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     ####       ####       ####       |  A TECHNOLOGY POLICY FOR AMERICA
     ########   ########   ########   |  by President-Elect Bill Clinton
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     EFFector Online           November 4, 1992                Issue  3.08
                A Publication of the Electronic Frontier Foundation
                                 ISSN 1062-9424
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               A TECHNOLOGY POLICY FOR AMERICA Six Broad Initiatives
                               by Bill Clinton
                             (September, 1991)
     
     The Clinton-Gore technology policy consists of six broad initiatives 
     that together will restore America's technological leadership: 
     
     1. Building a 21st Century Technology Infrastructure.  
     
     Infrastructure has traditionally been the responsibility of federal and 
     state governments. Investing in infrastructure means more than repairing 
     bridges, harbors and highways. Today, the United States faces a new 
     series of communications, transportation and environmental needs for the 
     21st century. The creation of a 21st century infrastructure program 
     would serve as a critical technology driver for the nation. It would 
     stimulate major new national R&D efforts; create large, predictable 
     markets that would prompt significant private sector investments; and 
     create millions of new jobs.
     
     A 21st century infrastructure would address many practical problems. For 
     example, the government can serve as a catalyst for the private sector 
     development of an advanced national communications network, which would 
     help companies collaborate on research and design for advanced 
     manufacturing; allow doctors across the country to access leading 
     medical expertise; put immense educational resources at the fingertips 
     of American teachers and students; open new avenues for disabled people 
     to do things they can't do today; provide technical information to small 
     businesses; and make telecommuting much easier. Such a network could do 
     for the productivity of individuals at their places of work and learning 
     what the interstate highway of the 1950s did for the productivity of the 
     nation's travel and distribution system.
     
     Each year, I plan to devote a significant portion of my four year, $80 
     billion Rebuild America fund to laying the groundwork for the nation's 
     infrastructure needs in the 21st century. Federal funding for the 
     National Research and Education Network is one example of how the 
     federal government can serve as a catalyst for private sector 
     infrastructure investment. We will also provide additional funding to 
     network our schools, hospitals and libraries.
     
     As part of the effort to assess U.S. needs and develop appropriate 
     programs, the federal government must monitor, or "benchmark", what 
     foreign governments are doing. For example, the Japanese government has 
     committed to invest over $120 billion by 1995 to develop a digital 
     broadband communication infrastructure called the Information Network 
     System, and plans to invest another $150 billion to establish model 
     programs for business and residential users.
     
     A comprehensive infrastructure program must also include effective 
     standards and regulations. By establishing reasonable standards and a 
     constructive regulatory environment, the government can send clear 
     signals to industry about important, emerging markets and spur private 
     sector investment. For example, the digital standard that the Federal 
     Communications Commission (FCC), in cooperation with industry, 
     established for high resolution television provides an excellent 
     indication of the future technical direction of the industry and will do 
     much to facilitate private sector R&D.
     
     A 21st century infrastructure program should consist of the following 
     five elements:
          Funding the establishment of key networks and demonstration 
          projects;
          Benchmarking U.S. programs against those of other major industrial 
          nations;
          Establishing standards and a regulatory climate that fosters 
          private sector investment;
          Involving the federal labs, companies, and universities in 
          conducting R&D on key technical issues; and
          Providing training for users of networks and databases.
     
     2.  Establishing Education and Training Programs for a High-Skill 
     Workforce. 
     
     The U.S. education system must make sure that American workers have the 
     requisite skills. The focus should be not only on the top American 
     students who measure up to world-class standards, but also on average 
     and disadvantaged students. It must also take into account the need to 
     upgrade workers' skills and help people make the difficult transition 
     from repetitive, low-skill jobs to the demands of a flexible, high-skill 
     workplace. Unlike Germany, the United States does not have a 
     sophisticated vocational education program, and unlike Japan, U.S. firms 
     do not have a strong incentive to invest in the training and retraining 
     of their workers. We need more of both, geared to meet the needs of the 
     mobile U.S. workforce.
     
     I will implement the following programs to strengthen the skills of 
     America's workforce:
          Establish tough standards and a national examination system in 
          core subjects like writing, communication, math and science; 
          level the playing field for disadvantaged students; 
          reduce class sizes;and give parents the right to chose the public 
          schools their child attends.
     
          Establish a national apprenticeship program that offers non-
          college bound students training in a marketable skill.
     
          Give every American the right to borrow money for college by 
          establishing a National Service Trust Fund. Students can repay 
          their borrowing as a percent of their earnings over time, or by 
          serving their communities for one or two years doing work their 
          country needs.  
     
          Stimulate industry to provide continuing, high skills training to 
          its front-line workers.
     
     For small manufacturers to compete today, it is not good enough simply 
     to have access to new equipment and new technologies if their workers do 
     not have the skills and know-how to operate them efficiently, and engage 
     in truly flexible production. Yet, too much of our training is for only 
     top executives or workers after they have lost their jobs. 
     
     My plan calls for companies with over 50 employees to ensure that 1.5 
     percent of their payroll goes to training throughout the workforce -- 
     not just for the top executives. But we must do more for smaller 
     companies who cannot afford to set up the training programs. These 
     companies need to adapt to new technologies and new equipment and the 
     constantly new demands. 
     
     New production technology should be worker-centered and skill-based, not 
     skill-eliminating. In the high-performance workplace, workers have more 
     control over production and worker responsibility is increased. Some 
     companies that have invested billions in new capital equipment have 
     found that genuine employee involvement and good labor-management 
     relations are ultimately more important. Therefore we need to undertake 
     the following: 
          Manufacturing training centers:
          We need to promote private sector-led efforts to set up training 
          for small companies. These can be done by building off community 
          colleges training and should be an integral part of the network of 
          Manufacturing Extension provisions. These would also be integrated 
          with my Apprenticeship initiative so that young people will have 
          the opportunity to learn specific skills needed for specific 
          manufacturing jobs or industries. Councils including private 
          sector and academic leaders as well as workers would help decide 
          generic areas for training. 
     
          Certificate of training guarantees:
          In order to be eligible for federal funds for manufacturing 
          training centers, such centers would have to provide all future 
          employers with a Certificate of Guarantee. This would ensure that, 
          when workers do not pick up the necessary skills the first time, 
          these centers would provide additional training -- at no 
          additional cost to the employer.  
     
          Best Practices on Worker Participation:
          An integral function of the Manufacturing Extension Centers will 
          be to collect and disseminate information on "best practices" with 
          regards to worker participation. Increasing worker productivity is 
          one of the keys to increasing overall manufacturing productivity.
     
     3.  Investing in Technology Programs that Empower America's Small 
     Businesses.
     
     A healthy and growing small-business sector is essential to America's 
     economic well-being. America's 20 million small businesses account for 
     40 percent of our GNP, half of all employment, and more than half of the 
     job creation. My technology policy will recognize the importance of 
     small and medium-sized business to America's economic growth with:
          Market-driven extension centers:
          Creating 170 manufacturing centers will put the best tools in the 
          hands of those companies that are creating the new jobs on which 
          the American economy depends by helping small- and medium- sized 
          manufacturers choose the right equipment, adopt the top business 
          practices, and learn cutting-edge production techniques. In order 
          to enhance U.S. industrial competitiveness, public policy must 
          promote the diffusion and absorption of technology across the U.S. 
          industrial base. Some state and local governments are already 
          involved in technology diffusion using manufacturing centers. They 
          are helping small businesses improve the productivity of their 
          existing machinery and equipment, adopt computer-integrated or 
          flexible manufacturing techniques, and identify training needs.
     
     The Commerce Department has five Manufacturing Technology Centers across 
     the country and has plans for two more. Unfortunately, these efforts are 
     only a drop in the bucket compared to those of our major competitors. 
     Germany has over 40 contract R&D centers (Fraunhofer Gesellschaft) and a 
     broad network of industry associations and research cooperatives that 
     effectively diffuse technology across industry. In Japan, major 
     government-sponsored research projects, 170 kohsetsushi technology 
     support centers for small businesses, and tight links between companies 
     and their suppliers serve much the same function. There is no comparable 
     system in the United States.
     
     A Clinton-Gore Administration will build on the efforts of state and 
     local governments to create a national technology extension program, 
     designed to meet the needs of the millions of small businesses that have 
     difficulty tracking new technology and adapting it to their needs.
     
     The involvement of workers is critical to developing and executing 
     successful industrial extension programs. In technology, as in other 
     area, we must put people first. New production technology should be 
     worker-centered and skill-based, not skill-eliminating. In the high-
     performance workplace, workers have more control over production and 
     worker responsibility is increased. Some companies that have invested 
     billions in new capital equipment have found that genuine employee 
     involvement and good labor-management relations are ultimately more 
     important.
     
     No less than 25 of these new manufacturing centers will be regional 
     technology alliances devoted to regions hit hard by defense cut-backs. 
     These alliances could promote the development of dual-use technologies 
     and manufacturing processes on a regional basis. Extending the Small 
     Business Innovation Research Program (SBIR)
     
     In addition to creating a national technology extension service for 
     small and medium-sized businesses, I will also expand the Small Business 
     Innovation Research Program. By requiring that federal agencies set-
     aside 1.25 percent of their R&D budget for small businesses, this 
     program has helped create billions of dollars of new commercial activity 
     while improving the research programs of the federal government. Given 
     this track record, the SBIR program should be doubled over a period of 
     four years to 2.5to accelerate the development of new products by 
     innovative small businesses. 
     
     Funding private sector-led training centers:
     We also need a fundamental change in the way we deal with R&D and 
     technology if we are to lead a new era of American manufacturing. 
     Currently, our R&D budget reflects neither the realities of the post-
     Cold War era nor the demands for a new national security. At present, 
     600f the federal R&D budget is devoted to defense programs and 40
     percent to non-defense programs. The federal government should aim to 
     restore a 50-50 balance between defense and non-defense R&D. That is why 
     I have called for a new civilian research and development program to 
     support research in the technologies that will launch new growth 
     industries and revitalize traditional ones.
     
     This civilian technology program will:  
          Invest in Private-Sector Led Consortia: When the private sector 
          creates consortia to share risks, pool resources, avoid 
          duplication and make investments that they would not make without 
          such agreements, government should be willing to do its part. 
          Support for consortia such as the SEMATECH, National Center for 
          Manufacturing Sciences and the Advanced Battery is appropriate. By 
          requiring firms to match federal contributions on at least a 50:50 
          basis, the government can insure that we are leveraging public 
          dollars and that they are market-led and market-oriented. Often 
          major companies are reluctant to invest in their suppliers and 
          assist them in quality management techniques, because they fear 
          they will go to another company. Private-sector-led consortia 
          allow the major companies to cure that problem by coming together 
          and agreeing on industry-wide efforts to invest in smaller 
          suppliers. Some of these consortia will be funded by the Advanced 
          Technology Program.   
     
          Inward Technology Transfer: While we must strengthen the links 
          between American R&D and American jobs, we must also develop a 
          strategy for acquiring, disseminating, and utilizing foreign 
          technologies. Our Government must increase the collection, 
          translation and dissemination of foreign scientific and technical 
          information.
     
     4. Increasing Dramatically the Percentage of Federal R&D for Critical 
     Technologies. 
     
     I will view the support of generic industrial technologies as a priority 
     mission. The government already spends $76 billion annually on R&D. This 
     funding should be refocused so that more resources are devoted to 
     critical technologies, such as advanced materials, information 
     technology and new manufacturing processes that boost industrial 
     performance.
     
     At present, 600f the federal R&D budget is devoted to defense programs 
     and 400000ercent to non-defense programs. This level of support for 
     defense R&D is a holdover from the massive arms build-up of the 1980s. 
     At the very least, in the next three years the federal government should 
     shift the balance between defense and non-defense programs back to a 50-
     50 balance, which would free-up over $7 billion for non-defense R&D. 
     Having achieved this balance, the government should examine whether 
     national security considerations and economic conditions warrant further 
     shifts.
     
     I will also create a civilian research and development program to 
     support research in the technologies that will launch new growth 
     industries and revitalize traditional ones. 
     
     This civilian technology program will: 
          Help companies develop innovative technologies and bring new 
          products to market;
          Take the lead in coordinating the R&D investments of federal 
          agencies; 
          and Cooperate and consult with industry, academia and labor in the 
          formulation and implementation of technology policy and R&D 
          programs. 
     
     Advanced Manufacturing R&D:
     The United States is currently underinvesting in advanced manufacturing 
     R&D. The federal government should work with the private sector -- with 
     the private sector taking the lead -- to develop an investment strategy 
     for those technologies critical to 21st century manufacturing. 
     
     Following the lead of my running mate, Al Gore, and several of his 
     colleagues, we must do more to support industry's efforts to develop the 
     advanced computer-controlled equipment ("intelligent machines") and the 
     electronic networks that will enable American factories to work as 
     quickly and efficiently as their Japanese counterparts. These 
     technologies also include flexible micro- and nanofabrication, 
     simulation and modeling of manufacturing processes, tools for concurrent 
     engineering, electronic networks that allow firms to share business and 
     product data within and between firms, and environmentally-conscious 
     manufacturing. According to industry experts, the United States has an 
     opportunity to capitalize on the emerging shift from mass production to 
     flexible or "agile" manufacturing.
     
     5. Leveraging the Existing Federal Investment in Technology to Maximize 
     its Contribution to Industrial Performance. 
     
     R&D conducted at the federal labs and consortia should be carefully 
     evaluated to assure that it has a maximum impact on industrial 
     performance. Furthermore, cooperation between universities and industry 
     should be encouraged.
     
     America's 726 federal laboratories collectively have a budget of $23 
     billion, but their missions and funding reflect the priorities that 
     guided the United States during the Cold War. Approximately one-half of 
     their budget is directed toward military R&D. By contract, the budget 
     for the National Institute for Standards and Technology (NIST) - the 
     only federal agency whose principal mission is to assist industry - 
     accounts for less than one percent of the total federal lab budget. 
     Despite several years of legislative reform and many new directives, the 
     labs still do not have the autonomy or funding to pursue joint ventures 
     and industry aggressively.
     
     These labs and other private non-profit research centers are national 
     treasures because they house large, multi-disciplinary teams of 
     researchers who have honed the skills of balancing basic and applied 
     research for long-term, mission-oriented projects. It would take years 
     to match these special capabilities elsewhere. Today, the labs and 
     industry cooperate on defense needs; we need to change regulations and 
     orientation to get this cooperation on technology development for 
     commercial usage.
     
     To remedy these problems, I propose the following: 
          The budget of the National Institute of Standards and Technology 
          should be doubled. Federal labs which can make a significant 
          contribution to U.S. competitiveness should have ten to twenty 
          percent of their existing budget assigned to establish joint 
          ventures with industry.
     
          Private corporations should compete for this funding through 
          review by panels managed by the labs and made up of corporate and 
          academic experts. Lab directors should have full authority to 
          sign, fund and implement cooperative R&D agreements with industry. 
          Some labs, such as NIST, already have this authority, but others 
          do not.
     
          Industry and the labs should jointly develop measures to determine 
          how well the technology transfer process is working and review 
          progress after 3 years. If these goals have not been met, industry 
          and the labs should reevaluate their involvement, and funds should 
          be redirected to consortia, universities and other organizations 
          that can work more effectively with industry for results.
     
          University research accounts for a large part of the federal basic 
          research budget. Funding for basic university research should 
          continue to be provided for a broad range of disciplines, since it 
          is impossible to predict where the next breakthrough may come. 
     
          While maintaining America's leadership in basic research, 
          government, universities and industry must all work together to 
          take advantage of these new breakthroughs to enhance U.S. 
          competitiveness.
     
     Cooperative R&D programs represent another opportunity. Consortia can 
     help firms share risks, pool resources, avoid duplication, and make 
     investments that they would not undertake individually. By requiring 
     that firms match federal contributions on at least a 50:50 basis, the 
     government can leverage its investments and ensure that they are market-
     oriented. 
     
     Many industries are demonstrating a new found willingness to cooperate 
     to meet the challenge of international competition: SEMATECH has proven 
     to be an important investment for the industry and the Nation. It has 
     helped improve U.S. semiconductor manufacturing technology, helped 
     reversed the decline in world-wide market share of U.S. semiconductor 
     manufacturing equipment companies, and improved communications between 
     users and suppliers. U.S. automakers have recently formed the United 
     States Council for Automotive Research to develop batteries for electric 
     cars, reduce emissions, improve safety, and enhance computer-aided 
     design. The Michigan-based National Center for Manufacturing Sciences, 
     which now has 130 members, is helping to develop and deploy the 
     technologies necessary for world-class manufacturing.  The 
     Microelectronics Computer Technology Corporation (MCC) is developing an 
     information infrastructure which will enable businesses to develop, 
     manufacture, deliver and support products and services with superior 
     speed, flexibility, and quality. U.S. steel-makers are cooperating to 
     develop manufacturing processes which would use less energy, create 
     fewer pollutants, and slash the time required to turn iron ore and coal 
     into steel.
     
     A Clinton-Gore Administration will work to build a productive 
     partnership between government, research labs, universities, and 
     business.
     
     6. Creating a World-Class Business Environment for Private Sector 
     Investment and Innovation.
     
     Changes in America's tax, trade and regulatory policies are also needed 
     to help restore America's industrial and technological leadership. In a 
     global economy in which capital and technology are increasingly mobile, 
     we must make sure that the United States has the best business 
     environment for private sector investment. Tax incentives can spur 
     investment in plant and equipment, R&D and new businesses. Trade policy 
     can ensure that U.S. firms have the same access to foreign markets that 
     our competitors enjoy in the U.S. market. Antitrust reform will enable 
     U.S. firms to share risks and pool resources. Strengthening commercial 
     sections of our embassies will increase our ability to promote U.S. 
     goods abroad. Streamlining export controls will reduce the bureaucratic 
     red tape which can undermine competitiveness. And an overhaul of 
     cumbersome defense procurement regulations will strengthen both our 
     civilian and defense industrial bases. Permanent incentives for private 
     sector investment:
     
     Too many federal incentives meant to spur innovation are on-again-off-
     again programs that industry views as unreliable. As a result, they have 
     not realized their full impact. Several permanent tax measures should be 
     put in place immediately to stimulate commercial activity. They include 
     the following: 
          Make the R&D tax credit permanent to provide incentives for U.S. 
          companies that invest in developing new technology. 
          Place a permanent moratorium on Treasury Regulation 1.861-8: This 
          regulation increases the effective rate of U.S. taxation of R&D 
          and creates a disincentive for companies to conduct R&D in the 
          United States. 
          Provide a targeted investment tax credit to encourage investment 
          in the new equipment that we need to compete in the global 
          economy, and ensure that depreciation schedules reflect the rapid 
          rate of technological obsolescence of today's high-tech equipment. 
          Help small businesses and entrepreneurs by offering a 50tax 
          exclusion to those who take risks by making long-term investments 
          in new businesses. 
     
     An effective trade policy:
     The Bush-Quayle Administration has failed to stand up for U.S. workers 
     and firms. We need a President who will open foreign markets and respond 
     forcefully to unfair trade practices. I will:
          - Enact a stronger, sharper Super 301 to ensure that U.S. 
          companies enjoy the same access to foreign markets that foreign 
          companies enjoy to our market. 
          - Successfully complete the Uruguay Round. This will help U.S. 
          manufacturers and high-tech companies by reducing foreign tariffs, 
          putting an end to the rampant theft of U.S. intellectual property, 
          and maintaining strong disciplines against unfair trade practices.
          - Insist on results from our trade agreements. Although the U.S. 
          has negotiated many trade agreements, particularly with Japan, 
          results have been disappointing. I will ensure that all trade 
          agreements are lived up to, including agreements in sectors such 
          as telecommunications, computers and semiconductors. Countries 
          that fail to comply with trade agreements will face sanctions. 
          - Promote manufactured goods exports by small and medium 
          companies: To promote exports of manufactured goods, I will 
          strengthen the commercial sections of our embassies abroad so that 
          they can promote U.S goods, participate in foreign standards-
          setting organizations, and support the sales efforts of small and 
          medium-sized businesses. We should also provide matching funds to 
          trade associations or other organizations who establish overseas 
          centers to promote U.S. manufactured goods exports. 
     
     Streamline Exports Controls:
     Export controls are necessary to protect U.S. national security 
     interests and prevent the proliferation of nuclear, biological and 
     chemical weapons. Nonetheless, these controls are often overly 
     restrictive and bureaucratic, creating a mountain of red tape and 
     costing the U.S. tens of billions of dollars in exports -- while 
     undermining the competitiveness of the high-tech industries on which our 
     national security depends. The United States should: 
          - Further liberalize East-West export controls that are 
          unnecessary given the end of the Cold War. 
          - Avoid unilateral export controls and controls on technology 
          widely available in world markets. Unilateral controls penalize 
          U.S. exporters without advancing U.S. national security or foreign 
          policy interests. 
          - Streamline the current decision-making process for export 
          controls. While our competitors use a single agency to administer 
          export controls, the United States system is often characterized 
          by lengthy bureaucratic turf wars between the State Department, 
          the Commerce Department, the Pentagon's Defense Technology 
          Security Agency, the Arms Control and Disarmament Agency, the 
          Department of Energy, and the National Security Agency. 
     
     Antitrust Reform: 
     Increasingly, the escalating cost of state-of-the-art manufacturing 
     facilities will require firms to share costs and pool risks. To permit 
     this cooperation, the United States should extend the National 
     Cooperative Research Act of 1984 to cover joint production ventures. 
     
     Civil-military integration: 
     Department of Defense procurement regulations are so cumbersome that 
     they have resulted in an unnecessary and wasteful segregation of our 
     civilian and defense industrial bases. The military specification for 
     sugar cookies is 10 pages long. Government procurement is so different 
     from private sector practices that companies now set up separate 
     divisions and manufacturing facilities to avoid distorting the 
     commercial part of their business. The U.S. must review and eliminate 
     barriers to the integration of our defense and civilian industrial base. 
     These barriers include cost and price accounting, unnecessary military 
     specifications, procurement regulations, inflexibility on technical data 
     rights, and a failure to develop technologies in a dual-use context.
     
     Taken together, the six initiatives discussed above comprise a 
     technology policy that will restore economic growth at home, help U.S. 
     firms succeed in world markets, and help American workers earn a good 
     standard of living in the international economy.
     
     
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