consequently, the Federal government must share the burden of the applied research necessary to bring these technologies to market.

ADVANCED TECHNOLOGY PROGRAM. The Commerce Department's Advanced Technology Program (ATP) addresses the problem of developing enabling and emerging technologies by sharing the costs and risks with the private sector. ATP forms partnerships with companies and joint ventures that have the greatest potential for meeting the primary objective of the program: developing technologies to achieve broad-based economic benefits with high rates of social return for the nation.
While government provides the catalyst, industry conceives, co-funds, and executes ATP projects. Specific R&D projects are selected from proposals submitted by industry, and all awards are made through a competitive merit-based selection process that evaluates technical and business merit. Industry is also the source of ideas for particular technology areas that offer important opportunities for economic growth. These are multi-year efforts aimed at specific, well-defined technology and business goals. By managing groups of projects that complement each other, the ATP fosters synergy and, over the long run, can have a strong impact on the U.S. technology base and the economy.
The Advanced Technology Program has supported a number of near-term accomplishments.

The Auto Body Consortium (ABC): A 1992 ATP award catalyzed the formation of this partnership involving a group of eight small- and medium-sized automobile technology suppliers, together with Chrysler, General Motors, and two universities in the "2 mm Program." They have developed new manufacturing technologies, practices, and training techniques capable of controlling variations in the fit of automobile body parts to 2 millimeters - about the thickness of a nickel - or less. The ABC technologies are not only effective, they are "agile" - readily adapted to other industries involved with the automated assembly of sheet metal parts. These technologies have been implemented at several assembly plants - already resulting in significant improvements in customer satisfaction scores.
Tissue Engineering, Inc., a Massachusetts company, received an ATP award for developing technologies at the leading edge of tissue engineering - integrating advances both in cellular biology and textile manufacturing. The company has created "prosthetic tissue" manufactured like cloth for biodegradable implants. This project has already resulted in a whole new range of reconstructive treatments for damaged periodontal, orthopedic, skin, and vascular tissues and created a line of early spin-off products for the research and testing markets.
Diamond Semiconductor Group (DSG)) credits the ATP with helping the company attract outside development capital from Varian Associates for a prototype ion-implant machine for semiconductor manufacture. DSG and Varian Associates were able to announce, early in 1996, an "industry first" - successful ion-implantation of a 300-mm wafer (the next-generation semiconductor wafer size) using the new technology.
Nanophase Technologies Corporation (Burr Ridge, Illinois), a small start-up company (two people), received an ATP award to develop an innovative process for producing ultra-fine ceramic and metal powders at the nanometer scale for applications ranging from skin-care products to high-performance engine parts. The ATP research enabled the company to attract support from major industrial organizations and venture capital firms, who furthered commercial development. The company has launched new products, and negotiated an agreement with Merck for international distribution of one early product. The company has opened the world's first facility devoted to commercial-scale production of nanocrystalline materials, and expects to employ several hundred workers within the next two years.
Accuwave, a 12-person California company, received a 1992 ATP award that enabled it to extend its new technology (which uses laser holography to "write" very high-resolution optical elements such as filters into the interior of crystals) to the rapidly growing fiber-optics communications industry. In 1994, the company introduced three new products that were early spin-offs of the ATP-sponsored technology: an optical network monitor, a wavelength standard, and a "wavelength locker." In 1995, Accuwave began selling these products to major telecommunications companies in the United States, Japan, and Europe. Since then, it has been developing a wavelength division multiplexing system based on the core results of the ATP project.

AERONAUTICS. Aeronautical research and technology play a vital role in promoting U.S. economic growth and national security. The challenges facing this $15 billion industry include growth in air traffic, demanding environmental standards, an aging aircraft fleet, and foreign competition. The continued safety and productivity of the nation's air transportation system and future U.S. competitiveness in aeronautics depend on national investments in aeronautical research and technology.

p.40.JPGThe jet fighter cockpit is one of the most complex workplaces for any human operator. Early WWI combat aircraft contained only the most basic flight instruments, but the number of controls and displays has risen dramatically over the years. Today, a combat pilot has to integrate a tremendous number of discrete pieces of information into a complete "picture' of the battlefield in order to successfully accomplish the mission. The next generation of cockpit technology will include Helmet Mounted and Wide Area Displays that will automate the data fusing process for enhanced battlefield awareness and aircraft operability.

To help meet these challenges, the National Aeronautics and Space Administration's (NASA) Aeronautics Enterprise identifies and develops high pay-off aeronautics technologies, and helps commercialize successful applications. This enterprise works closely with U.S. industry, universities, the Department of Defense, and the Federal Aviation Administration to coordinate R&D investments and to ensure that NASA's technology products and services add value and are developed to the level at which customers can confidently make decisions regarding the applications of those technologies. Additionally, under the Space Act, NASA has established more than 3,500 partnerships with industry.
Other aviation innovations on the horizon include:

  • Information technologies that can dramatically decrease the time and cost of designing aircraft, reducing time to production by 30 to 50 percent.
  • The use of global positioning satellites, advanced computers and sensors onboard the aircraft, and a new generation of digital communication technologies to revolutionize air traffic control and lead to major improvements in air safety.
  • New Air Traffic Management (ATM) technologies emerging from NASA's research and jointly developed with the FAA will reduce en route flight restrictions by 90 percent and safely increase landing rates under low visibility conditions by 25 percent.
  • Improved air traffic management can make a major contribution to energy efficiency and environmental goals. Industry estimates that airlines worldwide will save as much as $5 billion annually in fuel and other costs when this capability is fully implemented in conjunction with other evolutionary improvements in air traffic management capabilities.

PARTNERSHIP FOR A NEW GENERATION OF VEHICLES. In the Partnership for a New Generation of Vehicles (PNGV), seven Federal agencies and 20 national laboratories have partnered with the Big Three automobile manufacturers and more than 400 suppliers to achieve R&D goals in three areas: advanced manufacturing methods; technologies that can lead to near-term improvements in automobile efficiency, safety, and emissions; and research that could lead to vehicle prototypes with a threefold improvement in fuel efficiency. These super-fuel-efficient family-sedan-size vehicles should cost no more to own or operate than today's cars; offer comparable performance, roominess, and utility; and meet or exceed all safety and emissions standards.
PNGV has the potential to boost economic growth and meet important national goals. Because one in every seven jobs in the United States is automotive related, global competitiveness of this industry is extremely important to our economic well-being. PNGV will benefit the U.S. automotive industry by establishing manufacturing processes that are less costly and produce higher quality products. In addition to improving the competitiveness of the industry and preserving American jobs, PNGV aims to reduce our country's dependence on foreign oil and ensure a cleaner environment.
Significant progress has already been made toward PNGV goals. In 1996, each of the Big Three U.S. automakers produced a PNGV vehicle that demonstrated various "Supercar" possibilities. At the 1996 Detroit Auto Show, both Ford and Chrysler released their PNGV experimental concept cars - Ford's Synergy 2010 and Chrysler's Intrepid ESX. And in December 1996, General Motors introduced the industry's first electric car, the EV1, which incorporates a range of PNGV technologies.
In July 1996, PNGV and USCAR - the precompetitive research consortia representing Ford, Chrysler, and General Motors in the PNGV program - released the PNGV Technical Accomplishments report which details the significant progress of PNGV in fuel cell system development, advanced battery chemistries and other energy storage devices, and new manufacturing processes. Most recently, in January 1997, Chrysler announced that it will develop a vehicle prototype that uses PNGV-developed gasoline fuel cell technology.

p.41.JPGThe Partnership for a New Generation of Vehicles is a cooperative effort between the Federal government and the automobile industry to foster breakthrough technologies in personal vehicles. The goal is a production prototype vehicle capable of 80 miles per gallon by 2004. The program has identified areas of technical potential to reduce vehicle weight by 40 percent, to more than double energy conversion efficiency, and to lower aerodynamic drag and rolling resistance by up to 30 percent. This Ford Synergy 2010, a new concept car exploring the technological frontiers, was unveiled in Detroit at the 1996 North American International Auto Show.

HIGH PERFORMANCE COMPUTING AND COMMUNICATIONS. The Federal High Performance Computing and Communications (HPCC) Program observed its fifth anniversary in October 1996 with an impressive array of accomplishments to its credit. Throughout its existence, the HPCC Program has conducted long-term research and development in advanced computing, communications, and information technologies, and in ways to apply those technologies to the missions of the participating Federal departments and agencies. The use of advanced information technologies across the Federal government and throughout the economy demonstrates the significant impact of the HPCC Program.
An exciting recent achievement of the HPCC Program was the development of computing technologies that can execute one trillion floating point operations per second. New computing and communications technologies can be used to conduct basic scientific research and to prototype solutions to large science and engineering problems such as weather forecasting, climate prediction, environmental modeling, designing more energy-efficient cars and airplanes, and creating better drugs.
Under the leadership of the National Science and Technology Council's (NSTC) Committee on Computing, Information, and Communications, the HPCC Program is evolving. As a result of the successes of the original program and the changing role of information technology in Federal agency mission applications, broader collaborative R&D investments in computing, information, and communications are required.
In response to this need, the NSTC has organized its collaborative efforts into five program component areas:

    High End Computing and Computation: to provide the foundation for U.S. leadership in computing through investments in hardware and software innovations, and in algorithms and software for modeling and simulation needed for large-scale science and engineering applications.
    Large Scale Networking: to assure U.S. technological leadership in high performance network communications through advances in networking technologies, services, and performance.
    High Confidence Systems: to develop technologies that provide users with high levels of security, protection of privacy and data, reliability, and restorability of information services.
    Human Centered Systems: to make computing and networking more useful through collaboratories, technologies that provide knowledge from distributed repositories, multi-modal interactive systems, and virtual reality environments.
    Education, Training, and Human Resources: to support research that enables modern education and training technologies, including technologies that support lifelong and distance learning, and curriculum development.
    Federal R&D in advanced computing, communications, and information technology contributes enormously to U.S. leadership in the Information Age.

p.43.JPGPrecision hard turning may replace grinding with a more agile, environmentally friendly process. Hard turning uses cubic boron nitride, the next hardest material to diamond, to machine hardened steels to near mirror finishes. National Institute of Standards and Technology (NIST) research on this technology investigates fundamentals of tool wear and new approaches to extending the range of materials that can be machined. NIST's findings point the way to improvements in tool design and material selection. Unlike grinding, hard turning requires no coolants, so there are no potential harmful by-products that require disposal. Hard turning also reduces the risk to workers from inhaling coolant mist.

p.43b.JPGScientists can better understand how nature maintains a delicate balance of atmospheric gases, using pictures like these, and can begin to understand the impact of human activity on that balance. Sophisticated computer simulations help scientists understand how air is mixed in the atmosphere, a process of critical importance for both environmental and meteorological studies. Naturally occurring nitrous oxide can be used as a tracer, since its concentration changes very little through the outer reaches of the troposphere. It is measured here along a surface of constant potential temperature (q), a marker for altitude. Lower densities of nitrous oxide, denoted by the blue swirls, indicate mixing of the ozone-depleted stratospheric air.

MANUFACTURING EXTENSION PARTNERSHIP. New manufacturing technologies and approaches are available that can lead to dramatic improvements in product quality, cost, and time-to-market. With the exception of a few market leaders, most of America's 381,000 small- and medium-sized manufacturers have been slow to adopt these new technologies and approaches. These establishments form the backbone of the U.S. industrial base and represent about 95 percent of U.S. manufacturing plants. Millions of jobs rest on their competitive performance.
The Clinton Administration has achieved its goal of establishing a nationwide network of manufacturing extension centers to assist small- and medium-sized manufacturers in modernizing their production capability. By the end of 1996, manufacturing assistance was available in all 50 states and Puerto Rico, from more than 2,800 manufacturing engineers and business experts - none are Federal employees - through more than 300 sites around the nation. As a result, small- and medium-sized manufacturers are gaining new insights, finding more efficient ways to produce their products, and retaining and adding new jobs. Led by the Commerce Department's National Institute of Standards and Technology, the Manufacturing Extension Partnership (MEP) is designed to help smaller firms upgrade their equipment, improve their processes, and strengthen their business performance.
Working through non-profit state and local partners, the MEP is helping companies to create and retain jobs, increase sales and become more productive. For example, the New York centers' statewide economic impact in 1995 was estimated to be as high as $175M. Extension centers are helping to improve the performance of thousands of smaller manufacturers all across the country, from the California company that is saving $3M annually and has hired 55 new employees, to the Chicago firm that saw a 30 percent increase in sales and a 20 percent growth in employment, to the Wisconsin company that was facing a 20 percent cut in its workforce and now plans to expand by 10 percent over three years.

CONSTRUCTION AND BUILDING. A public-private cooperative research program has been established to develop and deliver high performance construction materials and systems, advanced information systems addressing industry needs, automation for construction processes and constructed facilities, knowledge needed for productivity and safety, and measures of effectiveness for construction technology.
The U.S. construction industry is directly responsible for 8 percent of the U.S. gross domestic product and employs over 3.5 million workers. Technology can increase the productivity of the construction process while improving product quality - lowering utility and maintenance costs and providing a more attractive and pleasant environment.
A number of quantitative objectives have been established. They include a 50 percent reduction in the time necessary to obtain regulatory clearance, design, and construct residential and commercial buildings; 50 percent less waste and pollution (including emissions of greenhouse gases); and 50 percent fewer accidents and illnesses associated with construction and occupancy.
In September 1996, in cooperation with the National Science and Technology Council (NSTC) State-Federal Technology Partnership, the NSTC initiated a project to be performed by the National Council of State Building Codes and Standards (NCSBCS) to streamline and coordinate the verification of compliance with land use, zoning, and environmental, health and safety regulations of construction projects by developing model regulations and standards. These model regulations and procedures will be developed in consultation with industry and state and local governments to be recommended for use with these and Federal agencies.

INDUSTRIES OF THE FUTURE. The Department of Energy's Industry of the Future Program targets sustainable economic growth and environmental improvements. DOE is working in close partnership with America's energy-intensive industries - steel, chemicals, forest and paper products, metal casting, glass, petroleum, aluminum, and textiles - to develop advanced manufacturing technologies for improved process and materials efficiency that will reduce the consumption of energy and resources used in production. These technologies will foster economic growth by improving manufacturing productivity while achieving environmental benefits such as pollution reduction through greater process efficiency. This approach offers large potential economic benefits - manufacturers spend about $100 billion on energy and $50 billion on pollution abatement annually. By co-funding the development of energy-efficient technologies, the Industry of the Future Program is helping to reshape the way industry sees itself and its future.

BIOTECHNOLOGY. Biotechnology promises to have a profound impact on health care, agriculture, energy, and environmental management. The development and production of biotechnology products will create thousands of new jobs, promote economic growth, and help address agricultural, environmental, and health concerns.
The United States now holds a competitive edge in biotechnology thanks to significant investment in health research. Japan and the European Union, however, have made achieving a leadership role in biotechnology by the year 2000 a priority. Each nation is effectively coordinating its public and private investments in biotechnology and establishing a strong government-supported technology transfer infrastructure in partnership with industry and the academic community.
In the United States, the Federal government has played an important role in advancing this embryonic technology. The National Institutes of Health which supported the cloning of the first gene in 1973, worked with the Department of Energy (DOE) on the development of DNA sequencing, and conducted the initial groundbreaking experiments in recombinant DNA genetics.
Today, 13 Federal agencies are engaged in biotechnology research in a broad array of areas such as agriculture, energy, the environment, health, and manufacturing/bioprocessing. Research activities seek to meet both economic and social goals, including transferring biotechnology research discoveries to commercial applications, increasing the benefits of biotechnology to the health and well-being of the population, and protecting and restoring the environment.
Industrial application of this approach harnesses living cells to treat a variety of diseases and conditions and for other useful purposes such as food and fiber production and environmental remediation. Today 40 approved biotechnology drugs are on the market, and 494 others have reached clinical testing stages. In addition, more than 700 biotechnology-derived medical devices are being used in clinical practice.


The Federal government must invest in a world-class infrastructure for the twenty-first century to support U.S. industry and promote commerce just as it has invested for more than a century in canals, rail transportation, aviation, and the national highway system. Today and in the future, infrastructure remains essential to the nation's ability to develop and deploy new technologies. We must continue to ensure the availability of efficient, high-performance transportation infrastructure, and continue our commitment to a national standards research, test, and measurement capability that keeps pace with technological innovations. Also, the knowledge-based economy demands that the Federal government encourage the adoption of new information technologies that will help government deliver services and meet responsibilities in transportation, public health, education, libraries, and other fields.


The role of information in all facets of society is growing. For business and industry, information links producers, suppliers, service providers, freight carriers, distributors, and customers in an ever-tightening network of commercial activity. Information also ties R&D, production, and marketing into a seamless innovation process, whether these functions reside within or outside the company. Advanced technologies are essential for the efficient management and use of this information.
America is leading the world into the Information Age. In 1993, the Administration articulated its vision for a National Information Infrastructure (NII) - a seamless web of communications networks, computers, databases, and consumer electronics that will put vast amounts of information at users' fingertips. Development of the NII will help unleash an information revolution that will change forever the way people live, work, and interact with one another. Turning this vision into reality will propel scientific inquiry and discovery, business productivity, and the education of our people.
Guiding principles of the National Information Infrastructure include the following:

  • Promote private sector investment.
  • Extend the "universal service" concept to ensure that information resources are available to all Americans at affordable prices.
  • Promote technological innovation and new applications.
  • Promote seamless, interactive, user-driven operation of the NII.
  • Coordinate with other levels of government and with other nations.
  • Provide access to government information and improve government procurement.

Today, the United States is laying the foundation for the NII which will link schools and homes, offices and factories, hospitals and clinics, and a myriad of other business, academic, and social institutions. This network will enable a colossal leap in knowledge sharing, which will in turn propel scientific inquiry and discovery, business productivity, transportation system performance, and the education of our citizenry.
Private firms are leading this revolution today through the development and deployment of the NII. Nevertheless, there remain essential roles for government in this process. Carefully crafted government actions will complement and enhance the efforts of the private sector and ensure the growth of an information infrastructure available to all Americans at reasonable cost.
To help communities and nonprofit organizations enter the Information Age, the Commerce Department's Telecommunications Information Infrastructure Assistance Program provides competitively awarded matching grants to school districts, libraries, state and local governments, health care providers, universities, and other nonprofit organizations to connect institutions to existing networks, to enhance those networks, and to permit users to interconnect among different networks.
In March 1994, Vice President Gore introduced the U.S. vision for an international corollary to the NII - the Global Information Infrastructure (GII) - at a meeting of the International Telecommunication Union in Buenos Aires, Argentina. Because information crosses state, regional, and national boundaries, coordination is important to avoid the establishment of unnecessary obstacles and to eliminate unfair policies that handicap U.S. industry. Like the vision for the NII, the GII is directed at promoting competition, creating flexible regulatory policies, ensuring universal service, and providing open access to the network for all information providers and users.


Forty years ago, the Federal government paved the way for a better life for future generations by creating the Federal interstate highway system. As the twenty-first century approaches, the U.S. Department of Transportation is looking to use advanced technology to build the transportation infrastructure needed to improve the lives and mobility of future generations.
In America, businesses lose $40 billion a year due to traffic congestion. It is estimated that just to keep abreast with congestion, the United States needs to enlarge its highway capacity by a third. Over the next decade, for 50 cities alone, that would cost $150 billion. However, for the same 50 cities, implementing an intelligent infrastructure, virtually from scratch, would cost $10 billion and increase capacity by two-thirds.
Under the Intelligent Transportation Initiative (ITI), the Federal government is working with state and local governments and the private sector to foster the deployment of a core information infrastructure in 75 of the nation's largest metropolitan areas. This initiative will support traffic control centers that manage operation of all major area roads, provide real-time information to motorists and other travelers, and identify and respond rapidly to breakdowns and accidents. The result is expected to be a 15 percent savings in travel time, achieved at a small fraction of the cost for new physical infrastructure that would accommodate the same increase in traffic capacity.
Transportation planners are already laying the foundation. In Seattle, for example, an advanced freeway management system has reduced travel time by 50 percent. In Minneapolis/St. Paul, the Minnesota Guidestar program has cut commuting time dramatically, accident rates have fallen 25 percent, emergency response time is down by 20 minutes, and freeway capacity has increased 22 percent.

p.48.JPGComputer simulations, like the finite element model shown here at the National Crash Analysis Center, save time, money and lives by accurately predicting the results of high energy impacts. Supercomputing resources - hardware, software, and expertise - found in many of our national laboratories allow engineers to design better safeguards for automobile passengers.

Building the ITI does not mean burdening communities with excessive costs. The Administration will encourage private sector partners to invest in infrastructure projects, allowing states to count private sector funds toward their required share of construction project funding. Moreover, Federal transportation funding to states can be used to build almost all of the ITI. Through a program called Operation TimeSaver, the government will advise communities on the most efficient way to use their existing funds to meet their program goals.
The Federal Highway Administration's Intelligent Transportation Systems Program is encouraging the application of core communications, computer, and sensing technologies to many transportation functions, including highway traffic management, in-vehicle navigation systems, nationwide management of fleet trucks, paperless non-stop crossing of state and national borders, and availability of comprehensive information to travelers.
While the initial components of the ITI focus on the surface transportation links of the overall transportation system, over time these will be extended and connected with improved communication and control systems put in place for the marine and air modes - resulting in a fully intermodal ITI. This will improve integration among the various elements, make the best use of existing capacity, and enable the system to react immediately to weather changes and other potential sources of disruption or delay.
Components of the Intelligent Transportation Initiative include:

    Traffic signal control systems to optimize traffic flow by adjusting signal timing and patterns in response to real-time traffic data.
    Freeway management systems to improve traffic flow on high-volume highways by adjusting ramp metering rates, variable message signs, and highway advisory radio messages based on real-time traffic surveillance.
    Transit management systems to manage bus operations based on real-time location information.
    Incident management programs to identify and quickly respond to vehicle accidents or breakdowns with appropriate emergency services, and restore roadways to full service.
    Electronic fare payment systems to consolidate all transit and parking transactions onto one electronic card for user convenience and to provide centralized information to transit agency managers.
    Electronic toll collection systems to allow payment without stopping.
    Regional multi-modal traveler information Centers to collect, analyze, and distribute accurate, reliable, and timely travel information to travelers and business carriers when and where requested.
    Railroad grade crossings safety systems which use in-vehicle warning systems when approaching a railroad crossing to encourage safe driving behavior by focusing driver attention on the danger of trains.
    Emergency management services to save lives and improve security through immediate notification of the precise location of accidents and breakdowns.


The Global Positioning System (GPS) is a dual-use navigation technology composed of two dozen satellites and a sophisticated ground tracking system. It has become a vital component of our National Information Infrastructure, providing precise terrestrial and airborne location for both civilian and military users. Today, the market for GPS receivers already exceeds $1 billion per year; 80,000 to 100,000 units are sold each month, far exceeding the original forecast of the entire armed service procurement.
Originally developed by the Air Force for military navigation, GPS now performs critical public safety services for maritime and airborne traffic. The Federal Aviation Administration is augmenting GPS to improve its accuracy and reliability even further, and plans to transition aircraft navigation services to a sole means GPS-based system by the year 2010. Such a move could save hundreds of millions of dollars in maintenance of the current radio beacons and dramatically simplify on-board avionics.

p.49.JPGAdded layers of accuracy, reliability, and integrity of position information result in safer air travel. The Wide Area Augmentation System of the Global Positioning System (GPS) will improve GPS accuracy from 100 meters to less than ten meters. Data from a sophisticated network of ground reference stations flows to a master station, then via a communications satellite to aircraft which incorporate error-correcting messages in their position fixes to increase accuracy.

GPS is being promoted as the backbone of a new Global Navigation Satellite System that will form a worldwide seamless airway in the twenty-first century. The U.S. Coast Guard is already operating a precise GPS service, known as differential GPS, around the U.S. coast and the Great Lakes for marine applications. This system is being expanded to cover the entire U.S. landmass and is being duplicated around the world for marine and other precise positioning applications.
GPS can also serve myriad automatic vehicle control applications including mass transit, intelligent vehicles, railroads, farm tractors, and construction vehicles, as well as mapping, timing, and surveying operations. These applications are being developed by U.S. manufacturers of farm and construction equipment, thereby keeping these industries at the cutting edge of the international market.
Additionally, GPS is popular with recreational boaters, hikers and skiers, where hand-held sets provide around-the-clock reliability and precision to within 300 feet anywhere on the planet. GPS receivers are being widely deployed in rental cars, where they are used with electronic maps and databases to provide drivers detailed route instructions.


Measurements and standards are indispensable to the nation's industrial foundation and ability to conduct commerce. The Commerce Department's National Institute of Standards and Technology (NIST) helps fulfill this responsibility through its world-class laboratory programs. NIST works with U.S. industry in areas such as manufacturing, materials, electronics, chemical processing, construction, and information technology. It focuses on measurement methods, standards, data evaluation, and test methods. NIST also works with national and international standards-setting organizations to stimulate U.S. commerce and help U.S. industry understand and comply with foreign standards, regulations, and procedures.


Among the many fields of R&D, medicine is one of the very few in which the results of exploratory research are often directly applicable to the development of new products. In other fields, it may take decades to translate such research results into their ultimate uses. NIH has identified five broad research areas that are especially rich in scientific opportunity. These research areas are likely to be exceptionally productive in the near future, yielding knowledge that will contribute in many ways to improved health and quality of life for the nation.
Between 1985 and 1996, NIH was awarded 667 patents and executed 896 licenses to develop commercial applications based on those patents. Accumulated sales of products developed under these licenses are estimated to be $2 billion and have generated more than $122 million in royalty income. Over the same period, NIH intramural scientists negotiated 353 CRADAs with private organizations. The $122 million in royalty income plus more than $31 million in industry resources brought in through CRADA collaborations stimulate and support additional research and product development at NIH.


An area of increasing interest to the United States is the globalization of research and development, as multinational corporations internationalize their research operations and locate more of their R&D abroad (including foreign firms conducting R&D in the United States), and as U.S. firms increasingly look to foreign firms as partners in research and technology development.
International technology cooperation benefits U.S. firms by providing a wider range of technologies, expanding market access, and reducing the cost of developing new technologies and products. At the same time, the U.S. government has recognized that barriers exist to international industrial cooperation which prevent the efficient development and exploitation of technology, and may impose unnecessary burdens on such cooperation.
To encourage the elimination of barriers to cooperation, the United States led an effort in the Organization for Economic Cooperation and Development (OECD) to develop guidelines for both governments and firms to promote international technology cooperation. The effort culminated in the adoption by the OECD Council, in September 1995, of "Principles for Facilitating International Technology Cooperation Involving Enterprises."
The principles call upon governments to maintain an effective and enforceable intellectual property regime, to apply international standards to encourage compatibility, and to encourage participation of small and medium-sized enterprises in cooperative projects. It recognizes that private enterprises have the primary responsibility for maintaining a competitive technology base and exploiting it to commercial advantage, but that national governments have an important role to play in creating an environment that will encourage industries to make longer-term investments in technological innovation.
Another exciting development occurred at the first World Trade Organization (WTO) Ministerial, which took place in Singapore in December 1996. Several countries (Australia, Canada, European Union, Hong Kong, Iceland, Indonesia, Japan, Korea, Liechtenstein, Norway, Singapore, Switzerland, Taiwan, and Turkey) joined the United States in committing to the completion of an Information Technology Agreement (ITA) by the end of March 1997. The ITA will eliminate tariffs on information technology products by the year 2000, affecting yearly trade currently estimated at over $500 billion. The ITA will directly benefit businesses and consumers in every member country by lowering costs, accelerating infrastructure development, improving productivity, stimulating foreign investment, and creating jobs.


The Administration has created a balanced portfolio of programs and Federal investments designed to ensure that the U.S. maintains leadership across the frontiers of science and applied sciences that lead to fundamental discoveries, technological innovation, economic growth, and job creation.
Private investors and risk-takers have always been a mainstay of American economic strength. The climate for innovation has been strengthened by the Administration's successes in reducing public deficits, streamlining regulations, and opening foreign markets to U.S. businesses. Federal investment in key infrastructures also plays a critical role. The National Information Infrastructure and global positioning satellites will be as important to America's growth as railroads, highways, and electricity were in an earlier generation. Focused research alliances combining university, business, and Federal partners play a critical role when markets alone fail to support the research needed to ensure American competitiveness in key technologies.
Federal investment in technology has always played a major role in American economic growth. The Administration will continue to tailor this successful tradition for the American economy of the twenty-first century.


Fuel cells are an emerging power generation technology for the efficient, economical, and environmentally acceptable production of electricity. Fuel cells produce electricity by oxidizing hydrogen, which is typically "reformed" from natural gas, coal gas, petroleum, or methane. Because there is no combustion, fuel cells create very little pollution and are extremely quiet. The combination of high efficiency and environmental compatibility has made fuel cells an attractive alternative for electric power generation.
There is little dispute that automotive powerplants based on fuel cell technology have the potential to dramatically reduce tailpipe emissions. Partnership for a New Generation of Vehicles (PNGV) objectives call for a vehicle capable of driving 80 miles on a gallon of gasoline, and a number of advanced technologies are being considered to meet this difficult challenge. Among them are hybrid vehicles with compression ignition and gas turbine engines, and electric cars powered by fuel cells.
Because the United States has invested $200 billion in its gasoline distribution infrastructure, the recently announced fuel cells that can reform ordinary gasoline are a promising, if interim, development, in this technology. Fuel cell technology can also be applied to a broad range of heavy-duty applications including buses, ships, trucks, and locomotives. Considering that transportation represents more than one third of our energy budget, the potential market impact is tremendous.

p.42.JPGTransportation technologies are key in the Administration's strategy for realizing energy security, economic, and environmental goals. Long-term development efforts include government-industry programs seeking breakthrough technologies capable of increasing fuel efficiency, such as this lightweight 50-kW fuel cell engine being developed by International Fuel Cells with the Department of Energy and Ford Motor Company.

One example of Federal participation in the PNGV initiative is the Department of Energy's core research program on fuel cells at Los Alamos National Laboratory, which has concentrated on the basic and applied research necessary to bring fuel cell technology to the performance and cost levels required for widespread use in transportation. A major barrier to the use of fuel cells in passenger vehicles has been the cost of the platinum required for the catalyst to achieve high power densities. Research conducted at Los Alamos yielded a membrane that needs one-sixteenth the amount of this precious metal.
Another remarkable achievement of the PNGV collaboration is the development of an advanced large-scale test stand by Allied Signal. This facility is capable of testing fuel cell stacks with outputs of more than 50 kW, and will allow designers to check system performance under a wide range of operating conditions, including pressure, temperature, flow rate, and humidity. This capability is critical to the development of fuel cells and is not otherwise available in the United States.


Nicknamed the "radar on a chip," the micropower impulse radar (MIR) will soon be available in dozens of products. Developed by an electronics engineer working in Lawrence Livermore National Laboratory's Laser Fusion Program, the MIR harnesses the speed of light for measurements in daily life - all for about $10 - doing what used to require equipment costing $40,000. Computer chip-sized radar units will detect cars in blind spots; serve as automobile back-up warning systems; detect burglars; locate studs in walls; monitor a baby's breathing; perform search and rescue; monitor heart contractions; measure fluid levels; and turn lights, tools, and appliances on and off. And that is only the beginning: this exciting technology is expected to perform scores of other tasks. To date, 20 licenses on the MIR have been granted to 18 companies, generating $2.5 million in licensing fees and royalties.


The Next Generation Internet (NGI), a part of the President's HPCC initiative, is designed to accelerate the development of networking technologies for the twenty-first century, and sets the stage for networks that are much more powerful and versatile than today's Internet. The NGI has three goals: to connect universities and national laboratories with high-speed networks that are 100 to 1,000 times faster than today's Internet; to promote experimentation with the next generation of networking technologies; and to demonstrate new applications that meet important national goals and missions.
The NGI will foster dynamic partnerships among industry, academia, and government that will keep the United States at the leading edge of computing, information, and communication technologies. Augmenting current, on-going Federal networking R&D, NGI will bring together researchers, network providers, and users to develop the networks and advanced applications technologies of tomorrow, including new multimedia services that will be available to homes, schools, and businesses.
The NGI offers the potential of large economic benefits to the nation. Developed in the United States, the widespread implementation of the Internet has already generated economic growth, high-wage jobs, and a large number of high tech start-ups. The NGI initiative will bolster America's technological leadership, creating new jobs and market opportunities.
In addition, the nation will derive large societal benefits, including: more widely available and rapidly accessible information from multiple distributed sources in more usable formats; more efficient and effective knowledge discovery and information dissemination, benefiting a wide range of research areas; and advances in education opportunities such as distance learning.
The Internet developments of the last decade have helped propel the United States to a commanding lead in information technology. Building on the foundation of Federal R&D from which the Internet arose, this new initiative will help ensure continued leadership in developing and applying new networking and information technologies.


Giant Magnetoresistance (GMR) materials are extremely useful for ultra-high-density data storage and the detection of magnetic fields. In the near future, many of the products and devices we take for granted will be dramatically improved by this new class of magnetic materials. Originally discovered by physicists in France in 1989, GMR materials are already the focus of intense research and development efforts at companies as wide-ranging as IBM, Kodak, Sony, Toyota, and Honeywell, among many others.
The first commercial application of GMR materials will be in the antilock braking system of many 1998 U.S. cars. The system operates by having magnets mounted on the wheel that pass by a GMR detector. The sensor measures the rate of wheel rotation and feeds the data to an on-board computer, which regulates the braking pressure to prevent a skid. GMR detectors like this are inexpensive, reliable, and very effective as position sensors.

p.46.JPGGiant Magnetoresistance materials will dramatically improve our ability to store magnetic bits of information on narrower, more densely packed tracks (shown above) on computer hard disks. Five gigabits of binary information, about 90,000 pages of text, can be stored on one square inch.

Another GMR application that will be commercially available soon is the sensor that reads the magnetic information stored on computer hard disks. GMR materials make it possible to read data stored at much higher density than is possible with the conventional hard disks. Also, GMR materials could be employed in a new generation of computer chips that would retain their memory when the power is switched off. This instant-on computer technology would be valuable in a wide variety of circumstances, from ordinary PC bootups to military preparedness. Moreover, GMR materials are radiation-hard, an attractive property that could be exploited for computer memories in satellites.
The importance of GMR materials was recognized immediately at NIST upon their discovery, and NIST has taken a leading role in helping U.S. industry lead the world in this field. Beginning in 1990, NIST set up a major new research program specifically aimed at providing the scientific understanding and measurement capability needed to enable U.S. industry to make the best GMR materials in the world. This program was centered on a new facility, known as the Magnetic Engineering Research Facility (MERF), which is one of the best magnetic thin-film production plants ever constructed.
Over the past few years, NIST researchers have developed the measurement techniques, clarified the scientific issues, and established the manufacturing processes needed to produce the highest quality GMR materials. These NIST discoveries are being transferred to U.S. industry as quickly as possible for implementation in its manufacturing facilities. Among the companies being assisted in the area of computer hard-disks are IBM, Hewlett-Packard, Read-Rite, Seagate, Quantum, Applied Magnetics, and Kodak. In the area of nonvolatile computer chips, NIST researchers are working with Motorola, IBM, Honeywell, and the Defense Advanced Projects Research Agency.
In 1992, the Advanced Technology Program office funded an industry consortium, consisting of the companies mentioned above, to develop GMR materials for use in hard disks. NIST researchers have been working closely with the members of the consortium, and the program appears to be headed for a successful conclusion later this year. GMR technology will be incorporated in the next generation of hard disks, greatly increasing their data storage capability, and maintaining the dominance of the United States in this world market.


The Angel Capital Electronic Network (ACE-Net) is a new resource, available on the World Wide Web, that links small business entrepreneurs in search of capital to accredited "angel" investors - wealthy individuals with business savvy. The service is spearheaded by the Small Business Administration, the Securities and Exchange Commission (SEC), state securities regulators and their organization, and the North American Securities Administrators Association (NASAA). Until ACE-Net, small businesses have been severely limited in their ability to link with angels on a national basis. This innovative network will make it easier for technology companies and investors to improve their access to each other.
Investors and entrepreneurs access ACE-Net by contacting one of the eight regional network participants. These university- or state-based nonprofit organizations are experienced in mentoring entrepreneurs and bringing small companies and investors together. The two network operators open for business today are the Technology Capital Network at MIT, and the Capital Network, Inc., Austin, Texas.
The following network operators will soon open access to ACE-Net:

  • The Accelerated Technology Small Business Development Center at the University of California-Irvine.
  • UCSD-CONNECT in San Diego.
  • The North Carolina Biotechnology Center in Research Triangle Park.
  • The Ben Franklin Partnership in Philadelphia.
  • The Kansas Technology Enterprise Corporation in Topeka.
  • The Advanced Technology Development Center at the Georgia Institute of Technology in Atlanta.

Entrepreneurs most likely to benefit from participation in ACE-Net are looking for $250,000-$5 million of equity type financing - amounts smaller than can typically be raised from venture capital markets. Venture capital experts estimate that each year angels invest $10 billion to $20 billion in nearly 40,000 businesses, compared to the $7.4 billion put up by venture capital funds. Details on how ACE-Net works can be obtained by visiting


In December 1996, the U.S. Department of Energy (DOE), in cooperation with Intel Corporation, announced the completion of the world's first 1-trillion-calculations-per-second computer - breaking the "teraflops" barrier.
This "ultra" computer is part of the department's Accelerated Strategic Computing Initiative (ASCI), which is developing simulation technologies to ensure the safety and reliability of the U.S. nuclear deterrent without nuclear testing. (See vignette on Maintaining the Safety and Reliability of Our Nuclear Weapons, Chapter 3) As part of DOE's ASCI program, Los Alamos National Laboratory in New Mexico and Lawrence Livermore National Laboratory in California are working in partnership with other computer vendors to develop even more powerful computers.
This breakthrough is the culmination of years of effort to reinvent computing. Instead of building a better, faster, single computer processor, which would have been extremely difficult and expensive, the U.S. program relied on so-called parallel architectures. Using this approach, the biggest computers in the world can be assembled from mass produced microprocessors, the "brains" of a computer, which were developed for use in desktop and home personal computers.
The real excitement about the achievement stems from the way it can be exploited to simulate physical processes and complex systems that would otherwise be prohibitively expensive, or even impossible, to explore.
The new machine could also be used for a variety of civilian applications including: simulating disease progression that could help doctors and scientists develop new medicines and drug therapy for debilitating diseases such as cancer and AIDS; tracking severe weather systems to minimize loss of human life and property; mapping the human genome to facilitate cures for genetic-based diseases or birth defects; simulating automobile accidents; and developing environmental remediation methods to clean up and reclaim polluted land.


The time-honored approach to breeding a disease-resistant plant variety - crossing a resistant strain with a disease-susceptible stock - can be hugely successful, but it also can take a decade or more. That timetable is being rapidly revised downward as scientists close in on the ability to quickly breed plants that resist disease. They are learning to slip the required genes into plants that are under attack, or that are even susceptible to a disease known to be making the rounds. Farmers hope these advances will help slash the billions of dollars they lose to crop disease each year ($5 billion for fungal rice blast alone in Southeast Asia, Japan, and the Philippines each year), while reducing their reliance on the chemicals widely used to fight plant disease.
In their quest to learn what makes one plant variety more capable of fighting off disease than another, molecular plant geneticists are identifying and mapping the genes that allow plants to resist the four scourges of field crops: fungi, viruses, nematodes, and bacteria. The research is experimental, as researchers ferret out and copy the disease-fighting genes known as resistance genes. Once a resistance gene is isolated, the researchers can begin to identify the proteins the gene produces. These resistance genes are thought to be early players in the defense game. The genes recognize the invading pathogen, which triggers the host to quickly respond with effective defense measures, often stopping the pathogen and bolstering the plant's resistance to later attacks by other pathogens.
The new molecular advances dovetail with years of applied and basic research that have resulted in maps of thousands of genes that code for diverse traits. In the last two years researchers learned, much to their surprise, that most genes for resistance to different bacterial, viral, and fungal pathogens have common sequence patterns, that is, they encode proteins that have similar structure and thus, may have similar functions. This finding suggests that the disease resistance genes may share an underlying mechanism for specifying disease resistance in all plants. Their similarities mean basic research on one plant/pathogen system will apply to many other systems, and thus may save scientists years of effort in bolstering plants' innate abilities to resist disease. The finding may also speed development of novel strategies for conferring resistance to a broad variety of pathogens.
So far, researchers have isolated and cloned at least 15 resistance genes. In 1994, they came a step closer to cross-species transfer when they successfully isolated and cloned the gene that fights tobacco mosaic virus, which afflicts not only tobacco, but more than 150 other kinds of plants including tomatoes, eggplants, and peppers. The microbe causes vulnerable plants to form a mosaic of yellow and green splotches, and can stunt the plant's growth. Resistant plants, however, quickly kill the cells surrounding the intruding virus, so the infection cannot spread. When researchers from the U.S. Department of Agriculture Agricultural Research Service, in collaboration with scientists from the University of California, placed the gene in tobacco plants highly susceptible to the tobacco mosaic virus, the plants shrugged off attack.

p.53.JPGNew molecular biological techniques are expanding the possibilities for developing healthier, disease resistant plants. The damage caused by tobacco mosaic virus can be readily seen in the tomato plant on the right which lacks the new disease resistance gene.

Encouraged, the researchers braced for the next challenge: inserting the resistance gene for tobacco mosaic virus into a line of tomato plants which are closely related to tobacco and are unusually susceptible to the disease. The experiment worked: the plantlets, when exposed to the virus, proved to be resistant to the virus disease.
The progress is impressive, but so are the challenges. The plant world has yet to yield keys to other mysteries, including how the plants recognize pathogens, and what mechanisms activate the cascade of signals that make up a plant's defense system. Researchers also want to know how cells untouched by the virus particles are alerted to the virus' presence. By some molecular signal, they become resistant, and the plant shows no ill effects from the infection.
"When we know the answer to these questions," says Barbara J. Baker, the University of California plant molecular geneticist who cloned the tobacco mosaic virus, "we can work toward engineering resistance to a broad spectrum of plant diseases. But instead of the traditional breeding process that may take a decade or more and can rarely cross species lines, we will be able to do it genetically, moving genes around and placing them where they do more good. We've waited a very long time to do this, but at last, we have a genetic handle on controlling disease in plants."


The National Medal of Science, established by Congress and administered by the National Science Foundation, honors individuals for contributions to the present state of knowledge in a variety of science frontiers. The National Medal of Technology, established by Congress and administered by the Department of Commerce, recognizes technological innovation and advancement of the nation's global competitiveness as well as ground-breaking contributions that commercialize a technology, create jobs, improve productivity or stimulate the nation's growth and development in other ways.

These men and women have devoted themselves to being the best at what they do. Their vision, their genius, their constant commitment to do their work better have made America a better place and the world a better place. They deserve the highest measure of our respect and praise, and they also deserve our support in following policies that will enable them and those who will succeed them to keep alive the burning torch of research, development, science and technology in the United States for as long as we are here.
--President Bill Clinton
1995-96 Medals Ceremonies


1995: Roger N. Shepard; Stanford University
For his work on the human mind's perception of the physical world.

1996: Paul A. Samuelson; Massachusetts Institute of Technology
For his contributions to economic science and policy over six decades.

1995: Alexander Rich; Massachusetts Institute of Technology
For his fundamental contributions on the structure and function of DNA and RNA.

1996: Ruth Patrick; Academy of Natural Sciences, Philadelphia
For her research on ecology and biodiversity of aquatic life.

1995: Thomas R. Cech; University of Colorado
For his discoveries on RNA catalysis.

1995: Isabella L. Karle; U.S. Department of Navy, Naval Research Laboratory
For her work on molecular structures by x-ray analysis.

1996: Norman Davidson; California Institute of Technology
For his contributions to understanding the informational properties of DNA.

1995: Hermann A. Haus; Massachusetts Institute of Technology
For his contributions to quantum electronics and ultra-fast optics.

1996: James L. Flanagan; Rutgers University
For his contributions to speech communication research and telecommunications technology.

1996: C. Kumar N. Patel; University of California, Los Angeles
For his contributions to quantum electronics and the invention of the carbon dioxide laser.

1995: Louis Nirenberg; New York University
For his contributions to linear and nonlinear partial differential equations.

1996: Richard M. Karp; University of California, Berkeley and University of Washington
For his research in theoretical computer science.

1996: Stephen Smale; University of California, Berkeley and City University of Hong Kong
For his contributions to mathematics in the fields of differential topology and dynamical systems.

1995: Hans G. Dehmelt; University of Washington
For his achievements in measuring the magnetism of the free electron and positron.

1995: Peter Goldreich; California Institute of Technology
For his contributions to planetary sciences and astrophysics.

1996: Wallace S. Broecker; Lamont-Doherty Earth Observatory, Columbia University
For his contributions to understanding ocean circulation and global climate changes.


1995: IBM Team: Praveen Chaudhari,
IBM Thomas J. Watson Research Center; Jerome J. Cuomo, North Carolina State University; Richard J. Gambino, State University of New York at Stony Brook
For their discovery of amorphous magnetic materials, the foundation of the worldwide magneto-optic disk industry.

1995: 3M
For its many innovations and breakthrough technologies over the decades.

1995: The Procter & Gamble Company
For developing and applying advanced technologies to consumer products.

1995: Edward R. McCracken; Chairman and CEO, Silicon Graphics, Inc.
For his ground-breaking work in 3D visual computing and supercomputing technologies.

1995: Sam B. Williams; Chairman and CEO, Williams International Corporation
For his achievements in gas turbine engine technology and for his leadership in the jet aircraft industry.

1996: Charles H. Kaman; Chairman, President, and Chief Executive Officer, Kaman Corporation
For his work in the field of rotary-wing flight and technology transfer from defense to commercial use.

1996: Stephanie L. Kwolek; Research Chemist (Ret.) and Consultant, DuPont Company
For her contributions to the discovery and development of high-performance aramid fibers.

1996: Peter H. Rose; President, Krytek Corporation
For his leadership in the development and commercialization of ion implantation products aiding the manufacture of semiconductors.


1996: Johnson & Johnson
For a century of innovation in the research and development of products critical to managing disease.

1995: Alejandro Zaffaroni; ALZA Corporation.
For his technological accomplishments in the field of drug discovery.

1996: James C. Morgan; Chairman and Chief Executive Officer, Applied Materials, Inc.
For his leadership in developing U.S. semiconductor manufacturing equipment.

1996: Ronald H. Brown; U.S. Secretary of Commerce, 1993-1996
For his vision of American global technological leadership, his tireless advocacy of research and development for economic growth and higher living standards for all, and his energetic efforts to champion the innovative spirit of the American people.



  • Advanced Technology Program
  • Partnership for a New Generation of Vehicles
  • Environmental Technologies
  • DOE's Industry of the Future Program
  • Energy and Renewable Energy Research
  • Intelligent Transportation Systems
  • Aeronautics Enterprise, Space Enterprise,
    and Goals for a National Partnership in Aeronautics Research and Technology
  • Commercial Remote Sensing Construction Technologies
  • NASA Commercial Technology Program
  • Manufacturing Extension Partnership
  • National Technical Information Service
  • Biotechnology and Medical Research
  • Agricultural Research
  • Public-Private Technology Partnerships
  • Federal Patent Licensing
  • Cooperative Research and Development Agreements


  • Deficit Reduction
  • Research and Experimentation Tax Credit
  • Joint Production Amendment to the National Cooperative Research Act
  • National Institutes of Health Reasonable Pricing Clause
  • Telecommunications Reform
  • North American Free Trade Agreement (NAFTA)
  • General Agreement on Tariffs and Trade (GATT)
  • Summit of the Americas
  • Asia Pacific Economic Cooperation
  • Export Control Reductions
  • International Telecommunications Agreement


  • National Information Infrastructure
  • Global Information Infrastructure
  • Telecommunications Information Infrastructure Assistance Program
  • High Performance Computing and Communications Initiative
  • Intelligent Transportation Systems
  • Patents, Trademarks, and Intellectual Property


Table of Contents

Cover Page

Title Page

Letter from the President to Congress

Letter from the Director of OSTP

Introduction and Overview

Chapter 1

Chapter 2

Chapter 3

Chapter 4

Chapter 5

Chapter 6


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