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Science and Engineering Indicators 2004
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Chapter 4:
National R&D Trends

Federal R&D Performance and Funding

Technology Linkages: Contract R&D, Federal Technology Transfer, and R&D Collaboration
International R&D Trends and Comparisons
R&D Investments by Multinational Corporations
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Figure 4-16

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Figure 4-17

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Figure 4-18

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Figure 4-19

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Figure 4-20

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Figure 4-21

U.S. and International Research and Development: Funds and Technology Linkages

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Technology Linkages: Contract R&D, Federal Technology Transfer, and R&D Collaboration

Contract R&D
Federal S&T Programs and Technology Transfer
Domestic and International Technology Alliances

In recent decades, the speed, complexity, and multidisciplinary nature of scientific research, coupled with the increased relevance of science for industrial technology development and the demands of a globally competitive environment, have increased the importance of technology linkages for innovation and long-term competitiveness (Branscomb and Florida 1998). Although external technology sources, including university research, have long played a key role in U.S. industry innovation and competitiveness (Mowery 1983; and Rosenberg and Nelson 1994), the current environment has encouraged an innovation system increasingly characterized by networking and feedback among R&D performers, technology users, and their suppliers and across industries and national boundaries (Coombs and Georghiou 2002; and Vonortas 1997). Several Federal S&T policies have also facilitated private R&D collaboration and Federal technology transfer, as discussed in more detail throughout this section. (See sidebar, "Major Federal Legislation Related to Cooperative R&D and Technology Transfer.")

Available indicators reveal increased cross-sector linkages over the 1990s. Manufacturing companies increased contract R&D expenditures at a 4.8 average annual percent rate, in real or inflation-adjusted terms, between 1993 and 2001, a full annual percentage point higher than the growth of in-house company-funded R&D expenditures over the same period. Federal agencies reporting technology transfer data to DOC increased their invention disclosures, patent activity, and licensing in FY 2001, reflecting their unique capabilities in terms of multidisciplinary R&D and specialized facilities. Patents issued to these Federal agencies topped 1,600 in FY 2001, up 15.6 percent from FY 2000.

The other major intersectoral activity involves cooperative R&D. U.S. Federal agencies participated in more than 3,600 Cooperative R&D Agreements (CRADAs) with industrial and nonprofit organizations in FY 2001, although new CRA-DAs have been stable at about 1,000 annually since FY 1997. In addition, between 1991 and 2001, U.S. companies participated in more than 4,600 research and technology alliances worldwide, or about 80 percent of all such alliances involving U.S., European, Japanese, and emerging-market companies. Activity was particularly strong in IT and biotechnology.

Outsourcing and collaboration aimed at the acquisition or development of technologies may reduce costs, expedite projects, or complement internal R&D capabilities (Howells and James 2001). Activities linking business, academic, and government laboratories may take place in special-purpose settings such as science parks. (See sidebar, "U.S. Science Parks.") The following sections discuss data on contract R&D, Federal technology transfer (e.g., patent licensing), and R&D alliances involving private companies, universities, and government laboratories.

Contract R&D top of page

Many companies have increasingly come to rely on other firms for a portion of their R&D needs. In fact, the growth rate of contract R&D, defined as company-funded R&D performed externally, exceeded that of company-funded R&D performed in-house in recent years, even after a decline in contract R&D expenditures in 2001. In 2001, more than 1,300 manufacturing companies (8 percent of all R&D-performing manufacturing companies in the United States) reported $4.0 billion ($3.6 billion in constant or inflation-adjusted dollars) in expenditures for contract R&D performed in the United States, compared with $4.8 billion ($4.5 billion in constant dollars) in 2000, a decline of 17.5 percent, according to NSF's Survey of Industrial Research and Development.[37] In contrast, their in-house company-funded R&D declined only 1.4 percent between 2000 and 2001. Over a longer time span, however, manufacturing companies increased contract R&D expenditures at a 4.8 average annual percentage rate in real, or inflation-adjusted, terms, a full annual percentage point higher than the growth of in-house company-funded R&D expenditures between 1993 and 2001, reflecting the importance of outside sources of technology for a number of corporate technology objectives (appendix table 4-36 Microsoft Excel icon).

In the manufacturing industry the overall ratio of expenditures for contract R&D to expenditures for R&D performed in-house increased from 3.3 percent in 1993 to a peak of 4.7 percent in the mid-1990s, then moderated somewhat to 3.6 percent in 2001 (figure 4-16 figure). In 2001 the proportion was higher for chemicals manufacturing at 11.7 percent (and pharmaceuticals manufacturing at 18.7 percent) (appendix table 4-37 Microsoft Excel icon). Within nonmanufacturing industries, the contract R&D ratios for the information sector and the professional, scientific, and technical services sector were notable at 3.3 and 7.4 percent, respectively. Within the latter industry, R&D services contracted out $1.3 billion in R&D activities in 2001, which is 12.0 percent of its $10.9 billion in internal company-funded R&D expenditures.

Of the manufacturing companies reporting contract R&D in the NSF survey in 2001, 132 companies (9.7 percent) identified $2.17 billion in R&D expenditures in terms of their R&D contractors being for-profit companies, universities and colleges, or other nonprofit organizations.[38] The highest proportion of these identified contract R&D expenditures, 92.0 percent, funded other companies, 5.9 percent funded universities and colleges, and 2.2 percent funded other non-profit institutions. For chemical companies, the distribution of contract R&D expenditures among their R&D contractors was similar (83, 12, and 5 percent, respectively). However, among companies in the scientific R&D services sector, the share of identified contract R&D expenditures performed by universities and colleges was much higher, 35.4 percent, although still second to the 49.7 percent performed by other for-profit companies.[39] The relatively higher reliance of U.S. R&D services companies on universities and colleges as R&D subcontractors may be related to the broader set of technologies in which these companies work, complementing their internal capabilities with the wide array of scientific capabilities of universities.

Federal S&T Programs and Technology Transfer top of page

Concerns over U.S. industrial strength and global competitiveness in the late 1970s and early 1980s led to a series of legislative changes that collectively created an environment conducive to industry-government collaboration in technology development (Link 1999). This section discusses technology transfer and collaborative activities involving Federal laboratories. Technology transfer can be defined as the exchange or sharing of technical knowledge, skills, processes, or products across different organizations.[40] Technology transfer activities involving Federal laboratories include patenting, licensing, joint R&D, user-facility agreements, and technical assistance.

Technology transfer functions performed by certain Federal laboratories, namely, intramural or government-owned-government-operated laboratories, such as NIH or the Agricultural Research Service, were established by the Stevenson-Wydler Technology Innovation Act of 1980 (Public Law 96-480). Later in the decade, the Federal Technology Transfer Act of 1986 authorized intramural laboratories to enter into CRADAs[41] with industrial partners, universities, and other organizations, whereas the FY 1990 DOD Authorization Act (Public Law 101-189) extended this authority to government-owned-contractor-operated laboratories, including government-owned FFRDCs[42] (Schacht 2000). In CRADAs, Federal laboratories may share or provide personnel, services, equipment, or facilities (but not funds) with or to a private organization as part of a joint R&D project with the potential to promote industrial innovation consistent with the agency's mission. Private partners may retain ownership rights or acquire exclusive licensing rights for the developed technologies. More recently, the Technology Transfer Commercialization Act of 2000 (Public Law 106-404) enhanced the ability of Federal agencies to license (and monitor) federally owned inventions.

R&D Funding Trends in Federal Laboratories

The share of Federal R&D obligations devoted to intramural laboratories and FFRDCs declined from 39 percent in the early 1980s to the low 30s in the late 1990s (NSF forthcoming). Still, the role of Federal laboratories, either as a source of technology to be commercialized by private parties or as a research partner, is considerable. Federal laboratories offer industrial and nonprofit researchers unique capabilities, such as the ability to perform interdisciplinary research and to use expensive, specialized equipment (Bozeman 2000).

In FY 2001 the Federal Government obligated $27.3 billion, or 34 percent of $79.9 billion in Federal funds earmarked for R&D, to Federal laboratories (table 4-14 text table), compared with $52.6 billion (66 percent of total) in R&D funding obligated to extramural performers, such as companies and universities (NSF forthcoming). Within individual agencies, the share devoted to government laboratories is largest for DOE (71.7 percent) and smallest for HHS (20.3 percent; 19.6 percent for its NIH component). Agencies with large amounts or relatively large proportions of their R&D obligations devoted to intramural and FFRDC performers have more internal outputs available for patenting and licensing than agencies that channel their R&D funds to extramural performers.

Federal agencies devoted a higher share of their funds for Federal laboratories to applied research and development than to basic research. Of the 34 percent devoted to Federal laboratories in FY 2001, less than a fourth went to basic research. Individual Federal agencies, however, varied considerably in the proportion of funds they devoted to basic research in their laboratories: 52.4 percent of HHS laboratory R&D funding (59.5 percent for its NIH component), followed by USDA (49.0 percent) and DOE (35.0 percent). DOD devoted only 5.3 percent to basic research in its laboratories. This profile of character of work at Federal laboratories, together with the various S&T emphases of these agencies, suggests that industrial partners are potentially able to use Federal facilities as a source for a variety of research outputs.

Federal Technology Transfer Trends

Since FY 1987, 10 Federal agencies have reported data on technology transfer to the DOC, pursuant to Federal technology transfer statutes (U.S. DOC 2002).[43] The 10 agencies reporting data were DOC, DOD, DOE, DOI, the Department of Transportation, the Environmental Protection Agency, HHS, NASA, USDA, and the Department of Veterans Affairs. In general, available metrics indicate an increased level of Federal technology transfer activities since the late 1980s. Data include inventions disclosed, federally owned patents, licenses, licensing income, and the number of CRADAs.

In FY 2001, Federal agencies reporting data on technology transfer activities logged more than 3,900 invention disclosures (table 4-15 text table). Invention disclosures increased 9.7 percent from FY 2000, close to the 4,000 mark reached in the early and mid-1990s (figure 4-17 figure). Patent applications increased to a peak of 2,172 in FY 2001, up 4.3 percent from FY 2000, after remaining at or just below 2,000 for most of the 1990s. Patents issued to these Federal agencies reached 1,608 in FY 2001, up 15.6 percent from FY 2000. Between FY 1997 (the first fiscal year for which these data were available from DOC) and FY 2001, a total of 7,178 patents were issued to these 10 Federal agencies.

At the agency level, DOD and DOE had the largest shares of inventions disclosed, patent applications, and patents issued in FY 2001. These two agencies accounted for 65–75 percent of those Federal technology transfer indicators among the reporting agencies. Differences in R&D funding structures and character of work may drive some of these results at the agency level. Furthermore, Federal agencies are engaged in other technology-related activities (e.g., technology procurement, safety or material standards, and technology assistance to businesses), offering other venues for technology diffusion not covered in this section.

Federal Laboratories in Collaborative Research Agreements

Two indicators of Federal laboratories' participation in research alliances show selected features of these activities: the first identifies their industrial focus, and the second describes Federal agency participation in CRADAs.

Ninety-nine R&D agreements registered from 1985 to 2001 in the Federal Register (11.5 percent of 861 R&D agreements) had at least one Federal laboratory partner.[44] Thirty-seven of these industry-government R&D alliances were classified in electronic and other electrical equipment and components manufacturing.[45] Ten alliances were classified in chemicals manufacturing (which includes pharmaceuticals), another 10 in industrial machinery and computer equipment manufacturing, and eight in transportation equipment manufacturing. Leyden and Link (1999) report that registered alliances with Federal laboratory partners tend to have more participants than do alliances without government partners. Federal laboratories in large alliances not only increase economies of technological scope but also reduce monitoring costs, increasing potential benefits to all members (Leyden and Link 1999).[46]

The 10 Federal agencies reporting technology transfer activities to DOC executed 926 new CRADAs with industrial and university partners in FY 2001, up 5.9 percent from FY 2000, but little changed from the 1,000 mark since first reported in FY 1997. The 2001 increase brought the number of active CRADAs to 3,603 (figure 4-17 figure). Three agencies accounted for more than 80 percent of active CRADAs in FY 2001: DOD, which participated in 1,965 CRADAs, or 54.5 percent of all CRADAs; DOE, which participated in 558, or 15.4 percent; and HHS, which participated in 490, or 13.6 percent.

The FY 2001 increase in active CRADAs was driven by increases in DOD and HHS CRADAs (44 and 12 percent, respectively) compared with a 19 percent decline in DOE CRADAs.[47] DOE had the largest share of CRADAs through the mid-1990s, driving the overall agency count to its FY 1996 peak, when CRADAs began their declining trend. Smaller increases in DOD CRADAs sustained the overall trend from further declines to FY 2000. Compared with other forms of technology transfer activities, cooperative research activities, both CRADAs and non-CRADA joint R&D projects, involve a number of additional managerial and organizational requirements for both agency and company participants. For agencies, an additional factor is the R&D or administrative budget devoted to technology transfer planning and management (U.S. GAO 2002).

Small Business S&T Programs

The Small Business Innovation Research (SBIR) program, created in 1982 (Public Law 97-219), leverages existing Federal R&D funding toward small companies (those with 500 or fewer employees).[48] Although larger firms dominate R&D performance in the United States, as discussed earlier in this chapter, small firms may have capabilities or incentives to innovate, which may or may not come to fruition due to a number of constraints, including financing.[49] SBIR's sister program, the Small Business Technology Transfer Program (STTR), was created in 1992 to stimulate cooperative R&D and technology transfer involving small businesses and nonprofit organizations, including universities and FFRDCs. Both programs leverage existing Federal R&D funding to small-company and nonprofit performers to stimulate innovation, technology transfer, and R&D commercialization.[50] SBIR and STTR are administered by participating agencies and coordinated by the Small Business Administration.

In SBIR, Federal agencies with extramural R&D obligations exceeding $100 million must set aside a fixed percentage of such obligations for SBIR projects. This set-aside has been 2.5 percent since FY 1997. To obtain this Federal funding, a small company applies for a Phase I SBIR grant of up to $100,000 for up to 6 months to assess the scientific and technical feasibility of ideas with commercial potential. If the concept shows further potential, the company can receive a Phase II grant of up to $750,000 over a period of up to 2 years for further development. In Phase III, the innovation must be brought to market with private-sector investment and support; no SBIR funds may be used for Phase III activities.

SBIR awarded about $12 billion to 64,300 projects through FY 2001. Projects included research and commercialization activities in the areas of computers, information processing and electronics, materials, energy, environmental protection, and life sciences. In FY 2001 the program awarded $1.29 billion in R&D funding ($1.18 billion in 1996 dollars) to 4,748 projects (figure 4-18 figure). In FY 2001, DOD led the 10 participating agencies in SBIR funding, obligating $576 million (45 percent of total SBIR funding), followed by HHS at $412 million (32 percent) in FY 2001 (appendix table 4-39 Microsoft Excel icon).

STTR involves cooperative R&D performed jointly by a small business and a research organization and is also structured in three phases. The participating research organization must be a nonprofit institution, as defined by the Stevenson-Wydler Technology Innovation Act of 1980, or an FFRDC. Five Federal agencies with extramural R&D budgets exceeding $1 billion participate in the program: DOD, NSF, DOE, NASA, and HHS. The required set-aside has been 0.15 percent from FY 1996 to FY 2003, compared with 2.5 percent for SBIR.[51] STTR awarded about $460 million to more than 2,400 projects from FY 1994 to FY 2001, including $71.3 million ($65.1 million in 1996 dollars) to 337 projects in 2001. DOD and HHS are the largest agency participants (appendix table 4-40 Microsoft Excel icon).

The Advanced Technology Program

The Advanced Technology Program (ATP), sponsored by DOC's National Institute of Standards and Technology (NIST), was established by the Omnibus Trade and Competitiveness Act of 1988 (Public Law 100-418; 15 USC, Section 278n) to promote the development and commercialization of generic or broad-based technologies. The program provides funding for high-risk R&D projects through a competitive process on a cost-share basis with private-company participants.

From ATP's inception through FY 2002 more than 1,300 companies, nonprofit institutions, and universities participated in 642 projects costing $3.8 billion, which were funded about equally by ATP and industry (appendix table 4-41 Microsoft Excel icon). Over the same period, 447 projects (70 percent) were single-company projects and 195 (30 percent) were joint ventures; two-thirds of participants were members of joint ventures. Participants pursued projects in five technology areas: biotechnology, electronics, IT, advanced materials and chemistry, and manufacturing.

In FY 2002, 61 R&D projects costing $289 million were initiated, with about 54 percent funded by ATP and the balance funded by participants. Public Law 108-7 appropriated $180 million for the program for FY 2003, a decline of 2.4 percent from FY 2002 (Schacht 2003). At the time of this writing, the Bush administration's FY 2004 budget calls for the suspension of new awards and requests funding only for administrative and close-out expenses (U.S. OMB 2003a).

Domestic and International Technology Alliances top of page

Over the past 2 decades, U.S. firms have not only turned to technology outsourcing but also increased their participation in technology alliances domestically and globally. Technology alliances can be defined as collaborative relationships or partnerships among legally distinct parties that involve joint R&D or technology development activities.[52]

Technology alliances allow firms to share R&D costs, pool technical and market risks, and complement and further develop internal capabilities (Vonortas 1997). Collaborative networks are not without risks, however. Unintended transfer of proprietary technology is always a concern for businesses. Cultural differences among different industries, public partners (government or academic), or international partners present additional difficulties in managing alliances. Lastly, public-private collaboration presents challenges for intellectual property policy and concerns for the free flow of basic scientific knowledge.[53]

Types of Technology Alliances

Technology alliances can be classified and analyzed according to several criteria (Hagedoorn, Link, and Vonortas 2000). In terms of their organizational structure, they can be classified as equity alliances, or research joint ventures (RJVs), in which two or more partners form a separate business entity with long-term objectives. In contrast, nonequity alliances are mostly contractual agreements governing short-term projects. By membership profile, they may be private-private alliances (involving only business partners such as suppliers, customers, or competitors) or public-private alliances (involving government laboratories and universities).

Technology alliances may focus on a number of innovation-related activities, ranging from industry-wide issues such as basic or precompetitive research, standards settings, or regulatory issues (Tassey 1997) to firm-specific projects. They can also range from longer term learning and capabilities-building activities to shorter term development projects closer to commercialization goals. These varied goals, together with firm-specific characteristics (e.g., size, age, internal organization, and R&D capabilities) and the underlying technology and market characteristics, affect the choice of partners and the organizational structure of these alliances.

Dedicated databases tracking these developments and sponsored in part by NSF include the Cooperative Research (CORE) database, housed at the University of North Carolina at Greensboro, and the Cooperative Agreements and Technology Indicators database, compiled by the Maastricht Economic Research Institute on Innovation and Technology (CATI-MERIT). The CORE database covers U.S.-based alliances and RJVs recorded in the Federal Register, pursuant to the provisions of the National Cooperative Research Act, as amended.[54] Trends in the CORE database are illustrative only, because the registry is not intended to be a comprehensive count of cooperative activity by U.S.-based firms. The CATI-MERIT database covers international technology agreements and is based on announcements of alliances and tabulated according to the country of ownership of the parent companies involved.[55]

Domestic Research Partnerships

A total of 861 technology alliances were registered in the CORE database from 1985 to 2001. The database shows the following trends:

  • In 2001 there were 26 new technology alliances, compared with 45 in 2000. New filings increased between 1986 and 1995, when they peaked at 115 (figure 4-19 figure). Brod and Link (2001) developed a statistical model to explain the trends in RJV filings, including the decline after 1995. They found that filings are likely to be countercyclical. In particular, they argue that "[w]hen the economy is strong and...R&D is growing, firms may rely less on cooperative research arrangements...than when the economy is weak and internal resources are more constrained" (p. 109).

  • About half of the technology alliances in 1985–2001 involved activities classified in three industrial areas: electronic and electrical equipment (18 percent), communication services (16 percent), and transportation equipment (15 percent).

  • Fifteen percent (125 of 861) of these alliances involved a U.S. university as a research member, whereas about 12 percent (99 of 861) included a Federal laboratory.

International Technology Alliances

The data from the CATI-MERIT database are annual counts of new technology alliances formed by domestic and multinational corporations and their subsidiaries or affiliates worldwide. Most of the alliances recorded in the database were owned by, and/or had R&D partners located in, the United States, Western Europe, and Japan, the so-called Triad regions.[56]

From 1991 to 2001, there were 5,892 new technology alliances formed worldwide in six major sectors: information technology (IT), biotechnology,[57] advanced materials, aerospace and defense, automotive, and (nonbiotech) chemicals. This total includes 602 alliances formed in 2001, a 25 percent increase from 483 in 2000 (figure 4-20 figure). This is the first increase since a 19.5 percent increase in 1995 to its all-time high of 674 technology alliances.

The majority of these alliances were organized as nonequity, or contractual, agreements (figure 4-20 figure). In particular, the share of nonequity alliances increased from 61 percent in 1980–90 to 86 percent in 1991–2001. The more flexible and project-based organization of nonequity agreements favors activities in highly dynamic high-technology sectors such as IT and biotechnology research and product development, as opposed to more mature technology sectors (Hagedoorn 2001). Indeed, these two sectors are the top technology sectors of these alliances.

The participation by U.S.-owned companies and their subsidiaries is considerable. About 80 percent (4,646 of 5,892) of the 1991–2001 technology alliances worldwide involved at least one U.S.-owned company (table 4-16 text table), up from two-thirds between 1980 and 1990. About half of the U.S. alliances between 1991 and 2001 (or 39 percent of the all countries total) were alliances exclusively among U.S.-owned companies. Thirty-four percent of the U.S. alliances (27 percent of the total) were formed between U.S.- and European-owned companies. European companies participated in 2,604 (44 percent of 5,892) technology alliances during the period 1991–2001, up from 1,989 alliances in 1980–1990. However, contrary to the pattern for U.S. companies, the majority of European technology alliances were between U.S.- and European-owned companies, as opposed to alliances exclusively among European-owned companies and subsidiaries. Japanese companies participated in 779 technology alliances worldwide between 1991 and 2001, down from 1,013 alliances between 1980 and 1990, according to the CATI-MERIT database.

IT was the major focus among most ownership categories shown in table 4-16 text table during 1990–2001. Notably, 46 percent of the alliances owned exclusively by U.S. companies in 1991–2001 were focused on IT activities. In contrast, the most frequent technology activity of U.S.-European alliances was biotechnology at 33 percent (table 4-16 text table). (The IT share for U.S.-European alliances was the second largest at 21 percent.) Indeed, biotechnology alliances began to outpace IT alliances in 2000 (figure 4-21 figure), driven by intense activity in this sector by U.S. and European companies (van Beuzekom 2001). In 1995 a new breed of alliance combining IT and biotechnology activities emerged in the database. From 1995 to 2001, a total of 46 alliances performed activities in areas such as bioinformatics applications. U.S. companies participated in 37 (80 percent) of these alliances, including 19 with European firms.


[37]  National Science Foundation, Division of Science Resources Statistics, Survey of Industrial Research and Development, 2003. Available at

[38]  National Science Foundation, Division of Science Resources Statistics, Survey of Industrial Research and Development, 2003. Available at

[39]  Disclosure limitations preclude further industry-level analyses.

[40]  This section describes technology transfer activities associated with R&D performed in federally owned laboratories (hereafter, Federal laboratories), whether run by Federal agencies themselves or by contractors. It does not include technology transfer activities associated with federally sponsored R&D performed by independent extramural entities (for example, companies and universities engaged in patenting resulting from federally sponsored R&D).

[41]  Legislation allowing cooperative research and development agreements between private companies and Federal laboratories complemented revised antitrust regulations intended to foster intercompany collaborative R&D.

[42]  See appendix table 4-26 Microsoft Excel icon for a list of FFRDCs, including R&D funding, location, sponsoring agency, and administrator, as of FY 2001. In general, FFRDCs may or may not be owned by the Federal Government, but most of the largest FFRDCs, such as the Department of Energy's (DOE's) FFRDCs, are owned by the Federal Government.

[43]  Data for FY 2001 (discussed below) may not be comparable to earlier years due to changes in data reporting or scope. In particular, data from some agencies include more subcomponents or laboratories than previous years. See also Technology Transfer and Commercialization Act of 2000 in sidebar "Major Federal Legislation Related to Cooperative R&D and Technology Transfer" and U.S. General Accounting Office, Intellectual Property—Federal Agency Efforts in Transferring and Reporting New Technology, GAO-03-47 (Washington, DC, 2002).

[44]  Cooperative Research (CORE) database, unpublished tabulations compiled by A. N. Link, University of North Carolina-Greensboro. See also "Domestic and International Technology Alliances."

[45]  These 37 alliances represented 47 percent of the 78 industry-government alliances identified by Standard Industrial Classification (SIC) code in the CORE database for the 1985–2001 period.

[46]  For studies on the performance or industrial impacts of industry-government alliances, see B. Bozeman and D. Wittmer, Technical roles and success of U.S. Federal laboratory-industry partnerships, Science and Public Policy 28, no. 4 (2001):169–178 and J. D. Adams, E. P. Chiang, and J. L. Jensen, The influence of Federal laboratory R&D on industrial research, Working Paper 7612 (Cambridge, MA: National Bureau of Economic Research, 2000).

[47]  Recall that FY 2001 data may not be comparable to earlier years due to in data reporting or scope.

[48]  The SBIR program was last reauthorized in December 2000 for the period through September 2008 (Public Law 106-554). This bill also requested that the National Research Council conduct a new 3-year SBIR study at five Federal agencies with SBIR budgets exceeding $50 million (DOD, Department of Health and Human Services, NASA, DOE, and NSF) to provide an assessment of SBIR’s operations and impacts. The study is currently in progress. For a summary of previous policy and empirical studies, see J. Lerner and C. Kegler, Evaluating the SBIR: A literature review, In The SBIR Program: An Assessment of the Department of Defense Fast Track Initiative (Washington, DC: National Academy Press, 2000).

[49]  For example, internal funds have been shown to significantly affect R&D activity conducted by small high-technology firms. See C. P. Himmelberg and B. C. Petersen, R&D and internal finance: A panel study of small firms in high-tech industries, The Review of Economics and Statistics 76, no. 1 (1994): 38–51.

[50]  The Small Business Technology Transfer Program was created by the Small Business Research and Development Enhancement Act of 1992 (Public Law 102-564). It was last reauthorized in October 2001 for the period through FY 2009 (Public Law 107-50).

[51]  The Small Business Technology Transfer Program's set-aside percentage is scheduled to increase to 0.3 percent from FY 2004 forward (Public Law 107-50). For further details on this program, see U.S. GAO (2001a).

[52]  In principle, alliances differ from external sourcing of existing technologies, such as patent licensing or contract R&D, in that the former involve some kind of joint R&D activity. In practice, however, a single technology project may involve both of these broad types of linkages.

[53]  For example, see M. P. Feldman, I. Feller, J. E. L. Bercovitz, and R. M. Burton, Understanding evolving university-industry relationships, In M. P. Feldman and A. Link, eds., Technology Policy for the Knowledge-Based Economy (Boston: Kluwer Academic Press, 2001).

[54]  Cooperative Research (CORE) database, unpublished tabulations compiled by A. N. Link, University of North Carolina-Greensboro. Restrictions on multifirm cooperative research relationships were loosened by the National Cooperative Research Act (NCRA) in 1984 (Public Law 98-462) after concerns about the technological leadership and international competitiveness of American firms in the early 1980s. This law was enacted to encourage U.S. firms to collaborate on generic, precompetitive research. However, to gain protection from antitrust litigation, NCRA requires firms engaging in research joint ventures (RJVs) to register them with the Department of Justice. In 1993 the National Cooperative Research and Production Act (NCRPA, Public Law 103-42) extended legal protection to collaborative production activities.

[55]  The Cooperative Agreements and Technology Indicators (CATI) database is compiled by the Maastricht Economic Research Institute on Innovation and Technology (MERIT) in the Netherlands. CATI is a literature-based database that draws on sources such as newspapers, journal articles, books, and specialized journals that report on business events. Agreements involving small firms and certain technology fields are likely to be underrepresented. Another limitation is that the database draws primarily from English-language materials.

[56]  The country assignment for the data subsequently discussed is based on the headquarters of the ultimate parent company of the alliance members, not on the location of the members. Classification by technology is not exclusive because an alliance may perform activities and be classified in more than one technology. The data were revised from previous editions to include exclusively joint research or development agreements, R&D contracts, equity joint ventures, and research corporations. Previous counts included cross-holdings (where two companies take a minority interest in each other), mutual second sourcing, and cross-licensing agreements. This change, however, did not affect overall trends. Separately, the data now provide detail on the structure of the alliances in terms of equity and nonequity arrangements. For conceptual, policy, and measurement issues regarding indicators of technology alliance, see J. de la Mothe and A. N. Link, Networks, Alliances, and Partnerships in the Innovation Process (Boston: Kluwer Academic Press, 2002); J. E. Jankowski, A. N. Link, and N. S. Vonortas, Strategic Research Partnerships: Proceedings From an NSF Workshop, NSF 01-336 (Arlington, VA: National Science Foundation, 2001); and B. Bozeman and J. S. Dietz, Strategic research partnerships: Constructing policy-relevant indicators, Journal of Technology Transfer 26 (2001):385–393.

[57]  This technology classification includes pharmaceutical biotechnology.

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