Private Sector Interaction in the Decision Making Processes of Public Research Policies

Country Profile: United States

1. Political, institutional and economic framework and important actors
In 2003, the United States’ R&D spending amounted to US$ 284584.3 bn (2.59% GDP). The
Public Sector accounted for 31.2%, the Private Sector for 63.1% and other sources for 5.7%
of GERD.1 The Private Sector is the most important performer of research, its share of total
R&D expenditure (68.9% of GERD) is significantly above EU and OECD averages while
Higher Education Institutions 2 (16.8%) and government institution (9.1%) are less important
performers compared to EU and OECD average.3
The US Science and Innovation System and its challenges can be described in the words of
the Annual Innovation Policy Trends Report for United States, Canada, Mexico and Brazil
2005 of the European Trend Chart on Innovation:
“The U.S., arguably the world leader in innovation, has a highly decentralised innova-
tion system. There is no explicit or over-arching innovation policy or a single bureauc-
racy managing the entire innovation system. Instead there are various federal and
state agencies, each with their own jurisdictions and agendas, sponsoring their own
innovation programmes. The strength of the U.S. innovation system lies in its ability to
generate innovations and then, relatively quickly, to commercialise them. This in turn,
can be attributed to several factors including public financing of basic research
through universities and federal laboratories; an ability to attract S&T talent from
around the world; the linkages among universities, federal laboratories and the private
sector that have been fostered over time; patent rights that provide incentives for the
commercialisation of innovations; strong private sector investment in R&D; easily es-
tablished start-up enterprises; federal support for start-ups; trained managers; and
well-developed financial markets…
…However, the increased focus on innovation by the EU and the Asian economic gi-
ants and the economic onslaught by the emerging Asian economies have led to con-
cerns about America’s competitiveness, and have put renewed pressure on the inno-
vation system. Doubts are being expressed about whether the relatively informal and
decentralised innovation system that currently exists will be able to meet the chal-
lenges of the future. The U.S. must, at the very least, maintain resources devoted to
R&D and innovation at the same level as it has in the past, and make use of techno-
logical innovations and entrepreneurship to continue recording productivity gains. The
question, however, is whether the current innovation system needs to be modified in
order to do so, and if yes, then how and to what extent.”
In this system, a multitude of actors interact on several levels (see Figure 1).
a. Political and governmental authorities
In the Legislative Branch of the US government, the bicameral United States Congress, both
the House of Representatives and the Senate maintain committees which deliberate on sci-
ence, technology and innovation issues. In the investigative work of these committees, Pri-
vate Sector representatives can be involved for example though hearings or field investiga-
tions.

1
Source: OECD MSTI database; EUROSTAT 2006; 2003 data
2
In the US, the HEI sector consists of public and private HEIs, where the latter play an important
role and contribute considerably to overall HEI research activities and performance.
3
BERD accounting for 1.79% of GDP; Source: OECD MSTI database; 2003 data

Page 1 of 14
Country Profile: United States

Public Sector Private Sector

US Senate US House of Representatives
Federal
Legislative Committee on Com-merce, Small Business Committee
Branch Science & Transportation Science Committee Industry Associations

American
President’s Committee of Executive Office of the National Science Chambers of Sector-specific
Advisors on Science and President and Technology Commerce Industry
Technology (PCAST) Office of Science Council (NSTC) Associations
and Technology
Federal Policy (OSTP)
Executive Executive Departments
Branch Joint Initiatives with major
Department Department Other Depart- Private Sector participation
Department of of Health Department
of Defense of Energy ments
Agriculture and Human
Services
Committee for
Council on Economic
Partially own programme funding and management, Competitiveness
research organisations and institutes, etc. Development

National Public Research

Intermediate Science Board Organisations
bodies and National Private
agencies National Science Sector
Academies R&D units
Foundation

NASA
Research Private Public
Universities Universities Public Private Industrial SMEs
Performers Partnerships Research
Research Research
Support / Higher Education Higher Education Nat’l Technology Contract
Large Scale Facilities Transfer Centers Research
Infrastructure

Figure 1: Structure of the Federal US National Science and Innovation System4

The House of Representative’s Science Committee has jurisdiction over all non-defence fed-
eral scientific research and development5. The Science Committee is responsible for over-
seeing research and development programs at all of the above agencies. In doing so, the
Committee monitors these programs to ensure that Federal tax dollars are being spent
wisely and efficiently and that America's Federal science and technology enterprise main-
tains its world pre-eminence. Among the other committees of the House of Representatives,
the Small Business Committee is particularly involved in STI policy issues relevant for its
main focus area (e.g. oversight and investigative authority for small business technology is-
sues, e.g. the implementation of changes to the Small Business Innovation Research (SBIR)
program and of the success of the Small Business Technology Transfer (STTR) program).
The U.S. Senate’s Committee on Commerce, Science & Transportation studies and reviews,
on a comprehensive basis, all matters relating to science and technology, oceans policy,
transportation, communications, and consumer affairs, deliberates on relevant jurisdiction
and reports thereon regularly. Two of its Sub-Committees, on Science and Space and on
Technology, Innovation and Competitiveness, are particularly involved in STI policy issues.
In the Executive Branch of the US government, the Executive Office of the President and the
Executive Departments are the main actors in STI policy-related issues. The Executive Office
of the President has mainly a coordinating role, compiling different departments’ and agen-
cies’ research policy strategies. With respect to science, technology and innovation issues,
the Executive Office of the President is supported by the President’s Committee of Advisors
on Science and Technology (PCAST) and the National Science and Technology Council
(NSTC).
Following a tradition of Presidential advisory panels on science and technology dating back
to Presidents Eisenhower and Truman, PCAST was originally established in 1990 to enable

4
focus on major actors and illustrative examples described in the text, not comprehensive
5
Federal agencies that fall under the Committee's jurisdiction (either completely or partially) in-
clude: National Aeronautics and Space Administration (NASA), Department of Homeland Security
(DHS), Department of Energy (DOE), Department of Transportation (DOT), Environmental Protec-
tion Agency (EPA), National Science Foundation (NSF), Federal Aviation Administration (FAA),
National Oceanic and Atmospheric Administration (NOAA), National Institute of Standards and
Technology (NIST), U.S. Geological Survey (USGS), and the White House Office of Science and
Technology Policy (OSTP); Source: http://www.house.gov/science/welcome.htm

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Country Profile: United States

the President to receive advice from the Private Sector and academic community on tech-
nology, scientific research priorities, mathematical and science education. PCAST holds 2-4
meetings per year and issues regularly reports on important issues of the US Science and
Innovation System6. PCAST is currently co-chaired by a Public Sector representative (OSTP
director) and a Private Sector representative (Partner of a high-tech venture capital com-
pany). Among its further 34 members, there are 17 representatives of Private Sector enter-
prises, the remaining members represent education and research institutions, non-
governmental institutions and independent experts7. PCAST members are appointed by the
President.
As a Cabinet-level council, the NSTC is chaired by the President; other members are the
Vice President, the Director of the Office of Science and Technology Policy, Cabinet Secre-
taries and Agency Heads with significant science and technology responsibilities, and other
White House officials. NSTC is the principal means within the executive branch to coordinate
the diverse elements of the Federal research and development policies. NSTC is also re-
sponsible for the establishment of national goals for federal science and technology invest-
ments. Recently, NSTC has been assigned the responsibility for the development of re-
search and development strategies that are coordinated across federal agencies to meet
multiple national goals. The work of the NSTC is organised under four primary committees;
Science, Technology, Environment and Natural Resources and Homeland and National Se-
curity. Each of these committees oversees subcommittees and working groups focused on
different aspects of science and technology and working to coordinate across the federal
government. For example, the Research Business Models (RBM) Subcommittee’s objectives
include the facilitation of a coordinated effort across federal agencies to address important
policy implications and examinations of the effects of these models on scientific research
funded by the Federal government. RBM invites regularly representatives of Public research
and other stakeholders, including the Private Sector to contribute to the subcommittees’
work.8
The mission of the Office of Science and Technology Policy (OSTP) is set out in the National
Science and Technology Policy, Organization, and Priorities Act of 1976 (Public Law 94-282).
It calls for OSTP to serve as a source of scientific and technological analysis and judgment
for the President with respect to major policies, plans, and programs of the Federal Govern-
ment. The Act authorises OSTP to (1) advise the President and others within the Executive
Office of the President on the impacts of science and technology on domestic and interna-
tional affairs; (2) lead an interagency effort to develop and implement sound science and
technology policies and budgets; (3) work with the Private Sector to ensure Federal invest-
ments in science and technology contribute to economic prosperity, environmental quality,
and national security; (4) build strong partnerships among Federal, State, and local govern-
ments, other countries, and the scientific community; (5) evaluate the scale, quality, and ef-
fectiveness of the Federal effort in science and technology.9
Over 90 percent of the federal government’s research budget is allocated through six federal
institutions: the Department of Defence, the Department of Health and Human Services, the
Department of Energy, the Department of Agriculture and two agencies, the National Aero-
nautics and Space Administration and the National Science Foundation. These departments
and agencies have a great deal of autonomy in directing their budgets. Most operate their
own national laboratories, funded directly by their departments, but a majority of the funds
the organisations control are directed toward research universities. For example, the De-

6
Recent reports include for example The National Nanotechnology Initiative at Five Years: As-
sessment and Recommendations of the National Nanotechnology Advisory Panel (2005), Main-
taining the Strength of Our Science & Engineering Capabilities (2004), S&T Collaboration: Ideas
for Enhancing European-American Cooperation (2004) and Technology Transfer of Federally
Funded R&D (2003)
7
Source: http://www.ostp.gov/PCAST/pcast.html
8
Source: http://rbm.nih.gov; meeting announcements, stakeholder submissions and presentations
from public meetings are published online under http://rbm.nih.gov/fed_reg_20030906/index.htm
9
Source: http://www.ostp.gov/

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Country Profile: United States

partment of Energy’s Office of Science sponsors research to develop new sources of energy
and to address other scientific challenges10. The Department of Energy spends over US $6
bn on R&D through its 25 science research centres and 10 national laboratories and through
research grants to universities and other research performers11. Other departments may also
fund research in their respective areas of responsibility, but to on a less important scale.
The described federal research and innovation governance structures are complemented by
the regional Science and Innovation Systems which each state has in place. These are dif-
ferent in their set-ups, ranging from centrally responsible departments or divisions12 to spe-
cialised agencies and rather independent, separate organisations. Many states have
launched own programmes to stimulate research and/or innovation activities, mostly includ-
ing a focus on collaborative research involving the Public Sector, universities and Private
Sector enterprises. Private Sector representatives can be involved in research policy debates
and decision making for example through membership in boards, commissions and through
other types of advisory roles.
b. Intermediate bodies and research performing institutions
Under the umbrella of the National Academies, four organisations, the National Academy of
Sciences, the National Academy of Engineering, the Institute of Medicine and the National
Research Council bring together committees of experts in all areas of scientific and techno-
logical endeavour. These experts serve pro bono to address critical national issues and give
advice to the federal government and the public. The National Academy of Sciences was
created by the federal government to be an adviser on scientific and technological matters.
However, the Academy and its associated organisations are private, not governmental, or-
ganisations and do not receive direct federal appropriations for their work. Studies under-
taken for the government by the National Academies usually are funded out of appropriations
made available to federal agencies. The great majority of the studies carried out by the Na-
tional Academies are at the request of government agencies. Among the over 2,000 peer-
elected members and foreign associates of the National Academy of Engineering, there are
senior professionals from academia, government and business. These members provide
leadership and expertise for numerous projects focused on the relationships between engi-
neering, technology, and the quality of life.
As an independent federal agency with an annual budget of about US$ 5.5 bn, the National
Science Foundation (NSF) provides approximately 20% of all federally support for basic re-
search conducted by US colleges and universities. NSF’s funding decisions are mostly
based on a bottom-up process, keeping track of global research trends and soliciting re-
search proposals from which funded projects are chosen by panels in a “merit review” proc-
ess. The activities and policies of the NSF are overseen and guided by the National Science
Board (NSB). The NSB has dual responsibilities, serving at the same time as an independent
national science policy body that provides advice to the President and the Congress on pol-
icy issues related to science and engineering that have been identified by the President,
Congress or by the Board itself. The NSB has 24 members (none of which comes from the
Private Sector currently) appointed by the President and confirmed by the Senate, plus the
NSF Director as an ex officio member.
With a budget of US$ 16.6 bn., the National Aeronautics and Space Administration (NASA) is
the most prominent example of a large US Public Research Organisation (PRO). NASA con-
ducts its work in four principle organisations, called mission directorates: Aeronautics, Explo-
ration Systems, Science and Space Operations. Through its Commercial Technology Pro-

10
Source: European Commission Enterprise Directorate-General, European Trend Chart on Innova-
tion, Annual Innovation Trends Policy Report for United States, Canada, Mexico and Brazil. 2005
11
Another example is the National Institutes of Health (NIH), a unit of the U.S. Department of Health
and Human Services, which represents approx. 80% of federal funding for health-related research.
NIH operates own research centres and institutes, but uses the bulk of its budget to sponsor out-
side research through project funding.
12
e.g. The North Carolina Board of Science and Technology, a Division of the North Carolina De-
partment of Commerce; see http://www.ncscienceandtechnology.com

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Country Profile: United States

gram, NASA operates own research centres and has facilitated the transfer of NASA tech-
nology to the Private Sector for more than 40 years. For this purpose NASA applies a multi-
tude of instruments, e.g. the NASA Scientific and Technical Information Program (STI).
Other important research and innovation funding sources include the U.S. Advanced Tech-
nology Programme (ATP) under the auspices of the National Institute of Standards and
Technology at the Department of Commerce (focus on fostering Public-Private-Partnerships
to speed up development and adoption of innovative technologies), and several programmes
aiming specifically to stimulate and support research and innovation efforts of SMEs. These
include the Manufacturing Extension Partnership (MEP; focus on funding regional manufac-
turing extension centres and providing complementary funds to state government-managed
extension programmes) and the Small Business Innovation Research (SBIR) Programme,
which is coordinated by the Small Business Administration (SBA).
Further intermediate institutions with relevance for the implementation of research and inno-
vation policies include the National Technology Transfer Centers (NTTC) whose mission is to
provide access to the technologies, facilities and human resources developed in federal labo-
ratories and universities to all interested parties and the Small Business Administration,
which provides a multitude of forms of assistance to small businesses, including technology-
oriented and entrepreneurial training.
Higher Education Institutions (HEI) account for 16.8% of GERD.13 However, this funding is
distributed very unevenly among the more than 3000 universities: Only 100 universities, two-
thirds of which are private, receive over 80 percent of government funds and account for 60
percent of all university research budgets. The Private Sector is frequently involved in the
governance of universities, e.g. through participation in university boards, foundations and
joint research and education programs. The leading universities maintain also elaborate pro-
grams and structures for the commercialisation of their research results, for spin-off creation
and for the development of networks and research collaborations with Private Sector part-
ners.14 Governance and management models of HEI and PROs and their mechanisms for
leveraging knowledge and research results are subject to continuous debate and improve-
ment
c. Private Sector15
The Private Sector performs 68.9% of GERD. Private Sector R&D expenditure amounts to
US$ 196,112 bn, of which US$ 166,021.7 bn (90%) are domestic funds (i.e. research fi-
nanced by U.S. Private Sector) the remaining 10% are government funding.16 Traditionally,
industrial R&D has focused on product development. But in recent years a shift towards ex-
tended complementary R&D activities, especially in applied research can be observed.
Private Sector enterprises are involved in Public Sector research policy decision making ei-
ther directly (e.g. through counselling on a personal base or membership in boards, advisory
councils, etc.) or through a number of associations.
The U.S. Chamber of Commerce is the world’s largest business federation, representing
more than 3 million businesses of all sizes, sectors, and regions. It includes hundreds of as-
sociations, thousands of local chambers and more than 100 American Chambers of Com-

13
Source: OECD 2005, 2003 data; note: figures for HEI include both private HEI and public HEI.
14
A typical example is the Industrial Liaison Program (ILP) of the Massachusetts Institute of Tech-
nology (MIT), which is intended to serve as a one-stop shop for MIT expertise to help provide
technological innovation for its Private Sector partners. Industrial Liaison Officers consult regularly
with ILP members to match their corporate needs with relevant MIT faculty and resources. Re-
search collaboration can take place in consortia or on an individual base. Currently over 600 com-
panies are working with faculty and students on projects of mutual interest. Among these corpo-
rate sponsors are many ILP members, including global leaders such as DuPont, Nippon Tele-
graph & Telephone (NTT), Microsoft, Ford, Siemens, and Hewlett-Packard. In addition, MIT has a
long history of moving research results and new technologies into the commercial sector. By 1997,
MIT graduates had founded or co-founded over 4,000 companies.
15
including important bodies with major Private Sector participation.
16
source: OECD 2005, 2003 data

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Country Profile: United States

merce in 91 countries. Members include businesses of all sizes and sectors - from large For-
tune 500 companies to home-based, one-person operations. In fact, 96% of the Chamber’s
membership encompasses businesses with fewer than 100 employees. The Chamber’s
Technology Policy Committee is responsible for developing and implementing the Chamber’s
policies on telecommunications, the Internet and e-commerce, emerging technologies and
intellectual property. The committee supports market-based solutions, policies that foster
investment in technology research and deployment and a balanced regulatory treatment of
technical platforms. In addition, the Chamber advocates for the implementation of provisions
that further the development and deployment of innovative technologies, e.g. in the area of
energy technologies17.
The Chamber’s activities are complemented by a large number of sector-oriented industry
associations, which are partially very active in research and innovation-related policy debates.
For example, the Telecommunications Industry Association (TIA), which was traditionally
organised in five product-oriented divisions (User Premises Equipment, Network Equipment,
Wireless Communications, Fiber Optics and Satellite Communications), approved in August
2005 the creation of a new Communications Research Division (CRD). The role of the CRD
is to ensure that the U.S. communications sector continues to be a world leader in advanced
research. The division provides expert advice to the government and to TIA on the status
and impact of research and technology to the communications industry; and works on edu-
cating the public on the importance of communications research as a foundation for the com-
munications products and services on which they depend. Another example is the Pharma-
ceutical Research and Manufacturers of America (PhRMA), representing leading pharma-
ceutical research and biotechnology companies, which publishes regular reports, issues offi-
cial submissions to policy making institutions and participates in policy instigation, formula-
tion and review through various testimonies of its senior staff on research and other impor-
tant policy areas.18
The Committee for Economic Development (CED) is an independent high level organisation
of Private Sector and education leaders which strives to enhance business engagement in
public policy through a variety of activities. In the area of research policy, the CED maintains
a Research Advisory Board and pursues initiatives in priority areas. For example, the CED’s
Digital Connections Council released a report Promoting Innovation and Economic Growth:
The Special Problem of Digital Intellectual Property in 2004.
The Council on Competitiveness is the nation’s leading organisation of CEOs, university
presidents, and labour leaders committed to promoting U.S. economic growth, success in
global markets and a rising standard of living for citizens. The Council’s value stems from its
unique membership network, a focus on transformational economic issues and an ability to
catalyse consensus around a national action agenda. The Council’s flagship program, the
National Innovation Initiative (NII), co-chaired by Intel Chairman Craig Barrett and Johns
Hopkins University President William Brody, defines a transformational agenda to drive inno-
vation nationwide. Over 400 business, labour and university thought leaders participated in
the preparation of the NII report Innovate America: Thriving in a World of Challenge and
Change. The Council collaborates with Administration officials and Congressional, business,
labour and university leaders to organise the implementation of the NII’s agenda. As a part of
its larger innovation program, the Council is supporting a number of complementary initia-
tives, e.g. benchmarking and economic assessment initiatives (for example the Competitive-
ness Index), a Regional Innovation Initiative or activities to enhance communication with the
US Congress (The Forum on Technology and Innovation and “Breakfast Bytes” briefings).

17
See the US Chamber of Commerce Policy Priorities for 2006,
http://www.uschamber.com/issues/priorities/default
18
For details see the homepages of these associations: http://www.tiaonline.org,
http://www.phrma.org/

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Country Profile: United States

2. National research policy decisions and Private Sector involvement19

Instigation and Design stage
The Private Sector is intensively involved in the instigation and design of research policies
and programmes through hearings, consultations, roundtable meetings, and other events
initiated by the Public Sector, through membership in boards and councils (e.g. PCAST and
NSTC) and through own initiatives. Industry associations and other organisations where the
Private Sector is engaged, e.g. the Council on Competitiveness, regularly prepare position
statements and white papers as well as roundtable forums and briefing sessions.
Private Sector involvement in Public Sector policy decision making covers all aspects of the
US Science and Innovation System, including research and innovation policies, higher edu-
cation strategy and relevant framework conditions. There is a standardised procedure for all
different policies to be observed.20 Similar mechanisms occur in the instigation and design of
state research and innovation policies.
Forecasting is not used frequently at a federal level and rather occasionally at a state level.
States which are applying forecasting involve all respective stakeholders, including the Pri-
vate Sector, in such studies. Private Sector opinions, needs and proposals are an important
element of such exercises.
The major motivation for involving the Private Sector at this stage is to include it’s know how
and specific needs in the design of research policies conducive towards efficient research
policies and seamless innovation processes. In the design of such policies, attention is also
given to risk sharing, namely technological and market risk, between the Public and the Pri-
vate Sector.
Implementation and Assessment/revision stage
Research-driven partnerships, in particular between universities/PROs and Private Sector
enterprises, are supported and encouraged by the legislative framework (Bayh-Dole Act and
subsequent legislation, e.g. the Technology Transfer Commercialisation Act of 2000). On this
basis, a multitude of research partnerships have emerged as well as other types of Public-
Private Partnerships.21 Under these circumstances, increasing competition between public
and private research institutions for external research funds creates a high level of Private
Sector influence on their research strategies.
On a federal level, policy measures like CRADA 22 (aiming at creating Public-Private-
Partnerships and SBIR (aiming at the enhancement of SME’s research and innovation capa-
bilities) are used to stimulate and support Public-Private-Partnerships. In such programmes,
projects are designed and carried out jointly by the participants, thus ensuring a high rele-
vance for the innovation objectives of business participants. On the operative institutional
level, the Private Sector is involved both informally and through membership in advisory
boards or steering committees.
Federally funded programmes are evaluated, based on legislation like the Government Per-
formance and Results Act, which requires the use of performance measures. Under the in-
fluence of further political interest and legislation, the use of evaluations has increased during
the last decade, paralleled by a move to employ benchmarking in research and innovation

19
Observations in the following chapter reflect desk research results only; hence they are of an illus-
trative nature, but do not rely on actual primary information sources.
20
See Sarewitz 2000 for a detailed description.
21
The European Trend Chart’s Annual Innovation Policy Trends Report for United States, Canada,
Mexico and Brazil 2005 (page 28) describes the example of the NSF’s work with universities and
local communities to improve science and engineering at the K-12, undergraduate, and graduate
levels. The programmes include Advanced Technology Education, which works with industry to
focus on vocational and technical training in high-technology areas.
22
Cooperative Research and Development Agreements, for details see Chapter Fehler! Verweis-
quelle konnte nicht gefunden werden. and http://www.usgs.gov/tech-transfer/what-crada.html

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Country Profile: United States

policy23. Private Sector enterprises participating in evaluations provide important inputs to

evaluation studies and Private Sector representatives are engaged in the discussion of re-
sults and conclusions.
Other policy initiatives aim at improving the education system as an essential part of the US
Science and Innovation System. Among the numerous initiatives in this field, considerable
attention is given to the reduction of times required for PhD studies, an expansion of the
number of institutions offering the Professional Masters Degrees and the retention of gradu-
ates in important fields of science for the benefit of US science and economy.
Observations: Possible barriers and current initiatives
The informal and decentralised Research and Innovation System of the US has a recognised
track record in generating scientific knowledge and innovations and in commercialising these
rapidly and efficiently. However, as was pointed out already in Chapter 1, the increasing in-
novation efforts of the EU and of some Asian countries have led to a growing discussion
whether it is enough to maintain the current level of resources devoted to R&D and innova-
tion and whether the current US system will be able to meet the challenges of the future. The
absence of a consistent national research and innovation strategy, the complex and some-
times unclear allocation of responsibilities and a resulting lack of coordination between key
elements of the US Research and Innovation System are important issues in this ongoing
debate.
Matching the mid term supply and demand of graduates in certain competence fields is con-
sidered as another challenge. In the past, the migration of highly educated and talented stu-
dents and researchers has not been a major concern in the U.S. to the extent to which this
has been the case in many other highly developed OECD countries. However, as many of
the numerous foreign students and trained foreign scientists and engineers working in the
US return to their home countries, a need for policy action may arise to avoid that a mid-term
shortage of qualified scientific staff occurs in certain areas.
Streamlining research policy-oriented decision processes, e.g. through improved coordina-
tion of different federal and state research and innovation policies, is a continuous concern.
Also PRO and public university governance and management systems are continuously de-
veloped further to assure their efficiency and effectiveness. In the course of these develop-
ments, Private Sector involvement is likely to increase further.

3. Other important policy decisions with Private Sector involvement

New models for funding of public research
Federal and state governments implement science and innovation policies through the allo-
cation of resources to research programmes, etc. In a complementary role, most research
institutions and institutes have taken the path of operating according to market mechanisms,
gearing their efforts towards the needs of economy and society and allocating their research
resources to resulting priority research areas. As a consequence, many universities and
PROs invest in the development of their external partner networks and in “marketing” their
research potential.
Based on these mechanisms, alternative models complementing the classical models of pro-
ject and institutional financing are sought. For example, the United States Congress has set
up the Foundation for the National Institutes of Health to support the mission of the National
Institutes of Health (NIH). Guided by a board of directors, composed of distinguished leaders
in biomedical research, philanthropy, and business, the Foundation for NIH works to advance
research by linking the generosity of Private Sector donors and partners to NIH programs.
The foundation facilitates Public-Private-Partnerships of all sizes and configurations, ranging

23
Examples include the Competitiveness Index of the Council on Competitiveness and the Progres-
sive Policy Institute’s biennial “New Economy” Indices for states and metro areas (described in the
European Trend Charts Annual Innovation Policy Trends Report for United States, Canada, Mex-
ico and Brazil 2005 (page 27)

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Country Profile: United States

from very large-scale programs 24 to much smaller ones, such as special fellowships, re-
search awards, lectures, and conferences.
Funds provided by the foundation’s donors may be used to advance and accelerate NIH re-
search programs or to advance research that complements NIH research programs. Funding
by the Foundation for NIH can foster innovations that may well entail scientific risk signifi-
cantly in excess of what is typically acceptable in government-funded research when the
prospect of discovery is commensurate with the risk. Such programs can also fill unmet
needs by supporting research that, for various reasons, is currently not adequately supported
by standard funding sources.
Much of the foundation’s focus is on identifying partners, including organisations and indi-
viduals, and matching donors’ interests to specific NIH needs. Sometimes, however, corpora-
tions, individuals, or researchers bring an idea to the foundation, which then works with do-
nors to assess which of the array of existing and prospective programs within NIH’s priorities
would be most relevant to their interest.

4. Types of Private Sector involvement and degree of their use

Private Sector interaction in research policy decision making varies, depending on the differ-
ent stages of research policy making. Categories of instruments mainly used for Private Sec-
tor involvement are as follows:

General dialogue, initiated by policy makers, is used intensively, especially in the instiga-
tion and to some extent in the design phase, e.g. for the identification of key technology
areas and for the development of research policies, scientific infrastructure and frame-
work conditions of the Science and Innovation System.

Informal involvement, mostly in an advisory role, is sought by both policy makers and the
Private Sector as part of their ongoing interaction in all phases of research policy making.

The Private Sector is formally involved in the instigation, design, implementation and as-
sessment of research policy measures through consultations, membership in advisory
councils, boards, etc. This type of involvement is used for example for the bottom-up
identification of needs and trends in the course of the design and fine-tuning of research
policy measures.

Joint activities between the Public and the Private Sector, especially on the operative
level in the forms of research partnerships, transfer of knowledge and research results,
etc. are a strong element of the US system.

Staff interaction between the Public and Private Sector occurs for example through the
intensive participation of Private Sector representatives on PRO and university advisory
councils and boards and through the various intensive R&D collaborations and spin-offs,
which ensure intensive interaction and a certain fluidity of staff.

Proactive involvement sought and initiated by the Private Sector is a traditional element
of the work of the American Chamber of Commerce, industry associations and the other
organisations with intensive Private Sector participation described in Chapter 1.
Different types and degrees of involvement are explained in more detail in table 1 on page 11.

5. Selected useful examples of transferable approaches and experiences25

Beyond examples already described in the previous Chapters (e.g. the Foundation for the
National Institutes of Health), the following examples of approaches used in the US may be
of interest also for other countries:26

24
such as the Alzheimer’s Disease Neuroimaging Initiative, the Osteoarthritis Initiative, the Grand
Challenges in Global Health initiative with the Bill & Melinda Gates Foundation, and The Edmond
J. Safra Family Lodge
25
Observations in the following chapter are based uniquely on desk research; hence they are not
comprehensive and of an illustrative nature without access to primary information sources.

Page 9 of 14
Country Profile: United States

5.1 Science and Technology Plans on a State level

Several U.S. states have taken the initiative to develop own research and technology plans
and research and innovation strategies. Common features of these plans are (1) the evalua-
tion and assessment of regional Public and Private Sector research infrastructure; (2) the
identification of key areas on which to focus public research investment and supportive
measures; (3) an interactive and collaborative development of these plans, involving all rele-
vant stakeholders and (4) a clear assignment of responsibility for the policy definition process.
For example in Arizona, the Strategic Plan for Economic Development highlights several key
initiatives in addition to selected priority research areas. These initiatives aim specifically at
K-12 mathematics and science education and at the encouragement of university research
with direct economic impact. In addition, the Governor’s Council on Science and Technology
was assigned decisive power in these areas, supported by advisory councils with substantial
formal Private Sector involvement.
In a comparable effort to improve their research base, other states have undertaken similar
efforts to strengthen their Science and Innovation System. For example, Tennessee is work-
ing on a strategy to build a competitive science and technology base, while North Carolina,
hosting the well known Research Triangle Park, as well as Maryland focus increasingly on
the improvement of university-industry relationships, soliciting proposals for the enhance-
ment of research collaborations and the improvement of knowledge and technology transfer
from the Private Sector.
5.2 Cooperative Research and Development Agreements (CRADA)
A Cooperative Research and Development Agreement (CRADA) is a written agreement be-
tween a Private Sector enterprise and a government agency to work together on a project.
Created as a result of the Stevenson-Wydler Technology Innovation Act of 1980, as
amended by the Federal Technology Transfer Act of 1986, a CRADA allows the Federal
government and non-Federal partners to optimise their resources, share technical expertise
in a protected environment, share intellectual property emerging from the effort, and acceler-
ate the commercialisation of federally developed technology.

As technology transfer tools, CRADAs can provide incentives for the acceleration of the com-
mercialisation of federally-developed technology, protect proprietary information brought to
the CRADA effort by the partner, allow the CRADA partners to keep research results confi-
dential and free from disclosure through the Freedom of Information Act for up to 5 years and
provide attractive solutions for patent and Intellectual Property issues.

5.3 The National Innovation Initiative

The National Innovation Initiative (NII) and the Forum on Technology & Innovation are com-
plementary activities of the Council on Competitiveness. Under the leadership of a high level
Principals Committee 27 , the Council on Competitiveness developed a national innovation
action plan which comprises visions and requirements from the Public and the Private Sector.
The initiative resulted in a strategic, actionable agenda to prepare the U.S. for innovation and
to increase US competitiveness. The December 2004 National Innovation Summit released
the NII's final report Innovate America: Thriving in a World of Challenge and Change which
proposes feasible measures, directly addressed to policy makers.

26
Representative examples to highlight good practices. Not intended to serve as a comprehensive
list and description.
27
chaired by Samuel J. Palmisano, chairman and CEO of IBM Corporation, and G. Wayne Clough,
president of the Georgia Institute of Technology

Page 10 of 14
Country Profile: United States

Appendix 1: Overview of identified instruments for Private Sector involvement

and their use in USA
NOTE: based only on desk research; due to lacking first-hand information no examples
quoted.
Used in
Inten- Initi- Examples

Implement.
Instigation
Instrument sity of ated Used for and

Review
Design
use by remarks

Insight studies, Awareness & identification

General dialogue

Public
roadmapping, Regular of emerging technologies &  
foresight Sector
trends
Public
Conferences Regular Discussion platform   
Sector
Brainstorming / Occa- Public Identification of priorities and
task forces   
sional Sector possible policy actions
Evaluation Public Programme review,
studies Regular   
Sector identification of policy needs
Informal decision
involvement

Public Participation in design,

Advisory groups Regular   
Sector evaluation, etc.
Informal Public Exchange of viewpoints
consultations Regular   
Sector between stakeholders
Formal Public
consultations Regular “Official” opinion   
Sector
Occa- Public
Task force Joint policy development  
sional Sector
Formal decision involvement

Participation in
decision making Both
Regular Decision involvement  
bodies (observer sides
status)
Participation in
decision making Occa- Public Decision involvement,

bodies with (co-) sional Sector shared responsibility
decision right
Administrative / Private Sector representa-
Both
supervisory Regular tives involved in important   
boards sides
institutional decisions
Initiation of Occa- Both Stimulation of joint Public-
networks  
Joint activities

sional sides Private Sector initiatives

Co-financing of Private
projects / Regular Sharing of cost / risks  
programmes Sector

Public Private Both

Partnership Regular Pooling of resources 
sides
(Temporary) Occa- Both Enhance mutual
 
interaction

Staff exchange sional sides understanding and mobility

Staff

Public Sector expertise in

Occa- Both
Staff mobility research leadership  
sional sides
positions
Statements, Private Express views, recommend
studies, white Regular   
contributions

Sector changes, infl. decisions

Unsolicited

papers, etc.
Dialogue Private Initiate / facilitate dialogue
platforms Regular  
Sector with Public Sector
Private Initiate / support research in
Research funding Regular   
Sector desired areas

Table 1: Overview of instruments used for Private Sector involvement

Page 11 of 14
Country Profile: United States

Appendix 2: Sources and Literature

1. General and country information

NSF, Science and engineering indicators–2004, National Science Foundation, Division of
Science Resources Statistics. NSB 04-07. Arlington, VA: NSB.
http://www.nsf.gov/sbe/srs/seind04/start.htm, 2004
OECD, Education at a glance-2003, Education Statistics and Indicators, Organization for
Economic Cooperation and Development,
http://www.oecd.org/document/52/0,2340,en_2649_34515_13634484_1_1_1_1,00.html,
Paris 2003
PCAST, Assessing the U.S. R&D investment, President’s Council of Advisors on Science
and Technology (PCAST),
http://www.ostp.gov/pcast/FINAL%20R&D%20REPORT%20WITH%20LETTERS.pdf, Wash-
ington 2002
Economic Development Administration, U.S. Department of Commerce; State Science and
Technology Institute, Science and Technology Strategic Planning Creating Economic Oppor-
tunity, Washington 2005
Executive Office of the President Office of Science and Technology Policy, Executive Office
of the President Office of Management and Budget, Memorandum for the Heads of Execu-
tive Departments and Agencies - FY 2007 Administration Research and Development
Budget Priorities, Washington 2005
Executive Office of the President; Office of Science and Technology Policy; Office of Man-
agement and Budget, Request for Information Relating to Research Awards, Federal Regis-
ter / Vol. 70, No. 136 / Monday, July 18, 2005 / Notices
The President’s Council of Advisors on Science and Technology, Assessing the U.S. R&D
Investment Findings and Proposed Actions, Washington 2002
Executive Office of the President, Bush administration science & technology accomplish-
ments Promoting Innovation for a Stronger, Safer America, Washington 2004
U.S. House of Representatives, Committee on Science, Views and Estimates Fiscal Year
2006, Washington 2004
European Commission Enterprise Directorate-General, European Trend Chart on Innovation,
Annual Innovation Policy Report for United States, Canada, Mexico and Brazil, September
2004
European Commission Enterprise Directorate-General, European Trend Chart on Innovation,
Annual Innovation Trends Policy Report for United States, Canada, Mexico and Brazil. 2005
Executive Office of the President, Science for the 21st Century, Washington 2005
The President’s Council of Advisors on Science and Technology, Report on Technology
Transfer of Federally Funded R&D, Washington 2003
United States Senate, Committee on Small Business and Entrepreneurship, Snowe, Talent,
Bond introduce Bill to Create Venture Capital Program for Small Business, Washington 2005
President’s Committee of Advisors on Science and Technology, Wellspring of Prosperity –
Science and Technology in U.S. Economy. How Investments in Discovery Are Making Our
Lives Better, Washington 2000
OECD, Innovation Policy and Performance - A Cross-Country Comparison, Paris 2005
OECD, MSTI database; Paris 2005
Eurostat, Science and Technology in Europe – Data 1990 – 2004, Office for Official Publica-
tions of the European Communities, Luxembourg, 2006

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Country Profile: United States

2. Important actors
http://www.house.gov U.S. House of Representatives
http://www.house.gov/science U.S. House of Representatives Committee on Science
http://wwwc.house.gov/smbiz U.S. House of Representatives Small Business Committee
http://www.senate.gov U.S. Senate
http://www.commerce.senate. U.S. Senate Committee on Commerce, Science & Transpor-
gov tation
http://www.sbc.senate.gov U.S. Senate Committee on Small Business & Entrepreneur-
ship
http://www.ostp.gov/PCAST/p Presidents Committee of Advisors on Science and Technol-
cast.html ogy
www.ostp.gov/NSTC/html/NS National Science and Technology Council (NSTC)
TC_Home.html
http://www.technology.gov Technology Administration
http://www.technology.gov/OT Office of Technology Policy
Policy
http://www.ostp.gov Office of Science and Technology Policy
http://www.compete.org Council on Competitiveness
http://www.uschamber.com Chamber of Commerce
http://www.ssti.org State Science & Technology Institute
http://www.ced.org Committee for Economic Development
http://www.ostp.gov/NSTC National Science and Technology Council
http://www.nsf.gov National Science Foundation
http://www.nih.gov National Institutes of Health
http://www.nsf.gov/nsb National Science Board
http://www.nae.edu National Academy of Engineering
http://www.autm.net Association of University Technology Managers (AUTM)
http://www.mep.org Manufacturing Extension Partnership (MEP)
http://www.sba.gov Small Business Administration
http://www.sbir.gov Small Business Innovation Research (SBIR) programme
http://www.nttc.edu National Technology Transfer Center
http://www.aaas.org American Association for the Advancement of Science

3. Other
Atkinson, Rob, Overview of U.S. Innovation Prospects and Innovation Policy, Progressive
Policy Institute, 2005
Wessner, Charles W., Strengths & Challenges in the U.S. Innovation System - An American
Perspective. Trend Chart Policy Workshop on the EU-US Innovation Gap, Brussels 2005
President’s Council of Advisors on Science and Technology, Workforce/Education Subcom-
mittee, Sustaining the Nation’s Innovation Ecosystem, Report on Maintaining the Strength of
Our Science & Engineering Capabilities, June, 2004

Page 13 of 14
Country Profile: United States

BEST, A bridge for all: higher education design principles to broaden participation in science,
technology, engineering and mathematics, Building Engineering and Science Talent (BEST),
http://www.bestworkforce.org/PDFdocs/BEST_High_Ed_Rep_48pg_02_25.pdf, 2004
CAWMSET, Land of plenty: diversity as America’s competitive edge in science, engineering
and technology, Report of the Congressional Commission on the Advancement of Women
and Minorities in Science, Engineering and Technology Development.
http://www.nsf.gov/od/cawmset/report/cawmset_report.pdf, 2000
Committee for Economic Development, Learning for the future: changing the culture of math
& science education to ensure a competitive workforce: A statement on national policy, Re-
search and Policy Committee. New York: Committee for Economic Development.
http://www.ced.org/docs/report/report_scientists.pdf, 2003
Hart, G. & Rudman, W. B. (Co-Chairs), Road map for national security: imperative for
change. The Phase III report of the U.S. Commission on National Security/21st Century,
http://www.nssg.gov/PhaseIIIFR.pdf, 2001
Moris, F., U.S.-China R&D linkages: direct investment and industrial alliances in the 1990s,
National Science Foundation Science Resources Statistics Infobrief, NSF 04-306.
http://www.nsf.gov/sbe/srs/infbrief/nsf04306/start.htm
Chinworth, The U.S. Innovation System, US-Japan Center for Studies and Cooperation, Van-
derbilt University, 2005
Council on Competitiveness, National Innovation Initiative, Innovation - The New Reality for
National Prosperity, Recommendations of the 21st Century Innovation Working Group v.2.1,
Washington 2004
Council of Economic Advisers, The Economic Report of the President, US Government Print-
ing Office, Washington, DC. 2001
Sarewitz, Daniel, Science Policy Present: Where is the Frontier? Center for Science, Policy,
and Outcomes Columbia University 2000
The Strategies for Global Prosperity, A US –Japan Innovation Summit (Summary Draft),
Global Innovation Summit Organizing Committee, September 15, 2005

4. Further information and feedback

This country profile has been prepared by Dr. Dirk Meissner. For further information and
feedback, please contact the responsible author under Dirk.Meissner@proneos.com

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