MARCH 6, 1997

I am very pleased to be here this evening. And I want to quickly allay your fears about being victims of a "droning after-dinner talk." I have been audience to many of them and my remarks will be in the category of "brief-after-a-big-delicious meal-talk."

In fact, I hope that I adhere to the advice on speeches that the comedian George Jessel would often give. He said, "If you haven't struck oil in your first three minutes, stop boring!" So this may be even briefer than I intended.

I am particularly pleased with this chance to meet members of the Colorado business and industry community. This has already been an enlightening and stimulating day of discussions with state legislators, university faculty and administrators, engineering center researchers, and representatives of the press. However, no discussion on Colorado's future or that of the nation, could be complete without the perspective and participation of business and industry.

When I was in Colorado Springs I was struck by the vision of the Pike's Peak business community and its strong support for the university. I know that is the case throughout this great state.

On the subject of the future, the well known business writer and commentator, Peter Drucker, said, "Long range planning does not deal with future decisions, but with the future of present decisions." And so I speak to you tonight about ideas and plans for the present and how they will influence America's long-term future.

Many of those ideas and plans will come directly from your community because the history of business in America has always been inextricably tied to our larger vision as a nation. We think of ourselves as a nation of innovators, creators, and exemplars of a can-do spirit. And much of that national creative experience has come from American entrepeneurship. There will be an increasing need for that creativity and robust spirit in the 21st century. There will be a growing demand for business and industry to be a "creative collaborator" with others in the coming century.

Since the end of the Cold War in 1989, the new openness in the world political and economic arena has created a global social and economic system "in flux," where different leaders, as well as different losers, can emerge. In that moveable tableau, America is confronted with aggressive competition in every field of knowledge, every industry, and every technology. And related issues as diverse as immigration policy and intellectual property rights present additional challenges.

Many in industry, government, and education (at all levels) have already recognized that our continued economic prosperity depends on the collective efforts of all three sectors. I do not say the independent or autonomous efforts but rather the collective efforts because it is the aspect of combining or integrating or partnering those sectors that produces a "whole" greater than the sum of its parts.

We all know by now that investments in research and development pay off handsomely in many ways, but especially in economic benefits. Economists note that industries as diverse as agriculture, aeronautics, computers, and biotechnology grew strong and dominant as a result of steady federal investments in science and technology. In fact, economists estimate that over the past fifty years innovation has been responsible for as much as half of our nation's economic growth. Even using conservative annual rates of return, like 20 percent consistently over decades, we are talking about a stockbrokers fantasy.

In that collectivity, scientific and engineering research will play an important role, not an exclusive role. Research must be thought of as an integral enabler. We cannot expect to do everything with it, but we cannot do anything without it. For that reason, I have characterized the projected cuts for federal R&D as a "very risky national experiment."

Despite this confirming evidence, we must recognize that there has been a changing pattern of support for research and development in America over the last 20 years. In 1976, the federal government funded 50 percent of all R&D performed in the nation. Ten years ago, that figure was 45 percent, and today it is less than 35 percent. The combination of balancing the budget, a necessary effort, and the goal of smaller government suggests a continued decline in the federal percentage and the amount of R&D funding.

One can view this change as a glass half empty or one half full. The "half empty school" can bemoan the loss of the good old days when the federal government was the 800 pound R&D gorilla. The "half full school," of which I am a member, sees this somewhat differently. I am not in any way an advocate of reduced federal R&D spending, but I see the increased diversity and balance among supporters of R&D as healthy, even advantageous. Simultaneously though, I believe we need to expand the overall R&D pie.

In terms of more diversity and balance among R&D supporters, let me just elaborate for a moment. With the government carrying less and less unilateral responsibility for the nation's R&D, there is greater need and flexibility to form creative combinations of R&D performers, larger partnerships, unprecedented interactions. This is not just a matter of financial burden-sharing. Considerable insight can be gained when two or three partners are linked by a single objective. The perspectives are more diverse and they can generate a multiplicity of ideas and approaches. Partnerships provide a quality of integration, a depth of understanding, and a richness of insight that unilateral approaches do not easily achieve.

Although the trend for partnering is growing , we really need increased enthusiasm and bold experimentation. And these partnerships must be true partnerships. They must respect the goals, the missions, and the constraints that can be quite different for each partner. Everybody has to have both something to offer and something to gain in a true partnership.

I was pleased to read recently the comments of a deputy director of one of our national labs. He was disputing the common view that technology exists at the lab and is automatically moved out to industry. On the contrary, he suggested that you don't build a partnership as a one-way street. In fact, he reported just the opposite. He claimed that working with the private sector often brings leading-edge technology into the lab portfolio. Industry, in addition, brings problems for consideration on which lab researchers had never thought to work. So you can see that these relationships can create an overlapping and complementary quality that enriches all concerned.

My visit earlier today to the NSF Opto-electronics Engineering Research Center was particularly exciting and encouraging. Not because it is an NSF-funded Center, although we do not deny pride in such efforts, but because it has been the successful means to several small business spin-offs. I know that representatives from some of those companies are here tonight. I hope that in the dialogue period that follows we have an opportunity to hear from them.

In closing let me return to Peter Drucker and his idea that long range planning deals with present decisions. I think we all understand the necessity for and the power of partnerships. I believe, however, we are just in the infancy of conceiving their diversity of form and function. I would encourage you to propose bold and unique combinations. Try them on a small scale, analyze their value, and abandon them and try another form if they do not work. But be proactive and creative, characteristics so frequently associated with the entrepreneurial spirit. We will need that more than ever in the coming century.

And, if you see things that NSF or other federal agencies should be doing differently, let us know. As your world changes, so must ours.

Thank you for giving me the opportunity to share a few thoughts. I can't tell you how good it feels to be in Colorado again. I look forward to hearing what's on your mind.