Federal Research Establishment in Need of Some Spinoff Control

Perhaps you thought the end of the Cold War had zapped the multibillion-dollar “Star Wars” Strategic Defense Initiative smack out of budgetary existence. Hardly. A leaner, meaner SDI now lives on as BMDO--the Ballistic Missile Defense Organization--and as the most blatant example of how Cold War technologists are pushing economic competitiveness as a reason to keep themselves in business.

While BMDO has yet to produce any effective ballistic missile defense capability to protect the United States, it has produced a beautifully illustrated report summarizing its manifold contributions to enhancing America’s commercial technologies. BMDO’s latest Technology Applications Report proffers a colorful array of technical innovations, ranging from niobium superconducting RFQs (never mind the acronym) for producing better particle beams to silicon carbide dynamic random access memory chips to optical scatterometers.

“The Ballistic Missile Defense Organization recognizes that one of the most efficient ways to incorporate innovation into the nation’s economy is to transfer federal technology--developed by matchless expertise--into American business,” proclaims the report.

Welcome to the “spinoffification” of America’s federal research establishment. From Lawrence Livermore to Los Alamos to the Jet Propulsion Laboratory to Brookhaven, national laboratories that once prided themselves on their missions and world-class research capabilities have desperately been scrambling to promote themselves as vital sources of commercial spinoffs.

Paradoxically, spinoffs have become central to how the labs now try to define themselves; they’ve gone from welcome byproduct to essential goal. Every lab wants its own Tang. Economic relevance has become the order of the day.

*

“This is what they think is their route to survival in an era of diminishing federal funds, and they’re promoting themselves accordingly,” observes Michael Odza, editor of Technology Access, which tracks technology transfer in the commercial, academic and governmental worlds. “The publicity machine is the first thing to get cranked up.”

Odza estimates that the Cold War-funded federal labs have been sending out “10 times more material . . . an order of magnitude more” than they did during the 1980s to sell themselves to Congress and the business community as wellsprings of commercial innovation.

This should hardly come as a surprise. For many of the nation’s labs, contributing to economic competitiveness or helping clean up the environmental messes they helped make is probably the best shot they have at justifying their existence. Publicizing and celebrating their expertise--and inviting partnership and support from the private sector--are all reasonable things to do when you’re worried about survival.

The problem is, does it really make sense for taxpayers--and for the labs themselves--to spend billions to re-engineer these 30-year-old-plus institutions around the promises of commercialism? Should they be America’s National Labs or primarily National Science & Technology Subcontractors for Private Industry? Precisely which industries should be defining science and technology goals for the labs?

The spinoffification of the labs has blurred what should be an important debate about the role of government in funding America’s innovation infrastructure. Too much time, money and effort is being spent on trying to turn the National Labs into engines of commercialism, and not enough thought is going into what kind of science and technology the federal government should be supporting. Whatever industry wants? Whatever Japan or Europe might be beating us in? Spinoffification has unfortunately kept the focus on transforming existing institutions rather than creating new opportunities.

*

Take the Department of Energy, for example, which oversees $30 billion worth of national labs. Living up to its name, DOE has been very energetic recently in promoting its labs as partners for industry. “We really were behind the learning curve of other agencies in this,” acknowledges Roger A. Lewis, who directs DOE’s Office of Technology Utilization. “We very much recognize that we need to change the culture of the labs so they can be better partners.”

To its credit, DOE has been quite aggressive in soliciting feedback from industry on its cooperative research and development agreements. Unfortunately, most of that feedback reveals that the labs are not very good at being partners with industry.

The labs collectively have a long way to go. Some labs do better than others, but what DOE really has is a portfolio of diverse institutions that never had technology transfer as a core value. Many of the people who joined the National Labs did so precisely to avoid having to deal with the constraints of commercial enterprise. These Labs simply weren’t designed to be transformed into quasi-commercial endeavors. How long do we give them to deliver the goods?

This push toward spinoffification isn’t “a sham or a cover,” asserts Jerome A. Moch, an executive with Motorola University, the high-tech company’s education unit, who works closely with the labs. “The directors and people I have interfaced with understand what they need to do.”

Yet Moch acknowledges that there is but “a moderate chance of success with selected labs” in achieving a fundamental transformation. Indeed, reorienting DOE’s Labs has proven such a thorny issue that Energy Secretary Hazel O’Leary effectively punted the challenge over to a commission headed by Motorola Chairman Robert Galvin. Galvin’s commission will make its recommendations next spring.

Whatever those recommendations may be, there should be no doubt that spinoffification will continue to be the most public justification for funding the labs at their current multibillion-dollar levels. Fulfilling the expectations of spinoffification may be the riskiest challenge the labs have undertaken.