Converting technology to commerce

Robert Hebner

Last month we presented the first half of an address by the author at the Inaugural Symposium at Boston University`s Photonics Center, in which he described technology as "the engine of economic growth" (see Laser Focus World, Jan. 1998, p. 71); this month he outlines proven ways to move the results of technological research to the worldwide marketplace.

The characteristics of high-technology businesses place a premium on cooperation between the developers of enabling technologies and potential users, particularly users in high-volume applications. The electronics industries in Japan and Korea have been particularly well structured for managing the innovation process in advanced electronics through such partnerships. And their worldwide marketshare reflects their success.

In the USA, such cooperation is developing. The Photonics Center at Boston University is a focal point for cooperation where the best in the university and in industry can come together to convert technology into commerce. Cooperative Research and Development Agreements allow industry and government laboratories to address problems of common interest. And in my own agency, the National Institute for Standards and Technology (NIST), the Advanced Technology Program allows industry and government to cofund the development of advanced technology expected to have wide economic benefit but which cannot otherwise be funded.

The importance of photonic technologies to our increasingly digital economy and our national security demands that the United States meet the challenge of converting R&D into market success. For if we do not generate market revenues, we will lose the flow of funds needed to maintain our technical leadership.

Critical time for photonics industry

With the scale-u¥of the digital economy, the photonics industry stands at a critical juncture. What can we do to foster partnerships between technology developers and users? And what can we do to encourage investment in product development and high-volume manufacturing?

I believe the industry is taking some very good steps--for example, in the development of the Optoelectronic Technology Roadma¥catalyzed by the Optoelectronics Industry Development Association. For an enabling technology, each player may see that its piece of the business has the potential for growth and profits. But success may depend on a larger framework, a constellation of firms and institutions that can bring a spectrum of abilities to bear on a market opportunity.

Roadmaps can hel¥establish that larger framework that clarifies where individual company efforts fit in exploiting a technology or market opportunity. This reduces uncertainty which, in turn, reduces an individual company`s risk. Roadmaps can also reduce duplication of effort and make more effective use of R&D dollars. I must admit that roadmaps also make NIST`s planning easier, particularly for our Measurements and Standards program. The better we understand how the industry thinks it will evolve, the better we understand what measurement capability will be required and on what time scale.

Close interaction between the developers of photonic technologies and potential users is also needed. Such cooperation helps identify markets earlier, helps drive innovation processes toward market goals, and moves products to market faster.

There are situations where it is appropriate for government to partner with in dustry, especially in the development of high-risk technologies that promise significant commercial payoffs and widespread benefits. This is the role of the Commerce Department`s Advanced Technology Program (ATP). By sharing R&D costs with industry at the precompetitive stage of technology development, the AT¥helps advance enabling technologies that are essential to the development of new products, processes, and services across diverse application areas. Close to half of all AT¥awards have involved electronics, computing, information, and communications technologies.

The AT¥has also been very successful in catalyzing cooperation between technology developers and users, and that may be one of the program`s most valuable outcomes. The Commerce Department, also through NIST, works with industry to develo¥critical measurements and standards for optoelectronics.

Beyond technology--the broader view

Experience has shown us that much more than technology is needed for commercial success and technology-based economic growth. That is why federal technology policy must address issues beyond R&D. First, the federal government must hel¥create an environment in which private-sector innovation can flourish. For the advanced electronics industry, this ranges from investment incentives such as the R&D tax credit to the recent telecommunications reforms that promise to expand the markets for your products.

The Clinton Administration`s recently released Framework for Global Electronic Commerce, applauded by industry, carefully considers the appropriate role of government, while ensuring that industry remains in the driver`s seat. It, too, sets forth principles that should spur markets for photonic products. We must pursue the growing overseas markets for photonic products and not ignore rapidly strengthening foreign competitors in the field. We must ensure that markets for high-tech products are open and unencumbered; the cost of R&D and production facilities in high-tech industries is often prohibitive unless markets are captured globally to generate a sufficient return on those investments.

We have made substantial progress in opening markets and in other key issues such as intellectual property protection through mechanisms such as GATT, NAFTA, and the Information Technology Agreement. Now we must work to ensure that emerging economies embrace the principles embodied in these agreements.

Recognizing that a modern infrastructure strongly enables innovation and growth, the United States is rapidly putting in place an infrastructure for the knowledge-based economy through efforts in both the public and private sectors to develo¥and deploy the National Information Infrastructure. Other key elements of our infrastructure, ones near and dear to my heart, are the measurements, standards, evaluated data, and test methods that are indispensable to a nation`s industrial foundation. NIST works closely with industry in this regard, and we are making significant efforts to ensure that we carry out our work in a way that is most supportive of US industry and that keeps pace with technological change.

Finally, no company in the advanced-electronics business, or most businesses for that matter, is going to make it without a highly skilled workforce. Today, our technology-driven economy is creating many high-skill jobs. For example, more than half of the new jobs created in the last three years require higher-level skills and training beyond what a high school diploma affords. Even many factory workers require knowledge and skills beyond what one gathers in high school. They are often required to use sophisticated technology and statistics-based systems of quality control and to assume a range of duties such as production scheduling, materials management, safety and environmental compliance, and workplace communications.

The Photonics Center at Boston University houses a key experiment in maintaining the US competitive lead. It is designed to make the strengths of a first-rate university available to developing business. This experiment, if successful, will produce students with the technical and business skills needed to succeed in tomorrow`s global market. We will be watching this program with great interest. The United States needs new effective mechanisms to remain competitive in the global markets of tomorrow. o