Recently the National Institute of Standards and Technology (NIST) announced the AMTech program’s intention to fund a series of planning grants to industry-led consortia. Our CTO, Warren Hunt, blogged about the program last week in his post. This is a smart move, and one that has been tried before with success.
In the 1990s and early 2000s, the U.S. Department of Energy’s Office of Industrial Technologies (now known as the Advanced Manufacturing Office) embarked upon its Industries of the Future program. The program’s mission was to re-invent the most energy-intensive industries with new process technologies that would drastically reduce the energy required to produce chemicals, steel, aluminum, paper, and similar products.
The core philosophy of the Industries of the Future program was for the government to work with industry to assess their needs and then co-fund R&D that fills gaps and accelerates progress. They did this by providing assistance to develop industry-driven technology roadmapping. Nexight CEO Jack Eisenhauer and I were among the key innovators who pioneered the planning techniques we still use to produce collaboratively developed roadmaps that cut across entire industry sectors.
Through this experience, I learned how industry-defined priorities could translate into powerful government R&D programs. The approach has three major benefits:
- Industry drives R&D funding in the United States, not government. Unlike in the 1970s and 1980s, government is no longer the dominant source of R&D funding in the United States. In 2013, industry is expected to fund $262 billion in R&D (+2.3% compared to 2012), more than double what the federal government is expected to fund, according to R&D Magazine. Federal funding, at $129 billion, is projected to decrease by 1.4% compared to the amount funded in 2012. By aligning federal and industry R&D priorities, federal funds can be leveraged to fill industry gaps, accelerate progress, and improve the effectiveness of industry R&D far better than if federal R&D programs are funded in isolation.
- Industry must commercialize the products of R&D. While the federal government often implements new technologies, particularly in the defense sector, the commercial industry is a far larger customer of R&D. Therefore, gaining early industry buy-in and ensuring R&D programs are addressing industry’s needs is a smart way to increase the likelihood that industry will take on the risk to commercialize the resulting new technologies. Far too many R&D programs end up with innovative technologies that never cross the “valley of death” and are left to gather dust on laboratory shelves.
- Industry is a powerful ally on Capitol Hill. The hot new technology of today quickly turns into yesterday’s news. Government programs that look to connect their success to such hot topics can learn that their support base evaporates quickly; they may find themselves ripe targets for budget cuts in the eternal Congressional budgeting process. By working collaboratively with industry and addressing its needs, federal R&D programs can build a strong base of support that will be more likely to advocate for the program’s ongoing success.
Was OIT’s approach successful? There are many factors in play, including efficiency improvements and sectoral shifts. The data indicates that since 1995 total energy consumption in the industrial sector has decreased by 10% while energy consumption in the transportation (+14%), residential (+17%), and commercial (+23%) sectors has increased, according to the Energy Information Administration. Nationally, energy consumption has increased by 7% during the same period.
This is why I strongly believe that NIST’s AMTech program is taking the right approach with the planning grants. But it won’t be easy.
The challenge with such programs is figuring out how to engage with entire industries, which are large, complex, diverse, ill-defined entities composed of fierce competitors looking to dominate the market. Fortunately, Nexight’s principals helped to pioneer the collaborative roadmapping techniques that can quickly and cost-effectively get groups organized, talking, and taking shared action to pursue common goals. It can be done, and the results can be powerful.