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- #### #### #### | A TECHNOLOGY POLICY FOR AMERICA
- ######## ######## ######## | by President-Elect Bill Clinton
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- EFFector Online November 4, 1992 Issue 3.08
- A Publication of the Electronic Frontier Foundation
- ISSN 1062-9424
- =====================================================================
-
-
- A TECHNOLOGY POLICY FOR AMERICA Six Broad Initiatives
- by Bill Clinton
- (September, 1992)
-
- The Clinton-Gore technology policy consists of six broad initiatives
- that together will restore America's technological leadership:
-
- 1. Building a 21st Century Technology Infrastructure.
-
- Infrastructure has traditionally been the responsibility of federal and
- state governments. Investing in infrastructure means more than repairing
- bridges, harbors and highways. Today, the United States faces a new
- series of communications, transportation and environmental needs for the
- 21st century. The creation of a 21st century infrastructure program
- would serve as a critical technology driver for the nation. It would
- stimulate major new national R&D efforts; create large, predictable
- markets that would prompt significant private sector investments; and
- create millions of new jobs.
-
- A 21st century infrastructure would address many practical problems. For
- example, the government can serve as a catalyst for the private sector
- development of an advanced national communications network, which would
- help companies collaborate on research and design for advanced
- manufacturing; allow doctors across the country to access leading
- medical expertise; put immense educational resources at the fingertips
- of American teachers and students; open new avenues for disabled people
- to do things they can't do today; provide technical information to small
- businesses; and make telecommuting much easier. Such a network could do
- for the productivity of individuals at their places of work and learning
- what the interstate highway of the 1950s did for the productivity of the
- nation's travel and distribution system.
-
- Each year, I plan to devote a significant portion of my four year, $80
- billion Rebuild America fund to laying the groundwork for the nation's
- infrastructure needs in the 21st century. Federal funding for the
- National Research and Education Network is one example of how the
- federal government can serve as a catalyst for private sector
- infrastructure investment. We will also provide additional funding to
- network our schools, hospitals and libraries.
-
- As part of the effort to assess U.S. needs and develop appropriate
- programs, the federal government must monitor, or "benchmark", what
- foreign governments are doing. For example, the Japanese government has
- committed to invest over $120 billion by 1995 to develop a digital
- broadband communication infrastructure called the Information Network
- System, and plans to invest another $150 billion to establish model
- programs for business and residential users.
-
- A comprehensive infrastructure program must also include effective
- standards and regulations. By establishing reasonable standards and a
- constructive regulatory environment, the government can send clear
- signals to industry about important, emerging markets and spur private
- sector investment. For example, the digital standard that the Federal
- Communications Commission (FCC), in cooperation with industry,
- established for high resolution television provides an excellent
- indication of the future technical direction of the industry and will do
- much to facilitate private sector R&D.
-
- A 21st century infrastructure program should consist of the following
- five elements:
- Funding the establishment of key networks and demonstration
- projects;
- Benchmarking U.S. programs against those of other major industrial
- nations;
- Establishing standards and a regulatory climate that fosters
- private sector investment;
- Involving the federal labs, companies, and universities in
- conducting R&D on key technical issues; and
- Providing training for users of networks and databases.
-
- 2. Establishing Education and Training Programs for a High-Skill
- Workforce.
-
- The U.S. education system must make sure that American workers have the
- requisite skills. The focus should be not only on the top American
- students who measure up to world-class standards, but also on average
- and disadvantaged students. It must also take into account the need to
- upgrade workers' skills and help people make the difficult transition
- from repetitive, low-skill jobs to the demands of a flexible, high-skill
- workplace. Unlike Germany, the United States does not have a
- sophisticated vocational education program, and unlike Japan, U.S. firms
- do not have a strong incentive to invest in the training and retraining
- of their workers. We need more of both, geared to meet the needs of the
- mobile U.S. workforce.
-
- I will implement the following programs to strengthen the skills of
- America's workforce:
- Establish tough standards and a national examination system in
- core subjects like writing, communication, math and science;
- level the playing field for disadvantaged students;
- reduce class sizes;and give parents the right to chose the public
- schools their child attends.
-
- Establish a national apprenticeship program that offers non-
- college bound students training in a marketable skill.
-
- Give every American the right to borrow money for college by
- establishing a National Service Trust Fund. Students can repay
- their borrowing as a percent of their earnings over time, or by
- serving their communities for one or two years doing work their
- country needs.
-
- Stimulate industry to provide continuing, high skills training to
- its front-line workers.
-
- For small manufacturers to compete today, it is not good enough simply
- to have access to new equipment and new technologies if their workers do
- not have the skills and know-how to operate them efficiently, and engage
- in truly flexible production. Yet, too much of our training is for only
- top executives or workers after they have lost their jobs.
-
- My plan calls for companies with over 50 employees to ensure that 1.5
- percent of their payroll goes to training throughout the workforce --
- not just for the top executives. But we must do more for smaller
- companies who cannot afford to set up the training programs. These
- companies need to adapt to new technologies and new equipment and the
- constantly new demands.
-
- New production technology should be worker-centered and skill-based, not
- skill-eliminating. In the high-performance workplace, workers have more
- control over production and worker responsibility is increased. Some
- companies that have invested billions in new capital equipment have
- found that genuine employee involvement and good labor-management
- relations are ultimately more important. Therefore we need to undertake
- the following:
- Manufacturing training centers:
- We need to promote private sector-led efforts to set up training
- for small companies. These can be done by building off community
- colleges training and should be an integral part of the network of
- Manufacturing Extension provisions. These would also be integrated
- with my Apprenticeship initiative so that young people will have
- the opportunity to learn specific skills needed for specific
- manufacturing jobs or industries. Councils including private
- sector and academic leaders as well as workers would help decide
- generic areas for training.
-
- Certificate of training guarantees:
- In order to be eligible for federal funds for manufacturing
- training centers, such centers would have to provide all future
- employers with a Certificate of Guarantee. This would ensure that,
- when workers do not pick up the necessary skills the first time,
- these centers would provide additional training -- at no
- additional cost to the employer.
-
- Best Practices on Worker Participation:
- An integral function of the Manufacturing Extension Centers will
- be to collect and disseminate information on "best practices" with
- regards to worker participation. Increasing worker productivity is
- one of the keys to increasing overall manufacturing productivity.
-
- 3. Investing in Technology Programs that Empower America's Small
- Businesses.
-
- A healthy and growing small-business sector is essential to America's
- economic well-being. America's 20 million small businesses account for
- 40 percent of our GNP, half of all employment, and more than half of the
- job creation. My technology policy will recognize the importance of
- small and medium-sized business to America's economic growth with:
- Market-driven extension centers:
- Creating 170 manufacturing centers will put the best tools in the
- hands of those companies that are creating the new jobs on which
- the American economy depends by helping small- and medium- sized
- manufacturers choose the right equipment, adopt the top business
- practices, and learn cutting-edge production techniques. In order
- to enhance U.S. industrial competitiveness, public policy must
- promote the diffusion and absorption of technology across the U.S.
- industrial base. Some state and local governments are already
- involved in technology diffusion using manufacturing centers. They
- are helping small businesses improve the productivity of their
- existing machinery and equipment, adopt computer-integrated or
- flexible manufacturing techniques, and identify training needs.
-
- The Commerce Department has five Manufacturing Technology Centers across
- the country and has plans for two more. Unfortunately, these efforts are
- only a drop in the bucket compared to those of our major competitors.
- Germany has over 40 contract R&D centers (Fraunhofer Gesellschaft) and a
- broad network of industry associations and research cooperatives that
- effectively diffuse technology across industry. In Japan, major
- government-sponsored research projects, 170 kohsetsushi technology
- support centers for small businesses, and tight links between companies
- and their suppliers serve much the same function. There is no comparable
- system in the United States.
-
- A Clinton-Gore Administration will build on the efforts of state and
- local governments to create a national technology extension program,
- designed to meet the needs of the millions of small businesses that have
- difficulty tracking new technology and adapting it to their needs.
-
- The involvement of workers is critical to developing and executing
- successful industrial extension programs. In technology, as in other
- area, we must put people first. New production technology should be
- worker-centered and skill-based, not skill-eliminating. In the high-
- performance workplace, workers have more control over production and
- worker responsibility is increased. Some companies that have invested
- billions in new capital equipment have found that genuine employee
- involvement and good labor-management relations are ultimately more
- important.
-
- No less than 25 of these new manufacturing centers will be regional
- technology alliances devoted to regions hit hard by defense cut-backs.
- These alliances could promote the development of dual-use technologies
- and manufacturing processes on a regional basis. Extending the Small
- Business Innovation Research Program (SBIR)
-
- In addition to creating a national technology extension service for
- small and medium-sized businesses, I will also expand the Small Business
- Innovation Research Program. By requiring that federal agencies set-
- aside 1.25 percent of their R&D budget for small businesses, this
- program has helped create billions of dollars of new commercial activity
- while improving the research programs of the federal government. Given
- this track record, the SBIR program should be doubled over a period of
- four years to 2.5% to accelerate the development of new products by
- innovative small businesses.
-
- Funding private sector-led training centers:
- We also need a fundamental change in the way we deal with R&D and
- technology if we are to lead a new era of American manufacturing.
- Currently, our R&D budget reflects neither the realities of the post-
- Cold War era nor the demands for a new national security. At present,
- 60% of the federal R&D budget is devoted to defense programs and 40%
- percent to non-defense programs. The federal government should aim to
- restore a 50-50 balance between defense and non-defense R&D. That is why
- I have called for a new civilian research and development program to
- support research in the technologies that will launch new growth
- industries and revitalize traditional ones.
-
- This civilian technology program will:
- Invest in Private-Sector Led Consortia: When the private sector
- creates consortia to share risks, pool resources, avoid
- duplication and make investments that they would not make without
- such agreements, government should be willing to do its part.
- Support for consortia such as the SEMATECH, National Center for
- Manufacturing Sciences and the Advanced Battery is appropriate. By
- requiring firms to match federal contributions on at least a 50:50
- basis, the government can insure that we are leveraging public
- dollars and that they are market-led and market-oriented. Often
- major companies are reluctant to invest in their suppliers and
- assist them in quality management techniques, because they fear
- they will go to another company. Private-sector-led consortia
- allow the major companies to cure that problem by coming together
- and agreeing on industry-wide efforts to invest in smaller
- suppliers. Some of these consortia will be funded by the Advanced
- Technology Program.
-
- Inward Technology Transfer: While we must strengthen the links
- between American R&D and American jobs, we must also develop a
- strategy for acquiring, disseminating, and utilizing foreign
- technologies. Our Government must increase the collection,
- translation and dissemination of foreign scientific and technical
- information.
-
- 4. Increasing Dramatically the Percentage of Federal R&D for Critical
- Technologies.
-
- I will view the support of generic industrial technologies as a priority
- mission. The government already spends $76 billion annually on R&D. This
- funding should be refocused so that more resources are devoted to
- critical technologies, such as advanced materials, information
- technology and new manufacturing processes that boost industrial
- performance.
-
- At present, 60% of the federal R&D budget is devoted to defense programs
- and 40% percent to non-defense programs. This level of support for
- defense R&D is a holdover from the massive arms build-up of the 1980s.
- At the very least, in the next three years the federal government should
- shift the balance between defense and non-defense programs back to a 50-
- 50 balance, which would free-up over $7 billion for non-defense R&D.
- Having achieved this balance, the government should examine whether
- national security considerations and economic conditions warrant further
- shifts.
-
- I will also create a civilian research and development program to
- support research in the technologies that will launch new growth
- industries and revitalize traditional ones.
-
- This civilian technology program will:
- Help companies develop innovative technologies and bring new
- products to market;
- Take the lead in coordinating the R&D investments of federal
- agencies;
- and Cooperate and consult with industry, academia and labor in the
- formulation and implementation of technology policy and R&D
- programs.
-
- Advanced Manufacturing R&D:
- The United States is currently underinvesting in advanced manufacturing
- R&D. The federal government should work with the private sector -- with
- the private sector taking the lead -- to develop an investment strategy
- for those technologies critical to 21st century manufacturing.
-
- Following the lead of my running mate, Al Gore, and several of his
- colleagues, we must do more to support industry's efforts to develop the
- advanced computer-controlled equipment ("intelligent machines") and the
- electronic networks that will enable American factories to work as
- quickly and efficiently as their Japanese counterparts. These
- technologies also include flexible micro- and nanofabrication,
- simulation and modeling of manufacturing processes, tools for concurrent
- engineering, electronic networks that allow firms to share business and
- product data within and between firms, and environmentally-conscious
- manufacturing. According to industry experts, the United States has an
- opportunity to capitalize on the emerging shift from mass production to
- flexible or "agile" manufacturing.
-
- 5. Leveraging the Existing Federal Investment in Technology to Maximize
- its Contribution to Industrial Performance.
-
- R&D conducted at the federal labs and consortia should be carefully
- evaluated to assure that it has a maximum impact on industrial
- performance. Furthermore, cooperation between universities and industry
- should be encouraged.
-
- America's 726 federal laboratories collectively have a budget of $23
- billion, but their missions and funding reflect the priorities that
- guided the United States during the Cold War. Approximately one-half of
- their budget is directed toward military R&D. By contract, the budget
- for the National Institute for Standards and Technology (NIST) - the
- only federal agency whose principal mission is to assist industry -
- accounts for less than one percent of the total federal lab budget.
- Despite several years of legislative reform and many new directives, the
- labs still do not have the autonomy or funding to pursue joint ventures
- and industry aggressively.
-
- These labs and other private non-profit research centers are national
- treasures because they house large, multi-disciplinary teams of
- researchers who have honed the skills of balancing basic and applied
- research for long-term, mission-oriented projects. It would take years
- to match these special capabilities elsewhere. Today, the labs and
- industry cooperate on defense needs; we need to change regulations and
- orientation to get this cooperation on technology development for
- commercial usage.
-
- To remedy these problems, I propose the following:
- The budget of the National Institute of Standards and Technology
- should be doubled. Federal labs which can make a significant
- contribution to U.S. competitiveness should have ten to twenty
- percent of their existing budget assigned to establish joint
- ventures with industry.
-
- Private corporations should compete for this funding through
- review by panels managed by the labs and made up of corporate and
- academic experts. Lab directors should have full authority to
- sign, fund and implement cooperative R&D agreements with industry.
- Some labs, such as NIST, already have this authority, but others
- do not.
-
- Industry and the labs should jointly develop measures to determine
- how well the technology transfer process is working and review
- progress after 3 years. If these goals have not been met, industry
- and the labs should reevaluate their involvement, and funds should
- be redirected to consortia, universities and other organizations
- that can work more effectively with industry for results.
-
- University research accounts for a large part of the federal basic
- research budget. Funding for basic university research should
- continue to be provided for a broad range of disciplines, since it
- is impossible to predict where the next breakthrough may come.
-
- While maintaining America's leadership in basic research,
- government, universities and industry must all work together to
- take advantage of these new breakthroughs to enhance U.S.
- competitiveness.
-
- Cooperative R&D programs represent another opportunity. Consortia can
- help firms share risks, pool resources, avoid duplication, and make
- investments that they would not undertake individually. By requiring
- that firms match federal contributions on at least a 50:50 basis, the
- government can leverage its investments and ensure that they are market-
- oriented.
-
- Many industries are demonstrating a new found willingness to cooperate
- to meet the challenge of international competition: SEMATECH has proven
- to be an important investment for the industry and the Nation. It has
- helped improve U.S. semiconductor manufacturing technology, helped
- reversed the decline in world-wide market share of U.S. semiconductor
- manufacturing equipment companies, and improved communications between
- users and suppliers. U.S. automakers have recently formed the United
- States Council for Automotive Research to develop batteries for electric
- cars, reduce emissions, improve safety, and enhance computer-aided
- design. The Michigan-based National Center for Manufacturing Sciences,
- which now has 130 members, is helping to develop and deploy the
- technologies necessary for world-class manufacturing. The
- Microelectronics Computer Technology Corporation (MCC) is developing an
- information infrastructure which will enable businesses to develop,
- manufacture, deliver and support products and services with superior
- speed, flexibility, and quality. U.S. steel-makers are cooperating to
- develop manufacturing processes which would use less energy, create
- fewer pollutants, and slash the time required to turn iron ore and coal
- into steel.
-
- A Clinton-Gore Administration will work to build a productive
- partnership between government, research labs, universities, and
- business.
-
- 6. Creating a World-Class Business Environment for Private Sector
- Investment and Innovation.
-
- Changes in America's tax, trade and regulatory policies are also needed
- to help restore America's industrial and technological leadership. In a
- global economy in which capital and technology are increasingly mobile,
- we must make sure that the United States has the best business
- environment for private sector investment. Tax incentives can spur
- investment in plant and equipment, R&D and new businesses. Trade policy
- can ensure that U.S. firms have the same access to foreign markets that
- our competitors enjoy in the U.S. market. Antitrust reform will enable
- U.S. firms to share risks and pool resources. Strengthening commercial
- sections of our embassies will increase our ability to promote U.S.
- goods abroad. Streamlining export controls will reduce the bureaucratic
- red tape which can undermine competitiveness. And an overhaul of
- cumbersome defense procurement regulations will strengthen both our
- civilian and defense industrial bases. Permanent incentives for private
- sector investment:
-
- Too many federal incentives meant to spur innovation are on-again-off-
- again programs that industry views as unreliable. As a result, they have
- not realized their full impact. Several permanent tax measures should be
- put in place immediately to stimulate commercial activity. They include
- the following:
- Make the R&D tax credit permanent to provide incentives for U.S.
- companies that invest in developing new technology.
- Place a permanent moratorium on Treasury Regulation 1.861-8: This
- regulation increases the effective rate of U.S. taxation of R&D
- and creates a disincentive for companies to conduct R&D in the
- United States.
- Provide a targeted investment tax credit to encourage investment
- in the new equipment that we need to compete in the global
- economy, and ensure that depreciation schedules reflect the rapid
- rate of technological obsolescence of today's high-tech equipment.
- Help small businesses and entrepreneurs by offering a 50% tax
- exclusion to those who take risks by making long-term investments
- in new businesses.
-
- An effective trade policy:
- The Bush-Quayle Administration has failed to stand up for U.S. workers
- and firms. We need a President who will open foreign markets and respond
- forcefully to unfair trade practices. I will:
- - Enact a stronger, sharper Super 301 to ensure that U.S.
- companies enjoy the same access to foreign markets that foreign
- companies enjoy to our market.
- - Successfully complete the Uruguay Round. This will help U.S.
- manufacturers and high-tech companies by reducing foreign tariffs,
- putting an end to the rampant theft of U.S. intellectual property,
- and maintaining strong disciplines against unfair trade practices.
- - Insist on results from our trade agreements. Although the U.S.
- has negotiated many trade agreements, particularly with Japan,
- results have been disappointing. I will ensure that all trade
- agreements are lived up to, including agreements in sectors such
- as telecommunications, computers and semiconductors. Countries
- that fail to comply with trade agreements will face sanctions.
- - Promote manufactured goods exports by small and medium
- companies: To promote exports of manufactured goods, I will
- strengthen the commercial sections of our embassies abroad so that
- they can promote U.S goods, participate in foreign standards-
- setting organizations, and support the sales efforts of small and
- medium-sized businesses. We should also provide matching funds to
- trade associations or other organizations who establish overseas
- centers to promote U.S. manufactured goods exports.
-
- Streamline Exports Controls:
- Export controls are necessary to protect U.S. national security
- interests and prevent the proliferation of nuclear, biological and
- chemical weapons. Nonetheless, these controls are often overly
- restrictive and bureaucratic, creating a mountain of red tape and
- costing the U.S. tens of billions of dollars in exports -- while
- undermining the competitiveness of the high-tech industries on which our
- national security depends. The United States should:
- - Further liberalize East-West export controls that are
- unnecessary given the end of the Cold War.
- - Avoid unilateral export controls and controls on technology
- widely available in world markets. Unilateral controls penalize
- U.S. exporters without advancing U.S. national security or foreign
- policy interests.
- - Streamline the current decision-making process for export
- controls. While our competitors use a single agency to administer
- export controls, the United States system is often characterized
- by lengthy bureaucratic turf wars between the State Department,
- the Commerce Department, the Pentagon's Defense Technology
- Security Agency, the Arms Control and Disarmament Agency, the
- Department of Energy, and the National Security Agency.
-
- Antitrust Reform:
- Increasingly, the escalating cost of state-of-the-art manufacturing
- facilities will require firms to share costs and pool risks. To permit
- this cooperation, the United States should extend the National
- Cooperative Research Act of 1984 to cover joint production ventures.
-
- Civil-military integration:
- Department of Defense procurement regulations are so cumbersome that
- they have resulted in an unnecessary and wasteful segregation of our
- civilian and defense industrial bases. The military specification for
- sugar cookies is 10 pages long. Government procurement is so different
- from private sector practices that companies now set up separate
- divisions and manufacturing facilities to avoid distorting the
- commercial part of their business. The U.S. must review and eliminate
- barriers to the integration of our defense and civilian industrial base.
- These barriers include cost and price accounting, unnecessary military
- specifications, procurement regulations, inflexibility on technical data
- rights, and a failure to develop technologies in a dual-use context.
-
- Taken together, the six initiatives discussed above comprise a
- technology policy that will restore economic growth at home, help U.S.
- firms succeed in world markets, and help American workers earn a good
- standard of living in the international economy.
-
-
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