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End of an Era?

Policy: Bush to reevaluate federal dollars for high-tech program.

As President George W. Bush and Congress battled over tax cuts, an element of the president’s budget that some believe could have a much longer-term impact on America’s economic health went largely unnoticed. Bush proposed to stop funding a landmark federal effort to help risky-and potentially lucrative-technologies out of the lab and into the marketplace: the National Institute of Standards and Technology’s $200-million-per-year Advanced Technology Program.

Created in the late 1980s, the program seeks to ensure the United States’ high-tech preeminence by funding development of cutting-edge technologies in corporate research labs. One notable success is the commercialization of DNA chips, which promise to revolutionize medical research and diagnosis. But now Bush has proposed suspending the program’s funding for the next two years (though outstanding grants would be honored) while the U.S. Department of Commerce, which oversees NIST, reviews its economic and technical impact. The president’s action appears to mark a dramatic turn away from federal support for the development of next-generation technology. While the GOP-led Congress fought to kill the program throughout the late 1990s, this is the first time the White House has appeared similarly disposed.

James McGroddy, former head of IBM research, helped start the program but feels its time has passed. “I was a big promoter of it 10 years ago because it was before the big venture capital explosion,” McGroddy says. “I thought there were a lot of good ideas then that needed help to get over the chasm. That’s not the environment we’ve been in for the last four or five years.” In addition, though the program maintains its own economic assessment office, McGroddy questions whether there has been any comprehensive assessment of the program’s economic impact.

Program proponents, however, call the president’s move outrageous. Johns Hopkins economist Maryann Feldman, one of the outside experts who has conducted studies for the assessment office, says the Advanced Technology Program is “probably one of the most studied programs in government.” Former NIST director Lewis Branscomb says, “The radical innovations that create both new markets and new technology are the toughest to bring off, but if you do bring them off successfully, the returns can be hundreds of times what the investment was. That’s what [the program] tries to do.”

And some, pointing to the proliferation of high-tech competitors overseas, see a danger in compromising the program’s future. “Standing down while you reassess the program, that’s two years of opportunities that aren’t met,” says Arden Bement, the head of Purdue University’s nuclear engineering department and chair of the program’s advisory committee. Bement notes that key program staff are likely to leave in the interim, leading to the loss of three to five years of program effectiveness; this could kill the program more efficiently than any direct political challenge.

If it does, it would mean an end to, arguably, one of the most successful technology collaborations of its time between government and industry.