ELECTIONS ‘94: IMPACT ON BUSINESS : GOP Sweep Will Take a Broom to High-Tech Agenda

The Clinton Administration’s ambitious agenda to make government an instrument of American high-tech competitiveness will not survive the Republican takeover of Congress. The electoral tide that swept away Democrats is sure to capsize the innovation initiatives the White House so ardently championed.

“I think you have to assume a scorched-earth policy when the Republicans come in,” says a rueful staffer at the National Economic Council, the White House’s economic policy arm. “We’ll have a very, very hard time.”

That could be an understatement. America’s science and technology policy is about to be turned upside down and face right. Newt Gingrich, who is set to become the Speaker of the House, had already targeted the Commerce Department’s Advanced Technology Program in his “Contract for America” as particularly worthy of extinction.

That means the Administration’s effort to transform the Commerce Department’s National Institute for Standards and Technology into a billion-dollar venture capitalist will be fast-forwarded to annihilation. Republicans have long objected to programs in which the government even appears to be picking winners and losers in the high-tech marketplace.

As their rhetoric and records unambiguously reveal, the Robert Dole-Newt Gingrich perception of appropriate public-private partnership is radically different than that proffered by Bill Clinton and Al Gore. To be sure, Republicans have historically been supportive of federal science and technology funding, but they reserve a special circle in their political hell for anything that remotely smacks of “industrial policy.” What the White House trumpeted as bold investment in America’s innovation infrastructure seems certain to invite the budgetary scalpels and machetes of the New Majority.

That’s not to say that Republicans will turn Gore’s “information superhighway” into a digital dirt road--Gingrich, for one, is quite interested in new media. But there should be no doubt that the New Majority has little interest in the sort of “universal service” and “non-discriminatory access” public policy issues that have dominated the Democratic discussions. More likely, we’ll see Republicans pushing for precisely the sort of deregulatory telecommunications legislation they gridlocked during the last Congress--but without the allegedly onerous public service obligations contained in the last bill.

Similarly, as co-author of the influential Bayh-Dole legislation (which pioneered the transfer of government-funded technology to the private sector), new Senate Majority Leader Dole is intimately familiar with the controversies and conflicts surrounding the challenge of technology transfer from government research institutions to the private sector. He is now superbly positioned to rewrite the White House agenda on public-private partnerships in high-tech innovation.

But if the Republican leadership practices what it ideologically preaches, there’s little place, for example, for the Pentagon’s plan to spend $500 million over five years to help American industry capture the global marketplace from Japan in flat-panel display technologies. Flat-panel displays are a prime example of how the Clinton Administration wants to fund dual-use technologies--that is, technologies for national security that have commercial applications and commercial technologies that have military potential.

Consequently, the entire issue of dual-use policy faces fundamental re-examination. The Pentagon’s Advanced Research Projects Agency--which has pioneered many breakthroughs in computer science and in effect created the Internet--has more than three-quarters of its budget tied up in dual-use funding. In many respects, ARPA is as much a vehicle for industry as armament. The Administration’s $550-million Technology Reinvestment Program, which is designed to facilitate defense conversion efforts by creating new collaborations between industry, academe and local governments, is sure to be scrutinized--though many elements of the program enjoy bipartisan support.

“Dual use is a powerful way to get the best of both worlds,” says the White House staffer. “In theory, everyone gets better technology. In practice, appropriators often consider (dual use) to be leakage to the commercial sector.”

On the surface, dual-use technologies and defense conversion seem likely candidates for bipartisan cooperation. There is just as clear a need to invest wisely in dual-use technologies as there is to ease the trauma of transition from a Cold War economy to a global one. However, it seems likely that Republicans--who now control the Armed Services and Defense Appropriations committees in both houses--will offer their own definitions of dual use.

Similarly, don’t be surprised if the New Majority pushes for greater research and development spending in specialized defense technologies. The defense weapons laboratories may have been bought a little breathing space.

Of course, the single biggest impact of the Republican takeover is uncertainty: Which agency or research institution can intelligently plan for the future with so many unknowns now a part of Washington’s innovation infrastructure? Is Republican control a two-year aberration? Or will it be a structural change? What kind of a business person would enter into a high-tech partnership with a national laboratory under such circumstances?

George Brown no longer runs the House Science, Space and Technology Committee; Ed Markey is now subordinate in Telecommunications and Finance, and John Dingell’s huge shadow no longer looms over the critical Energy and Commerce Committee. All the new players are untested. They’ve never led before.

Given this uncertainty and novelty, it’s easy to predict that the political battles surrounding science and technology policy over the next two years will be far more interesting than those of the last few.

* More Innovation: For a collection of recent Innovation columns by Michael Schrage, sign on to the TimesLink on-line service and “jump” to keyword “Innovation.”

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