Federal Labs Open Doors to Industry

PRESIDENT Clinton has a historic opportunity to reshape federal involvement in research and development.

With the end of the cold war, Washington has already moved to make government-operated laboratories more available to the private sector for R&D joint ventures. The new administration aims to go further down this road.

The effort is controversial, however, because it amounts to having bureaucrats bet taxpayer money on a technology horse race. Murray Weidenbaum, an economist who directs the Center for the Study of American Business at Washington University in St. Louis, cites a long history of similarly intended government misspending and misguidance - and not just here.

Japanese bureaucrats tried to discourage Sony from pursuing consumer electronics and Honda from making cars, Dr. Weidenbaum notes. Japan's approach to high-definition television, selected and underwritten by that government, has proven inferior to technology that American companies have developed unaided.

One of the most prominent government-industry partnerships in the United States, and one that is hailed by enthusiasts of such arrangements as a model to follow, is Sematech. The six-year-old consortium brings together a dozen of the largest US makers of computer chips to conduct precompetitive research in advanced fabrication technologies. Half of the $200 million annual cost is paid by the Advanced Projects Research Agency (ARPA) at the Department of Defense.

Sematech was quick to claim some of the credit when the US recently caught up with Japan in worldwide sales of chips.

"Sematech didn't help," scoffs T. J. Rodgers, a vocal critic who is president and chief executive officer of Cypress Semiconductor Corporation in San Jose, Calif. Rather, Mr. Rodgers asserts, aggressive, innovative young companies like his own breathed new life into the industry. And the older "dinosaurs" like Sematech's members decided to wake up and compete.

Weidenbaum agrees that the US rebound was "not especially connected to Sematech's efforts." However, he does find merit in the loosening of antitrust laws that (at no cost to taxpayers) allows companies to cooperate on research.

Jerry Sanders, chairman of Advanced Micro Devices, a Sematech member, says that government funding in partnerships such as Sematech can give the US an edge by helping to accelerate the development of technology.

Under Mr. Clinton's policy, the National Institute of Standards and Technology (NIST) in the Department of Commerce would receive a boost in funding to promote ventures like Sematech.

One that already has ARPA funding and seeks NIST money as well is the Composites Automation Consortium. Consortium president Leiv Blad explains that makers of products from composite materials "really weren't driven by cost and market forces" back when the Defense Department was buying all their output. That market is drying up, so now the consortium members such as Dow Chemical and Lockheed want the government to help develop cost-saving machinery so it can compete in commercial markets.

CLINTON also wants more money for the national laboratories, which developed nuclear weapons and did civilian research in areas such as energy and space exploration. The president said the labs should allocate 10 to 20 percent of their roughly $22 billion budget to joint research ventures with private companies.

"You'll find a lot of the labs are either there or above that," says Alan Schriesheim, director of Argonne National Laboratories outside Chicago. Congress has passed numerous laws to enable the private sector to benefit from research at the national labs. Argonne alone has spun off 30 companies to commercialize its research. Dr. Schriesheim says he expects Clinton to make the process even easier, but that the resulting increase in joint research will be "evolutionary and not revolutionary."

Weidenbaum recommends privatizing the labs, saying that then business would be more likely to use them to design new products.

Andrew Grove, the chief executive officer of Intel Corporation, the leading chipmaker, suggests cutting the national labs' budget by 50 percent. "They're doing cold war stuff," he says.

Sandia National Laboratories in Albuquerque, N.M., is one of three national labs that used to be devoted to nuclear weapons. Some of that work must continue, spokesman Rod Geer says. But already, Mr. Geer says, more than half of Sandia's research concerns other fields. The lab has 95 cooperative research and development agreements with private companies, including Sematech.

Gordon Bell, former head of engineering at Digital Equipment Corporation, is "adamantly against the national labs." But Danny Hillis, founder of Thinking Machines, calls them "a source of great technological expertise. To throw out these institutions would be to throw away a national asset."