The majority of our proposed CRADAs with Sandia are semiconductor related. AT&T is one of our most capable competitors in semiconductors, particularly in DSPs (Digital Signal Processors). Motorola could find itself in the position of initiating a joint program with Sandia, leading to Sandia patents which were available to AT&T but not to Motorola. At the very least it prevents Motorola from negotiating for an exclusive license to patents based on work we helped perform. We will not participate in a CRADA under such circumstances. Problems resulting from the length of time it takes to negotiate a CRADA have resulted in Motorola dropping certain CRADAS. In the case of the Nanocrystal CRADA described above, Motorola was still willing to participate after twenty months of waiting. This is not generally the case. We abandoned one CRADA proposal with Sandia after five months of negotiations, because the Motorolans involved could not wait for the negotiations to be completed. The proposed CRADA would have had Motorola researchers work with Sandia researchers on some novel Gallium Arsenide transistor structures of interest to both groups. These structures are expected to result in circuits which will have very low power consumption compared to conventional structures. Sandia had certain equipment and deposition experience which would have made the prototyping of some of these structures possible. However, the Motorolans involved had a specific time schedule for the circuit development. As the negotiations dragged on for months, they found another, less satisfactory way of completing their experiments. Some structure needs to be in place so that CRADAs can be negotiated and begun in weeks, rather than months, or much of the usefulness of the National Labs to industry will be wasted. Argonne National Laboratory As described in the initial section, Motorola is a very decentralized company, with little Corporate oversight or control over individual managers. It occasionally may happen that an individual lab manager seeking to perform a CRADA may not be aware of the regulatory and accounting burden which he or she is accepting. This has led to some problems at Argonne. The Quartz Crystal organization of the Components Products Sector of the Paging and Wireless Data Group, as an entity within Motorola, sought to set up a CRADA with Argonne to utilize the modeling expertise there in the design of complex quartz crystal devices for use in communications equipment. The combination of our experimental capabilities in the field with Argonne's computational abilities would benefit both organizations. Just prior to the signing of the CRADA, the lab manager involved became aware of the legal responsibilities he was accepting, and quickly stopped the CRADA. As described earlier, Motorola is much like a small company in that there is little formal accounting done at the individual lab level. The lab manager would have been committing to provide like kind work which he could not document, and hence could have been held criminally liable during an aggressive post-audit years in the future. The solution to this problem may simply be for Congress or DOE to simply specify how like kind work should be measured. Los Alamos National Laboratory Motorola currently has only one CRADA with Los Alamos, though several of our groups are discussing with them programs. Los Alamos should be commended as being, in our experience, the most pro-active National Lab in efforts at technology transfer and industrial interactions. Motorola and Los Alamos have had numerous meetings, often at Los Alamos' initiation, and their commitment is clear. Proposals for the Subcommittee's Consideration The Subcommittee is already addressing many of the concerns of industry in regard to CRADAS. Specifically, we understand the following initiatives are under consideration: • Give individual DOE labs the authority to enter into CRADAs to improve the CRADA cycle time. • Allocate a specific fraction of DOE funds to technology transfer to encourage such transfer. • Provide for accountability on the part of the lab directors and the DOE in the matters of technology transfer. Motorola agrees with the Subcommittee that some initiatives in these areas would increase the industrial relevance of the National Labs. The following initiatives are offered to the committee in addition to the three mentioned above: • Rights of the contractor in GOCOs. Provide that the contractors in GOCO Labs not automatically receive rights to Intellectual Property created at the Labs under a CRADA. • CRADA language and format. Provide for the general use of the CSPP model CRADA for all high technology CRADAs, replacing the current DOE model CRADA. • Funding Accountability. Provide clear guidance as to how in kind work should be measured in a CRADA. A reasonable suggestion is to have work in kind defined in person-hours, rather than dollars. Employee hours are much more easily monitored and less subject to debate than dollars. Such a change may not require legislation, but may be instituted by the appropriate government agency directly. • Cycle time goals. Motorola has generally found that specific goals often help improve performance. As a part of the accountability of the Labs to the CRADA process, we suggest a goal of four weeks from the agreement between the company and the Lab on the CRADA work statement, and the signing of the CRADA. Adherence to, or progress towards this goal should be part of the performance measurement of the Lab director. Naturally, this will require the empowerment of the Lab director to approve CRADAS, as proposed by the Subcommittee. Such a goal will likely have to be phased in over some period of time, and will require adjustments on both sides. For example, it is unlikely that Motorola itself could complete the process itself in four weeks right now. We believe that with the right plan and the cooperation of DOE, we could do so. We are willing to commit to such a goal, with intermediate goals for a phase in period, if DOE will do so. Conclusions In no cases of my visits to the National Labs have I found technologies simply "sitting on the shelf" awaiting commercialization. I have found excellent technology which, with significant additional work, can be commercialized. Indeed, the term "technology transfer" is somewhat of a misnomer; something along the lines of "technology sharing" might better describe the opportunities presented by the National Labs. This highlights the cooperative nature of National Lab-Industry interactions, and the fact that only together can we increase US industrial competitiveness. Motorola, and industry in general, realizes that we share responsibility for the slow technology transfer from the National Labs. Motorola is doing what it can to improve the situation, as evidenced by my own perseverance in the twenty month effort to enter into a CRADA with LBL. DOE has done some of its part in negotiating the CSPP model, as well. However, there are many things which can and should be done to improve the CRADA process. In our opinion, the seven initiatives outlined above will be major steps in the right direction. In particular, Motorola wishes to work with the National Labs and the respective government agencies to reduce the cycle time for CRADA approval. Motorola commends the Subcommittee for its interest in improving the competitiveness of US industry, large and small, through the use of the National Labs. Council on Competitiveness TESTIMONY OF ERICH BLOCH DISTINGUISHED FELLOW, COUNCIL ON COMPETITIVENESS BEFORE THE COMMITTEE ON SMALL BUSINESS SUBCOMMITTEE ON REGULATION, BUSINESS OPPORTUNITIES, AND ENERGY U.S. HOUSE OF REPRESENTATIVES DECEMBER 4, 1992 I. INTRODUCTION My name is Erich Bloch and I am the Distinguished Fellow at the Council on Competitiveness, a private organization that represents a broad cross section of American business, higher education institutions and organized labor. The Council's purpose is to be a focal point for private sector activities and to work for changes to enhance the country's competitiveness. Before joining the Council, I was the Director of the National Science Foundation (NSF) and before that I was a corporate vice president at IBM. My experiences, therefore, span both the public and private sector of our economy. My concern has been, and remains, the linkage between science and technology and economic competitiveness as well as our need for cooperation between the public and private sectors. our To assure our economic competitiveness, this country needs to take advantage of its resources in both the public and private sectors, to cooperate across the boundaries that separate people and resources--many times this is an artificial separation based on historical reasons--which leads to less than their optimum utilization. To that end, the Council has turned its attention to one of our national resources--the federal labs. It is not an unexplored idea that these laboratories need a new mission, and that their likely customers in the future will not be the military, as in the past, but more and more the civilian sector of our society. I was pleased to chair a distinguished panel for this project which was comprised of members from industry, academia and federal laboratory directors. panel members and our project These 1 900 17TH Street NW Suite 1050 Washington, DC 20006 director, Dan Burton from the Council, who wrote the report, brought varied and in-depth experience to these deliberations. I am equally pleased to testify before this subcommittee and I am encouraged by Chairman Wyden's letter outlining some ideas as to how we may proceed with new policies for federal laboratories and the energy laboratories specifically. II. PROBLEM The end of the Cold War has provided an opportunity to utilize --at least in part--the superb resources that have been built up over years in the federal laboratories, and to address the many technological requirements of the civilian sector. One of these needs is to focus on generic technologies in areas like materials, biotechnology, information technology, manufacturing processes and others. All are useful, not for individual companies, but for whole industry sectors. These multi-disciplinary areas are well represented in the capabilities of the government laboratories. In addition to their human resources, the laboratories have a superb array of expensive facilities, equipment and instruments that could be more intensively utilized by and for the private sector. Then what stands in the way of utilizing these resources to the fullest? There are many reasons: o Industry, in general, is not familiar with the capabilities of the laboratories--and that is especially true for small businesses--or they have been disillusioned because of past experiences. The reverse is also true; the labs are often unfamiliar with industry needs. o The laboratories and industry each have their own set of approaches. They have their own bureaucracies and traditions. Moreover, regulations, often accumulated over decades, make it difficult to quickly come to an agreement on joint projects. Both have different optimization goals to solve technical problems. O Laboratory technology transfer programs are inadequately funded, and, in the case of the department of energy (DOE), the labs do not even have the authority to redirect their existing budget to these activities. To the outside world, this lack of resources signals that technology transfer is not a priority. Many labs tend to view issues related to industrial technology and competitiveness as peripheral concerns rather than as a part of their core missions. Success in technology transfer is not included as part of the labs' reward system. Although some labs have embraced competitiveness as one of their priorities, many |