January 30, 1996

Prepared by: Silber & Associates
Dr. Bohne Silber
13067 Twelve Hills Road
Clarksville, MD 21029-1144

INCREASED ABILITY TO AFFORD AND
ENGAGE IN HIGH- RISK RESEARCH

When studying the table below, the reader should bear in mind the differential effect of one individual on percentage calculations when the number of people answering is 27, as in the case of 1990 and 1992 participants, versus 61 (the 1991 participants).

In all the tables, "n" is used to indicate the number of people answering a particular question, since not every company responded to every question.

Those who said that the impact of ATP on their ability to engage in high-risk R&D is small or none typically gave one of two explanations. Some explained that the ATP award amount was relatively small compared with the companies' overall research budget. As one company put it, "This is a relatively minor piece of what we do, since we're a $2-3 billion company. But it has given us a mechanism for focusing on longer-term research than what we'd otherwise be able to do. We don't have the luxury of putting resources into advanced research like this." Others described themselves as research companies for whom high risk R&D is not something new, but a way of life.

In contrast, most participants described the ATP as an enabling program. "We wouldn't have done this research without the award. It absolutely enabled us. We couldn't have gotten the funding [internally] nor considered it." Another participant elaborated, "ATP has played a great role in development of [specific program]. More progress has been made in the past 2-4 years than the last 10. We are certainly doing things we wouldn't have done otherwise because of the award. The award has pushed ahead development of the [specific project]. The economic impact is great--like the assembly line of the 1920's."

Numerous participants offered comments such as this one: "It speeded the process up by five years or more. For [specific application], it has moved time to market up by at least a decade, if we ever would have gotten to market at all. At the time of the award, we didn't have the capacity in terms of personnel or research tools. Now we're the leading facility in the world for researching this technology. The majority of this change is due to ATP. ATP has gotten us over technological hurdles. We can now get funding for applications. ATP was a very critical step in our path."

Another organization added, "It helped us level an uneven playing field which has been invaluable to our success. In our area, we are now the market leader. This forced [a Japanese company] to abandon U.S. market efforts. ATP was a significant piece of that. If the goal of ATP was to help small American companies be successful, it achieved that goal. It will keep the market [for our computer technology] in American hands. It gave us the dominant market position."

And from others, this sampling of comments:

• "The ATP meant survival. Without it our business would have met its demise."
• "Without ATP, we could not have done this program...there are so many applications of our technology we would have lost a billion dollar market, at least."
• "The ATP has had an outstanding impact and been a tremendous help in allowing us to engage in high risk research. We wouldn't have had the background or support at all without ATP."
• "We wouldn't be where we are without the award. It just plain wouldn't have happened."
• "It has enabled us to pull together a scientific team to develop the technology. Prior to ATP, we had done some work but had insufficient funds...the technology may have died without ATP."

For some, the outside funding drew management's attention, encouraging company decision-makers to take a closer look at the technology and channel more internal resources its way. "Our ability to afford and engage in high risk research has been influenced to a great extent, because the ATP has raised the company's awareness that [the materials we developed through ATP] are very advantageous, very attractive." The award has been a catalyst within the company, said a respondent, and "given us a focus for change. Now other parts of the corporation are interested in getting involved."

Others spoke about the ATP's ability to give their research program a jump-start or to sustain their efforts for a longer course. Without the ATP funding, said a respondent, "We would not be able to follow this high-risk path as long or as intensely. It allowed us to do a project that wouldn't have been done otherwise. It increased our speed and gave us direction." Another said, "Without ATP it would have been several years before we got involved. ATP was the catalyst to get us working in this area. The government provided us with an opportunity we wouldn't have had--it gave us the ability to partner with [company name]. We wanted to participate, even absent of funds. We elected not to receive funds because of the overhead, but we wanted to participate because of potential intellectual property discoveries and bench marking with other companies."

Another company, also an ATP joint venture participant who did not share in the monetary award, described, "I think it has helped to change upper management's perception of how soon this technology is needed. They've seen it can work. ATP helped convince them. Through the program, our management saw that other companies were working on this. Everyone now feels that [the research break-through] is possible. It gave more credibility to the technology, especially at our company."

Without the ATP, most companies indicated that they either would not have developed the technology at all or would have scaled back their goals and level of effort substantially. Of the 30% who thought they would have forged ahead without the ATP award, nine out of ten said their goals and level of effort would have been significantly scaled back and their progress significantly slower (see Figure 1). "We would have pursued [the technology]," said one, "but in an emasculated, ineffective fashion." The remaining 70% (61.4% of 1992 companies, 67.7% from 1991, and 81.4% from 1990) said the chances are slim or nonexistent that they would have pursued the technology development at all.

"At least in the '90's," said one participant, "[the technology] would not have been on the agenda. We couldn't have taken the risk--it's a very infant market. We needed NIST to get this return on investment." Explained another company, "Because of the money and critical size, we would have been unlikely to pursue development of the technology. We wouldn't have had access to the work of the other

Others echoed those feelings. "We would have gotten very little [internal] support without ATP, since we're a small company with multiple projects," reported a participant. "ATP really provided the opportunity." Added another company, "It was too big a bite without the award. We couldn't have pursued it, given the time frame."

The program has also brought scientific rigor and better focus to existing research efforts. "We eventually would have addressed these issues," said one researcher, "but ATP enabled us to do it in a scientific, timely manner. The primary benefit is the scientific approach." As another described, "We would have been doing incremental research, not this enabling research which requires critical mass."

CHANGES IN CORPORATE INVESTMENT

Over 90% of the companies believe they have invested far more money in the technology--on average, an additional $1.47 million1--as a result of the ATP award. Many would have invested nothing, or close to nothing, since their program might not have existed, they maintain, without the ATP.

"The ATP award was very important," commented a participant. "We particularly liked that it wasn't a grant, but a match. This eliminated companies who just wanted a government subsidy. It promotes putting money where your mouth is. We're seriously committed and have already invested $2 million. ATP money encouraged us that a little company like us can be taken seriously."