Revamped grants program offers R&D funds for ‘critical national needs’

Exactly where would you spend taxpayer money if you were ordered by Congress to invest in R&D critical to the nation’s future but you had only $8 million?

That’s the situation that faces Marc Stanley, who directs the Technology Innovation Program, a new cost-shared grants office housed in NIST. TIP replaces the 18-year-old Advanced Technology Program (ATP) and, like its predecessor, is meant to assist in the commercialization of high-payoff technologies that are considered too risky to attract private capital. Created by last year’s America Creating Opportunities to Meaningfully Promote Excellence in Technology, Education, and Science (COMPETES) Act, TIP has been given the added mission of steering its investments into “areas of critical national need.” NIST has since identified seven such areas: water, energy, manufacturing, civil infrastructure, personalized medicine, communications, and complex networks.

It’s a tall order for a few million bucks. But dozens of ATP reviews and case studies have measured impacts out of proportion to the program’s modest means. A 2005 analysis of 40 completed ATP projects commissioned by the program’s in-house economic assessment unit identified more than $18 billion worth of expected present-value social benefits, an 8-to-1 return on the $2.3 billion total the ATP had spent up to that point. A 2006 case study compared the fortunes of two manufacturers of microdisplays, one a 1994 ATP grantee, the other a nongrantee. With its $1.7 million ATP grant, the one company shortened its time to market by two years and realized $5 million to $7 million in measurable net economic gains, according to the analysis.

Winners and losers

But partly due to concern with having the government pick winners and losers, the ATP was controversial from its inception. The Bush administration, and until last year the Republican-controlled Congress, has repeatedly targeted the program for termination. Opposition has always been along political and ideological lines; ATP detractors also objected to its subsidizing large corporations.

Historical statistics on ATP awards (1990–2007)

Over the years, the ATP received at least 29 reviews by the Government Accountability Office or the Department of Commerce’s Office of Inspector General. In a detailed 2002 audit, even the Office of Management and Budget gave the program high marks for its planning, program management, and results. But the OMB called for the ATP’s termination on the grounds that it wasn’t needed, that it was too small to have an impact, and that it overlapped with other federal programs.

That the ATP survived as long as it did speaks to the power of at least one well-placed lawmaker. From his perch as the top Democrat on the relevant appropriations subcommittee, Senator Ernest Hollings (D-SC) singlehandedly rescued the ATP more than once. When Hollings retired in 2005, opponents almost killed the program; no new grants were awarded in fiscal years 2005 and 2006, but the ATP was left to complete projects begun in prior years.

Congress appropriated $65.2 million for TIP this fiscal year, with most of that going to finish work on the 56 ATP grants that were awarded in 2007.

To ease the corporate subsidy concerns, TIP will exclude bids from large companies, defined as those listed among the Fortune 1000. Universities, which previously could participate in the ATP only as part of an industry-led team, will be eligible in 2009 to compete for TIP grants on their own. The maximum grant size for TIP awards to single companies has been raised to $3 million over three years, compared with the ATP’s $2 million maximum. But joint ventures can receive up to $9 million in TIP funds over five years. President Bush’s FY 2009 budget request includes zero for TIP, but lawmakers are likely to continue funding it.

No shortage of advice

TIP managers do not lack for advice on how to spend the meager budget. At a 24 April symposium convened at the National Academies, Stanley heard two dozen presenters from industry, government, national laboratories, and universities pitch their ideas about critical national technological needs. Stanley said he will also be tapping his eight program managers, an external TIP advisory committee, the National Research Council, and other sources for advice, in addition to studying papers he’s commissioned from three NIST fellows.

At the National Academies event, Peter Lee, head of the computer science department at Carnegie Mellon University, said TIP could consider funding new technological approaches to shrink microprocessor feature size. He suspected that the gambles Intel Corp and other chip manufacturers have made in taking a multicore architecture approach may not pay off as they hope. Anna Barker, deputy director of the National Cancer Institute, saw a critical national need in getting cancer biologists and clinicians to appreciate the potential of nanoscience to fight the disease. The NCI has established several university-based interdisciplinary centers for cancer nanotechnology excellence, where researchers are trying to put nanomaterials to work diagnosing and treating the disease.

Thomas Bowles, science adviser to New Mexico Governor Bill Richardson, recommended that TIP projects contribute to workforce development and to improving public understanding of science, technology, engineering, and mathematics. Richard Stulen, chief technical officer at Sandia National Laboratories, noted a pressing national need for all sorts of remote sensors and power sources for them. New methods for deterring cyberattacks are also needed, he said, as is greater use of models and simulations to cut US manufacturers’ product development times.

Stanley admitted that the task of picking a few projects to address a mountain of challenges will be daunting. Plans call for focusing on one of the seven needs categories for this year’s TIP competition. A request for proposals should be issued sometime this summer, with awards expected in November.

Begun during President George H. W. Bush’s term, the ATP thrived in the early Clinton years, peaking at $414 million in 1995. But the Republican takeover of Congress that year brought a reversal, and with the exception of one year, funding never topped $200 million again. Through September 2007, a total of $2.4 billion in ATP money had been committed for 824 projects involving 1581 participants, with the awardees contributing $2.2 billion in matching funds (see table on page 23). Small businesses of fewer than 500 employees took half of all awards, but their share increased in recent years; 53 of the 70 awards made last year were to small firms.