The federal government will have spent an estimated $138.9 billion in FY2012 on research and development to meet the mission requirements of the federal departments and agencies. Approximately one-third of this is for intramural research and development (R&D) by federal laboratories (including support for Federally Funded Research and Development Centers). While the major portion of federal support has been in the defense arena, government R&D has led to new products and processes for the commercial marketplace including, but not limited to, antibiotics, plastics, airplanes, computers, microwaves, and bioengineered drugs. Given the increasing competitive pressures on U.S. firms in the international marketplace, proponents of technology transfer argue that there are many other technologies and techniques generated in the federal laboratory system which could have market value if further developed by the industrial community. Similarly, the knowledge base created by the agencies' R&D activities can serve as a foundation for additional commercially relevant efforts in the private sector. The movement of technology from the federal laboratories to industry and to state and local governments is achieved through technology transfer. Technology transfer is a process by which technology developed in one organization, in one area, or for one purpose is applied in another organization, in another area, or for another purpose. In the defense arena it is often called "spin-off." Technology transfer can have different meanings in different situations. In some instances, it refers to the transfer of legal rights, such as the assignment of patent title to a contractor or the licensing of a government-owned patent to a private firm. In other cases, the transfer endeavor involves the informal movement of information, knowledge, and skills through person-to-person interaction. The crucial aspect in a successful transfer is the actual use of the product or process. Without this, the benefits from more efficient and effective provision of goods and services are not achieved. However, while the United States has perhaps the best basic research enterprise in the world—as evidenced in part by the large number of Nobel Prizes awarded to American scientists—other countries sometimes appear more adept at taking the results of this effort and making commercially viable products to be sold in U.S. and world markets. Despite the potential offered by the resources of the federal laboratory system, the commercialization level of the results of federally funded research and development remained low through the 1970s and 1980s. Studies indicated that only approximately 10% of federally owned patents were ever used. There were various reasons for this, including the fact that many of these technologies and patents had no commercial application. A major factor in successful transfer is a perceived market need for the technology or technique. However, because federal laboratory R&D is generally undertaken to meet an agency's mission or because there are insufficient incentives for private sector research that the government deems in the national interest, decisions reflect public sector, rather than commercial needs. Thus, transfer often depends on attempts to ascertain commercial applications of technologies developed for government use—"technology push"—rather than on "market pull." In other words, a technology is developed and a use for it established because the expertise exists rather than because it is perceived to be needed. Additional barriers to transfer involve costs. Studies have estimated that research accounts for approximately 25% of expenditures associated with bringing a new product or process to market. Thus, while it might be advantageous for companies to rely on government-funded research, there are still significant added costs of commercialization after the transfer of technology has occurred. However, industry unfamiliarity with these technologies, the "not invented here" syndrome, and ambiguities associated with obtaining title to or exclusive license for federally owned patents also contribute to a limited level of commercialization. Complicating the issue is the fact that the transfer of technology is a complex process that involves many stages and variables. Often the participants do not know or understand each other's work environment, procedures, terminology, rewards, and constraints. The transfer of technology appears to be most successful when it involves one-to-one interaction between committed individuals in the laboratory and in industry or state and local government. "Champions" are generally necessary to see a transfer through to completion because it is so often a time- and energy-consuming process. Given this, technology transfer is best approached on a case-by-case basis that can take into account the needs, operating methods, and constraints of the involved parties. The federal interest in the transfer of technology from government laboratories to the private sector is based on several factors. The government requires certain goods and services to operate. Much of the research it funds is directed at developing the knowledge and expertise necessary to formulate these products and processes. However, the government has neither the mandate nor the capability to commercialize the results of the federal R&D effort. Technology transfer is a mechanism to get federally generated technology and technical know-how to the business community where it can be developed, commercialized, and made available for use by the public sector. Federal involvement in technology transfer also arises from an interest in promoting the economic growth that is vital to the nation's welfare and security. It is through further development, refinement, and marketing that the results of research become diffused throughout the economy and can generate growth. It is widely accepted that technological progress is responsible for up to one-half the growth of the U.S. economy and is the principal driving force in long-term economic growth and increases in our standard of living. Economic benefits of a technology or technique accrue when a product, process, or service is brought to the marketplace where it can be sold or used to increase productivity. When technology transfer is successful, new and different products or processes become available to meet or induce market demand. Transfer from the federal laboratories can result in substantial increases in employment and income generated at the firm level. In addition, cooperation with the private sector provides a means for federal scientists and engineers to obtain state-of-the-art technical information from the industrial community, which in various instances is more advanced than that available in the government. Technology transfer is also a way to assist companies that have been dependent on defense contracts and procurement to convert to manufacturing for the civilian, commercial marketplace. Successful efforts range from advances in the commercial aviation industry, to the development of a new technology for use in advanced ceramics, to the evolution of the biotechnology sector. The increasing demands on state and local governments to provide improved goods and services have been accompanied by a recognition that expanded technological expertise can help meet many of these needs. The transfer of technology and technical knowledge from government laboratories to state and local jurisdictions can allow for additional use of ideas and inventions that have been funded and created through federal R&D. Intergovernmental technology transfer can also help state and local officials meet responsibilities imposed by federal legislation. As state and local governments increasingly looked for technological solutions, the concept of "public technology"—the adaptation and utilization of new or existing technology to public sector needs—emerged. The application of technology to state and local services is a complex and intricate procedure. In transferring technology from the federal laboratories, the application often can be direct. At other times, alterations in technical products and processes may be necessary for application in the state and local environment. However, this "adaptive engineering" generally is not extensive or expensive and can be accomplished by federal laboratory and state and local personnel working together. State and local government concerns with regional economic growth also have focused attention on technology transfer as a mechanism to increase private sector innovation related activities within their jurisdiction. In order to develop and foster an entrepreneurial climate, many states and localities are undertaking the support of programs that assist high technology businesses, and that often use the federal laboratory system. State and local efforts to develop "incubator centers" for small companies may rely on cooperation with federal laboratories, which supply technical expertise to firms locating at the center. Other larger programs to promote innovation in the state, such as the Ben Franklin Partnership in Pennsylvania, use the science and technology resources of federal personnel. Additional programs have been created involving state universities, private companies, and the federal laboratories, with each program geared to the specific needs and desires of the participating parties. Over the years, legislative initiatives have fostered the transfer of technology from the federal government to state and local jurisdictions and to the private sector. The primary law affording access to the federal laboratory system is P.L. 96 - 480 , the Stevenson-Wydler Technology Innovation Act of 1980, as amended by the Federal Technology Transfer Act of 1986 ( P.L. 99 - 502 ), the Omnibus Trade and Competitiveness Act ( P.L. 100-418 ), the 1990 Department of Defense (DOD) Authorization Act ( P.L. 101 - 189 ), the National Defense Authorization Act for FY1991 ( P.L. 101 - 510 ), the Technology Transfer Improvements and Advancement Act ( P.L. 104 - 113 ), and the Technology Transfer Commercialization Act ( P.L. 106 - 404 ). Several practices have been established and laws enacted that are aimed at encouraging the private sector to utilize the knowledge and technologies generated by the federal R&D endeavor. These are discussed below. One of the primary federal efforts to facilitate and coordinate the transfer of technology among various levels of government and to the private sector is the Federal Laboratory Consortium for Technology Transfer (FLC). The Consortium was originally established under the auspices of the Department of Defense in the early 1970s to assist in transferring DOD technology to state and local governments. Several years later, it was expanded to include other federal departments in a voluntary organization of approximately 300 federal laboratories. The Federal Technology Transfer Act of 1986 ( P.L. 99 - 502 ) provided the FLC with a legislative mandate to operate and required the membership of most federal laboratories. Today, over 600 laboratories are represented.