The ABC's of Science, Technology & Innovation (STI) Policy: Spelling Out Problems, Consequences and Viable Solutions 3031344626, 9783031344626

Table of contents :
Glossary of Terms
Introduction
Author’s Introduction
Contents
About the Author
A – Aristotle’s Three States of Knowledge
First State of Knowledge: Epistêmê or Conceptual Discovery
Second State of Knowledge: Technê or Prototype Invention
Third State of Knowledge: Phronesis or Industrial Innovation
Aristotle’s States of Knowledge Versus Current STI Policy & Practice
Knowledge Attributes Are Unique Within Each State
The Utility of Knowledge States for Understanding Innovation
B – Vannaver Bush’s Fateful Omission
Post-WWII STI Policy
The Focus on Scientific Research
The Inherent Bias of STI Policy Advisors
C – Coalition Eisenhower Didn’t Foresee
Local Incentives Drive National Policies
National Policies Drive Funding Allocations
Government Funding Allocations Expand Government Agencies
Explosive Growth in Government Spending
The Rise of the Academic-Bureaucratic Complex
Professional Incentives in Academia
Professional Incentives in Government
The Opportunity Cost of Professional Incentives
D – Development Versus Research
Intentions Do Not Equal Results
The Intractable Linkage Between Research and Development
Engineering Methods Differ from Scientific Methods
The Corporate Role of Engineering
The Profit Motive in Private Sector Corporations
The Bias Against for-Profit Sector
The Necessary Emergence of Corporate Laboratories
Development Is Indeed Different
E – Everett Rogers’ Innovation Definition
Perception Versus Reality
The Policy Implications of Conflated Terminology
The Legacy of Conflated Dynamics
Government Bureaucracy Legacy
Academic Scholar Legacy
Industrial Sector Response
F – Federal Laboratory Consortium
The Operational Organization of Federal Labs
Role of the Federal Laboratory Consortium
Lessons from Exploratory Demonstration Projects
Lessons from Focused Demonstration Projects
G – Government Bias in Funding
Funding Drives Policy Implementation
Government Funding for Basic Scientific Research
Disproportionate Growth in Public Funding to University Sector
Government Funding for Applied Scientific Research
Another Disproportionate Leap in Public Funding to University Sector
Commensurate Growth in Funding to Sponsoring Government Agencies
The Practical Implications of Government Policy Bias
Restoring Balance Requires Objective Analysis
H – Project Hindsight Versus Traces
Powerful Interests on a Collision Course
Assessing Contributions to Product Innovation
Pre-Emptive Strike on the Message and Messenger
Putting a Contract Out on DoD
Hiring the Hit Man
Pulling the Trigger
A Second Wave of Button Men
Disposing of the Evidence
Dead Studies Tell No Tales
I – Idea Factory Lessons
History’s Most Innovative Corporation
The Corporate Formula for Sustained Innovation
Risk and Reward Across Sectors
Academic Incentive System
Government Incentive System
Incentives Shape Behaviors
J – Juggling STI Terminology
Accounting Rules Influence Innovation Terms
Terminology Influences Positions and Decisions
The Best of Both Worlds
K – Knowledge Communication
Transforming the Tacit into the Explicit
Communicate Across Sectors and Cultures
When Incentives Are Disincentives
Knowledge Translation as a Strategy
Exceptions Prove the Rule
L – Logic Models at Work
The Benefits of Logic Models
The Problem of Illogic Models
Progress Milestones Across Three Knowledge States
Tracking Milestones Keeps Projects on Track
M – Multiplier Effect
A Promise of Future Benefit
From Addition to Multiplication
From Multiplication to Division
Organic Versus Artificial Growth
N – National Science Foundation
Scientific Research as a National Priority
The Science of Science and Innovation Policy
Subjective Analysis Yields Desired Conclusions
The Process of Sponsoring Scientific Research
A System Designed for Long-Term Priorities
The Potential Role for Objective Inquiry
O – Orphan Product Approach
Industry Underwrites Research and Development
Industry Performs Most Development Activity
When the Market Opportunity Is Too Large or Too Small
The Role of Procurement Contracts in Orphan Products
The Role of Exploratory Grants in Orphan Products
Matching Process to Desired Outcome
Limitations to Addressing Market Failures
The Case of the Standing/Climbing Wheelchair
P – Push Versus Pull
Subordinating Demand Pull to Supply Push
Integrating Both Forces to Achieve Innovation
Existing Bias Favors Push Over Pull
The Challenge of Monitoring Supply Forces
The Effort Required Outweighs the Potential Reward
Defending Bias of the False Dichotomy
Q – EQuations for National Innovation
Constructing an Innovation Equation
The Problem with an Equation of Convenience
GERD/GDP = Level of Innovation
An Illustrative Example
R – Rhetoric Versus Reality
Mismatching Methods and Results
Innovation as Socio-economic Benefit
Evidence-Based Examples of the Disconnect
A New Shortcut to Claimed Success
Problems Within the Proposal Process
Problems with Grant Implementation
Problems Within the Grant Review Process
Problems Within the Grant Management Process
Implications for Innovation-Oriented Programs
Hope on the Horizon for STI Policy
S – Subordinating Engineering to Science
The Pivot Toward Science
The Pivot from Engineering to Technology
The Payoff from the Pivots
Expanding the Payoff
Delineating Types of Scientific Research
What About Engineering Development?
Delineating Types of Engineering Development
T – Technology Transfer Offices
From Copyright to Patent Claim
Transferring Ownership from Government to University
The Rise of ORTA’s and TTO’s
The Effect on Industry Engagement
Hazards of Inter-sector Collaboration
The Challenge of Brokering the Unknown
A Fox in the Henhouse
Professional Incentives in Play
Government Bias at Work
U – University as Free Enterprise
Staying on Message
Why the Message Is Inaccurate
How the Message Supports the Academic Operation
The Bottom-Line Is Something Else Entirely
History Leads by Example
Re-branding as a Marketing Strategy
V – Valuation of Invention Claims
To Protect and Pursue or Not
Challenges to Making a Deal
Early Diligence Is Key to Value
Four Essential Questions
Prior Collaborations Facilitate Transfer
Minding the Gaps in Process
W – New Net Wealth
The Private Sector’s Metrics
National Government Metrics
Industry Generates Wealth
X – Xi Jinping’s China Strategy
China’s Focused on Industry
Leveraging the West’s Outputs
China Is Nation Z
Y – WhY STI Fallacies Persist
Doubling Down on Myth
Investigators Caught in the Paradox
Insights from Investigators
Planning for Outcomes
Integrating Decision Gates
Logic Models as a Planning Framework
Z – Zero Sum Game
The Paradigm Persists
Necessary But Not Sufficient
Winners and Losers
?– What Comes After Z?
Recapping STI Policy Trajectory
Evidence of Continued Support
Detrimental Downstream Consequences
Options for Correcting the Trajectory
A Focused Message for STI Policy Change
Correction to: The ABC’s of Science, Technology & Innovation (STI) Policy

Citation preview

Joseph P. Lane

The ABC’s of Science, Technology & Innovation (STI) Policy Spelling Out Problems, Consequences and Viable Solutions

The ABC’s of Science, Technology & Innovation (STI) Policy

Joseph P. Lane

The ABC’s of Science, Technology & Innovation (STI) Policy Spelling Out Problems, Consequences and Viable Solutions

Joseph P. Lane University of Buffalo Amherst, NY, USA

ISBN 978-3-031-34462-6    ISBN 978-3-031-34463-3 (eBook) https://doi.org/10.1007/978-3-031-34463-3 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2023, Corrected Publication 2023 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

My dedication is first to my wonderful wife Jill, who patiently listened to me puzzle about these issues over three decades yet patiently read and critiqued multiple iterations of this manuscript. I promise to speak of these matters no more, or at least not as often. Second, to my University at Buffalo team, James Leahy, Vathsala Stone, Jennifer Flagg, Michelle Lockett, Susan Arnold, Douglas Usiak, and Stephen Bauer, who all strove mightily to improve STI processes and outcomes within our narrow field of application for the benefit of people with disabilities and society at large. Third, to colleagues from the academic, government, and industrial sectors who provided critical feedback and editorial comments to many of these constructs in prior publications over the years. Specifically Steve Bauer, Victor Paquet, Stephen Sprigle, Paul Eberle, and Paul Herman for their input on this manuscript. Also to Nitza Jones for seeing value in the manuscript and to her team at Spring Nature for bringing this book to fruition. Finally, to my mentors Kenneth L. Kraemer and William C. Mann who made my career possible, and to my dearly departed colleague Benoît Godin who urged me to write all this down. How we would have enjoyed rigorously debating the paradox

between accepted scholarly wisdom and my practitioner’s perspective. Of course, I alone assume full responsibility for the entire content that follows.

Glossary of Terms

Much of the following content discusses how terms are used or misused in the context of STI policy and practice. I strove for consistency here by using lower-case letters for generic terms describing relevant activities such as the distinct yet related methods of scientific research, engineering development, and commercial production. Further, I introduce the phrase research or development and the acronym RorD, rather than the traditional research and development phrase and R&D acronym, to emphasize that research activity is distinct from development activity. I also introduce the terms directed and undirected to characterize the context in which RorD projects are performed. The rationale for these distinctions is as follows: Linear Model of Innovation describes a theoretical framework whereby technological advances, economic growth, and societal benefit are assumed to result from a sequential progression that starts with scientific research. The findings from research-based inquiry are thought to serve as a wellspring of new knowledge from which the government and industrial sectors draw inspiration and guidance. Although explicitly and widely discredited by scholars once it was challenged, it remains the implicit and de facto rational for the allocation of public funds for undirected research or development. Academic-Bureaucratice Coalition (A-BC) is a phrase and acronym I created to describe coordinated efforts by these two sectors to direct public funding so as to grow their internal capacities, enrich their operational budgets, and expand their influence over future resource allocations. The A-BC has been quite successful in achieving its objectives without the same level of public awareness and scrutiny dedicated to what is called the Military/Industrial Complex. Scientific Research objectively explores an unfamiliar subject without preconceptions in order to better understand it. Scientific research encompasses all branches of the natural and social disciplines that meet established standards of rigor and replication. The scientific method is used to generate new-to-the-world knowledge that can be accepted as valid and reliable. Scientific research studies may be initiated through both basic (curiosity-driven) and applied (oriented toward a field of use) intent, but with rare exception is conducted by qualified scholars vii

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Glossary of Terms

trained at the doctoral level. The new-to-the-world outputs from scientific research are conceptual discoveries; some fact of nature or relationship between variables demonstrated in a laboratory but not yet reduced to any practical form. Engineering Development encompasses all projects using the methods of any engineering discipline to demonstrate an idea as embodied in a tangible and operational artifact, as a new-to-the-world prototype invention. As with scientific research, engineering development projects may be initiated through basic or applied intent. Project leadership requires some technical skills with large-scale projects conducted by technicians led by qualified professional engineers trained at the graduate level of master’s or even doctorate degrees. The outputs from engineering development with a valid claim of originality are prototype inventions; the operational demonstration of conceptual knowledge as tangible proof of conceptual knowledge in practice. Commercial Production strives to gain and sustain a competitive advantage in the global marketplace of technological innovations. So technology-based commercial production transforms conceptual discoveries from science and/or prototype inventions from engineering development into next-generation products or services for the commercial marketplace; outputs as market innovations. Market innovation efforts may be led by a single corporation, a consortium, or by an industrial sector, typically sponsoring some combination of directed development, possibly supported by directed research. The directed research or development projects may be conducted by corporate employees, or may occur through contracts with research universities or with government laboratories, so long as the project is managed by a corporation/industry or is performed in direct collaboration with same. As with scientific research and engineering development, commercial production depends upon continuous funding either from internal revenue generated through sales of existing products or services, or from an infusion of new capital from external sources. Research or Development (RorD) is used throughout because in technical use the word ‘or’ can mean Research alone, Development alone, or both Research and Development together. For reasons described throughout this monograph, I avoid the use of the phrase ‘research and development’ and the acronym ‘R&D’, because both have helped conflate two words with very different meanings, with significant implications for STI policy and practice. Projects labeled as RorD will be identified as directed or undirected in nature. Directed versus Undirected RorD is a critical distinction for assessing the contribution of scientific research or engineering development projects to technological innovation; whether RorD projects are directly engaged with the commercial production process led by industry—Directed Research—or are not so engaged with industry—Undirected Research. The traditional distinction between basic and applied RorD projects implies that the future transfer and use of knowledge outputs is determined by intent of the sponsor or the investigator, when in fact that decision rests with corporate managers in industry.

Introduction

This book offers a unique interpretation of Science, Technology, and Innovation (STI) policies in Western nations. It starts by recounting how the ancient Greeks had defined three states of knowledge (conceptual discovery, tangible prototype, and commercial product), and how each knowledge state contributed to what we today call technological innovations. The second chapter describes how at the end of WWII elected officials and their appointed advisors in the victorious Western nations formulated modern STI policies. In doing so, their professional positions and personal perspectives precipitated five serious formative errors: 1. Conflating terminology for the different models, methods, and metrics underlying the three distinct states of knowledge 2. Subordinating the contributions of engineering disciplines and their development methods, to those of science disciplines and their research methods 3. Minimizing the contributions from industry’s commercial production methods, and the private sector’s requirement for public subsidy in the absence of market incentives 4. Establishing an unprecedented partnership between the academic and government sectors 5. Promoting a direct causal relationship between scholarly enterprise and societal benefit Subsequent chapters offer evidence to support these claims, with examples drawn from government data, scholarly literature, practitioners’ anecdotes, and the author’s personal experience. The issues presented here were encountered while assessing invention claims, transferring intellectual property, facilitating cross-sector collaborations, or trying to make sense of confounds between policies and programs. Collectively, they form a detailed critique of STI policies by illustrating the profound implications and unintended consequences arising from the five seminal errors. The chapters address what’s working, what isn’t, and why across the myriad of costly government-sponsored programs that are intended to generate innovations with societal health, welfare, and economic benefits, yet continue to fall far short of ix

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Introduction

their aspirational claims. Further, they explain why the foundational assumptions underlying these claims have never been subjected to rigorous scrutiny, and provide a detailed account of what happened when one government agency attempted to do so. Given the number and range of topics to cover, the English alphabet became a convenient organizing framework. Because more than twenty-six topics were readily identified, those thought to have the most significant implications for Western nations won inclusion. Chapters are intentionally brief to focus attention on their key points, although many could easily be expanded to full manuscript length. They do contain references to other chapters to help reader’s navigate between related topics. The book’s final chapter is an appeal to correct the original five errors. Underneath the linguistic complexities and conceptual confounds accreted over the past seven decades, the critical elements of Science, Technology, and Innovation are actually as simple and straightforward as ABC.  All three methods of scientific research, engineering development, and commercial production are necessary to achieve the promised and expected socioeconomic benefits from the introduction of new-to-the-­ world products and services in the commercial marketplace. However, none of the three methods or their resulting knowledge outputs are individually sufficient to achieve the ultimate goal of innovation. History suggests that the most efficient and effective way to deliberately and systematically generate technological innovations that yield the desired socioeconomic benefits, is for national governments to sponsor directed scientific research and directed engineering development and align both with the requirements of carefully managed commercial production. The remedy is not complicated and requires no new insights. It only requires acknowledging and supporting the proper alignment of the three methods and the respective contributions of their resulting knowledge states. The true challenge to implementing the necessary change is overcoming resistance from those who receive their power, influence, and resources from the current system. The critical message for current policy makers and their advisors is that without significant realignment, they will lose their privileged roles as Western nations permanently lose the global competition for technological leadership.

I take the vision which comes from dreams and apply the magic of science and mathematics, adding the heritage of my profession and my knowledge of nature’s materials to create a design. I organize the efforts and skills of my fellow workers employing the capital of the thrifty and the products of many industries, and together we work toward our goal undaunted by hazards and obstacles. And when we have completed our task, all can see that the dreams and plans have materialized for the comfort and welfare of all. I am an Engineer, I serve mankind, by making dreams come true. —Anonymous

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Author’s Introduction

This monograph is a critique of the models, methods, and metrics driving policies and practices in the United States and most Western nations on the topic of Science, Technology, and Innovation, commonly referred to by its acronym: STI. My views formed while working in a focused field of technology applications that encompassed scientific research, engineering development, and commercial production activities. I write this summary to inform earnest practitioners and sincere policymakers who wish to achieve the socioeconomic goals of technological innovation, not for those who merely make a living off the benefits current STI thinking. Herein I present my analysis and conclusions about serious issues within the domain of STI policy and practice. More importantly, I explain the implications for programs supported through taxpayer funds which are intended to generate health and welfare, social and economic benefits, yet continue to fall far short of their aspirational claims. I assert three key failure points in national innovation policies that must be addressed by Western nations in order to regain competitive equilibrium with China by 2050: 1. The subordination of engineering development to scientific research 2. The entrenched bias against public funding of commercial production 3. The sustained myth that scientific research drives commercial innovation Due to the wide range of STI-related issues addressed here—and the fundamental nature of their underlying constructs—I use the alphabet as a convenient organizing framework. Chapters are intentionally brief to focus attention on a key point. Each chapter is intended to stand alone although they typically cross-reference others, so they may be read sequentially, or according to titles or summaries of interest to the reader. In retrospect, I found that the first ten chapters do follow a loose chronology of historical events, leaving the balance of chapters to address persistent and specific points of concern independent of any timeline. The entire alphabet presents simple truths I have encountered while trying to understand and articulate existing STI policies, as well as when my team worked to implement proper practices to achieve technological innovations. Collectively, the chapters signify that underneath the linguistic complexities and conceptual confounds accreted through xiii

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decades of scholarly analysis and enlightened self-interest, the critical elements of science, technology, and innovation are actually as simple and straightforward as the ABC’s. Who am I to write this critique? I am an entrepreneurial scholar/practitioner who led a team tasked by a Federal government agency to engage university professors, entrepreneurs, corporations, and their customers in both mainstream and niche markets. We secured five consecutive awards of five-year funding cycles, each won through an open national competition. The sponsor agency’s stated objective was to support research and development leading to the generation of innovations in the field of assistive technology devices; products designed to help persons with disabilities regain or sustain functional abilities (physical, sensory, cognitive), which in turn would help people pursue their personal goals of education, vocation, and independent living. My team’s efforts to study and practice invention development, technology transfer, and product commercialization spanned a quarter century (1993–2019). Our mission as a national rehabilitation engineering research center required us to operate at the intersection of government, academic, and commercial sectors. Our engagements encompassed individual inventors and business entrepreneurs, university faculty and administrators, government-sponsored laboratories, non-profit community and national organizations, and for-profit corporations from small to medium-sized enterprises (SMEs) to Fortune 500 companies, along with domestic and foreign government agencies. As practitioners operating under such a cross-sector umbrella we learned much about how each sector operates, who benefits from their existence, and which incentives drive the individuals responsible for delivering results. Although we focused on delivering results within our niche market of assistive technology devices, our funding through a government research grant mechanism, required us to also produce some level of scholarly documentation and publication regarding the models, methods, and metrics involved in technological innovation. In doing so, we encountered the numerous issues presented in this monograph. Empirical and analysis of other applications of technology transfer and innovation revealed that the issues we encountered in our market niche of assistive technology devices were actually present in most fields where STI policies and practices apply. The material presented here contradicts the accepted historical narrative underlying prevailing STI policies which I contend hamper true progress in technological innovation by Western nations and, more importantly, within the competitive global marketplace. Contrary to the adage that history is written by the victorious, it is actually written by the scribes entrusted to document the victory. In the STI context, the history of policy and practice reflects a gradual distortion of reality by a succession of collaborating scribes in academia and government, who have succeeded in shaping the story’s arc for the benefit of themselves and their host institutions. They claim exclusive rights to the creation of new knowledge and for its application for public benefit. A factual history of STI would instead highlight the critical and leading contributions of the fields of professional engineering and commercial enterprise in generating new knowledge and applying that new knowledge to benefit society. Yet the foundations of STI policy and practice subordinate the roles of

Author’s Introduction

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engineering and commerce to those of academia and government. The following critique of the models, methods, and metrics underlying STI policy and practice is an urgent call to rectify this distortion of reality by Western nations before it is too late; if it’s not already too late. I make this appeal while recognizing that criticizing the scholarly community and the entrenched government bureaucracy is not well tolerated. A critic—even one who views themselves as a critical friend—is likely to be branded and dismissed with the damning label of being anti-science. I am not. True scientific endeavors and their achievements do qualify as standing on the shoulders of giants, those dedicated to advancing knowledge based on the exploration of clearly defined variables, carefully studying their interactions under controlled conditions, and the candid reporting of the resulting discoveries. I heartily support the dedicated scientific community and its contributions to society through the rigors of empiricism. Unfortunately, as shown here, the current state of STI policy lacks such sufficient rigor. STI policies instead reflect a gradual, deliberate, and mis-directed expansion of the science mission from generating fundamental knowledge about our world, to claiming responsibility for technological innovation, without regard for demonstrating evidence to substantiate such a bold claim with profound implications for a nation’s health, welfare, and competitive position with the global economy. I explain in the following chapters how the inexorable mission creep in STI policies is based on faulty logic and false suppositions, all intentionally constructed to serve the interests of very bright and equally ambitious individuals. The ability of scholars to secure influential appointments as government advisors and as academic opinion leaders, enables them to perpetuate the accepted yet flawed assumption that scientific research drives technological innovation, which in turn sustains current STI policies and practices. These same scholars are well positioned to mute critics and suppress contrary perspectives. The only possible remedy is for a new cadre of savvy practitioners to distinguish the prevailing rhetoric from our looming reality, and for enlightened scholars to subordinate their self-interest to the greater national needs for STI policies that deliver on the expected benefits from technological innovation in a globally competitive marketplace. I hope my perspectives embolden others to affect the necessary changes. The key takeaway from my analysis is that all three methods of scientific research, engineering development, and commercial production are necessary to achieve the promised and expected socioeconomic benefits from the introduction of new-to-the-world products and services in the commercial marketplace. However, none of the three methods or their resulting knowledge outputs are independently sufficient to achieve the ultimate goal of innovation. In fact, undirected research or development projects hold the most tenuous claim of contributing to innovation outcomes, because of the low probability that RorD project outputs generated independent of commercial production activity will serendipitously match industry interests or requirements. The only way to deliberately and systematically accomplish product innovation that yields the desired socioeconomic benefits to any nation is to conduct directed research and directed development in support of and aligned with the prescribed

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goals of commercial production projects. Within the context of STI policy and practice, all three methods, along with the expertise and institutions supporting them, must be explicitly linked through the effective communication of their relevant knowledge outputs, the transfer and transformation of knowledge between the three methods, and all under the coordination and supervision of the private sector corporations responsible for the final delivery of products and services to the competitive global commercial marketplace.

Contents

A – Aristotle’s Three States of Knowledge��������������������������������������������������     1 First State of Knowledge: Epistêmê or Conceptual Discovery������������������������     2 Second State of Knowledge: Technê or Prototype Invention��������������������������     3 Third State of Knowledge: Phronesis or Industrial Innovation ����������������������     5 Aristotle’s States of Knowledge Versus Current STI Policy & Practice����������     6 Knowledge Attributes Are Unique Within Each State ������������������������������������     8 The Utility of Knowledge States for Understanding Innovation ��������������������     9 B – Vannaver Bush’s Fateful Omission��������������������������������������������������������    11 Post-WWII STI Policy������������������������������������������������������������������������������������    12 The Focus on Scientific Research��������������������������������������������������������������������    13 The Inherent Bias of STI Policy Advisors ������������������������������������������������������    14 C – Coalition Eisenhower Didn’t Foresee����������������������������������������������������    17 Local Incentives Drive National Policies��������������������������������������������������������    18 National Policies Drive Funding Allocations��������������������������������������������������    19 Government Funding Allocations Expand Government Agencies������������������    21 Explosive Growth in Government Spending ��������������������������������������������������    22 The Rise of the Academic-Bureaucratic Complex������������������������������������������    24 Professional Incentives in Academia ��������������������������������������������������������������    25 Professional Incentives in Government ����������������������������������������������������������    26 The Opportunity Cost of Professional Incentives��������������������������������������������    27 D – Development Versus Research ��������������������������������������������������������������    29 Intentions Do Not Equal Results����������������������������������������������������������������������    30 The Intractable Linkage Between Research and Development ����������������������    30 Engineering Methods Differ from Scientific Methods������������������������������������    31 The Corporate Role of Engineering����������������������������������������������������������������    31 The Profit Motive in Private Sector Corporations��������������������������������������������    32 The Bias Against for-Profit Sector ������������������������������������������������������������������    33 The Necessary Emergence of Corporate Laboratories������������������������������������    33 Development Is Indeed Different��������������������������������������������������������������������    35 xvii

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E – Everett Rogers’ Innovation Definition��������������������������������������������������    37 Perception Versus Reality��������������������������������������������������������������������������������    38 The Policy Implications of Conflated Terminology����������������������������������������    38 The Legacy of Conflated Dynamics����������������������������������������������������������������    39 Government Bureaucracy Legacy��������������������������������������������������������������������    40 Academic Scholar Legacy ������������������������������������������������������������������������������    40 Industrial Sector Response������������������������������������������������������������������������������    41 F – Federal Laboratory Consortium������������������������������������������������������������    45 The Operational Organization of Federal Labs������������������������������������������������    45 Role of the Federal Laboratory Consortium����������������������������������������������������    46 Lessons from Exploratory Demonstration Projects ����������������������������������������    47 Lessons from Focused Demonstration Projects ����������������������������������������������    48 G – Government Bias in Funding����������������������������������������������������������������    51 Funding Drives Policy Implementation ����������������������������������������������������������    51 Government Funding for Basic Scientific Research����������������������������������������    52 Disproportionate Growth in Public Funding to University Sector������������������    54 Government Funding for Applied Scientific Research������������������������������������    55 Another Disproportionate Leap in Public Funding to University Sector ������������������������������������������������������������������������������������    56 Commensurate Growth in Funding to Sponsoring Government Agencies������������������������������������������������������������������������������������������������������    57 The Practical Implications of Government Policy Bias����������������������������������    58 Restoring Balance Requires Objective Analysis����������������������������������������������    59 H – Project Hindsight Versus Traces������������������������������������������������������������    61 Powerful Interests on a Collision Course��������������������������������������������������������    61 Assessing Contributions to Product Innovation����������������������������������������������    62 Pre-Emptive Strike on the Message and Messenger����������������������������������������    63 Putting a Contract Out on DoD������������������������������������������������������������������������    65 Hiring the Hit Man������������������������������������������������������������������������������������������    66 Pulling the Trigger ������������������������������������������������������������������������������������������    67 A Second Wave of Button Men������������������������������������������������������������������������    67 Disposing of the Evidence ������������������������������������������������������������������������������    69 Dead Studies Tell No Tales������������������������������������������������������������������������������    71 I – Idea Factory Lessons��������������������������������������������������������������������������������    73 History’s Most Innovative Corporation�����������������������������������������������������������    74 The Corporate Formula for Sustained Innovation ������������������������������������������    75 Risk and Reward Across Sectors ��������������������������������������������������������������������    76 Academic Incentive System����������������������������������������������������������������������������    77 Government Incentive System ������������������������������������������������������������������������    78 Incentives Shape Behaviors ����������������������������������������������������������������������������    79 J – Juggling STI Terminology ����������������������������������������������������������������������    81 Accounting Rules Influence Innovation Terms������������������������������������������������    81 Terminology Influences Positions and Decisions��������������������������������������������    82 The Best of Both Worlds����������������������������������������������������������������������������������    84

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K – Knowledge Communication������������������������������������������������������������������    87 Transforming the Tacit into the Explicit����������������������������������������������������������    87 Communicate Across Sectors and Cultures ����������������������������������������������������    88 When Incentives Are Disincentives ����������������������������������������������������������������    89 Knowledge Translation as a Strategy��������������������������������������������������������������    90 Exceptions Prove the Rule ������������������������������������������������������������������������������    90 L – Logic Models at Work ����������������������������������������������������������������������������    93 The Benefits of Logic Models��������������������������������������������������������������������������    93 The Problem of Illogic Models������������������������������������������������������������������������    94 Progress Milestones Across Three Knowledge States ������������������������������������    95 Tracking Milestones Keeps Projects on Track������������������������������������������������    97 M – Multiplier Effect ������������������������������������������������������������������������������������    99 A Promise of Future Benefit����������������������������������������������������������������������������    99 From Addition to Multiplication����������������������������������������������������������������������   100 From Multiplication to Division����������������������������������������������������������������������   102 Organic Versus Artificial Growth ��������������������������������������������������������������������   104 N – National Science Foundation������������������������������������������������������������������   107 Scientific Research as a National Priority��������������������������������������������������������   107 The Science of Science and Innovation Policy������������������������������������������������   108 Subjective Analysis Yields Desired Conclusions ��������������������������������������������   110 The Process of Sponsoring Scientific Research����������������������������������������������   112 A System Designed for Long-Term Priorities ������������������������������������������������   113 The Potential Role for Objective Inquiry��������������������������������������������������������   114 O – Orphan Product Approach��������������������������������������������������������������������   117 Industry Underwrites Research and Development������������������������������������������   117 Industry Performs Most Development Activity ����������������������������������������������   119 When the Market Opportunity Is Too Large or Too Small������������������������������   120 The Role of Procurement Contracts in Orphan Products��������������������������������   121 The Role of Exploratory Grants in Orphan Products��������������������������������������   122 Matching Process to Desired Outcome������������������������������������������������������������   122 Limitations to Addressing Market Failures������������������������������������������������������   123 The Case of the Standing/Climbing Wheelchair����������������������������������������������   124 P – Push Versus Pull��������������������������������������������������������������������������������������   127 Subordinating Demand Pull to Supply Push����������������������������������������������������   127 Integrating Both Forces to Achieve Innovation ����������������������������������������������   129 Existing Bias Favors Push Over Pull ��������������������������������������������������������������   129 The Challenge of Monitoring Supply Forces��������������������������������������������������   130 The Effort Required Outweighs the Potential Reward������������������������������������   131 Defending Bias of the False Dichotomy����������������������������������������������������������   132 Q – EQuations for National Innovation������������������������������������������������������   135 Constructing an Innovation Equation��������������������������������������������������������������   135 The Problem with an Equation of Convenience����������������������������������������������   136

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GERD/GDP = Level of Innovation������������������������������������������������������������������   137 An Illustrative Example ����������������������������������������������������������������������������������   137 R – Rhetoric Versus Reality��������������������������������������������������������������������������   139 Mismatching Methods and Results������������������������������������������������������������������   139 Innovation as Socio-economic Benefit������������������������������������������������������������   141 Evidence-Based Examples of the Disconnect��������������������������������������������������   142 A New Shortcut to Claimed Success ��������������������������������������������������������������   143 Problems Within the Proposal Process������������������������������������������������������������   145 Problems with Grant Implementation��������������������������������������������������������������   146 Problems Within the Grant Review Process����������������������������������������������������   149 Problems Within the Grant Management Process ������������������������������������������   149 Implications for Innovation-Oriented Programs����������������������������������������������   150 Hope on the Horizon for STI Policy����������������������������������������������������������������   151 S – Subordinating Engineering to Science��������������������������������������������������   153 The Pivot Toward Science��������������������������������������������������������������������������������   154 The Pivot from Engineering to Technology����������������������������������������������������   155 The Payoff from the Pivots������������������������������������������������������������������������������   156 Expanding the Payoff��������������������������������������������������������������������������������������   157 Delineating Types of Scientific Research��������������������������������������������������������   158 What About Engineering Development? ��������������������������������������������������������   159 Delineating Types of Engineering Development ��������������������������������������������   160 T – Technology Transfer Offices ��������������������������������������������������������������������  163 From Copyright to Patent Claim����������������������������������������������������������������������   163 Transferring Ownership from Government to University��������������������������������   164 The Rise of ORTA’s and TTO’s ����������������������������������������������������������������������   165 The Effect on Industry Engagement����������������������������������������������������������������   166 Hazards of Inter-sector Collaboration��������������������������������������������������������������   167 The Challenge of Brokering the Unknown������������������������������������������������������   168 A Fox in the Henhouse������������������������������������������������������������������������������������   169 Professional Incentives in Play������������������������������������������������������������������������   170 Government Bias at Work��������������������������������������������������������������������������������   172 U – University as Free Enterprise����������������������������������������������������������������   173 Staying on Message ����������������������������������������������������������������������������������������   173 Why the Message Is Inaccurate ����������������������������������������������������������������������   174 How the Message Supports the Academic Operation��������������������������������������   175 The Bottom-Line Is Something Else Entirely��������������������������������������������������   176 History Leads by Example������������������������������������������������������������������������������   177 Re-branding as a Marketing Strategy��������������������������������������������������������������   178 V – Valuation of Invention Claims����������������������������������������������������������������   179 To Protect and Pursue or Not ��������������������������������������������������������������������������   180 Challenges to Making a Deal��������������������������������������������������������������������������   181 Early Diligence Is Key to Value����������������������������������������������������������������������   182

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Four Essential Questions����������������������������������������������������������������������������������   182 Prior Collaborations Facilitate Transfer����������������������������������������������������������   184 Minding the Gaps in Process ��������������������������������������������������������������������������   184  – New Net Wealth��������������������������������������������������������������������������������������   187 W The Private Sector’s Metrics����������������������������������������������������������������������������   187 National Government Metrics��������������������������������������������������������������������������   188 Industry Generates Wealth ������������������������������������������������������������������������������   189 X – Xi Jinping’s China Strategy ������������������������������������������������������������������   191 China’s Focused on Industry����������������������������������������������������������������������������   191 Leveraging the West’s Outputs������������������������������������������������������������������������   192 China Is Nation Z��������������������������������������������������������������������������������������������   193 Y – WhY STI Fallacies Persist����������������������������������������������������������������������   195 Doubling Down on Myth ��������������������������������������������������������������������������������   195 Investigators Caught in the Paradox����������������������������������������������������������������   196 Insights from Investigators������������������������������������������������������������������������������   197 Planning for Outcomes������������������������������������������������������������������������������������   197 Integrating Decision Gates������������������������������������������������������������������������������   198 Logic Models as a Planning Framework����������������������������������������������������������   199 Z – Zero Sum Game��������������������������������������������������������������������������������������   201 The Paradigm Persists��������������������������������������������������������������������������������������   202 Necessary But Not Sufficient��������������������������������������������������������������������������   202 Winners and Losers������������������������������������������������������������������������������������������   204 ?– What Comes After Z? ������������������������������������������������������������������������������   207 Recapping STI Policy Trajectory��������������������������������������������������������������������   207 Evidence of Continued Support ����������������������������������������������������������������������   208 Detrimental Downstream Consequences ��������������������������������������������������������   209 Options for Correcting the Trajectory��������������������������������������������������������������   211 A Focused Message for STI Policy Change����������������������������������������������������   213 Correction to: The ABC’s of Science, Technology & Innovation (STI) Policy ������������������������������������������������������������������������������  C1

The original version of this book was revised. A correction is available at https://doi.org/ 10.1007/978-3-031-34463-3_28

About the Author

Joseph  P.  Lane  holds a Master’s degree in Business and Public Administration (MBPA) from the University of California, Irvine. He is currently director of the Center for Assistive Technology, University at Buffalo. For twenty-five years, as principal investigator of the US government–sponsored rehabilitation research engineering center, he led a team tasked with generating innovative new products in both mainstream and niche markets, and supporting other funded programs with the same mission. As such, he simultaneously practiced and studied the seemingly arcane processes of discovery and invention, product development, technology transfer, and commercial deployment. The mission required the team to operate at the intersection of government, academic, and commercial sectors, so we engaged with garage inventors and business entrepreneurs, university faculty and administrators, government-sponsored laboratories, non-profit community and national organizations, and for-profit corporations from small to medium-sized enterprises (SMEs) to Fortune 500 companies, along with domestic and foreign government agencies. This broad experience taught them much about each sector; who’s involved, how they function, what they contribute, which incentives motivate them, and why they participate.The program’s sponsor’s primary focus is on advancing the field of rehabilitative and assistive technology devices; products designed to help persons with disabilities regain or sustain functional abilities (physical, sensory, cognitive). Such products help individuals pursue their personal goals of education, vocation, and independent living. However, given the dual mandate to deliver results and support others, the team strove to identify and adopt established models, methods, and metrics of product innovation drawn from all fields of application.Over time and through hundreds of case examples, they encountered barriers to progress, inter-sector conflicts, and contradictions to assumptions underlying the relationship between scientific research, engineering development, and industrial production. As their efforts crossed over into other sectors, they learned that the issues encountered in the market niche of assistive technology devices were actually present in most fields where STI policies and practices apply. Along with Dr. William C. Mann, Mr.

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About the Author

Lane authored the first textbook on assistive technology, published by the American Occupational Therapy Association in 1993, and served as founding editor of the journal Technology & Disability. Having authored several dozen peer-reviewed papers on STI topics, presented at numerous academic and industry conferences around the world, and discussed related issues with policymakers, scholars, and practitioners, Mr. Lane thought it important to compile and share what he has learned in this book.

A – Aristotle’s Three States of Knowledge

I was originally supposed to become an engineer but the thought of having to expend my creative energy on things that make practical everyday life even more refined, with a loathsome capital gain as the goal, was unbearable to me. Albert Einstein

STI policies and practices lack coherence because they fail to recognize and support three distinct states of knowledge, their origins and their relative contributions to technological progress, despite them being clearly articulated 2,000 years ago.

Starting this alphabetical review with ‘A’ for Aristotle (384–322 BCE) is historically appropriate because he is the genesis of the core concepts underlying Science, Technology & Innovation (STI) that followed. This chapter describes Aristotle’s description of three states of knowledge. The three knowledge states are very useful for deconstructing the erroneous confounds and complexities and that have accreted to STI policy and practice since his time. Especially the broadly accepted notion that new knowledge creation is the exclusive domain of academics trained to apply the methods of scientific research. In an effort to understand the human mind and articulate the relationship between thought and action, Aristotle considered the artifacts of civilization around him.1 A chair served as an adequate example. Aristotle knew that his chair, unlike the Goddess Athena, didn’t spring fully formed from Zeus’ forehead; that it was conceived, designed and constructed through some combination of mental and physical processes. But how many processes and how did they relate? Aristotle’s thought exercise resulted in him naming and describing the three core concepts underlying today’s STI triumvirate: Epistêmê, Technê and Phronesis.

 Aristotle, Nicomachean Ethics; translated with introduction, notes and glossary by Terrance Irwin, 2019, (3rd Edition). Indianapolis: Hackett Publishing Company, Inc. 1

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023, Corrected Publication 2023 J. P. Lane, The ABC’s of Science, Technology & Innovation (STI) Policy, https://doi.org/10.1007/978-3-031-34463-3_1

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A – Aristotle’s Three States of Knowledge

We’ll call them the three states of knowledge because they succinctly capture a kernel of new knowledge as the distinct output from the application of different processes, while preserving the essence of that kernel of knowledge as it transforms from one state to other. It helps to think of these three knowledge states as analogous to the three traditional states of matter; gas, liquid, solid.

First State of Knowledge: Epistêmê or Conceptual Discovery The first state of knowledge—Aristotle’s Epistêmê (Ancient Greek: ἐπιστήμη)—is a noun describing a principled system of understanding, from the verb epístamai (ἐπῐ́στᾰμαι), meaning ‘to know, to understand, to be acquainted with’. Aristotle recognized that we must mentally organize our thoughts into structured patterns and relationships, so that they can be meaningfully articulated to ourselves and to others. Structured thought on any subject is knowledge at a conceptual level. In Aristotle’s thought exercise, conceiving of the general purpose of a chair precedes the specification of its components or the construction of a functional chair. A chair allows one to sit and unlike a fixed ledge is portable, can be positioned at different angles, and provides postural support. This conceptual knowledge regarding a chair is akin to the gaseous state of matter. It is amorphous, applicable across any scope or scale, easily revised or subsumed by new thoughts, and harbors potential limited only by one’s imagination. One can also consider the chair’s dimensions, weight, sturdiness, ornamentation and status symbolism. Eventually one must progress beyond the conceptual in order to differentiate sound ideas from fanciful ones then verify the merits of the former through some manner of analysis. Over time, the Greek’s principled system of expanding our understanding of the world around us became formalized into scientific research, a structured process for generating new conceptual knowledge on any subject. The methodology of scientific research involves the control and manipulation of variables in order to discover new knowledge about effects and relationships between them, and done in a manner permitting verification through replication. The application of science broadened and grew into numerous disciplines generally classified as formal (logic and math), natural (physical and life), and social (human behavior) sciences. All of which continue to expand as new conceptual knowledge is discovered. Over time, the education and training of professional scientists evolved into a core curriculum, with most of today’s scientists trained to the doctorate (PhD) degree level or beyond, before finding employment in industry, government or academia. The academic community has established an organized system for documenting new conceptual discoveries generated through scientific research as findings of established fact, promulgated to audiences through articles published in scholarly magazines (journals). Anyone claiming a new conceptual discovery in the sciences prepares a manuscript describing their intent, method and results, which is submitted to the editor of a relevant journal. The editor circulates the manuscript to a panel of experts on that topic (peers) who verify or deny the two criteria of a discovery: the

Second State of Knowledge: Technê or Prototype Invention

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described study’s legitimacy (validity), and originality (novelty). The review panel provides comments back to the original author through the editor along with a decision to publish with or without revisions, or to reject the manuscript. Manuscripts that pass this peer-review are then published in a subsequent issue of the journal for public consumption. The act of publishing confers legal ownership over the described discovery to the author(s) through copyright, which verifies the dates of manuscript submission and publication as the first articulation of that conceptual discovery; confirming its novelty. By convention, any future description of that discovery by others should contains a reference to the original author(s) publication. All scholarly publications contain sufficient details regarding the scientific research methodology implemented—the research design—to permit others to validate findings through replication. A validated discovery becomes the basis for future experimentation leading to new discoveries, although progress is not necessarily structured or linear but instead is driven by accepted wisdom (paradigms), as well as the interests of the individual scientist. No matter the pace of progress and direction of inquiry, conceptual discoveries arising from scientific research perpetuate the state of knowledge Artistotle first labeled as Epistêmê.

Second State of Knowledge: Technê or Prototype Invention The second State of Knowledge—Aristotle’s Technê (τέχνη)—is a noun describing a skill or craft of hand. This state of knowledge allows a person to transform the conceptual knowledge (Epistêmê) into a tangible embodiment of that concept. In Aristotle’s example, the skill involves the selection, shaping and joining of appropriate materials into the envisioned chair’s form and function. The person possessing this technê-level knowledge at the time was a craftsman—in this case a carpenter. The first chair built from the conceptual design is a prototype—it proves that the idea of a chair can be realized in the physical world. A prototype rarely represents the finished product, but instead captures the key elements of a chair while serving as a basis for testing and revision. This reduction-to-practice state of knowledge is akin to the liquid state of matter. The scope and scale of the original conceptual idea has been more narrowly defined within the intended form and function of this chair design, so this state of knowledge is more structured than gas yet still somewhat malleable before reaching its final and fixed form. Of course, more sophisticated technê-level knowledge was required to design, build and maintain complex mechanical devices and architectural structures, but the construct of a second and distinct state of knowledge holds. Over time, the skill and craft involved in reducing concepts into practical forms became organized into engineering development methods, which formed the basis for the formally structured disciplines that comprise the engineering professions. Engineering disciplines combine materials and techniques into tangible artifacts within the constraints of physical properties and forces. Just as in science evolves through new conceptual

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A – Aristotle’s Three States of Knowledge

discoveries, engineering disciplines continue to expand through new applications of techniques and materials, all within the core classifications of chemical, civil, electrical and mechanical engineering. Today, practitioners are typically trained in specific engineering disciplines to the master’s degree level, and are licensed to practice as professional engineers. It is important to note that fundamental training in engineering disciplines involves a great deal of instruction in scientific (epistêmê) knowledge, which is necessary for engineers to understand and apply that first state of knowledge within this second state. Without the ability to translate and apply epistêmê-level knowledge, engineers would be left at a primitive cut-and-try approach to achieving technê-level results. Engineering development methods are used to design and build a working model—a prototype—embodying the attributes of some knowledge. Achieving the second state of knowledge requires two conditions: the prototype must be operational (feasibility), and it must be new to the world (novelty). If both conditions are met through objective assessment the creator(s) have achieved a prototype invention. This notion of objective assessment is key because the subjective views of the creator are often biased and wrong. Despite the creator’s best efforts, the attributes realized in a functional prototype may already exist elsewhere (a wheel), or the envisioned attributes may not be yet be realizable (anti-gravity device). Because individuals become subjectively enamored by their own creations, their resources are squandered on re-invention. Or worse, what my team labeled square wheels; poorly designed re-inventions. The claims underlying a prototype invention are certified through a legal document called a patent, which is only issued after an objective governing body determines it has met the requirements of feasibility and novelty. The patent is supposed to certify that all future applications of that invention are under the control and consent of the named inventor(s) for a specified period of time. Or, as discussed later, at least up to the inventor’s ability to defend their patent rights. The named inventor may be an individual or an organization in which the individual is employed, depending on stipulations set forth in an employment contract. The details surrounding patent rights and responsibilities are complicated and vary by country and region in ways too varied to describe here. In this chapter’s context, the existence of a functional prototype invention meeting the novelty and feasibility requirements of a patent, is the terminal point of the second state of knowledge. No application of the invention claims is required under patent rights, while any substantive revisions to prototype invention is an opportunity to submit new claims under the original (controlling) patent. New prototype inventions arising through the application of engineering development methods perpetuate the state of knowledge Aristotle first called Technê. Appending the suffix -logia (Ancient Greek: λογία) to technê is the basis for the modern word technology which defines the state of knowledge in any tangible form generated through skill and craft.

Third State of Knowledge: Phronesis or Industrial Innovation

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Third State of Knowledge: Phronesis or Industrial Innovation A third state of knowledge—Aristotle’s Phronesis (Ancient Greek: φρόνησις )—is a word meaning a type of intelligence that reflects good judgement in the form of practical action. While the word is mainly used in philosophy to reference wisdom or mindfulness, in the context of STI principles it represents the final form of a finished good or service. The prototype invention reflecting the state of technê knowledge must be further refined to meet an envisioned business opportunity in the commercial marketplace. Doing so requires standardizing all aspects of the envisioned good or service so that it can be manufactured, distributed and sold through industrial methods and channels, in sufficient quantities to pay costs and satisfy anticipated market demand. In the chair example, the prototype’s overall dimensions may need revision to accommodate a range of height and weight among potential users and to address aesthetic considerations, while the materials and finish may be altered to address financial and manufacturing constraints of cost, availability, ease of shaping and assembly or overall quality. The transition from one-off creations to mass manufacturing through standardized tools, techniques and designs, gradually evolved into what we now know as the methods of commercial production, an established set of processes for manufacturing goods and services at a pre-determined cost and quality. Practitioner’s combine training in business disciplines such as accounting/finance, operations research, organizational management and marketing/sales—typically at the master’s degree (MBA) level—along with experience working with existing products/services and potential customers to guide the transition to the innovation state of knowledge. Industrial production as the method underlying innovation as a third state of knowledge is complementary to—yet distinct from—the methods and outputs of basic/applied research and engineering development. As noted above, people engaged in commercial production may have foundational training in science/engineering disciplines to help translate relevant knowledge inherent in discoveries or inventions. Or they may rely on others qualified in those core disciplines. Some engineering disciplines (industrial, systems and manufacturing), are closely tied phronesis-level knowledge creation, but they are not sufficient to generate a proof-of-product meeting the dynamic constraints and opportunities of the commercial marketplace. This final form of a market innovation requires support from all disciplines of business and commerce. In modern parlance the term phronesis represents a ‘best practice’—a consensus among commercial production professionals regarding the most efficient and effective method for achieving a desired end result, often as determined through technê prototype-level trials. The concept of best practices in commercial production actually aligns quite well with the original Greek definition of phronesis as ‘good judgement’. The Product Development Managers Association (PDMA)2 is an international professional organization devoted to documenting such best practices among corporations involved in the commercial production process.

 Product Development Managers Association (PDMA). https://www.pdma.org/default.aspx

2

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A – Aristotle’s Three States of Knowledge

To transition from a prototype invention to a commercial innovation, a product must meet the following criteria: it must deliver an expected function (utility), at an acceptable price (cost), in an appealing form (aesthetics), and all those parameters must exceed those of existing products or services in the marketplace (competitive advantage). As with inventions, a subjective assessment of these innovation criteria results in wasted investment and failed market introductions. An objective assessment of the business case is required to attract the necessary capital investment to enter a market niche because investors are understandably risk averse. The investor’s motivation is the potential for a financial return exceeding the investment through the mass production, distribution and sale of the finished product. In ancient Greece, once the product’s parameters were finalized and the financial investment secured, multiple craftsmen could be trained to build identical iterations of the final chair design, which when properly managed achieved both quality control and economies of scale. The result of this refinement process is most analogous to a solid state of matter. It is highly specific in terms of materials, techniques and skills involved, essentially freezing in place the previously liquid state of prototype knowledge. Any deviation from this final set of parameters would incur an entirely new set of costs in time, money and materials. The modern equivalent is a combination of skilled labor, materials inventory and fabrication equipment operating under set of conditions designed to optimize the manufacturing process in the context of the constraints and opportunities listed above. We’ve already noted that different legal protections exist for Aristotle’s first two states of knowledge: copyright protection for conceptual discoveries (epistêmê) and patent protection for prototype inventions (technê). Yet a third legal protection exists for the commercial innovations representing Aristotle’s third state of knowledge (phronesis). New knowledge in the state of a finished product or service can obtain its own legal protection against unauthorized use in the form of a trademark or service mark. Just as livestock are branded with the owner’s symbol, a unique word (brand name) or symbol (initials, figure) can be registered with the government and affixed to every copy of the product/service produced.

 ristotle’s States of Knowledge Versus Current STI A Policy & Practice Despite the intervening 2,000 years of technological progress, Aristotle’s characterization of knowledge in three distinct states remains remarkably valid and comprehensive. All three states of knowledge are comprised of a set of attributes. These attributes are at once unique within each knowledge state, while being analogous across the three states. Even national legal systems explicitly recognized that the same kernel of knowledge can exist in three different states, by establishing the three different forms of intellectual property protection for three different knowledge states (copyright, patent, trademark). A case example under Letter O describes

Aristotle’s States of Knowledge Versus Current STI Policy & Practice

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a novel and functional device secured legal standing under a patent as a prototype invention, then secured different legal standing through a trademark as a product innovation. Thus, legal systems already recognize that new knowledge is not the exclusive output of one method or profession even though Western nation’s STI policies treat new knowledge to be the exclusive domain of scientific research methods. What should be as obvious today as it was to Aristotle two millennia ago, is that any kernel of original knowledge must advance through all three states in order to deliver beneficial impacts for nations and society. While the three methods of scientific research, engineering development and commercial production are all necessary, none of the three methods are individually sufficient to achieve society’s innovation outcomes.3 Current national STI policies do not fully recognize and equally support knowledge creation in the three different states. Instead, the first state of knowledge—conceptual discovery through scientific research—garners the most attention, credit and support because the received wisdom among established policy-makers (Letter B), and promulgated by vested interests benefitting from the unequal distribution of public funding (Letter C). They persist in claiming that scientific discoveries create a wellspring of conceptual knowledge from which future invention and innovation is drawn (Letter B). Because the Science Drives Innovation benefits those best positioned to examine it, the specific mechanisms through which knowledge is transformed from one state to another is not well articulated in scholarly publications, nor is are those mechanisms of transformation supported equally across the entire process underlying actual product innovation. For this reason, the level of front-end investment in what is widely called ‘R&D’—but we are here calling RorD—is not generating an equivalent level of product and service innovation at the back-end. More than a decade ago, I had raised this issue with Professor Benoît Godin during one of our earliest discussions. As one of the world’s foremost scholars on the history of statistics and innovation, the ideological roots of innovation as a concept, and how the term’s usage had changed over centuries, I had sought him out to exchange ideas. He maintained a vast library on these subjects and was conversant with the original sources written over centuries and in multiple languages. After some time had passed, he informed me that he could recall only one author who had previously made distinctions similar to Aristotle’s. In the context of economic policy analysis Professor Simon Kuznet’s had defined a discovery as an addition to the general knowledge base, invention as a tested combination of existing knowledge to a useful end, and an innovation as an initial and significant application of an invention—whether technological or social—to economic production.4 I accepted Professor Godin’s assessment that beyond this one exception, the distinctions

 Bozeman, B. and Melkers, J. (2013) Evaluating R&D Impacts: Method and Practice, Springer: New York, NY. 4  Kuznets, Simon (1966). Modern Economic Growth: Rate, Structure and Spread. Yale University Press, ISBN-13 # 978-0300006469. 3

A – Aristotle’s Three States of Knowledge

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between three states of knowledge had been lost to scholarly thought over the intervening two millenia.

Knowledge Attributes Are Unique Within Each State Achieving the goals of innovation require STI policy and practice professionals to begin considering and valuing new knowledge outputs in all three states of knowledge. Doing so would force a realignment of public funding and national program priorities to better support the expected innovation outcomes and beneficial socio-­ economic impacts. The table on the following page summarizes the unique yet analogous attributes within and across Aristotle’s original three states of knowledge. Upon review it seems clear that Aristotle had succinctly captured the essence of new knowledge creation and transformation. Readers who stop here have all the information they need to understand, internalize and apply the core constructs underling innovation, as well as to accurately assess and refute the bulk of scholarly writing on STI policy and practice over the past half century. As easy as ABC. The remaining twenty-five letters of the alphabet explain in greater detail how these core attributes of knowledge states are central to sorting reality from rhetoric in the context of Science, Technology & Innovation policy and practice. One chapter (Letter L) even contains a more detailed table containing a complementary set of milestones, aligned to the progression of each knowledge state from inputs through processes to outputs, outcomes and impacts. The Modern Attributes of Aristotle’s Three States of Knowledge Episteme Knowledge attribute K-State (Output) Conceptual Discovery K-Methodology Research K-Expertise Science K-Motivation Intellectual Empiricism –‘Know What’ K-Matter State Gas K-Proof Standard First Articulation K-Legal Status Copyright K-Contribution Factual information (Outcome) in knowledge base K-Adoption Mode Translation K-Timeframe Long Term Focus

Techne

Phronesis

Prototype Invention

Product Innovation

Development Engineering Operational experimentation—‘Know how’ Liquid Feasibility & novelty Patent Proof-of-concept tangible

Production Business Commercial competition—‘Know Why’ Solid Utility, cost, advantage Trade/Service mark New product or service in marketplace Transaction Short term

Transfer Mid Term

The Utility of Knowledge States for Understanding Innovation

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The Utility of Knowledge States for Understanding Innovation Aristotle’s taxonomy can readily classify and assess the relevance of each new kernel of knowledge output to a society’s socio-economic standing. Here is a fun exercise to test the idea out. Choose any annual compilation of new so-called innovations as compiled by popular magazines (Popular Science, Discover, Technology Review), and review the descriptions. The actual knowledge state is easily identified through the description provided for each item. For example, item descriptions containing the phrases ‘may someday lead to’ or ‘holds future promise’ indicates a conceptual discovery from scientific research (epistêmê), because there is no evidence of application aside from some vague description of potential uses. Other item descriptions containing phrases such as ‘demonstrating the practical use for’ or ‘proving its performance as’ denotes a prototype invention (technê) that resulted from engineering development and therefore at the proof-of-concept stage, but not yet integrated into commercial products or services. While a third group of item descriptions with language such as ‘tradeshow unveiling’ or ‘now available’ are referring to a commercial market innovation (phronesis) designed and manufactured through commercial production that is currently available for sale, acquisition and use. The motivation for pursuing the three knowledge states differs for each one. Essentially outputs from scientific research (discoveries) tell us something that we didn’t already know; the know what. The outputs from engineering development (inventions) embody instructions for turning a concept into a reality; the know-how. While the outputs from commercial production (innovations) represent the motivation for investing additional resources to reach the marketplace as a product; the know why. However, for reasons explained throughout this book, terminology within the field of STI is carelessly and often erroneously applied. The names of the three methods and the three states of knowledge are routinely conflated with conceptual discoveries from scientific research called ‘innovations’ as though they are equivalent to the end realization of marketplace goods and services from commercial production. Or that a nation’s level of innovation success can be measured by financial inputs rather than product outputs (Letter Q). This situation is tremendously problematic for STI planning and implementation in both policy and practice because, as depicted in the table above, the inputs, processes and outputs within each of these three knowledge states are completely different! Given the relative ease of discriminating between them, I’m compelled to conclude that the misuse of terminology is due to willful ignorance of these distinctions and/or deliberate manipulation of them motivated by ego and ambition. The result is a confounding of both expectations and realities regarding the investment of public resources to stimulate innovation through STI policies. This in turn has a consequent reduction in the actual return on each Western nation’s significant public investment in technological innovation, and the good faith and trust of

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A – Aristotle’s Three States of Knowledge

their citizens who are not receiving the full benefit of promised socio-economic benefits. These circumstances are combining to weaken the position of Western nations within the competitive global marketplace. STI policies must be revised to establish equitable public investment across the three knowledge states for all the reasons explained in the following chapters.

B – Vannaver Bush’s Fateful Omission

The great enemy of the truth is very often not the lie, deliberate, contrived and dishonest, but the myth, persistent, persuasive and unrealistic. John F. Kennedy

The seminal 1940’s essay ‘Science: The Endless Frontier,’ vastly overstated the role of scientific research in generating product innovations, henceforth skewing subsequent public policies and the resources they generate away from the equally important contributions of engineering development and commercial production.

Dr. Vannevar Bush was an electrical engineer, prolific inventor, successful entrepreneur, corporate executive, director of both non-profit and government institutes, MIT professor and dean. At MIT he was faculty advisor to a graduate student named Claude Shannon, who would go on to formulate ‘information theory’- a conceptual discovery widely acknowledged as the foundation of computer-based information and communications technology industry. Dr. Bush was the first named Science Advisor to U.S.  Presidents and then appointed as Chair of the Office of Scientific Research and Development (OSR&D) at its inception. He held those roles while advising both Franklin Delano Roosevelt and Harry S.  Truman. Dr. Bush’s tenure spanned World War II – history’s greatest concentration of technological endeavors combining scientific research, engineering development and commercial production – as well as the ensuing period of the USA’s post-war boom in global reconstruction and its domestic economic expansion.1

 Carew, M.G. (2010) Becoming the Arsenal: The American Industrial Mobilization for World War II, University Press of America, Lanham, Maryland. 1

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023, Corrected Publication 2023 J. P. Lane, The ABC’s of Science, Technology & Innovation (STI) Policy, https://doi.org/10.1007/978-3-031-34463-3_2

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B – Vannaver Bush’s Fateful Omission

Post-WWII STI Policy As such, Dr. Vannevar Bush presided over a critical period in the evolution of national STI policies and practice, and more importantly, the language used to articulate both. Despite Aristotle’s lesson that the domain of development is engineering not science, the academic and governmental centers, institutes and initiatives Dr. Bush headed were all labeled with the term science and/or research. The only time the word development appeared was in the contraction Research & Development and only in the context of scientific research & development (Letters D, G & S). The word engineering and therefore the whole construct of engineering development as a separate and complementary process yielding a different state of knowledge than that of scientific research, was simply absent from the lexicon of university scholars and government policymakers. The pervasive neglect of engineering as a term and discipline in government titles and entities may have resulted from the concise nature of bureaucratic shorthand and tidy acronyms. Yet the consequence – whether intentional or not – was to deny the profession of engineering its rightful role in and credit for the great leap forward in technological capabilities and resulting products and services available in our post-war world. It seems inexplicable given Dr. Bush’s education and training, along with his prior personal experience as an inventor and entrepreneur, that he would somehow have simply missed the serious implication of this linguistic legerdemain. Failing to give engineering development as well as commercial production their due credit for technological innovations seems inexcusable given that Dr. Bush witnessed firsthand the Allied nation’s successful efforts to accelerate their technological capabilities in all facets of military systems, capabilities which lagged dangerously behind Germany’s at the outset of WWII.  Further, he witnessed the immense industrial capacity harnessed to design, manufacture and deploy the many thousands of finished products needed to equip the Allied fighting forces: uniforms and rifles, radios and radar, bullets and bombs, trucks and tanks, planes and ships, as described in the book entitled Freedom’s Forge.2 Dr. Bush had too seemed to draw the correct conclusion from that military example: that symbiotic collaboration by three sectors (government, academia and industry), to coordinate the application of all three methods (scientific research, engineering development and commercial production), harbored potential to accelerate all fields of technology for the betterment of humanity.

 Herman, Arthur (2013). Freedom’s Forge. Random House. ISBN 9780812982046.

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The Focus on Scientific Research

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The Focus on Scientific Research And yet this vital message of science and engineering collaboration delivered to the marketplace by industry, and all the promise it conveyed for other fields of application, was forever after muddled when Vannevar Bush titled his 1945 report: “Science, The Endless Frontier: A Report to the President.”3 Note that he titled the report Science. Not science and engineering, not scientific research and engineering development, nor even discovery and invention. Just SCIENCE writ large. This unfortunate title and the message conveyed in narrative earned Dr. Bush his place in this book’s alphabet. So that there is no question regarding the bias Dr. Bush built into that landmark, it began as follows: Scientific Progress Is Essential – Progress in the war against disease depends upon a flow of new scientific knowledge. New products, new industries, and more jobs require continuous additions to knowledge of the laws of nature, and the application of that knowledge to practical purposes. Similarly, our defense against aggression demands new knowledge so that we can develop new and improved weapons. This essential, new knowledge can be obtained only through basic scientific research. Science can be effective in the national welfare only as a member of a team, whether the conditions be peace or war. But without scientific progress no amount of achievement in other directions can insure our health, prosperity, and security as a nation in the modern world.

While Dr. Bush hedged his focus on science and its research methods by including the phrases, ‘and the application of that knowledge’ and ‘Science can be effective … only as a member of a team’, the bulk of the paragraph conveys the singular importance of knowledge as an output from scientific research. Note that Dr. Bush used the term basic research because scientific research is traditionally categorized as either basic (curiosity-driven) or applied (oriented toward a targeted use). The difference is supposedly determined by the intention of the sponsor or of the funded investigator. I assert that in the context of STI, this distinction is largely irrelevant. The intention of the sponsor or the investigator does not predetermine whether or not some discovery from scientific research will be transformed into a prototype invention and on into a commercial market innovation. Instead, it is up to corporations and industries to assess the utility of conceptual discoveries from scientific research no matter the sponsor or investigator intent. Due to the critical role of industry in generating innovations, throughout this book I substitute the terms undirected for basic and directed for applied, because these terms better represent the critical distinction for analyzing the role of science in achieving innovation outcomes. Directed scientific research projects are those deliberately focused on initiating or advancing progress in the features or functions of commercial products or services. Consequently, directed research projects are

 Bush, V. (1945) Science the Endless Frontier: A Report to the President by Vannevar Bush, Director of the Office of Scientific Research and Development, https://www.nsf.gov/od/lpa/nsf50/ vbush1945.htm 3

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B – Vannaver Bush’s Fateful Omission

typically conducted under the purview of corporations or industries, or are contracted to corporations or industries to deliver specific results. Undirected scientific research projects are not focused on achieving a specific discovery so are not directly engaged with industry. The same distinction holds for engineering development projects which may be also be directed or undirected by corporations/industry. Corporate/industry engagement and direction is essential for RorD projects to achieving the goals of STI, because commercial production is required for society to acquire and use the beneficial attributes of innovations, and for the sale of those innovative products and services to generate new net wealth for corporations and their host governments (Letter W). Dr. Bush consistently used the term basic to mean curiosity-driven or undirected research He didn’t even give due credit to applied or directed research where the scientist’s inquiry is at least oriented toward some tangible utility. Instead, Dr. Bush explicitly focused on unfettered exploration initiated through the scientist’s own intellectual pursuits. His position formed the basis for future depictions of undirected scientific research as a wellspring of new knowledge from which all future progress depends. Otherwise known as the Linear Model of Innovation.4

The Inherent Bias of STI Policy Advisors So why did Dr. Bush vigorously promote undirected scientific research and so blatantly elevate its role in the pantheon of knowledge states as the sole driver of innovation, at the expense of directed research as well as engineering development? And why did he not delve into the essential linkage between RorD and commercial production as the downstream requirement to deliver innovative goods and services to the marketplace? Perhaps because at the time of his writing, the U.S. industrial sector had already benefited financially from the US government’s WWII investment in their manufacturing capabilities, and from the immense orders for military equipment from the Allied nations. Corporate America was now poised to turn their massive factories to the production of civilian goods for both the war’s victors and the vanquished. Perhaps Dr. Bush assumed that the private sector was flush with resources and so would not need public sector policies to support the industry sponsored RorD necessary to achieve his envisioned health and welfare applications. On the other hand, Dr. Bush and the university presidents advising him all may have worried the unprecedented support from government agencies to universities during the war effort might wind down. After all, undirected scientific research is primarily the domain of university-based scholars. Prior to WWII, U.S. universities largely subsisted on private endowments and grants from state legislatures (Letter

 Godin, B. (2006) ‘The linear model of innovation: the historical construction of an analytical framework’, Science, Technology & Human Values, Vol. 31, No. 6, pp.639–667. 4

The Inherent Bias of STI Policy Advisors

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U).5 The Great Depression of the 1930’s had seriously diminished both sources. The caricature of professors in sweaters with elbow patches was fairly accurate as they and their graduate students scrounged for grant and scholarship funding. Dr. Bush’s advisors within his Office of Scientific Research and Development included the presidents of both MIT and Harvard, as well as several military officers who had created their own RorD laboratory fiefdoms during the early 1940’s (Letter F). None of them would have relished a return to the pre-WWII frugality resulting from diminished future government support. Perhaps they all weighed in on the pre-­ eminent value of undirected scientific research which conveniently implied an indefinite flow of future funding from public coffers to public and private universities, without constraints or ties to corporate America. We can’t know for sure because unlike publicly promulgated STI policies, the private thoughts and personal ambitions of high-level government advisors and decision-makers are not typically divulged or documented. Instead, we are left with the formally constructed rationales for STI policies that relied heavily on altruism, patriotism and the greater good of society, but then as now were short on empirical evidence for asserting that undirected scientific research alone was the driving force for innovation (Letter R). Other chapters will explain how this skewing language and thinking toward undirected scientific research influenced all future facets of Science, Technology & Innovation policies and practices. As one example drawn from the most recent reprint of Dr. Bush’s 1945 report in 2021,6 Dr. Rush D. Holt wrote in a companion essay: Science, the Endless Frontier is recognized as the landmark argument for the essential role of science in society and government’s responsibility to support scientific endeavors. First issued when Vannevar Bush was the director of the US Office of Scientific Research and Development during the Second World War, this classic remains vital in making the case that scientific progress is necessary to a nation’s health, security, and prosperity. Bush’s vision set the course for US science policy for more than half a century, building the world’s most productive scientific enterprise. Today, amid a changing funding landscape and challenges to science’s very credibility, ‘Science, the Endless Frontier,’ resonates as a powerful reminder that scientific progress and public well-being alike depend on the successful symbiosis between science and government.

One might infer that the science-focused language was an innocent simplification of the more complex relationship between science, engineering and industry. But then why was it never simplified as a symbiosis between engineering and government, or industry and government? The focus on science even as a simplification had significant future implications for conceptualizing the STI process. Dr. Bush’s influential essay, and those that followed, firmly set the parameters for STI policies to be grounded in the mantra that all new knowledge on which society’s progress depends arises from undirected scientific research, which in turn must be supported through public funding to research universities administered through government agencies.

 https://nces.ed.gov/programs/digest/d13/tables/dt13_301.20.asp?current=yes  Bush, V. (2021) Science the Endless Frontier, Princeton University Press. ISBN:9780691186627

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B – Vannaver Bush’s Fateful Omission

The prevailing emphasis on undirected scientific research relegated the professions and methods of engineering development and commercial production into supporting roles within STI programs, characterizing both activities as dependent on their ability to exploit the conceptual discoveries emerging from the science research process, and leaving them without an equal share of public funding allocations. Under Letter C we will next recount the origins of an increasingly powerful and lucrative partnership, what Dr. Holt called, ‘the successful symbioses between academic science and government bureaucracy.

C – Coalition Eisenhower Didn’t Foresee

I suppose it is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail. Abraham Maslow

Government expenditures on directed RorD for military programs raised political and fiscal concerns as funding grew after WWII. In parallel, scholars and their government sponsors discretely expanded funding to universities and government laboratories undirected scientific research across a wide range of non-defense fields, while ensuring the programs were labeled for both research and development, and for directed as well as undirected purposes.

In the decade following WWII, concern grew among policy watchdogs that the continued growth of the US military, and the commensurate growth of the corporations comprising what is euphemistically called the defense industry, were exerting undue influence through various mechanisms, on public policies that served their parochial interests ahead of national interests. These mechanisms included political lobbying and donations, and encouraging elected and community support for local projects bringing money and jobs. This concern was publicly articulated in 1961 by no less than the outgoing President Dwight D. Eisenhower – the former five-star general who had served as Supreme Allied Commander in WWII. In his farewell address to the nation, President Eisenhower warned of the dangers of increased spending by and for the Military-Industrial Complex (M-IC) over budget allocations.1

 Eisenhower, Dwight D. (1961). Farewell Address https://catalog.archives.gov/id/594599

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C – Coalition Eisenhower Didn’t Foresee

Local Incentives Drive National Policies Ike’s warning went unheeded because support for military spending from both elected officials and local communities was already baked into such budgetary largesse. As former Speaker of the House Thomas ‘Tip’ O’Neill said, all politics is local, and military expenditures were scattering public funds across the USA. Every military installation or corporation is geographically situated within some community represented by federal, state, regional and local officials  – both elected and appointed – along with civic leaders and local chapters of national non-profit organizations. All of them can and often do lay some claim for securing new public funding because it builds infrastructure, expands employment and enhances that community’s economic stature. Pick any city housing a military base or contractor and imagine it then and now without that continuing stream of revenue from government coffers. Or think back to recent protests that accompanied several rounds of military base closings, or those opposing corporate mergers that consolidated factories. That local self-­ interests drive excessive spending is not limited to domestic borders. The US established military bases all around the globe after WWII which accounted for a share of the growth in public expenditures. It took decades after the Cold War for many countries to agree to closing such bases and losing the economic benefit from civilian base operations and the thousands of US military paychecks expended in their local communities. Despite President Eisenhower’s warning, the influence of the M-IC continues unabated to the present day. Through economic fluctuations, competing demands from national health and welfare requirements, and even public statements from high-ranking military officials regarding excess capacity and unnecessary weapon systems, Congressional allocations for military spending continue their inexorable growth. In the context of STI one can argue that the MI-C has well demonstrated its ability to deliver on the promise of product and service innovations. Whether or not one supports this use of public funds, US military hardware remains superior to that produced by other nations, although recent advances in hypersonic missile technology by both China and Russia may soon challenge that statement. Why has that technological edge remained to date? Because both the scientific research and the engineering development underlying military-based innovations were conducted under the management of or in direct collaboration with private sector corporations that were serving as the prime government contractors for each innovation effort. When government agencies sponsor projects, the projects are often large and broad in scope. Conducting the specified work may involve many entities so the government sponsor typically selects one entity to organize and manage all of the project components; that entity is the project’s prime contractor. Prime contractors for military projects traditionally work in close coordination with defense and energy focused Federal Laboratories (Letter F) and with faculty with specific expertise in research universities, to advance the performance capabilities of weapon systems

National Policies Drive Funding Allocations

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through successive generations. The required RorD work for military applications is sponsored by government agencies, led by industrial corporations and with performance tied to quantitative technical specifications (Letter H). The RorD supporting technological innovations for military applications represents a special market case as discussed under Letter O. Support for the MI-C is also grounded in the human instinct of fear. Citizens want to feel safe from attack. A quick review of the USA’s past seven decades of ‘defense’ expenditures (all amounts in this paragraph presented in constant 2020 dollars) shows that the public is willing to dedicate whatever share of the public treasury is deemed necessary. The US government’s budget for military-oriented directed RorD in 1952 – less than a decade after WWII – was about $12 billion. This considerable funding was due largely to the escalating tensions with the Soviet Union which evolved into the decades long Cold War and affiliated proxy wars ignited along the way. Despite the absence of another global hot war the amount of funding allocated by Congress for military directed RorD quadrupled to $48 billion over the following several decades, then gradually increased until it doubled at the highwater mark of nearly $100 billion in 2009. At that point the USA was waging wars in both Afghanistan and Iraq, while continuing to build new weapons to keep pace with China – the greatest perceived threat after the Soviet Union dissolved. The government budget for directed military RorD projects has gradually declined into the $50 - $60 billion range which is still equal to the funds allocated during the height of the Cold War. The MI-C continues to thrive.

National Policies Drive Funding Allocations President Eisenhower’s 1961 speech carried additional warnings about other expanding spheres of influence on policy and politics. He warned of the domination of scholars by Federal employment and project allocations. He next warned against public policy becoming captive to a scientific-technological elite. However, what he didn’t foresee was an emerging coalition involving both the career government bureaucrats and the university scholars funded through public money, as we recount below. Parallel to growth under the umbrella of military defense, was growth in funding for projects categorized as non-defense spending. Prior to World War II, both public and private institutions of higher education in the USA had limited affiliations with the federal government (Letter B). Organized religions and philanthropists were the primary source of financial support for the modest funding of private colleges and universities until 1862 when the Morrill Act and subsequent legislation established the land-grant system that allocated state-level funding to establish new public institutions focused on agriculture, engineering and liberal arts.2 The

 https://www.archives.gov/milestone-documents/morrill-act

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C – Coalition Eisenhower Didn’t Foresee

Association of American Universities was created in 1900 to formally define and structure the role of public higher education in society.3 These included establishing graduate programs through the doctoral level, expanding degree programs to all academic disciplines in science, engineering, medicine and professions, and engaging in work-for-hire with the industrial sector and emerging government agencies. The university system enjoyed a tremendous increase in federal government funding during World War II, commensurate with funding for industry in support of the war effort which included the challenge of closing the broad technological gap with Germany. As one might expect, university presidents and trustees became accustomed to these higher levels of funding and sought to continue the federal revenue stream into the post-war period. Similarly, government agencies created to administer the war period funding also expanded and became accustomed to status and influence. The continued operation of both universities and affiliated government agencies depended upon a sustained flow of public funds from federal government coffers. As a consequence, the US federal funding for what government calls non-defense R&D activities  – primarily consisting of the undirected scientific research conducted within universities promoted by Dr. Bush and his peers in higher education – show even more remarkable growth than defense funding over the same period. As one dramatic example, in 1945 the National Institute of Health (Institute singular) contained two entities; the National Cancer Institute (NCI) and the National Center for Research Resources (NCRR).4 Their total budget was a combined $42 million in current dollars. Presaging future growth, in 1948 the organization’s name was pluralized to be the National Institutes of Health. What a different one letter can make. Today the NIH contains twenty-seven different institutes and agencies with an operating budget of $41.6 billion  – increasing about 100-fold over the intervening seventy-­five years. This amount includes funding for both directed and undirected biomedical research conducted in NIH’s internal research laboratories, external government and university research facilities, or to a lesser extend private corporations addressing orphan product requirements (Letter O). Unlike military spending this explosive growth in public expenditures on health-­ related RorD  – as termed here  – and the government bureaucracy to support it, occurred without any explicit warning from President Eisenhower or subsequent administrations. In fact, this spending addressed the spirit of Dr. Bush’s 1945 call for future R&D to address the health and welfare of society. However, the NIH programs are primarily focused on generating conceptual discoveries through undirected RorD, without broad collaboration with corporations engaged in commercial production, so they lack the synergy so essential to the WWII advances championed by Dr. Bush. Although it is difficult to specifically determine the NIH allocation to undirected to directed RorD, the majority appears to favor undirected RorD.

 https://www.aau.edu/aau-history  https://www.nih.gov/about-nih/what-we-do/nih-almanac/legislative-chronology

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Government Funding Allocations Expand Government Agencies

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The NIH’s funding orientation seems driven by the assertion that conceptual discoveries from undirected scientific research is the wellspring of future medical innovations, and therefore the NIH is fulfilling the promise that society will eventually reap the benefits across all aspects of health, welfare and daily living. Both the assertion and promise were promulgated by all elements of academia from university presidents to scholars advising appointed and elected government officials. Given their reputations for objectivity, the advisor’s arguments supporting investments in university-based undirected RorD in order to achieve the envisioned societal benefits, seem to have been accepted without question or skepticism by government officials and the general public. The historical record of annual growth in funding for undirected RorD across non-defense categories seems to support that interpretation. As an aside, labeling the funding as R&D might at least suggest that some of the resources support directed RorD, but it is fair to challenge the funding’s contribution to medical innovations if the proportion allocated to directed versus undirected RorD is not clearly delineated.

 overnment Funding Allocations Expand G Government Agencies Now keep in mind that the expansion of government-sponsored programs in non-­ defense areas wasn’t just a paper transfer of funding to universities. An entire new level of government bureaucracy in every sponsoring agency grew apace. Both expanded funding in existing programs and new programs and/or new agencies required new cohorts of civil servants to intake the funds allocated by Congress; set-up the rules and regulations for disbursement of funds through grants and contracts, track compliance with the fiduciary entities receiving and expending the funds, and document the activity and outputs accomplished by the recipients. Every new program also needed to hire clerical and administrative personnel, as well as tiers of supervisors and managers, stacking like a layer cake as the program or agency grew along with growth in funding allocations. Given the peer-review culture of academic scholarship, programs dispensing grants and contracts required scientists who could verify the quality of the new studies proposed by external university faculty. Those government programs authorized to conduct their own RorD internally, needed to hire and support an additional cadre of scientists, support staff and program managers. Today the National Institutes of Health alone employs about 17,000 people to conduct the agency’s full range of intramural and extramural research programs. All are likely to fervent advocates for continued government funding for undirected RorD programs. Another salient point concerns how government budgeting and expenditures work in practice. Government program funding is a competitive annual exercise that is at the mercy of Congressional members and their staff. If an agency’s request is for $100 million this year, that request has to be justified by the requirements to run

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the internal operation as well as to support the approved extramural research projects. Should the agency end up expending only $90 million it would be hard pressed to justify a subsequent year’s request at $100 million, let alone to ask for an increase. Instead, Congressional staff might reduce their budget to free up funding for other programs that had succeeded in spending out their allocated funding. Any bureaucratic organization following its natural tendency to grow so that current personnel can rise in rank, responsibility and influence, must not only ensure that through all available means its current allocation of funding is expended, but should try to spend at a pace that justifies a higher budget request in successive years.

Explosive Growth in Government Spending The two charts compiled by the American Academy for the Advancement of Science (AAAS) on the following page, together show that public funding for RorD programs overall, has increased at an accelerated pace over time, which in turn means that both the academic sector and government agencies supporting these RorD programs, have grown commensurately through this public funding. The first chart shows the gradual acceleration of funding for military and non-military RorD programs from the early 1950’s to the present day.5 In comparison, the chart on the following page shows the distribution of Non-Defense R&D funding between categories over the same nearly seventy-year timeframe.6 Unfortunately, these charts have no utility in the context of STI policy and practice because they do not differentiate between funding for scientific research programs that generate conceptual discoveries, versus funding for engineering development programs that generate prototype inventions. Nor do these charts differentiate funding for undirected RorD conducted independent of commercial production goals, versus directed RorD performed in close collaboration with corporations/industries. As a consequence, we are unable to use such gross reporting of R&D expenditures to analyze the relative contribution of public funding to advancing the state of general knowledge as compared to advancing the state of technological innovation. The latter being the outcomes expected from STI policies. Charts in Letter G will show the relative allocation of these government RorD funds to difference sectors of the economy, which will still only allow a general sense of the directed versus undirected RorD sponsored by these allocations as a basis for inferring progress in national technological innovation.

 https://www.aaas.org/sites/default/files/2020-05/Function.png  https://www.aaas.org/sites/default/files/2020-05/FunctionNON.png

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Explosive Growth in Government Spending

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C – Coalition Eisenhower Didn’t Foresee

The Rise of the Academic-Bureaucratic Complex Despite the lack of detail, these charts showing total RorD expenditures demonstrate the pervasive and persistent influence of what I’m calling the Academic-­ Bureaucratic Coalition (A-BC), because there are very few years where the top line annual budget allocation was ever reduced. Why? Because as we will see under Letter G, the academic institutions and government agencies receiving the majority of public R&D funding operate as non-profit organizations within their respective states, regions and local communities. The infusion of public government funding has direct economic benefit for those institutions and agencies, which are vigorously protected by their appointed and elected officials (Letter U). Further, a portion of their faculty and professional staff have permanent employment through academic tenure or civil service regulations, as do a percentage of government staff in the agencies operating these RorD programs. As a result, the academic and government agencies engaged in RorD projects have few options for reducing the size of programs and staff except under the most extreme circumstances of retrenchment. Therefore, once a new higher increment of funding is secured it usually becomes the established minimum level for future budgets. Government bureaucracies certainly benefitted from the past explosive growth in Congressional appropriations as input to their organizations, but since they served as a pass-through for some share of the funding, we’ll now look at how this largesse affected the academic community of RorD investigators largely housed within public and private universities. The premise of undirected scientific research is that university faculty and government laboratory staff focus their intellect to advance conceptual knowledge about a very specific topic. They become experts in that topic by mastering existing knowledge captured in prior scholarly articles published and archived by scientific journals within their discipline. This expertise ensures that their own exploration and discovery work will contribute to their field of study, and be captured in subsequent articles published in those same scientific journals. A researcher’s publication record forms their academic reputation so it is highly prized and carefully curated by the scholarly community. Each new contribution to what is unabashedly called the scientific literature, is catalogued under identifying information including author’s name(s) and institutional affiliation(s), along with article title, journal issue date and number, and key words reflecting the subject matter. This carefully catalogued information serves two purposes. First, it secures the author’s claim of ownership over the content as an original creative work. This claim over intellectual property is conferred through the legal status of a copyright (Letters A & L). Second, it also creates a standardized reference system enabling other scholars to find, read and apply the reporting discovery within their own scientific research endeavors. This reference system  – called the citation index  – is the framework through which scientific knowledge is compiled, revised and expanded over time.

Professional Incentives in Academia

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Professional Incentives in Academia Professional advancement within the academic community requires having an impact on – that is, be worthy of notice by – the peer scientific community. The measure of a scholar’s impact relies almost exclusively on how frequently the author’s work is listed (cited) by others in future publications, and the quality of the journal in which both the original articles and future citations appear. Scholars actually call this citation count  – the number of times one scholar’s publications are cited by others – the article and scholar’s ‘impact factor.’ To advance in professorial ranks – to secure permanent employment or tenure – one must successfully publish as many papers as possible and be among those cited most frequently by other scientists, all within the scientific journals with the highest ranking for their own impact on the scientific community. This is the core criteria underlying the academic dictum: publish or perish. The secondary measure of academic success is having a monetary impact on the host university through the acquisition of grants and contracts (securing extramural funding). As discussed under Letter U, for every dollar of scientific research or engineering development funding secured by a faculty member – whether for undirected or directed purpose -- the host university receives some matching percentage of additional government funding as a surcharge for facility maintenance and administrative operating expenses. The percentage is often negotiated with the sponsor and can range from 10% to more than 100% of the funds awarded to the research project. Host universities have a direct financial interest in having faculty who generate as much RorD funding as possible. Employing faculty who’ve earned prestigious awards – with a Nobel Laureate being the most coveted prize – brings the institution prestige and the benefit of an ability to attract highly qualified faculty and graduate students who collectively attract future public funding. Even government agencies gain reflected glory by sponsoring such accomplished and esteemed academics. So, the professional incentives for career scholars staff revolve around having an intellectual impact on peer scholars or a financial impact on their host institution. These incentives are not tied to contributions to the commercial marketplace nor on improving the condition of society in general. Despite fledgling and largely unsuccessful efforts by some universities to establish additional metrics related to invention and innovation such as patents awarded, licenses signed or royalties paid (Letter I), citations and funding for conceptual discoveries remain the two critical metrics for promotion and tenure for scholars across the top-tier of research universities and government laboratories.

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Professional Incentives in Government The complementary demands for growth in funding and stature by major research universities and by government bureaucracies became fully entwined as the A-BC. The academic component of this coalition is comprised of research university administrators, deans and tenured professors who are positioned to advocate and advise on STI matters, along with their elected, appointed and senior career counterparts in government agencies. These same It is important to differentiate the roles of elected/appointed officials also advocate on behalf of the civil service workforce within government agencies, who together comprise the bureaucratic component of the A-BC. The A-BC became another influential force shaping national policies, but one which President Eisenhower failed to address in his warnings because he didn’t anticipate the creation of a coalition based upon mutual interest in funding growth. Elected/appointed officials working within the Federal government do exert great influence when articulating priority national needs and allocating public funding to address those needs. As we discuss here, they play a critical role in the STI process by approving funding allocations for all publicly-sponsored R&D programs. Or rather their staff members craft the regulations and determine the budget details, on behalf of the priorities set by the elected/appointed officials. However, the elected/appointed officials and their staff members are not the key element of the A-BC for two reasons. First, their influence is limited to the time they serve in office, while current STI policies and practices have been sustained for decades. Second, their career paths are not determined by the internal size and mission of government agencies. It is the career civil service employees, the bureaucrats, in government agencies, who’s interests are served by agency growth and stature. Their perspectives on STI are in turned shaped by those university academics who benefit equally from the continuous funding delivered through the status quo. Regardless of the episodic influence of elected/appointed officials, it is the entrenched employees of both academic and bureaucratic agencies who mutually reinforce the demand for continuous and increasing levels of funding from the national public treasury, while establishing a baseline of organizational capacity through lifetime employment. Although adroit at serving their own interests, these career employees and the sponsored faculty who advise them, are not paying sufficient attention to the downside of their STI advocacy. That their focus on allocating public funds to research universities and to related government agencies, and therefore the emphasis on undirected RorD, diminishes the investment in directed RorD as led or managed by corporations and industries, which is necessary for delivering innovative products and services that address national needs.

The Opportunity Cost of Professional Incentives

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The Opportunity Cost of Professional Incentives This situation is a problem for the field of STI because it signifies an opportunity cost. That is, public STI funding expended for undirected RorD that does not achieve the promised contribution to society, is a cost that precluded investing in directed RorD that is required to transform conceptual discoveries from scientific research and prototype inventions from engineering development into products and services for the competitive global marketplace through commercial production. These knowledge transformations are necessary for RorD to eventually benefit society (Letter W). More to the point, the way the A-BC system is structured, operates and incentivized means it cannot deliver on the promise of contributing to product/service innovations in any deliberate and systematic manner (Letter R). The professional incentive systems within both academic and government sectors are focused on internal organizational expansion and financial growth (Letter U). Neither the academic nor government sectors are incentivized to support the market delivery of technology innovations. Instead, it is the managers in private sector corporations, their shareholders and employees who are most concerned with, and rewarded for, transforming conceptual discoveries into prototype inventions and commercial product innovations. It seems only logical for university faculty and government lab staff to agree to subordinate their own career interests in order to address the requirements of private sector corporations when engaged in RorD projects focused on generating technological innovations. But they don’t seem to do so. Letter D will explain why the A-BC disregards the distinctions between scientific research and engineering development (Letter A), and how that approach reinforces the science-biased agenda arising from Dr. Bush’s 1945 treatise (Letter B).

D – Development Versus Research

R is not D. R about D is not D. D is different. Ed Linsenmeyer

Evolving STI policies disproportionally funded scientific research, by failing to recognize the pioneering contributions of engineering disciplines, the development method, invention outputs and the role of commercial production and deployment of innovations from the late nineteenth century to the present.

In the STI context, the term development refers to the process of designing, constructing and testing prototype devices in order to demonstrate the operational feasibility of conceptual ideas as novel inventions. Development processes encompass all of the field of professional engineering from mechanical and electrical to molecular and biomedical. Why devote an entire chapter to distinguishing development in the STI context from the way the term is used in the context of scholarly scientific research? I’ve already presented the obvious distinctions between the natural sciences and engineering disciplines – particularly the methods and objectives of research versus development (Letter A). In 1945, Dr. Vannevar Bush did describe three types of ‘research activity’ as: basic research, applied research & experimental development (Letter B), in order to depict the progression of knowledge from a general fact to some operational form. But his book’s title and argument regarding the central role of basic research in generating innovations, thoroughly if unintentionally elevated scientific activity over engineering activity, and thereby subordinated development methods to research methods.

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023, Corrected Publication 2023 J. P. Lane, The ABC’s of Science, Technology & Innovation (STI) Policy, https://doi.org/10.1007/978-3-031-34463-3_4

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Intentions Do Not Equal Results The Academic-Bureaucratic Coalition (A-BC) took Dr. Bush’s analysis further by shifting the focus from activity output to actor intention, merely by coupling the distinction between basic and applied with the intentions of the program sponsor and/or the sponsored scientist or engineer (Letter C). This association implied that it was the program’s sponsor or the individual investigator who determined the eventual innovation outcome from their project activity. As if by declaring that their work was applied rather than basic, the results would in fact – some day and some way – be brought to the commercial market by private sector actors. But we know an academic investigator’s intentions do not determine any outcome where other actors have a stake in the decision-making, and where the investigator’s activity occur outside of a specific context. As noted under Letter B, a scholar must master the context of their area of specialization before they can make a useful contribution. No trained scholar would presume to contribute to an area outside of their expertise. Yet members of the A-BC proceed in the naïve presumption that their RorD outputs will be viable contributions to the state of industry practice. In the context of STI, the corporate/industry actors in charge of commercial production make their decisions based on risk and return; risk to their existing standing in the competitive marketplace and return on their chosen investments. From their perspective, discovery or invention outputs from undirected RorD are unlikely to meet corporate requirements for commercial production, regardless of the investigator’s intentions.

The Intractable Linkage Between Research and Development The A-BC extends its naivete by linking the distinct activities of scientific research versus those of engineering development into one shared phrase: research and development or R&D. The historical budget allocation tables (Letter C) are labeled so as to substantiate the convention of linking the two distinct methods through the acronym R&D; where engineering development activity is permanently subsumed by scientific research activity. Esteemed entities like the American Academy for the Advancement of Science help diminish the contributions of engineering development by first omitting the term engineering from its name, and secondly by lumping together scientific research activity and engineering development activity as R&D within their own analyses and reports. They should know better. Perhaps they do so only out of convention but that still perpetuates the skewed perspective within STI policy and practice. The bias in terminology implies that engineering development activity is incapable of independently initiating invention efforts leading to innovation, because the innovation process is characterized is tightly coupled with, and wholly dependent upon, the methods and conceptual discoveries arising from scientific research.

The Corporate Role of Engineering

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Engineering Methods Differ from Scientific Methods The history of technology-based innovation shows this biased characterization is false. Pick up any book that recounts the role of engineering in societal innovation to quickly see how experimental construction using engineering methods differ from exploratory investigation using scientific methods, and how the former successfully operates independent of the latter. Engineers think about ways of manipulating the material world to achieve some desired operational artifact and then set about building and trying out alternative designs until they hit upon one that works. Examples abound in: A Social History of Engineering1; A History of Engineering and Technology Artful Methods2; Engineering in History3; or Invention by Design.4 The engineer’s mode of experimentation began with a cut-and-try approach to innovation that was sufficient for centuries as inventors combined existing materials (stone, wood, base and precious metals) into innovative structures and products. Major construction projects (pyramids and aqua-ducts) were massive public works, while successive generations of Aristotle’s chairs were refined by craftsmen trained through the apprentice system. Gradual improvements in agriculture, metallurgy and power led to the Industrial Revolution from mid-18th through the 19th centuries, where heavy equipment powered by fossil fuels replaced human and horse power, and precision tools replaced hand crafting. Vaclav Smil’s insightful books fully describes the emergence of new technological inventions during this period in captivating detail. Engineering techniques driving new structures and products became more complex over time and so had to be standardized to achieve the intended results on a reliable basis. The arrival of computer-based modeling, design and fabrication, led to simulation; the information age version of cut-and-try.

The Corporate Role of Engineering The expertise required of professional engineers also became more standardized and specialized as the engineer/inventor types gathered teams of labor and management into technology-based business enterprises under the new legal status of incorporation. Corporations could be privately held or they could issue shares of ownership as a means to raise additional funds. Corporations operated for profit as

 Armytage, W.H.G. (1965) A Social History of Engineering, 2nd ed., The M.I.T. Press, Cambridge, MA. ISBN 978-0262511711. 2  Garrison, Ervan G (1998), A History of Engineering and Technology: Artful Methods (2nd Ed). CRC Press. ISBN 9780849398100. 3  Kirby, RS; Withington, S; Darling, AB; Kilgour, FG (1990). Engineering in History. Dover Publications. 9780486264127 4  Petroski, H. (2000). Invention by Design: How Engineers Get From Thought to Thing. Harvard University Press. 1

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the basis of Capitalism. For-profit ownership in early corporations encouraged experimentation to minimize the risk of failure, and invention to profit from novel commercial products and services. As with discoveries arising from scientific research, most inventions from engineering development are incremental in nature, and therefore new commercial products touted as innovations are actually incremental changes in existing product’s form or function. This is a marketing strategy called continuous quality improvement which allows a company to maintain an advantage over competing products, while avoiding the costs and risks involved in introducing an entirely new product. However, incremental changes typically generate incremental profit margins because the company is focused on maintaining its share of the market for that type of product. None-the-less, incrementalism rewards corporate executives with bonuses, shareholders with dividends and staff with continued employment.

The Profit Motive in Private Sector Corporations The promise of wealth accrual in the form of profit, spurs competition in the commercial marketplace until incrementalism gives way to true innovation; when the directed scientific research and/or engineering development activities make a leap in materials, components or systems that permits commercial production activity to introduce something truly revolutionary. Such products generate massive sales and corporate profits by establishing an entirely new product category and/or establish an entirely new market. Sometimes these product innovations result from the application of cutting-edge scientific discoveries while others result from the novel application of well-established practices. Just as in scientific research methods, engineering development methods permit both incremental and revolutionary progress. Privately owned corporations striving to generate wealth from commerce gave rise to their own for-profit economic sector, differentiating their methods and goals from public sector agencies funded by governments, and from the non-profit institutions consisting of colleges/universities, hospitals and charitable organizations. The public and non-profit sectors are expected to expend their revenues on sustaining operations which are geared toward societal benefit (e.g., utilities, infrastructure, education, health care). Non-profit employees receive salaries and benefits but there is no excess revenue generated for distribution to owners because the general public is the owner per se. In contrast, corporations exist to maximize the excess revenue generated over the cost of operations – the profit margin – that can be distributed in publicly-traded companies to shareholders as dividends as well as increased stock value, in privately-held companies to owners, and in all corporations to senior executives as bonuses above base salary. Staff engineers who generated the innovation expect promotions that lead to the rarified level of executive compensation. If such opportunities are not forthcoming, they may leave to establish their own company unless their employment contract contains a non-compete clause.

The Necessary Emergence of Corporate Laboratories

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The Bias Against for-Profit Sector The accrual of wealth to private citizens holding ownership in corporations became a source of bias against them in the non-profit sectors whos’ members viewed, perhaps with envy, the return of profit to owners as motivated by greed. Of course, doing so ignored the downside risks to owners and staff who stood to lose their investment and jobs should their products and services fail in the competitive marketplace. Most people operating in the non-profit and public sectors did not invest their own capital in the organization so they do not carry personal risk of capital loss. There is a legitimate basis for criticizing the profit motive in the case of private corporations which are more focused on their return to shareholders (owners), than on any potential harm from their products to people or the environment (i.e., tobacco, pesticides, junk food, fossil fuels), but restricting the flow of public funding to private corporations involved in technological innovation because of that overall bias. In the context of STI, this broad bias against allocating public funds to private corporations began influencing public policies regarding investment in either research or development activities. Those early American entrepreneurs who dominated heavy industries (Carnegie, Vanderbilt & Gould), as well as those who presided over financial enterprises (Morgan, Rockefeller), accrued unprecedented wealth. As one example, in 1893 a drastic decline in the US gold reserve devalued the dollar to the point it threatened the solvency of the US Treasury by 1895. The solution required a desperate President Grover Cleveland to ask John Pierpont Morgan to loan the government $65 million in gold; the equivalent of almost $2 billion in today’s dollars.5 Such enormous private wealth generated concern among government officials and resentment among the general public, with the press eventually labeling them as robber barons. This period inculcated an aversion to investing public funds into private projects and biased public policies against profiteering, largely due to the rumors and reputations of this handful of industrial titans. Elected and appointed officials in government agencies preferred to focus investments in non-profit institutions where employee compensation seemed more constrained and without private owners reaping such enormous wealth, power and influence.

The Necessary Emergence of Corporate Laboratories So, while corporate engineers at both staff and management levels were demonstrating the contributions of engineering development and commercial production to benefit society through technology-based inventions and innovations, the growing  Timberlake, Jr., Richard H. (1997). Panic of 1893. In Glasner, David; Cooley, Thomas F. (eds.). Business Cycles and Depressions: an Encyclopedia. New York: Garland Publishing. pp. 516–18. ISBN 0-8240-0944-4. 5

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aversion to public investment in private companies left business owners with little access to public funding for their product development projects. In the last quarter of the nineteenth century several of the most successful entrepreneurial engineers found they had reached the limits of the trial-and-error approach to invention. They realized that their existing state of scientific research and cut-and-try methods of experimental development, could no longer solve the barriers they were encountering. They needed new discoveries that could only arise from scientific research to better understand the natural principles underlying their areas of commercial interest. The existing bias left these wealthy business owners with no choice but to underwrite the cost of equipping and staffing their own facilities for conducting directed RorD. The scientists performing directed research focus on resolving barriers to improved performance parameters, as specified by the engineers performing directed development, in order to achieve product innovations that can be exploited for advantage in the competitive global marketplace. Corporate RorD facilities demonstrate the close coordination required of scientists and engineers when deliberately pursuing focused technological innovation (Letter I).6 For example, Thomas Edison established the Menlo Park Laboratory (later called the Invention Factory) in 1876 to formalize a structure and team to reduce his conceptual discoveries into working prototype inventions (e.g., telephone, microphone, phonograph).7 Edison along with two partners established the General Electric Research Laboratory in 1890 to expand the product (audio entertainment) and service (communications) applications of his earlier inventions. It remains in operation as GE Global Research pioneering inventions in medical imaging and transportation. In the same timeframe, Alexander Graham Bell invested funds from his telephone invention to establish the Volta Laboratory for conducting Corporate R&D on the principles and mechanics underlying the recording and transmission of sound waves. In 1925 this became Bell Telephone Laboratories Inc., jointly owned by a product development business, Western Electric, and by the product deployment and service business, American Telephone & Telegraph (AT&T) Company. There will be much more to say on this joint enterprise as a model for successfully integrating scientific research and engineering development to achieve unprecedented levels of technological product innovation, as described under Letter I. In 1902, as the nation’s leading maker of relatively stable gunpowder, E.I. Dupont set-up the Eastern Laboratory as part of Eastern Dynamite Company, and staffed it with the scientific expertise necessary to research the finer and rather lethally delicate points of manufacturing more powerful and rather volatile explosives such as dynamite and nitroglycerine; product lines not conducive to trial-and-error methods.8 This research laboratory effort was immediately followed by the DuPont  Reich, Leonard S (2002). The Making of American Industrial Research. Cambridge University Press. ISBN 0-521-52237-4. 7  Reich, L.S. (1985). The Making of American Industrial Research: Science and Business at GE and Bell, 1876–1926. Cambridge University Press. 8  Hounshell, D.A. & J.K.  Smith (1988). Science and Corporate Strategy: Du Pont R and D 1902–1980. Cambridge University Press. 6

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Experimental Station in 1903, dedicated to conducting molecular research and chemical engineering in non-explosive polymers, to the extent and success that DuPont now lays claim to dozens of materials found in everyday use. The DuPont Experimental Station remains in operation, continuing to generate technology-­ based inventions and innovations in realms as diverse as nanotechnology and biomaterials. We can only speculate on the advances that could have been achieved if these early corporate laboratories had received a regular infusion of public funding for their directed RorD. Instead, some of the profits from successful innovations had to be invested to sustain their internal directed RorD. In fact, industrial laboratories staffed with scientists supporting the work of engineers proliferated across every field of application from electronics and aeronautics to pharmaceuticals and agriculture from the 1920’s through the 1940’s. Case studies show that some corporations established their RorD laboratories in geographic proximity to a university campus, which allowed companies to hire on faculty and graduate students with relevant expertise as consultants, interns or even full-time staff. The presence of such corporate RorD laboratories opened a second career track for scientists interested in fields of application, in parallel to that of employment as university faculty conducting traditional undirected RorD. This new and potentially more lucrative career track had the reciprocal effect of increasing student interest in enrolling for natural science training in those research universities. Corporate labs conducting directed RorD grew in unison with university and government labs conducting undirected RorD.

Development Is Indeed Different The lesson here is that the models, methods and metrics of engineering development are analogous to, but quite distinct from, those of scientific research. The practical differences between the university, government or even garage environments, where undirected RorD occurs, and the corporate environments where directed RorD occurs, and their respective implications for successful product innovation, are discussed in detail under Letter I. Successful product innovation does require collaborative input from scientists and engineers to generate new conceptual discoveries through research methods, and then to reduce them to practical form through development methods, all focused on the commercial interests of the corporation. But in the final analysis development is indeed different than research in intent, expertise, process and output. These two methods must be conceptually uncoupled and then treated with parity, in order for STI policy and practice to achieve the desired innovation goals.

E – Everett Rogers’ Innovation Definition

Uncertainty is no virtue when the facts are clear, and ambiguity is mere obfuscation when more precise terms are applicable. Julian Baggini

In the early 1960’s another influential work distorted the meaning of the term innovation, further distancing it from a core element of objective novelty, by defining innovation subjectively as something new to the individual rather than something new to the world.

Dr. Everett Rogers is known for his book, Diffusion of Innovations (1995, 2003), and the theory by the same name.1 The book is very informative as well as entertaining due to the numerous case studies illustrating the book’s key points. He is present in this alphabet not for that book but for how the interpretation of his influential work helped muddle the very definition of the term Innovation. Trained in sociology, Dr. Rogers was a professor in Communications and Journalism. As such he was interested in how information was passed along through social networks; the pre-Internet version known as word-of-mouth. That is, how did individuals within any group become aware of and interested in new information, and how their experience with adoption and use of that new information successively spread to other individuals or groups? He chose to study technology-based products and services, because through interview techniques and archival materials, he could identify the progression of awareness, adoption and use, within any select group from farmers to physicians.

 Rogers, E., 2003. Diffusion of Innovations (5th Edition). Free Press, New  York, NY.  ISBN 978-0-7432-2209-9. 1

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023, Corrected Publication 2023 J. P. Lane, The ABC’s of Science, Technology & Innovation (STI) Policy, https://doi.org/10.1007/978-3-031-34463-3_5

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Perception Versus Reality Given that orientation, Dr. Rogers was interested in the role of novel ideas in prompting interpersonal communication and motivating human behavior. He was not necessarily interested in the attributes of technological innovation per se. For the purpose of his own social science research study, Dr. Roger’s explicitly defined: An innovation is an idea, practice or project that is perceived as new by an individual or other unit of adoption. That is, something subjectively viewed as novel from the perspective of an individual alone, or by people within an organization. He was equally explicit in differentiating his definition from the objectively defined or new to the world standard for defining an innovation. From his sociological context he stated, It matters little, so far as human behavior is concerned, whether or not an idea is ‘objectively’ new … [because] The perceived newness of the idea for the individual determines his or her reaction to it. He was not concerned about how an innovation arose from invention development and then introduced as a product or service new to the world. Instead, he was interested in how, when and why individuals or groups become aware of something new, and how over time they become persuaded or not, to take action regarding the novelty’s adoption and use. His analyses generated a sequence of adoption intervals, labeling the them as a function of time lag between awareness and use, with the first users labeled as innovators, followed by early adopters and late adopters, and out to those labeled as laggards. Dr. Roger’s goal was understanding how awareness of something perceived as new is communicated, received and used within and across specific user groups. While he deserves credit for producing this framework for understanding the pace and process underlying technology adoption, one can see his choice of terms was unfortunate in the context of STI terminology. By defining an innovation for the purpose of his study as something new to the individual or organization members, he inadvertently distorted the meaning of the term innovation away from the core definition as the inception of new to the world product or service. According to this reasoning, by extension the decision to adopt something new makes each successive person an innovator.

The Policy Implications of Conflated Terminology Dr. Rogers was an established academic so his book and theory were well-received and were quickly diffused through the social science communities. To his credit the book and work it represents remains very popular and widely cited by others. The downside of that popularity is a dilution of the term’s innovation and innovator from their strict definition as some artifact or creator of that artifact objectively determined to be new to the world. The presence of word innovation in the book’s title had the unfortunate effect of attracting attention from scholars studying, modeling

The Legacy of Conflated Dynamics

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and labeling the discovery, invention and innovation processes. However, it seems these scholars lacked sufficient practical experience to distinguish between the objective and subjective definition of innovation and its critical importance to the motivations underlying national STI policies. As explained under Letter W, having a product or service be perceived as new to the individual is irrelevant to the economic justification for investing private or even public resources into the Commercial Production of new to the world products and services as true innovations. Instead, the subjective definition dilutes the core intent and value of an objectively defined market innovation by allowing anyone to claim the title of innovator, with evidence or demonstration in the competitive marketplace. Further, the perceived value of a product or service erroneously identified as an innovation, is nullified once an objectively novel version of the product or service is encountered, so the potential new net wealth accruing from a subjective innovation is fleeting and marginal compared to that accruing from an objective innovation. The community of STI scholars eagerly embraced the many wonderful examples Dr. Roger’s offered of how new information diffuses through society. However, as with other instances described herein, scholars took it a step too far by treating these examples of information diffusion as examples of true innovation. Doing so to justify the Linear Model of Innovation, they only further muddle Aristotle’s clear distinctions between the three states of knowledge (Letter A) – and their consequent outputs and outcomes (Letter L).

The Legacy of Conflated Dynamics The continued blurring of conceptual and practical boundaries between the complementary activities of scientific research, engineering development and industry commercialization, served only to diminish the actual cause/effect relationship between the intent of Federally sponsored programs and the actual outcomes from their sponsored programs and projects. In his 1945 paper advocating for a scientific research orientation, Dr. Bush stated that, Research will always suffer when put in competition with operations.2 Given the established orientation of the Academic-Bureaucratic Coalition (A-BC), a corollary statement might be: Commercialization will always suffer when put in competition with research sponsored in academic setting. The Linear Model of Innovation has not demonstrated effectiveness in either innovation process or outcome. The expected results from prioritizing scientific research have not materialize over the subsequent half century. The true legacy is a confusing mix of models, methods and metrics for innovation policy and practice. Here are two influential examples that arose from the A-BC’s biased perspective.

 https://www.nsf.gov/od/lpa/nsf50/vbush1945.htm#ch6

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Government Bureaucracy Legacy Due to the formative rhetoric underlying the Linear Model of Innovation, the US government’s Executive Branch has been encouraged by its academic advisors to substantiate the assumed and proclaimed causal link between scientific research and societal benefits. Starting with the 1993 passage of the Government Performance Results Act (GEPRA), and up through the 2000’s Program Assessment Rating Tool (PART), the Federal government attempted to match evidence-based outcomes to original program goal claims, as a measure of performance.3 The expressed intent was to link demonstrated performance to future government budget allocations for sponsored to RandD programs. It was an earnest if misguided effort to apply a business model to the goals of established public policies. Independent reviews of the resulting evidence collected, revealed a disheartening mix of qualified results, quantified obfuscation and plain old pork barrel politics.4 The conflation of research, development and commercialization means and ends, increases the difficulty for identifying, tracking and measuring the performance of Federally-sponsored programs. The muddles missions of the three sectors further complicates the situation. For example, the U.S. Office of Management and Budget’s (OMB) performance evaluation criteria have never clearly distinguish between the actual outcomes for scientific research as conceptual discoveries, for outcomes of engineering development as prototype inventions, or for outcomes of commercial production as product innovations (Letter A). The OMB’s criteria remain grounded in scientific research models, methods and metrics.5 The documented difficulty in overlaying these criteria on Federally-sponsored R&D programs, is matched by the difficulty in establishing evidence of accomplishment, linking results to program goals, and even linking goals back to agency mission or national need.

Academic Scholar Legacy The academic sector’s perspective on innovation is greatly influenced by being the Federal government’s priority recipient for RorD program funding. Of course, their perspective is based in circular reasoning because this funding priority was established by the scholars serving as policy advisors to the Federal government (Letter C). Despite the tautological origin of the Linear Model of Innovation, at the turn of the century some influential scholars activity extended this thinking deeper into the industrial sector’s commercial mission. In their 2001 paper, “The Transformation of  https://search.archives.gov/search/docs?affiliate=national-­archives&query=http%3A%2F%2 Fwww.whitehouse.gov%2Fomb%2Fmgmt-gpra%2Fgplaw2m.html&dc=3560&submit. x=0&submit.y=0 4  https://www.everycrsreport.com/reports/RL32671.html 5  https://www.whitehouse.gov/omb/information-for-agencies/evidence-and-evaluation/ 3

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University-Industry-Government Relations,” Dr’s Leydesdorff and Etzkowitz, coined the term triple helix to describe an utterly fantastic model whereby the academic, government and industrial sectors each not only contributed value to the innovation process, but the authors proposed were increasingly able to assume the roles of the other sectors.6 This biological imagery was sufficiently compelling to spawn an entire series of subsequent conferences, through which scholar’s continued to elevate the role of academia. In their view, cross-sector collaborations transcended national boundaries, transdisciplinarity inexorably linked basic research to practical applications, and the academic sector reigned supreme: The next great transformation, the third academic revolution, is based upon the creation of entrepreneurial universities embedded in triple helix relationships The academy will become ever more central to the innovation process and it will supersede many functions of the industrial enterprise.. . In a third academic revolution, the entrepreneurial university becomes the center of gravity for economic development, knowledge creation and diffusion in both advanced industrial and developing societies (Viale & Etzkowitz, 2005, page 25).7

In reality, universities are the center of gravity for public funding as resource inputs, but not for economic development as output (Letter U). Only a fraction of the public funds allocated to university-based research ever result in innovations used by industry. Scientific inquiry independent of application, as undirected RorD, should be acknowledged as important but not be confused with directed RorD targeting commercial product outcomes (Letter D). The claim for being the center for knowledge creation is anchored in the premise that the generation of new knowledge is strictly the domain of scientific research, despite the fact that the presence of knowledge in multiple states was articulated as far back as Aristotle (Letter A). The continued dilution of innovation as a term for new to the world products, allowed both government and academic sectors to avoid any objective analysis of their respective roles in support of the industrial sector’s leading role in delivering true innovations to the global commercial marketplace.

Industrial Sector Response Dr. Alfred E. Mann (1925–2016) was a physicist, inventor and entrepreneur who became a billionaire due to his ability at linking scientific research, engineering development and industrial commercialization.8 Dr. Mann was keenly aware of the true nature of innovations as products new to the global marketplace. As a result, he became a vocal critic of the academic sector because of the constraints universities imposed on the external transfer and commercialization of discoveries from  Leydesdorff, L., & Etzkowitz, H. (2001). The Transformation of University-Industry-Government Relations. Electronic Journal of Sociology, 5, 338–344. 7  https://scholar.google.com/citations?view_op=view_citation&hl=en&user=MRwhkJ0AAAAJ& citation_for_view=MRwhkJ0AAAAJ:pyW8ca7W8N0C 8  https://en.wikipedia.org/wiki/Alfred_E._Mann 6

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scientific research and inventions from engineering development. In the late 1990’s he tried to single-handedly change the entrenched culture by demonstrating the benefits of early and direct collaboration between universities and companies. He did so by making an open offer of $100  in private funding to any number of the major research universities. In exchange for the donation, Dr. Mann’s companies would have the first rights to exploit the commercial potential of any discoveries or inventions resulting from the RorD activity sponsored with that funding. The offer was similar to government’s standard right as sponsor to put discovery/invention disclosures into practical use for the good of society (see Letter T). Only in this case, the university-based program would function more like a corporate laboratory (Letter D) with the benefits accruing first to Dr. Mann’s companies.9 The targeted universities all summarily rejected the offer, because they saw the terms as infringing on their principles of academic freedom. They viewed Dr. Mann as criticizing their internal competence at technology transfer and an attack on the Linear Model of Innovation. Even the University of California at Los Angeles – a public university and Dr. Mann’s own alma mater -- turned down his $100 million offer. At least initially. However, UCLA’s cross-town rival, the University of Southern California as a private university with an entrepreneurial president at the helm, had no qualms about accepting the funding along with Dr. Mann’s terms.10 So as not to be left out, UCLA eventually agreed to the gift without the strict requirement of first right to exploit project outputs.11 Over the ensuing decades, the Alfred E.  Mann Foundation for Scientific Research has continued to donate millions of dollars to various universities. Dr. Mann’s criticism of the university-based barriers to transfer and commercialization were well founded. However, his approach then, and that of his foundation now, has two limitations. First, Dr. Mann fell into the same trap of conflating sector metrics. He used the level of Federal support as a measure of university RorD excellence when vetting candidate institutions for his offer. The resistance he encountered should not have been surprising because those institutions most successful at securing Federal funding were those most deeply immersed in the Linear Model of Innovation. Dr. Mann might have found greater receptivity and a higher yield by building up the infrastructure and capacity of universities with less overall Federal funding but with a greater commitment to industrial partnerships. The University of Southern California was the first to accept his offer and a good example of a university that was open to close collaboration with companies. The University of Central Florida is a hybrid example being both well funded by government programs yet also oriented towards entrepreneurship and industry partnerships (see Letter I). Second, Dr. Mann presented the problem of deficiencies in program outcomes as occurring at the level of the institutions and actors. Telling faculty that they are really bad at doing something, is not the same as explaining why their training for

 https://www.forbes.com/forbes/2006/1009/064.html?sh=9e3acff9606f  https://ieeexplore.ieee.org/document/6248745 11  https://www.latimes.com/archives/la-xpm-1998-feb-05-mn-15695-story.html 9

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academic R&D, is not appropriate for conducting commercial R&D. Telling university administrators that they are ineffective at transferring technology, is not the same explaining how the conflation of academic and commercial models created a situation where project outcomes do not meet program expectations. If he had addressed the root cause of the problem as the definition of innovation and the Linear Model of Innovation, both entrenched in public policies, Dr. Mann’s generous incentives might have precipitated a meaningful dialogue focused on a solution. Unfortunately Dr. Mann’s expenditures and accompanying message did not lead to a constructive national solution. More explicit demonstrations of the private sector’s critical role in transfer and commercialization, as lessons for both the academic and government sectors, might have helped distinguish true innovation from discovery and invention. Universities seeking to accomplish societal benefits would put more emphasis on recruiting faculty interested in more applied work, and might have established an incentive system for commercialization equivalent to that for publication. On the government side, the intellectual property and technology transfer regulations established through Bayh-Dole and subsequent legislation apply only to RorD sponsored through Federal funding (see Letter I). A parallel set of rules and regulations from the Office of Management and Budget could guide and track true innovations resulting from academic and industry partnerships. With proper government metrics and equitable funding, industry would have sufficient incentives to invest in university partnerships with a demand pull market orientation for university discoveries and inventions (Letter S). Such an orientation would be viewed by internal staff of Technology Transfer Offices as a welcome relief from the burden of managing the traditional supply push portfolio of faculty disclosures (Letter T). We will later describe how China has already established such industry-­ driven and market-oriented innovation policies (Letter X). Alas, none of these policy corrections have yet come to pass in the US or in other Western nations. Fifty years after Dr. Bush’s influential yet biased report (Letter B), Dr. Roger’s insights were misappropriated by the A-BC to further diminished society’s appreciation for the necessary contribution of directed RorD, conducted or managed by corporations. As a result, national innovation policies continue to enrich the university sector and expand the government sector while inhibiting their collective ability to support the generation of new to the world product and service innovations in the global commercial marketplace.

F – Federal Laboratory Consortium

I not only use all of the brains that I have but all I can borrow. Woodrow Wilson

In an effort to justify new or continued public funding, even highly competent and successful government sponsored RorD laboratories are often tasked with unrealistic expectations regarding technological innovation results and technology transfer opportunities that fall outside their core missions, managerial directives and operational structures.

The Federal government funds over 300 laboratory facilities known as Federal Labs. Some conduct undirected RorD activities for the cabinet-level government agencies that sponsor and operate them; called government owned and government operated (GOGO Labs). Other labs are government owned but operated by corporations (GOCO Labs), so they conduct directed RorD as public/private partnerships addressing specific national needs. Their organizational structures are determined by the sponsoring government agency’s mission requirements (military, energy, aerospace, medical), and by regulatory requirements (secrecy, budgetary, property rights).

The Operational Organization of Federal Labs These Federal Labs are charged with generating conceptual discoveries and prototype inventions for application within their designated core missions, which they meet to a very high standard of performance. For example, the Federal Labs operated by the Department of Energy named Los Alamos, Sandia and Livermore are indelibly linked to the advent of our atomic age. Given the critical importance of their core missions, government laboratories are equipped with state-of-the-art instrumentation, and staffed with the best and brightest scientists, engineers as well © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023, Corrected Publication 2023 J. P. Lane, The ABC’s of Science, Technology & Innovation (STI) Policy, https://doi.org/10.1007/978-3-031-34463-3_6

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as highly qualified civilian and military program managers. Federal Labs don’t hesitate to contract on temporary assignment to bring in additional expertise deemed necessary from universities, other labs or corporations both domestic and foreign. Of course, engagement with external expertise is limited by the level of security classification required by any project or program. Within their mission context, Federal Labs operating as GOCO’s function much like corporations by building well managed teams of scientists and engineers who conduct directed RorD in order to achieve defined technical performance parameters for new products and systems. However, political considerations and/or budgetary expediency often mandates that the Federal Labs demonstrate the ability to transfer their internal technologies out to external entities and for non-mission purposes. The rationale is getting more bang for the government’s buck is known as dual-use. Dual-use is the most highly sought form of technology transfer within the STI domain because the originating laboratory, whether federal university or corporate, can claim a new application and any new revenue that may result from the license or sale of the intellectual property underlying the discovery or invention, while the recipient immediately gains use of the discovery or invention at a fraction of the original cost in time and resources expended to initially generate it. Finding a second perhaps entirely different use for a publicly-funded technology is a twofer. That is, the US government as the Federal Lab owner gets revenue back into the treasury through a license or sale (Letter T), and the new user avoids the full cost and risk of the precipitating research and development. Successful examples of dual-use help justify continued funding for the mission-oriented RorD projects.

Role of the Federal Laboratory Consortium The Federal Laboratory Consortium (FLC) is a non-profit organization established in 1974 and subsequently chartered through the 1986 Federal Technology Transfer Act.1 Beyond a small core staff, the FLC is governed by an elected Board of Directors drawn from the member labs. Its’ mission is to facilitate inter-laboratory collaborations on both undirected and directed RorD, while concurrently seeking opportunities to transfer technologies out for application in new and different fields of practice by encouraging communication between Federal Labs and with universities and corporations through meetings and technology exhibitions. Thus, the FLC is the primary conduit for finding novel applications for Federal Lab generated discoveries and inventions; for brokering dual-use agreements. The FLC’s website routinely contains vignettes describing successful transfers of mission-oriented technologies into a surprisingly wide range of non-mission applications. However, the successful transfers highlighted only scratch the surface of their potential contributions to society. We know this because we have seen how the commitment of member labs to the FLC’s dual-use or technology transfer mission has varied widely over time. There were extended periods where individual lab directors and their top-level managers exercised wide discretion over internal transfer efforts  https://federallabs.org

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ranging from aggressive support to outright discouragement. There were times when Congress or the Executive Branch exerted pressure on the transfer effort, sometimes in a whipsaw fashion. The first Clinton administration with support from a Democratic Congress pushed the notion of dual-use of Federal lab technologies as a means for the government to capture a monetary return on its continuing and increasing R&D investments (Letter C). However, just as the Federal Labs geared up their efforts and had invested staff time and effort into establishing dialogues with corporations and industry representatives, the Republican Party took control of Congress and squashed the entire concept of dual-use, instead ordering the labs to go back to focusing on their internal missions. I happened to be serving as an ex-officio member of the FLC’s Board of Directors during this timeframe. Both the Federal Lab staff and their opposite numbers in corporations were angered and discouraged by these dramatic shifts in policy and practice. Several corporate executives told me directly that after this debacle they would never again entertain such a collaborative dialogue. The FLC folks were left to find new ways to shop their member’s technologies to outsiders. They responded by creating the Technology Locator Service, a search engine intended to help match external parties with technologies available within various labs. The FLC labored to get labs to prepare and submit non-enabling descriptions to the database by the early 2000’s.

Lessons from Exploratory Demonstration Projects At that time the FLC had sufficient member funding to support demonstration grants within each of its six national regions. My team secured demonstration funding to screen through technology disclosures in two different regions, to identify technologies with potential application in our field of practice; devices for persons with disabilities. We found several promising candidates, none of which survived the follow-through contact with their respective labs. In one instance, the lab director who happened to be a military field-grade officer didn’t condone the idea of such dual-use transfers, so he rebuffed our effort to engage lab personnel working on microelectromechanical systems (MEMS) technology we thought relevant to the needs of persons who were blind. In another case where we tracked down the project’s lead scientist, he confided that the non-enabling description he had submitted was too vague to be useful and was not in fact capable of our envisioned use in the area of cognitive prosthetics. The chief scientist in a third case replied that the project supporting the military technology with potential as a portable oxygen generating device had ended, the participating staff had all been reassigned and therefore had no basis to proceed with technical analysis of our requirements for civilian application! The lesson from our demonstration projects that we conferred back to the FLC management team, was that our sample of their database contents actually worked against their transfer objectives. Sharing inaccurate information sets false expectations which could discourage use.

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Some of the issues we discovered through our Federal Lab demonstration projects reflected a lack of commitment to transfer on the part of the FLC staff scientists and engineers. As civil servants or tenured university faculty recruited to collaborate on lab projects, their career paths and professional compensation relied on meeting core mission requirements, conducting curiosity driven projects and/or publishing scholarly articles and participating in technical conferences within their fields of interest. They held a very strong bias toward their internal RorD activity rather than toward the transfer and deployment of discoveries or inventions into non-mission applications (Letter G). These Federal Lab staff seemed uninterested in diverting effort and attention toward addressing societal problems. Even though their missions largely overlapped organizations involved in the Military-Industrial Complex (MI-C) where there is never a shortage of opportunities for technology transfer, many of the Federal Lab managers and employees seemed perfectly comfortable operating within the incentives of the Academic-Bureaucratic Coalition (AB-C) (Letter C). Despite this general indifference, opportunities for technology transfer still arose if more from informal serendipity than from formal mandates. These included chance encounters between government and corporate scientists and engineers in adjoining airplane seats, cocktail receptions or conference hallway conversations. I was involved in some of the subsequent meetings that followed such initial expressions of interest in dual-use transfers. The more formal follow-up meetings at either Federal Lab or corporate offices were typically more reserved once the glow of the preliminary promise had dimmed, and because these meeting often involved staff other than those who sparked the initial expression of interest. Unfortunately, these meeting became a tug-of-war between the Federal lab and corporate people, because neither side wanted to commit their internal resources into performing a detailed analysis of the potential collaboration. Federal lab guys on one side of a table would push a thick binder across to the corporate guys saying, “Take a look at what we have to offer and tell us what’s of interest.” The corporate guys would push the lab binder back across along with a thin document of their own saying, “Review our current areas of interest and tell us what you have to offer.” Such meetings ended with a promise to get back to each other which then didn’t happen. This result seemed most likely when there was no clear application target for the two sides to aim at together.

Lessons from Focused Demonstration Projects Frustrated by these unsatisfactory outcomes and wanting better results in the context of our own field of application, my team sponsored and organized a series of four conferences each focused on a particular segment of the industry providing assistive technology products for persons with disabilities; wheeled mobility, vision, hearing

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and speech.2 We wanted to see if we could generate more collaborative responses and more effective outcomes from networking between Federal Labs, research universities and corporations in the assistive technology market, once we defined targets of transfer opportunity through technology platforms and performance specifications. These four tightly focused conferences followed the same structure and process. We first asked companies in each assistive technology industry segment to identify technology-based barriers that they were unable to overcome with their internal directed RorD resources in order to deliver innovations; the next generation of device features and functions. Of course, these barriers had to be non-­proprietary and common to all companies in the industry segment, for them to be discussed in public forums. We then identified dozens of people with relevant expertise in Federal Labs, mainstream corporate RorD laboratories, research universities, clinical practice and community agencies, as well as experienced users of the devices with stateof-the-practice features and functions. Third, my team prepared and circulated summary papers describing the technology barriers and new performance requirements in the most specific terms possible, and only then did we convene meetings to identify and discuss potential solutions. To ensure participation by companies in the assistive technology industry, we left open timeframes for them to schedule private meetings with external government, corporate and university experts where they could discuss their proprietary needs under non-disclosure agreements. After each of the four focused conferences, we classified the resulting technology transfer opportunities into three timeframes. First were operational technologies our own team was prepared to help transfer from source to user in the short-term. We did broker several transfers such as a battery power monitoring and management technology from the electronic automobile field to electric wheelchairs, and we are aware of several additional proprietary collaborations initiated there. Second were prototype technologies that appeared to require more collaborative engineering development by the inventor and the relevant industry companies. That further work was expected to be led by the university RorD center which was already receiving funding to work in that assistive technology application area. We expected the lead university investigators to eagerly join in to advance a technology now proven to have both utility and corporate interest. However, the university faculty in those RorD centers seemed too focused on their on-going scientific research to make room in their budgets and staff to pursue such new near-term transfer opportunities, even after having them served up on a proverbial platter. The third category of opportunities included technologies still at the conceptual stage that would likely require longer-term government support through new directed RorD funding to advance to some proof-of-concept prototype. As with the university faculty in sponsored RorD centers, management in the sponsoring government agency was not inclined to fund directed RorD to address such practical matters at the potential expense of their loftier scholarly pursuits. These managers  Lane, JP, JA Leahy, SM Bauer (2003). Accomplishing Technology Transfer: Case-based Lessons of What Works and What Does Not. Assistive Technology: The Official Journal of RESNA. 15 (1):69–88. 2

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saw themselves as serving an undirected scientific research mission, to be perceived as scholars like those managing programs in NSF or NIH. Their perceptions and aspirations actually worked against their founding authorization which included improving the quality of life for persons with disabilities through the development, demonstration and delivery of new products and services. The unfortunate result was the sponsor agency’s indifference to the RorD investment opportunities from our four focused conferences that identified clear targets for product innovations with demonstrable quality of life improvements. My team’s approach to painting a bulls-eye on opportunities for technology transfer revealed an important point for STI policies and practices. We found a direct relationship between the level of technical detail at which each industry requirement could be specified, and the number and quality of potential solutions offered by external stakeholders; the number of dual-use transfer opportunities. The requirements for wheeled mobility innovations were the most detailed, had the most technology platforms shared with mainstream industries, and therefore received the most public and proprietary opportunities. The hearing and vision industry segments offered fewer detailed requirements and generated fewer collaborative transfer opportunities in return. The industry segment addressing speech – more formally called augmentative and alternative communication (AAC)  – is the smallest and least connected to mainstream industry and their leading corporations were least able to articulate detailed requirements of mutual interest. While these efforts were on-going and in the interim timeframe since, a parallel set of innovations arose to compete with the stand-alone AAC devices such as the one widely recognized as used by Professor Stephen Hawking. Companies in the field of mainstream information and communication systems were developing and offering increasingly sophisticated software packages that provide artificial speech output from standard laptop, pad and even smartphone platforms. As the market for speech input and output systems grew, the price dropped making them more accessible for the general population of AAC users. For example, a software package called Dragon Dictate which in the 1990’s required a combined hardware and software system at a cost $12,000 USD, is now available as a download for $200, with competing products offered through retailers at as low as $50 USD. In summary, our limited experience shows that given the enormous range of projects conducted by these 600+ Federal Labs and their continuous stream of mission-­oriented technological inventions, they could increase their success in dual-­ use transfers by replicating our demonstration projects across a wide range of applications and industries. We implemented several different structured approaches to identifying, tracking and reporting Federal Lab innovations with potential application to other fields of practice. This national approach to defining and addressing national needs would better fulfill Dr. Bush’s vision of the endless frontier (Letter B) than the current model of serendipity that seems to drive Federal Lab directors and their staff.

G – Government Bias in Funding

There are two ways to be fooled. One is to believe what isn’t true; the other is to refuse to believe what is true. Søren Kierkegaard

As governments allocate a greater share of public funds to support undirected scientific research activities due to their claimed basis for future innovation, the competition for those resources escalates in ways that may actually hamper the STI progress which the funding is intended to promote.

We’ve already shown that the US government’s funding for what it labeled R&D programs escalated rapidly during WWII and has grown in scope and scale ever since (Letter B). Under Letter C we explained that the term R&D means programs conducting scientific research and/or engineering development (RorD) programs and projects. We also noted that the term R&D has limited utility for analysis of national STI efforts and results, because it does not differentiate government funding for undirected RorD from funding for directed RorD (Letter C). We defined directed RorD conducted in collaboration with corporations/industries, which have the capacity to transform conceptual discoveries and prototype inventions into innovative products and services for the commercial marketplace.

Funding Drives Policy Implementation To gain some understanding of the STI implications of government funding allocations, we must make two assumptions here. First, we’ll assume that the organization/economic sector receiving the funding  – be it university, government lab or industry – is the organization/economic sector managing the funded RorD activity. The funding recipient typically determines the questions asked and answered, the methods applied and how the results are reported or used. Based on our prior © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023, Corrected Publication 2023 J. P. Lane, The ABC’s of Science, Technology & Innovation (STI) Policy, https://doi.org/10.1007/978-3-031-34463-3_7

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definitions of directed versus undirected RorD, we will further assume that most government funding allocated to the corporations/industry sector is used by them for directed RorD activity; conducted under the direct supervision or in close collaboration with that private sector corporation. Conversely funding allocated to nonprofit academic and public government agencies, is mostly used for undirected RorD activity. For example, universities conduct scholarly projects directed by individual faculty, while federal labs conduct mission-oriented projects, directed by their sponsor government agency. As a related point, under Letter C we explained that the traditional distinctions between basic and applied scientific research as determined by the intention of the sponsor/investigator, are irrelevant to STI analysis. The same point applies to engineering development activities where sponsors and project directors also harbor their intent as either basic or applied (Letter D). However, RorD conducted in the context of generating commercial innovations, the critical actions and decisions to transform conceptual discoveries or prototype inventions into innovative products and services, are made by corporations/industry and implemented through their own methods of commercial production methods. Although we recognize these differences, we will still need to frame the following discussion of government’s bias in RorD funding by using the two traditional terms of ‘basic research’ versus ‘applied research’, because these terms remain in routine use by government agencies when reporting their funding allocations. Further, the following charts drawn from government sources use those two terms in their titles and legends. As national STI policies took shape, university scholars advising elected and appointed government officials extolled the virtues of basic scientific research in the context of technological innovation outcomes. They expanded the message of Dr. Bush’s 1945 ‘Science: The Endless Frontier’ into a fictional storyline called the Linear Model of Innovation. As detailed under Letter L, this storyline explains how all good things for society flow from a figurative wellspring of new knowledge narrowly defined as resulting chiefly from undirected scientific research, and that this wellspring must constantly be replenished by continued funding for undirected. The same advisors appealed to the interests of members of Congress along with officials at state and local levels, by explaining that each public dollar allocated to basic scientific research led to many additional dollars in local economic activity. This unsubstantiated relationship is called the multiplier effect (Letter M).

Government Funding for Basic Scientific Research The chart on the following page1 shows that the majority of funding for curiosity-­ driven (basic) scientific research has always flowed to members of the A-BC: the largest allocation to research universities, followed by decreasing allocations to

 https://www.nae.edu/70979.aspx

1

Government Funding for Basic Scientific Research

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Federal Labs (Letter F), and then to Federally Funded Research and Development Centers (FFRDC). FFRDRC’s include research universities and Federal Labs, along with private non-profit organizations of the think-tank variety (RAND, MITRE, BATTELLE) funded to conduct RorD projects under contractual agreements with government agencies.2 These three categories consume the majority of funds allocated to basic scientific research, with the smallest shares allocated to a catch-all category of other public and private non-profit organizations (All Other), and the least funding to private sector corporations in industry. Based on our assumption that the recipient determines the objective, the majority of government funding supports undirected basic research. The smallest allocation of public funding for basic research to the industrial sector seems a contradiction. If basic scientific research supposedly drives innovation, yet private sector corporations deliver innovations to the marketplace, then it seems logical to support basic research for innovation within the sector harboring the expertise and incentives for producing innovations; to supporting directed basic research. Instead, the distribution is biased toward the expertise and professional incentives of academic scholars in non-profit sectors; undirected research. The relatively trivial support allocated to industry explains why private corporations in need of conceptual discoveries had to underwrite the cost of establishing their own RorD laboratories in order to conduct the necessary directed basic research (Letter D). A major impetus for funding growth within A-BC organizations occurred in 1950 when President Harry Truman established the National Science Foundation with a mission to support basic scientific research in all fields except medicine (Letter N). We’ve noted that the National Institutes of Health was already up and running in support of basic scientific research in all of the bio-medical fields (Letter C). University presidents comprised the majority of the twelve- member Advisory Board for the National Science Foundation, giving scholars their most influential platform yet attained for promoting a basic research agenda within the Federal government, partly justified by the need for sustained technological innovation. This justification being made with scant mention of the critical role played by engineering development in transforming scientific discoveries into tangible inventions (Letter N); a necessary transformation before technological innovations can be realized as products or services in the commercial marketplace.

 https://www.nsf.gov/statistics/ffrdclist/

2

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G – Government Bias in Funding

 isproportionate Growth in Public Funding D to University Sector The following table using constant dollar values shows in the first column that funding for basic research had more than tripled between 1967 and 2010 from $10 billion to $34 billion (AAAS, 2014). Comparing growth across the five sector categories, we see that the academic sector gained most both in terms of total funding and in its relative share of the total funds allocated for basic research. The university sector’s share grew from 46% to 56% of the total. In contrast, industry’s consistently smallest share of government funding for basic research actually declined further to only 5% of the total allocated, falling by half over that same forty-year timeframe. If Dr. Vannevar Bush’s claim that basic research is indeed the wellspring of innovation (Letter B) then it seems difficult to understand why industry should have suffered such a disproportionate reduction in government support. While curiosity-drive (undirected) research may be the primary domain of research universities and government laboratories, the transformation of conceptual discoveries and prototype inventions into marketplace innovations is inarguably the domain of industry (Letter A). To the extent nations claim to support STI through policies and practice, then industry’s requirements for new conceptual discoveries

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Government Funding for Applied Scientific Research

through directed basic research should at least maintain its small share of public funding support instead of further reductions. Change in US Government Funding for Basic Research by Sector Performer (1967 vs. 2010)

1967 % 2010 %

Total $ (millions) 10,168 33,983

Intramural government 2396 24% 5548 16%

Industry 997 10% 1867 5%

University 4722 46% 18,600 56%

FFDRC’s 1333 13% 3849 11%

Other 722 7% 4118 12%

Government Funding for Applied Scientific Research In contrast with basic research, applied research must be oriented toward some pre-­ determined objective. As defined by the National Science Foundation: In applied (scientific) research, the objective of the sponsoring agency is to gain knowledge or understanding necessary for determining the means by which a recognized need may be met. Both basic and applied research fall within Aristotle’s definition of conceptual discovery (episteme) because they both generate new conceptual knowledge that is not yet reduced to practical form (Letter A). The important distinction is that in applied research the sponsoring entity or investigator has defined a specific use for some new conceptual knowledge. The US government sponsors applied research to help address national needs in fields such as agriculture, defense, energy, transportation and medicine. As discussed in detail under Letter O, governments depend primarily on industry to deliver products and services to address those national needs, because that sector’s professional expertise and incentive systems are properly aligned. Consequently, one would expect the majority of public funding for applied research to be allocated to the industrial sector, with smaller portions allocated to federal laboratories and universities working in support of industry. This approach would have refined and formalized the ad hoc processes established to advance military technologies in World War II (Letter B). But it turns out that even national priorities could not derail the expansion of the A-BC (Letter C).

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 nother Disproportionate Leap in Public Funding A to University Sector The applied research allocations in the above chart show the persistent influence of the Linear Model of Innovation message on the flow of public funds.3 The distribution of public funds across sectors follows essentially the same pattern for applied research as for basic research. A disproportionate and growing share of public funding for applied research is allocated to universities, Federal labs and to non-profit FFRDC’s. This imbalanced and arguably inverse allocation increased at an accelerated rate over time. In the STI context, funding for research oriented toward defined needs is even more relevant to attaining innovation than basic research so industry share of public funding for directed applied research should be proportionately larger than that for undirected applied research in other sectors. While industry does receive a relatively larger share of applied research funding than basic research funding, its share remains small and appears to have remained at nearly constant amounts. The majority of public funds sponsor undirected applied research conducted in university and government laboratories.

 https://www.nae.edu/70979.aspx

3

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Commensurate Growth in Funding to Sponsoring Government Agencies

As above, the following table quantifies the amount and relative share of public funding allocated for applied research showing that the A-BC’s influence extends beyond funding for basic research. The university sector’s share of funding for (undirected) applied research ESR has more than doubled their share of the total from 16% to 38%. While the portions allocated to FFDRC’s and Other categories gained slightly, the Federal Lab share decreased by a third and Industry share declined by half. Institutional bias seems to be the only plausible explanation for increased support for undirected applied research led by university scholars, largely borne by a substantial decrease in support for directed applied research led corporate executives. Change in US Government Funding for Basic Research by Sector Performer (1967 vs. 2010)

1967 % 2010 %

Total $ (millions) 15,345 34,130

Intramural government 5654 37% 8647 25%

Industry 4725 31% 5214 15%

University 2507 16% 13,044 38%

FFDRC’s 1266 8% 3360 10%

Other 1194 8% 3864 11%

 ommensurate Growth in Funding to Sponsoring C Government Agencies Overall, the sustained increase in government funding allocation for basic research and applied research combined has been accompanied by a commensurate level of funding to expand the administrative capacity of government agencies charged with overseeing the dispersion of public funds, and of research universities and other non-profit organizations charged with supervision the expenditure of funds received; a commensurate growth in the A-BC.  As funding for any government sponsored basic or applied research (or development) program increases, there is a corresponding increase in the government agency administering that program. The dictum, follow the money, is sound advice for understanding who benefits from resource allocations. The non-profit sector benefits from funding allocated to undirected RorD, while the for-profit sector benefits from funding allocated to directed RorD.  A misalignment of goals and outcomes is increasingly evident between government funding allocated to undirected RorD and the stated national STI goals used to justify that funding. The disproportionate growth in public funding intended to support technological innovation yet channeled toward undirected RorD is problematic public resources are finite. This biased allocation can only occur at the expense of the directed RorD by private corporations within the

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G – Government Bias in Funding

industrial sector, where the bulk of the actual innovation transformation occurs. The cost is more evident and the STI implications more daunting when we compare this approach to an alternative scenario emphasizing support for the industrial sector and commercial market focus (Letter O). To those averse to having public funds support private sector enterprises, or who maintain that the shift is not feasible, I suggest they look to China which has already been implemented this approach to STI policy and practice (Letter X).

The Practical Implications of Government Policy Bias We’ve shown that a dearth of public funding for directed RorD in the industrial sector caused large corporations to establish their own internal RorD capabilities, in order to resolved knowledge barriers to progress in technological innovations (Letter D). Unfortunately, many markets where innovation could benefit society are comprised of relatively small companies. For those companies, the absence of public funding to industry severely constrains their ability to bring innovations to market. When their short-term needs are misaligned with the short-term incentives of those sectors receiving the majority of the government funding for RorD programs – such as research university academic incentives of publications and tenure – few innovative products and services result in the near term. Under this misalignment of stated goals and career incentives, near-term beneficial impacts from the undirected RorD are marginal, while the time it takes for the findings from undirected RorD to passively and gradually diffuse out for uptake and use by relevant corporations – to the extent they may be relevant at all – strains the credibility of STI claims made by the sponsoring organization to justify continued funding for its stated mission. The constraints arising from misalignment are most detrimental for small niche markets such as my team’s field of assistive technology devices. For example, most companies operating in the field of assistive technology are very small and due to caps on public reimbursement for devices, their profit margins are at a subsistence level. More than one corporate manager in this field has told me that they have zero funding for directed research, and the only funding they can devote to directed development is dedicated to finding ways to decrease their costs, in order to keep them under the government reimbursement limitations for the acquisition of assistive technology products and services. This situation persists on the private sector side while government agencies allocate hundreds of millions of dollars annually, to university and government laboratory-based projects free to conduct undirected RorD projects independent of the defined needs of the private sector small businesses. My team’s longitudinal studies of the inputs, processes and outcomes for undirected RorD  – analyzed through both retrospective and prospective study designs – demonstrate little evidence that this convoluted pathway functions efficiently or effectively for the intended beneficiary populations (Letter O).

Restoring Balance Requires Objective Analysis

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Restoring Balance Requires Objective Analysis Instead of sustaining this biased distribution of funding, especially in the context of their stated STI goals, the US government should at least take a balanced approach to supporting RorD, in recognition of the complementary roles Aristotle’s three knowledge states play in achieving innovation outcomes (Letter A). or perhaps even bias funding toward directed RorD performed by industry. I’m even suggesting that the bias be reversed so that the majority of government funding for the purpose of achieving STI outcomes, be allocated for directed RorD led corporations in industry. Even under directed RorD programs, the conceptual discoveries from scientific research require substantial time and effort to progress through the engineering development process to become prototype inventions. Then yet another lag occurs while those inventions are transformed through commercial production to become innovative products and services. Careful study and analysis by several generations of STI scholars could by now have established a suite of milestones to objectively monitor, manage and measure the progression of knowledge through the three states of knowledge, in order to achieve the intended beneficial socio-economic outcomes for society. But such a reasoned approach to forming STI policies did not occur so we still lack an equitable balance between undirected and directed RorD.  The bias championed by the A-BC continued to grow until it threatened to overwhelm justifications for directed RorD. By the early 1960’s the Military/ Industrial Complex decided to make a stand against this bias, which forced a confrontation with the A-BC. Letter H describes how these two formidable alliances clashed over the Congressional funding allocations for direct versus indirect RorD. One faction relied on the factual analysis of case studies while the other faction resorted to obfuscation and manipulation. The reader may be surprised to learn which faction pursued which approach.

H – Project Hindsight Versus Traces

Ideas that require people to reorganize their picture of the world provoke hostility. James Gleick

In the 1960’s debate grew over whether undirected R&D or directed R&D contributed most to the realization of technological innovation through commercial production efforts. When the Department of Defense attempted to resolve the matter through objective analysis, the National Science Foundation employed very unscientific studies to preemptively discredit the results, serving to further distort the reality underlying STI policy and practice.

Between Dr. Bush’s 1940’s pronouncements regarding the preeminent role of basic research in innovation for social benefit and the full-scale Cold War of the 1960s, I have no evidence of any government or university sanctioned investigations into the actual processes and mechanisms underlying Aristotle’s three knowledge states (Letter A), whereby a kernel of new knowledge in the form of a conceptual discovery arising from scientific research (epistêmê), is transformed through engineering development methods to become a prototype invention (technê), and then transforming further through commercial design and manufacturing into an innovative product innovation in the commercial marketplace (phronesis).

Powerful Interests on a Collision Course No one bothered to investigate, articulate or validate the innovation process, but instead built STI policy and practice around the assumption that Science Drives Innovation (Letter B). The prior seven chapters reviewed several consequences of this assumption. First, the dramatic growth in government allocations of public funds for what was generically called research and development. Second, the © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023, Corrected Publication 2023 J. P. Lane, The ABC’s of Science, Technology & Innovation (STI) Policy, https://doi.org/10.1007/978-3-031-34463-3_8

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emphasis on undirected basic and applied scientific research over engineering development. Third, a bias toward funding scholars in research university, government labs and non-profit think tanks, over for-profit practitioners in industry. I am also unable to find formally documented record of STI policy debates through the 1950’s between elected officials, government agency heads or private sector leaders, regarding the relative contributions of undirected RorD versus those of directed RorD to technological innovations embodied in new products in the commercial marketplace. The post-WWII economic boom may have simply provided enough public and private funding to keep all economic sectors fat and happy. However, by the 1960’s inter-agency and inter-sector tensions arose, eventually leading to a protracted battle between the Academic-Bureaucratic Coalition (A-BC) and the Military-Industrial Complex (M-IC). I’ll speculate here that the relative allocation of public money was the cause. The charts in Letter C show how government allocations to RorD in non-defense categories erupted in the early 1960’s, as compared to defense spending. The charts in Letter G showed how those allocations grew for undirected research in university and government labs, and did so largely at the expense of directed research conducted by industry. The gains for the A-BC were coming at the expense of the M-IC. We can see how that could have increased tensions among some combination of corporate executives, cabinet secretaries, university presidents and/or members of Congress due to the zero-sum nature of public resource allocations in annual budgets (Letter Z). That is, given a finite amount of funding, a higher percentage allocated to indirect RorD and growth in spending for non-defense projects, meant a lower percentage allocation for direct RorD and for spending on defense projects.

Assessing Contributions to Product Innovation Tension rose to a point where those relative contributions of indirect RorD versus direct RorD to technological innovations become a focused point of contention at the highest levels of national STI policy.1 Whatever the motivating factors might have been, in 1963, the US Department of Defense (DoD) initiated a rigorously designed longitudinal study to detail the processes underlying the transition from one generation of military hardware to the next generation, and to apportion the relative credit for advances in the subsequent generation to either prior conceptual discoveries from indirect RorD or to direct RorD conducted corporations serving as prime contractors. The study was named Project Hindsight. This comparative analysis was no trivial undertaking. Based on results from a pilot study, in 1964 the DoD identified a convenience sample of twenty different examples of operational military hardware that were in the process of being

  Arthur D.  Little (April, 1965). Management Factors Affecting Research and Exploratory Development. (AD 618321) Cambridge, MA. 1

Pre-Emptive Strike on the Message and Messenger

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upgraded from the versions created during the WWII era. Project Hindsight implemented a case study research design by establishing baseline component and performance criteria for the existing generation of operational hardware, then over-time tracked in minute detail the flow and type of information contributing to the design, construction and new performance specifications for the next generation of these twenty examples over subsequent years. To perform this analysis the DoD assembled an ad hoc team of military and civilian in-house personnel, supported by scholars from Northwestern University and the Massachusetts Institute of Technology, and consultants from the Institute for Defense Analysis and the RAND Corporation, along with voluntary participation by five industrial-management scientists. The Project Hindsight project team followed the progression from one generation of military product to the next, as implemented and managed by the twenty corporations serving as prime contractors for each new military product. The project team performed its data collection and analysis in parallel with each prime contractor’s product development activity as a longitudinal and prospective study. The DoD study was designed to classify the data elements as evidence of contributions to innovative features/functions of the new military products, as originating either from prior undirected RorD – from the wellspring of curiosity-driven conceptual discoveries accumulated over the long term – or originating from direct RorD conducted within the immediate context of that specific project in the short term. Whether initially intended as such or not, the DoD’s Project Hindsight represented a proxy debate capable of settling the growing contention over resources allocation policies regarding funding for directed RorD favored by the M-IC versus funding for undirected RorD advocated by the A-BC. The financial implications of that proxy role certainly did not escape the attention of the latter group. The following narrative recounts the ensuing five-year timeline through which the A-BC demonstrated its ability and willingness to defend its support for the Science Drives Innovation position. Even though this defense required the National Science Foundation (NSF) as the nation’s premiere science agency (Letter N), to disregard established research methods in order to concoct the desired conclusions.

Pre-Emptive Strike on the Message and Messenger As recounted here, from the time the DoD first released Project Hindsight’s preliminary findings, elements of the National Science Foundation moved rapidly to pre-­ emptively contradict those findings through a seriously flawed counter-study, followed by a prolonged campaign by established scholars to discredit Project Hindsight entirely. The timing and sequence of NSF’s attack seems analogous to a mob hit on a rival gang. Ruthless and unorthodox yet quite effective. The battle commenced in the summer and fall of 1966, when the DoD self-­ published an interim progress report on Project Hindsight’s preliminary study findings:

64

H – Project Hindsight Versus Traces That is, science and technology funds deliberately invested and managed for defense purposes [directed] have been about one order of magnitude more efficient in producing useful events than the same amount invested without concern for defense needs [undirected]. Thus, we see that although technological ‘spin off’ into defense weapon systems from the non-defense sector exists, it is very small and it is quite inadequate to produce the number of innovations needed to make possible the large increase in performance which has been attained.2

These findings did not bode well for the vaunted Linear Model of Innovation. The study was finding that directed RorD contributed much more to product innovation than did undirected RorD.  Further, that basic research findings from prior undirected RorD were insufficient to achieve the required level of innovations. These conclusions are not exactly earth shattering. We’ve explained why directed RorD has more impact on innovation outcomes, and that scientific research discoveries are like engineering development inventions; necessary but insufficient to achieve product innovation outcomes. Despite the relatively benign language, DoD’s internal interim report immediately attracted the attention of spectators observing the rising contention between the scholars in the AB-C community and the practitioners in the M-IC community. A nearly contemporaneous commentary then appeared in the premiere journal Science with this prescient summary regarding the scholar’s eventual response: What must first be observed is that Project Hindsight is not likely to sit well with those statesmen of science who have long propounded the ideology that science pays off best when it is left to freely follow its own curiosity … In any case, when the statesmen of science ascend Capitol Hill next year …they might profitably have something better to offer than expression of faith that basic research pays for itself.3

The very next issue of the journal Science carried a front-page editorial regarding the potential financial impact of what was still only an internal DoD interim report on Project Hindsight’s preliminary findings: Because of its unprecedented nature and impressive scope, Project Hindsight is likely to be influential… The report implicitly raises questions concerning government support of academic research which university scientists will do well to consider.4 Do well to consider indeed. The NSF was definitely considering the implications of the DoD study. If Project Hindsight’s findings challenged the Science Drives Innovation paradigm, then shaping STI policy, that could in turn alter the established bias toward undirected RorD in Congressional funding appropriations. To avoid this impending threat to their public largesse, the presidents of research universities and their government program sponsors leading the A-BC had better find a way to deliver some formal data to reaffirm their position that undirected RorD is both necessary and sufficient for achieving technological innovation. A plan to counter DoD’s nascent findings would have to involve some form of a parallel  Sherwin, C. W., & Isenson, R. S. (1966). First interim report on Project Hindsight (summary). Office of the Director of Defense Research and Engineering Washington DC. 3  Greenberg, D. S. (1966). Hindsight: DOD Study Examines Return on Investment in Research. Science, 154(3751), 872–873. 4  Abelson, P. H. (1966). Project Hindsight. Science, 154(3753), 1123–1123. 2

P utting a Contract Out on DoD

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analysis, one that appeared to be objective but would instead be pre-ordained to deliberately generate the opposite findings. What better agency to conduct such a contrived yet apparently objective analysis than the NSF, the bastion of objective empirical scientific research?

Putting a Contract Out on DoD Now keep in mind that the process through which Federal agencies allocate funding for new sponsored studies usually requires a year or more elapsed time. The sponsoring agency prepares a new grant opportunity, which is reviewed, revised and approved through a series of administrative and legal levels, then submits the opportunity as a Request for Applications (RFA) through the government’s official publication (Federal Register) and other print and electronic media. At that point potential applicants prepare and submit their proposed plan to conduct the solicited study, followed by proposal content review by panels of experts in the field of study, the sponsor’s approval of the review and award process as completed, and the eventual awarding of funds to the host institution. But not this time. Project Hindsight’s threat to the Linear Model of innovation was clearly a matter of great urgency. In 1967, the DoD published in the very same journal Science, a summary of Hindsight’s preliminary fundings.5 The gauntlet had been thrown. The NSF responded by skipping the entire sanctified academic process of regulatory approval and peer-review. That is, instead of soliciting proposals from the broader scholarly community in response to a grant opportunity, the NSF issued a direct contract which had three specific advantages over a grant solicitation approach. First, it expedites the funding process by eliminating the time lag for soliciting, receiving and reviewing grant proposals. Second, it allows the sponsor to hand-pick the entity and individuals who will conduct the desired study. Third, the contract mechanism permits the sponsor’s career internal staff to actively define and closely guide the scope of work conducted. As will be discussed under Letter O, the contract award mechanism has its place for the procurement of pre-defined deliverables through commercial production conducted by industry. These contracts often required directed RorD activity as was occurring within the twenty military projects under study by Project Hindsight. Corporations serving as prime contractors would accomplish the required directed RorD with in-house resources supplemented by expertise from industry and/or from the non-profit research universities and Federal laboratories. However, contracts are not typically directly awarded to a single recipient. A competitive review process enables the sponsor to fund the most objectively rigorous and meritorious proposal submitted. In the interest of valid science, sponsor’s

 Sherwin, C. W., & Isenson, R. S. (1967). Project Hindsight: A Defense Department study of the utility of research. Science, 156 (3782), 1571–1577. 5

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avoid single source contracts due to the potential for introducing subjective bias in the results, should the study be designed so that the results are predetermined. This is seen all too often when studies labeled as objective ESR have been sponsored by interest groups such as the tobacco, chemical, or pharmaceutical industries. Nor are contracts the traditional vehicle for undirected RorD projects. These are typically offered and awarded through a grant mechanism, affording recipients the widest latitude for the exploration and discovery of new knowledge (Letter U).

Hiring the Hit Man Despite these irregularities in its approach, the NSF quickly awarded a single-source contract to the Illinois Institute of Technology Research Institute (IITRI) in order to immediately initiate the planned report. The NSF dictated both the project’s design and even its title: Technology in Retrospect and Critical Events in Science (TRACES).6 The TRACES report preparation commenced at IITRI in Fall 1967. The entire process was then closely supervised by senior career staff within the NSF’s Office of Planning and Policy Studies. I label it a report rather than a study because the approach NSF took to identifying and describing case examples to support the intended conclusion was the antithesis of valid and reliable scientific research methodology. Rigorous scientific analysis requires the objective selection of cases to be analyzed, so that the results are a valid and reliable indicator of factual reality. For example, Project Hindsight pre-identified twenty weapons systems for study while advancing to the next generation, so that one could not pre-determine the relative influence of directed versus undirected RorD on achieving their innovative features and functions. In contrast, NSF specifically instructed the TRACES contractor: ‘ …to investigate the manner in which non-mission-related research has contributed over a number of years to practical innovations of economic or social importance.’ Not if science had contributed but how it had done so. Taking bias another step further, the NSF pre-ordained the project’s findings regarding the primacy of undirected research to technological innovation. The NSF explicitly tasked the TRACES contractor to selectively identify five examples of past commercial innovations for which the contractor could associate prior scholarly articles which they could confidently deem: … likely to have had an influence on the later work. The NSF even told the contractor to search for associated scholarly articles published as far back as twenty-five years before the commercial product’s introduction.

 Technology in Retrospect and Critical Events in Science (TRACES). https://ntrl.ntis.gov/NTRL/ dashboard/searchResults/titleDetail/PB234767.xhtml 6

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Pulling the Trigger No scholar could reasonably defend the TRACES approach as a valid and reliable scientific research design. No matter. The contracted lead investigator at IITRI dutifully conducted the NSF’s prescribed analysis and published the contrived report – all two volumes worth – in slightly more than one year’s elapsed time (December 1968). The TRACES final report published by the NSF was entitled: Technology in Retrospect and Critical Events in Science (TRACES).7 Its’ contents reveal NSF’s guiding hands throughout the contract’s implementation and analysis. As the IITRI investigator noted in the report’s forward section, perhaps to insulate himself from criticism: [The NSF Director of Planning] … maintained unflagging interest and provided incisive criticism … [while Mr. Falk himself noted] This study is the result of closely integrated cooperative efforts between the staff of the Foundation’s Planning Organization and the IIT Research Institute. The IITRI lead investigator distanced himself one step further by revealing the NSF’s close oversight in crafting the TRACES report’s language through numerous drafts: The many iterations of this report were patiently typed by my secretary, Miss Brunsting. By December 1968 the NSF had quickly completed the first phase of something analogous to a contract mob hit on the DoD: NSF established a contract award mechanism, designed and titled the contracted work, selected the investigator, defined the scope of work, then closely managed implementation and final report. All performed and prepared under the IITRI investigator’s name to keep the NSF’s role in the process concealed. All the while NSF’s contrived effort was conceived, completed and disseminated, the unsuspecting DoD’s Project Hindsight dutifully continued its methodical approach to prospectively gathering and analyzing data across the twenty military products undergoing updating.

A Second Wave of Button Men In the absence of any a priori peer-review and approval of the TRACES contract design, the second phase of NSF’s assault on the DoD required some public validation of the TRACES sources and methods with a commensurate endorsement of its findings as valid and reliable. Despite the fatal flaws in the TRACES project’s methods, the highly respected scholarly journal Science came through for NSF by publishing in January 1969 a Commentary written by an internal staff member; a mere five weeks after the TRACES report was released.8 The language of that Science

 Technology in Retrospect and Critical Events and Critical Events in Science (TRACES), Final Report Vol. I & II (January 1969). C. A. Stone, Director, IIT Research Institute. https://ntrl.ntis. gov/NTRL/dashboard/searchResults/titleDetail/PB234768.xhtml 8  Thompson, P. (1969). TRACES: basic research links to technology appraised. Science, 163(3865), 374–375. 7

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Commentary supporting the conclusions drawn within the TRACES study was intended to categorically refute the anticipated conclusions from Project Hindsight. The Commentary’s opening sentence references Project Hindsight’s preliminary finding that: … the contributions to defense from basics research since 1945 have been small. The subsequent sentence rebuts that claim by declaring to the contrary that NSF’s TRACES study: … found that basic research was of overwhelming importance in five recent technological innovations of wide value. To reinforce the essential point the Commentary in Science concluded that: The team of [TRACES] experts …evidently found strong justification for the idea that undirected research, with knowledge for its own sake is the only goal, provides a reservoir of understanding essential to subsequent technological innovation. The phrase, reservoir of understanding, seems to be an adroitly worded but still obvious synonym for the Linear Model of Innovation’s pet phrase: wellspring of knowledge. By any name the Commentary’s core point was that undirected research leads to technological innovation. This remained the foundational justification for preserving the flow of Congressional funding for undirected research to research universities and government laboratories in the service of the A-BC, but in the name of national STI goals. The closing sentence in the Science Commentary unabashedly makes this connection by stating the quiet part of the A-BC’s agenda in print: The [TRACES] report will be a valuable piece of supporting evidence when NSF faces congressional authorization hearings in early March. Clearly the editorial board of Science, as well as the NSF Directorship, had been mindful of the Congressional appropriations calendar the entire time the TRACES study was conceived, implemented, analyzed and published. As a whole, the Science Commentary was carefully thought out and presented, if not subtle in its message. It was careful to not directly attack Project Hindsight’s preliminary findings which could have prompted closer scrutiny of both efforts. Instead, the Commentary benignly surmised that Project Hindsight’s conclusions simply had looked back far enough to see the invisible hand of science driving toward innovation. The Commentary explained that by delving further into the past reports of basic scientific discoveries, TRACES found that about ninety percent (!) of the knowledge underlying the five innovative products analyzed had been generated through undirected basic research at least a full decade prior to the commercial product’s market introduction. The 1969 Science Commentary failed to mention the inconvenient fact that TRACES’ five commercial products were pre-selected precisely because the IITRI contractor could ‘likely’ associate them with prior scholarly articles. That fact actually invalidated TRACES findings. Instead, the Science Commentary deftly concluded that any analysis only considering contemporaneous contributions to product innovations was far too myopic in scope to determine the full contributions of undirected research to product innovations, thus implying that Project Hindsight actually contained the flawed study design. The NSF’s entire assault on Project Hindsight seemed to be well played in service to the A-BC. The Commentary in Science even tried to nullify any thoughts about scrutinizing the TRACES methodology by characterizing it as: … similar in method to the DoD

Disposing of the Evidence

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study. This statement was obviously false because unlike Project Hindsight the TRACES study was not grounded in the methods of empirical science. As noted earlier, instead of being designed to objectively establish facts the TRACES project was designed to reach desired conclusions. The TRACES project design eschewed the gold standard of random design or even of purposive sampling, and instead introduced bias by NSF telling the IITRI contractor to identify five products currently on the market – from any field of application – which they could judge likely to have resulted from prior undirected research. The NSF had deliberately and overtly built subjective biases into every aspect of the TRACES analysis and report. The TRACES contract was not at all similar in method to Project Hindsight’s study, the latter being designed and implemented to prospectively and objectively determine the relative contributions of directed versus undirected RorD across twenty different military products. In fact, and perhaps by intention, TRACES’ methodological shortcomings allowed it to progress so rapidly that its final report (December 1968) preceded the final report from Project Hindsight by nearly two full years. The DOD released Project Hindsight’s final report for internal review in October 1969, then only cleared it for public release almost another year later in September 1970.9 NSF’s rapid funding, conduct and publication of the TRACES report preemptively blunted if not wholly negated the STI policy implications of Project Hindsight. More importantly from the A-BC’s perspective, the TRACES report staved off any negative financial implications in the near-term Congressional allocation of public funding for undirected RorD to research universities and government laboratories.

Disposing of the Evidence But the A-BC was not yet finished with DOD.  They wanted Project Hindsights’ forthcoming evidence regarding the high value of directed RorD to technological innovation to be encased in concrete and buried too deep for future recovery. In May 1970 – still prior to the public release of Project Hindsight’s final report – the A-BC conducted a third phase assault on DoD through yet another scholarly critique of Project Hindsight in the pages of Science. Even closer to DOD’s home front, this assault was written by two members of the Air Force Office of Scientific Research. Titled, Scientific Research and the Innovation Process, the article’s authors conclude: It is unfortunate that some people have quoted the first interim report … without taking into account the severe limitations of the Project Hindsight methodology (4) for evaluating the contribution of such [indirect] research.10  Project Hindsight – Final Report (October, 1969). Office of the Director of Defense Research and Engineering. Washington, DC. https://ntrl.ntis.gov/NTRL/dashboard/searchResults/titleDetail/ AD495905.xhtml 10  Price, W. J., & Bass, L. W. (1970). Scientific Research and the Innovative Process: The dialogue between science and technology plays an important, but usually nonlinear, role in innovation. Science, 164(3881), 802–806. 9

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The public critique of Project Hindsight’s methodology was now being echoed by staff from within the DoD. The prior nuanced language replaced with a more blatant statement about Hindsight’s limitations. This statement could only serve to discourage readers from giving credence to Project HINDSGHT’s eventual conclusions, and thereby reduce their influence on future Congressional deliberations regarding the allocation of public funding in support of STI policies and practices. The final shovel of dirt on the grave dug for Hindsight’s conclusions, was a full-­ throated condemnation published about one year later in 1971. It was authored by a university faculty member who happened to be formerly employed by the NSF’s Planning and Organization section; the sponsor of the TRACES contract. The author had also previously served as a consultant to the National Research Council, a leading advocacy group for undirected research funding (Letter U). Unlike prior tempered criticisms in the established journal Science, this outright attack appeared in the very first issue of a brand-new journal entitled Science Studies. The scathing twenty-three-page paper titled, Hindsight and the Real World of Science Policy, mischaracterized the DoD’s study from virtually every aspect, including its operational terms, methodology and conclusions. It opened as follows: The report of Project Hindsight, that ambitious, energetic attempt (1963–1967) by the US Department of Defense (DOD) to evaluate its programs in research and development, has finally been published. Although it may not rank very high intellectually when compared with other recent efforts in this genre ….11 The opening pages of this article are laden with emotional words (alarm, anxiety, attack, disastrous) unbefitting a scholarly paper, then spirals downhill from there. Whatever shred of DoD’s credibility had survived the prior attacks, this paper was the last word in denigration. In a subsequent issue of this nascent journal the same author published another article titled: Toward a Theory of Science Policy, which acknowledges funding for the current paper as coming from the NSF.12 One can only speculate about the NFS’s motives and role in supporting scholars who delivered such devastating critiques of Project Hindsight. The A-BC’s preemptive and sustained assault on the M-IC’s own study of directed versus undirected RorD on innovation outcomes, appears to have achieved the desired result. It justified continued public funding support for the A-BC. Project, and helped Hindsight’s final report simply disappear from scholarly consideration with the few rare mentions cast in derisive terms. Interestingly, despite its apparent support for the primary role of undirected research in the innovation process, the TRACES final report was never widely circulated or published in any peer-reviewed journal. For several decades a few paper copies survived in university library archives. Fortunately, an electronic version can now be accessed or downloaded.

 Kreilkamp, K. (1971). Hindsight and the Real World of Science Policy. Science Studies, 1(1), 43–66. http://www.jstor.org/stable/370196 12  Kreilkamp, K. (1973). Towards a Theory of Science Policy. Science Studies, 3(1), 3–29. http:// www.jstor.org/stable/284462 11

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Dead Studies Tell No Tales Unfortunately, what was essentially a battle over money further obscured the reality of the forces underlying STI policy and practice. Over long timeframes and through the passive diffusion process, conceptual discoveries from undirected scientific research as well as prototype inventions from undirected engineering development, do reach the attention an interest of actors involved in directed RorD leading to commercial production. Of course, nations cannot rely on such protracted and serendipitous processes for the advanced knowledge inputs from science and engineering necessary to deliver both incremental and disruptive technological innovations to the global competitive commercial marketplace. STI polices have still not yet struck a balance between the long-term passive approach of undirected RorD, and the short-term active approach of directed RorD, in support of technological innovation. Such a balance could still be achieved through a rigorous Hindsight-type of analysis conducted across the broad range of non-defense technology application areas currently receiving government funding allocations (Letter C). The required analysis would involve both prospective and retrospective analyses, spanning both short and log timeframes to conclusively demonstrate the complementary roles of both undirected and directed RorD, as well as the essential contribution of commercial production methods, to the final generation and deployment of technological innovations with socio-economic benefit. Instead of performing such a comprehensive analysis to settle the matter and set more effective polices for resource allocations, The US and other Western nations continue dithering over meaningless dichotomies, conflated terminology and false choices. Whether China has or has not conducted any such sweeping and definitive analysis, its STI policies reflect a more factually grounded approach by focusing financial and intellectual resources on directed RorD programs, to deliberately support commercial production efforts by industry, to achieve their expressed goals of delivering competitive innovations for both military and civilian applications to the global commercial marketplace (Letter X).

I – Idea Factory Lessons

An ounce of performance is worth a pound of promises. Mae West

Deliberate and sustained technological innovation requires performance specifications, close supervision of coordinated science and engineering efforts, comprehensive progress tracking and closely aligned professional incentives, all attributes of private-sector corporations.

Through practical necessity private sector industry had long ago resolved the great debate recounted in Letter H. Both scientific research and engineering development are necessary for advancing the state of technology-based products and services. But they are not sufficient, especially when undirected. To meet the near-­ term requirements of national STI goals, the RorD program must be conducted in unison and under the explicit direction of industry. Only then can they be rapidly transformed through the methods of commercial production for timely delivery to the global competitive marketplace. This chapter will substantiate that perspective. It will also demonstrate how even industry directed RorD, when properly financed and managed, created a well-spring of new knowledge comprising fundamental conceptual discoveries and prototype inventions with future innovation value. As noted under Letter C, the US industrial sector had as much military and civilian business is it could handle through the post-WWII quarter century. Supplying the domestic Baby Boom while supporting international efforts to rebuild Europe and Asia left them little incentive to battle with the university sector over public funding for RorD. In fact, the immense profits generated through all that business allowed larger companies to establish their own R&D laboratories in major industrial sectors (Letter D).

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023, Corrected Publication 2023 J. P. Lane, The ABC’s of Science, Technology & Innovation (STI) Policy, https://doi.org/10.1007/978-3-031-34463-3_9

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History’s Most Innovative Corporation Over time, Bell Telephone Laboratories Inc. (Bell Labs) became the single most successful of these RorD laboratories, with nine Nobel Prizes, five Turing Awards for scientific discoveries, as well as thousands of patents for engineering inventions, and hundreds of product innovations across the remainder of the twentieth century. Bell’s scientists and engineers designed, built, tested and delivered the first transistor, first laser, first photovoltaic cell and first charged coupling device. They pioneered the field of radio astronomy, and first articulated information theory which underlies the entire revolution in computing and information systems, programming languages and communications technologies. The book entitled, The Idea Factory: Bells Labs and the Great Age of American Innovation,1 recounts these astounding accomplishments and the individuals who made them in rich detail. I note this book here for three reasons: First, recounting specific examples of innovation within the confines of a single well-resourced organization reduces the impact of many determining variables in the wilds of entrepreneurial ventures, such as the presence of stable financial resources, adequate technical staff and equipment, qualifications of key actors, clear communication channels, and credibility among internal and external collaborators. Second, documentation compiled within that single operating environment (lab notebooks, minutes of team and management meetings, technical reports and patent applications) permits an investigator to reconstruct – perhaps even objectively trace – the processes through which kernels of knowledge progress through Aristotle’s three states; from episteme through techne to phronesis. Third, this structured environment with a deliberate focus on target applications and tiered levels of progress reporting and managerial oversight, demonstrates how Vannevar Bush’s vision of how both scientific research and engineering development could have contributed to society if their proper roles had been established in coordination with industry through objective STI policy and practice (Letter B). Bell Labs became much more than an RorD lab because it coalesced under a unique set of government, economic and social circumstances. The American Telephone and Telegraph (AT&T) corporation held a virtual monopoly over information and communication technologies, and controlled sufficient resources to build and staff an unparalleled private sector RorD laboratory, all dedicated to advancing a defined set of products and services and all operating under one managerial umbrella.

 Gertner, J. (2012) The Idea Factory: Bell Labs and the Great Age of American Innovation, The Penguin Press, New York, New York. 1

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The Corporate Formula for Sustained Innovation Bell Labs demonstrated the formula for sustained success in STI by linking the three complementary methods and their resulting states of knowledge, for the purpose of generating world-class technology-based solutions. The first step in that formula was the ability to specify a set of features and functions representing the next generation of any product or service. Second was assembling and equipping a team of scientists and engineers, each qualified in one or more technical fields of expertise. Third, task a cohort of managers with qualifications equal or greater than their staff, to supervise on-going projects and programs, and to openly share progress reports with peer managers and higher corporate executive levels. This approach ensures that everyone is working toward a shared goal. And what qualifications do employees within a successful corporate innovation enterprise possess? Bell Lab’s team leaders and most staff have terminal degrees – scientists with doctorates or professional engineer licensure – and many have both. Even more telling, most of the early Bell Lab employees grew up in small towns or rural settings where they gained practical experience in mechanical construction and repair (farm machinery, automobiles), or in electrical product installation and maintenance (wiring a house or installing telephone service). They had demonstrated practical aptitude and interest in how material products worked long before pursuing their academic credentials. Further, Bell Lab’s project and executive managers mostly began as staff who were promoted through the ranks, after demonstrating their proficiency within the science and engineering teams. These top-level managers gained additional insights by rotating out of the corporation to stints at high-level positions in government as advisors or agency heads, or appointments in academia as deans, provosts or presidents. My own team learned the advisory value of having an internal staff member take a position in a government agency, as described under Letter R. Not surprisingly, the best and the brightest of these people worked symbiotically across sectors and fields to achieve true technological innovation. The closest parallel to Bell Labs past innovation success in modern American society is, for better or worse, the quality of military hardware produced by the Military-Industrial Complex (M-IC) described in Letter C. The carefully managed coordination of directed RorD linked to commercial production – as documented by the much-maligned Project Hindsight study (Letter H) – has routinely and consistently delivered world-class product innovations since WWII. The U.S. arsenal of aircraft, ships, vehicles and weapons are demonstrably superior to all other nations, although we’ve noted looming competition from China and Russia in hypersonic flight systems (Letter C). Of course, we see that even when operating under what might be considered the optimal conditions for directed RorD for the M-IC, there are still technological limitations and performance envelopes that challenge the combined efforts of the best minds and resources the US can assemble. For example, the F-35 Joint Strike Fighter demonstrated constrains on innovation from a combination of technological

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complexity and continuous system upgrades, coupled with organizational malfeasance (pork barrel spending and crony capitalism). After nearly $2 trillion in expenditures and nearly twenty years, the F-35 aircraft is still not fully functional.2 Due to sustained innovations US military products keep remain coveted by countries able to afford each successive generation. Close allies can acquire state-of-thepractice versions, while other nations make do with the versions being replaced. In the broader socio-economic context of STI goals, exporting innovative products is desirable because it creates a revenue stream of new net wealth for the exporting nation that can be reinvested domestically (Letter W).

Risk and Reward Across Sectors Private industry has demonstrated its capacity for innovation through its internal RorD capabilities as well as directed RorD conducted by collaborating research universities and government labs. Given the sustained government investment of public funding for undirected RorD in universities and government laboratories, why isn’t the Academic-Bureaucratic Coalition (A-BC) drawing similar levels of innovation from its wellspring of basic research discoveries? It boils down to two timeless factors: risk and reward. Corporate employees serve at the pleasure of their superiors, performing the tasks assigned and held accountable for delivering defined results on a short-term basis. Corporate employee incentives are tied to corporate goals because a corporation’s continued existence depends on their ability to generate sufficient revenue under the constraints and threats of a highly competitive marketplace. While some companies are large enough to insulate themselves from technical risks and market competition, most corporations survive quarter to quarter and year to year in the competitive marketplace. Academic faculty and Government career employees enjoy risk and reward systems very different from that of private corporate employees (Letter U). During their university training, scientists who plan a career as faculty scholars are taught to identify an unexplored topic area where they can create a research track that becomes uniquely identified with them, because their publications are branded with their names. This specialization results in a silo effect, where each scholar works within their own topic area amongst a small group of colleagues who also happen to specialize in that topic area. Junior faculty are hired by research universities as either fixed-term contact or tenure track employees. Fixed-term contractors focus primarily on teaching undergraduate students and performing related administrative duties. Their contract terms may be annual or multi-year and are subject to renewal based on institutional needs and their job performance. It is the tenure-track employees who expect to

 https://www.forbes.com/sites/davidaxe/2021/02/23/the-us-air-force-just-admittedthe-f-35-stealth-fighter-has-failed/?sh=41271c521b16 2

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create a record of scholarly research through sponsored RorD. Readers may be surprised that tenure-track employment is declining even in research universities, which are instead increasingly offering fixed-term contract employment even to those faculty planning a career based on scholarly RorD. Tenure-track employment begins with a multi-year grace period of employment security (the tenure clock) along with some package of start-up resources to help the individual initiate their personal research program. A successful research program is almost entirely dependent on securing external funding through government agencies. Funding permits RorD activity, which generates findings that are expected to contributed to the base of knowledge in the chosen field of study. The primary metric for their academic progress is the number of publications (publish or perish) in the most prestigious scholarly journals possible, followed by the number and quality of citations in publications authored by other academics. A secondary measure of qualification for tenure is a compilation of testimonies from peer faculty working in related fields regarding the importance of the scholarship completed. Tertiary evidence is a record of instructional courses delivered (teaching load) and service to the home department/school (committee assignments) and/or the community.

Academic Incentive System Among the approximately 400 major research universities, securing extramural government funding is vital to achieving the primary incentive of publications. However, performance accountability as a faculty member ultimately rests with the university’s internal chain of command (program head/department chair/school dean/university provost). Each of these levels has their own expectations regarding faculty performance which extend beyond scholarship to include teaching undergraduates, mentoring graduate students, supervising internships or fieldwork placements, serving on internal committees, peer-review panels and professional organizations, in additional to performing community-based services. These other duties compete for the time and attention devoted to scholarly research. In an interesting twist on incentives, faculty who secure funding for RorD projects, whether through undirected grants or directed contracts, are given some relief from other duties. This usually entails a reduction in their teaching requirement for the term of funding because a portion of the funding to the institution is compensation for the faculty’s time now committed to the RorD project. All other obligations are secondary to those attracting external funding to the university. Even within the context of faculty scholarship, progress through the professorial ranks is largely determined by peer scholars working in the same field assessing scholarly productivity – not by project officers in sponsoring agencies. The internal university and peer assessments drive faculty behaviors, while project officers in sponsoring government agencies have little control over the investigator’s day-to-­ day activities. This is especially true for undirected RorD funded through the grant

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mechanism. Undirected grant funding offers faculty wide latitude to pursue their proposed course of research, and once tenure is achieved a professor inclined to pursue undirected RorD has even greater discretion to invoke the principle of academic freedom to justify pursuing their intellectual curiosity wherever it leads. Tenured professors in private research universities. A handful of research universities have experimented with having the institution take a more directed approach to faculty engagement in sponsored projects. The University of Central Florida – befitting its origins as a technical training program affiliated with local industries  – starts junior faculty off by assigning them to directed RorD projects led by the corporate partners. This approach shifts the incentives for junior faculty from academic to corporate, with promotion and tenure dependent on delivering expected results rather than on a record of scholarly publications. New faculty go through an orientation and training program on the expectations underlying directed RorD, versus those of traditional undirected RorD, where they are told tongue-in-cheek that they will be freed to pursue curiosity-driven undirected RorD immediately after earning their first Nobel Prize. The accompanying incentive structure for tenure and promotion increased the value of securing patents and commercial product outcomes. While this novel approach may work for faculty remaining within that single institution, it hampers their mobility across the broader academic community which still value a record of scholarly publications far above any patent or commercial product outcomes.

Government Incentive System The incentive system for government employees in state universities and government agencies, as well as in federal government agencies, is equally disconnected from private corporate culture. Most government employees – those not specifically hired as temporary or term – are granted permanent employment after a relatively short timeframe of 3–5 years. I myself am a permanent New York State employee holding a non-academic staff position within the State University of New York system. During this initial timeframe prior to securing permanency, government employees are expected to perform their job duties but equally important they must avoid a few prohibited behaviors that can lead to termination. Exceeding annual performance plans can lead to early permanency while one must perform at an exceptionally low level to be dismissed without a great deal of paperwork, hearings and appeals. Once beyond their probationary period, career government employees operate in a bureaucratic environment with incentives different than that of academic faculty. Staff and lower managerial tiers enjoy permanency and a combination of lower pay yet better fringe and retirement benefits than found in the private sector. Senior professional career staff may eventually be promoted to the management-­confidential level where they gain higher pay in exchange for losing their permanency. The managers are in the precarious position of balancing the government’s regulatory

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requirements and statutory obligations (red tape), against the often contrary and sometimes unrealistic demands of each new cadre of politically-appointed department, agency and cabinet level directors. Government agency directorships are bequeathed more as rewards for prior political support and donations, than for any particular expertise, so their abilities vary from knowledgeable and effective to naïve and incompetent. In my experience such appointed directors have ranged from actually having expertise in the agency’s field of practice to having no prior record of formal work experience whatsoever. Some career staff and managerial employees strive to maintain their agency at a highly effective operational level across changing political administrations and appointed leaders, while at least appearing to comply with the dictates of each new appointed director. Still others adopt a foxhole mentality of doing as little as possible, particularly avoiding any actions or decisions that might attract attention or be perceived as controversial by the political appointees. The latter situation limits the agency’s capacity for change, stifles efficiency and effectiveness and suppresses moral. Not the formula for fostering innovation. Overall, employment within the government service roles of the A-BC offers less risk with comparable rewards than that of the average corporate employee. While there is a nominal chain of command their organization’s missions and operational plans embody longer-term perspectives than do corporations. I call it a glacial perspective. This relaxed approach results from having relatively stable budgets and no active competitors posing a serious threat to the organization’s existence. Universities and government agencies simply don’t go out of business.

Incentives Shape Behaviors In decades of meeting with people from the various economic sectors it was always easy for me to differentiate the behavior of the corporate managers. The government and academic managers carried a more casual almost philosophical air regarding the meeting’s purpose, and were usually satisfied with a vague agenda and an interesting discussion. In contrast, the corporate managers projected a sense of urgency, had an eye on the clock and strove to identify action items relevant to their corporate interests before the meeting concluded. As asserted throughout this book, private sector corporations are organized, equipped and incentivized to generate product innovations. Consequently, the scientists and engineers employed by corporations are focused on generating such innovations. The industrial sector has established best practices for capturing and implementing technology-based discoveries, inventions and innovations, with the full understanding that the STI process can only be optimized through a hierarchical structure of highly qualified managers who pursue short-term incentives for delivering defined results. Serendipitous anecdotes aside, the academic and government sectors simply lack the staffing, orientation and incentives necessary for deliberate and continuous innovation.

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They also lack the same depth of knowledge regarding the competitive commercial marketplace as professionals engaged in directed RorD within the industrial sector. Erstwhile entrepreneurs in university and government labs often complain that they are unable to transform their discoveries and inventions into commercial product innovations due a lack of sufficient funding; what they call the Valley of Death. These individuals have likely devoted only a portion of their workday to their undirected RorD project, whether through government sponsorship or by devoting evenings and weekends as garage inventors. In their classic book Taking Technical Risks (2003),3 Branscomb and Auerswald counter that the proper analogy is not a desert wasteland but instead a Darwinian sea teaming with resources. In this competition where the fittest survive, most undirected RorD projects fail to attract resources because they lack sufficient value compared to competing investment options. Do part-time entrepreneurs really believe they can offer more value than teams of full-time professionals whose livelihood depends on competing successfully? The sheer volume of government funding for undirected RorD projects generates a continuous flow of scholarly papers and government reports, without any apparent connection to on-going commercial production efforts in the private sector. Corporations lack sufficient justification to expend the time and effort necessary to sift through the sustained avalanche of these papers and reports, in the hope of gleaning some findings relevant to addressing their short-term project requirements. If STI policies shifted resources toward supporting industry, then a higher percentage of university papers and government reports would have relevance to industry requirements and to potential product innovations. Western nations currently lack any mechanism for monitoring performance and reporting outcomes from university and government undirected RorD programs claiming contributions to innovation. STI-oriented regulations such as the Bayh-­ Dole Act, that governs how university-based intellectual property is disclosed and treated, exist but are not strictly followed and there are no formal penalties for non-­ compliance (Letter T). New inter-governmental agency tools such as iEdison are designed to enable grantees and contractors to report inventions, patents and utilization data in a unified format, but Congress has not yet funded and mandated participation by all government agencies. Industry still has no efficient and effective way to search for viable contributions from undirected RorD project outputs. As DOD’s Project Hindsight study demonstrated – despite the A-BC’s largely successful efforts to disparage its findings (Letter H) – commercial product innovations systematically result from directed RorD, not through chance encounters with discoveries or prototypes from undirected RorD cast afloat in the Darwinian sea. As my project team was fond of saying: Serendipity is not a viable business plan.

 Branscomb, L. M., Auerswald, P. E. (2003). Taking Technical Risks: How Innovators, Managers, and Investors Manage Risk in High-Tech Innovations. United States: MIT Press. 3

J – Juggling STI Terminology

It is difficult to get a man to understand something, when his salary depends on his not understanding it. Upton Sinclair

The US government defined corporate internal research and/or development activity for financial accounting purposes, but in the context of STI policy the labels Research and Development and R&D, further conflated and helped blur the critical distinctions between the two activities.

This book touches on many factors that influence both policy and practice, some more obvious than others. But some surprisingly obscure factors can also play a role. This chapter presents one such example.

Accounting Rules Influence Innovation Terms The U.S. Financial Accounting Standards Board (FASB) began instituting Generally Accepted Accounting Principles (GAAP) in 1973, intended to provide a standard basis whereby public corporations could determine their net income or loss when preparing their quarterly and annual financial statements. Of the nearly two hundred Statements of Financial Accounting Standards (SFAS) established between 1973 and 2009, the very second one (SFAS #2, Accounting for Research and Development Costs, October 1974) defined a category of expenditures called Research and Development or R&D.1 So here we have yet another example of how the continuing tendency for conflating scientific research activity with engineering development activity diffused into other realms of government policy and professional practice.  https://fasb.org/page/PageContent?pageId=/reference-library/superseded-standards/status-of-­ statement-no-2.html&bcpath=tff 1

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The SFAS #2 was created to distinguish corporate expenditures for preliminary or preparatory work in the area of product development, from those expenditures for commercial product manufacturing activities. Corporate expenditures classified by the government as R&D – what we label as directed RorD in this paper – are deemed qualified for specific accounting treatment under GAAP. Under SFAS #2, activities constituting Research and Development are defined as: Research is planned search or critical investigation aimed at discovery of new knowledge with the hope that such knowledge will be useful in developing a new product or service (hereinafter “product”) or a new process or technique (hereinafter “process”) or in bringing about a significant improvement to an existing product or process. Development is the translation of research findings or other knowledge into a plan or design for a new product or process or for a significant improvement to an existing product or process whether intended for sale or use. It includes the conceptual formulation, design, and testing of product alternatives, construction of prototypes, and operation of pilot plants. [Development] does not include routine or periodic alterations to existing products, production lines, manufacturing processes, and other on-going operations even though those alterations may represent improvements and it does not include market research or market testing activities. These definitions introduced in 1974 were quite congruent with the emerging international business definition for innovation, in that they specifically address activity intending to improve products, services or related processes in the context of the commercial marketplace. While the SFAS #2 definition of R&D explicitly excludes all corporate expenditures for post-innovation activities, there was no boundary established for expenditures on pre-innovation activity. The phrase ‘aimed at discovery of new knowledge’ within the definition of pre-production activity included any scientific research or engineering development conducted or sponsored by a corporate entity. From a practical accounting standpoint SFAS #2 was entirely reasonable. We’ve already discussed the fact that corporations invested their own internal funds to establish laboratories for conducting directed RorD for the purpose of generating conceptual discoveries and prototype inventions relevant to their commercial market product and service offerings (Letter D).

Terminology Influences Positions and Decisions However, in the context of STI policies, the unintended consequence of SFAS #2 was to further blur two critical distinctions. First, having the US government’s accounting practices anoint the terms ‘research and development’ and ‘R&D,’ the two distinct activities scientific research and engineering development were further conjoined. Second, although the SFAS #2 was written for corporations, it did not explicitly distinguish between undirected RorD and directed RorD.  The R&D

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definition’s phrase ‘with the hope that’ actually reinforced the aspirational spin of the Science Drives Innovation paradigm, by echoing the false notion that the intent of the sponsor or investigator determines the future utility of the RorD activity in commercial production (Letter C). The SFAS #2 language gave the Academic-Bureaucratic Coalition (A-BC) further justification to directly link all undirected RorD to future commercial product innovations, even though undirected RorD occurs without linkage to corporate interests or product requirements, and so has a very low probability of future relevance to or adoption by any industry (Letter I). The semantic argument was that the US government defined scientific research as pre-production activity in the context of R&D, thereby justifying increasing public funding levels for research universities and government laboratories. This rationale gradually progressed over decades from argument to axiom in the halls of Congress, which allowed universities and government labs to expand their claimed missions. The career staff in government-­ based agencies sponsoring undirected RorD programs know that their own career growth largely depended on growing their budgets and agency staff. They had no reason to challenge the expanding mission for undirected RorD under the innovation mission, as it was accompanied by a welcomed increase in their own baseline funding (Letter G). Despite the vaguely sweeping general definition of activity qualifying as R&D, the fine print language of SFAS #2 did distinguish corporate research activities from corporate development activities. Further, the examples of activities qualifying as one or the other were also easily differentiated as either generating new knowledge discoveries (research activity and outputs) or transforming discoveries to operational prototypes (development activities and outputs): • Laboratory research aimed at discovery of new knowledge • Searching for applications of new research findings or other knowledge VERSUS • • • • • •

Conceptual formulation and design of possible product or process alternatives Testing in search for or evaluation of product or process alternatives Modification of the formulation or design of a product or process Design, construction, and testing of pre-production prototypes and models Design of tools, jigs, molds, and dies involving new technology Design, construction, and operation of a pilot plant that is not of a scale economically feasible to the enterprise for Industrial Production. • Engineering activity required to advance the design of a product to the point that it meets specific functional and economic requirements and is ready for manufacture. The practical distinctions between the methods, metrics and outputs of scientific research activity versus engineering development activity would have been made clearer had the SFAS #2 been titled; Research or Development (RorD) rather than Research and Development (RandD). The latter phrase created the indelibly associated acronym of R&D which couples both types of fundamental activity under one

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unifying term. This R&D contraction further blurred the critical differences between the two resulting knowledge states of conceptual discoveries versus prototype inventions. The unintended consequence of SFAS #2’S combining Research and Development into one category of activity despite their different definitions – was to further reinforce the Science Drives Innovation paradigm.

The Best of Both Worlds In the context of STI policies, distinctions made by scholars and practitioners between basic scientific research and applied scientific research became a false dichotomy, by associating future innovation to the espoused intentions of sponsors or investigators, rather than to the corporate led (directed) or curiosity-driven (undirected) nature of each RorD project (Letter D). In order to perpetuate claims for the importance of professional autonomy while claiming a role in technological innovation, the community of scholars had to imply but not assert – because factual assertions required evidence – that undirected (basic) research was somehow the initiating input for innovation processes leading to future innovation outputs, outcomes and eventual societal impacts (Letter L). Claiming this role allowed the A-BC to lobby Congress for greater public funding allocations to research universities and government laboratories operating programs unaffiliated with private sector industry. Faculty researchers gradually followed suit by claiming their intentions to generate product innovations in grant proposals, even when their RorD projects were curiosity-driven and undirected by industry. As a peer reviewer of grant submissions to various federal agencies I found these excessive claims easy to detect. For example, most proposal narratives did not define their envisioned product’s specifications, lacked development milestones and timeframes, made no mention of data concerning marketing, sales and functional limitations of existing products in the marketplace, and presented no evidence of discussions or collaborations with existing companies operating in the targeted market. Such proposals were devoid of the due diligence necessary to have any chance of a successful future market introduction of an innovative product. Yet, other peer reviewers the majority of whom are traditionally academic scholars rather than industry practitioners, casually dismissed these glaring omissions, especially if they were otherwise enamored with those elements of the proposal concerning the rigor of the scientific research methods proposed as antecedents to proposed engineering development efforts. Group discussion among the peer-reviewers over those proposal’s relative merits and often concluded with the majority opinion that no one can predict the future innovation value of undirected RorD projects. Therefore, so as long as the proposed research design reflected high academic rigor, it’s best to allow the investigator to proceed as they see fit and hope for the intended outcomes. There was never much discussion about the quality of the engineering development methods nor their linkage to future commercial production methods, as the peer-reviewers admitted lacking ‘wisdom’ in those areas. Not exactly a formula for accomplishing deliberate and sustained

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innovation, but an example of how the conceptual linkage between R&D and innovation percolated down to the level of individual scholar’s perceptions of the innovation potential inherent in grant proposals claiming innovation intent. Revising STI policies and practices to better align public funding with expected innovation goals would involve Congress revising these definitions to better differentiate scientific research from engineering development, undirected versus directed RorD, and all from the commercial production process – including pre-production, production and post-production phases – then revising governmental statutory and regulatory language so that Congress and government agencies would be obligated to allocate and expend some defined percentage of their annual budgets on industry directed RorD projects addressing specified national needs for innovation. As described in Letter D and Letter I, these sponsored projects would be funded as performance contracts rather than exploratory grants, and be subject to the same level of management and accountability as any directed RorD conducted by industry. To more closely reflect the successful approach to innovation experienced during WWII (Letter B), these directed RorD projects would be led by an individual or consortium of private sector corporations representing the technological capabilities most capable of translating the discovery and invention outcomes into commercial product and service applications for the global competitive commercial marketplace.

K – Knowledge Communication

The single biggest problem in communication is the illusion that it has taken place. George Bernard Shaw

The innovation process requires new knowledge in the state of discovery or invention be described in terms of what it does rather than what it is, in order to convey its potential value to those who must choose to assume the cost and risk of transforming that knowledge into subsequent knowledge states. Effective communication is especially critical when conveying information from scholars/entrepreneurs to industrial corporations.

The scientist who observes some new interaction between natural forces must understand its potential value as a discovery before deciding to commit time and effort to exploring the interaction in a systematic fashion. People passively witnessed falling objects long before Sir Isaac Newton saw it as a reaction to an invisible force which lead him to explore the nature of gravity by manipulating the relationship in a systematic fashion. Similarly, water flowing downstream only became a structured source of mechanical power after the Roman engineer named Vitruvius designed and built the first water wheel connected with wooden gears to a millstone. An individual may mentally comprehend an observation as new knowledge, which by definition is a conceptual discovery.

Transforming the Tacit into the Explicit New knowledge regarding an interaction, a process or a technique, is in a tacit form while held in the mind of an individual. That conceptual discovery only becomes explicit once it is organized into words or symbols for communication to others. In the STI context, the first transition from tacit to explicit knowledge usually happens © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023, Corrected Publication 2023 J. P. Lane, The ABC’s of Science, Technology & Innovation (STI) Policy, https://doi.org/10.1007/978-3-031-34463-3_11

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between those who share expertise in a shared set of words and symbols – conceptual discoveries between scientists within a field of study, and prototype inventions between engineers within a specific discipline. Within their shared domains it is sufficient to understand what the knowledge is, because peers will tacitly understand how the discovery/invention can be put to use. Sharing that factual information is unlikely to elicit the same reaction from outsiders. They must also be told what the discovery/invention does; the tacit utility must be made explicit to them. A shared language aids communication but even people speaking different languages simply need a translation process to be understood. Similarly, scientists or engineers trained in the same discipline can communicate with ease, while those from different disciplines may require some level of translation to share a kernel of knowledge. The communication challenge grows as the training and background of the parties diverge and when communicating from one knowledge state to another. Communication between scientists and engineers may rely more on mathematics as a shared set of technical symbols than on language. Likewise, communication between project staff and managers is both efficient and effective when the managers share tacit knowledge arising from training and project experience we described as the case in Bell Labs (Letter I). But how can professionals effectively communicate across professional domains and economic sectors?

Communicate Across Sectors and Cultures Overcoming barriers in communication is a major challenge for innovation progress in most naturally occurring settings. Corporate executives lacking training in a science discipline may not comprehend the relevance of a bench researcher’s discovery to their core business, while the scientist may fail to convey the discovery’s relevance to a product’s features or functions. Similarly, an exuberant inventor may lack tacit knowledge about manufacturing complexities and constraints when negotiating a license for their prototype device, while the company simply views the inventor as unreasonable. The same communication issues even occur within the same company where sales/marketing managers refer to RorD managers throwing a product prototype over the wall, to describe the absence of a shared and explicit understanding about the prototype is supposed to relate to the company’s overall business. Barriers to communication increase with the distance between the training of the parties involved and with their opportunities to interact. Scientists more easily communicate with engineers than with sales/marketing types, and project staff communicate better their line supervisors than with executives. Organizations committed to generating technological innovation build intermediary levels of managers spanning roles and expertise in order to translate and interact between disparate groups. Such translators must be able to conceive of applications for a conceptual discovery, or for a prototype invention within the company’s overall business plan. Organizations

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seeking to transfer their discovery or prototype invention knowledge outputs to others for implementation must rely on translators who can envision different types of applications. This is a challenging assignment as demonstrated by university and government laboratory technology transfer offices (Letter T).

When Incentives Are Disincentives The requirement to translate knowledge for effective communication between the three knowledge states of conceptual discovery, prototype invention and product innovation, is especially challenging for the academic sector. Faculty incentives focus on communicating their discoveries from undirected RorD projects to their peer scholars through academic journals within their own field of study. The barriers here are minimal because the communication targets share the same language, culture and tacit knowledge. Academic communication is facilitated by the referencing system shared by scholarly journals, which is structured to catalogue and archive each contribution by author’s name and affiliation, as well as keywords and biographical information, now all accessible through web-based platforms. However, even within the peer network the process of manuscript preparation, peer-review, revision and preparation for publication consumes many months which is its own significant barrier to timely communication. If the scholar’s intent is to communicate their research findings to engineers engaged in invention development or commercial production, the communication process becomes much more burdensome. Preparing research findings for communication to professionals outside the scientist’s discipline requires an allocation of additional time and effort that does not fit within their own incentive system. Their scholarly manuscripts or reports focus on the facts; what the discovery is and how it was derived. Descriptions of the discoveries value to others is not deemed suitable for publication by their traditional journals. Academics have to identify and secure access to publications or other media not only outside their own culture, but that are routinely accessed by these non-traditional target audiences. Beyond the required time and effort involved, documentation generated for dissemination outside of standard scholarly channels  – technical reports, information brochures, popular press summaries – are pejoratively called grey literature with virtually no value for the scholar’s tenure and promotion. There is even a cultural barrier to broader outreach. Reporting research findings in more than one outlet – even though it is for a different purpose and audience  – is an unfamiliar practice among scholars. It is erroneously considered unethical to do, because it is misunderstood by academics as an attempt to inflate the all-important publication metric through duplicate publications.

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Knowledge Translation as a Strategy The concept of knowledge translation1 arose from the medical field where scholars and professionals observed that conceptual discoveries published in academic journals based on laboratory research and pilot studies did not seem to be influencing the clinical practice of physicians and nurses. Scholars exploring the potential barriers to knowledge adoption concluded that the problem rests with the recipient practitioners not with the disseminating researchers. Their explanation was that the target recipients of new knowledge lacked sufficient absorptive capacity; they had insufficient ability to comprehend, interpret and apply the discoveries in practice. That conclusion handily absolved the scholars from any responsibility for expending the additional effort required to ensure that the discoveries were communicated in form and content familiar to practitioners; to make the information more readily absorbable. Although the latter approach would likely increase adoption and therefore improve medical practices, such additional effort would not contribute to the incentives for academic promotion and tenure. Hence the conclusion to shift responsibility for understanding and applying conceptual discoveries from the investigator who was funded to conduct the research, to the target audiences who without a hint have no way to know which academic papers may be relevant to them. All this background is important for understanding why there is a serious disconnect between the institutional culture and incentives driving the A-BC and its espoused engagement in the STI domain. Scholars who are funded to contribute to innovations instead inhibit the communication process by expecting potential audiences to finding relevance in knowledge presented as factual discoveries in their original scholarly language and media. They leave to potential users the burden of translation from what the reported discovery is in the tacit context of the scholar, to how the discovery might be used in the explicitly context of the corporation. Given their full-time responsibilities for internal product/service RorD and commercial production, corporate staff have little time or inclination to ponder the potential value of discoveries couched in academic language and devoid of information regarding potential applications. This gap in knowledge communication must be resolved in order to achieve STI goals by increasing the uptake and use of undirected RorD outputs by the corporate sector.

Exceptions Prove the Rule The top tier of US research universities with a heavy emphasis on advanced science and engineering training (e.g., MIT, Stanford, Berkeley, Purdue, CalTec, CMU) have the capacity, commitment and industry contacts to achieve successful transfers  Lane, J. P., & Flagg, J. L. (2010). Translating three states of knowledge – discovery, invention, and innovation. Implementation science: IS, 5, 9. https://doi.org/10.1186/1748-5908-5-9ge 1

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of discoveries and inventions through directed RorD programs. However, the broad and expanding range of government agencies operating programs that claim STI missions, and the sheer volume of grant funding they are able to dispense, enables less qualified institutions and investigators to secure funding for undirected RorD projects that promise more than they can deliver. The output from those lesser institutions lacking effective corporate collaborators, simply floods publication venues with manuscripts of little value to innovation efforts, making any industry effort to search and find relevant content even more challenging. My own project team observed and advised multiple government agencies sponsoring exploratory grants for undirected RorD to universities and small businesses (Letter S), justified by expectations for beneficial socio-economic outcomes. At one point we initiated a five-year longitudinal study of grantee progress from proposed plans to actual results delivered. Our findings revealed significant barriers arising from insufficient planning, implementation, resource management as well as a lack of commitment to effective knowledge communication from the grantee to either the government sponsor or to potential corporate sector partners (Letter R).2 One shining exception to the generally dour assessment was the Trace Center, formerly at the University of Wisconsin and now University of Maryland, that over four decades had successfully provided innovations through both tacit and explicit knowledge communication to the computer-based information and communication technology (ICT) industry.3 Through a combination of undirected and directed RorD projects, the investigator had effectively conveyed information about conceptual discoveries, prototype inventions and even about emerging market requirements and opportunities. It happened that the university-based RorD program had matured in parallel to the ICT industry, and that the lead investigator had consistently demonstrated the commercial value of his projects to ICT companies. This combination helped to establish the credibility and personal contacts necessary to sustain effective inter-sector knowledge communication resulting in product and service innovations presently residing in every commercial product in the competitive global marketplace. Another worthy example is a very dedicated group of medical and rehabilitation professionals working out of the University of Toronto and a consortium of related medical centers led by the Toronto Rehabilitation Institute.4 This group engaged with Canadian corporations and community service providers decades ago, and so were also able to track the gradual evolution of product and service offerings in the field of rehabilitative and assistive technology. Their efforts, certainly facilitated by Canada’s national health care policies, sustained a high level of clinical and technological contributions to industry in their comparatively small national market, while

 https://www.researchgate.net/publication/341684888_Outcomes_from_NIDILRRsponsored_ technology_development_projects_Lessons_drawn_from_a_longitudinal_study_of_forty_cases/ stats#fullTextFileContent 3  https://trace.umd.edu 4  https://www.uhn.ca/TorontoRehab/ 2

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gradually building the world’s single largest program in rehabilitation research and practice. A small number of programs operating out of the leading medical and research university centers (e.g., Carnegie-Mellon, University of Chicago, MIT), add a few more exceptions to the general rule of meager contributions to technological innovation from the broad number of government grant and contract recipients in the field of disability and rehabilitation.

L – Logic Models at Work

If you don’t know where you are going, any road will take you there. Paraphrase of Lewis Carroll

The three knowledge generation processes and outputs culminating in technological innovation must be understood as generally sequential to allow participants to contribute their expertise in constructive ways, yet conducive to iteration made necessary by new input or changing circumstances.

The Science, Technology & Innovation (STI) domain represents intellectual achievements, societal progress and potential profits for companies and nations. Given the wide range of economic sectors and academic professional disciplines involved, it is understandable that competing interests vie for the lion’s share of credit for results. As we’ve seen with the Academic-Bureaucratic Coalition (A-BC), the greater the share of credit accrued, the greater the amount of STI-oriented funding allocated (Letters D & G). Unfortunately, the continuing scrum for credit and funding led to the convoluted language we deal with today when communicating information about new technology-oriented knowledge (Letter J).

The Benefits of Logic Models Logic Models  – briefly mentioned under Letter G  – offer a straightforward but seldom used way to sort out the actual credit for the creation of new knowledge leading to innovations. They are nothing more than a simple structure for ordering reasonable cause and effect relationships within any bounded process. A Logic Model addresses two causal elements: (1) INPUT  – the expertise and resources applied to the effort, and (2) PROCESS – the methodologies used to structure the inputs applied. A Logic Model next integrates three successive levels of effect: (1) OUTPUT – the direct results in the short-term, (2) OUTCOME – the uptake and use © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023, Corrected Publication 2023 J. P. Lane, The ABC’s of Science, Technology & Innovation (STI) Policy, https://doi.org/10.1007/978-3-031-34463-3_12

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of result by others in the mid-term, and (3) IMPACT – the long-term consequences of that uptake and use. We’ve already seen how Project Hindsight’s attempt to apply logic modeling to RorD efforts was pre-empted by the A-BC’s wholly illogical intervention (Letter H). Organizing the language of STI according to a strict logic model sequence shows just how convoluted the core terminology has become. The following Table shows the three paths of new knowledge creation in vertical columns as simple logic paths from inputs through processes to outputs, indicated by the vertical arrow. For example, the input of scientific expertise applies the methods of research to generate conceptual discovery outputs; or SRD as we might paraphrase Aristotle’s logic framework (Letter A). Similarly, we could use the acronym ERI or BPI to represent the other two sequences: Progression of three knowledge states Logic model factors Input (Expertise) Science Process (Methodology) Research Output (Knowledge State) Discovery

Engineering Development Invention

Business Production Innovation

The Problem of Illogic Models In contrast to these straightforward logic paths for terminology, the STI phrase itself conflates these three pathways by slashing diagonally across them, as indicated by the two diagonal arrows. It links one type of Input (the expertise of the science discipline), with a different type of Process (engineering development methods), and on to a different type of Output (product/service innovations), all into one confusing jumble of terms. The STI phrase goes further by substituting the word technology for development. Technology is generally defined as the application of scientific knowledge for practical purposes, so here we have another example of how STI terminology allows research to overshadow development and science to subordinate engineering (Letter S). Progression of three knowledge states Logic model factors Input (Expertise) Science Process (Methodology) Research Output (Knowledge State)

Discovery

Engineering Technology (Development) Invention

Business Production Innovation

Had national policymakers and their scholarly advisors properly aligned labels and acronyms along the three logic model paths (input, process or output) and their inter-relationships, current policies and practices would be able to clearly analyze the attributes of innovation, the roles each element plays, and the proper distribution of credit and resources to achieve the intended results:

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• Input Elements address the three primary professions: Science, Engineering & Business (SEB); • Process Elements address the three primary methods: Research, Development & Production (RDP); • Output Elements address the three knowledge states: Discovery, Invention & Innovation (DII). Of the three alternative phrases offered here, the likely focus for public policy is on Process Elements so the more accurate terminology for the field should be RDP policy rather than STI policy. Ordering all relevant terms under a Logic Model framework reveals how value-­ laden, inaccurate and unhelpful the phrase Science, Technology & Innovation has actually become, making the obvious conflation of terms difficult to unsee. Unfortunately, none of three properly aligned phrase/acronyms shown above are currently used to describe innovation policies and practices. Conflating the terms and order further complicates efforts to establish accurate metrics for each form of knowledge creation and to differentiate their relative value to innovation. For example, the lag time between the publication of a conceptual discovery in a scholarly journal and its uptake and use within a product innovation varies greatly depending on the degree to which the actors are aware of each other’s needs and opportunities. Scientists working within a corporate can expedite the communication and transfer of their discovery state knowledge to the engineers in prototype, whereas a discovery by a university-based scientist published in a scholarly journal may require long timeframes, if ever, to reach corporate engineers. As noted in Letter K, we lack an efficient system to facilitate such knowledge communication, although it is certainly feasible to create through existing information and communication networks. The ability to collect, assess and search undirected RorD project outputs could be greatly enhanced through the application of artificial intelligence, with machine learning substituting for human effort. Of course, the A-BC proponents would have to admit the limitations of the current approach before such a system could be created through a cross-sector collaboration. More crucially, they might also be concerned that such a system would document actual levels of uptake and use of discovery output by industry, revealing inconvenient truths about the Science Drives Innovation justification for undirected RorD.

Progress Milestones Across Three Knowledge States The simple three factor Logic Model can be easily expanded to include interim steps involved in progressing to and through each knowledge state, and even beyond Outputs to encompass both Outcomes and Impacts.1 A table of these steps can serve  Stone, VI & JP Lane (2012) Modeling technology innovation: How science engineering and industry methods can combine to generate beneficial socio-economic impacts. Implementation 1

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as a handy reference for planning, implementing, monitoring or reviewing evidence of progress within any project intending to generate benefits from innovations. As shown below, my project team created a such a table with the left column listing major milestones common to all three knowledge states, and subsequent three columns briefly noting how each milestone is characterized differently under each knowledge state. We created this table for our own reference, for use by investigators conducting undirected RorD in our field of practice, and in our broader attempts to articulate the problems in national STI policies and practices. Progress milestone Conceptual discovery INPUT – Identify Science – Knowledge opportunity gap in field of study Establish scope & validate novelty Proposed Solution PROCESS – Method Conclusion drawn

Review content of prior publications on topic Experimental hypothesis Scientific research

Academic discovery stated – know what OUTPUT Scholarly manuscript/ presentation of concept Legal intellectual Copyright automatic/ property protection filed External quality Peer-review of method review rigor and contribution External quality Presentation/ verification manuscript OUTCOME Discovery described in scholarly journal Audience adoption Value to Creator IMPACT

Article access, purchase Quotes, citations Advance state of science in scholarly discipline

Prototype invention Engineering – Gap between concept and tangible form Review relevant solutions and prior patent claims Inventor’s conception

Product innovation Business – Product gap in marketplace

Experimental development Practical invention claim – know how Proof of concept technology prototype

Commercial production Entrepreneurial Value proposition – know why Market rollout of tech-based product/ service

Patent Application filed

Trademark/service mark filed Trademark/Service Mark filed Symbol/term approved/ registered Innovation described in trade journal

Patent Office examines novelty and feasibility Patent issued Technology invention disclosed by Patent Office License or purchase rights Royalty payments Advance state of engineering practice

Assess market scale and similar product options Business value case

Market purchase or copy Revenue/market share Advance quality of life in society

The above table of Progress Milestones emphasizes the distinctions between the three methodologies and their parallel pathways. It serves as a simple reference for identifying the core elements required to generate each of the three knowledge

Science, 2012, 7:44.

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states, and for translating conflated terminology by sorting claims and objectives into the proper columns and rows across them.

Tracking Milestones Keeps Projects on Track Our own participation and observation suggested that every successful project had progressed through these milestones, although not necessarily in a strict sequential pattern. In many cases, professionals working through the innovation process found themselves iterating certain steps, returning to prior states, working backwards in a reverse engineering approach, or otherwise proceeding in a decidedly non-linear fashion. Through proper diligence they found prior work by others that satisfied a milestone’s requirement, they chose to postpone work gathering information from other milestones, or they back-tracked based on results derived from other milestones. No matter how convoluted the path taken, projects that successfully introduced innovative products/services into the global competitive marketplace had worked diligently to complete every milestone along the way. Those projects that relied on assumptions or shortcuts eventually encountered insurmountable barriers to progress. Skipping the completion of any milestones or assuming information without verification reduces the probability of eventually accomplishing a success commercial innovation. It is analogous to failing to follow a recipe for baking a cake. Nothing prevents a baker from deciding the egg is too expensive and therefore excluding it from the batter. But even if all other recipe elements are followed, the baker will not produce a viable cake. As noted above, there is some latitude in the milestone sequences involved in the innovation process, as in baking a cake. A baker may choose to add the egg before the milk, or to add the liquid ingredients to the powder instead of the opposite. But there are limits. One cannot add the egg after the other ingredients are baked. In the innovation process there is no warning signal when a task is not thoroughly completed because the implications and consequences only arise later in the process. For example, by not expending the time and effort to thoroughly exploring the existing market one may miss the presence of a competing product, or by not analyzing the distribution chain one may fail to account for costs that render the envisioned product too expensive to compete. Insufficient diligence reduces the probability but not the certainty of success, because there is always the element of chance. The innovation project may get lucky and have some external factor obviate the problem caused by not properly completing a milestone; as when a competing product ceases production because the parent company goes out of business. But the long odds against a lucky break are no substitute for diligence when time, money and opportunity are all in play and at risk.

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Projects publicly funded to conduct undirected RorD for the expressed purpose of generating technological innovations within a specific market context to meet a defined societal need, should eventually be able to check-off their thorough completion of all the milestones within and across the three knowledge states. Government sponsors and the recipients of public funding need to know, acknowledge and accept the commitment of time and resources necessary to properly complete the entire innovation process, and nations need valid metrics that hold such projects accountable (Letter Q).

M – Multiplier Effect

The scientists of today think deeply instead of clearly. One must be sane to think clearly, but one can think deeply and be quite insane. Nikola Tesla

The value of a sum does not increase as a function of being distributed across multiple recipients, nor as a result of being divided among recipients, nor does it increase as a function of successive distributions over time. The value of the sum remains that of the original sum.

What error is easier to grasp and correct than a simple mathematical formula that does not add up? Apparently, it is this myth of a multiplier effect from the allocation of public funds to some local agency. According to the Academic-Bureaucratic Coalition (A-BC) expending public money on undirected RorD not only benefits society in general, but it also financially enriches those living in the geographic region around the recipient organization. This claim of regional economic growth is typically reserved for proponents of gambling casinos and corporate relocation tax breaks who reap short-term benefits by promising greater future returns to the community.

A Promise of Future Benefit At a national level this is known as trickle-down economics where the wealthy and powerful are enriched today while promising to enrich others tomorrow. I call this the J. Welllington Wimpy scheme, where that character in classic Popeye cartoons would approach anyone with the pitch, ‘I will gladly pay you Tuesday, for a hamburger today.’ Of course, experience and data show that the financial benefit is overwhelmingly limited to the recipients of the initial cash infusion (Wimpy eats today’s hamburger), while the promised future benefits (the Tuesday payday) to the broader audience that doesn’t materialize is soon parsed, qualified and eventually forgotten. © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023, Corrected Publication 2023 J. P. Lane, The ABC’s of Science, Technology & Innovation (STI) Policy, https://doi.org/10.1007/978-3-031-34463-3_13

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None-the-less, the A-BC has even assigned metrics to this unfounded assertion. The prestigious Association of American Medical Colleges (AAMC) commissions a continuing series of studies that contain some version of the economic multiplier effect. Early publications contained direct assertions regarding the return on investment in university-based medical research: The Tripp Umbach report shows that federal- and state-funded research received by medical schools and teaching hospitals in 2009 added close to $45 billion to the U.S. economy … While NIH funding is critical, the data show that for every dollar invested in research at medical school and teaching hospitals, $2.60 of economic activity occurs.1

In order to sell the public on the notion that investing public money into undirected RorD generates a multiple in return, the report’s calculation of measurable economic benefits was compelled to include both quantitative and qualitative sums: The [Tripp Umbach] report indicates that the federal and state research funding received by medical schools and teaching hospitals directly supports nearly 300,000 full-time mostly high-skilled, jobs, or about 1 in every 500 jobs in the United States. While the direct employment impact is significant, the actual extent of the impact is considerably larger when one considers the business volume generated. Those same physicians and scientists who conduct life-saving and life-extending medical research shop for groceries, go to restaurants, rent or own homes, and contribute to all sectors of the local and national economy.2

If the 1 in 500 skilled jobs in the U.S. are supported by public funding of medical schools at universities and affiliated teaching hospitals, then the direct economic impact is no more or less beneficial to a region than that resulting from public funding of employment in other public or non-profit organization such as utilities, military bases or social service programs. The economic impact is obvious and equivalent yet it is presented here as something uniquely arising from public funding for medical research.

From Addition to Multiplication The claim of additional indirect economic impact – as a multiplier of the initial funding – actually borders on the incredible because of the way this report contorts its characterization of the funding path. It describes the economic impact as resulting from increases in the institution’s internal productivity beyond the institution’s actual distribution of public funds. It co-mingles the allocation of the public funds to the institution with the institution’s subsequent expenditure of those same public funds: For the purposes of this report, “economic impact” includes both the direct and indirect business volume generated by an institution from public state and federal research funding. Direct impact includes items such as institutional spending, employee spending, and spend-

 The Economic Impact of Publicly Funded Research Conducted by AAMC-Member Medical Schools and Teaching Hospitals A Report Prepared for the AAMC by Tripp Umbach November 2011. 2  Ibid. 1

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ing by visitors. The indirect impact, also known as the multiplier effect, results from the re-spending of dollars generated directly by the institution.3

The report itself casually admits that the multiplier effect is nothing more than double/triple counting; what it euphemistically calls the re-spending of dollars. According to the report’s analysis, the public funding can be repeatedly summed each time it changes hands, as though it is newly minted money springing forth from the institution to benefit the region. Although entirely false, this characterization serves as further justification for local leaders to encourage elected officials to continue the flow of public funding to medical research institutions. More recent versions of the AAMC reports have tempered these claims by presenting them in broader terms of economic benefit in relation to overall institutional member expenditures: According to RTI International’s research using data from 2019, the medical schools and teaching hospitals represented by the AAMC contributed more than $728 billion in gross domestic product (GDP). This amount translates to about 3.2% of the U.S. GDP, making the economic impact of these medical schools and teaching hospitals comparable in size to other important sectors such as transportation and warehousing, and accommodation and food services. On a per capita basis, these medical schools and teaching hospitals generate approximately $2,218 in economic impact per person.4

Elements of the Academic-Bureaucratic Coalition (A-BC) in the US were not alone in claiming significant returns from public investment in scientific research. In the early 1980’s the European Union had created a fund to support collaborative member R&D projects through the EU Framework Programme.5 Statistics published in reports of impact assessment made even more aggressive claims about the economic added value – the vaunted multiplier effect — created by funding science at the level of the European Union. These reports state that €1 of EU Framework Programme funding leads to an increase in industry added value of between €7 and €14.6 As in the US, the EU Framework Programmes expanded number and nature of government agencies administering the resources allocated: As the FP evolved, the instruments used for its implementation diversified. The initial grants for transnational cooperative research projects were complemented, inter alia, by the development of public-public and public-private partnerships, the establishment of new structures such as the European Research Council (ERC) and the European Institute for Innovation and Technology (EIT), specific instruments for SME support, and individual mobility grants. With Horizon 2020 the FP became a programme of programmes covering all aspects of the innovation process and implementing various EU policies. Complexity in the management and implementation of the FP brought about a new level of fragmentation at EU level regarding the funding of innovation-related activities.7

 Ibid.  https://www.aamc.org/media/61256/download?attachment 5  https://www.europarl.europa.eu/RegData/etudes/IDAN/2017/608697/EPRS_IDA(2017)608697_EN.pdf 6  European Commission (2011). Impact Assessment Accompanying the Communication from the Commission ‘Horizon 2020  – The Framework Programme for Research and Innovation’. Commission Staff Working Paper. 7  Reillon, Vincent (2017). EU Framework Programmes for Research and Innovation. https://www. europarl.europa.eu/RegData/etudes/IDAN/2017/608697/EPRS_IDA(2017)608697_EN.pdf 3 4

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Fortunately, the European Commission is gradually moving toward a more realistic appreciation for the challenge of attributing economic impact from public investment in scientific research: Defining impact pathways for research and innovation programmes towards economic impacts and corresponding metrics as indicators to track respective progress provides numerous challenges. A major cause for these challenges is the complexity of innovation processes. Theoretical models that aim to explain this complexity have challenged the older linear thinking. In the linear model, innovation (and respective economic impacts) is seen as the consequence of a linear sequence of steps starting with basic research, moving onto applied research and eventually to product development, market introduction and distribution. Newer models underline that innovation is more complex and interactive, which has considerable implications for the design of modern evaluation systems.8

The various reports noted above don’t typically reference sources or include the many assumptions or detailed calculations in footnotes. Instead, the vaguely referenced estimates are rolled out in special reports and eventually become accepted as facts to be cited among those promoting the benefits of the A-BC to local, regional and national economies. A 2016 review and synthesis of prior reports recounted the complexity – and general futility – of attempting to quantity the return of investment in scientific research, let alone following the expenditures out to some multiplier in the broader economy.9 One can readily perceive the logical flaws in the Multiplier Effect in the context of STI policies by following the government’s allocation of a single dollar to a research university. The first point to acknowledge is that this dollar sitting in the government’s treasury was collected from taxes paid by individuals and corporations who through their own efforts had generated and reported the creation of new net wealth in the private for-profit sector (Letter W). That means that the public funding available for allocation had been collected by the government from prior productivity within the private sector. Even the income taxes paid by public and non-profit sector employees represent a portion of prior tax monies allocated to their organizations, through the government, collected from these same private sector individuals and companies creating new net wealth from commercial activity.

From Multiplication to Division STI polices expend funds in the following manner. A single dollar in the government treasury is first allocated by Congress to some government agency tasked with generating innovations either through directed or undirected RorD.  That

 European Commission, Directorate-General for Research and Innovation, Flecha, R., Radauer, A., Besselaar, P. (2018). Monitoring the impact of EU Framework Programmes: expert report, Publications Office. https://data.europa.eu/doi/10.2777/518781 9  Preuss, Michael (2016). Return on Investment and Grants: A review of present understandings and recommendations for change. Research Management Review. 21 (1). 8

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government agency allocates the same dollar to an internal program administering the innovation-oriented projects – while additional public dollars support the agency’s career government employees and their relatively permanent bureaucratic infrastructure. The agency’s extramural RorD program – after additional expenses for soliciting and reviewing proposals – sends the same single dollar to an organization qualified to receive the funding, in order to pay the actual costs involving in completing the proposed scope of work. Qualifying organizations fall within those categories discussed under Letter G (Intramural, University, FFRDC, Corporate or other Non-Profits). Public money is not sent to an individual investigator because the host organization is the fiduciary agent responsible for ensuring the public funds are expended as proposed. The host organization typically receives additional public funding to pay for indirect expenses associated with the project, called Facilities and Administrative (F&A) costs. Many established recipient organizations have pre-negotiated F&A rates calculated as a percentage of the direct expenses. These rates can range from between 10% and 25% for smaller organizations to beyond 60% for the most prestigious research universities and affiliated hospitals. In actual economic terms, the multiplier effect works in a manner opposite of that described under the paradigm; awards for RorD projects multiply expenses not revenue. In this example, the allocation of the single dollar in direct expense costs the public treasure many additional dollars to pay for the political budgeting, sponsor agency administration of program and project level disbursement, and the host organization’s F&A expenses. The cost of delivering the single dollar to the recipient accrues the expenditure of many additional public dollars. The multiplier effect is in essence the expansion of the bureaucratic systems in the political, government and academic sectors with no basis for claiming a multiplier in public benefit to any locality, region or nation. The A-BC beneficiaries collaborate to sustain the system because they all share in the resulting revenues (Letter C). Once the single dollar of public money is received by the RorD project’s lead investigator, the cascade of actual expenditures begins. But these expenditures represent a divisional rather than a multiplier effect. The single grant dollar is distributed across all the direct costs incurred by the project, with some pennies allocated to staff salaries and fringe benefits, materials and supplies, publication fees, conference registration and travel, and/or for consultants and contractors. The pennies allocated to each of these categories are a subset of the 100 pennies in the original dollar. The recipients in each category then re-spend their share of the same 100 pennies for their professional or personal expenses within the own community. Subsequent rounds of recipients continue re-distributing their share of the pennies. But that continuing cascade of spending involves the same 100 pennies in public funds originally allocated by Congress. The successive rounds of spending do generate more administrative duties involving payroll processing, fringe benefit systems and income tax reporting, but they don’t create additional funding in the form of new net wealth to pay for those activities.

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Organic Versus Artificial Growth One further extension of the multiplier effect is the belief that new public funding attracts other economic activity such as when corporations decide to expend their own resources to locate their facilities in proximity to a university or Federal lab receiving the funds. This belief points to economic growth in regions like California’s Silicon Valley and Route 128 in Massachusetts. Other states and regions argue that they can repeat such economic growth if only Congress first invests heavily in their envisioned area of technology specialization. However, the two cited examples largely arose from the serendipitous effects of their region’s corporate expertise, capacity and timing, without requiring any specific and deliberate investment of public funding. One cannot artificially re-create such serendipity no matter how much funding is expended. The late Senator Robert Byrd’s efforts to make West Virginia the epicenter for the nation’s technology transfer efforts demonstrated that one cannot artificially impose such a multiplier effect within a region. Most hubs of high technology such as the Research Triangle grow through a self-fulfilling process, where the continuous flow of public funding attracts public and private organizations seeking to gain a share of those public funds. The two quantifiable multiplier effects resulting from STI policies and practices involving undirected RorD programs, are the continued growth in national debt to fund the ever-expanding budgets of the public and non-profit sectors, and the concurrent increasing burden on taxpaying private corporations and individuals to sustain that growth. Rationale thought should be sufficient to dispel this Multiplier Effect myth, yet the claims persist unchallenged. Worse, the myth’s success at the level of national governments has spread to state-level reports such as this one from the Illinois Science and Technology Coalition: http://www.illinoisinnovation.com/science-­ technology-­roadmap). Such reports purport to describe the process for harnessing public investment and driving future innovation as some kind of roadmap. As if the elements of innovation are fixed and the outcome pre-ordained so one merely needs to navigate from Point A to Point B to arrive at the desired innovation. It all amounts to the same formula of a sales pitch made on behalf of the A-BC as a special interest group, to capture a larger regional/state share of the public revenues collected and held for redistribution at the national level. The only economic advantage realized is when a state/region manages to attract more public funding than the same state/region pays in taxes, which is nothing more than a redistribution of existing wealth from within the pot of available national funds. This is a common occurrence within the US, where the citizens and corporations in some states pay far more in taxes to the Federal government than they receive back (givers), while other states pay in far less than they in return (takers). The imbalance most obvious in states where public research universities, military installations, and government agencies – all tax revenue takers – exceed the number and size of private sector corporations  – the tax revenue givers. The disparity

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becomes politically sensitive when the taker states brag about enjoying lower taxation rates than those rates in the giver states. Historical data and current circumstances both handily dismiss the claimed beneficial economic impacts. If a multiplier effect of any magnitude actually existed, the preceding five decades of public funding allocated to undirected RorD conducted by research universities should have made them self-sufficient by the present time. Beyond that, the supposed innovations spun off from their decades of undirected RorD projects should have also yielded sufficient new net wealth in the form of license and sales revenue to support future RorD operations. Of course, this has not happened. Instead, the same academic institutions return annually to the same government agencies for new funding, while the lobbyists return to the halls of Congress armed with the dual fallacies of the Linear Model of Innovation for society and the benefits of the economic multiplier effect within their home region.

N – National Science Foundation

One can talk good and shower down roses, but it’s the receiver that has to walk through the thorns, and all its false expectations. Anthony Liccione

The lead US agency sponsoring science, technology, engineering and mathematics programs can rightly and proudly claim responsibility for discovery and invention outputs, but instead overreaches by also claiming that its funding inputs are a form of innovation output. What we now call the National Science Foundation didn’t yet exist when in 1945 Vannevar Bush’s famous report entitled, Science: The Endless Frontier called for the creation of a National Research Foundation, dedicated to sponsoring undirected research across natural science disciplines for the long-term benefit of society. Despite being an engineer and witnessing the the role of all methods and sectors in WWII innovations, Dr. Bush’s report title and general theme focused almost exclusively on the role of university-based scientific research. It did not address in any detail the role of government funding in the transform conceptual discoveries from scientific research into inventions through engineering development methods, nor the further transformation into innovative products/services through commercial production in the private sector (Letter B).

Scientific Research as a National Priority The sustained primacy of science and research methods over engineering and development methods permeating national STI policy to this day (Letter S), was evident early in the US government’s language and organization of agency support. The National Science Foundation (NSF) was established in 1950 with the explicit mission of conducting undirected research across the science and engineering disciplines for

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023, Corrected Publication 2023 J. P. Lane, The ABC’s of Science, Technology & Innovation (STI) Policy, https://doi.org/10.1007/978-3-031-34463-3_14

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the future betterment of society.1 The term science, not the phrase science and engineering, and the term research, not the phrase research and development, were the operative focus. Further, the NSF was organized into a series of directorates, each focused on a specific scientific discipline. While research on engineering topics were included as authorized activities under some of these science-focused directorates, another thirty years passed before the NSF established its first official Engineering Directorate in 1981.2 Even then, the new Engineering Directorate’s mission statement showed that to operate within the nation’s premiere scientific research organization, those engineers who wished to administer the agency’s programs or to pursue grant funding would have to focus on the exploration and discovery attributes of undirected research within engineering disciplines, not on the design, build and test attributes of prototype invention development. NSF was clearly organized to support curiosity-driven scholarship rather than application-­oriented demonstration. Despite having the phrase science and engineering in the NSF’s original program description, the omission of engineering in the agency’s title continues the now seventy-year tradition of branding all aspects of the agency with the term science. However, efforts to justify expanding annual budgets under the Academic-­ Bureaucratic Coalition (A-BC) eventually required NSF to extend their generic claims of future societal benefits from their sponsored undirected RorD, to include the more immediate and specific claims of technological innovations. Perhaps NSF was simply calling discovery and/or invention outputs innovations as a public relations strategy, because we’ve firmly established their differences through all the preceding chapters so there is no validity in such a claim. No matter the motivation for linking the outputs from scientific research activity to innovations, the NSF continued to subordinated to critical role of engineering development to that of scientific research in the process of generating product/service innovations. This practice and its implications are addressed under Letter S.

The Science of Science and Innovation Policy Government agencies should be careful about having their claims exceed their capabilities. The general public through their elected officials does occasionally call for accountability from government agencies and programs supported through taxpayer funding, such as we recounted in the 1960s example of Project Hindsight versus TRACES (Letter H). More recently, the NSF established a new program in 2009 to formally establish the links between undirected RorD and societal benefits. The Science of Science and Innovation Policy (SciSIP) program’s mission is as follows: The SciSIP program underwrites fundamental research that creates new explanatory models, analytic tools and datasets designed to inform the nation’s public and private sectors

 https://www.nsf.gov/about/history/nsf50/nsf8816.jsp  https://www.nsf.gov/eng/history.jsp

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about the processes through which investments in science and engineering (S&E) research are transformed into social and economic outcomes.3

During the SciSIP program’s formative period, I was among those invited to comment on the NSF’s approach to articulating the role of scientific research in transforming public funding into innovations with societal benefits. One quickly aborted approach was an NSF sponsored website announcing the public’s ability to see where innovation is happening. The website contained a navigable map of the USA through which users could drill down to the level of states, regions and communities. But instead of identifying geographic sites where innovative technology-based products and services had originated, it simply displayed the amount of funding NSF had allocated to each area during the prior year. The map essentially equated NSF’s front-end allocation of public revenues with back-end innovation. The fallacy here is apparent to anyone with a basic understanding of logic models (Letter L). I immediately commented that innovations in the context of socio-economic benefits are defined as commercial market OUTCOMES that result from an extensive and complex process. In contrast the allocation of funding from NSF or any other source to initiate new projects is among the INPUTS that may or may not be related to innovation processes, outputs and outcomes. Emphasizing the geographic distribution of NSF’s funding appealed to politicians who enjoy claiming credit for delivering both funding and results to constituents, and it bolstered the Linear Model of Innovation claims made by the A-BC. But the funding allocation metrics shown bore no relation to the generation of innovations, per se. The site’s promotional tagline was removed soon after NSF received such pointed feedback about that fundamental conflict between rhetoric and reality (Letter R). The SciSIP programs mission seemed to offer a great opportunity to clarify and resolve all the STI policy problems already described in the prior chapters. To that end, I submitted a proposal to take the first and simplest step; clarify the three states of knowledge and their related terminology following Aristotle’s original concepts and definitions (Letter A). The rationale was described in detail and the approach even involved convening university scholars and government officials to ensure the results could withstand scrutiny from STI policymakers and the A-BC advocates. The NSF’s proposal reviewers dismissed my proposed analysis out of hand, and discouraged further attempts by giving by far the lowest scores I had ever received. Keep in mind we are talking here about refining the application of methods and the specificity of terminology, two hallmark of rigorous scientific inquiry and validation. In that context the reviewer comments were astounding. One wrote, I marvel at the facility and variety offered by the English language and see no reason to restrict the use of terms. Would any scholar suggest we allow synonyms for elements in the Periodic Table, or apply any established nomenclature haphazardly? After receiving these review comments, I re-visited the SciSIP’s mission statement, now recognizing that there was no room in the language to scrutinize if government investment in science and engineering projects contributed to innovation, but only  https://www.nsf.gov/pubs/2007/nsf07547/nsf07547.htm

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to seek ways to demonstrate how they did so. This seemed very much in the tradition of confirmation bias described in the NSF-sponsored TRACES study. Facility and variety of the English language indeed. The SCISIP program was re-branded in 2019 as The Science of Science: Communication and Impact (SoS:DCI), as a new angle to more effectively promote the societal value of scientific research to policymakers.4 The primary motivation was summarized as: [The potential] adverse impact upon major science policy decisions, including those relating to research investments and funding levels…These efforts … are critical to maintaining public trust in science and to pushing back against the growing antiscience [sic] movement.5

The notion of an anti-science movement is a blanket reference applied to anyone who challenges the accepted wisdom regarding societal impacts, or earnestly seeks data based evidence of its presence.

Subjective Analysis Yields Desired Conclusions Despite the tenuous logic and tortured terminology NSF used to link undirected RorD to innovation outcomes, the A-BC succeeds in selling Congress and the general public on the preposition that societal benefit increases in proportion to the public funding allocated. Once those groups accept that Science Drives Innovation, then it is a short leap for A-BC supporters to claim that more funding generates more innovation. And who would oppose that? Given that natural and obvious relationship between cause and effect, when asked sponsors of undirected RorD projects should be able to demonstrate evidence of their contributions to society. However, A-BC advocates cleverly placed a curve in their characterization of the road to innovation so that the destination is always just around the bend; characterized as the Wimpy scheme under Letter M. The A-BC is uninterested in efforts to demonstrate a causal relationship between undirected RorD and socio-economic benefits. When challenged, scholars and policymakers conveniently take the position that it is impossible to directly link the outputs from undirected RorD to beneficial socio-economic impacts, because of the long and often serendipitous path of passive diffusion from the academic sector to potential adopters among practitioners. However, they helpfully suggest a valid surrogate measure for societal benefit is the level and rate of publication and citation for scholarly journal articles. This is a convention of convenience because publication and citation are the sine qua non metrics for any scholar’s career. Yet they offer no clear relationship to adoption of published discoveries and their subsequent  National Science Foundation (2020). Frequently asked questions about SBE’s science of science programs, NSF-20-128. https://www.nsf.gov/pubs/2020/nsf20128/nsf20128.jsp#ql 5  Smith, T.L. (2022). Demonstrating the value of government investment in science: Developing a data framework to improve science policy. Harvard Data Science Review, 4(2). 4

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transformation into product/service innovations. It is tantamount to men convincing their wives that an indirect measure of their success as a husband and father is the number of hours spent watching televised sporting events. Earning credit towards tenure and promotion while taking credit for society’s progress make scholarly publications a win-win for faculty and their host institutions alike. But not necessarily in benefits for society. The proposition that publications are a surrogate measure for innovation lacks evidence. But is there even a link between increasing funding for undirected RorD and the level and rate of scholarly publications? The few and infrequently commissioned studies say no, as this and other related myths are discussed in the book entitled, Weapons of Math Destruction.6 Here is one example. The U.S. National Science Foundation commissioned the non-profit think-tank SRI International to analyze the historical rate of U.S. scientific publication activity over a fifteen-year period of dramatic increases in funding (1988–2003). The SRI analysis compared the level of funding in any given year to the number and rate of publications three years later, in order to account for the expected time lag between funding and publication of results. We showed those steps in the milestone table under Letter L. SRI International submitted a draft report of the results to NSF in 2006, but NSF delayed the public release of its volatile and counter-myth findings until November, 2010.7 The NSF’s long delayed report’s Fig. 1 chart (below) and following conclusion summarized the results: … the absolute number of science and engineering (S&E) articles published by U.S. based scientists in the world’s major peer reviewed journals plateaued, while resource inputs – funds and personal – kept increasing (Fig. 14.1).

The nearly two-hundred-page long SRI report contains another 31 figures and 10 Appendices all dense with statistical analyses that deconstruct the data in every conceivable manner. But none of these sub-analyses detract from Fig. 14.1’s clear indictment of the mythical link between funding levels and publication levels, which casts further doubt on the publications as a surrogate for innovations. These results should not be surprising to anyone who understands how undirected RorD projects secure funding and are then conducted. In reality, three key factors account for this disparity between level of funding and publication productivity: (1) How government programs and priorities are structured; (2) How the award process works; (3) Finite number of grant recipients qualified to perform research of sufficient rigor and relevance for publication in scholarly journals.

 O’Neil, Cathy (2016) Weapons of Math Destruction. Crown Books. ISBN-100553418815  http://www.nsf.gov/statistics/srs11201/pdf/srs11201.pdf

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Fig. 14.1  Comparison of relatively flat publication output, to growth in both R&D expenditures and R&D workforce: 1988–2003

The Process of Sponsoring Scientific Research Every government agency sponsoring undirected RorD has an administrative structure and hierarchy of program/project managers. The structure allows for the funding of various types of awards. Some awards are made to fund a single project, while others involve center-level funding for a cluster of projects within a related

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topic. Different award types involve various time frames of one, three or even five-­ year duration, and contain different amounts from thousands to many millions of dollars. Although future year funding is always contingent on Congressional allocations to each agency. Awards for undirected RorD projects are usually in the form of exploratory grants where the investigator determines the course of study. As previously noted, contracts and cooperative agreements are the standard form for directed RorD projects where the agency defines deliverables and even plays a role in guiding the project (Letter H). Some types of grant awards are dedicated to early-career professionals while others require more senior-level scientists. The annual funding level within each government program determines the range of award types, and the number of awards made within each type. However, we’ve already shown on funding levels usually increase and rarely decrease, so changes in program funding levels result more from political choices than funding levels (Letters D and G). University faculty and Federal Lab staff learn to closely follow the award announcements made by agency’s funding their line of RorD activity. Some award types are field-initiated, that is open to any and all ideas submitted by investigators, while others are announced as funding projects within a very specific topic area. In the latter case, the program/project officers within the funding agency have wide latitude in setting the agenda for topics to be studied. A program/project officer may have expertise and high interest in a particular topic area, either because it is considered promising or because it is considered neglected. These managers are often scholars with their own research track record, which in turn may influence their decision to encourage submissions on one topic versus another. The implication for funding levels is that each agency’s program structure and each program manager’s topic priorities set opportunities and constraints for the nation’s undirected RorD agenda.

A System Designed for Long-Term Priorities Agencies sponsoring RorD programs are not structured to accommodate the rapid funding increases or decreases in those programs. Each program requires a team of people to prepare and manage the annual competition. Pre-award actions include prepare/revise the application process and package, solicit and collect the proposals, vet submissions for compliance, convene or recruit the review panels, oversee proposal critiques and scoring, and forward funding decisions internally. Award activity shifts to engaging recipients and host organizations, reconciling review comments with all applicants, where appropriate revising proposed scope of work and conducting site visits, and initiating disbursement of funds and monitoring of project activity. In addition, the agency’s program team is fielding information requests from award recipients and their organizations, requests for additional feedback from unfunded applicants or their political representatives, and completing all agency-­ level administrative and regulatory reporting requirements.

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It is not feasible for a government agency to expand its range of programs nor increase its staff of career employees in response to a temporary increase in funding – no matter how large or how long the duration. Further, the entire annual budget must still be expended in the same calendar year it is allocated, so there is no option to save newly allocated funds for future competitions. Instead, temporary revenue increases the total dollars that must be expended by that program within the current budget year. And the additional activity must still be administered by the same finite number of program staff. This only leaves two feasible options for disbursing the extra funds: either increase the dollar amount available to current award recipients, or fund an additional number of previously reviewed proposals that were deemed not qualified for funding. Under the first option, currently funded projects receive supplemental funding. While good news for them and their host institutions that receive another infusion of additional funds for their facilities and administration expenses (Letter M), the additional funding can only cause a marginal increase in the project’s productivity because there is already a set number of actively engaged scholars and graduate students who are already engaged in the project’s objectives, tasks and timelines. The second option raises an intriguing question that the scientific community does not seem interested in answering. That is, all the proposals with the highest scores  – those deemed to be most meritorious through peer review  – will have already received their full funding allocation from the sponsor’s baseline budget. With the best proposals funded the surplus funding would go to proposals of lower overall quality. Lower quality proposal yields lower quality work which translates into lower quality manuscripts less likely to pass peer review for publication. The combination of both options explains why the infusion of supplemental funding into undirected RorD programs does not result in more publications, let alone contributions to innovation outcomes. Rather than periodically increasing a government agency’s budget for political expedience, a more deliberate and comprehensive approach would be to establish long-term programs designed to attract and engage teams of scientists, engineers and companies, for the purpose of addressing validated societal needs for technology-based products and services, within clearly defined features, functions and performance parameters. Government would supply the front-end funding and provide the back-end market for the resulting products and services, to then be distributed based on need, as discussed further in the following chapter (Letter O).

The Potential Role for Objective Inquiry The NSF plays a vital role in generating conceptual discoveries through undirected RorD programs. STI claims regarding linkages between resource inputs and innovation outputs, between discovery outputs and innovation output, and between publication levels and innovation are all suspect because they lack evidence. Such evidence would result from the SciSIP program conducting rigorous analyses which

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would begin by organizing and classifying the critical variables within a logical model framework (Letter L). There is no apparent interest or will to conduct such analyses, mostly because the A-BC benefits from sustaining ambiguity in the innovation process at the front line of vague terminology. The book Innovation Economics: The Race for Global Advantage,8 proposed the creation of a National Innovation Foundation as a parallel government entity to the NSF. The idea was to channel all innovation-oriented government sponsored programs into a single overarching organization, so that the promotion and support for innovation is treated as a central component of US national economic policy. When discussing the idea with the book’s co-author shortly after publication, I pointed out that there were no safeguards in the proposed plan to prevent the A-BC from subsuming the proposed new tranche of funding under the same old Science Drives Innovation paradigm, especially since the concept included continued emphasis on funding for scientific research. He agreed that it was a fair point and was the most likely outcome should the plan gain ever support. There remains no National Innovation Foundation to the present day.

 Atkinson, R. and Ezell, S. (2012) Innovation Economics: The Race for Global Advantage, Yale University Press, London. 8

O – Orphan Product Approach

But our energy woes are in many ways the result of classic market failures that can only be addressed through collective action, and government is the vehicle for collective action in a democracy. Sherwood Boehlert

When government takes an active role in meeting socio-economic needs for technological innovation that lack sufficient free market incentives, the program mechanisms employed must align resources and incentives across all three knowledge states to achieve the intended outcomes and beneficial impacts. Society relies on the industrial sector to supply product and service innovations that meet demands through the free market system. Corporations identify opportunities to deliver a new product or service at a price that allows them to collect a profit margin – revenue in excess of all costs. With the business case established corporations are willing to expend their own capital and labor to implement the elements of commercial production. By investing their own resources private corporations are also will to assume the risk of failure. If they do not generate the expected profit employees may lose their jobs, owners may lose revenue and the corporate entity could cease operations. This downside risk is unique to the industrial sector because the academic and government sectors do not face that same threat of extinction following bad decisions or poor project implementation (Letter I).

Industry Underwrites Research and Development Under Letter D we explained how using the acronym R&D in STI policy discussions obfuscates critical distinctions between scientific research and engineering development, and between directed RorD programs involving industry, and undirected RorD programs independent of industry. Despite these problems, the chart on the following page shows that US industry’s share of overall expenditures for all © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023, Corrected Publication 2023 J. P. Lane, The ABC’s of Science, Technology & Innovation (STI) Policy, https://doi.org/10.1007/978-3-031-34463-3_15

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RorD conducted in the nation has grown at an exponential rate over the past several decades.1 Despite this high level of investment, or perhaps because of it, the potential downside of losing money rather than making a profit makes corporate decision makers averse to excessive risk. And level of risk increases with uncertainty. They will typically not pursue an opportunity that does not demonstrate a high probability of success and financial gain. Pursuing an entirely new line of products or services represents an increased risk because that decision may require substantial investments in machine tooling, raw materials, staff training and/or new modes of sales/marketing, inventory management and delivery. Companies prefer to make incremental improvements to already successful internal offerings or create new products/services based on their internal expertise and manufacturing capabilities. They will typically not pursue an opportunity that does not demonstrate a high probability of success and financial gain. The default approach taken by established company’s toward truly innovate products or services that by definition lack a clearly defined market and/or quantifiable return on investment, is to allow others to bear the risk. One option for deferring such risk is to monitor the market introduction of truly innovative offerings to small to medium sized enterprises (SME’s). If and when the new offering demonstrates market viability, the established company can move to acquire the SME, and assume management or retaining the SME’s management under specified timeframes and deliverables. The other option for deferring risk is to have a third party – typically a public government or private non-profit entity – assume the cost of the front-end investment in exchange for some future societal benefit or financial return. The US Food and Drug Administration (FDA) formally assumed this intermediary risk through a the Orphan Drug Act.2 Through this act the FDA supports the development and evaluation of new drugs or biological products designed to prevent, diagnose or treat a rare disease or condition. For my purpose here, the term rare is critical because it reflects a small, elusive or poorly defined market.3 Such rare markets are not limited to medical or health topics, but represent any markets that carry the financial investment and return uncertainties that connote risk to a corporation. Therefore, I use the term orphan product and orphan market throughout to reflect those circumstances whereby a diligent company requires external supports and incentives in order to commit internal resources toward a new product or service.

 https://www.nae.edu/70979.aspx  https://www.congress.gov/bill/97th-congress/house-bill/5238 3  h t t p s : / / w w w. f d a . g ov / i n d u s t r y / m e d i c a l - p r o d u c t s - r a r e - d i s e a s e s - a n d - c o n d i t i o n s / designating-orphan-product-drugs-and-biological-products 1 2

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Industry Performs Most Development Activity The following chart shows where the US government has allocated public funding for directed RorD projects over several decades.4 The chart’s title is, Federal Development Funding by Performer, so it actually presents funding for engineering development projects – a sub-category of the Federal government’s more general R&D classification. So, this chart is as close as US Federal government reporting comes to delineating funding for directed development efforts focused on the short-­ term production and delivery of innovative products or services. We can clearly see that when national needs are defined in terms of requirements and expect delivery of new technology-based products within established timeframes, the US government sends the majority of project funding to the industrial sector. Only a small portion of directed RorD funds is ever allocated to the government’s intramural Federal Laboratory system (Letter F), and even a smaller portion is ever allocated to universities or other non-profits. The chart shows several long-wave cycles of government investment which parallel historical periods of national needs for the short-term delivery of technology-based product innovations, including the 1960s Space Race, the Cold War through the 1980s, and the declared War on Terror in the  https://www.nae.edu/70979.aspx

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early 2000s. When government is serious about generating innovations, it by-passes standard STI policies and relies on industry to deliver.

When the Market Opportunity Is Too Large or Too Small Opportunities to develop a new or improved product/service offering that are not pursued by corporations are labeled as market failures when they fail to meet key business case criteria such market size, core competence/capability or return on investment. Companies typically do not pursue them because the risk exceeds the potential reward. For example, companies are willing to bear the high costs and long timeframes for developing new pharmaceuticals for mainstream markets because the resulting drug will sell at a price and in a quantity to generate sufficient future revenue. However, demand for what the FDA defines as orphan drugs are not independently pursued because the drug cannot sell at prices and quantities sufficient to justify the up-front investment. The market criteria fail to justify the cost and risk involved. One could argue that Big Pharma has the necessary resources to underwrite such drugs even at a loss, but that approach runs counter to the fiduciary responsibility of corporate managers to generate revenue and profit for their shareholders. Cases of market failure in medicine or in any other field must be address by governments or philanthropic agencies willing to carry the cost and assume financial loss or they are not addressed at all. Note that third-party investment does not

The Role of Procurement Contracts in Orphan Products

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guarantee that the product/service will achieve successful market entry or penetration, because the sponsored company’s RorD may prove inadequate to address the requirements, or their production capabilities may fail to deliver an outcome meeting the performance specifications. A corollary form of market failure is where the financial return is too small, is instances where the required investment in personnel and materials is too large for any one company to undertake, and/or the development timeframe is so long that the company will be unable to sustain their operations long enough to realize a return on their investment. The production of major military equipment (e.g., aircraft carriers) is a market failure based on the required capital investment and extended timeframe. Although nations with naval fleets could purchase the finished product, no company or consortium can afford to assume the risk for such a massive up-front investment. Instead, these over-sized market failures required governments to assume the front-end cost and back-end risk before companies are willing to commit their internal capabilities. When a market opportunity is too large or too small to meet standard business case criteria, but that market failure is deemed important to society, national governments invoke STI-oriented policies to intervene through directed RorD projects. Governments provide the missing market incentives in the form of front-end financial investment and by becoming the primary customer for the finished product or service. Governments have two different approaches for addressing market failures depending on their expectations regarding the desired outputs from the directed RorD activity: (1) Procurement Contracts and (2) Exploratory Grants.

The Role of Procurement Contracts in Orphan Products In this approach the government applies public funding to artificially create a viable market opportunity by providing the front-end funding for the necessary directed RorD – thus saving companies from the investment risk and cost – and providing a provisional order for some predetermined quantity of the finished product. Government procurement contracts may be established through a competitive bidding process involving single corporations or some collaborating consortia, or may be let to a single source without competition when justifiable. The terms set forth in a contract are binding on all participants and are enforceable through penalties. The procurement contract approach is typically used when the new product’s technical specifications and performance requirements can be clearly defined, and where progress milestones and target timeframes for deliverables can be established. This approach to subsidizing market failures works equally well when addressing the needs of small groups (e.g., drugs for rare medical conditions) or when serving the perceived needs of an entire nation (e.g., military hardware, space exploration or energy systems). The procurement contract approach satisfies the private corporation’s incentives to produce tangible product outputs under specified terms, while minimizing risks and guaranteeing profit.

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The Role of Exploratory Grants in Orphan Products In this second approach to addressing market failures of national importance, the government allocates funding for directed RorD to create a very different kind of market opportunity. Instead of seeking to underwrite the engineering development and commercial production efforts of corporations, government fund directed RorD with an emphasis on generating new conceptual discoveries through scientific research. This directed scientific research is typically performed by universities, Federal Labs or FFRDC’s that have expertise in the targeted topic and underlying disciplines. The distribution of these funds across sectors likely conforms to the chart in Letter G entitled, Federal Funding for Basic Research because the directed government funding for scientific research is a subset of total government support for both directed and undirected scientific research. Government’s goal for directed scientific research is to gain more complete knowledge or understanding of the fundamental aspects of phenomena and of observable facts, without specific applications toward processes or products in mind. Research projects funded to generate new conceptual discovery knowledge in fields of science (quantum physics), medicine (molecular oncology) or even engineering (nano-technology), align properly with the incentives and goals of scholars in the academic sector. Given the sheer volume of US scholarly publications and academic awards compared to other nations, the exploratory grant process works fairly well for advancing scientific knowledge as judged by peer scientists.

Matching Process to Desired Outcome In contrast, the exploratory grant process does not work well for government agencies when pursuing the STI objectives of generating innovation outcomes, because those objectives are not aligned with the incentives and goals of scholars conducting scientific research. Taking that approach is based on the flawed assumptions underlying the Linear Model of Innovation; that funding scholarly research is the foundation for generating industry-based innovation (Letter B). Questioning assumptions and challenging established norms through evidence-based analysis is a hallmark of scientific inquiry. Yet the assumptions underlying the linkage between the exploratory grant approach and STI policy goals has remained unchallenged since the TRACES study successfully impugned Project Hindsight fifty years ago (Letter H). This puzzling lack of rigorous scrutiny by scholars is resolved by understanding that maintaining the fictional link sustains the funding largesse enjoyed by the entire A-BC. Without that fiction in place, one might reasonably conclude that any national need for orphan product innovation is best addressed through the procurement contract approach led by industry. That approach does not in any way exclude academia from the process. Industry is always free to secure additional support from expertise in other sectors whether it’s by funding university professors, hiring graduate

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students in specialty areas, or collaborating with government laboratories, and the most innovative companies don’t hesitate to draw upon such supplemental expertise. The difference between a contract and grant approach is that under the procurement contract approach, industry would only recruit any required scholarly expertise to address the project’s specific requirements, monitoring and managing the collaborative so that it adheres to corporate project timeframes, while ensuring that relevant conceptual discoveries were captured, catalogued and integrated by project management (Letter I).

Limitations to Addressing Market Failures The tactic of engaging university scholars in support of industry-led procurement contracts is not always successful. My project team had witnessed numerous cases in the context of the orphan market of assistive devices. Despite corporate requirements, shared expectations and earnest initial commitments by scholars, the work of the supporting academics lagged behind the required schedules until the corporate partner was forced to sever ties. The breakdown results from multiple conflicts. For one, the demands on scholars fall within an academic calendar which is not always congruent with industry timelines. Secondly, the primary mission of university-­ based scholars is to educate and train a continuous succession of graduate students, so that projects involving graduate students with the most relevant skills, face turnover and the next learning curve. No matter the reasons and no matter how valid, once this experience was occurred within a university-based partnership, the involved companies usually declined to again pursue that collaborative approach. These all to real and routine circumstances bely the notion of academia’s role in procurement contract activity. Socio-economic problems requiring tangible solutions delivered in the short-­ term rely on the industrial sector operating under free market conditions. When free market conditions fail, society should demand that government subsidize industry-­ based directed RorD rather than university-based directed RorD. By serving as the source of RorD fund at the front-end, and as the primary customer at the back-end, government eliminates the constraints of market failures, and instead ensures that the intended beneficiaries in niche markets have access to high quality products and services at minimal personal cost. This strategy has served the military sector well for nearly a century. It would serve equally well for addressing other unmet socio-­ economic needs. In my field of practice, I envision it delivering the world’s highest quality assistive technology products and services freely available to persons with physical, sensory or cognitive disabilities, to help them achieve their education, vocation and community living aspirations. A worthy goal for citizens of a wealthy nation pursuing life, liberty and happiness.

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The Case of the Standing/Climbing Wheelchair Here is an example of sustained market failure from my own field of practice, demonstrating what happens  – or actually doesn’t happen  – when the government declines to fill the missing resources at the input side and the demand at the output side. People who use wheelchairs face a range of issues when conducting their lives from a seating position. They are at increased risk for multiple health problems including blood clots from restricted circulation, loss of bone density and pressure sores. These risks are greater for persons with quadriplegia because unlike people with hemiplegia, they are unable to use their upper bodies to periodically shift their weight and adjust their posture. Their functional constraints encompass everything one cannot do from a seating position such as many household chores, placing or retrieving objects much above shoulder height, holding eye-level conversations or seeing amongst crowds, to sports and recreation. Over past decades, several companies sought to address these health and function issues by designing, building and selling wheelchairs that included the ability to move someone from a sitting to a standing position. One company, Gaymar Industries Inc., offered a line of mattresses for medical settings, which made their staff especially aware of circulatory and pressure ulcer problems for sedentary people. In the 1980’s the company Invested internal resources through a subsidiary corporation (RETEC PR Inc.) to design, test, patent (1986) and produce a powered wheelchair/walker combination, allowing a user to rise to a standing position without the use of their lower limbs.5 The HiRider by name (trademark registered in 1989 but cancelled in 1996),6 received heavy promotion and press coverage, especially the story and photo of a man playing a round of gold using the HiRider. Two factors combined to limit the production and distribution of what should have been a beneficial product option for wheelchair users. First, the company had to recoup the full cost of its own front-end investment in development, testing and intellectual property protection, in addition to the on-going production, marketing, sales and support costs. The resulting price was about $12,000 in 1990, which is more than double ($27,000) in today’s dollars. Had the government treated this as a market failure deserving subsidy at the front end, the initial cost and recovery to RETEC/Gaymar Industries Inc. would have been substantially less. A similar subsidy at the back-end would have allowed the company to achieve economies of scale through larger production quantities. Having no support at either end, the retail price was set to allow the company to sustain itself and support the HiRider. The second factor that hurt production and distribution was the decision by the Centers for Medicare/Medicaid Systems (CMS) to not provide government reimbursement for the HiRider. Despite the obvious medical and functional benefits offered, the CMS rules limit reimbursement to devices that address a medical necessity, and that exclusively meet that medical need. Products and services that meet a  https://patents.google.com/patent/US5137102A/en  https://alter.com/trademarks/hirider-73794401

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medical need but that also serve non-medical purposes are usually denied reimbursement. Due to the overall cost and lack of reimbursement, production of the HiRider ceased in the mid-90’s after five years of promotional efforts. When recounting the device’s history, the company’s then vice president for sales and marketing told me that the lesson here was that no matter how many wheelchair users could potentially benefit – the actual sales of a novel device at a price point double the most expensive powered wheelchair – was about 200 per year. That is because there are only a limited number of wheelchair users with the personal wealth to pay out of pocket for such a useful but expensive device. That observation proved prophetic five years later when an even more innovative wheeled mobility device called the iBOT’s® reached the commercial marketplace in 1999.7 After investing about $50 million and five years in development costs, Independence Technologies Inc., a subsidiary of Johnson & Johnson, introduced the iBOT® which instead of standing the person up, actually stood the chair up by rotating a four-wheeled base into a vertical position. It also provides a previously impossible function by climbing stairs while maintaining the user’s balance in a seated position. The iBOT® used a gyroscopic system invented by Dean Kamen at DEKA Research, which he later applied to more well-known Segway self-balancing two-­ wheeled scooter. Despite these innovative and useful functional enhancements for a wheelchair user, and the backing of a perennial Fortune 50 company in Johnson & Johnson, sales for the iBOT® were doomed by many of the same constraints based by the Gaymar’s HiRider. At a price tag of $25,000, there were still a very small number of wheelchair users who could pay out of pocket. Even among the potential users who could pay and the rehabilitation professionals positioned to recommend it, not all were satisfied with the chair’s overall design. Some found that the form factors inherent in the approach taken to accommodate the standing/climbing features, created new functional limitations not found in standard power wheelchairs. While the CMS did eventually authorized government reimbursement, it was capped at $5000, the same amount of reimbursement for a standard power wheelchair that neither stood nor climbed stairs. After a full decade and many millions more spent on marketing and sales promotion, Johnson & Johnson cancelled production of the iBOT® in 2009.8 As a persistent and successful inventor, Dean Kamen bought all the intellectual property rights back for a token amount, and has spent yet another decade developing a second generation iBOT® through a new company Mobius Mobility at a retail price of around $32,000, remaining out of reach for most potential users.9 Standing/climbing wheelchairs remain an excellent example of a market failure that could be a great market success and if only governments treated such beneficial orphan products the same as military hardware. One recent positive sign, and an

 https://en.wikipedia.org/wiki/IBOT  https://mobilitymgmt.com/articles/2009/02/01/independence-technology-discontinues-theibot.aspx 9  https://mobiusmobility.com 7 8

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interesting link to the military system, is that Mobius Mobility succeeded in getting the iBOT® authorized for acquisition as a medical device through the US Federal Supply Schedule (Contract # 36F79721DO202).10 This means that Veterans who obtain a physician’s prescription through a Veterans Administration Medical Center (VAMC) may be eligible to obtain an iBOT® at no charge. To demonstrate the device’s potential, Mobius Mobility has donated two iBOT® wheelchairs to each VAMC that treats Veterans with spinal cord injuries. The marketing and sales effort continues.

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 https://mobiusmobility.com/faq/

P – Push Versus Pull

A theory has only the alternative of being right or wrong. A model has a third possibility: it may be right, but irrelevant. Manfred Eigen

Despite long-standing debate, the innovation process may be initiated by either supply push or demand-pull forces, but both forces must eventually arise and combine in order to drive the process to a successful result.

One of the least constructive yet consistently distracting issues surrounding technology-­based innovation is the debate over the precipitating force for innovation. One position is that the opportunity for product innovation is pushed forward through the supply of new conceptual discoveries and prototype inventions. Supply Push forces are indeed valid contributors to innovation because demonstrating any new-to- the-world technological capability has potential for additional applications in different fields, none of which can be realized without the arrival of that new capability. However, the potential can only be realized once a market application is identified and the downstream partners are made aware of it. The other position is that innovation is pulled forward through the demands of the marketplace for new or improved features, functions or capabilities. Demand Pull forces are an equally valid contributor to innovation because they may identify an unmet opportunity for a product or service and may even specific the performance requirements to address the unmet need. But as above, the market opportunity goes unmet until an appropriate discovery or invention solution is identified and supplied.

Subordinating Demand Pull to Supply Push Letter B recounted how WWII generated new and immediate demands amongst the Allied nations for innovative military products and services, in order to compete with Axis forces. To address these urgent demands nations had to conduct scientific © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023, Corrected Publication 2023 J. P. Lane, The ABC’s of Science, Technology & Innovation (STI) Policy, https://doi.org/10.1007/978-3-031-34463-3_16

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research and engineering development at a scale that required unprecedented integration of industrial, academic and government resources. These efforts were demonstrably successful, with the added benefit of having military innovations generated through demand pull forces rapidly finding applications in civilian commercial arenas. Given the accomplishments of industry in the first half of the twentieth century, capped by the WWII example of demand driven innovation, the US government could have justified establishing innovation policies that directed public funding to the private sector, supported by collaboration with academia, in order to generate new products and services in targeted areas of national interest. Instead, Dr. Vannevar Bush’s 1945 policy paper: Science, The Endless Frontier flipped the successful formula on its head.1 In it, Dr. Bush first characterized the cascade model which became the underlying concept for the Linear Model of Innovation. This model asserts that basic (undirected) scientific research generates a continuous supply of new knowledge – what Dr. Bush called scientific capital – which is viewed as the raw material that industry then coverts into new products and services. Following Dr. Bush’s own reasoning, government’s responsibility in promoting industrial innovation was not through direct funding of corporate laboratories directly responsible for their design, manufacture and distribution. Instead, indirectly through the support of basic research by his university colleagues, and the training of new scientific talent through the academic sector. He concluded that only university research institutions could relied upon to pursue basic research because: They are the wellsprings of knowledge and understanding. Under Dr. Bush’s supply-push orientation, companies have to sort through the random discoveries generated by academia, to identify those with application to government or commercial product needs. From the perspective of academia, there was no requirement to solicit or even understand the product needs of the business sector. Nor did government fund industry to transform any of the academic discoveries – which could be conceptual or early stage development – into useful products. Dr. Bush argued to exclude both government and industry from receiving public funding for RorD, because he thought their demand-pull operational missions would skew resource allocation away from the more fundamental supply-push exploration within scientific fields. While he anointed scientific research as the source of knowledge driving innovations, he insulated universities from accountability for their contributions to those innovations. He reinforced the ground rules underlying academic freedom, which relieved scholars of any obligation to demonstrate their contribution to short-term tangible results. In Dr. Bush’s model, the sector responsible for supplying the raw material for innovations was the sector furthest removed from commercial application and exploitation, in terms of both time and effort. In retrospect, the Western nation’s policies regarding innovation formulated at the end of WWII that persis to this day, created an inherent contradiction between the forces of supply push and demand pull, conflated the roles of each sector and the expectations for their respective inputs and outcomes. These innovation polices  Bush, V. (2021) Science the Endless Frontier, Princeton University Press. ISBN:9780691186627.

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increased the complexity of the relationship between research, development and commercialization activity by subordinating the commercial sector the adademic sector (Letter I). This is the genesis of our current conflicts and biases between science, technology and industry.

Integrating Both Forces to Achieve Innovation Distinctions between push and pull forces are moot in the context of corporations funding their own internal RorD efforts. As Letter I shows companies orient their internal RorD supply channels toward the innovation demands of their product and service lines. When organized and managed well, the supply satisfies immediate demands while also establishing a supply of related discoveries or inventions with potential utility for related corporate products or services. The coordination of supply and demand forces gets more complicated when companies seek innovations from external sources, or when external university or government laboratories seek corporation partners to apply their discoveries and inventions. A kernel of new knowledge in any of the three states carries a claim of ownership called intellectual property. The term and concept are relevant to this push versus pull discussion when the individual/entity that owns the kernel of knowledge to be supplied, is different than the individual/entity with the demand to apply the kernel of knowledge. In such instances, ownership or control over the application of the intellectual property must be transferred from the former party to the latter. Letter T contains more details on intellectual property and the process of technology transfer. For this chapter it is sufficient to recognize that such transfers of intellectual property signify the convergence of supply push and demand-pull forces. The value of transferring a technological capability from one field of application to another is twofold: the source field gains additional revenues and related benefits from the application in the new market without further investment, while the destination field avoids the time, expense and risk involved in the initial capability development effort. This combination of increased benefit to the source and decreased cost to the destination is the premise and promise underlying true cases of successful technology transfer.

Existing Bias Favors Push Over Pull Unfortunately, the Science Drives Innovation narrative relies heavily on the supply push position. It largely ignores any serious efforts to explain the downstream processes through which conceptual discovery outputs from scientific research are transformed into innovative products and services with beneficial socio-economic impacts. These downstream processes occur outside and beyond the role of the academic sector so they are largely ignored by the Academic-Bureaucratic Coalition

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(A-BC) advocates. They preemptively characterize the demand side of innovation as largely serendipitous yet inevitable through the following three axioms: scientific research outputs are inherently useful; external corporate stakeholders eventually recognize this utility and apply those outputs; the mechanism and timing of transfer and transformation from academia to industry are unpredictable and unknowable so there is no justification to study them. The most serious problem with A-BC’s position that supply push outputs are critical to innovation outcomes is that the intellectual property in the state of conceptual discovery knowledge (Letter A), is supplied through the vehicle of scholarly publications. Lacking the tangible form of prototype inventions, conceptual discovery outputs from scientific research projects are embedded as written descriptions in manuscripts submitted to scholarly journals. In order for such conceptual discoveries to contribute to the innovation process, they must be found and read with their potential value to others understood, accessed and applied.

The Challenge of Monitoring Supply Forces Letter I showed how a corporation is structured to monitor and apply conceptual discoveries from its directed scientific research projects – as well as from directed engineering development projects – the challenges for monitoring published articles reporting discoveries from undirected scientific research seem insurmountable. According to the International Association of Science, Technical and Medical Publishers (STM), in 2018 there were about 30,000 different journals publishing about two million articles per year.2 No corporation can justify the staff effort required to monitor the full range of journal publications on the random chance that a discovery held some potential relevance to corporate innovation efforts. One could argue that it is possible to narrow the scope of monitoring to a particular scientific, technical or medical discipline, and certainly some companies do track discoveries reported within specific scholarly journals or reported at certain academic conferences. But that approach runs counter to the Linear Model of Innovation’s position that the generic wellspring of new conceptual knowledge must be continuously fed by science-based discoveries in order for innovation to proceed apace. A remarkable tenet of the A-BC is that one cannot hope to predict how or where scientific research discoveries might be applied, so agency sponsors and elected officials are well schooled to avoid constraining the intellectual curiosity of scholars performing undirected scientific research who by definition do not have to consider a priori how their discoveries might be applied by others. Nor are they under sponsor obligations to target their manuscripts to journals most relevant to any particular field of application. Instead, they only have to contribute knowledge considered new in the context of previously reported conceptual discoveries

 https://www.stm-assoc.org/2018_10_04_STM_Report_2018.pdf

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from within their own discipline. It’s a comfortable position so long as one stays within that discipline’s boundaries. Directed scientific research supported through the exploratory grant mechanism has similar latitude. Although the sponsor agency may target the sponsored study to a specific topic area, the investigator retains wide discretion on the approach taken and the path pursued. The complexity of the natural world means that scientists may follow their curiosity down any number of sequentially branching sub-topics within any given topic area, to the point where hundreds of investigators can be contributing new knowledge without redundancy except instances where replication occurs intentionally to confirm prior discoveries. Given all these factors, there is a very low probability that any specific scientific discovery reported among the two million articles published per year will find its way to even the most mainstream product development project supported by the resources of a major corporation. The probability for this linkage in the context of a project underway at a small business attempting to generate an orphan product for a niche market, is infinitesimal. The track record in small/orphan product markets – such as assistive technology devices for persons with disabilities – shows that when government relies on the exploratory grant process to generate new conceptual discoveries, the results rarely contribute to product or service innovations within the competitive commercial marketplace. Instead, academia gets more presentations and publications which benefit the careers of the funded investigators rather than the intended target populations (Letter U). The same is true for the gap between the approximately three million provisional and utility patents filed annually that result from government sponsored undirected or directed engineering development projects not collaborating with corporations. Although we know from the milestone table in Letter L, that patent outputs from engineering development projects are further along the innovation pathway than are publications, we also know that they only represent the subject prototype invention’s attributes of novelty and feasibility. Those attributes are distinct from – and still far from the end of the innovation pathway than – proof of product or demonstration of market viability. As with scholarly publications, corporations cannot expend personnel resources wading through the continuous flow of published patents to find if any match their internal product or process requirements. Even if they thought there was a patent field relevant to their own interests, companies have no guarantee that they could gain access to and control over any specific patent because the claimed intellectual property is already owned by other individuals or entities.

The Effort Required Outweighs the Potential Reward As previously stated, the discussion of push versus pull forces is not to discount the contributions of scientific research to society in general, or even to advancing the state of practice through innovation when directed by a corporation or an industrial sector. The point here is to refute the A-BC’s position that supply trumps demand,

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especially because their version of supply is the flow of scholarly publications. Calls to increase a nation’s level of technological innovation are met with the A-BC’s response to increase public funding to scientific research. But we’ve repeatedly pointed out the absence of any direct causal or even correlational relationship between them. Corporations routinely demonstrate that the innovation process is predictable and knowable, so national STI policies could be modified to support the entire chain of events necessary to increase technological innovation in deliberate and predictable ways with great benefit accruing to society. However, due to the supply push focus of the Linear Model of Innovation, and the characterization of the supply-side of future innovation being scholarly publications, the actual transformation process from science outputs to innovation so critical to successful STI policy outcomes remains an unexamined black box. The closest approximation to a description of the innovation process offered by A-BC advocates, involves the passive diffusion of scientific knowledge through unspecific mechanisms and over indeterminate timeframes, until its utility is somehow recognized and adopted by practitioners. This is somewhat analogous to the trickle-down theory underlying Reagonomics in the 1980’s, which itself is nothing more than Wimpy’s self-serving proposition; give me my payment now and I’ll promise to repay you later. No matter the name given or the influential sanction, these schemes all involve some unexplained process by which monetary compensation – or discovery-state knowledge in the case of the A-BC – eventually diffuses through the social or economic strata to benefit all. Although the downstream enrichment never occurs, trickle-down policies remain popular among the wealthy and powerful who unfailingly gain the short-term infusion of new money. The same supply-side reasoning serves the A-BC by promoting the benefits of future innovation through the present public funding of science.

Defending Bias of the False Dichotomy The proponents of the supply-side innovation narrative resist critical analysis. Authors who question the narrative’s legitimacy or attempt to explain the complex downstream processes underlying the development, production and delivery of technology-based product and service innovations are castigated or summarily dismissed by proponents. My favorite books presenting that alternative perspective

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include: Taking Technical Risks3; Engines of Innovation4; The Honest Broker5; Frontiers of Illusion,6 and The Myths of Innovation.7 Giving credit for innovation to mechanisms or stakeholders outside of the academic sector would be a concession by the A-BC to the presence of other forces and factors also essential to the innovation process. And this would imply that funding scientific research is necessary but not sufficient to accomplish innovation. That implication would invite unwelcomed scrutiny into identifying those other forces and factors, which could in turn cause policymakers to consider allocating some greater portion of the funding available for innovation to those other mechanisms of engineering development and commercial production, and to other stakeholders including professional engineers, corporations and industries. In the zero-sum thinking of those in the A-BC who control the innovation narrative, that scenario is a slippery slope towards a reduction in the level of funding allocated to the academic sector (Letter Z). The operating costs of a research university or government agency requires substantial continuous funding which chiefly comes from the allocation of public money (Letter U). The more bloated and inefficient these institutions become, the more expensive their operations and therefore the more dependent on further largesse. This level of dependence adds a strident tone to their incessant calls for more funding, which are largely based on excessive claims of socio-economic benefits (Letter N). Ignoring reality may not maintain an errant status quo indefinitely, but sustained denial has already done great and lasting harm. At a minimum it has hampered society’s ability to progress, and a nation’s ability to compete in global markets (Letter X). If scientific research drove innovation as the A-BC proponents assert, the billions of dollars invested over the past six decades would have already solved the major social problems and left universities wealthy enough to endow their own research programs without requiring further support from public sources (Letter M). The plain truth is that the supply push narrative underlying the Science Drives Innovation paradigm is incomplete and therefore incapable of explaining the entire innovation process. Public funding for scientific research to supply new conceptual discoveries is but one factor in the innovation equation (Letter Q). The primary barrier to achieving deliberate and systematic innovation through government policies and public funding is the thick crust of conflated terminology propagated by the A-BC to perpetuate funding for scientific research at a level disproportionate to its actual role in technological innovation.  Branscomb, L. M., & Auerswald, P. E. (2003). Taking technical risks: How innovators, managers, and investors manage risk in high-tech innovations. MIT Press. 4  Rosenbloom, R.S. and Spencer, W.J. (1996) Engines of Innovation: U.S. Industrial Research at the End of an Era, Harvard University Press, Boston, MA. 5  Pielke, R.  A. (2007). The Honest Broker: Making sense of science in policy and politics. Cambridge: Cambridge University Press. 6  Sarewitz, Daniel, (1996). Frontiers of Illusion: Science, Technology and the Politics of Progress. Temple University Press, Philadelphia. 7  Berkun, Scott (2010). The Myths of Innovation. O’Reilly Press. 3

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Supply Push versus Demand Pull issue is a false dichotomy serving only to distract from our appreciation of the dynamic process through which innovation occurs. The motivating forces of both push and pull must coalesce through a managed process in order to realize a product innovation that advances the state of practice while accruing benefits to the owners. True progress in innovation as shown in examples such as World War II, space exploration and medical advances reveals that both supply and demand must work in concert. Support for both directed and undirected scientific research in the public and non-profit sectors, must be coordinated with and balanced by support for directed RorD programs led by the for-profit sector. Deliberate efforts to advance any field of application must ensure that the process is closely managed and that the progress is carefully monitored (Letter I).

Q – EQuations for National Innovation

The hardest thing to explain is the glaringly evident which everybody has decided not to see. Ayn Rand, The Fountainhead

A nation’s level of technological innovation is properly measured by its share of commerce in the global competitive commercial marketplace, its product and service outputs. It is not measured by its expenditures on scientific research and/or engineering development, its resource inputs. By the 1960’s advanced nations were all subscribing to the Linear Model of Innovation paradigm and allocating increased shares of public funding to support scientific research in pursuit of increased economic gain through innovation (Letter G). With the language and acronyms erroneously aligned by consensus (Letter J), the next step was for scholars to codify these relationships in some official capacity, in this case by institutionalizing them within the fields of economics and law. The AcademicBureaucratic Coalition (A-BC) needed some tidy metric to justify public policies underlying this continued investment. Such a metric would quantify each country’s level of innovation activity and allow for international comparative analyses.

Constructing an Innovation Equation Scholarly advisors to governments took it upon themselves to create an equation representing such a generic measure of innovation.1 For convenience they used as the denominator a statistic already being collected by all countries: Gross Domestic Production (GDP). GDP is defined as the total monetary/market value of all finished goods and services produced within an individual country’s borders on an annual or  https://www.imf.org/external/pubs/ft/wp/2004/wp04185.pdf

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other periodic basis. While GDP is accepted as an overall measure of a nation’s economic health, using GDP as the dominator in an Innovation Equation is a problem because the composition of a nation’s economic output may vary by industrial sector, natural resources and even geographic location. One nation’s GDP outputs may primarily consist of energy production, another of agricultural outputs, and a third of electronic components, so each nation’s consumable outputs may have more or less relationship to that nation’s level of technological innovation. Despite this limitation, GDP became the denominator in the widely accepted Innovation Equation. This new Innovation Equation also required a numerator to carve out that portion of annual production attributable to innovation-oriented activity. However, creating an equation that accurately established some cause and effect through a standard logic modeling approach (Letter L) would have required the collection and analysis of detailed data on new-to-the-world innovations in goods and services that were introduced into the marketplace during the designated timeframe. It would also require equally detailed data on a wide variety of factors that served as inputs to the innovation process, such as corporate tax laws, international trade policies, intellectual property enforcement, and especially a close look at the relative contributions to innovations from the three states of methods and their underlying methods. As we saw under Letter H, detailed analysis of input factors such as through the Department of Defense’s prospective study, carried the risk of exposing the fallacy of the Linear Model of Innovation by specifically attributing the economic benefits of technology-oriented innovation to factors beyond undirected scientific research. So, the collective wisdom of the A-BC members sitting on international advisory councils appears to have avoided all of that critical yet potentially revealing analysis by conjuring up a numerator that was not based on new data on specific factors documented as contributing to innovation. Just as with the innovation equation’s denominator, the advisors instead conveniently selected a statistic already collected and compiled by each nation to serve as a surrogate numerator; Gross Domestic Expenditures on Research and Development (GERD). The GERD sums all intramural expenditures on R&D performed by a nation within a specified timeframe. It includes payments from other nations for R&D performed internally but excluded payments for R&D performed in other nations.

The Problem with an Equation of Convenience Having GERD represent the entire innovation system of all inputs, processes and outputs (Letter L), and to somehow reflect that system’s socio-economic impact on a nation, should strike readers of the prior sixteen chapters as absurd. As noted throughout, scientific research and engineering development are fundamentally different. They provide different forms of expertise as input, they rely on different methods as process, they are conducted by different sectors for different purposes, they generate knowledge outputs in different states, and are even driven by different professional incentives.

An Illustrative Example

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Furthermore, gross R&D expenditures do not even encompass all necessary inputs to innovation. The GERD equates simply omits the critical role of the industrial sector in terms of business expertise input and the commercial production process which are both critical to transforming the knowledge outputs from RorD projects into the third state of knowledge — the very goods and services that comprise the measurement of Gross Domestic Product. GERD as numerator has no more conceptual or mathematical validity for innovation than does GDP as the denominator. Using these gross measures of GDP and GERD as simple surrogates for the complexities of innovation seems more unrealistic upon closer inspection. By considering as inputs to innovation only those funds supplied to support activities  – while omitting the full and wide range of activities themselves — the metric has strayed far from capturing and quantifying the essential factors that generate marketplace innovations. Despite these serious and essentially disqualifying limitations, Gross Domestic Expenditures on Research and Development is globally accepted by scholars and policy makers as the single valid measure of any nation’s level of innovation activity, so it is the de facto numerator for the Innovation Equation expressed as:

GERD/GDP = Level of Innovation2 The convenience and simplicity of this numerator are vastly outweighed by the fact that GERD is an illogically conflated measure of two distinctly different variables, and the omission of a critical third variable. The numerator (∑R + ∑D) lacks face and factual validity as a measure of innovation for any single program, let alone a measure of innovation at a national level. The equation’s very presence in official analyses says much about the current fragile and facile state of STI scholarship and policymaking in the US and Western nations.

An Illustrative Example The following page describes a brief thought exercise demonstrating the fallacy of the accepted Innovation Equation. The exercise describes three nations, each for purpose of illustration, taking very different approaches to investing in programs and activities expected to generate innovations. The approaches are exaggerated to demonstrate the Innovation Equation’s inability to realistically represent innovation defined in the context of new or improved products or services introduced within the global commercial ­marketplace.

 http://data.uis.unesco.org/index.aspx?queryid=74

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Three nations X, Y and Z, each report $100 billion in GDP: Nation X and Y report identical annual GERD of $3 billion. The GERD/GDP Innovation Equation indicates that nation’s X and Y have identical levels of innovation activity (3/100 = 3%). Nation X spends all $3 billion of its GERD on Scientific Research only (SR = $3 billion). This deliberate focus increased its international academic reputation among faculty and students and yielded a very high rate of conference publications and scholarly publications. With its research reputation and publication copyrights secured, nation X attracts many graduate students and professors who enjoy enhanced career prospects through their publication and citation records, as well as some level of corporate funding for directed RorD projects. Due to this singular focus on academia, nation X generates no new prototype inventions no new to the world commercial products or services, yet earns a GERD/GDP innovation score of three percent. In contrast, Nation Y spends all $3 billion of its GERD funding on Engineering Development only (ED = $3 billion). This very different focus yields a very high rate of prototype devices and patent claims filed/approved. Nation Y relies on Nation X to train their graduate students, as a source of scholarly reference materials, and contracts for necessary directed RorD. Nation Y generates revenue by licensing or selling rights to use their patented intellectual property to other nations. Although Nation Y does not generate new to the world commercial products or services, its GERD/GDP calculation earns it the same innovation score of three percent. The $100 billion in GDP reported by nation’s X and Y resulted from a wide range of economic factors. Both are both simply healthy economies with stable internal growth, each taking a different approach to investing in RorD programs. Neither chose to invest public or private resources into the production of new to the world products or services, yet both achieved an equivalent innovation score of three percent. Now consider Nation Z which reported a GERD of $0 because it expended no internal resources on RorD programs. Nation Z earned an innovation score of zero percent indicating no innovation activity. Yet Nation Z expended an equivalent $3 billion on Commercial Production (CP) activity; the manufacture and distribution of new to the world products for the global marketplace. Instead of funding Scientific Research (SR) or Engineering Development (ED), nation Z chose to obtain any required conceptual discovery knowledge from the publicly available scholarly presentations and papers generated by Nation X, and any enabling prototype invention knowledge from the publicly disclosed patent claims of Nation Y. By investing in CP instead of SR&ED, Nation Z was able to achieve an equivalent GDP of $100 billion through a combination of domestic economic activity, supplemented by sales of their innovative products and services N ations X and Y. These sales generated new net wealth for further investment in continued CP activity (Letter W) all with a GERD/GDP innovation score of zero percent. The example logically demonstrates that the globally accepted GERD/GDP Innovation Equation is invalid. It fails to discriminate between the socioeconomic implications of the widely divergent GERD strategies of Nation’s X and Y. Worse, it completely misses the actual socio-economic gains accrued from the Commercial Production strategy of Nation Z. We’ll discuss China’s example of the Nation Z innovation strategy under Letters X and Y.

R – Rhetoric Versus Reality

The twin sisters to autonomy and freedom are responsibility and accountability. You cannot have one without the other. If someone is given an area of responsibility, not only must they be set free to do it, they must also be held accountable for what they do. Henry Cloud

Exaggerating the role of scientific research in generating innovation creates programs unable to accomplish their assigned missions, funds projects unable to deliver on their promised results, and leads to unintended consequences driven by personal incentives rather than national STI goals.

Here I again express my support for conducting scientific research for the purpose of generating conceptual discoveries. Funding scientific research is important. Very important. Governments must continue to allocate some sustained level of funding to continuing research in all disciplines and branches of science. Further, I believe that the exploratory grant mechanism is the proper vehicle for awarding funds for scientific research, and that research universities are the proper recipient because they have the expertise and incentives to deliver the expected conceptual discovery outputs. Scientists sponsored to conduct undirected research should be free to pursue their curiosity in any topic of their choosing. Society should expect nothing in return from this investment beyond increasing our collective understanding of the world around us through discovery state knowledge.

Mismatching Methods and Results However, I do object to the inappropriate application of scientific research where the expected outcomes are other than conceptual discoveries. This chapter focuses on the consequences of the Science Drives Innovation rhetoric claiming to accomplish innovation outcomes, when instead it is espoused to capture an ever-increasing © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023, Corrected Publication 2023 J. P. Lane, The ABC’s of Science, Technology & Innovation (STI) Policy, https://doi.org/10.1007/978-3-031-34463-3_18

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share of public funding allocated through national STI policies. As an example of the inappropriate approach most familiar to me, a government agency offers funding to university faculty, as well as small business entrepreneurs (Letter S), through the exploratory grant mechanism to generate new or improved products for the marketplace. But due to the heightened expectations for innovation and socio-economic benefit within the rhetoric justifying the funding allocation, the applicants must commit in their proposals to conduct not only scientific research, but also engineering development and either technology transfer (Letter T) or commercial production, in order to have any hope of successfully competing for the funding award. Through several examples described below, I will explain how this mis-alignment between the sponsor’s expectations, the award mechanism and the recipient’s incentives combine to result in high levels of failure. Documents generated by the Academic-Bureaucratic Coalition (A-BC) are very carefully worded to strongly suggest that undirected scientific research returns numerous benefits to society, while deftly avoiding factual statements that could be scrutinized or tested. An excellent example of this careful phrasing is a letter I archived from the National Advisory Council on Innovation and Entrepreneurship (NACIE) to the U.S. Secretary of Commerce.1 Nearly one hundred individual university presidents and chancellors co-signed the NACIE letter sent to coincide with then President Obama’s proposed budget to double the funding for undirected research at universities, while freezing overall domestic discretionary funding. Keep in mind that NACIE was established to advise the U.S. president on ways to foster entrepreneurship and transform laboratory ideas into technological innovations capable of generating new businesses and jobs. The body of the NACIE letter contained six areas targeted for expanded efforts each containing bullet points with action items. However, all the action items contain aspirational language (strive, encourage, expand, support, facilitate, foster), with no operational specifics, milestones or metrics (Letter L). Nor did any of the target areas speak directly to the NACIE mission regarding private sector technological innovation, corporation formation or job creation. The five-page letter closed with the following sentence: We are dedicated to ensuring that the knowledge and technological breakthroughs developed at our institutions are rapidly and broadly disseminated to advance the nation’s social and economic interests. Universities are so adept at conveying the Science drives Innovation message that they deftly avoid addressing the NACIE’s specific mission, and instead recounted nothing more than their traditional university missions of research, education and community service, without ever being forced to reconcile those missions with the national need for engagement with industry to help achieve the expressed STI goals. While A-BC advocates carefully avoid making specific claims of societal impact from undirected scientific research, they don’t hesitate to pay others to make such unsubstantiated claims. While appearing to be above the fray as objective arbiters of

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truth, universities function very much like any other economic sector in the pursuit of public funding, including retaining lobbyists to press their agendas with elected officials. The website Open Secrets documents lobbying activity by economic sectors and by individual organizations. It reports that the Education lobby has spent $890 million dollars over the past 40 years, increasing spending from $3 million in 1990 to $82 million in 2020.2 The 2020 figures are based on 592 clients (research universities and general education colleges) who employed a small army of lobbyists (1061). Over half of these paid lobbyists (574) were classified as revolvers  — they had moved between the government, private and non-profit sectors during their careers – so the lobby for undirected funding to research universities is not shy about retaining highly experienced professionals who don’t work cheap. These numbers show the concerted effort and financial commitment involved in sustaining the rhetoric of the A-BC in linking undirected funding to STI policies and socio-­economic benefits.

Innovation as Socio-economic Benefit The general public understands the term innovation to mean new and improved products and services in the marketplace to enhance quality of life. However, elected and appointed officials within the A-BC are willing to expand the definition to include what we understand here to be conceptual discoveries and prototype inventions (Letters A & L). Claiming innovation as a payoff from investing in academic research is more compelling than claiming to publish papers and educate students. Elected officials support government programs claiming to generate innovations because of the short-term political gains derived from new public funds being allocated to their home districts. Indeed, appointed and career government employees and the university presidents and professors who advise them, have no motivation to correct these erroneous assumptions and false expectations. However, it doesn’t require much scrutiny to see a yawning gap between the public expectations and what actually occurs within government bureaucracies and academic institutions in the name of innovation-focused policies and practices. Why so? Some scholars have criticized the popular analytic work of economist Steven Levitt, but their commentaries do not dispel his key observation about two critical aspects of managerial decision-making in all fields of endeavor: the Power of Personal Incentives as a root motivation (cause), and the Law of Unintended Consequences as a persistent yield (effect).3 Applying Dr. Levitt’s two critical factors to the myths underlying current STI policies and practices, readily explains why Western nations are spending more on innovation, getting less in return, and

 https://www.opensecrets.org/federal-lobbying/industries?cycle=2020  Levitt, SD & SJ Dubner (2009) Freakonomics. William Morrow. ISBN: 0060731338.

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why the situation is unlikely to improve without major and immediate intervention by responsible actors.

Evidence-Based Examples of the Disconnect As we’ve described, the A-BC scholars are disinclined to scrutinize the performance of grant-based undirected RorD programs claiming to achieve innovation outcomes (Letter H), or when pressed re-define innovation as analogous to discovery or invention outputs (Letter J), or explain the lengthy timeframes and serendipitous path of passive diffusion (Letter P). Given the absence of studies on this point across a range of applications, I cannot substantiate the problems arising from rhetoric with a strong empirical evidence base. Instead, I can only offer the findings from a pair of exhaustive studies conducted in one narrow field of technology application. Given that the findings arise from the same combination of entities and actors involved in most grant-based undirected RorD programs, I can only suggest that the factors and issues identified are probably present in other fields as well. As the case in point, my team recently completed a five-year study in our field of assistive technology devices.4 Our findings supported Dr. Levitt’s observations and reveals a range of issues that must be resolved in order for the rhetoric surrounding STI to become reality. The study involved a longitudinal analysis of forty projects funded through the exploratory grant mechanism, tasked with addressing the need for new or improved assistive technology products or services; a targeted area of market failure (Letter O). None of the forty projects met our definition of directed RorD, because they were not sponsored or managed by private sector corporations. The majority of forty projects were university-based and funded for 5  years, while several were two- or three-year projects led by small business entrepreneurs. All forty investigators won their respective grant competitions by promising to conduct a combination of scientific research projects and engineering development projects, leading to the transfer, adoption or commercialization of technology-based innovations. The projects addressed a wide range of technology platforms and intended to benefit different user groups such as people with mobility, vision, hearing or speech disabilities. For purpose of this analysis, we classified all forty projects under four categories of intended outputs: Standards/Guidelines, Instruments/ Tools, Software Applications, and Commercial Hardware.5 My project team followed the progress of all forty projects from near inception through the end of their funding timeframe. Our analysis concerned not only what  https://www.researchgate.net/publication/341684888_Outcomes_from_NIDILRRsponsored_ technology_development_projects_Lessons_drawn_from_a_longitudinal_study_of_ forty_cases 5  Lane, Joseph P. (2008) ‘Delivering on the D in R&D: Recommendations for increasing transfer outcomes from development projects’, Assistive Technology Outcomes & Benefits, Fall special issue, pp.1–60. 4

A New Shortcut to Claimed Success

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results were achieved, but how much progress had been made and why the intended results had or had not been achieved. About half of the investigators had agreed to participate in periodic interviews by my team on their progress, and were willing to receive advice from us on their efforts and options to that work. The other half declined to engage with us, so we followed the progress of their projects through their annual reports of progress to the government agency sponsor, along with evidence obtained from their conference presentations and website postings. Therefore, we lacked the same rich level of detail on the second group, nor were we able to offer any advice to them. For comparison purposes, we referenced another study we had conducted in the mid 2000’s, where we performed a retrospective analysis of seventy projects conducted by a similar mix of university and small business entities funded by the same sponsor.6 In some instances, they were the same entities and the same investigators. We had gone back to their original proposals funded in the late 1990’s to identify their intended outputs across the same four categories note above, and through interviews and similar archival records of reports, presentations and postings, sought any and all evidence of transfer, adoption and/or commercialization success. The retrospective analysis gave us the ability to seek evidence of success up to 3 years after the seventy projects had concluded, to accommodate the typical time lags between generating outputs from RorD projects, then achieving transfer, adoption and/or commercialization outcomes (Letter H). For the prior retrospective analysis of seventy projects intending transfer, adoption or commercialization outcomes we found evidence to support a success rate of under ten percent. Projects had the highest level of success with two categories of technology-based outputs, one closest to their expertise as scholars and authors (Standards/Guidelines), and the second requiring adoption without transfer or commercialization (Instruments/Tools). They had close to no success with the two categories of outputs requiring formal transfer of ownership over intellectual property to an established corporation, and requiring significant downstream investment of resources by that external corporate entity: (Software Applications; Commercial Hardware).

A New Shortcut to Claimed Success Overall, the forty projects in the more recent prospective study improved somewhat on that dismal prior record of delivering on promised results, but still fell far short of expectations. The category of technology-based outputs with the highest success rate was now Software Applications. What had changed in that category? In the past, the transfer and commercialization process for new software applications was

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nearly identifical to the process for hardware. The application’s code had to be captured on tangible media (floppy disks, then CD-ROM’s, then DVD’s), packaged with paper manuals and ancillary materials, then purchased off-the-shelf through retail outlets, along with a license to install and use them. Like hardware, that meant the application had to be frozen in a final form for sale, with any updates sold as a completely new version. The license and sale of upgrades helped companies like Microsoft grow and prosper. The presence of the World Wide Web changed that entire process of commercialization, by allowing software creators to make their new applications directly available to users through immediate download, with updates posted for access as they were written. It no longer mattered how simple or complex the function, how broad or narrow its utility, and no matter whether anyone actually ever downloaded and used it. The opportunity to create new software packages and then submit them for posting in the web-based Apple7 or Google8 App Stores, became a new avenue of quasi-transfer that did not exist for projects conducted in the timeframe of the prior retrospective study. I call it quasi-transfer because this avenue of freely posting any new application on-line, allowed projects to claim transfer/commercialization outcomes without requiring any formal transfer of ownership over intellectual property, nor did it require any commitment of downstream investment of resources by external entities. The downside being that the direct to user path freed the software creator from the important barriers to entry of thoroughly testing and debugging the software code, ensuring compatibility with user interfaces, demonstrating functional quality or even any preliminary assessments of external utility. In fact, the App Store path to market is really no different than posting the software package on an internal website, or self-publishing documentation about the package, than a true example of transfer or commercialization. The absence of barriers to App Store entry remanded any true assessment of a Software Application’s actual market value or customer utility, to future tracking of download numbers or posted user reviews. Both of which occur beyond the point where the the claim of transfer or commercialization was made by the investigator and tallied as a success by the sponsoring agency. Despite the presence of web-based Apple and Android App Stores as a new and increasingly popular angle for claiming transfer and/or commercialization, the rate of actual transfer of discoveries or prototypes to external corporate partners remained scant among the forty projects we studied. The following paragraphs summarize the many factors accounting for disparities between sponsor/investigator intentions and actual transfer/commercialization outcomes. These factors arose in all phases of the process from the proposal competition through project implementation, and involve deficiencies and unintended consequences involving the sponsoring agency and grant recipients alike.

 https://www.apple.com/app-store/  https://play.google.com

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Problems Within the Proposal Process Problems arising at the inception of a process tend to permeate subsequent efforts and damage the results; garbage in, garbage out in programming parlance. So, we’ll spend considerable space reviewing problems in grant proposals and their appraisal. In an effort to impress review panels in the competitive grant seeking process, applicant proposals often exaggerate the likely progress, results and value of their planned RorD projects. The proposals often lack supporting evidence to validate the need, that the proposed solution is novel and feasible, or that they have planned the path to transfer. For example, an applicant was awarded funding to design a new software product for the commercial marketplace, but didn’t take the time to explore the target customer’s interest until after it had created an operational prototype. Once the grantee did so at our team’s behest, they found that customers outright rejected the entire concept of the product. Given the scholarly convention of peer review, government grant sponsors recruit fellow scholars to review and score the submitted proposals with the highest scores winning the funding. The scholars conducting the reviews often do not know or appreciate the evidence of market opportunity and business case analysis industry requires in order to allocate resources to consider adoption of outputs from university-based engineering development projects. Instead, such proposal deficiencies that are absolutely essential to downstream transfer, adoption and commercialization, are casually overlooked while reviewers concentrate on the rigor of the scientific research design; their particular area of professional expertise and incentives. The grant-based undirected RorD projects intending innovation outcomes typically expend from one to five million dollars over their three-to-five-year funding cycles, depending on the type of sponsoring program. Professional incentives for university faculty rest with the scientific research projects, so these applicants often allocate insufficient personnel time and resources to their proposed engineering development projects, with key people dedicating 2–4 h per week (5–10% FTE). This level of effort does not compare favorably to corporate approaches to new product development where teams of people dedicate the majority of their time within a framework of defined milestones and deliverables, and under the supervision of multiple layers of managers (Letter I). University-based grant applicants even assign part-time graduate students  – who cost much less than faculty  — to performing critical tasks within the engineering development projects. This approach is seen as a convenient way to provide financial support to graduate students while faculty focus on conducting their own scholarly research. Unfortunately, many faculty grant recipients do not take the expressed commitment to development and transfer seriously because they view this task as layered on top of their scholarly obligations leading to professional advancement. Development-oriented expectations set by the sponsor are treated as an unfunded mandate; an obligatory element expeditiously addressed and belatedly conducted, in order to obtain funding for the higher priority research projects proposed within the overall grant application.

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Small to medium sized business that receive grant-based undirected RorD project awards have similar issues arising from their incentives and diligence. They typically pursue funding through government programs expressly dedicated to spurring technology-based innovation through smaller corporations. These programs dedicated to funding small businesses are described in more detail under Letter S. Entrepreneurs don’t share the university faculty’s incentive to publish, but as private sector business proprietors their primary incentive is to generate sufficient revenue to stay solvent. While university faculty skew their proposals towards research goals, private entrepreneurs skew their proposals toward paying the salaries of key employees, including themselves. The sponsor’s language for proposals suggests that the applicant provide a sound business plan and demonstrate evidence of the market opportunity, but because these are undirected grants, the review panels are largely comprised of scholars who are not well qualified to assess the quality of the plan and opportunity. The few reviewers with industry expertise often find their critiques are discounted or over-powered by the scores from the scholars. These faculty and entrepreneurs do correctly perceive the sponsor’s own emphasis on scholarly research. The score sheet used by grant review panels awards the majority of points for the rigorous design, conduct and evaluation of research projects. It offers fewer scoring criteria for development projects and does not specifically assign points to preliminary market research, corporate partnerships, or rigorous technology transfer plans. Instead, these exploratory grants are structured to allow recipients to perform such essential market research only after they have conceived, proposed, obtained funding and initiated the project. This misaligned approach is tantamount to the sequence, Ready, Fire, Aim  – because staff and resources are already allocated and operational before requirements are even specified. This is no way to address society’s need for orphan products as described under Letter O.

Problems with Grant Implementation Some university-based grantees do indeed recognize the importance of engaging corporations early on to ensure their engineering development efforts will conform to the requirements of commercial production methods. Some of these enlightened grant applicants make the effort to secure a collaborating corporation prior to applying, in which case that downstream expertise is evidence in the proposal narrative. Others pursue partners once the funding is secured or if not are open to guidance through a collaboration brokered by outside interested parties, such as my project team. The majority of grantees do retain the academic mindset and so focus effort on implementing their research projects once funding is secured. They may not put much attention toward the engineering development projects until late in their funding cycle, which is usually far too late to implement an effective effort. Of course, small business entrepreneurs were equally influenced by the power of personal incentives. Despite the sponsor agency’s focus on innovation outcomes,

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the urgent incentive of all small businesses is to generate sufficient capital to stay in business; to pay its bills. So just as university faculty focus effort on research that generates publications, small business owners focus on covering their operating costs such as paying the salaries of key employees, including themselves. While their intent is to apply their expertise toward generating innovations under their proposed timelines, delays in progress consistently arise from the imperative of routine operational matters. Some essentially game the system by treating grant awards as a source of operating revenue rather than as seed funds to initiate the proposed project. These grant mills are discussed in more detail under Letter S. Neglect in the implementation of engineering development reflects a form of rhetoric versus reality that is well documented in narrative supplied by grantees within their obligatory performance reports (APR). These APR’s must be submitted to the sponsor agency on an annual basis, as a condition of receiving the next year’s funding. It happens that any Federally funded program or project not classified for national security purposes, is open to public scrutiny upon filing a request through the Freedom of Information Act (FOIA) to the sponsoring government agency. The agency first reviews the requested material to remove information that falls within several restricted categories, then sends the revised material to the actual grantee for their opportunity to redact certain categories of proprietary information, before the requestor eventually receives the material For purposes of our analysis, we requested copies of a grantee’s original proposal as well as all of their subsequent progress reports, because those are the investigator-submitted materials that are publicly accessible upon request. Submitted grant proposals that are not deemed qualified for funding are not eligible for public access via FOIA request. Grant awards typically commence in October soon after the sponsoring government agency obtains its funds authorized by Congress for that new fiscal year. Since the first APR is due the following May, grantees can only report progress on their first half year’s efforts. Given this short timeframe, the first year APR’s typically contain a detailed description of progress made on each research project, while the development projects contain no more than a copy of the original proposal’s narrative. In many project cases we examined, subsequent APR’s reported further progress on research projects, while the same original proposal narrative for development was again inserted, indicating either a lack of attention to reporting requirements or evidence of no actual progress over the course of multiple project years. Despite this obvious absence of new content in the report narrative, the same grantees routinely check the boxes indicating the same development project’s status as progressing ‘On Time’ and experiencing ‘No Problems.’ These status boxes are falsely selected because grantees are keenly aware that to indicate that the project is ‘delayed’ or to describe problems encountered is to signal the need for greater scrutiny of the project from the sponsor agency’s assigned monitor (project officer), who may not otherwise notice the absence of updated narrative. It is important to note that some grantees within the same RorD programs did achieve and report continued progress on engineering development projects, and did disclose problems in full detail when they arose. Likewise, a subset of sponsoring agency project officers did closely monitor grantee progress. In fact, close sponsor monitoring was

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closely associated with detailed grantee reporting. Conversely, negligent reporting by grantees was closely associated with lax monitoring by other project officers. The disparity in monitoring, reporting and actual progress revealed a lack of concern and oversight by higher level career, professional and appointed managers within the sponsor agency. My project team did collect some anecdotal information regarding occasions where certain grantees demonstrated such poor performance over extended timeframes, that project officers requested corrective action. In those rare instances the project officer had to create and gain approval for a plan of action, then implement that plan in collaboration with the grantee. The termination of funding during a project’s multi-year award cycle was so rare that I am aware of only one instance in the sponsor agency’s forty-year history. Appointed and professional managers opposed this terminal action, fearing political reprisal from the grantee’s Congressional representative, or potential legal action by the grantee’s host institution. Sponsor agency managers preferred to continue sending money to unproductive projects than to create a disturbance that could harm their own careers. Allowing underperforming projects to continue indefinitely and without corrective action does not reflect best practices in product development as demonstrated by corporations, where project managers closely monitor progress, and cancel projects or even terminate staff when planned progress is not accurately reported and demonstrated (Letter I). Some grantees candidly described their behaviors regarding grant awards in personal interviews we conducted. Once funding is secured, daily work demands and career incentives take precedent over grant implementation. Academic department chairs prioritize course load, student advisement and committee assignments over grant activity. The time grantees can carve out to implement the proposed mix of scientific research and engineering development projects was always weighted toward the research activity at the expense of time and effort devoted to the development activity. The former took priority because it generated data suitable for a scholarly manuscript necessary for tenure or to secure additional funding. The assigned project leader’s status was also an issue for diligent implementation. Junior faculty and graduate students are unlikely to demand senior faculty members pay attention to a stalled project. Our study team also learned that some lead investigators still harbor the antiquated notion that collaborating with companies can somehow jeopardize their academic integrity, while project staff are afraid to correct that perception even though it creates formidable barriers to successful technology transfer. Our studies suggest that many exploratory grant recipients still don’t know what they need to know about invention, transfer or innovation, and are reluctant to devote the necessary time to learn. Some avoid recruiting external business expertise due to ego, fear of losing control or having to share the available funds. Some investigators still don’t involve their own university’s Technology Transfer Offices (TTO), even though staff in those offices may have relevant expertise that is usually free to access (Letter T). Interviews showed that even when the sponsoring agency provides information on these essential downstream topics during annual meetings

Problems Within the Grant Management Process

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of lead grant investigators, this information is not captured by the investigators or shared with the project staff back home, who end up being chiefly responsible for implementing and conducting engineering development project.

Problems Within the Grant Review Process Our study team’s review of grantee proposals and/or interviews with the lead investigators, reveals numerous instances where the proposal review panel as well as the sponsor agency’s internal proposal review, could have raised more questions about the applicant’s claims for their proposed engineering development projects. For example, one successful small business proposal had projected skyrocketing cash flow from a new application, without any substantiating evidence from their internal analysis or from examples of similar products in the market. That claim should have invited skepticism during the proposal review process. And as it turned out, that proposal was funded yet the successful grantee never again mentioned cash flow in their APR’s. The initial proposal review process for each engineering development project should at a minimum verify that the stated problem exists and that the proposed solution is novel. Scholars serving as peer reviewers know to ensure that scientific research projects contain preliminary data to validate the hypothesized conceptual discovery to be explored, but due to a lack of a certain amount of wisdom regarding engineering development projects, the same reviewers allow the grantee to make unchallenged claims about novelty and feasibility of an envisioned prototype invention. In several cases, a quick Internet search by my own project team revealed that nearly identical products already existed to those proposed and funded, all of which eventually failed to achieve their planned outcomes due to their redundancy to adequate existing products.

Problems Within the Grant Management Process The sponsoring government agency bears ultimate responsibility for the outcomes achieved by its grantees. Most government sponsor regulations expressly state that funding for future years is dependent on demonstrating substantial progress during the current year. These agencies have the authority to delay funds or even withhold them entirely, yet that action is almost never taken, and certainly did not occur with any of the over one hundred development projects within our retrospective or longitudinal studies. In both the retrospective and longitudinal studies, we found numerous examples where little or no progress was made over multiple years, yet the funding continued to flow. There is evidence that the lack of proper sponsor scrutiny and oversight is widespread among undirected grant-based university projects. Non-profit organizations

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like the Cochrane Collaboration and Campbell Collaboration review the quality of scientific research methods reported in scholarly journal articles. They have consistently found that a surprisingly high percentage of peer-reviewed manuscripts deemed suitable for publication lack adequate rigor for their findings to be considered valid and reliable. This means these projects supported with public funding have lacked sufficient oversight by host institutions, proposal review committees or by project officers in the sponsoring organizations, for their conceptual discovery outputs to be considered as contributions to the scientific knowledge base. The funding did not benefit society, even while the money benefited faculty careers and the host institution’s stature. Project officers in sponsor agencies are in a role equivalent to upper management in private corporations, yet the evidence shows that they do not all provide the oversight necessary to ensure progress is made and outcomes achieved. While some grantees reported regular communication with their sponsor’s project officers, others reported no personal contact after the funds were initially awarded in the first year of these three-to-five-year awards. Apparently, some sponsor staff view grants as unrestricted gifts for the entire award timeframe despite the explicit requirements in government regulations for continued funding to be conditional on grantee evidence of substantive annual progress. These government employees must spend their grantee oversight time on other matters they consider to be of a higher priority. Our study team found multiple cases where even a cursory review of grantee progress could have led to closer scrutiny/guidance or even the curtailment of funds. However, there was not a single instance where the sponsor’s designated project officers exerted corrective actions for languishing projects. The way government funding works, the sponsor agency is incentivized to expend all funds allocated by Congress each fiscal year, so withholding funds from a grantee could result in an unwelcome end of year surplus (Letter U). Such a surplus is problematic for the sponsoring agency, because those funds could be taken back by a higher organizational level, which could lead to a lower budget allocation in subsequent years. Even if the sponsor did not resort to terminating funding, agency staff could at least provide active guidance to development projects that APR’s indicate are uninitiated or stalled.

Implications for Innovation-Oriented Programs We can only assume that what we’ve witnessed occurs across government agencies due to their shared context and incentives. It indicates a potential for many investigators and their host institutions to pursue and win sequential cycles of three or 5 year-long grants, each worth hundreds of thousands to millions of dollars annually, without facing expectations for accurate progress reporting or enforced accountability by the project officers or their sponsoring agencies. The context of our longitudinal study was projects funded by one specific government agency tasked with funding both scientific research and engineering

Hope on the Horizon for STI Policy

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development projects, that would collectively generate beneficial impacts on the quality of life for persons with disabilities. We found that the sponsor agency did not provide sufficient project oversight to ensure progress, and that the majority of university grantees emphasized research that addressed their incentives over development that did not. Similarly, small businesses pursued revenue over project results. The majority of grantees preferred to supply rhetoric regarding their progress, over the reality of the unintended consequences resulting from their immediate incentives. Given that lack of sponsor oversight and grantee candor, it seems left up to the intended beneficiaries and their concerned stakeholders to document the expected outcomes of funded proposals and to hold the agency and grantees accountable for the efficient and effective use of public monies expended to accomplish that mission. Based on our interactions with other government agencies sponsoring RorD programs through the grant mechanism and which make awards to university and small business applicants, I suggest that such vigilance is warranted wherever government agency rhetoric claims outcomes and impacts with societal benefit.

Hope on the Horizon for STI Policy There are some glimmers of hope that reality will eventually overtake this sustained rhetoric. Properly defining innovation is a critical first step. After decades of analysis and refinement, in 2005 the European Union finally settled on a definition for the term innovation as: An innovation is the implementation of a new or significantly improved product (good or service), or process, a new marketing method, or even a new organizational method in business practices, workplace organization or external relations.9

The US National Research Board then adopted the same definition in 2012.10 This shared definition is an important refinement for terminology used in policy and practice, because it was intended to restrict use of the term innovation to the context of products and related activities within the industrial sector – also called the corporate, business or enterprise sector — of national economies. It was also intended to correct the countervailing trend of using the word innovation in all manner of marketing materials and media promotion, as a synonym for more accurate terms like insight, improvement, discovery or invention. The more restricted definition of the term innovation adopted in the US and Europe was an important first step toward a broader effort of clarifying the underlying models, methods and metrics of innovation, and to counter the decades of

 OECD/Eurostat, 2005. Oslo Manual – Guidelines for Collecting and Interpreting Technological Innovation Data. (3rd Ed). Organization for Economic Cooperation and Development, Paris, France. 10  National Science Board (2012) Research, Development, Innovation, and the Science and Engineering Workforce: A Companion to Science and Engineering Indicators 2012. https://nsf. gov/nsb/publications/2012/nsb1203.pdf 9

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rhetoric that confuses and conflates these critical factors. By now it should have been integrated into all aspects of STI policy and practice. That is, if anyone involved in the A-BC had cared to tone down their rhetoric. But as of this writing, the presence of these revised terms has not changed the policies, the practices or the rhetoric underlying the traditional allocation of grant-based funding for undirected research conducted in the public sector, rather than to contract-based directed research and development, led by industry. The unintended consequence is that the private sector  – where funding for innovation activity should be focused  – remains under-­ supported by Western national governments.

S – Subordinating Engineering to Science

Science is about knowing; engineering is about doing. Henry Petroski

The STI policy bias toward science means that even government programs specifically created to support engineering development, business creation and commercial innovations must be branded with the term research in order to be funded by Congress.

Throughout the twentieth century, the phrase Research and Development and acronym R&D referred to the combination of scientific research activity and engineering development activity required to yield appropriate inputs to commercial production activity for the purpose of yielding technological innovations in the form of products and services for the competitive global marketplace (Letter D). However, the fundamental methods underlying both science and engineering were recognized centuries earlier when their activities were supported independently by governments and society. Then in the late nineteenth century, first Germany then England began to house scientists and engineers in the same laboratories to further national goals. The US soon followed suit while also creating active collaborations with industry to meet requirements for advancing the enabling technologies underlying products and services – both civilian and military (Letters B and I). In more recent times, government decision-makers and university advisors across all of these Western countries could have recognized that the outputs from all three methodologies (scientific, engineering and industrial) individually represented the creation of new knowledge in different states and collectively represented the elements necessary to generate true technology-based innovations in products and services for the marketplace (Letter A). Such recognition would have led to national STI policies and practices that apportioned public funding and aligned the missions of relevant public agencies to achieve the intended outcomes. If so, we would now see the private commercial sector leading national innovation priorities through directed RorD programs. But that is not the legacy from established STI policy. © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023, Corrected Publication 2023 J. P. Lane, The ABC’s of Science, Technology & Innovation (STI) Policy, https://doi.org/10.1007/978-3-031-34463-3_19

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The Pivot Toward Science Since World War II, national policy discussions about activity recognized as R&D were dominated by advisory panels and senior staff comprised of scholars rather than practitioners. These scholars gradually increased their focus to topics related to their own training, culture and incentive, including scholarship, peer review and publication (Letter C). General descriptions for government programs concerned with sponsoring R&D programs routinely emphasized the term research while diminishing mention of the term development, even going so far as substituting the term demonstration, as in having R&D mean Research and Demonstration.1 Similarly, the term science held sway in the descriptive language of government sponsored programs, while the term engineering was hardly mentioned. The concept of research gradually assumed primacy to the point where STI policy documents concerning innovation focused almost exclusively on scientific research endeavors. The word development was largely divorced from the professional practice of engineering, and instead was coupled with research-oriented activities such as the construction (development) of hypotheses, theory building (development) and expanding (developing) areas of scholarly inquiry. A case in point at the government level is the US National Science Foundation (NSF); which could have been named the National Science and Engineering Foundation (NSEF) as was explained in Letter N. The following official summary from NSF’s website clearly demonstrates the agency’s focus on research by both scientists and engineers with only passing reference to development as a separate and complementary methodology: The American people recognized that scientists and engineers had helped win World War II. Penicillin and the atomic bomb were but the two best known of the many contributions made by the research community. With the coming of peace, the challenge facing politicians and researchers alike was how to ensure that science and engineering would continue both to expand the frontiers of knowledge and serve the American people. The answer was the National Science Foundation (NSF), established in 1950, which continues to be the only federal agency dedicated to the support of fundamental research and education in all scientific and engineering disciplines. Charged with making certain that the United States maintains leadership in scientific discovery and the development of new technologies, the NSF has provided funding for thousands of distinguished scientists and engineers to conduct groundbreaking research, including many Nobel Prize Winners.2

Naturally, Congressional funding for the NSF and its programs followed the agency’s expressed mandate so that fundamental research and scholarly education — which all occurs primarily within academia — became the focus of expenditures, at the expense of the downstream professional engineering and industrial manufacturing elements so essential to the innovation process. As noted under Letter B, even Dr. Vannevar Bush did not foresee the impending schism between science and engineering as indicated by his 1950 remarks at Harvard University:

 https://www.ecfr.gov/current/title-40/chapter-I/subchapter-B/part-40  http://www.nsf.gov/about/history/

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The Pivot from Engineering to Technology

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The borderline between the engineer and the applied scientist is becoming dim. It has never been clean-cut. An applied scientist is one who renders science useful. An engineer is one who utilizes science in an economic manner for man’s benefit ... The difference has, in the past, been mainly that the former starts as a scientist and seeks to apply, while the latter begins with the appreciation of a human need and searches out the science by which it can be met...Yet even this difference has been modified. Engineers, those who are really in the forefront of advance, are becoming more entitled to be recognized as scientists in their own right... Applied scientists, under the pressure of war and its aftermath, have often become accomplished engineers as well.3

The Pivot from Engineering to Technology Perhaps Dr. Bush did not foresee the implications of this shifting emphasis toward scientific research because it was not logical, practical or justifiable based on the factual evidence he witnessed regarding the complimentary roles science, engineering and industry all played in WWII’s unprecedented pace and extent of technological innovation. The persistent devaluation of engineering as a field and the cooptation of terminology persisted during the Cold War’s heyday of military and aerospace advances (Letter H). During this timeframe, scholars and policymakers within the Academic-Bureaucratic Coalition (A-BC) deftly substituted the phrase ‘Science and Technology’ (S&T) for the more accurate phrase ‘Science and Engineering’ (S&E). This led to Science, Technology and Innovation (STI) becoming the phrase used to represent innovation policy and practice. The substitution of S&T for S&E should have been rejected based solely on the conceptual inconsistencies between the terms. As explained under Letter L, the term science refers to the methodology of scientific research so it represents a process. In contrast, technology refers to the output resulting from the methodology of engineering development. A phrase combining one method with the output from a different method within one phrase is yet another example of the brilliant yet utterly false conceptual legerdemain implemented in support of the Science Drives Innovation paradigm. This subtle yet intentional change in terminology firmly established a direct coupling between scientific research as process and technology as result, without the burdensome explanation of how the transformation from conceptual discovery to prototype invention actually occurred. This neat shortcut helped simplify the A-BC’s foundational rhetoric (Letter R). Even the prestigious U.S.  National Academies adopted the substitution of the term technology for engineering in their official journal’s title: Issues in Science and Technology.4 The National Academies collective membership representing science, engineering and medicine have not yet ­recognized  Bush V, et al. 1950. Present-day engineering and applied science. In Report of the Panel on the McKay Bequest to the President and Fellows of Harvard College, Sect. 4, p. 7. Cambridge, MA: Harvard College. 4  https://nap.nationalacademies.org/catalog/892/issues-in-science-and-technology 3

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that the crux of the problem limiting progress in national innovation sponsored by government agencies, is the subordination of engineering as a professional practice along with the shunning of industry as a funding recipient (Letter G).

The Payoff from the Pivots Here is a specific example of how the two terms science and technology in STI imbedded bias into specific government funding programs intended to generate innovation outcomes from RorD programs. In 1982 the United States established a new program administered by the Small Business Administration agency, to encourage innovation at the level of small privately-held businesses calling it the Small Business Innovation Research (SBIR) program.5 As seen elsewhere in government, the program’s title was not innovation research and engineering, or innovation research and development, but instead simply innovation research with no mention of engineering or development. We know that this was an intentional shift in focus from development activity to research activity, because the legislation was in fact originally titled the Small Business Innovation Development (SBID) Act. That original title would have placed the funded program’s emphasis squarely on the role of engineering development in the generation of innovations. But the deliberate focus on research activity once again prevailed. Funding for SBIR grants came from a percentage carved out from the R&D budgets of every government agency sponsoring R&D above a specified monetary threshold. Some SBIR announcements included specific product requirements more similar to procurement contracts, while the majority of announcements are broader invitations allowing all manner of exploratory grant proposals. To be eligible for an SBIR award, a grant recipient must be a small private corporation with the lead investigator employed at least half-time by that corporation. Although the term small business evokes images of a neighborhood storefront with a few employees scratching out a living, the formal government definition of small business includes companies employing up to five hundred people. Given the intended focus on innovation, the corporate entities funded through the SBIR program were allowed to allocate some of the grant funds through subcontracts to university-based researchers with expertise relevant to the proposed project. Further, the rules did not preclude any university faculty member from meeting eligibility to apply by creating a small business entity, and only then employing themselves at greater than half-time within their own small business once funding was secured. Even with these two options for accessing SBIR funds available to them – sub-­ contract or entrepreneurial faculty — university presidents, boards of directors and their paid lobbyists, complained that the SBIR programs carve-out had reduced the

 https://www.sbir.gov/about

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pot of R&D funds available to them, and more specifically eliminated their opportunity to serve as the primary grant recipient. This distinction is important because according to the rules governing government grants/contracts, the primary recipient is permitted to charge an additional amount to the sponsor, to recoup what are called facilities and administration (F&A) costs associated with housing the project and managing the funding. Most grant/contract recipients negotiate their own F&A rate with the Federal government. It is almost 60% of the actual award at my university and even higher at some others (Letters M & U).

Expanding the Payoff Over ensuing decades, university advocates within the A-BC complained and lobbied enough about this small carve-out for small businesses from the massive pot of revenue allocated to government agencies for general RorD programs, that US government to create a second and parallel innovation program, whereby universities were eligible to be the prime grant recipient. That allowed them to control the budgets within grant awards, and more importantly, made them eligible to tack on the additional charges for their negotiated F&A rates. The Small Business Technology Transfer Research (STTR) program created in 1992 was another carve-out but this time the new slice of funds was reserved for grants to universities with the expectation that technology-based outputs would eventually be transferred out to the commercial marketplace.6 Here again though, the program had to include the term research in both the name and acronym, while the term engineering was absent from the clumsy name. Even the term business didn’t make it into the equally clumsy acronym STTR. Both the SBIR and STTR programs are wildly popular among politicians despite their dismal record of return on investment. Funding flows to all states and so many congressional districts, that members of the senate and house can all claim some credit for bringing new funding to their home constituents. Even better, the spending is wrapped in the patriotic bunting of grass-roots entrepreneurship. The two programs are so unregulated that some small to medium-sized corporations operate as SBIR/STTR proposal mills by submitting proposals and winning multiple cycles of grant funding for a single idea that sounds promising but never delivers results (Letter R). Without any oversight from the Small Business Administration, or effective communication between sponsoring agencies, these eligible applicants can submit the same proposal idea to multiple government agencies offering these SBIR/STTR programs without challenge to redundancy or lack of prior success. Some universities have boarded this gravy train using the same strategy of recycling promising ideas by circulating them through multiple agencies. The emphasis on scientific research aids in this strategy because unlike engineering development, the

 Ibid.

6

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research projects have no obligation to generate tangible results. As long as they claim they are advancing knowledge in the conceptual state of discoveries, they can claim project progress while continuing to collect grant funding in support of their internal operations. In years past one could easily identify those grant mills by reviewing the history of SBIR/STTR awards  – listed by corporate entity or university name  — on the Small Business Administration’s website. However, investigators are now concealing their strategy by creating multiple entities with different names under the framework of limited liability corporations (LLC’s). Creating a new LLC takes no more effort than filing some paperwork and paying a small fee. Overall, there is little incentive to curtail the nefarious practices within these popular programs. Beyond the political goodwill they create, local communities enjoy the infusion of additional public funding to their economies, which sponsor agencies and universities tout as beneficial through the illusory multiplier effect (Letter M). The National Academies of Science reinforced the claims of a high multiplier effect in its 2015 analysis of SIBR programs under the National Science Foundation and the National Institutes of Health. Even if some portion of the SBIR/STTR grantees were actually delivering some socio-economic benefits from the investment of public funds, the programs would benefit from careful oversight from sponsor agencies over the engineering development projects conducted by universities and small businesses through the grant funding mechanism, and through closer coordination with companies expected to adopt and apply the resulting technological innovations due to their engagement with market segments requiring government sponsored innovation, as describe under Letter O.

Delineating Types of Scientific Research The subordination of engineering development to scientific research reaches down to the level of program descriptions within government agencies. One government agency familiar to me had established a reference model depicting four Stages of Research so grant applicants could describe to the sponsor and reviewers the type of research they planned to conduct within each of their proposed research project7: 1. Exploration & Discovery; 2. Intervention Development; 3. Intervention Efficacy; 4. Scale-Up Evaluation. Applicants were invited to propose projects comprising any combination of these four research stages within their proposed funding cycle. In some instances, the current applicant had received prior awards spanning years or even decades.

 https://acl.gov/aging-and-disability-in-america/nidilrr-frameworks

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What About Engineering Development?

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Consequently, their new proposals might describe their prior findings and then detail some continuing series of research projects to progress from discovery through implementation to evaluation outputs. This sponsor agency had acknowledged how research-based exploration leads to discovery outputs, and had also described how that discovery can be applied in the form of interventions to improve the lives of persons with disabilities. Defining multiple stages within the method of scientific research was fine as far as it went. The problem was that this sponsor agency’s explicit mission was to fund both scientific research and engineering development projects for the purpose of generating new or improved prototype inventions and commercial products and services for a defined market segment. No matter. Internal career agency staff insisted on pursuing an academic mission emphasizing scholarly publications, more akin to NIH or NSF, rather than the original mission oriented toward the delivery of product and service solutions for the marketplace. Consequently, this agency consistently used the term development as a form of research, as in the research stage intervention development. There was no equivalent stage structure offered for applicants to describe actual engineering development projects.

What About Engineering Development? Government agencies periodically release long-range plans or changes to policies or processes. When doing so they solicit public comments on those plans and changes. The comments are reviewed, summarized, then published along with agency responses regarding any revisions made or not based on the public comments. My team made a habit of commenting over several decades on this agency’s scientific research orientation and its commensurate neglect of engineering development as a separate and distinct type of project. We also commented on the absence of business practitioners and corporate managers on proposal review panels. Without their presence, the peer-review panel lacked representation by peers of applicants submitting proposals focused on engineering development, technology transfer and eventual commercial production. Their absence reinforced the emphasis on scientific research while failing to adequately critique the proposed plans for those downstream activities so important to fulfilling the agency’s mission to improve the quality of life for persons with disabilities. At one point in this extended timeframe, a group of distinguished scholars had performed an external review of this agency’s programs and processes and had found no significant deficiencies in the proposal review process. During a public hearing on their final report, I had pointed out the specific deficiency in review panel representation and its consequences for inadequate scrutiny of downstream development and transfer plans in submitted proposals. The panel chair’s reply was an understated admission that due to its composition; the external review panel had indeed lacked a certain amount of wisdom in those areas. Alas, there was no effort by the panel or the agency to re-visit or correct that oversight.

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None-the-less, my team persisted in submitting detailed critiques each time public comments were solicited by the sponsoring agency, where we sought parallel references to research and development as distinct methods, as well as parity between them. In response to one of the agency’s new long-range plans, we submitted over forty separate comments, one comment for each time the narrative used the term research alone when the subject matter in that section of the plan clearly referred to both research and development activities. We also argued that given the presence of four stages of scientific research, there needed to be an equivalent series of stages for engineering development. We saw this as accomplishing three objectives: First, to clearly distinguish experimental development projects from exploratory research projects in terms of their inputs, processes and outputs. Second, to signal to agency staff, review panel members and applicants alike that development project designs, implementation plans and measures of success should be articulated and assessed differently than those proposed as research projects. Third, the presence of stages would facilitate the tracking of progress through milestones specific to each stage. At last, one of our arguments seemed to hit home. It helped that a senior member of my own project team had taken a career staff position within the sponsoring government agency, so this agency now had an internal person supporting our arguments. In fact, that individual was eventually tasked with leading the internal effort to create a Stages of Development framework. The process took several years and went through numerous iterations involving internal agency reviews, external government agency reviews, and further opportunities for public comment on additional draft versions. The end result was a compromise between opposing factions. One group that included my team and corporate representatives wanted the stages of development to essentially mirror the existing stages of research, and in doing so ensure that the stages carried the engineering development process out through transfer and commercial production (outcomes), and beyond to benefits for persons with disabilities as the intended beneficiaries (impacts). The other group comprised of agency staff and university grantees maintained the perspective of the A-BC, which was that the grantee’s funded to perform the engineering development work have no control over the outcomes and impacts, so it is unfair to charge them with achieving anything more than demonstrating some form of external uptake of the project’s output.

Delineating Types of Engineering Development In the end the sponsoring agency released a set of three Stages of Development that applicants must use when characterizing engineering development projects within their grant proposals8:

 Ibid.

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Delineating Types of Engineering Development

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1. Proof of Concept; 2. Proof of Product; 3. Proof of Adoption. Note that the Proof of Product stage as defined by the agency is actually proof of functional prototype, so the term product is misused within this model. We were unable to persuade the agency to adopt a four-stage model where the second stage would be Proof of Prototype, followed by an additional third stage Proof of Product, representing the bona fide commercial production and distribution of a new/ improved product or service in the commercial marketplace; a true innovation. This third stage would have been equivalent to Intervention Efficacy in the research stage framework, because the corporate partner would have performed the necessary consumer and market testing to convince corporate decision-makers that the envisioned product or service would deliver new value in the competitive marketplace (Letter V). The then fourth stage perhaps named Proof of Impact would have logically followed market availability (Scale-up in the research stage parlance), which in this version would have measured the level of benefit from acquisition/purchase and use of new or improved products in the commercial marketplace. Despite this shortcoming, having this sponsoring agency recognize and define engineering development projects separate from scientific research projects was certainly an indicator of progress in elevating the status of engineering development to hopefully attain some parity with scientific research. The unresolved question was the extent to which these new Stages of Development would be internalized and implemented by agency political management and career staff, peer-review panel members, and the grant applications themselves. To date there has still been no wholesale change in the agency’s operations or in the rate at which projects are progressing through stages of development. Small projects like mine see the need and struggle to elevate the role of engineering and industry in government-sponsored innovation programs. But our efforts could be greatly enhanced through parallel efforts initiated by groups such as the Society of Professional Engineers and industry’s major trade associations. We continue to wonder why such powerful groups allowed this wholesale usurpation of their rightful roles in the publicly funded innovation process by the A-BC? Perhaps as we’ve described in several prior chapters, they simply did not have the same historical dependence on public support. Industrial corporations generate their own revenues chiefly from the sale of goods and services in the marketplace, so corporations had to weigh the marginal benefit of government funding against the cost and uncertainly of applying, extended timeframes for review and approval, and the legal and regulatory entanglements attached to such public funding. Similarly, professional engineering firms generate most of their revenue through procurement contracts with industrial firms or government agencies, as those contracts are essential to ensuring quality and compliance for projects involving design, building and/or testing in the civil, mechanical, electrical, aerospace or biomedical fields. Most of the dozens of mainstream corporations that my team had interviewed over past decades are aware of the government agencies and programs sponsoring

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innovation-oriented activity, but the whole process and culture of grant funding is alien to the private sector. Especially because of the academic and scientific orientiaton of the proposal submission process, which few corporations feel qualified to complete. However, the private sector is careful to not complain about inefficient or unproductive government programs because the programs are perceived as entrenched and there is always caution about the government’s long reach and longer memory should a government agency wish to retaliate for unwanted criticism from a corporate entity. Regardless of the barriers, we won’t see improvements in STI policies and practices until the private sector steps up and helps make a compelling case for elevating the role of engineering and industry in publicly-funded innovation programs.

T – Technology Transfer Offices

Many are stubborn in pursuit of the path they have chosen, few in pursuit of the goal. Friedrich Nietzche

Laws instituted 40 years ago to facilitate technology transfer from university and government laboratories to industry actually created new complications for the transfer process and additional barriers for potential corporate transfer partners.

We have described how after WWII the Academic-Bureaucratic Coalition (A-BC) successfully positioned itself at the input side of the innovation equation, to gain an ever-increasing share of the public funds allocated by Congress for programs intended to generate technology-based innovations (Letters B & G). Now we’ll see how once a steady and growing stream of funding was secured, the same A-BC extended their control over the actual outputs from such programs; the intellectual property protected through patents on prototype invention claims.

From Copyright to Patent Claim As previously explained (Letters A, L, Q), engineering development methods transform a kernel of new knowledge from the state of a conceptual discovery derived from scientific research methods, to the state of a tangible prototype invention through a demonstration of both feasibility and novelty. The attributes of feasibility and novelty are both necessary to claim new knowledge as an invention, and the ownership of the underlying intellectual property is secured through the registration of an approved patent. Patent ownership can be national or international in scope, and precludes anyone else from freely duplicating that invention as specified for a pre-determined number of years. The patent owner may allow others to use the © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023, Corrected Publication 2023 J. P. Lane, The ABC’s of Science, Technology & Innovation (STI) Policy, https://doi.org/10.1007/978-3-031-34463-3_20

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patent either permanently by selling ownership, or temporarily by permitting limited use through terms set forth in a license agreement. That is, the owner can generate revenue from their intellectual property through sale or lease. During the period of growth in US government support for university-based R&D projects, the standing rules regarding intellectual property were as follows. Ownership and control over a conceptual discovery protected by copyright — after presentation or publication through scholarly channels —remained with the author, although the government sponsor requested that the source of the funding be acknowledged. There was no monetary compensation for scholarly presentations and publications which were freely disclosed in the public domain. Anyone else could in turn freely apply the conceptual discovery as long as they noted the original author as the source to avoid being accused of plagiarism. A different set of rules applied to prototype inventions claimed as patents, because they held potential future monetary compensation through license or sales. If a government-funded engineering development project at a university or Federal lab generated a tangible output with potential for patent protection, ownership and control over the patent decision reverted to the government. The rationale being that the general public should benefit from inventions generated through public investment. This rule held into the 1970’s when the A-BC began lobbying for change in their continuing search for new sources of revenue. Universities argued that they should retain ownership and control over inventions rather than assign patent rights to the government, because they were better positioned to exploit the value of the invention within the marketplace. The relevant stakeholders and policymakers agreed with the university position because Congressional members could claim credit for bringing home the bacon. Even better, new revenue generated from a government-funded program could possibly even represent a rare valid example of the generally dubious claim for an economic multiplier effect (Letter M).

Transferring Ownership from Government to University The collective efforts of the A-BC and their supporters culminated in the Bayh-Dole Act of 1980 (Patent and Trademark Law Amendments Act: P.L. 96–517) which did indeed allow universities to own and control the sale and license of patented inventions albeit with a set of related conditions.1 The law permitted the government as provider of the initial funding to retain full and royalty-free rights to put the patented invention into practice where it deemed necessary to serve national interests. Further, if the host institution chose to not pursue patent protection for a specific invention, that institution could still offer to surrender the patent rights to the government. As one further condition, if both the host institution and the government waived their rights to protect an invention, the named inventor could petition to gain ownership and control.

 https://uscode.house.gov/statutes/pl/96/517.pdf

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In all of the above instances, the named inventor (faculty, graduate student or staff) as well as the sponsored project’s host institution, would still receive a portion of the future revenue resulting from an outright sale of ownership or from license royalties, no matter what entity or individual controlled the intellectual property. Given the sustained rhetoric surrounding the role of scientific research in spurring technological innovation (Letter R), university administrators envisioned their entire research and development enterprise as a source of new operating revenue (Letter U). Believing their own hype regarding Science Drives Innovation, universities reasoned that any invention output must have resulted from scientific research, so they immediately created a new internal department with responsibility for invention assessment and management called Technology Transfer Offices (TTOs). Given the legal framework for protecting intellectual property, the TTOs were quickly staffed predominantly with attorneys trained to address legal matters, along with a smaller contingent of staff with technical expertise due to the broad range of potential submissions. These offices included only a smattering of business and marketing professionals. After all, university administrators saw the competitive business end of innovation as more practical than scholarly and so best left to private sector corporations. While the Bayh-Dole Act was being written, the A-BC was simultaneously promoting the promise of civilian benefits from government-sponsored R&D activity occurring within the Federal Laboratory Consortium (Letter F). The rationale being that some inventions developed for defense and aerospace missions had also found commercial application, so the future potential for spin-off or dual-use of government sponsored invention occurring within Federal Labs should be formalized. The Stevenson-Wydler Technology Innovation Act of 1980 (PL 96–480) was passed concurrently with the Bayh-Dole Act, requiring every Federal Lab to establish an Office of Research and Technology Applications (ORTA), to coordinate and promote technology transfer.2 As in universities, government lab administrators saw great potential for new revenue from their envisioned internally generated inventions.

The Rise of ORTA’s and TTO’s In response to the legislated mandate, ORTA’s sprung up in Federal Laboratories, like boom-towns during a gold rush. As in universities, the ORTA’s were staffed predominantly by lawyers since intellectual property was grounded in legal matters, followed by a successively smaller mix of scientists/engineers with technical knowledge and business/marketing managers. Fresh-faced and enthusiastic, TTO/ORTA staff proceeded to solicit invention disclosures from all operating programs and projects in order to stock an inventory of intellectual property claims as items for

 https://uscode.house.gov/statutes/pl/96/480.pdf

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sale. Many disclosures came from scientific research projects which were more properly the domain of copyright rather than patent protection, but the distinction was unclear to all participants due to the historical conflation of terms and methods (Letters I & J). Given the wide variety of disclosures submitted, and the uncertainty regarding the future transfer success and monetary value of these disclosures, TTO/ORTA staff had to institute a triage process of shelving those not qualifying for patent protection and those difficult to assess, putting minimal effort into those with some vague promise, and focusing their limited resources on protecting and dissemination information about those few claims that seemed to reflect the attributes of big winners. Faculty members and lab staff had no choice in how TTO/ORTA’s handled their intellectual property disclosures because their host university or lab now owned any intellectual property generated. Even if they were able to get their host institution to waive ownership, and then get the government sponsor to waive their own inherent claims, the named investigators faced their own barriers. Government sponsors and host institutions did not offer funding to seek patents for individuals, so those costs would now come out of the investigator’s own pocket. The lack of follow-on funding dampened investigator enthusiasm for submitting invention claims, although some investigators did pursue patent protection. We know some worked through the process to secure individual rights, while others circumvented the process by ignoring rules by independently pursuing patent protection external to their host institution.

The Effect on Industry Engagement Following Steve Levitt’s Law of Unintended Consequences (Letter R), this shift in ownership and control over invention claims through Bayh-Dole and Stevenson-­ Wydler had a negative impact on the private sector’s perspective adoption of government-­sponsored intellectual property created in universities and labs. The legislated changes put an end to industry’s prior advantageous position of negotiating ownership and control over intellectual property directly with government agencies sponsoring the originating engineering development projects. Prior to 1980, large corporations with sufficient capacity and interest could monitor relevant activity occurring in universities and government laboratories relevant to their internal technical expertise and product offerings. Large corporation out of necessity limited their monitoring efforts to the top tier of technically-oriented research universities (Letter K). They often elected to simplify the search process by hiring faculty investigators with desired engineering development expertise as consultants, or by offering full-time employment to the faculty member’s most promising graduate students as consultants. If/when a corporation identified a viable prototype or inventions claim, they could negotiate directly with the government agency sponsors for ownership or rights to use that intellectual property. Government officials

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responsible for those negotiations held no personal stake in the sale or license agreement so acquisition was routinely granted with nominal terms favorable to the recipient corporation. This arrangement served industry’s interests so they were willing to expend effort to monitor on-going engineering development projects in select universities and Federal labs. After the 1980 legislation took effect, corporations had to begin dealing with a new middle-man empowered to broker access to intellectual property rights. A corporation now had to approach the individual university’s TTO or laboratory’s ORTA to negotiate for access to intellectual property. So instead of negotiating with government agencies that were largely indifference to future value, corporations now had to negotiate with individual TTOs and ORTAs which viewed patents as a potential source of future income for their host institution, as well as a share to the originating investigator(s). Since the future value of any given invention is largely unknowable, and because attorneys are trained to be risk averse on behalf of their client organization, corporations found that TTOs and ORTAs were setting unrealistic projections of future value from their inventions, and therefore demanding excessive up-front payments, high royalty rates and strict control over the terms of use. Instead of facilitating the transfer of technology-based inventions from government sponsored projects out to the private sector, the TTOs and ORTAs functioned as an unwelcome impediment to technology transfer. Companies expecting the transfer terms offered by TTO/ORTA’s to be infeasible would naturally reduce their efforts to seek relevant intellectual property from research universities and government laboratories, further diminishing opportunities for successful technology transfer to the marketplace. The fact of the matter is that universities and government laboratories should have treated the relatively rare opportunity to transfer inventions out to industry as an opportunity to truly achieve the much-vaunted Linear Model of Innovation. The engineering development conducted to generate the intellectual property was already financed by the government, so accepting any terms for acquisition or license offered by industry could have been treated as a win for the university and a win for society.

Hazards of Inter-sector Collaboration Some corporations were persuaded by the 1980 laws and subsequent publicity surrounding dual-use transfer opportunities, to invest time and effort into exploring the inventory of invention disclosures offered through TTOs and ORTAs. But as we witnessed, these companies encountered additional barriers along the way. Corporations found that some disclosure claims exaggerated the state of knowledge or had infringed on existing intellectual property. Other disclosures either no longer represented the state of project knowledge, the project had terminated and staff reassigned, or the claims had been generated by investigators who were no longer accessible. All those issues meant that disclosure inventories held by TTOs and ORTAs

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were not being actively monitored and updated, which we had previously found to be the case through one of our own prior demonstration projects involving ORTAs (Letter F). Companies also encountered conflicts in relative scale or collaborative commitment. Relatively small companies faced bureaucratic and procedural barriers when attempting to extract intellectual property from large research universities or massive government laboratories. They also faced extended time frames or erratic response patterns depending on the named inventor’s other institutional activities, or the laboratory manager’s primary mission requirements. Although Bayh-Dole and Stevenson-Wydler had granted ownership permission to universities and laboratories, the laws and associated regulations had made no effort to harmonize the authority or procedural operations between the cultures, requirements and incentives of such disparate organizations and sectors. Looking back, the pair of 1980 laws that intended to expand the diffusion of innovations to the marketplace instead unintentionally created a new barrier to both the sale/license of protected prototype inventions. Once universities and laboratories assumed the mindset of making money from faculty outputs, that thinking even influenced the traditional scholarly mode of free and open communication of conceptual discoveries directly from researchers to the general public. This entire trajectory of thought shifts the role of academia from openly sharing their discoveries with the world to advance civilization – which at least had potential to eventually contribute to innovation activity through the diffusion process  – to controlling access to and use of even their conceptual discoveries by external entities. Why so? Thinking back to the initial seven chapters (Letters A through G) in this STI alphabet, we’ve established that academia and government have a very fuzzy understanding of the distinctions between the knowledge state of a conceptual discovery from scientific research methods and the knowledge state of a prototype invention from engineering development methods. Now picture a research university or government laboratory with hundreds or even several thousand scientists and engineers, busily engaged in research and/or development projects. Their work and the outputs from that work could involve any one or several scholarly disciplines and fields of technical expertise. Now interpose a new office staffed by attorney’s tasked with identifying and protecting any intellectual property with potential commercial value, and requiring faculty to disclose any claims of invention to that office. The result was a hodge-podge of valid and invalid claims with no clear means of valuing the commercial potential of intellectual property outputs (Letter V).

The Challenge of Brokering the Unknown In fairness the TTO/ORTA staff operate from an unenviable position. First, they had to assess which faculty outputs were conceptual discoveries deemed properly disclosed through scholarly presentations and publications, and which contained enabling information that needed patent protection prior to disclosure. To further

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complicate matters, patent law contained a time bar; a patent claim must be filed within 1 year of initial public disclosure or the claim is considered in the public domain and therefore not protectable. So, a submitted claim accompanied by evidence of disclosure via publication or presentation added time urgency to the TTO/ ORTA’s required diligence in screening and valuation. The second challenge was that invention claims could arise from any discipline and could have application in virtually any field of commerce. TTO/ORTA staff had to quickly understand the claim’s standing within the source discipline and then envision how the claim could possibly be applied in any form and for any purpose. Third, they had to estimate the future value of any and all applications in order to assign some monetary value to a sale or license deal, as discussed under Letter V. Widely publicized examples of commercially successful university/laboratory inventions in the areas of pharmaceuticals and consumer products established an unwarranted level of concern among host institutions fearing they might miss out on a home run; a patent that leads to a large and long-term infusion of royalty income. At the same time, as previously noted, overestimating the value of invention disclosures, discourages corporate interest in any sale or licensing deal. All the above due diligence and decision making has to be accomplished in a timely manner and without benefit of a crystal ball. More than 40 years after Bayh-Dole one wonders if TTOs and ORTAs have ever even generated enough revenue to cover their cost of operations let alone generate surplus funds for their host institutions. This circumstance is not surprising. Even if a subset of faculty claims had potential commercial value, how could any one person or team of people possibly make the required connections between discovery and application? The TTO and ORTA staff are expected to understand, vet and value faculty/staff claims no matter the state of knowledge, the investigator’s discipline or the field of origin. Beyond that unrealistic expectation, these technology transfer staff are somehow expected to have deep insight into the current and emerging state of practice within any and all the relevant industries, in addition to maintaining credible ties to corporate decision-makers across this diverse range of target areas of application.

A Fox in the Henhouse My own team had disclosed multiple internally developed prototype inventions to our host institution, some of which were successfully licensed because we had brought a corporate connection to the table, or in one case where our own TTO found an external broker. That specific device had both mainstream and niche market potential, so our TTO funded the preliminary and full patent claims process.3 Once patented, our TTO licensed it to a local entrepreneurial venture entity that was

 https://patents.google.com/patent/US7543770B2/en

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soliciting intellectual property from universities. Chalk that up as a win/win right? No. Instead of honoring the initial deal, the external venture’s agent submitted a new patent claim by re-designing the disposable element of the device, and once his patent was granted, the venture entity had the temerity to demand re-negotiating the existing terms. Worse, instead of rejecting this effort to circumvent our existing patent, our university TTO actually agreed to accept a reduction in future royalty payments from the external partner (pirate?) due to the venture entity’s new patent. The named inventors on my team were understandably furious. Multiple ensuing meetings with the TTO failed to overturn the revised royalty schedule and credit for invention. The TTO’s director, who was himself a successful inventor and a distinguished professor, even heatedly chastised the named inventors in front of the venture entity’s agent and TTO staff for their persistent objections. The TTO eventually agreed to a further review of the circumstances by an external arbiter. The arbiter concluded with a shrug that while the venture agent’s actions seemed highly unethical, they were not technically illegal. The TTO director and staff were satisfied to chalk it up a successful license of a university patent. They expressed no further interest in contesting the inventors’ loss of royalty income. After all, the TTO staff were all state-funded employees so they had no personal financial gain or loss in the deal, thus they had no incentive to contest prior terms with a firm that could provide future transfer wins even if their practices were unethical. Any loss of actual royalty revenue to the inventors of record was simply of no concern to the TTO staff. Let that point be a warning to employees of universities and laboratories who might expect their host institution to safeguard an inventor’s fair share of future royalty revenues.

Professional Incentives in Play By necessity, many TTO and ORTA staff focus on the few potentially lucrative fields of application (e.g., pharmaceuticals), resulting in claims from within other fields receiving less attention or simply being shelved. That leaves many researchers unhappy with the level of support received, administrators unhappy with the level of TTO/ORTA overall performance metrics, and government sponsors of engineering development projects left with over-promising and under-performing innovation programs. It is no wonder these TTO’s and ORTA’s have high turnover. Beyond the competing demands and difficult workloads, staff turnover resulted from the early career attorney’s viewing these TTO/ORTA positions as entry level career opportunities. While serving in these offices they expected to established valuable contacts with private firms and government agencies which they hoped would then to lead to higher paying and more prestigious positions. One experience at the Association of University Technology Managers (AUTM) conference demonstrated the power of personal incentives among attorneys

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working in the field of technology transfer. Given the absence of industry perspective within TTO/ORTA offices, my team had assembled a panel of Fortune 200 executives to present their criteria for pursuing external intellectual property at an AUTM conference. Much to our embarrassment, there were less than five attendees! I went down the hallway to see where all the attorney’s had congregated, only to find an overflow audience crowding into the doorway of a session on regulatory changes. Such updates were routinely published and widely disseminated through multiple media, so they contained no information that could not be found and read back home in the office. In contrast, this panel of product managers from major corporations offered a rare opportunity to hear about their requirements and valuation criteria, especially given the regular question and answer period within such seminar presentations. The AUTM attendees were clearly more focused on legal updates that burnished their legal credentials, than about learning how to engage corporate executives for the purpose of establishing working relationships and to facilitate actual technology transfer results. But leave it to the A-BC to create excuses impersonating explanations for their inability to deliver results beyond those traditionally expected from their scholarly training and professional incentive systems. A 2013 analysis by the Brookings Institute determined that the problem is not that TTO/ORTA’s fail to offer intellectual property with sufficient innovative value, but that industry’s approach to licensing intellectual property is wrong. Apparently mature and successful companies are incapable of recognizing immense latent value when they see it. The Brookings Institute report suggested that government agencies begin funding yet another approach to technology transfer whereby universities focus on nurturing internal start-up ventures operated by their own faculty. This recommendation fell along the same misguided lines as the parallel efforts by universities to establish new training programs in entrepreneurship for their academic faculty. As if university scholars who spent a decade or more in graduate-level education to hone their scientific research skills and ascend through the faculty ranks, suddenly decided they would rather be out hawking widgets. Besides, such recommendations make the entire effort to transfer out inventions even more parochial and insular, because the scholarly community fails to recognize that invention/innovation value is determined not by the investigator by instead by the customer (Letter V). Of course, not every university is encouraging faculty to become entrepreneurs and to leave academia to start up a small business. Under the prevailing paradigm’s narrative, it is easier to conclude that the academic community has already fulfilled its responsibility by declaring that outputs from scientific research held inherent value to society. As such, they should focus on their scholarship and assume a passive role in the transfer process. This position neatly shifts all expectations and responsibility for transfer outcomes and societal benefits to the private sector. Corporations are expected to prospect for and extract the assumed innovation value from university discoveries and inventions.

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Government Bias at Work Beyond existing barriers to invention access and the extremely low probability of transfer success, another problem is that public funding is not routinely offered to companies interested in bridging the transition from discovery to application, due to the inherent bias against funding the private sector (Letter G). The public and non-­ profit sectors expect the private sector to gain substantial financial profits from such translation and transfer efforts, so pursuing transfers is assumed to generate its own monetary rewards. Except when expedient as explained under Letter U, the corporate profit motive is still treated as unseemly by the academic and government sectors, even though their own existence heavily depends on the collection of tax revenues from those same corporate profits. Their arms-length reasoning allows the A-BC to preserve its claims about engaging in technological innovation, while deftly shifting the burden of accountability for outcomes and impacts to the private sector.

U – University as Free Enterprise

A man doesn’t know what he knows until he knows what he doesn’t know. Laurence J. Peter

In their pursuit of growth universities have gradually expanded their three traditional missions of: Research, Education & Service. Claims of technological innovation have relied more on marketing, promotion and lobbying than on delivering tangible benefits to society. Given the decades of evidence demonstrating the necessary yet not sufficient role scientific research plays in generating technological innovations in the commercial marketplace, one might expect the Academic-Bureaucratic Coalition (A-BC) to finally acknowledge their contributions fall into a supporting role within the broader context and therefore reign in their claims. But no. Instead of admitting to the flawed assumptions underlying the Science Drives Innovation paradigm, the same advocates and advisors create entirely new rationales to keep the public funding flowing through current STI policies by employing a tactic called mission creep; expanding its traditional roles in scientific research, student education and community service to now encompass a corporate model of entrepreneurship and business leadership.

Staying on Message Historically, the A-BC expended great effort to distinguish its models, methods and metrics from those of the corporate sector as justification for its prominent position in the public funding pipeline. Yet the tactic of mission creep transformed those distinctions into commonalities when it suited the A-BC’s intended narrative. For example, the U.S.  National Research Council (NRC) released a series of reports asking then answering questions of national concern such as: At a time of budget stringency, how can we foster more innovation to ensure America’s unprecedented © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023, Corrected Publication 2023 J. P. Lane, The ABC’s of Science, Technology & Innovation (STI) Policy, https://doi.org/10.1007/978-3-031-34463-3_21

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prosperity, security, and quality of life? Instead of seriously and rigorously addressing the full spectrum of contributing methods (scientific research, engineering development and commercial production), these reports simply reinforced the assumption that Science Drives Innovation, and therefore concluded that any responsible government best supports innovation in society by funding more science. No matter the question society poses, the A-BC stays on message: Allocate more public money to scientific research endeavors. The NRC’s 2014 report titled, Furthering America’s Research Enterprise reached new heights of hyperbole by being the first to include the word enterprise in the title, and by making the bold assertion that the A-BC is analogous to the free enterprise system.1 That funding undirected research is good business because of the already discredited multiplier effect (Letter M), whereby new net wealth is supposed to result. The assertion is absurd on its face because the primary source of the A-BC’s continuing funding is public tax revenue and additional debt, rather than net income in excess of costs (Letter W). The U.S. National Research Council’s conclusions better serve the future prosperity, security and quality of life for the A-BC itself than for the nation as a whole.

Why the Message Is Inaccurate It is difficult to reconcile research universities with the notion of free enterprise. The academic sector’s research programs exist in a subsidized bubble rather than surviving in a competitive market. Life support for this closed system consists of government funding for undirected RorD activity which beyond the direct payment to conduct the RorD activity, enriches the host institution through additional payments for overhead or what’s called facilities and administration charges (Letter M). In addition, the funding received in the award budgets include government reimbursement of the salary/fringe costs for university faculty, staff and graduate students who’s time is dedicated to the sponsored RorD activities. On balance, sponsored RorD projects usually cost the host institution nothing because the government covers all the costs associated with activity. While some sponsors or programs required cost-sharing by the host institution, this is usually addressed by identifying and dedicating some existing infrastructure or affiliated personnel to the project, that in reality requires no new expenditure by the institution. The academic sector shares little commonality with free enterprise with regard to the expenditure process as well. Under the free enterprise system, corporate investment decisions are made based on the absolute potential of each available option. Corporate managers, company shareholders and external investment groups are free to allocate whatever amount of funding they deem appropriate, that may involve allocating no money at all, depending on their analysis of the opportunities in any

 https://nap.nationalacademies.org/catalog/18804/furthering-americas-research-enterprise

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given year or other timeframe. This is completely opposite of the government/university mandate to exhaust each annual allocation in order to justify future requests for the same amount or more.

How the Message Supports the Academic Operation The aim and scope of these publicly sponsored expenditures – as well as the selection of proposals to fund – is determined by a network of peer-scholars acculturated in the Science-Drives-Innovation paradigm, not by the general public or the elected officials holding expectations regarding the outputs supplied. The multi-faceted explanation for this ‘peer-review’ system appeals to expertise (only scholars can fully comprehend the complexity of scholarship), autonomy (external accountability extinguishes the very essence of scholarship), and mystery (the myriad and unknowable ways through which scholarly outputs transform into innovations). While some may question the quid pro quo implicit in peer review, scholars portray themselves as operating on a higher moral plane that they view as immune to such petty temptations, thanks to their purported scientific objectivity. The scholars receiving the public tax money through the undirected RorD grant mechanism, pursue whatever line of inquiry they originally proposed, the peer-­ review judged meritorious and the sponsoring agency deemed responsive to their mission. The institution hosting the scholarly activity promises to provide a hospitable environment for the activity and to account for expenditures within established guidelines. Local elected officials may take credit for bringing home the bacon, the host institution will add the award to the total extramural funding received as a measure of its prowess, and the funded investigator will be released from other responsibilities (teaching, committees, projects) for that portion of time allocated to the funded project. The investigator will pursue project implementation, results analysis and manuscript preparation with all possible diligence, because publication in scholarly journals or conference proceedings earn credit towards tenure and promotion. Under the exploratory grant mechanism, claims for the return on investment of public funds do not go beyond the traditional scholarly outputs of learning something not previously known and attempting to publish the findings in an academic journal. To be clear, elected officials, host institutions and individuals make no formal claims regarding outcomes that may result from the application of those project outputs by others, nor about the actual impacts accruing to society for having underwritten the entire system’s costs. The carefully constructed yet unsubstantiated narrative that Science Drives Innovation is sustained by lobbyists hired to substitute campaign contributions for factual evidence of results. In fact, academic sector ranking in the top twenty industries identified as lobbying for government expenditures. The sponsoring government agencies are willing to cover all costs associated with RorD programs because that helps them ensure that the level of funding allocated by Congress continues or even increases annually (Letter C). Doing so requires government agencies sponsoring RorD programs to expend their entire

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budget each fiscal year. Having unexpended funds at the end of the fiscal year tells Congress that the current appropriation may have been too high, and that the agency could get by with less funding the following year. When faced with unspent money, a common practice is for government agencies to solicit requests for supplemental funding from on-going sponsored projects whether the funds are actually needed or not. The other option is to continue making new awards until the year’s unallocated funds are depleted. The former approach results in projects conjuring rationales for more funding, while the latter approach means sending money to sponsor proposals that had not met the predetermined quality threshold during the peer review process, as described under Letter N. The government sponsor’s annual spending imperative means that the academic sector can rely on receiving the full allocation of funds for all active RorD projects. Universities can count on these extramural funds as a reliable infusion of new capital, with much of the total committed over multiple years to support continuing awards of three, five or even longer periods of funding. Plus, the bonus of possible supplemental funding in any given year. All A-BC constituents are well served by the decidedly non-enterprise aspects of this publicly sponsored RorD program and project system. There is little evidence of concerns expressed by government agencies or universities over the opportunity cost of the cash flow in the context of other societal needs, let alone for the long-term survival of the nation’s economy in the context of global competition.

The Bottom-Line Is Something Else Entirely The national economic burden of misdirected STI policies does not end with funds expended through federal-level agencies. State and regional governments underwrite a large portion of their local university’s facilities, staffing, and administrative costs, all of which continue to escalate. The scholarly publication system offers unlimited demand for faculty project manuscripts and conference proceedings, which are packaged as periodic issues then sold back to the institution’s libraries, as proof of their faculty’s scholarly productivity. Universities compete for prestige based on the amount of extramural money they attract annually, and the prowess of their athletic teams, rather than based on their actual contributions to society. They do promote national and international awards received for their scholarship, but those awards typically initiate a new round of competition between universities to recruit those academic superstars along with their proven ability to secure more funding for research, facilities and support staff. The bottom line for dismissing the myth of universities as enterprises per se, is that there is no concern about – or careful scrutiny of – any bottom-line calculation of new net wealth (Letter W) generated by university faculty or their academic institutions as a return on taxpayer investment. In fact, the A-BC seeks public subsidies while demanding substantial autonomy regarding the sponsored work performed and the peer-assessment of outcomes achieved. Their expectations for little to no external oversight and accountability is

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an artifact from past centuries when the smaller private universities aligned with the laissez-faire temperament of wealthy benefactors who sponsored scientific inquiry along with artistic expression (Letter A). Prior chapters (Letters H & I) demonstrated that in the context of deliberate and successive technological innovation of commercial products and services, managed programs achieve their stated goals more consistently than those left to spurious events. To the extent that the A-BC community asks for money and in return promises to deliver socio-economic value, then some level of oversight seems appropriate to those outside of academia. This should be especially true for government sponsored programs of a directed RorD nature that are expected to contain predetermined goals, established budgets and timeframes and outcomes promised by award recipients (Letter R).

History Leads by Example This book’s early example of the successful coordination of scientific research and engineering development methods in support of commercial development in World War II (Letter B), should have been sufficient to demonstrate how close collaboration between industry and academia, financed and directed by government agencies, is the only tried and true formula for solving critical technology-based challenges in the short-term required to address socio-economic problems. In that example, numerous conceptual discoveries were transformed into prototypes inventions, then transferred to industry for transformation into products or services, as well as raising new challenges requiring further advances at the frontiers of scientific exploration and engineering experimentation. The same pattern was repeated on a global scale in the ensuing three decades during the dual races between the United States and the Soviet Union in military armaments and space exploration. Universities did not lead the effort nor deliver the results. Close inter-sector collaboration advanced the core technologies underlying the weapons and aerospace systems exponentially, while civilian spin-off applications yielded the current state of practice in consumer products and their underlying information and communication infrastructure. One must concede that the historical examples of global conflict and competition represent exceptional levels of existential threat, that instilled a sense of urgency and a unified consensus among all sectors and citizens. The same cannot be said for setting priorities among competing socio-economic needs where no such consensus driving threat exists. Technological innovation in civilian industries progressed over the most recent decades due to a mix of geo-political priorities and global competitive market pressures. Through it all, directed RorD programs led by industry demonstrated the critical importance of managerial oversight for identifying and guiding linkages between the potential value inherent in fundamental discoveries and prototype inventions, and the actual value realized through the application of these knowledge states in the generation of innovative products and services. A tiered managerial monitoring system and cultural orientation regarding technological innovations as described in Letter I, is another hallmark of

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entrepreneurial enterprise lacking in the academic sector. Instead, professors are essential contract employees hired by universities for an indefinite period. They are free to climb the promotion and tenure ladder either within one institution or by moving their sponsored RorD programs from one institution to another. There is no managerial oversight at the institution (e.g., senior faculty, department chair, school dean), responsible for tracking and reporting progress from discovery through invention and then out to innovations. Unlike corporations, universities have no formal oversight committee established to collect and track findings and advances in the context of technological innovations within or across academic disciplines. Discoveries generated through scientific research methods are described in manuscripts prepared by the individual faculty member, then disseminated through scholarly and professional publications – unless they are held in confidence as proprietary information (Letter K). These discoveries are traditionally reported as results generated through the research method applied – without reference to any particular field of future application as a basis for invention or for innovation. While corporate managers could seek out these scholarly outputs through key words or study abstracts, neither search option offers a deep understanding of project outputs related to technological innovation or any aggregation of outputs converging along similar conceptual paths (Letter F).

Re-branding as a Marketing Strategy Talk is cheap and so are labels. To further the impression of academia as enterprise, universities have taken rebranding dull-sounding administrative offices such as Office of Sponsored Programs or Office of Extramural Research, with new business-­ oriented names like Office of Research and Economic Development or Office of Research and Commercialization. These names suggest a direct link to socio-­ economic benefit that does not fit most universities. The Science Drives Innovation paradigm has established yet another clever rhetorical position (Letter R). But clear thinking shows the academic sector is trying to have it both ways. Certainly, there should be no expectation for those engaged in curiosity-driven undirected RorD to identify practical applications for their conceptual discoveries. Conversely, those so engaged should not be allowed to represent their outputs as inherently containing value to society, in or to justify continued and increased levels of public support for undirected RorD. While one cannot definitely prove the absence of future potential utility from any and all conceptual discoveries, the paradigm is based more on faith than on fact. While repetition is not substantiation, having the prestigious group of A-BC advocates stay on that single message for decades, while serving as objective advisors to STI policy-makers has proved to be an effective substitute for hard facts.

V – Valuation of Invention Claims

A journey of a thousand miles begins with a single step. Lao Tzu

Determining the likely innovation potential of any invention does not required extensive knowledge or analysis of fields of practice. Instead, assess the quality of the inventor’s documented efforts to verify feasibility, novelty and utility within the competitive commercial context, prior to having initiated their RorD projects.

As a core component of STI policies, most nations annually allocate a portion of public funds to sponsoring RorD projects in universities and government laboratories. As previously defined, these may involve directed RorD with specific requirements and deliverables spelled out via a procurement contract mechanism, or they may be undirected RoD left to the recipient’s discretion and administered through a exploratory grant mechanism. In return government’s expect recipients to deliver whatever technological innovations with social and economic benefits are promised within the funded contract or grant proposals. Regardless of promises made, undirected grant recipients have great latitude regarding their actual outputs, as compared to directed grant recipients working under the performance specifications within procurement contracts. Due to their professional incentives, there is a tendency for scholars to prioritize the initiation of proposed scientific research projects leading to scholarly publications, while postponing development projects until later in their grant award’s timeframe. The reason for delay is that university faculty and career laboratory staff have little prior exposure to industry requirements, and many who receive undirected – or even government directed – grant funding have limited formal training in engineering development project planning, implementation, budgeting and management culminating in a prototype invention suitable for transfer consideration by industry. Delays in implementation typically result in the proposed engineering © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023, Corrected Publication 2023 J. P. Lane, The ABC’s of Science, Technology & Innovation (STI) Policy, https://doi.org/10.1007/978-3-031-34463-3_22

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development projects being rushed to completion under constrained conditions just to satisfy the promised scope of work. Such postponements also have a way of becoming permanent if/when the emphasis on scientific research consumes all of the grant award’s available time and money.

To Protect and Pursue or Not In the context of STI goals, there is substantial divergence between sponsor expectations for undirected RorD grants intended to generate innovations with socio-­ economic value, and the grantee’s own priorities regarding research versus development activities. To the extent that some undirected RorD projects do result in disclosed claims of invention outputs, there are three critical levels of claims assessment that the TTO/ORTA staff are expected to satisfactorily address: (1) the invention’s potential for intellectual property protection, (2) the most efficient and effective pathway to achieve a successful transfer to an external licensing partner, and (3) the potential financial and public relations return to the university resulting from the invention’s eventual commercialization. The TTO/ORTA’s evaluation process is complicated by the fact that inventors naturally assume their claim is worthy of patent protection even if they haven’t performed their own due diligence, they expect external licensing partners to beat the proverbial path to the university’s door even if they personally have had no prior contact with companies, and they tend to envision a personal financial windfall from commercialization. The expectation of financial benefit often represents the greatest challenge. Inventors are suspicious of external appraisals of their claims, thinking the value is intentionally underestimated for negotiating purposes, or because others simply don’t grasp the full value they envision. Inventor’s subjective valuations are reinforced if their TTO/ORTA representatives over value the invention during presentations to external parties. Conversely, once faced with resistance from potential external transfer partners, the TTO/ORTA staff may try convincing the inventor to accept a negotiated deal with lower terms, because the TTO/ORTAl’s performance metrics include the number of licenses obtained, as well as claims cleared, revenue generated and many others.1 This type of flip-flop heightens the inventor’s suspicions of the valuation process, adding a self-inflicted barrier to successful transfer. The TTO/ORTA presents its own set of constraints on assessing the potential value of invention claims. Existing staffing capacity may force a quick and dirty triage of incoming invention claims, so that not every one will receive the same level of diligence across the three levels of assessment. Prior experience with the claimant, the category of claim or the potential transfer partners may influence the level

 https://techtransfercentral.com/reprints/ttt/909-new-metrics/

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of effort applied. Legendeary examples from other universities like Gatorade2 may skew the assessments as staff breeze through claims searching for the next commercial success story.

Challenges to Making a Deal Under the best of circumstances involving rational parties concluding a transfer deal is still challenging because even the most revolutionary inventions require substantial follow-on investment in money and time to refine, test, produce, deploy and promote the ensuing innovative products and services within the competitive commercial marketplace. Given their prior expenditure of intellect, time and ego, the inventor may think their contribution is worth the majority of future value, the corporate partner views the future required investment as requiring a majority return. The inventor is unaware and largely unconcerned with those downstream costs, which are of paramount concern to corporate managers. Even when a company sees sufficient value to consider buying or licensing the intellectual property, the future value of this new opportunity is competing with the future value of the company’s internal development projects which have their own internal champions with professional incentives and personal ego involved. In the zero-sum reality of finite resources (Letter Z), the company may have to choose between this external transfer opportunity and some worthy internal project, with significant implications for resource allocation, staff assignments and perhaps even managerial promotions. Achieving collective consensus over the future value of intellectual property, and the relative share apportioned to each party to the deal, is difficult given the uncertainty inherent in projections and the competing vested interests involved. As noted under Letter T, staff in TTO/ORTAs are challenged by the difficult task of accepting disclosures from any field of science or engineering, determining their appropriate level of intellectual property protection (copyright or patent), most importantly for future transfer negotiations, forecasting their potential future value to external partners in the context of the commercial marketplace. Complicating the matter, confidentiality restrictions, disclosure rules and negotiation realities limit options available to these offices for consulting with industry experts to help determine future value. In our own efforts to assess invention potential we drew upon industry best practices to establish an efficient and effective shortcut to identify the rare disclosures with potential value – to identify the proverbial pony in the pile – without benefit of knowledge about the field of origin or future market applications.

 https://research.ufl.edu/publications/explore/v08n1/gatorade.html

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Early Diligence Is Key to Value My team’s work over several decades to address the challenges of valuing inventions from any field, we concluded that the best approach is a careful reading of the disclosure package followed by an interview with the person makig the invention claim. We determined that this preliminary analysis restricted to the claimant’s own prior work elicits most all the information necessary to determine whether or not the claims are likely to represent some commercially viable opportunity. The elicited answers quickly identify claims worth the time and effort to perform the necessary due diligence and the resource expenditure required to secure intellectual property protection. The inventor’s own efforts to fully explore and understand the invention’s feasibility, novelty and utility in the context of the commercial marketplace context prior to initiating the sponsored RorD project, is the critical element for assessing value. It is very likely that the level of prior diligence varies widely between directed RorD performed through procurement contracts, and undirected RorD performed through exploratory grants. Directed RorD arises from a fairly well defined set of requirements even if the solution itself is not well defined, so the requirements are more likely to have assessed at least some aspects of the technical, market and commercial viability of the solution. Resulting invention claims are more likely to be valid. Conversely, invention claims arising from exploratory grants typically lack such assessments from the sponsor or the investigator, so invention claims are less likely to be valid except through some serendipitous events. The level and extent of prior due diligence are so critical because the training and incentives underlying research-oriented scientists and engineers leads them to focus on their project’s contribution to scholarship over its contributions to the marketplace or to society (Letters D and G). There is a low probability that projects conducted independent of potential applications have commercial market value. Those inventor’s documenting a thorough understanding of the marketplace especially those who demonstrate prior engagement with the most relevant corporations, are the ones that deserve careful scrutiny during the valuation process.

Four Essential Questions We determined that the most efficient and effective approach to valuing an invention disclosure resulting from undirected exploratory RorD grants, is to assess how thoroughly the inventor documented answers to the following four questions in their proposal submitted to the sponsoring agency, as well as in their supporting documentation for the current invention claim:

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1. What effort was made to define and validate a societal problem? (a) Was a problem defined from the perspective of the eventual primary customer group(s)? (b) Were those findings verified through concurrent input from other relevant stakeholder groups in the supply/demand chain regarding business, marketing and technical feasibility? 2. How was the technology-based solution defined and validated? (a) Was the solution defined in objective ‘new to world’ terms rather than subjective ‘new to me’ terms? (b) Was the solution initially envisioned as the intended project output, or as a coincidental by-product? (c) Was care taken to limit public disclosure of enabling information regarding the envisioned solution? 3. Was the problem/solution set described as an improvement over the features/ functions of current market offerings, or as an entirely new set of features/functions enabled by some new technology-based capability? (a) Why has the problem not already been adequately solved by existing products/services? (b) How is the claimed solution superior to all existing sub-optimal solutions? (c) Was a thorough SLOT (Strengths, Limitations, Opportunities, Threats) analysis performed on the problem/solution set and what did it reveal? 4. How fully has the path to market been planned? (a) How far did the Project Leader intend to proceed; through conceptual discovery, through operational prototype, or all the way to market introduction? (b) What additional expertise/resources are necessary to verify the novelty, feasibility and utility of the envisioned final product/service? (c) How will intended partners/customers find the envisioned solution? The quality of answers to these four questions can help TTO/ORTA staff, corporate executives and even government agency personnel quickly determine the quality of outputs and potential for innovation outcomes from sponsored RorD projects. The degree to which the inventor addressed these questions when preparing the original grant proposal and the submitted invention claim, is the degree to which the TTO/ORTA staff can have confidence that the prototype invention has potential commercial value, without the TTO/ORTA having yet studied the particular technology claims or their presumed field of application. Conversely, the degree to which such prior exploration and analysis is absent from the inventor’s documentation, decreases the likelihood of commercial value to a point approaching random chance.

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Prior Collaborations Facilitate Transfer The most expeditious approach to transferring inventions is for the inventor to have secured prior collaboration with a corporate entity holding relevant internal science and engineering capabilities as well as the capacity to transform the invention into a commercial innovation. This approach falls outside the culture and comfort of most university faculty. It is more likely that the inventor performed little analysis prior to applying for the RorD grant funding and can furnish scant documentation in response to the four questions. To our surprise we learned that the scholar’s rationale for not conducting due diligence regarding the future value of their planned project’s output, is that conducting any such preliminary technical, marketing or business analysis requires them to voluntarily expend uncompensated time and effort, which they are not willing to do. They expect such analysis to be done only after a government agency provides the funds to do so. Consequently, the justification offered for undirected RorD intending innovation outcomes is largely dependent upon a knowledge gap in scholarly publications, a curiosity-driven inspiration from the investigator, or an anecdotal report of an unresolved problem. All have only the most tenuous link to future commercial market value. Conducting a comprehensive product, market and corporate partner analysis prior to proposal creation, does indeed require the investigator to perform some up-­ front and uncompensated effort. That level of analysis is considered essential by companies where the short-term expense from internal resources avoids a more costly long-term investment in a non-viable project. The potential downstream costs of a failed sponsored grant project are of less concern to academic faculty because those costs are born by the sponsoring government agency and therefore by society at large. However, those select few faculty and government sponsors that are serious about helping to achieve innovation outcomes acknowledge the importance of performing proper due diligence to validate both the problem and the solution prior to pursuing funding for the envisioned RorD project.

Minding the Gaps in Process We’ve already established that both scientific research and engineering development are necessary antecedents to achieving technological innovations outcomes. But that does not mean that every RorD project intending to contribute to innovation must conduct an original suite of research and development activity independent of the established base of discovery and invention. A careful preliminary analysis could reveal that all the necessary exploration and discovery underlying the required scientific research had already been conducted for other purposes. In such cases, a proposal could document the established base of scientific evidence and therefore plan to commence with engineering development activity. Of course, this approach of skipping the scientific research phase of activity, even if fully justified through

Minding the Gaps in Process

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due diligence, does not satisfy the professional incentives of university faculty or their graduate students who’s training, culture and incentives demands that sponsored projects commence with scientific research activity. In other instances, careful preliminary analysis could reveal that all the necessary scientific research and engineering development had already been completed. Under those circumstances, a proposal could be initiated with commercial production by either securing a willing corporate partner or by establishing a new business enterprise around the existing prototype invention. At that point the investigation would focus on understanding why the invention had not yet been transformed into a commercial product or service. It may be that others already tried to enter the market with a similar product and had failed, or they had abandoned their efforts after learned that previously unidentified existing products already well addressed the assumed need. Revealing such factual information in a timely manner would invalidate the envisioned problem/solution set and avoid wasting public funds on a project destined to fail. Yet, too often the absence of proper prior analysis, and the inability of review panels and sponsor agencies to recognize its absence, results in public funding of RorD projects that are called reinventing the wheel; generating a solution that is obvious, that already exists and works well in another form. Or worse, public funding only accomplishes what we call reinventing the square wheel  – expend resources to create a flawed and poorly functioning version of a successful existing product or service. Finally, careful investigation of the business case surrounding an envisioned new product or service outcome, prior to initiating or funding an RorD project intending innovation outcomes, could reveal downstream financial barriers concerning the cost of materials and assembly, distribution, sales and marketing, or even reimbursement for products meeting a social need. As explained under Letter R, sponsoring government agencies and their proposal review panels are the first line of defense against poorly conceived and inadequately justified RorD proposals. By recognizing that as a potential failure point, TTO/ORTA offices can avoid expending their limited resources on invention claims with limited potential, by carefully reviewing the level of document in the investigator’s original proposal as well as that furnished in support of the invention claim. All of the failures that result from insufficient prior analysis represent RorD project outcomes that waste public resources and that fail to satisfy the socio-economic goals of national STI policies and practices.

W – New Net Wealth

If you want better behavior from bankers, then make their financial incentives more like those in the hedge-fund world – where managers have ‘skin in the game,’ and their net worth is tied to their long-term performance. David Ignatius

Western STI policies and practices need to be re-oriented toward outcome rather than process, and the surest measure of success in generating innovations is an accurate accounting for new net wealth and supporting the actors and sectors who generate it.

All the promotion and promise surrounding innovation as beneficial to society is wonderful, yet the actors are largely driven by the promise of wealth. That is, new wealth accruing to some recipient group or entity. Even better is new net wealth which is wealth remaining after subtracting all expenses required to generate it. The promise of future new net wealth from innovation through scientific research is a foundational assertion underlying the Academic-Bureaucratic Coalition’s (A-BC) ability to secure a large and increasing share of public funding through STI policies. We have shown throughout that this assertion has remained unproven because the public and non-profit entities face no existential threat to their employment and operation for failing to deliver on the promise.

The Private Sector’s Metrics In contrast, the industrial sector operates under the proven assertion that expending time and resources in unprofitable ways can lead to corporate insolvency and unemployment. Corporate employees know their jobs on the line because their individual performance is monitored constantly while each corporation’s overall performance is monitored daily or at least quarterly by private owners or by public shareholders. © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023, Corrected Publication 2023 J. P. Lane, The ABC’s of Science, Technology & Innovation (STI) Policy, https://doi.org/10.1007/978-3-031-34463-3_23

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Corporations know they have to eventually deliver promised results in order to be paid, while the paychecks for tenured faculty and career government staff continue indefinitely. This is not to say that the private sector has a philanthropic bent to address national needs. Corporations are motivated by profit. Their willingness to address national needs require sufficient incentives, as in the case of orphan products when governments provide the upfront funding for directed RorD projects, and eliminate the back-end risk of market failure by guaranteeing purchase of the resulting products or services (Letter O). The fact is that the private sector is structured to achieve the goals of national STI policies, whereas the academic and government sectors are not. Further, domestic corporations are required to share the wealth created through the commercial sale of innovations with their country’s government, so that nations with the most innovative commercial production sectors accrue the highest level of new net wealth from global sales of their domestic products. Under Letter M we explained that passing money from one organization or sector within a single nation’s boundary does not generate new net wealth. The myth of the multiplier effect stems from government allocations of funds to a university, government laboratory or corporation. The recipient then re-allocates the funds to actors and organizations in the region, and those funds are then further distributed through the local economy. But each successive infusion of funds involved a sub-set of the same national economy. No new net wealth was generated for the nation by these re-allocations, so there was no true multiplication of the initial investment for that nation. A multiplier effect of net wealth only occurs when the investment creates an infusion of new revenue from outside the national economy.

National Government Metrics Governments can successfully generate new net wealth so long as they align their STI policies with private sector’s practices. The thought exercise in Letter Q described three nations, each focusing their investments exclusively on one of the three methods contribution to technological innovation. Scientific research generates expertise generates publications and engineering development generates prototypes, while only commercial production generates products and services for the global competitive marketplace. The example exaggerated the investments to demonstrate the problem with using GERD divided by GDP as the internationally accepted metric for measuring innovation. The same lesson holds true for new net wealth which is equally dependent on the generation of innovative products and services in the global competitive marketplace. Global competition depends heavily on technological innovation in both mass markets and for orphan products with international customers. Companies and home countries responsible for producing advanced information and computer capabilities for consumer products accrue new net wealth from the global marketplace. Similarly, nations with the most sophisticated military equipment enjoy a

Industry Generates Wealth

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period of technological superiority from their initial investment in directed RorD programs, then accrue new net wealth by selling that equipment to other nations once they move to the next generation of weapons systems. To the extent that STI programs identify and support opportunities to design, build and deploy successive generations of domestic products and services, the sponsoring nation ensures a future flow of revenue from other nations as new net wealth. The situation is complicated by multinational corporations where sales revenue and tax payments are distributed across multiple countries. These same corporations typically source raw materials, components and labor from multiple countries, so their expenditures are also distributed globally. The only solution is to consolidate corporate or even industry level operations horizontally and vertically within the home country in order to capture the maximum share of new net wealth. We can again look to China to see how well this approach is working in practice.

Industry Generates Wealth US industry is the engine of its national economic growth as well as the primary source of new net wealth in the context of the global economy. This is because industry underwrites most of the nation’s RorD costs underlying free market innovation opportunities (Letter O), and is encouraged to do so by favorable accounting treatment reserved for expenditures that qualify as research or development (Letter J). Public policies encourage corporate RorD expenditures because governments know they will eventually collect additional revenues when they tax the corporate profits on innovative products and services sold, as tax the wages paid to corporate employees paid to products those products and services. Governments can then allocate the additional tax revenue collected to fund programs sponsored through STI and other public policies. This system of revenue collection and disbursement works well when the government policies are grounded in valid requirements and generate the intended results. For example, the A-BC serves an important purpose when focused on educating and training successive generations of citizens, including scientists, engineers and business managers who drive the innovation network. However, to the extent public policies rely on academia to address societal needs for technological innovations, they decrease the probability of translating knowledge in the states of scientific discoveries or prototype invention into new or improved products and services for domestic and global markets. Government resources are finite and depend on the collection of tax revenues as well as newly accrued debt for replenishment. Diverting the limited flow of public money for directed RorD programs led by industry, to undirected RorD programs led by academic, diminishes the private sector’s capacity for innovation, which reduces the potential future generation of new net wealth and ultimately the amount of revenue collected to replenish government coffers (Letter Z).

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If academic and government personnel had their professional incentives tied to the delivery of promised results, then the limitations described in the prior chapters would disappear. Those sectors would have to stop over-promising and perhaps even retract their claims of generating innovations with beneficial societal impacts. That could change the orientation of government policies so that innovation funding would be re-allocated to the private sector. A nation’s ability to sell innovative domestic products to a global marketplace generates a net gain of new wealth for the selling nation at the expense of a net loss of wealth for the buying nation. China has been following this formula for the past several decades as we see in the following chapter (Letter X).

X – Xi Jinping’s China Strategy

Give a man a fish; you have fed him for today. Teach a man to fish; and you have fed him for a lifetime. Chinese Proverb

China’s 2050 plan winning the global competition in technological innovation is correctly focused on public support for market products, business development and private sector growth.

If you want to know how the global innovation competition is being fought and will likely be won, read the 2010 publication, Science & Technology in China: A Roadmap to 2050.1 The Chinese government is the one nation that has accurately framed the process through which the economic sectors collectively achieve STI goals. China recognizes that innovation-oriented RorD programs must be coordinated, managed and externally relevant in order to generate new net wealth through market value. The 2010 report announced a radical shift in China’s STI policies by ensuring that technology-oriented science and engineering is guided by directly coupling sponsored RorD programs to commercialization goals market requirements, under the guidance of private sector business and industry.

China’s Focused on Industry China’s strategy echoes that taken by AT&T Bell Labs accomplished decades ago in the USA (Letter I). The Chinese government recognizes that it operates as a monopoly at a national level, so just like AT&T it can orient and manage its RorD inputs, processes and outputs to support desired commercialization outcomes.  Yonxiang, L. (2011) Science & Technology in China: A Roadmap to 2050: Strategic General Report of the Chinese Academy of Sciences, Bejing: Springer/Science Press. 1

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023, Corrected Publication 2023 J. P. Lane, The ABC’s of Science, Technology & Innovation (STI) Policy, https://doi.org/10.1007/978-3-031-34463-3_24

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Further, as a communist country it can allocate both its public government and private corporate in whatever manner it chooses. China is using the fallacy inherent in Western innovation equations (Letter Q) to leverage its internal investments to gain competitive advantage in global commercial markets. For example, the US and EU’s emphasis on investments in undirected RorD in universities and government laboratories is a vast of resource for exploitation at no cost. We’ve noted that the primary professional incentive for university faculty is publishing their research methods and results through the peer-­review process (Letter C). Consequently, the full range of science and engineering discoveries – with the exception of projects classified by governments -- are continuously being released through international academic journals that adhere to the quality standard of peerreview. This global intellectual output is freely available to Chinese audiences. Since English is the de facto language for most scientific journals, China easily bridges the language gap by sending many of its science and engineering students to be educated at the highest quality Western institutions. These graduates are then well qualified to read, understand and apply these published conceptual discoveries at home. To maintain its internal capacity to absorb and apply these discoveries at home, China does also allocate sufficient funds to maintain its own network of about one hundred research universities, eleven of which are ranked among the top 200 global universities by US News & World Report. In comparison to Western nations, university faculty in China have less job security and academic freedom and have very little input into the tenure and promotion process, which is controlled by each university’s administration and in turn reports to Chinese government officials. This approach gives the central government tight control over sponsored university-­based RorD projects.

Leveraging the West’s Outputs While accessing the rest of the world’s published discoveries, Chinese scholars gain the parallel benefit of reading about science and engineering discoveries generated by their internal network of universities and government laboratories, that are published in domestic journals. Domestic journal articles are written in Standard Chinese, which is a passive barrier to access, absorption and application outside of China. Consider how few scientists and engineers who are citizens of Western countries have been educated to read, understand and apply these Chinese articles? The net result is an information access disparity conveniently resulting from this simple difference in languages used. Similarly, China has free reign to exploit Western nation investments in directed RorD programs that generate prototype inventions. With the exception of classified government programs and proprietary corporate projects, the enabling information for any invention claims that result from this activity is disclosed publicly when patents are issued. By exploiting the enabling information in the vetted invention

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claims of Western nations, China can focus its internal RorD resources to fill discovery and invention gaps, or pursue discovery and invention outputs in novel application areas. By selecting from among the most well demonstrated invention claims, it also avoids the risk and cost of experimental failures, much as larger corporations allows smaller businesses to assume cost and risk before acquiring those demonstrating success (Letter O). China’s efforts to exploit conceptual discoveries and prototype inventions goes beyond legal and conventional access through published journal articles and patent claims. China’s practice of infringing on protected intellectual property is well publicized, despite the prohibitions established by international conventions. China also practices corporate and government espionage in order to access discoveries and inventions that are considered classified or proprietary and are therefore protected as state or trade secrets. Despite being illicit and unlawful, these aggressive intelligence gathering activities compound China’s competitive market advantages gained through their domestic science and engineering programs, coupled with their careful study of Western publications and patents.

China Is Nation Z China’s 2050 plan appears to be a hybrid approach to the STI policies described in the thought exercise under Letter Q. China is operating most like Nation Z in that exercise, by deliberately orienting its public investments toward the production of goods and services for global commercial markets. China recognizes that this orientation will yield the highest level of new net wealth over time (Letter W). Concurrently, China is investing in both its university-based RorD capacity, and its commercial production infrastructure, to ensure it has the capabilities to exploit the outputs of Western nations that are functioning more like Nations X and Y in that thought exercise. China is applying to innovation the same strategy it applied to manufacturing; the gradual vertical and horizontal integration of capabilities previously held by Western Nation. China’s complementary strategies of expanding its geographic sphere of influence and gaining greater control over finite natural resources critical to high-technology manufacturing, represents long-term integration at a geo-political level. To prepare for implementing these strategies, China spent the prior thirty years building the world’s greatest manufacturing and production capacity. It contracted with Western nations for the most basic manufacturing and assembly tasks underlying consumer products, which allowed the final goods to be sold in Western countries at lower prices that those sourced domestically. Short-sighted consumers were quite happy to abandon domestic suppliers to save a few dollars by acquiring Made in China. In the US the heirs to Sam Walton’s patriotic branded chain of stores led the way in sending its business to China. The result was that US domestic factories along with the mostly union jobs dried up and shuttered, leaving the formerly

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well-­paid workers to become Wal-Mart greeters. In retrospect, sacrificing new net wealth, economic health and national security seems like a poor exchange for lower prices, always. China has already demonstrated the proper path for achieving innovation; they’ve generated so much new net wealth from manufacturing products previously made in the USA that they can afford to create entire new islands in the Pacific Ocean, then build modern infrastructure to make them habitable. China’s rise began by winning contracts for low-tech, high-volume components and products by undercutting Western material and labor costs. Over several decades they vertically integrated manufacturing and production functions within their borders, while continuing to undercut Western material and labor costs. China’s domestic employment of workers gradually working at higher skill levels through vertical integration of manufacturing elements, was matched by a decrease in demand for employees at those same skill levels in Western nations. China’s population enjoys growth in middle and upper-income levels as their net wealth continues to increase. China’s vertical integration of the supply chain allowed it to capture an increasing share of the cost involved in manufacturing, while also expanding its work force to higher skilled blue-collar labor and white-collar management jobs. This vertical integration continued until China is now capable of producing finished goods that rival or surpass any finished goods sourced in the Western nations. China has reached a point where it can now contract out the lowest level of manufacturing and assembly to other nations – in some cases back to Western countries – as it frees up its own skilled labor and management to capture an even greater share of monetary profit from production, sales and now with technological innovations. The forward looking Chinese have also directed some of their new net wealth to acquiring control over the rare earth element deposits in Asia and Africa that are increasingly vital to the operating components of future generations of civilian and military technological innovations. At the present time, China is the world’s economic juggernaut with the absorptive capacity (Letter K) to capture and integrate all new published knowledge from scientific research, and to acquire and apply – legally or illegally – all new patented invention claims from engineering development, while conserving its massive internal resources to focus on market requirements and commercial production efforts. China is well on its way to secure global domination of new net wealth by 2050, while Western nations continued to cling to antiquated notions of technological innovation and global competition, by flogging the Science Drives Innovation paradigm in the face of counterfactual evidence. This scenario has alarming consequences should the US and EU not revise their own metrics for innovation, which is the only basis by which they could quickly and dramatically shift their policy and investment decisions to better align and compete with China (Letter J). There seems to be little probability of that occurring given the incentives for perpetuating the current approaches to STI policy and practice.

Y – WhY STI Fallacies Persist

The man who chases two rabbits catches neither. Confucius

STI fallacies persist because they deliver the resources necessary to further the careers of academics and bureaucrats who sustain them, despite the resulting mixed messages about project means and ends, and the lack of evidence for beneficial socio-economic impacts.

We have noted that all advanced nations require a cadre of scholars qualified to conduct rigorous scientific research in order to generate conceptual discoveries that advance all fields of knowledge, as well as to absorb and apply discoveries documented by others through the global publication network. Such nations also require a governmental infrastructure including agencies with a mission to support undirected scientific research conducted by university faculty. Both academia and government play an essential role in supporting scientific research as one component of technological innovation.

Doubling Down on Myth The essential role for scientific research only became a problem when the A-BC expanded the narrative regarding the benefits of scientific research from expanding the state of conceptual knowledge to claiming to be the primary driver of technological innovation. This claim persists despite the absence of any demonstrated causal link between scientific research activity and commercial market innovation outcomes that can be used to justify the bias in national STI policies and practices. Nor have there been any deliberate and systematic efforts by the scholarly community to establish such a causal link. To the contrary, the A-BC moved aggressively to discredit the single most comprehensive effort to determine the actual contributions © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023, Corrected Publication 2023 J. P. Lane, The ABC’s of Science, Technology & Innovation (STI) Policy, https://doi.org/10.1007/978-3-031-34463-3_25

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of scientific research to product innovations relative to the contributions of engineering development (Letter H). This lack interest in establishing causation or even objective validation is a key indicator that the academic community doesn’t risk exposing evidence contrary to the core myth underlying their Science Drives Innovation paradigm. The A-BC advocates have been successful in sustaining the myth. But what about the university faculty and laboratory staff who are the beneficiaries of the funding? How have the individual scientists responded to the expectations beyond scholarship that the innovation myth placed upon them? Narrowly focused by their training and eager to pursue the available funding, some faculty are completely unaware of the broader implications of STI policies and practices. Despite the expressed innovation goals to justify funding, most of the government programs end up labeled as research programs (Letter S). Scientific researchers simply pursue the various funding opportunities announced annually by government agencies and made available to them through their host institutions. Some of the university faculty who secure undirected grant funding for RorD intending innovation outcomes, are aware of the different states of knowledge and the critical factors supporting transfer between them, and consequently do implement rigorous RorD projects resulting in innovation outcomes. As my team’s retrospective and prospective analysis showed, these success cases exception within the broad scope of public allocations for that purpose (Letter K).

Investigators Caught in the Paradox Most investigators funded to conduct both scientific research and engineering development projects through government sponsored programs spanning several decades, consistently prioritized their research efforts over their government sponsor’s expressed technology development and transfer goals. When asked, these investigators explained that they are trained as scientists to conduct research and to publish their findings, which is the foundation of their academic careers. They tended to gloss over the development and transfer language in the undirected grant solicitations released by sponsors, reasoning that those downstream goals were not relevant to them; that they were somebody else’s to address by finding and adopting their research discoveries. These funded investigators did not necessarily feel responsible for addressing social problems because despite the efforts of some universities (Letter T), most university faculty see themselves as scholars not entrepreneurs. Few had even considered, let alone thought through, the negative social/economic consequences resulting from unsubstantiated and exaggerated claims made by the A-BC on their behalf. When pressed, a fair number of these investigators actually take offense at criticisms regarding the disconnect between a sponsored programs expressed purpose to generate downstream beneficial socio-economic impacts, and their own focus on upstream scientific research. By reacting defensively, they miss the critical issue because they view the criticism from mid-stream rather than from the root cause.

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They see the public pressure for accountability and results from innovation-oriented programs as attacks on the culture underlying curiosity-based science. They fail to distinguish between baseline funding for undirected research – which is generally considered import and worthy of support – and the current levels of funding attained through promises of societal benefit made but not fulfilled. Instead of understanding the criticism and using their positions as respected scholars to address the disconnect, some faculty publish books like Science Mart1 which adopt the perspective and language of a victim; woe to the struggling scientist in their makeshift laboratory who are heroically fending off attempts at exploitation by greedy capitalists. They refuse to acknowledge that the source of the expectations they vilify is the rhetoric of promises from the academic sector and their paid lobbyists (Letter R). Such books even go so far as to perpetuate the Science Drives Innovation myth by dutifully recounting the erroneous conclusions promulgated by NSF’s hired guns during the Project Hindsight versus TRACES Study debacle (Letter H).

Insights from Investigators My team received funding over several decades to improve the success rates among university-based projects to develop, transfer and commercialize new or improved assistive technology devices and services. As noted under Letter U, even as of this writing funded RorD projects and the agency sponsors themselves continue to struggle with this mission, despite their claimed best intentions. As explained under Letter R, their own culture and rhetoric are barriers to applying basic sensible strategies like planning their work then working their plan. During discussions about planning and implementation, some university faculty who manage sponsored projects with explicit technology development and transfer requirements express distaste for such mundane approaches. Their position is that of the classic scholar saying that one cannot predict where scientific inquiry will lead, so one cannot plan in advance. This position is held despite our best efforts to explain that we are only referring to projects funded under the sponsor’s explicit requirements for investigators to also implement engineering development and to pursue the downstream objectives of technology transfer and commercial production.

Planning for Outcomes The traditional orientation of curiosity-driven research is so ingrained through training and culture, and the career incentives so pressing, that once university faculty secure funding for projects combining scientific research and engineering development, they immediately focus on research because it leads to scholarly  Mirowski, P. (2011) Science Mart: Privatizing American Science. Harvard University Press.

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publications for themselves and their graduate students. This focus leaves little time and attention to engage in planning for post-discovery application, or post-invention transfer. What they don’t plan and budget to do, doesn’t end up happening. At one of our annual meeting of several dozen faculty who were directors of national RorD centers, the guest speakers were from NASA’s mission control center in Houston. Out of concern for the lack of planning by grantees, I asked those NASA engineers to explain the importance of planning projects, then following the plan, with revisions made along the way as needed. The guests at first seemed incredulous at the need to explain the importance of planning to investigators leading multi-million-dollar projects, but they did what I asked. They patiently explained all the milestones and steps involved in a successful mission to space, and how failing to follow the plan at even the smallest level of detail can put the entire mission at risk. They shared one humorous anecdote where the astronauts played a practical joke involving a carefully scheduled task. While unpacking a sensitive instrument at the designated time they revealed an empty crate, much to the horror and consternation of the ground-based crew who thought they had missed the step of inserting the instrument in the crate! Actually, the astronauts had used a period scheduled for relaxation when they were not being monitored from Mission Control to unpack the crate early, so that at the designated time the ground crew would witness them opening what appeared to be an empty crate. Despite the mix of rigor and humor in the lessons about planning offered by the NASA engineers, a fair number of the assembled investigators remained unconvinced it pertained to their projects. They still resisted the notion of meticulous planning because they identify so deeply as scholars free to ruminate unfettered by task schedules reserved for practitioners. They didn’t view their engineering development work as prototype invention per se, but instead as an extension of their scholarly research which through their training and culture cannot be planned through output and outcome. These investigators firmly believe that proper scientific rigor requires them to be agnostic to the eventual results of their work. They fail to recognize the disconnect between the invention-level outputs and beneficial societal outcomes promised in their proposals, and their personal expectations to explore concepts and report eventual findings wherever the scientific method leads them (Letter U). This distinction remains at the heart of the debate regarding the role of scholarship within innovation, especially when scholars are funded to lead the innovation process.

Integrating Decision Gates My team had consistently advised university-based researchers funded to generate innovations, to at the very least establish a decision gate at the completion of each milestone within their on-going funded projects; as listed in the table under Letter L. Meaning that at the completion of each milestone event, the project leader would consider whether to proceed, modify or terminate the project; in essence a decision

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gate based upon a conscious and deliberate analysis of progress, and likelihood of future progress. Academics struggled with this decision gate approach because it was yet another departure from the traditional academic approach to undirected grantfunded projects. According to their standard practices and culture once a project was implemented, it continued until the time and money ran out. The idea being that faculty and graduate students could generate presentations and papers based on the processes alone, without great concern over achieving the original intended outcomes and impacts. After all, they and their peers in the A-BC are free to define outcomes and impacts within the narrow definitions we outlined under the vertical column labeled Conceptual Discoveries in the expanded table of milestones under Letter L. This basic level of planning and tracking progress can be applied to any field of RorD application. As noted under Letter R, within our field of assistive technology devices and services, we were able to readily classify all technology-based projects into four categories of OUTPUTS intending to have beneficial OUTCOMES and IMPACTS for persons with disabilities: Industry Standards/Clinical Guidelines; Clinical Instruments/Fabrication Tools; Freeware Applications; or Commercial Devices. We used industry standard best practices to generate stage/gate models showing the role of Scientific Research, Experimental Development and Industrial Production within each category of output. Interestingly, all four discrete categories of OUTPUTS we classified, shared the same set of INPUTS (Letter L). That is, they all required a clear identification of an opportunity in the marketplace, a clear articulation of the performance specifications required to address the opportunity, and a comprehensive scoping of the other prior, existing and emerging options for addressing the opportunity. The four categories only diverged once they began implementing their respective PROCESSES. The shared requirements at the INPUT end reflect the importance of conducting proper due diligence prior to initiating any RorD projects to better know what has already been accomplished and to pinpoint the proper point of entry for the proposed new project (Letter V).

Logic Models as a Planning Framework We eventually went further with the logic modeling format to create a very detailed list of dozens of tasks/activities, barriers and facilitators and tips from practitioner publications, all backed up with evidence drawn from over thirty years of scholarly studies regarding the discovery, invention and innovation processes. We called them Need to Knowledge models because validating a need comes before efforts to generate new knowledge to address the need, and because the models contain the essential information that investigators need to know prior to initiating a proposal or at least prior to implementing a funded program oriented toward achieving innovation outcomes.2  https://implementationscience.biomedcentral.com/articles/10.1186/1748-5908-8-21

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The four models were posted on our project’s website and shared with university faculty, business managers and entrepreneurs alike.3 Within the scope of technical assistance that we provided to our sponsor’s several dozen grantees engaged in innovation-oriented RorD programs, we were able to guide some university-based and small business projects to more efficient and effective progress in achieving their proposed projects outputs and outcomes, but not all.4 Our mixed results show that fallacies regarding STI persist, not due to an absence of information and guidance regarding proven strategies and demonstrated results, but instead because they fit comfortably within the familiar language, culture and incentives of the A-BC advocates and the investigators who benefit from the funding levels secured. They appear to have no pressing incentive to change the system.

 https://publichealth.buffalo.edu/cat/kt4tt/best-practices/need-to-knowledge-ntk-model.html  Lane, Joseph P. (2015). Aligning policy and practice in science, technology and innovation to deliver the intended socio-economic results: The case of assistive technology. International Journal of Transitions and Innovation Systems, 4(3–4), 221–248 3 4

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A new scientific truth does not triumph by convincing its opponents and making them see the light, but rather because its opponents eventually die, and a new generation grows up that is familiar with it. Max Planck

Western nations are running out of time – if it isn’t already too late – to revise STI policies so they are driven by the needs of the global marketplace in the context of private sector commercialization.

I have asserted throughout this book that civilization’s progress in technological innovation depends on the interplay of three related methodologies: Scientific Research, Engineering Development, and Commercial Production, each with distinct models, elements and metrics. All three methods generate new knowledge in different states (Letter A). The three states of knowledge are analogous to the three traditional states of matter: a conceptual discovery is diffuse and intangible like a gas; a prototype invention has more mass yet is still quite malleable like a liquid; a commercial product is fixed in design, materials and function like a solid. Commercial innovations in the form of goods and services arise from the interplay of all three methods and knowledge states: the gaseous state of inspired conceptual discoveries from scientific research exploration, the liquid state of interative experimental inventions flowing from engineering development, and finally the solid state of finished goods resulting from materials, systems and functions combined through industrial manufacturing practices. These methods complement and even precipitate each other in new and original ways, but the generation of new net wealth requires them to eventually culminate in something with value in the competitive global commercial marketplace. That final step is necessary for business and industry to survive. Corporations will invest as much as necessary in RorD, but they will strive to save costs where possible by adopting and applying discovery and prototype outputs funded by and generated by others. Consequently, industry is

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023, Corrected Publication 2023 J. P. Lane, The ABC’s of Science, Technology & Innovation (STI) Policy, https://doi.org/10.1007/978-3-031-34463-3_26

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quite happy to have their national governments invest public money in RorD programs in areas relevant to their business interests.

The Paradigm Persists Unfortunately, the Academic-Bureaucratic Coalition (A-BC) has distorted the complementary roles performed by science and engineering in support of industry, and has consistently conflated their respective inputs, processes and outputs under the acronym of R&D.  Conveniently, this conflation happens to support their Science Drives Innovation paradigm, while the critical contributions to innovation outcomes made by professional engineers and corporate managers have been minimized to shape and sustain the paradigm’s narrative. However, the paradigm’s persistence is not evidence of its validity. This chapter’s quote refers both to Thomas Kuhn’s notion of scientific paradigms and to Max Planck’s rejoinder about their tenacity. But even the revered Dr. Planck may have underestimated the tenacity of the original paradigm holders. Instead of sitting idle as their fiction was overwhelmed by facts regarding the full range of innovation requirements, the A-BC advocates defended their paradigm by recruiting, acculturating and strategically placing a successive cadre of acolytes over time. The power of personal incentives that drives the status quo became sufficient to maintain loyalty and thereby perpetuate the paradigm. In addition, advocates for current STI policies found that the best defense of the existing resource base was a relentless offensive to continuously increase the funding levels. The new generation of disciples ensures continued arguments for more funding without the need to offer credible evidence-based justification in the form of results delivered.

Necessary But Not Sufficient The plain truth remains that scientific research is necessary but far from sufficient to generate innovations defined as new or improved products and services in the global competitive commercial marketplace. The continued pressure from A-BC advocates to demand more funding for science while remaining silent about the other requisite components for delivering innovation does not benefit society. Instead, it hampers true progress in innovation by crowding out the opportunity to fund the downstream and related activities of engineering development and commercial production.

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According to data compiled in Science and Engineering Indicators, an annual report from the NSF’s National Center for Science and Engineering Statistics, the Science Drives Innovation paradigm continues to harness an increasing share of the available public funding intended for benefitting society through innovation.1 Its data charts show the allocation of national government funding to various performers (i.e., intramural government, industry, universities, national laboratories, other non-profits) has sustained the gradual shift of funding toward universities and other non-profits, and away from private sector corporations.

A companion chart shows the continued government funding shift toward undirected (basic) research and away from directed (applied) research and away from engineering (experimental) development.

 https://ncses.nsf.gov/pubs/nsb20221/u-s-and-global-research-and-development#u-sperformance-and-funding-trends

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The data and accompanying narrative in these reports show the continued emphasis on the professional academic incentives of securing funding, conducting and publishing base research, and training the next generation of scholars. This in itself is not a bad thing because nations need a strong base of scientific research capability and capacity. But government’s do operate in a world of finite resources, so increasing funding allocations to one sector results in diminished funding to others.

Winners and Losers In the context of STI policy and practice, this continued shift toward undirected (basic) research in universities corresponds to a reduction in public funding for directed (applied) research and engineering (experimental) development performed or led by industry. Corporations do primarily invest their own internal resources from business profits to pursue product innovations for the competitive marketplace. However, industry depends largely upon public funding to pursue projects of high risk and uncertain returns  – particularly those for orphan product markets (Letter O) – which allows them to build a sufficiently robust business case to justify the risks involved.

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Beyond the financial implications, the Science Drives Innovation paradigm hampers society’s progress in innovation in two other critical areas. First, the rhetoric has created a schism between those who’ve assumed the mantle of responsibility for technological innovation and those who actually deliver innovations to the marketplace (Letter R). The former group is comprised of research university administrators, deans and tenured professors, and their elected, appointed and senior career officials in government; the cream of the A-BC. The latter group consists of executives, mid-level managers and staff working in private sector corporations with expertise in the science, engineering and business disciplines. Continuing employment in the private sector depends on consistently delivering the intended results in the form of innovative products and services for the commercial marketplace. Competing successfully in our global economy while addressing national needs for mass and orphan products, rests with these professional employees working in the trenches of industry. Yet, they seem to have no role in setting STI policy, while the scholars fiddle at the margins of conflated terms (Letter J), inadequate models (Letter L) and erroneous metrics (Letter Q). Second and consequently, the Science Drives Innovation thinking has eroded public support for industry’s rightful role in delivering innovations to the marketplace. Although the US Research Board and its EU equivalents have more recently generated a consensus definition of innovation as commercial product based and business oriented (Letter R), this revised language has yet to permeate the wide range of STI policies and then diffuse through all the associated regulatory and statutory language to influence resource allocations. And as discussed under Letter Y, the beneficiaries of the current government bias – those in the most influential position to re-direct attention and funding – appear to have little awareness, interest or inclination to reorient the status quo. Without their efforts to revise STI policy, they will gain while their host nations lose. Such is the nature of zero-sum situations.

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You can’t change the fruit without changing the root. Stephen R. Covey

One cannot expect to change the dominant STI culture without enlisting the cooperation of its current advocates through an alternative perspective with enhanced incentives.

The prior chapters described how STI policies in Western nations remain grounded in the Science Drives Innovation paradigm promulgated in the post-WWII era by university presidents and senior scholars, and by elected and appointed government officials, who collectively comprise what we’ve called the Academic-­ Bureaucratic Coalition (A-BC). I have emphasized the importance of scientific research to a nation’s position in our global economy, including the contributions of government programs sponsoring undirected research in universities, government labs and other non-profit entities. Conceptual discoveries as the outputs from scientific research are the foundational knowledge of society. They also serve as critical inputs to engineering development methods that generate new knowledge in the state of prototype inventions. These inventions, in turn, serve as inputs to the commercial production process that yields new or improved products and services for the global competitive marketplace. In an iterative fashion, the state-of-practice represented by invention and innovation outputs, opens new frontiers for exploration and discovery through undirected and directed research.

Recapping STI Policy Trajectory Although important, the role of undirected scientific research and academic scholarship traditionally received only modest support and that from wealthy patrons and state agencies. In the early 20th century, directed scientific research (and engineering

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023, Corrected Publication 2023 J. P. Lane, The ABC’s of Science, Technology & Innovation (STI) Policy, https://doi.org/10.1007/978-3-031-34463-3_27

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development) gradually grew within the domain of industry, with private sector corporations establishing their own RorD laboratories to advance the state-of-­ knowledge in areas relevant to their products and services. It was the tremendous infusion of government funding for research, development and production during WWII that brought academia out of the monastic shadows and into the bright lights of wealth, status and influence. Post-war growth in support for scientific research arose and was sustained by an alliance between major research universities and the government agencies sponsoring their work. Scholars viewed as bright and objective arbiters of truth were appointed as advisors to government policymaking bodies, and exercised their persuasive powers in matters of self-interest as well as matters of national interests. Marquee events like the Cold War and the Space Race featured advances made by the (mostly) men in white lab coats, while television delivered their messages into every citizen’s home. Domestic and international events called for more government spending on RorD programs and continued economic growth obliged. During this period and aided by society’s positive view of science as the endless frontier, the messaging from the Academic-Bureaucratic Coalition (A-BC) reached beyond the traditional role of scholarship to claim a new cultural orientation with an entirely new level of funding and incentives; being the driving force behind technological innovation.1 The AB-C advocates pointed to examples of links between conceptual discoveries from Research and their eventual application in commercial products and services. Despite some examples being more serendipitous than deliberate, and ignoring the indispensable roles of both engineering development and commercial production in the transformation from concept to product, the A-BC advocates pushed this claim to increase funding for scientific research under the banner of achieving national innovation goals. The claim was cleverly hedged by vague corollary positions that all research discoveries benefit society sooner or later so the more scientific activity the better off society will be. And that since the specific future benefits cannot be predicted, society’s support cannot reasonably include demands for evidence of the expected benefits. This linkage between science and innovation was eventually formalized under the name Science, Technology and Innovation (STI) policy. Science first, of course.

Evidence of Continued Support Based on mounting evidence that China is taking the global lead in technological innovation, one might hope that leading policy advisors in Western nations would be changing their perspective. But that hope seems in vain. A 2021 book entitled, Innovation and Public Policy was issued by the US National Bureau of Economic  Godin, B. and Lane, J. (2012) ‘A century of talks on research: what happened to development and production?’, International Journal of Transitions & Innovation Systems, Vol. 2, No. 1, pp.5–13. 1

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Research, published by the University of Chicago, and authored by two university professors holding endowed faculty appointments.2 A classic lineup of respected STI policy advisors and prestigious institutions with the high credibility necessary to influence thought and action within the A-BC community. Unfortunately, the summary on the publisher’s website shows the book offers no revisionist thinking, but instead only a recitation of what’s been criticized in the prior chapters here: In advanced economies like the United States, innovation has long been recognized as a central force for increasing economic prosperity and human welfare. Today, the US government promotes innovation through various mechanisms, including tax credits for private-­ sector research, grant support for basic and applied research, and institutions like the Small Business Innovation Research Program of the National Science Foundation. Drawing on the latest empirical and conceptual research, Innovation and Public Policy surveys the key components of innovation policy and the social returns to innovation investment. It examines mechanisms that can advance the pace of invention and innovative activity, including expanding the research workforce through schooling and immigration policy and funding basic research. It also considers scientific grant systems for funding basic research, including those at institutions like the National Institutes of Health and the National Science Foundation, and investigates the role of entrepreneurship policy and of other institutions that promote an environment conducive to scientific breakthroughs.

Detrimental Downstream Consequences The A-BC’s Science Drives Innovation paradigm seems more entrenched than ever. The problem being that the A-BC’s success in promoting science has had numerous detrimental consequences for the downstream contributions of professional engineering and private sector industry in the generation and delivery of technology innovation. Examples include: • The unprecedented growth in government and non-profit sectors has been at the expense of public funding for industry; • Subordinating engineering development methods to science research methods skews perceptions and support for the role of professional engineering; • Excessive funding for undirected RorD projects led by academics reduces the public funds available to support directed RorD projects led by industry; • A lack of emphasis on industry requirements when funding RorD projects at university and government labs lowers the probability of achieving the critical transformation of RorD outputs to becoming inputs to commercial production; and • Conflating terminology regarding states of knowledge, the inadequate metrics for measuring national innovation, and the clever use of rhetoric to mask deficiencies in reality, all negatively affect the scope and pace of a nation’s technological innovation outcomes and impacts.

 https://www.nber.org/reporter/2021number4/innovation-and-public-policy

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These consequences have combined to hamper progress in technology innovation over decades and across international boundaries. The US Congress established its national program to enhance the lives of persons with disabilities through the Rehabilitation Act of 1973, whereby a new institute was created within the Department of Education.3 While repeatedly amended over the ensuing decades, the essential mission for that portion of programs and funding intended to support technological innovation has continued to focus on projects of scholarly research and practical demonstration; their version of ‘R&D’ never even used the word development. Despite funding a series of projects dedicated to technology evaluation and transfer—including those directed by me—the lead institute never acknowledged the need to directly engage with industry to ensure downstream outcomes. Instead, the majority of the approximately $100 million in annual funding supports the university scholars and their graduate students, who naturally focus on generating scholarly papers and conference presentations. Stakeholders most concerned with the creation and delivery of new or improved products and services are left to look back through the nearly empty pipeline and wonder where all that money went. The same pattern appeared when in the 1990’s the European Union began dedicating funding through its Framework Programmes (Letter M) on Information and Communication Technologies (ICT), to target support for projects expected to generate technological innovations for persons with disabilities.4 As in the US experience, the EU program was defined and implemented by scholars who set scientific rigor as the primary criterion for judging grant proposals. As expected, the funding flowed to academic institutions who proceeded to generate papers, presentations and diplomas while the fledgling rehabilitation and assistive technology industry was left to fend for itself. After nearly thirty years of expenditures and activity, the EU innovation pipeline looks equally dry to the chagrin of stakeholders who long advocates for funding in this field. In 2012-2013, a new Brazilian government committed to becoming the Latin American leader in products and services for persons with disabilities. Eager to share my experience in the US and the EU, I accepted an invitation from the Ministry of Science, Technology & Industry (STI) in Sao Paulo to be part of a ‘blue ribbon’ advisory panel.5 Given the ministry’s title, I should have expected what was eventually implemented. Despite my strenuous cautions, objections and examples, the scholar’s on the advisory panel, heartily supported by the domestic advisors recruited from Brazil’s major research universities, agreed to channel the new funding to the research universities. As far as I can tell, the inputs for the active program were funding for new government entities and university grants, while the outcomes were more scholarly papers and new conferences convened by the recipient institutions.

 https://www.eeoc.gov/rehabilitation-act-1973-original-text  https://ec.europa.eu/regional_policy/en/policy/themes/ict/ 5  https://www.deepdyve.com/lp/association-for-computing-machinery/panorama-brazils-assistive-technology-based-on-the-living-without-iBf1fGmHHJ 3 4

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The Brazil example is a cautionary tale for nation’s with emerging market and developing economies. Unless extreme caution is taken to focus investment and effort on the needs of the commercial sector, the academic and bureaucratic sectors in those nations will repeat the mistakes with the same dire consequences by aggressively acting to control the narrative and accompanying resources. Better to emulate China’s approach than that of the advanced economies of Western nations.

Options for Correcting the Trajectory The only way to overcome these negative consequences which will continue to arise from the entrenched A-BC, is to correct the problems inherent in Western nation’s innovation policies. That can only happen either by changing the perspective of those support current STI policies, or have an external constituency led by industry and the general public stage an intervention targeting elected government officials. The most expeditious but least likely solution is for the A-BC advocates to recognize the innovation claims as overreach, and to take responsibility for moderating those claims and simultaneously working to recalibrate public expectations. Senior scholars in universities, government agencies and public policy organizations have the stature to challenge the rhetoric and insist that university and government officials cease taking excessive credit for current advances and over-promising future results. These same scholars should also take the lead in designing serious studies to factually establish the reciprocal and synergistic contributions to innovation arising from knowledge creation in all three states, from conceptual discovery, through prototype invention and out to commercial product or service. While the A-BC advocates who framed the current state of STI policy should feel obligated to correct it, they probably lack the will to reverse or even reduce their favorable position within the current system. Many would oppose such change by anticipating a substantial reduction in public funding for science, especially for undirected research programs. However, those willing to place the future socio-­ economic health of their nation above personal incentives would realize that the current system is not sustainable as a greater share of global net wealth accrues to other nations. With sufficient effort from within the A-BC, even those focused on their own interests might see the value of diminishing academia’s role in innovation. The primary benefit to them would be a return to focusing on the three traditional university missions of scientific research, student education and community service. Moderating innovation claims would negatively impact the bottom line of many universities and government laboratories in the short term, because it would reduce the flow of overall funding for undirected RorD programs. The benefit would be restoring the academic meritocracy comprised of those research universities and government laboratories which have a consistent history of delivering contributions to the innovation process, which value the role of engineering development and willingly subordinate their academic incentives when collaborating with private

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sector corporations.. Those most qualified institutions would deservedly continue to receive all the funding they could productively expend in such endeavors. The funding reductions would also negatively impact the annual allocations to the government agencies sponsoring RorD programs. Although such reductions are largely unprecedented and would be opposed by those agencies and their advocates, they could result directly from Congressional budget reconciliation actions once elected officials were persuaded to act. The government agencies would absorb the reductions through attrition of senior career staff, reassignment of junior staff and curtailing new hires during the adjustment period. The remaining staff might welcome the lesser flow within programs, allowing them to dedicate more time to monitoring grant activity and management contract activity, which in turn would increase the quality of outputs delivered through the remaining level of sponsored RorD projects. The less competitive universities no longer eligible for RorD funding would then necessarily shift their attention to delivering quality undergraduate education in the arts and sciences. Perhaps they would even expand their offerings for vocational training in the more highly technical fields to fill the growing workforce gap in Western nations. Restricting innovation programs to directed RorD projects and fewer institutions would reduce the noise in the knowledge communication system generated by the broad scope of sponsored undirected RorD activity at less meritorious institutions. Shrinking the number of sponsored projects would eliminate the avalanche of published journal articles and conference papers with questionable rigor and little relevance to innovation, along with decreasing the number of publishing houses disseminating them. Reducing the volume would great simply future efforts by all sectors involved in technological innovation to identify and engage relevant RorD projects, their outputs and the expertise of scientists and engineers leading them. Revising STI policies to better align academia’s actual contributions to innovation with reality would reduce the pressure on universities to pursue activities outside their core roles, culture and incentive systems. These extraneous pursuits of extramural RorD support are chiefly to increase their overall annual funding levels, which itself has morphed into a dominant metric for ranking academic institutions. The high priority placed on funding levels is problematic. Funding is an input to the RorD process—not an output or an outcome from that process—so it should not be treated as a measure of academic quality, or institutional contributions to society. Aside from being irrelevant, measures based on funding received have wasteful consequences. Universities end up acquiring redundant instrumentation and building excess infrastructure to support individual investigators and projects. The mandate to expend the annual funds awarded discourages sharing resources and collaborating. The constant pursuit of more annual funding also creates a competition to recruit top scholars resulting in a revolving door of ‘superstars’ in scientific fields who move between institutions in the manner of star athletes. These superstars stay only long enough to help the host institution secure additional funding, then they move on to the next highest bidder for their presence. By eliminating the extramural

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funding imperative, the universities committed to supporting innovation efforts could concentrate on delivering discovery outputs with actual value as defined by the engineering disciplines and their industrial partners in relevant fields of application. Their measures of productivity would shift to relevant output metrics such as invention patents licensed or sold, and outcome measures such as the number of patented outputs integrated into new to the world products and services through collaborations with industry. Beyond revising the metrics to better conform with the reality of the innovation process, shifting academia’s mindset toward delivering results would provide additional budgetary savings to society at large. Shrinking the number and size of university administrative operations would reduce the amount of overhead funding paid by sponsoring government agencies. In turn, the cost of government itself would shrink through a reduction of programs and staff in those same sponsoring agencies. The entire shift would realign the economic sectors involved in innovation to be more in line with their proper roles. But is this change likely to occur from within the A-BC advocates who sit comfortably in charge of the status quo in STI policy and practice? Unfortunately, long-term altruism rarely supercedes short-term avarice.

A Focused Message for STI Policy Change As during WWII, only collective action at a national level working toward a common purpose, will permit Western nations to catch and eclipse China’s lead in market driven technological innovation programs. Even though the stakes couldn’t be higher, the will to do so is not presently evident in STI policy circles. Instead, it seems that accomplishing a major overhaul of STI policy and practice will require a concerted effort by factions external to the A-BC in order to overcome the active resistance or even passive neglect from the existing paradigm’s advocates. Such change will certainly require leadership from the industrial sector, which has sufficient wealth and power to persuade elected officials to implement the resolution. Industry must expose the myths perpetuating the prevailing paradigm in order to progress to a more realistic and productive approach to achieving the technological innovation at a competitive level within the global economy. The new paradigm’s message should be Knowledge Drives Innovation—rather than Science Drives Innovation. It would describe a continuum of knowledge progression, recognizing the merit and worth of new knowledge in all three states of conceptual discoveries, prototype inventions and commercial product innovations. It would recognize the role of engineering development methods and prototype invention outputs, as separate yet equal to the role of scientific research methods and conceptual discovery outputs. It would acknowledge both research scholars and development practitioners as necessary contributors to advancing knowledge through this continuum. Finally, it would accept the industrial sector as the leader of

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programs pursuing technological innovation, and so would receive the appropriate share of public funding allocated for that purpose. These simple changes in perspective would create an opportunity for the academic sector to undertake the critical and unbiased analyses necessary to establish parity between the methods of scientific research and engineering development, and focus their complementary support of commercial production led by industry. That in turn would permit all sectors to collectively define the models and metrics needed to coordinate and manage programs and projects on technological innovation. The results would justify the re-alignment of funding allocations by government agencies sponsoring innovation-oriented RorD programs. Recognizing the contributions of all disciplines and sectors as critical elements underlying innovation would ensure the new paradigm was both inclusive and comprehensive. It would also yield a more equitable, more efficient and more effective system for achieving national socio-economic goals long espoused as the province of technological innovation. I think the United States and other western nations are facing their final opportunity to realign their resources and capabilities to compete for sustained technological primacy in the global arena. By 2050 anyone reading this either in English or Mandarin Chinese will know what happened and why.

Correction to: The ABC’s of Science, Technology & Innovation (STI) Policy Joseph P. Lane

Correction to: J. P. Lane, The ABC’s of Science, Technology & Innovation (STI) Policy, https://doi.org/10.1007/978-­3-­031-­34463-­3 The book was inadvertently published with an incorrect abstract in each chapter in the online version. These have now been replaced with new abstracts.

The updated original version of the book can be found at https://doi.org/10.1007/978-­3-­031-­34463-­3

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 J. P. Lane, The ABC’s of Science, Technology & Innovation (STI) Policy, https://doi.org/10.1007/978-3-031-34463-3_28

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