White House Office of Science and Technology Policy (OSTP)

National Science and Technology Council (NSTC)

Committee on Science

**Regional Forum on Research Business Models**

### Alignment of Funding Mechanisms 

### with Scientific Opportunities

**WORKSHOP SUMMARY**

Lawrence Berkeley National Laboratory

Berkeley, California

October 27, 2003

Prepared by:

Rose Li and Associates, Inc.

November 28, 2003

White House Office of Science and Technology Policy (OSTP)

National Science and Technology Council (NSTC)

Committee on Science

Regional Forum on Research Business Models

# Alignment of Funding Mechanisms with Scientific Opportunities

Lawrence Berkeley National Laboratory

October 27, 2003

# Executive Summary

The Regional Forum on Research Business Models was held in Berkeley, CA
on October 27, 2003 at the Lawrence Berkeley National Laboratory. The
goal of this first of four regional forums -- which are sponsored by the
Subcommittee on Research Business Models, under the White House Office
of Science and Technology Policy (OSTP) National Science and Technology
Council (NSTC) Committee on Science -- is to improve the Federal
research process. To that end, these Forums are soliciting suggestions
from the research community regarding the business side of the
relationship between funding agencies and scientists. In particular, the
Berkeley forum addressed how government funding can encourage innovation
and facilitate the conduct of research. Two panels provided specific
comments to the Subcommittee, and ideas and suggestions from the
audience were encouraged.

The day focused upon collaborative research -- either among scientists
in different disciplines or among different types of research entities
(universities, private industry, Federal agencies). Collaborative
research still constitutes a relatively small share of all scientific
research, but it is a new and growing arena. Today, exciting research is
being conducted at the "borders of disciplines," and it necessarily
involves scientists from different fields. Examples of subjects
requiring multidisciplinary research include nanotechnology, genomic
science, astrobiology and space technology, bioengineering, and
information technology. Meanwhile, partnerships among national
laboratories, universities, and organizations in private industry can be
very fruitful. Universities are particularly strong in basic research,
while labs and private industry have a more applied perspective. Several
researchers were concerned about the "Valley of Death," in which
technological advances are never put to productive uses. Teaming
participants from private industry with researchers from universities
and labs can help overcome this problem, by bringing products to market.
Small Business Innovation Research (SBIR) grants and Small Business
Technology Transfer Research (STTR) grants are useful in funding this
process; however, more funds frequently are needed than SBIRs and STTRs
are able to provide.

Many speakers discussed the fact that, in order to conduct
multidisciplinary research, scientists need funding for shared
facilities and equipment. Shared facilities are important, because they
enable scientists from different disciplines to interact both formally
and informally. Unfortunately, it is often very expensive to procure and
maintain state-of-the-art equipment for multidisciplinary research. In
some cases, no funding mechanism exists to upgrade equipment or to hire
and/or train personnel to operate sophisticated equipment.

Many speakers lamented the lack of funding for administrative costs, and
noted that multidisciplinary research generally creates greater needs
for administrative support. Administrative caps and full-cost-recovery
accounting both inhibit multidisciplinary researchers' ability to
conduct productive scientific studies. Sometimes faculty members are
forced to shoulder administrative burdens, even though someone else
could do it better and at a lower salary. Universities are now paying
more of the administrative costs than they have in the past, which is
reducing their ability to conduct basic research. Many speakers
recommended lowering administrative costs by making rules and
regulations consistent across agencies; this would reduce the amount of
time researchers currently must spend just sorting through the differing
interpretations of similar requirements or forms. Unfortunately, funding
for such indirect costs, (like funding for administrative support and
shared facilities) is unpopular among politicians.

Although collaborative research was the forum's focus, many speakers
commented on the need to keep the core disciplines strong, particularly
at the universities where most basic research is now conducted. At the
same time, it is important to remain open to the newer areas of science,
such as nanotechnology, particle astrophysics, or bioengineering. The
best multidisciplinary team members are those who are strongest in their
own disciplines. In light of this, many speakers expressed concern that
today's youth are less scientifically and technologically oriented than
in the past. In the past, this void might have been filled by foreign
students, who tend to be more interested and skilled in the sciences
than are U.S. students; with today's increased security, however, it is
difficult for foreign graduate students to enroll in U.S. universities.
One solution suggested was increasing Federal funding for tuition
assistance to encourage and retain students in science and technology.

Team research presents other challenging issues, which are less common
when conducting research according to the traditional model of a single
investigator. These issues include the fact that:

-   scientists from different disciplines or various research agencies
    must learn to bridge their "cultural differences;"

-   faculty members are expected to have sole-authored publications;

-   new questions arise regarding the management of intellectual
    property; and

-   interdisciplinary projects often require a longer lead time, because
    it takes more time to put together team-based research.

Solutions to these problems may include fostering more interaction among
the team players -- i.e., by using shared facilities or sponsoring
structured opportunities for communication, such as brown bag seminars,
symposia, and meetings. In addition, individual departments at
participating universities should be urged to value the contributions of
junior faculty in team research, and to structure team research in such
a way that junior faculty members can conduct individual research
projects. Universities also need to provide longer funding cycles,
distribute funding for indirect costs back to the departments, and train
team leaders in management skills.

White House Office of Science and Technology Policy (OSTP)

National Science and Technology Council (NSTC)

Committee on Science

Regional Forum on Research Business Models

# Alignment of Funding Mechanisms with Scientific Opportunities

Lawrence Berkeley National Laboratory

October 27, 2003

# Meeting Summary

## Opening Remarks

Dr. Nathaniel Pitts, Co-chair of the Research Business Models
Subcommittee and Director of the Office of Integrative Activities,
National Science Foundation (NSF), opened the meeting by encouraging
audience discussion throughout the day. He said the purpose of the forum
was to receive ideas and suggestions from the people who have to deal
with government rules and regulations. The Subcommittee of Research
Business Models hopes to provide short term fixes for immediate
problems, while also implementing long-term changes.

Dr. Pier Oddone, Deputy Directory of the Lawrence Berkeley National
Laboratory, stressed that United States Research & Development (R&D) is
the envy of many counties, and that the Subcommittee "should above all,
do no harm." That said, there is always room for improvement. Dr. Oddone
discussed the diversity in the ways today's R&D is conducted. Federal
agencies, national laboratories, universities, and members of private
industry all contribute to the country's R&D, providing various
mechanisms for developing ideas. The original intent of the Lawrence
Berkeley National Laboratory was to bring together expertise from many
different disciplines for one large project; thus, it is one early model
for interdisciplinary research. The Lab continues to house many experts
from different fields.

Dr. Kathie Olsen, Associate Director for Science, Office of Science and
Technology Policy (OSTP), thanked the hosts of Lawrence Livermore
Laboratory, as well as Drs. Nat Pitts of NSF, Christine Chalk of DOE,
Michael Sierverts, Jane Stutsman, and Geoff Grant of NSF, Norka Ruiz
Bravo of NIH, and Connie Atwell representing both NIH and the NSTC
Subcommittee on Research Business Models (RBM). She particularly thanked
the participants for their attendance and comments. The goal of this
forum was to solicit comments to improve the Federal research process.
Dr. Olsen explained the structure of the Federal agencies overseeing
these changes. The work of the National Science and Technology Council
(NSTC) is achieved through four committees, which in turn have
subcommittees and working groups. Today's forum was sponsored by the
Subcommittee on Research Business Models (RBM), under NSTC's Committee
on Science. The purpose of the RBM Subcommittee is to (1) identify and
address important policy implications arising from the changing nature
of scientific research, and (2) examine the impacts of these changes
upon business models and business practices for the conduct of
scientific research funded by the government and carried out by
academic, industrial, and governmental entities. She cautioned that the
term "business models and business practices" was a metaphor, and did
not imply an emphasis on outcomes. Rather, the term "business processes"
was meant to convey the whole array of activities that support the
research process for the purpose of maximizing science. It is the hope
of the RBM Subcommittee that the time is right to make changes. They are
hoping to make quick progress on easy-to-fix problems, while
simultaneously tackling more substantial, far-reaching issues. Dr. Olsen
believes that the RBM Subcommittee is a good model for the rest of NSTC
to follow.

## Summary of Public Comments

##### Geoffrey Grant, Staff Director, Subcommittee of Research Business Models (RBM) and Deputy Director for Management, Operations & Policy, Office of Budget, Finance & Award Management, National Science Foundation

Mr. Geoffrey Grant represented those public comments received by October
6. The Committee has tried to reach out broadly to the research
community, and the summary of comments received represents a growing
body of work. Mr. Grant summarized the written comments provided to date
by 46 respondents. Written comments are still being accepted through
December of 2003; additional feedback, including comments provided
during the October 27 forum, will be added continuously. Verbatim
comments are available on the RBM Subcommittee website
(*http://rbm.nih.gov*), and a preliminary analysis of the comments soon
will be available on that website, as well.

By October 6, 46 respondents had sent in a total of 150 written
comments, of which 12 were from professional associations, 2 from
Federal agencies, 10 from individuals, 3 from industry or small
businesses, and 19 from universities. The comments are separated into 12
themes, corresponding to the Request for Information. Some of the
categories had many (and sometimes conflicting) comments. One
recommendation repeated across all categories was to establish
consistent policies and regulations across all agencies, which would be
applied across the board -- i.e., in accounting practices, other
regulatory requirements, or best practices. Standardized rules would
simplify the research process enormously, since each participating
institution would need to learn and implement only one process (which
would be the same for all). Respondents also offered comments on state
and institutional requirements.

**[(1) General (18 comments)]{.underline}**

In highlighting the major themes from the general comments, Mr. Grant
first discussed the need for caution regarding the overuse of a
"business model" perspective. He emphasized that research spending
should be considered more as an "investment" and less as a matter of
"procurement." Adherence to a business model would suggest that agencies
might coordinate "portfolios" of interconnected activities. It is
important not to put an undue emphasis upon outcome evaluation --
especially because, unlike in the business world, the elements of risk,
negative findings, and "failures" are (and should be) an integral part
of the research process.

**[(2) Principles of Partnership (18 comments)]{.underline}**

In discussing comments that were centered upon principles of
partnership, Mr. Grant stated that consistent interpretations must be
developed for agency and institutional best practices, norms, and
standards. The assistance nature of the relationship also needs to be
reaffirmed. Success depends upon stability, transparency, and a
reasonable level of predictability. Concerns were raised that policy
changes could have unintended, adverse consequences upon the research
enterprise. The system must be flexible, competitive, and responsive, as
well as supportive of the individual investigator, with funding
decisions based upon merit. The financial investment must be diverse, in
terms of the fields supported and modes of support. The process must be
open to new ideas and investigators from all research institutions,
regardless of size. We need to seek agreement among the funding agencies
and members of the audit and research communities, regarding acceptable
business principles and standards.

**[(3) Accountability (20 comments)]{.underline}**

Twenty (20) comments were received regarding accountability. Respondents
placed a high priority upon striving to return to a costing and
regulatory system that is equitable and effective, and appropriately
reflects the diversity of research providers. This was considered to be
even more pressing than articulating a new business model. The principle
of full-cost reimbursement was seen as vital. Two central considerations
were costs (including how they are charged and compensated) and
administrative regulations (including how they are complied with and
imposed). It is especially important to establish an ongoing process and
dialogue. Commentators also noted that a good business model cannot
tolerate a hybrid of conflicting goals. Accountability should be defined
in terms of scientific outcomes, not just in terms of
financial-administrative compliance, and should be evaluated through
publications and progress reports.

Comments also included a number of more detailed suggestions regarding
how to improve accountability. The NSTC was encouraged to examine NIH
GPRA goals, as appropriate, and to avoid requiring other new performance
goals. Federal agencies were asked to reduce or eliminate multiple and
overlapping agency audit requirements. This request was made because a
number of agencies currently insist upon performing their own audits and
are eliminating or streamlining subrecipient monitoring --- which is at
odds with increasing collaborative networks over the last 5 years; they
also eliminate Cost Accounting Standards requirements, or only
incorporate the principles of those requirements, rather than imposing
the standards as an unfunded mandate upon recipients.

Respondents also recommended applying a business-to-business model to
scientific collaborations; for example, if common standards were
adopted, one could consider "accrediting" institutional oversight
systems that deploy these standards and practices.

**[(4) Inconsistency of Policies and Practices among Federal Agencies
(21 comments)]{.underline}**

A surprising number of comments in this area suggested that the basic
principles are sound, but that the recent changes are burdensome. In
addition, agency practices vary considerably -- i.e., the variations in
implementing A-110 and the FAR. Accountability should be based upon a
business partnership and should emphasize scientific outcomes; it should
not be a matter of overlapping financial and administrative audits.
Continued increases in substantial compliance costs cannot be borne by
recipients without impeding the research enterprise. For scientific
partnerships to be successful, the principle of full-cost reimbursement
is vital. Thus, the administrative and salary caps, as well as caps on
stipends and tuition costs, are inconsistent with the basic objectives;
they also shift the legitimate research costs to the awardees. Imposing
salary caps can make it difficult to recruit and retain
physician-investigators. Perhaps more problematic are the cost-sharing
requirements in small institutions, where hiring decisions often are
affected by decisions regarding total support and cost-sharing
requirements.

Mr. Grant said that Cost Accounting Standard (CAS) and Disclosure
Standard-2 requirements cost an estimated \$20 million in start-up costs
for the top 100 universities, yet only 25 of those have been audited and
approved. Respondents also sought coordination of the RBM with similar
ongoing processes, especially the Initiative to Reduce Regulatory
Burden.

There is a strong preference for a government-wide policy regarding both
conflict of interest and misconduct in science. The NSF clarification on
cost-sharing was welcome, but some argued that it should be applied as
standard policy across all agencies. Requests also were made for
standard template award notices, with reference to terms and reporting
procedures. At the same time, it was the hope that flexibility be
preserved regarding the types of institutions receiving funds, not all
of which are research universities (e.g. Federal research laboratories).
To the extent that collaborations are encouraged with national
laboratories, more should be done to facilitate such collaborations. It
also is problematic to make awards for research that is sensitive but
unclassified. In addition, payment of an academic year salary is
inconsistent among agencies and even within some agencies.

**[(5) Regulatory Requirements (17 comments)]{.underline}**

Concerns were raised about HIPAA as an impediment to clinical research,
while others sought to rationalize EPA hazardous waste requirements;
implement best practices; reduce redundancy and overlapping requirements
in animal welfare regulations; and enhance and promote alternatives to
animal use.

**[(6) Multidisciplinary Research (13 comments)]{.underline}**

Comments regarding multidisciplinary research called for eliminating the
existing political and practical barriers for projects that transcend
disciplines and/or specific agency missions. Multidisciplinary research
often requires greater administrative support. Teams need special
support, especially for young faculty members, who need to develop
independence within their disciplines by demonstrating independent
research and publications. There also should be more balance in the
research portfolio, to (1) encourage collaboration between Federal
laboratories and organizations within private industry, and (2)
eliminate artificial distinctions among research, education, and public
service. Other comments on this topic asked agencies to:

-   examine the sufficiency of "mid-size" multi-investigator funding;

-   improve oversight and extend its use more broadly;

-   coordinate inter-agency communication on project funding; and

-   increase the average amount and duration of individual awards, due
    to the large degree of effort that must go into producing them.

**[(7) Research Infrastructure (10 comments)]{.underline}**

In terms of research infrastructure, academic institutions have assumed
the burden for constructing new facilities. Multidisciplinary research
requires more (and predictable) levels of support for specialized
facilities and instrumentation support, independent of individual
project grants -- i.e., for sophisticated instrumentation, primates,
recombinant rodents, and other animals. Service centers should be able
to accumulate costs for replacement equipment or changes in technology.
Implementation of a Federal facility loan guarantee program also was
endorsed, and increased support was requested for specialized, shared
instrumentation, such as MRI and PET scanners or mass spectrometers.
Respondents also sought more cross-disciplinary support for special
facilities and Federal labs. Underscoring the need for actual
cost-recovery, a 2003 study by the Council on Governmental Relations
(COGR) reported a \$1 billion under-recovery, due to the administrative
cap. This is consistent with a RAND report for OSTP that estimated
under-recovery to be between \$700 million and \$1.5 billion.

Institutions are seeking relief from the administrative cap, to (1)
increase reimbursement for utility cost adjustment for all institutions,
(2) remove agency policies that provide less than full reimbursement,
and (3) promote fair rate negotiation. Others advocated that A-21 be
modified to allow direct charging of administrative services that are
directly linked to the performance of research. There was a call to
emphasize "rate determination," as opposed to "rate negotiation."

**[(8) Information Technology (9 comments)]{.underline}**

Comments in this category endorsed establishing one eGov solution, as
opposed to multiple agency solutions -- including national, uniform,
interoperative clinical information systems to support clinical trials.
Agencies should move more quickly to develop or support common
interfaces.

**[(9) Technology Transfer Optimization (7 comments)]{.underline}**

Respondents sought to:

-   reaffirm the Bayh-Dole tech transfer principles;

-   minimize agency-specific limitations on property rights;

-   address concerns about agency departures from principles and
    potential restrictions on royalties; and

-   promote exchange of tools among investigators while protecting
    proprietary rights.

**[(10) Inconsistency of Policies and Practices among Universities (11
comments)]{.underline}**

A few comments were received regarding inconsistent policies and
practices among universities. Some institutions do not waive or reduce
an award's facilities and administrative (F&A) costs that have not been
paid by sponsors, even though there may be good reasons for the
different treatment among the various institutions. Institutions also
vary in their acceptance of terms and conditions, e.g. restrictions upon
publications.

Four (4) comments addressed State and Institutional Requirements,
primarily seeking to reconcile stringent state requirements. No comments
have been received yet on the theme of Research Support, although one
general comment recommended the consistent application of the peer
review process across all agencies.

## Panel: Does How We Support Research Determine What We Get? Perspectives from the Science and Engineering Community

Dr. Nathaniel Pitts opened this panel by discussing the Request for
Information. How can government funding encourage or discourage
innovation? He emphasized again the desire to hear comments and ideas
from participants.

##### Arthur Bienenstock, Stanford University, and former Associative Director for Science, OSTP

Dr. Arthur Bienenstock started by discussing how important basic R&D has
been: It accounts for 50 percent of our growth and is essential in order
to maintain our standard of living. Several important trends threaten
R&D today. Industrial labs, like Bell Labs or Xerox Park, have been
downsizing and producing less basic research. Because universities are
now the primary environment in which basic research is being conducted
in the U.S., it is critical to keep them well funded. Unfortunately,
government funds have declined for universities, with the result that
the academic institutions themselves are shouldering more and more of
the burden of basic scientific research. Another disturbing trend is the
declining participation of U.S. youth in the science and technology
fields -- a trend that in part is due to prohibitive tuition costs.

Exciting research is being conducted at the borders of the disciplines,
where multidisciplinary research is needed. Examples include
bioengineering, nanotechnology, and particle astrophysics. The best team
members are considered to be those who are strong in their own
disciplines; thus, it is particularly important to maintain the strength
of the core disciplines in academic institutions. Shared facilities
(probably new facilities) also are important, so that researchers can
interact both formally and informally. Interdisciplinary research also
requires securing funding for shared instruments, which in some cases
can be very expensive. A related problem is the difficulty in keeping
shared facilities up to date, since funds are scarce for infrastructure
and equipment upgrades. A tangential, cautionary note is that,
multidisciplinary research may be more vulnerable to research misconduct
as researchers in diverse fields are less familiar with the methods of
their colleagues and cannot adequately check or replicate work outside
their own fields.

Administrative reimbursement costs are a concern, because they are
capped, which means that universities must absorb more of these costs.
Faculty members are spending valuable time on administrative tasks, when
others could do these tasks better and at a lower salary. Universities
need help with administrative costs -- not only by receiving additional
funding but also by being able to hire administrative staff, which would
reduce those costs. In addition, administrative costs could be reduced
by eliminating unnecessary tasks and establishing more consistent
policies and practices across agencies.

Administrative costs are likely to be compounded in a multidisciplinary
setting, but these costs are offset by the significant payoff that such
research endeavors may yield. An example of rising administrative costs
is in the case of toxic materials, for which it is now imperative to
keep better records.

Institutional review boards are another area in need of improved
government funding. It is increasingly difficult for academic
departments to participate in such boards, because costs are not
reimbursed.

##### Question & Answer Period:

Dr. Peter Friedland, NASA Ames, made several comments.

1.  What can government do to stop the decline in R&D at the research
    labs? Dr. Friedland believes the decline may be due to a
    business-based emphasis upon maximizing quarterly returns.

2.  Dr. Friedland recommended documenting the payoff of interagency and
    interdisciplinary research. If there were a metric to measure the
    payoff, akin to the business world's Rate of Investment, it might be
    easier to obtain funding for R&D.

3.  Universities, with their changing student populations, have less
    continuity than do laboratories, and therefore are at a relative
    disadvantage for conducting R&D.

Dr. Bienenstock responded to the first point by saying that
globalization is driving the decline of industrial R&D. Profits are no
longer possible, because intellectual property cannot be protected
outside our borders. Regarding the third point, Dr. Bienenstock
responded that there are some things that universities do well, and
other things that labs do well; thus, we need a balance in where R&D is
funded.

##### Dennis Matthews, Director, Center for Bioscience and Engineering, Lawrence Livermore National Laboratory

Dr. Dennis Matthews has worked on interdisciplinary teams for much of
his career, including his latest endeavor: a Cancer Center, which is a
partnership between the University of California Davis and Lawrence
Livermore Labs. Throughout his career, he has put together
interdisciplinary teams both to take advantage of opportunities and to
create them.

He discussed a concern about the balance in funding among
discovery-driven, hypothesis--driven, design-driven, and
translation-driven research. Research institutions have promoted
discovery-driven research; NIH has promoted hypothesis-driven research;
and the engineering community has promoted design-driven research. In
addition, we need translation-driven research -- that is, how to hand
off key research to industry. Small Business Innovation Research (SBIR)
grants and Small Business Technology Transfer Research (STTR) grants are
good, but they often are not enough to get a product to market.

Dr. Matthews recounted that, in his experience, the inhibitors to
interdisciplinary research include the fact that:

-   full cost-recovery accounting stifles creativity and productivity,
    because people with natural interests and capabilities may have to
    abandon those interests if the budget is not immediately available
    for their fields of research;

-   the missions of government agencies' missions do not foster
    interagency research, and the OMB actually discourages it;

-   universities and laboratories need more models of interdisciplinary
    research, from which they may learn how to work in a team
    environment;

-   patents, not publications, need greater emphasis; and

-   the "Call for Research" process is not flexible and does not
    capitalize upon ongoing, programmatic laboratory research. Even when
    labs are on a fruitful R&D path, they may not necessarily receive
    further funding for their research.

New models for interdisciplinary research include the following
possibilities:

-   funding research parks and regional development centers;

-   using venture capitalists to help mentor scientists regarding how to
    develop start-ups;

-   encouraging "Grand Challenges" for which there is a vision or
    roadmap to achieve new ideas. Such challenges guide funding and
    allow for individuality, while keeping education and research
    initiators focused.

##### Question & Answer Period:

A question about how scientists could be prepared to work in a
multidisciplinary and team environment spurred discussion by several
presenters. Dr. Matthews agreed that most scientists are not trained for
interdisciplinary research. Dr. Bienenstock observed that (1) scientists
are trained by doing, and (2) there is a great diversity of scientists.
Dr. Pitts agreed; in his 13 years at NSF, he found that each new team
always experiences a learning curve. Dr. Bienenstock noted that large,
shared facilities are important for interdisciplinary work. Many
researchers work in the evenings, and camaraderie and informal chats
encourage creativity. The Clark Building, Stanford University's new
interdisciplinary R&D facility, contains a café and mini cafeteria to
encourage casual interaction among scientists. The Clark Building is an
important experiment in interdisciplinary research. Dr. Pitts agreed,
noting that knowledge transfer is a "contact sport." Mr. Grant raised
the need for acknowledgment and recognition of co-investigators. How can
the government facilitate this need? In response, Dr. Pitts remarked
that government personnel routinely went to bat for junior faculty
members who had made contributions in a team environment, by talking
with deans and others involved in tenure decisions.

## Keynote Speaker: Science for the Future

##### M.R.C. Greenwood, Chancellor, U.C. Santa Cruz

Dr. M.R.C. Greenwood discussed disturbing trends she saw in the funding
of basic research and education, the importance of education in the
economy, and the successes of interdisciplinary research at the
University of California Santa Cruz. She concluded with a number of
recommendations.

Dr. Greenwood noted three disturbing trends in R&D: Federal
disinvestments in basic research; state disinvestments in higher
education, particularly at research universities; and threats to U.S.
primacy in graduate and professional education. She showed various
pieces of evidence to support her views: a declining share of Federal
funding to R&D research, a declining share of California's general funds
to University of California (U.C.) campuses; and a comparison of degrees
held by 24-year-olds in 1975 versus in 1999: a cross-national study
showing that the U.S. ranked high in 1975, but below average in 1999.

Dr. Greenwood used the state of California as a model for the nation.
California has huge investments in education, with nine U.C. campuses,
three DOE national energy laboratories, eight engineering schools, and
five medical labs. The investment in education has been key to
California's economic success: one out of three firms were founded by a
U.C. scientist; one in three biotech firms is located within 35 miles of
a U.C. campus; 85 percent of the state's biotech firms employ U.C.
alumni with advanced degrees; and an impressive list of large companies
have been founded by U.C. scientists. In California, there is a dynamic
relationship between the U.C. campuses and industry. One such example is
the recent partnership between U.C. Santa Cruz and NASA Ames.

Today's research problems are complex, and finding answers will require
the best minds available, often in a multidisciplinary environment.
Multidisciplinary science thrives in regions that support basic
research. It exists in places where business and communication
infrastructures already exist. It requires experienced entrepreneurs and
significant venture capital investments,

Strong examples of state-stimulated, multidisciplinary research can be
seen at the four California Institutes for Science and Innovation, which
have received \$4 billion of funding over four years and are a
collaboration of two or more U.C. campuses. The NSF Science and
Technology Centers exemplify just one type of Federally-stimulated
multidisciplinary research institution.

Dr. Greenwood's recommendations for the Subcommittee included:

-   avoiding different fast-track processes;

-   reducing unnecessary regulations;

-   providing motivational initiatives;

-   coordinating with state and private infrastructures; and

-   maintaining individual grant support.

With the increased difficulty in attracting foreign students (due to
tightened security), it becomes even more important to encourage higher
education within the domestic population -- something akin to the
National Needs graduate program, which was generated after Sputnik in
the 1950s.

##### Question & Answer Period:

Dr. Kathie Olsen expressed concern about finding funds for facilities,
since facilities are not a "sexy" topic. Dr. Greenwood agreed with the
concern and noted the need for \$4 billion in capital facilities within
the United States. Internationally, however, countries are successfully
funding infrastructure. Dr. Bienenstock noted that at Stanford,
facilities are paid for not only by traditional means, but also by
borrowing money, under the assumption that future research will later
generate funds. He also suggested that when the government negotiates
fees with universities, the negotiators should not drive a hard bargain,
because the government needs to provide enough money to help
universities fund infrastructure.

Dr. Atwell brought up the concern that it is hard to obtain funding for
high-quality technical personnel to run expensive multidisciplinary
research facilities. Dr. Greenwood concurred that this is an ongoing
problem; the Human Genome project is a good example. Often, personnel
are funded through individual or program grant money, even though such
grants can expire within five years. Universities try hard to find
alternative funding when this occurs. The Federal government may need to
(1) rethink how it funds core facilities, and (2) allow for funding
technical support personnel.

Dr. Olsen asked a similar question: Are there completely different,
out-of-the-box, ways we should be funding universities? Dr. Greenwood
noted that, in general, universities need flexibility in allocating
funds. Administrative caps are particularly problematic. Indirect costs
are important to fund, but politicians are reluctant to pay for them. It
would help if new terminology could be introduced that would make it
more acceptable to fund indirect costs.

## Panel: New Models for Supporting Science and Engineering Research

Dr. Connie Atwell opened the panel by stating that R&D research has been
valuable in stimulating science and the economy in the United States.
The aim of this Subcommittee is to improve upon what is already a good
and valuable enterprise. Administration and infrastructure are designed
to support the practicing scientists; in short, the Subcommittee wants
to make it easier for scientists to conduct research. She also
encouraged comments from the audience.

##### Mary Lidstrom, University of Washington, Associate Dean for New Initiatives in Engineering and Director, Microscale Life Sciences Center 

After acknowledging that single investigators are still very successful
and form the mainstay of science and technology research, Dr. Mary
Lidstrom focused upon the importance of team research. Collaboration is
especially appropriate when:

-   the research issues are complex and span scientific disciplines;

-   the need for research findings is urgent;

-   common facilities, instruments, or databases are required to solve
    problems; and

-   there are shared interests and needs.

Collaborative research teams can be as small as a few scientists or as
large as institutes. Guiding principles of team research include that:

-   individual creativity should be preserved while taking advantage of
    team synergy;

-   leadership, management structure, and communication are central;

-   integrity, trust, and respect among scientists are essential;

-   administrative burdens should not fall upon faculty (especially
    those who are the most productive and creative scientists); and

-   teams need a strong motivation and intellectual challenge, to
    encourage collaboration.

Variables affecting the issues that research teams face include the size
of the team, the geographic location of the team members (co-resident or
virtual), the goals of the research, and the research structure (i.e.,
directors, advisory boards, staff and budgetary allocation). All teams
need administrative support, as well as:

-   special support for young faculty members (i.e., mentoring), to
    ensure their success;

-   funding and special resources for young researchers, and the
    opportunity to publish as individuals;

-   an evaluation plan, in order to set goals and allow for measuring a
    project's success.

-   a plan for protecting intellectual property; and

-   attention to the "ramping up" phase of a project (which often takes
    longer than anticipated) and a plan for finishing the research in a
    timely manner.

Teams that are successful have the following characteristics:

-   leadership that is visionary, enthusiastic, committed, with a true
    team spirit;

-   communication that is ample in time and effort, with sufficient
    technology and training mechanisms;

-   a management structure that integrates leadership and communication;

-   a team-friendly environment fostering integrity, trust, respect, and
    sharing among scientists; and

-   institutional commitment in providing space, administrative support,
    and faculty investment.

Dr. Lidstrom provided examples from her experience at the University of
Washington. The College of Engineering has \$80 million per year in
funded research, of which 10 to 15 percent is funded through team
projects, and that percentage is rising. Successful strategies include:

-   ensuring that departments are reimbursed for at least some of the
    costs, so that they are supportive of team research;

-   distributing funding to individual sub-accounts, so that each
    scientist has access to funds;

-   having promotion and tenure policies that recognize and value
    collaborative efforts;

-   having a reward structure in which revenues are directed toward team
    research activities, so that only teams have access to these moneys;

-   holding workshops and training sessions for center directors, to
    help them develop management skills; and

-   assigning senior administrative personnel to research teams.

For example, Dr. Lidstrom's Microscale Life Science Center has worked
through many of the tough issues facing today's research teams, and has
come up with the following structures: Graduate students in one field
are paired with other graduate students in another field, using a "buddy
system." Classes are held in the buildings of several different
departments, so that graduate students are physically in the other
department's spaces. Team milestones are marked, and short quarterly
reports are produced in which progress is noted. Five-year grants (with
a review after three years) provide enough time for teams to produce
results. Two directors are assigned to a project, which helps to split
the administrative burden. To bridge cultural differences, the team
comes together for brown bag lunches, symposia, and meetings. Young
investigators are given individual projects within the team scope, so
that they can publish on their own. These strategies have supported
multidisciplinary team research at the University of Washington.

##### Question & Answer Period:

What can the government do to help faculty members learn how to become
team researchers? Dr. Lidstrom noted that people are either inclined or
disinclined to participate in team research. For those who wish to
conduct team research but do not know how, training is helpful. Dr.
Pitts shared his NSF experience, in which strategic, off-site planning
retreats helped the scientific team to develop core values, discuss
intellectual property issues, and develop post-doctoral opportunities.
Team researchers also had workshops and other training opportunities, on
topics such as ethics and managing large scientific projects.

In response to a comment that Co-Investigators are not afforded the sort
of recognition that is commensurate with their roles, Dr. Atwell
observed that, to date, this has been a computer-driven problem: the
system is programmed to accept only one Principal Investigator (PI). NIH
currently is working to change the situation; in the meantime, projects
still will need a single, legal point of contact, although multiple
researchers should be able to submit proposals. In other words, roles
need to be redefined, so that Co-Investigators and PIs have equal
status. Dr. Lidstrom noted that at the University of Washington, awards
go to only one person, but the funds are distributed to multiple
people/departments.

Additional discussion centered upon the need to balance Federal funding
for individual and team research. Teams should not dominate funding. In
Dr. Lidstrom's department, team research funding may constitute 20
percent of all research.

##### Scott Hubbard, Director, NASA Ames Research Center 

Dr. Scott Hubbard described the NASA Ames Research Center, founded in
1939 to study basic sciences (earth-life-space) and astrobiology (the
study of life in the universe). The Center's research is necessarily
multidisciplinary, including the study of biology, information
technology, and nanotechnology, and Center scientists must compete with
the extramural community for research funds. The Center continues to
experiment with different types of collaborative efforts, and has
stimulated broad, cross-disciplinary applications -- some of which
involve an academic institution's philosophy or religion departments, to
study the ethics of their research. Their Astrobiology Institute is a
virtual center, with 15 PIs across the country.

An important lesson was learned from their project SOFIA, an observatory
for infrared astronomy. This was intentionally designed to have minimal
oversight by the government. The lack of oversight proved to be
problematic, however, and Dr. Hubbard recommended that other
Federally-funded projects have more substantive governmental oversight.

An example of unusual cross-disciplinary research occurred in the Ames
Center's project for the FAA. Ames developed new systems to help
automate the air traffic controllers' jobs. However, because of the
controllers' fear of automation, the FAA brought in sociologists to help
their people adjust to the cultural changes that would result from
implementing the new technology.

Ames' other multidisciplinary projects include: creating a Weather
Simulator, and partnering with a commercial firm (SGI, which later sold
the technology for a handsome profit); and developing Kepler -- a
sophisticated telescope that will be launched in 2007, to search for
other habitable planets.

Another significant, new collaboration is the NASA Ames partnership with
U.C. Santa Cruz. The Ames Center's close scientific ties with the
university will move beyond a traditional research model. University
researchers will study tasks that are part of Ames critical milestones.
The partnership is structured for flexibility and the ability to change
research directions.

In addition, NASA Ames is developing 213 acres for a research park. The
area currently surrounds the AMES facility. The park will allow research
groups with common interests to work together more easily.

##### Question & Answer Period:

Dr. Pitts expressed interest in the sociological issues in Ames Research
Park -- in particular, the cultural differences that may arise among
Federal, university, and industry researchers. Are there plans to track
the sociological development of the research collaboration? Dr. Hubbard
agreed that sociological perspectives are very important in research
collaborations. He observed that the Columbia disaster was as much a
communication problem as it was a technological one. Sociologists are
best at ascertaining whether people work well in teams, not interviewers
who simply ask team members questions. He also cited a recent project in
which Ames developed scientific software. The equivalent of an
ethnographic field team videotaped scientists who were performing
complex tasks and then designed tools to aid their research. This was
much more successful than asking scientists how they conduct their
research. Dr. Hubbard said that, in general, complex teams need to be
formed and studied with the benefit of psychological insights.

## Open Mike

Dr. Chris Kniel, Lawrence Berkeley Labs, worked in private industry for
20 years before coming to the Lab. He designs and builds large energy
facilities and expressed concern about the lack of support for
collaborative research. He noted that the principal DOE Office of
Science program that funds collaborative lab-industry research (SC-LTR)
is being eliminated in FY 2005. Furthermore, the research community is
not promoting collaborative research. He cited the GAO Report GA-02-465
("Technology Transfer: Several Factors Have Led to a Decline in
Partnerships at DOE's Laboratories") which found that the number of
partnerships between DOE laboratories and private industry has been
declining. He argued for a balanced national research portfolio. The gap
between basic and applied research is widening, and the "Valley of
Death" is becoming ever more challenging for technologies that are
trying to move from the public to the private sector.

Dr. Judy Parrish, Dean at Idaho University, discussed the problems of
small universities. In particular, cost-shifting is very problematic in
small states, where matching funds are not available. Also, cost-sharing
for expensive equipment does not work for the small states. Even hiring
decisions are being negatively affected by cost-sharing.

Ms. Linda Retkofski, a lab administrator at Lawrence Berkeley
Laboratory, observed that there are now more consortia among
universities, labs, and Federal agencies. She has encountered the
following problem numerous times: terms and conditions of contracts
assume that subcontractors are universities. In actual fact, the
laboratory is often a subcontractor, sometimes receiving the majority of
funds, but it cannot comply with the terms and conditions of
universities. She reported that it is difficult to work with the people
who administer the contract and it is hard to convince them that the lab
is not subject to the same terms and conditions as universities.

Ms. Sara Bible, Stanford University, noted that Service Centers are
having a difficult time paying for new equipment. They are allowed to
charge only for current costs and cannot accumulate funding for future
large purchases. Dr. Lidstrom responded by noting that this is an
instance in which a business model approach could be especially useful,
so that depreciation could be built into fees.

Dr. Kate Phillips, Council of Government Relations, suggested that the
Subcommittee review a recent NSF-Mathematica study, "Report on
Efficiency of Grant Size and Duration," which is posted on the NSF
website (*www.nsf.gov*). The report discusses the extent to which
resources are consumed by investigators who are preparing research
applications; the correlation between award duration and funding
efficiency; and the benefits of changes in award duration and funding
cycles.

Dr. David Eisenbud, President of the American Mathematical Society (AMS)
and Director of Mathematical Sciences Research Institute (MSRI), and Dr.
Hugo Rossi, Vice President of the AMS and Deputy Director of MSRI,
together submitted a written comment that highlighted the enabling role
that mathematics plays in R&D, in support of many other disciplines. The
benefits of mathematical research include, among many others:

-   secure Internet communication;

-   deciphering DNA;

-   forecasting weather;

-   fingerprint storage technology;

-   blood flow and heart research;

-   brain research; and

-   routing traffic.

They gave several examples of basic research in mathematics which later
led to applications. They noted that in mathematics, full-time
academics, post-docs, and graduate students receive substantially less
Federal funding than those in the physical and biological sciences. They
urged that Federal funding take into account the special characteristics
of this unique discipline and its need for human capital.