> OSCAR P. MANLEY

13212 WYE OAK DR.

GAITHERSBURG, MD 20878

TEL:301-977-2249; FAX:301-977-4426

EMAIL:OMANLEY@INDIANA.EDU, MANLEYO@EMAIL.NIST.GOV

priorities for federal innovation reform

We suggest that some structural changes in the governance,

funding, and policies of the National Laboratories (DOE) will

increase the Laboratories\' potential for innovation leading to

enhanced contributions to the Nation\'s wealth. The remarks

herein are probably inapplicable to the three weapons

laboratories. However I believe those remarks should be helpful

in getting a better value than obtainable hitherto from the non-

weapons DOE laboratories. Ample historical data show that other

US Government supported laboratories have played a significant

role in innovation, thus enhancing the national economy and hence

the nation\'s wealth.

There are billions of dollars spent at the National Laboratories

every year. At the same time the support for R&D funding in this

country has come under increasing pressure. It is then of the

highest priority to examine possible changes in the structure and

governance of the DOE laboratories which could render them more

readily responsive to the need for technological innovation

consonant with the advancing global economy. Several thoughts

for possible actions to ameliorate the situation

come to mind. Let me voice two of them. First, while DOE funds

the lion\'s share of its Laboratories budgets, it is not the

ultimate customer for the fruits of the resulting R&D (except in

the case of weapon systems). Yet DOE behaves as if it were a

monopsony (i.e. one buyer pursued by many vendors). If nothing else,

that unnatural behavior creates a barrier between the researchers

and technologists on the one hand, and the ultimate beneficiaries

of the R&D results on the other hand, clearly a barrier to

innovation in the market place.

Action needed: find methods for support of research at the DOE

Laboratories such that the input to research goals comes directly

from industry and the public, with little or no contribution

(except for money) from DOE. This is a real challenge. I am

fully aware of the political and organizational difficulties

intrinsic to finding such methods, to say nothing of implementing

them.

Secondly, it is of some passing interest to note that the many

committees chartered over the years to look into improving the

operation of the National Laboratories, never looked at a basic

economic question: why for all the billions of dollars spent at

those institutions, they have never had anywhere near the impact

on the US economy, as did other US Government laboratories

(notably DOD Laboratories, NIST, NASA, and NIH). All of the

latter institutions have been dedicated to support the mission of

their parent organizations, and yet have rendered the basis for

the modern post-industrial economy at large (computers, Internet,

solid state devices, air transportation, health industry, etc.).

Some policy changes that brought all this about, looked initially

like minor innocuous changes, yet their effects have been

profound beyond all expectations. For instance, during the

Eisenhower administration in the \'50\'s, it was decided to fund

fully the R&D required by the DOD, with the proviso that strict

personnel ceilings at the DOD Laboratories be enforced. That

forced many of those laboratories to contract out some of the

necessary work (including highly classified R&D) for which there

was inadequate in-house manpower. It was that decision which had

helped the proliferation of small R&D firms flourishing along the

famous rt.128 around Boston, MA. At the other extreme of such

policies is the example of NIST (formerly NBS): its Congressional

appropriation has for many years provided only one-half of the

support needed by that laboratory\'s scientific personnel; that has

forced the administration of the laboratory and its more senior

scientific/engineering staff to seek funding from other

government organizations and more directly from industry to fill

in the missing 50% of their annual salary budget. I could quote

other such examples, but these suffice to identify the needed

action: while the US economy, and the rest of the world have

changed in the past 40 years, some lessons from the past can prove

useful.

To elucidate those lessons, convoke a committee (consisting of

historians of technology, economists specializing in the role

innovative R&D plays in a growing economy, and knowledgeable senior

managers of successful innovative organizations) to study

the operation of the DOE non-defense National Laboratories, and

to identify the organizational, legislative, and regulatory

barriers to innovative activities at those institutions. To

avoid any possible adverse biases and even the most ephemeral

conflicts of interest, the membership of this committee should

not include anyone with even the remotest relationship to the DOE

and/or its Laboratories.

I have had occasions to see the DOE/AEC laboratories from various

aspects: 1960-1975 as a DOD and NASA contractor, 1975-1997 as an

ERDA/DOE program manager (Engineering Research Program). Over

those years, essentially my entire professional career in turn as

a scientist/engineer, and a bureaucrat, I have often wondered how

those organizations thrive in the face of so many seemingly self-

destructive actions. I am semi-retired now, but I would be

glad to help launch and carry out such an exciting project, while

lending my extensive experience in small business R&D, and in the

management of Government sponsored innovative R&D.

In summary, the action items presented in this issue paper are:

1\) Find politically acceptable means for more direct guidance

from the private sector in establishing the R&D goals for the

non-defense DOE National Laboratories.

2\) Convoke a committee to study and compare the historical

evolution of the DOE National Laboratories with the historical

evolution of other US Government supported Laboratories, focusing

on how the latter organizations contributed to technological

innovations beyond the purview of their charters.

Oscar M.

Oscar M.

omanley@indiana.edu