FOR IMMEDIATE RELEASE:                  G 96-09
Feb. 12, 1996

              
 
     The Commerce Department's Advanced Technology Program is succeeding
in its near-term goal of fostering and accelerating the development of
promising, but high-risk, enabling technologies by U.S. industry,
according to the results of a new study released today.

     The largest and most thorough study of the ATP to date summarizes
the results of a survey of 125 companies and non-profit organizations
participating in ATP projects awarded during the first three years of
the program.

     The survey was conducted by Silber and Associates, an independent
research firm, under contract to the National Institute of Standards and
Technology, which manages the ATP. It extends the scope of an early
pilot study of the first ATP projects, conducted by Solomon Associates
in 1993.

     Seventy percent of the companies interviewed reported that there
was little or no chance that they would have pursued the technology now
under development without support from the ATP. Of the balance, 90
percent said that if they had gone ahead with the research without the
ATP, they would have done so with significantly lower goals and/or at a
significantly slower pace. "We would have been much slower, probably
three years out," commented one respondent, "which in this industry is
forever."

     Commerce Secretary Ronald H. Brown said this study showed the ATP
is a valuable national resource deserving broad, bipartisan support.
"When you're investing money in people and their projects, it's easy to
get them to say nice things about you in the abstract, but this report
cuts through that to hard facts and results," said Brown.

     "Two years or more knocked off the R&D cycle, according to seven
out of 10 participants. New technologies that will enable higher
quality, higher performance products, according to eight out of 10.
Improved competitive position for their companies as a direct result of
the ATP project according to more than half the respondents. Those are
solid results that translate to jobs and economic growth for the United
States, and that's what we're here for," said Brown.

     In presenting the study results, NIST Director Arati Prabhakar
emphasized that the new study only considered near-term, relatively
immediate, impacts of the program. "The real goals of the ATP are long
term catalyzing broad economic benefits for the economy. That happens
when products and technologies based on ATP projects enter the
marketplace and, in turn, enable others in the economy to introduce new
and better products of their own to the world's markets," Prabhakar
said.

     "Studies like this report are one of several economic research
tools we use to track the progress of the ATP. One particularly
encouraging result of this study is the extent to which the companies
already are commercializing results from the ATP projects," she said.

     Established in 1990, the Advanced Technology Program offers
cost-sharing awards to industry on a competitive basis for R&D projects
to advance high-risk enabling technologies with the potential for
important, broad-based economic benefits for the nation. By reducing
early R&D risks for individual companies, the ATP enables industry to
pursue promising technologies that otherwise would be ignored or
developed too slowly to compete in rapidly changing world markets. The
program has sponsored nearly 300 R&D projects since its inception.

     Other results from the current study reinforce earlier findings
     that the ATP has:

*    stimulated collaboration and formation of strategic alliances
     between companies;


*    accelerated commercialization of technologies related to the ATP
     project;

*    created new business opportunities;

*    increased the credibility and standing of project participants with
     competitors and customers;

*    enabled participants to attract additional R&D funding; and in some
     cases

*    effected changes in the corporate R&D culture seen as beneficial by
     the companies.

     As a non-regulatory agency of the Commerce Department's Technology
Administration, NIST promotes U.S. economic growth by working with
industry to develop and apply technology, measurements and standards.



Editor's note: Copies of the full study are available for reporters from
               NIST. Contact Michael Baum at the number above. Other
               requests for copies of the study should be made to the
               Advanced Technology Program, (301) 975-4332.

Silber Study - Executive Summary

1. The Survey of ATP Awardees is an extensive and in-depth look at the program's impact on companies who received funding during ATP's initial three years. It is a snap-shot at a particular point in time. The focus of the survey is on early effects of the ATP awards on the companies that received the awards, and not on the longer-term economic impacts that are expected to accrue to awardees and also extend beyond them. All 125 companies and consortia who participated in 60 ATP-funded projects from 1990 to 1992 were interviewed by telephone January through June, 1995. [refer to page 6]

2. With the exception of three participants, who expressed clear-cut dissatisfaction, the other 122 cited numerous examples of the program's positive impact. Many maintain that the ATP has been the lifeblood of their company's innovative research efforts, permitting them to venture into arenas new to U.S. industry. Even several companies whose ATP funding ended early spoke favorably about the program. [refer to page 11]

3. The three dissatisfied participants all criticized some aspects of joint ventures. One disagreed with ATP's decision not to renew his project. One complained about the difficulty of managing complex, collaborative relationships, and the third criticized the decision-making ability of the joint venture team. [refer to pages 12-13]

4. The impact of the ATP awards is already proving to be significant and far-reaching. Participants named the most important outcomes of the award from their perspective: it (1) enabled them to afford and engage in high-risk research, which, in many cases, meant the difference between pursuing and abandoning their technology and in other cases, a significant boost to their level of effort and speed [pages 14 & 18] , (2) stimulated collaboration and formation of strategic alliances [page 21], (3) shortened the R & D cycle [page 39]. Other significant outcomes include increased credibility among competitors, customers, and company management [page 44] ; positive changes in competitive standing [page 48]; changes in companies' traditional ways of doing business [page 58] ; and creation of new business opportunities [page 18] .

6. Sixty-two percent of participants anticipate their company will commercialize a product or service resulting from the ATP award [page 59] . (About 30%--typically joint venture participants playing a minor role--indicated their role in the project was not to pursue commercialization; rather, they focused only on R&D issues or a narrow piece of the ATP project.)

7. More than half of 1990 participants, 30% of 1991 participants, and 25% from 1992 said they expected to earn revenue from technology related to their ATP project before the end of 1995, and some have already seen it happen [pages 60-61] . Most of the companies who are currently receiving revenue as a direct or indirect result of the ATP award say they've generated a return several years sooner than they would have without the support of the ATP [page 60] .

8. Indications are that the ATP-funded technologies are truly enabling. Sixty-one percent of commercializing participants said they've uncovered an average of three new applications of their ATP-related technology, ones which crystallized after their project began, in addition to the initial applications identified in their proposal[page 50] .

9. Over 90% of participants report they have invested far more money in the technology--on average, an additional $1.47 million each from their own coffers--as a result of the ATP award [page 20] .

10. Fifty-six percent of participants reported creating an average of six new positions--at this R & D stage, mostly for scientists and engineers--as a direct result of the ATP award. Twenty-eight percent said the award enabled them to retain an average of three employees--again, predominantly scientists and engineers--whose jobs otherwise would have been eliminated [pages 48-49] . An early commercializer of ATP technology reported 100 new manufacturing jobs to date. [This number was not included in the computation of the average number of new jobs, since the participant relayed the information anecdotally, not in response to a specific question about the effect of the award on employment.]

11. Many participants hailed the uncommon opportunity to work hand in hand with their competitors or customers, creating a powerful and pragmatic research alliance. On average, each joint venture project included six formal participants. In addition, JV participants and Single Applicants both established an average of two more business relationships during the course of their project. Many of the JV and subcontractor relationships were new ones, created expressly under the ATP. Participants reported forming alliances with an average of five companies with whom they had never before done business [page 23] .

12. Leveraging of money, resources, and expertise is a critical element of the award. Without the opportunity for risk sharing, most companies could not venture down a high-risk path of research. Under the ATP, competitors have joined hands, and suppliers have banded with customers, to share ideas and resources for the sake of common research goals [pages 21-27] .

13. Of the 115 companies who worked collaboratively on their ATP project, 95% said they realized a significant benefit from partnering with other companies [page 24] . In addition to leveraging resources, one of the greatest benefits is the stimulation of creative thinking, the collective brain power. Some companies, in fact, are participating without funding simply for exposure to scientific ideas. Other major benefits of collaboration include getting products to market sooner, time savings, increased customer acceptance, and obtaining R & D expertise not available in-house [page 27] .

14. Ninety-two percent of the companies said their ATP experience has peaked their interest in working collaboratively with other companies, and 96% of joint venture participants reported that this experience has influenced them to pursue other joint ventures down the road. More than 90% of all participants said their collaborative relationships on the ATP project have worked out very well [page 33] .

15. Ninety-six percent of participants believe the ATP award has accelerated their progress, greatly shortening their time involved in research and development. The majority anticipate shaving off a minimum of two years from the R & D cycle, a critical time savings. Without ATP to push the technology forward, some companies maintain they would have missed the window of opportunity, losing markets potentially worth "millions of dollars." Without the ATP funding a large group of participants report that their projects if they occurred at all would not conclude in realistic time frame [pages 37-38] .

16. As a result of the award, some companies have experienced a significant and perhaps lasting change in corporate philosophy, one which has led them to rethink their traditional ways of doing business, particularly with regard to collaboration, information sharing, and investment in research. The mindset of U.S. industry, according to a number of participants, is to emphasize short-term profits, a mentality one person called a "fatal flaw in American industry." The ATP participants say encourages and allows companies to focus on long-range technological development [pages 50-52] .

17. The ATP has stimulated business growth well beyond the development of the funded technology. Indeed, some participants maintain that their existence is due to the ATP award, and that without it, companies which are now flourishing would have been forced to shut their doors. Many companies described new business opportunities, stemming from new applications of the technology and the relationships they've cultivated through the project, which have emerged as a by-product of their ATP experience [pages 53-54] .

18. Many companies perceive the market potential of their evolving technology as even more favorable than at the outset. Now several years into their work, they have found increased cause for optimism, due in large part to clearing technical hurdles and reaching the market sooner [pages 39-40] .

19. About three-fourths of the companies say their competitive standing has improved since the time they won the award. To a "great" or extent 75% of this group relate the change in status to ATP award. Typically they attributed their competitive growth technological advances and new business opportunities made possible by moved from being a nobody premiere world provider said one [pages 46-47] .

20. Besides saving time, over 86% believe the ATP award will enable them to make a better product, in terms of quality and performance [page 55] .

21. Nine out of ten participants reported benefiting to a great or moderate extent from enhanced credibility associated with the award. Credibility, they say, is almost equal in importance to the direct financial impact of the award, particularly since increased credibility has meant increased business activity for many [pages 41-43] .

22. Forty percent of award recipients have attracted additional funding related to their ATP technology, and 78% of this group attribute their success at capturing funding to the ATP award. In general, the additional funds have ranged from $1 million to $2 million and have come from other agencies of the federal government, private industry, and investors [pages 44-45] .

23. About 95% of the companies plan to disseminate non-proprietary information related to their ATP project. Most participants view information sharing as an essential component of technological progress and already engage in it extensively [pages 56-57] .

24. The group of participants (28% of all companies in the program) who have availed themselves of NIST's technical support are overwhelmingly satisfied with the help they've received--96% rated the relationship favorably [page 68] .

25. Participants spoke of the ATP Office and personnel as first-rate. A number of companies commended ATP's administrative style, mentioning in particular how their ATP liaison provided support and direction without micro-managing their efforts [page 69].

26. The ATP, characterized by participants as this country's greatest hope for keeping pace with technological progress abroad, is held in highest regard: a full 98% of participating companies report they are very satisfied with the program overall. Consistent with their overall satisfaction, 97% of the participants believe the U.S. should continue the ATP, viewing it as a critical component of the country's long-term economic survival. The nation, they say, is already realizing some early yet significant economic results from the program [pages 71-72] .

• Proceed to Chapter One (for users with Netscape enhanced (v. 1.1) browsers.)
• Proceed to the Table of Contents (for users with Netscape enhanced (v. 1.1) browsers.)

For others, please request a full printed copy of the Silber Report from Cindy Smith at (301) 975-4332.

Date created: January 30, 1996
Last updated: April 12, 2005

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