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IDENTIFIERS Congress 98Th; United States DOCUMENT RESUME ED 255 719 CE 041 223 TITLE Climate for Entrepreneurship and Innovation in the United States. Hearings before the Joint Economic Committee, Congress of the United States, Ninety-Eighth Congress, Second Session. Part 1. August 7, 1984--Role of Governmental Labs in Regional Development. August 9, 1984--State Innovation Strategies. REPORT NO S-Hrg.-98-1251-Pt-1 PUB DATE .Aug 84 NOTE 254p.;' /or parts 2 and 3, see CE 041 224-225. Document contains small type. PUB TYPE Legal/Legislative/Regulatory Materials (090)-- Viewpoints (120) EDRS PRICE MF01 Plus Postage. PC Not Available from EDRS. DESCRIPTORS Business Cycles; Change Strategies; *Economic Climate; *Economic Development; *Entrepreneurship; *Government Role; Innovation; Public Policy; Regional Planning; Science Laboratories; Small Businesses; Statewide Planning; *Technological Advancement; *Technology Transfer IDENTIFIERS Congress 98th; United States ABSTRACT This Congressional 'report deals with the role of government laboratories in regional development and state innovation strategies for encouraging entrepreneurship. Included among those persons providing testimony on these two particular aspects of developing entrepreneurship in the United States were representatives of the following agencies and organizations: the U.S. Department of Commerce, the U.S. Army Construction Engineering Research Laboratory, Sandia National Laboratories, the Lawrence Livermore National Laboratory at the University of California, the University of Florida, the Microelectronics Center of North Carolina, Brennan and Garso, Control Data Corporation, and the U.S. Small Business Administration. (MN) *********************************************************************** Reproductions supplied by EDRS are the best that can be made from the original document. *********************************************************************** S.HRO.98-1251 CLIMATE FOR ENTREPRENEURSHIP AND INNOVATION IN THE UNITED STATES HEARINGS BEFORE THE JOINT ECONOMIC COMMITTEE CONGRESS OF THE UNITED STATES NINETY-EIGHTH CONGRESS SECOND SESSION PART 1 AUGUST 7, 1984ROLE OF GOVERNMENT LABS IN REGIONAL DEVELOPMENT AUGUST 9, 1984--STATE INNOVATION STRATEGIES Printed for the use of the Joint Economic Committee U.S. DEPARTMENT OFEDUCATION NATIONAL INSTITUTE OFEDUCATION INFORMATION ED ATIONAL RESOURCES CENTER (ERIC) This document has beenreproduced as received from tho person ororganization originating ot Minor changes have been made toimprove reproduction quality Points of view or opinions stated inthis docu official NIE ment do not necessarily represent position ot policy U.S. GOVERNMENT PRINTING OFFICE 42 03911 WASHINGTON : 1985 ) JOINT ECONOMIC COMMITTEE (Created pursuant to sec. 5ia) of Public Law 304, 79th Congress] SENATE HOUSE OF REPRESENTATIVES R(X;ER W. JEPSEN, Iowa,Chairman LEE .H. HAMILTON, Indiana, Vice Chairman WILLIAM V.Rom, JR.,Delaware GILLIS W. LONG, Louisiana JAMES ATIDNOR, South Dakota PAWN J. MITCHELL, Maryland STEVEN D. SYMMS, Idaho AUIRISTUS F. HAWKINS, California MACK MATTINGLY, Georgia DAVID R. OBEY, Wisconsin ALFONSE M. D'AMATO, New York JAMES H. SCHEUER, New York LLOYD IJENTSEN, Texas CHALMERS P. WYLIE, Ohio WILLIAM PROXMIRE, Wisconsin MARJORIE S. HOLT, Maryland EDWARD M. KENNEDY, Massachlsetts DANIEL E. LUNGREN, California PAUL S. SARBANES, Maryland OLYMPIA J. SNOWE, Maine nor C. Ronewrs,Executive Director JAWSK.GALBRAITH, Deputy Director r. CONTENTS WITNESSES AND STATEMENTS TUESDAY, Alwyn 7, 1984 Lungren, Hon. Daniel E., member of the Joint Page ing: Opening statement Economic Committee, presid- 1 Brown, Clarence, Deputy Secretary, Departmentof Commerce 2 Theuer, Col. Paul J., Commander and Director,U.S. Army Construction Engi- neering Research Laboratory [CERL],Champaign, IL, accompanied by Louis R. Shaffer, Technical Director 22 Ducey, George, president, Sandia NationalLaboratories 26 Miller, Charles P., University of California,Lawrence Livermore National Laboratory 29 Malecki, Edward J., associate professor ofgeography, University of Florida, Gainesville 44 THURSDAY, AUGUST 9, 1984 Lungren, Hon. Daniel E., member of the Joint ing: Opening statement Economic Conttee, presid- 77 Matheson, Hon. Scott M., Governor, State of Utah 78 Thornburgh, Hon. Dick, Governor, State of Pennsylvania 96 Reitman, Donald S., president, MicroelectronicsCenter of North Carolina 119 Brennan, Peter J., partner, Brennan &Gerson, New York, NY 139 SUBMISSIONS FOR THE RECORD TUESDAY, AUGUST 7, 1984 Brown, Clarence: Preparedstatement 6 Malecki, Edward J.: Prepared statement 49 Miller, Charles F.: Prepared statement 34 THURSDAY, AUGUST 9, 1984 Reitman, Donald S.: Preparedstatement 124 Brennan, Peter J.: Prepared statement, togetherwith an attachment 145 Matheson, Hon. Scott M.: Preparedstatement, together with an attachment 84 Thornburgh, Hon. Dick: Prepared statement 100 APPENDIX Regan, Edward V., comptroller, State ofNew York: Statement of 207 Norris, William C., chairman and chiefexecutive officer, Control Data Corp : Statement of 210 Swain, Frank S., Chief Counsel for Advocacy, U.S.Small Business Adminis- tration: Statement of 222 MI 4 ROLE OF 'GOVERNMENT LABS IN REGIONAL DEVELOPMENT TUESDAY, AUGUST 7, 1984 CONGRESS OF THE UNITED STATES, JOINT ECONOMIC COMMITTEE, Washington, DC. The committee met, pursuant to notice,at 9:30 a.m., in room 1310, I,ongworth House Office Building, Hon. DanielE. Lungren (member of the committee) presiding. Present: Representative Lungren. Also present: Robert Premus, professional staff member. , OPENING STATEMENT OF REPRESENTATIVE LUNGREN, PRESIDING --- Representative LUNGREN. Good morning. , -- Research in Government laboratories providesan important source of new ideas for the economy. These rum ideas haveenor- mous potential to spur entrepreneurial activities throughout the Nation and in the regions where the labsare located. Many re- gions, realizing this potential, are beginning to emphasizetechnolo- gy transfer in their development strategies. The Stevenson-Wydler Act, by requiring Government agencies and labsto transfer tech- nology and disseminate information about the commercialpoten- tial of their research, is'aiding thisprocess. The hearing today will explore the technologytransfer issue from the perspective of Government laboratories. Thecommittee is particularly interested in possible barriers to entrepreneurialspin- off activity from Government-funded research, and thetype of en- vironment within Government labs that is most conduciveto tech- nology transfer. Patent policies, licensing procedures, responsibility for tec anology transfer, and joint venturingare topics that will be discussed. The central question concerning America today is howto encour- age technological innovation so our economy can compete. The im- proved flow of technology from Government researchcan be an im- portant component of this national innovation policy. Findingways to improve technology transfer without sacrificing the missionre- quirements of Federal agencies is the major focus of this hearing. I am pleased to announce that we have appearing todaya group of nationally recognized experts and practitionerson these issues. Mr. Clarence Brown is Deputy Secretary of the Departmentof Commerce, a former Member of Congress anda former ranking Re- publican member of the Joint Economic Committee. Mr.Brown, we (1) fp 2 are delighted at your appearancebefore the committee today, and we are looking forward to yourtestimony. Other witnesses include Colonel Paul Theuer, U.S., Army Construction Engineering Re- search Laboratory; Mr. George Dacey, Sandia National Laborato- ries; Mr. Charles Miller, Lawrence Livermore National Laboratory; and Mr. Edward Malecki, University of Florida. Gentlemen, we welcome you to the hearing and look forwar, your testimony. First of all, we will hear from a former colleague, someone who helped me when I first came to Congress, Mr. Clarence Brown. STATEMENT OF CLARENCE BROWN, DEPUTY SECRETARY, DEPARTMENT OF COMMERCE Mr. BROWN. Good morning, Congressman. I am delighted to have a chance to meet with youthis morning and with this historic and significant committee which I served on for 13 years while 1 was in Congress, and ,iiscuss the role that Government laboratories could play in regional economic development. Because of the Commerce Department's Governmentwideresponsibilitiesfortechnology transfer and r hent policy, I want to address the Federal laborato- ry system as a whole in myremarks this morning: The U.S. Government owns and operatesor has contractors op- eratenearly 400 laboratories. These labs employ from 10 to over 5,000 employees, a total of over 200,000 people, 83,000 of whom are full-time professional scientists and researchers. We are the single largest employer of that class. The labs spend about one-third of the Federal research and development budget or about one-sixth of the R&D funds spent in the United States. Although the labs are part of a rich tradition of Federal scientif- ic activity dating back to the earliest days of our country, mostof the labs are relatively isolated from the private sector. This isola- tion problem has been addressed in sever it reports, includingthe May 1983 Report of the White House Science Council's Federal Laboratory Review Panel, also known as the Packard Report. Last February, the Department, of Commerce issued a report on the Government's accomplishments under the Stevenson-Wydler Technology Innovation Act of 1980. The report commends the Fed- eral agencies for doing a valuable job of providing information, advice
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