The Endless Frontier Act and charting a direction for technology policy

One of the long-standing issues in technology policy is improving the process of turning new technologies into economic activities. While often referred to as technology transfer, the concept of “translation research” has taken hold as the key component of the innovation model. It is at the heart of the so-called “valley of death” where, in the linear model of advancing from the results of basic research to technology development to commercial product, the process falls short. Under this model, funding is available from mostly public sources for the first stages. Basic and some applied research is seen as a public good which by its very nature cannot attract adequate private funding. Private funding is available for the later stages of technology development when a working prototype or some other form of proof of concept is available and a company can take the technology to a commerializable scale. The lack of funding for the transition stage [the translation of an idea to a product] creates this valley of death where the technology is no longer a pure public good nor a purely private good (capable of generating a return on investment). [Note for my critique of the linear model, see here.]

A key issue then is who should fund and undertake this translation research.

Earlier this year, a bipartisan, bicameral group of legislators [Senators Chuck Schumer (D-NY) and Todd Young (R-IN); Representatives Ro Khanna (D-CA) and Mike Gallagher (R-WI)] introduced a bill to increase investment in technology development and commercialization. The Endless Frontier Act (S. 3832 and H.R. 6978) would expand the National Science Foundation (NSF) into the National Science and Technology Foundation by creating a Directorate for Technology with a budget of $100 billion over five years ($20 billion per year) to fund university-based technology development (see summary here). [Note that the entire FY2020 NSF budget is $8.3 billion.]

While the goal of increasing investment in technology development and commercialization is laudable, questions have been raised as to whether the Act is the best structure to achieve this goal.

One such critique is by three long-standing respected technology policy experts, Patrick Windham, Christopher Hill, David Cheney. [In the interest of full disclosure, I should point out that they are long-time friends and colleagues.] Published in the Summer 2020 edition of Issues in Science and Technology, their article “Improving the Endless Frontier Act” argues to let NSF be NSF and not task it with something beyond its ken. They argue instead for an expansion of Defense Advanced Research Projects Agency (DARPA)-like organizations within mission-oriented agencies.

The heart of their argument is the difference between science and engineering and the role of the research university in the innovation process:

“In the first place, most radical new technologies in recent decades have come from solutions-driven engineering work funded by agencies such as DARPA and NASA or from companies driven by market opportunities. On the government side, DARPA has played a decisive role in developing advanced materials, the personal computer, the internet, and more recently advanced prosthetics and RNA vaccines. Several government organizations, in particular the Naval Research Laboratory, were central to the development of the Global Positioning System. Government technology agencies draw on important fundamental research funded by NSF, and they themselves also fund additional university research in support of their technological goals—but as part of larger R&D programs that fund a wide range of R&D performers, including companies that often go on to commercialize these new technologies. University discoveries contribute to such work, but university research alone did not create most of the radical new technologies of our time.

Although the incentives and capabilities at universities and at NSF itself are well-aligned with basic research and open publication, universities are not equipped to undertake large applied engineering projects, much less to translate the resulting new technologies into products and processes. Putting universities in the lead on technology development misunderstands both their role and their capabilities in the innovation system. It would also risk diluting the valuable basic research role that universities and NSF play.”

I have been supporter of the “civilian DARPA” approach going back to my days as a staffer to Senator Jeff Bingaman. I remember well (as will the article’s authors) the debate between the Advanced Civilian Technology Agency (ACTA) and the Advanced Technology Program (ATP) in what became the Omnibus Trade and Competitiveness Act of 1988. For a number of reasons, the program approach (ATP) prevailed over the agency approach (ACTA).

Since that battle, thinking has shifted from the creation of a single civilian DARPA to multiple agency/technology entities. Over the years there have been numerous calls for the creation of DARPA-like entities to address technologies ranging from education to cybersecurity.

As the article notes, the Advanced Research Projects Agency-Energy (ARPA-E) at the Department of Energy is an example of a successful mission-oriented entity. Created in 2009, ARPA-E funds (according to their website) “high-potential, high-impact energy technologies that are too early for private-sector investment.” Funding spans the range of energy technologies from energy generation to storage to use.

One must be careful however not to assume that any DARPA-like sounding agency in fact operates like DARPA. An example is the question whether the Biomedical Advanced Research and Development Authority (BARDA) is truly a DARPA-like entity. Unlike DARPA or ARPA-E, BARDA has a much more limited technological focus. Part of the Department of Health and Human Services (HHS) Office of the Assistant Secretary for Preparedness and Response, BARDA “supports the transition of medical countermeasures such as vaccines, drugs, and diagnostics from research through advanced development towards consideration for approval by the FDA and inclusion into the Strategic National Stockpile.” Think anthrax, Ebola, Zika as well as COVID-19. [It should be noted that DARPA has an active Biological Technologies Office.]

BARDA also has unique authorities. It has both a R&D and an operational role. In its R&D role BARDA not only provides funding for development of new vaccines and other medical countermeasures, it also helps guide those products through the FDA approval process and the manufacturing scale-up phase. Operationally it is the lead government agency for procurement and stockpiling of these products. Thus, it is a unique combination of developer and customer.

Given the challenge of designing a successful organization, I would recommend that the Government Accountability Office (GAO) be tasked to undertake a more detailed analysis of DARPA, ARPA-E, and BARDA to distill lessons learned. A starting point might be a re-review of a 30-year-old but still relevant discussion of the underlying issues by Alic and Robyn entitled “Designing a Civilian DARPA.”

In addition to increasing DARPA funding and creating DARPA-like (ARPA-E like) agencies, the authors proposal set up a Technology Frontier pilot program in NSF and Increasing funding for the existing Manufacturing USA institutes.

I strongly support increased funding for the Manufacturing USA institutes.

But I’m a little unsure of the need for a Technology Frontier pilot at NSF.

Somewhat surprisingly, the article (nor as far as I can tell any other discussion of the Act) never mentions existing NSF programs geared toward doing exactly what the Act hopes to accomplish. NSF’s Engineering Research Center (ERC) program has been around since 1985. ERCs are university-based, multi-institution consortia that undertake interdisciplinary research and technology translation activities. According to NSF, the program has funded 75 ERCs and resulted in over 200 spinoff companies and over 850 patents. Some ERC outcomes include minimally invasive surgery technologies and high-speed internet technologies. Recently NSF announced $104 million in funding over 5 years to support 4 new centers in the areas of cryogenics for biological systems, electric vehicle re-charging technologies, quantum networks, and Internet of Things for precision agriculture.

A few years ago, the National Academies did a study on the future of the NSF’s Engineering Research Centers. Their report called for shifting the direction of these centers to transdisciplinary convergent research focused on the Grand Challenges for Engineering. NSF embraced this concept, embedding convergent research  into to its plans for funding Gen-4 Engineering Research Centers. NSF  also established a Convergence Accelerator (C-Accel) program focused on transitioning research  into practice. The 2019 program pilot provided $39 million to 43 teams in two topic areas: Harnessing the Data Revolution and the Future of Work at the Human-Technology Frontier.

Rather than start up another new pilot program, I would suggest building upon and expanding the ERC/C-Accel programs.

One final point. The authors also critique the proposal for pre-determining which technologies should be supported. I agree that it is all too tempting to build political support by targeting the hot new technologies of the day as opposed to letting the funding follow the technology:

“The US government actually has a better way to identify and fund promising new areas of research and technology. National leaders set overall priorities while researchers and agency experts scan for new scientific and technical opportunities and propose new R&D directions. Then agency leaders and, for big initiatives, the White House and Congress vet these ideas and decide which to support. The result is a flexible federal system that identifies new opportunities, reviews them, and creates a diverse and high-quality portfolio of R&D programs.

The top-down portion—statements of overall national priorities—consists of annual White House memoranda on presidential R&D priorities (including one for fiscal year 2021), agency planning documents, and congressional laws. The bottom-up portion is a remarkable American strength. Instead of looking only at current technologies, researchers and agency technical experts constantly scan for the next big things in their fields and propose new initiatives. Sometimes agency directors directly evaluate these ideas and decide which to support, as was the case with the National Nanotechnology Initiative. Sometimes NSF workshops and National Academies meetings test and refine new R&D proposals before policy leaders consider them, as with Academies reports that help set priorities in chemistry, space sciences, and other fields. Some of the resulting investments are large, such as multiagency initiatives in high-performance computing and nanotechnology, while many others are smaller or even experimental “seedling” projects. By funding a wide range of existing and new R&D areas—funding an overall R&D portfolio—federal agencies do not just develop today’s technologies; they also begin investing in the technologies of the future. Confining technology development support to a relative short list of predetermined areas that can only be updated every four years or so seems sure to result in a system far less dynamic than the current one.”

[I would just add a note that this is related to but does not directly addresses the other debate over R&D funding: curiosity-driven versus use-driven research. See also Pasteur’s Quadrant and Highly Integrative Basic and Responsive (HIBAR) research.]

Let me conclude by lauding the efforts of Senators Schumer and Young and Representatives Khanna and Gallagher. It is my hope that the Endless Frontier Act will spur action toward increasing funding for the critical task of commercializing new technologies. It is also my hope that the Act will spur a vigorous and productive debate over how to best channel that investment. The article by Windham, Hill and Cheney is an important part of that debate.

COVID-19 and the ventilator surge

This spring saw an example of an industrial surge capacity as companies such as Ford and GM revamped factories to produce medical ventilators to respond to the COVID-19 pandemic. While the pandemic rages on, enough time has passed that we can look back at the surge and ask whether it was a success or failure. The answer is clearly yes – as this article from today’s Washington Post illustrates. The surge produced a lot of ventilators (so it was a success); too many in fact (so it was a failure according to some).

The ventilator case (which I’m sure will end in business school courses) illustrates both the strengths and weaknesses of the surge process. Successful surge requires a high level of adaptability. Such adaptability is beneficial for normal operations in a rapidly changing market environment. However, an ad hoc surge process risks the overcommitment of valuable resources. Having contingency plans that can be adapted to the situation would more effective and efficient.

Digital Divide déjà vu

The Digital Divide is back! While the divide never really went away, the coronavirus pandemic has refocused attention on the gap between the digitally connected haves and have-nots. As a report from the Government Accountability Office notes:

The recent outbreak of the Coronavirus Disease 2019 (COVID-19), a fatal and highly communicable disease caused by the coronavirus, across the United States and the resulting limitation of large gatherings have reinforced the importance of access to broadband. Many health care systems, government entities, businesses, educational institutions, restaurants, and other merchants have transitioned some or all operations online to minimize interpersonal contact and help slow the spread of the disease. Lack of access to broadband poses challenges to accessing telemedicine, telework, remote instruction, and resources for home schooling, as well as e-commerce. Because broadband has become increasingly critical to economic opportunity, jobs, education, and civic engagement, those without access are unable to enjoy the social and economic benefits of broadband.

The concern is especially high now that schools are attempting to re-open on-line. As Brookings’ Nicol Turner Lee puts it:

Many school districts have announced plans to either go completely virtual or implement a hybrid model of both in-person and distance learning. But if the last few months are any indication of most schools’ effectiveness in deploying remote learning, minority and rural students, especially those from impoverished public schools, will lose the race to educational and social mobility outcomes. 

If all of this seems familiar, it is. Twenty years ago, I hosted a conference on “New IT – New Equity – New Economy.” The purpose of the conference was to broaden the conversation beyond the narrow digital divide focus on access to the Internet. I believe the insights from that conference, published as a report Inclusion in the Information Age are still relevant today.

Given the richness of the discussions, it was not appropriate to draw any final conclusions. Rather, the conference summary offered “points to consider.” The following are those points as published in the report:

Point one: Focus on the transformation, not the technology.  

 At its heart, the issue of the “digital divide” is not simply a question of technological deployment. The broader issue concerns the transformation to what, for lack of a better term, we call the Information Age. The end purpose is not to narrow some gap, but to ensure that everyone has access to the expanded opportunities. Our framework should be one of inclusion for all in the broader activities that make up society and the economy. Our goal should be to facilitate the transformation to help everyone participate in civic and economic activities, however those activities are carried out in this new information age.  

 Point two: Review and coordinate efforts.

The problem has aspects of telecommunications policy, such as infrastructure and standards, and elements of technology policy, such as research and development and technology deployment. It also draws from information policy in the areas of content. But it also has aspects of policies on training and workforce development, education, economic development, housing and community development, human services and trade.  

 Reaching our goal requires a coordinated approach – in the private, public and non-governmental sectors – that combines the various elements of providing opportunity and inclusion in the information age.  

 In terms of governmental policy, this means that the focus of digital opportunity efforts should be the White House, not any one department or agency. Since the issue spans agency boundaries, the point for coordination of efforts must be the National Economic Council (or whatever structure the President chooses to coordinate policy at the White House). The bully pulpit of the Presidency should be used to highlight local community initiatives and promote government and private sector programs.  

 It is also time to take a new look at some policy areas. For example, a comprehensive approach is needed toward all parts of managing the information commons: privacy, intellectual property rights, “right-to-know” policies and other related areas.  

 Point three: Work to ensure that everyone has access to the technological infrastructure.  

 As discussed throughout this report, barriers to access to the infrastructure are many. Ways of overcoming those barriers are also varied, including public access facilities that can combine access with training and other activities, as well as home access.  

 With respect to access in the home, we must return to the question of universal access. The concept of universal access is built on the notion of a necessary public utility that requires government action to ensure that it is available to all. As the convergence of telecommunications and media takes place, is IT and the Internet more or less a public utility? And if so, what is the role for the government in guaranteeing universal access? We need to re-look at the concept of universal access in light of the coming convergence.  

 The development of broadband capabilities around the country is rapidly becoming a predicate for access – both at home and at work. Some worry about an over-built broadband system.57 Tell that to the millions of people in rural America and the inner cities who don’t have access to broadband – and to those who struggle to get POTS (plain old telephone service).  

 Since the conference, a number of competing proposals have come forward to facilitate the development of broadband. It is beyond the scope of this report to examine those proposals. However, as part of our discussion of universal service, we should examine our goals for broadband deployment. For example, Canada has committed to having broadband reach every community by 2004. The goal is to utilize the technology for on-line education and health care, especially in rural areas – and to help Canadian small- and medium-size businesses compete.58 Whether or not the Canadian model is applicable here is an open question. It is, however, a question that should be discussed.  

 It is important to recognize that there is no single model for the places where the public may gain access to the new IT infrastructure. Both home use and public access points are important. Multiple access public points are needed, such as existing public facilities, training centers, libraries, and after-school centers. For such public access sites, maintenance and on-going operational support is a must. This includes mundane issues, such as security, janitorial support, utilities as well as the more IT specific, such as network administrators and other technical support personnel. We need to bolster and expand programs, such as those at the Commerce and Education Departments, which support these activities.  

 Beyond support for on-going operations, there is the issue of funding for organizational development. There are many community efforts throughout the country to promote access, all of which struggle with organizational problems. Sustainability is the key. A grant here and there from the government and foundations is not enough.  

 The bottom line is not just access to information technology, but the utilization of that technology by organizations and individuals to better peoples’ lives. We must work to weave information technology into the operations of community groups in a way that will both help individuals use the technology and will make those groups more efficient and effective in their core mission.  

 Some of the barriers to digital inclusion are physical: the usability of the technology. This is not, as commonly thought of, an issue only for those with disabilities. The problems of usability and human-machine interfaces affect all of us. Surveys show that one major reason people do not use computers and the Internet is that it is too difficult. Research on ways to increase access for those with disabilities will pay off in increased usability for all. Recent Federal rules require that government web sites be accessible to the disabled. We need to build upon these efforts to make usability and accessibility part of all web sites, and a regular part of a good web design training program.  

 Point four: Encourage and facilitate participation and involvement by all in the digital economy and information society.  

 Participation and involvement begins with the usability of the technology. Technology must meet people’s needs – not define those needs. Information technology can help people in their day-to-day lives if it is designed and structured in such a way that it helps answer their questions and solve their problems. Otherwise it becomes a barrier and a source of frustration. This is the danger of what some refer to as the “over-wired” world.  

 It is important to understand that individuals have different needs. A one size- fits-all may help some – and increase their participation and involvement – but will block others. By focusing on “demand-pull,” rather than “technology-push,” we can better tailor the technology to meet individual needs.  

 Development of meaningful content is one of the ways to increase the level of participation. Involvement will increase as compelling content is available. For example, information on health care is a major draw for many. Increased educational content and help for parents and teachers in using that content is another way of promoting utilization. The other way to increase participation is through support for the development of locally-based content. Not only does locally-based content give individuals a reason to participate, the process of creating community-relevant content itself stimulates involvement. Some foundations have stepped up to this task. But more can and should be done by both the public and the private sectors.  

 In the area of e-government and political participation, the question of involvement and access takes on a special significance. We need to make sure that egovernment is available to all. If a government (Federal, state or local) is going to deliver services or make information available through electronic means, then it is incumbent that the government promote access for the purpose of allowing these services to be widely delivered to everybody in the community. No services or information should be removed or dramatically cut back from traditional means of dissemination in favor of electronic dissemination until and unless all members of the community have access to that electronic means as easily as they have to the traditional means.  

 Point five: Focus economic development on the Information Economy, not the Internet Economy.  

 The information age will require a new approach to economic development. It is not about replicating Silicon Valley. It is about helping existing businesses and existing (and potential) entrepreneurs become more competitive by using technology. Key to the process is using and developing assets: financial, social, skill-based, and information assets. We must focus on building the local economy’s vitality and ability to compete in the age of globalization and help people make the switch to the new economy. One of our first tasks should be the development of processes for identifying and assessing local assets.  

 Revitalized programs for training the existing workforce should also be a top priority. Training programs should not be only for those who are laid off or are looking for a job. The new information age requires constant updating of skills. On-the-job training and incumbent worker training must be a large part of our workforce development activities. We must also expand our focus on all the various levels and forms of literacy and basic skills, including critical thinking skills.  

 We need special emphasis on how SMEs are making use of information technologies. It’s relatively easier for large firms, compared to small businesses, to incorporate new technologies into their operations. One idea that surfaced at the conference was to support mechanisms for collaborative learning amongst companies looking at the comprehensive use of information technology in small business.  

 We also need to foster entrepreneurship at all levels. New technology-creating (“high-tech”) businesses are important – but so are new businesses that use the technology. New entrepreneurial opportunities arise from the economic assets and the market demands of an area. Those may be high-tech based or not. The important point is not to replicate someone else’s strategy, but to grow the economy from the local assets, whatever they may be.  

 New innovative financial mechanisms are needed, both for dealing with “intangible” assets and to reach out to those communities left behind. Individual Development Accounts, micro-loans, and the New Markets Initiative in the FY2001 budget deal are cases in point. The New Markets Initiative is an example of a true bipartisan effort, which the Bush Administration and Congress would do well to emulate and build upon.  

 Collaborative learning and sharing of information is also important in the larger process of economic development. There are a number of examples of information assets being applied within businesses and local economies: the example given at the conference of ACEnet is a case in point. Economic development is an information intensive activity. We need to utilize new knowledge management techniques and old-fashioned communications techniques to collect, disseminate and better utilize that information.  

 Point six: We need a better understanding of what is going on.  

 One of the frustrations many people felt during the conference was based on their inability to describe what was happening in the economy. Since the date of the conference, the debate about the “old” and “new” economy has only sharpened. The concern is especially heightened in local economies. As one conference participant put it, “we’ve been gathering the same old data about the state of local economies in the same old way for 30 to 40 years and we haven’t caught up with the real trends and the underlying issues in local economies.” We need to re-look at the data needed for economic development in the information economy.  

 The problem of data extends beyond the scope of local economic data. We need both better data and expanded analysis of the socioeconomic aspects of the information technology. To quote the National Academy of Sciences:

Despite the significance of these impacts [of information technologies] for society, there has been relatively little investment in research to help understand, predict and shape them.60 We need to make those investments.  

 Expanding social science research is not enough. That research must be translated into policy relevant terms. In a cost-cutting effort in the 1990s, Congress eliminated the Office of Technology Assessment (OTA). This may turn out to be an example of false economy. OTA was widely praised as an authoritative and nonpartisan source of information on a variety of technology related issues. Congress should seriously consider re-establishing this agency.  

 Point seven: The decision-making process must be open.  

 True inclusion and opportunity can only occur in if the process of decision making is open and transparent. Information technology has a tremendous potential for opening and maintaining channels for general input and advocacy. However, decisions made about the technology can have the effect of closing off the process rather than opening it up. We must insure that all parties are at the table when decisions, including issues such as standard setting, are made. As noted earlier, having people with grass roots experience in on the discussions would greatly enrich the process. Everyone – the innovators and social entrepreneurs as well as “everyday people” – should be included.  

 The decision-making process will also affect the future development and utilization of information technology. Issues of trust, such as privacy and security, are key factors in that development. An open and transparent decision-making process will help foster trust and thereby foster technology utilization. A closed process will retard future development.  

 The need for an open process extends beyond the actions of the government. In America, we value and respect the rights of private citizens (individual and corporate) to conduct their business in private. However, the freedoms which are associated with the marketplace also need to be accompanied by responsibility. Issues of corporate responsibility are moving higher up on the agenda in connection with the issue of globalization. Some conference participants suggested that we need to start a national dialogue about corporate responsibility in the information age.  

 Point eight: Innovate and experiment.  

 We are in a time of transformation and change. The speed of that change and the pace of economic activity will vary. Yet the change is real and will continue.  

 In such a time, we must often invent new ways of coping with our problems and new policies for guiding our economy and society. This does not mean that we should throw out the old models and values. On the contrary, we should build upon what we cherish and what has worked in the past. But we cannot be bound by the constraints of “that is the way we always did it.”  

 In the area of public policy, we need to view our activities and programs as a series of experiments. As June Holley noted:  

Policy needs to be much more rapid – prototyping, we call it. So you get some innovations happening out there, and then you set up an environment when you can learn from those innovations…and begin to build sort of this moving wave of policy in that fashion.

 Such experimentation will require great policy discipline, however. It will require the ability to drop a policy or program when it is not working – regardless of how hard we fought for it in the first place. It also requires accepting and expanding a policy or program that work – no matter how much we opposed it originally. It also requires a strong, unbiased means of evaluating programs and policies. We must support and strengthen those organizations and institutions that undertake such evaluation.  

 We must also find means to ensure that the evaluations are timely for the fast-moving policy arena. The goal in evaluation is not simply proving the effectiveness of an action – it is to facilitate learning. Learning is the hallmark of the Information Age. Our public policy process must embrace that concept as tightly as the rest of our economy and society already have.

July employment data

This morning’s employment data shows both strengths and vulnerabilities.

BLS reported that employment in July rose by 1.8 million, in line with expectations of an increase of 1.7 million jobs. [Reminder that these are not all “new” jobs but workers being called back to work.]. Employment in both tangible and intangible producing industries rose. Similar to June (but at a smaller scale), the biggest increases were in industries where there is physical presence with customers. Increases occurred tangible services of personal services and, to a lesser degree in accommodation & food services, and in the one intangible service that requires physical presence: arts and entertainment. As I noted last month, these industries are also the ones most vulnerable to a re-closure of the economy.

Almost all other industries saw more modest gains. However, information services and telecommunications employment declined. Employment in nursing and residential care facilities continued to drop dramatically.

Bottom line: under normal circumstances, this would be a stellar increase. However, in the age of COVID-19, this is only a modest rebound in employment. Much more needs to be done.