
Technology for America's Economic Growth:
A New Direction to Build Economic Strength


A New Direction

        Investing in technology is investing in America's future: a 
growing economy with more high-skill, high-wage jobs for American 
workers; a cleaner environment where energy efficiency increases 
profits and reduces pollution; a stronger, more competitive private 
sector able to maintain U.S. leadership in critical world markets; 
an educational system where every student is challenged; and an 
inspired scientific and technological research community focused on 
ensuring not just our national security but our very quality of 
life.

       American technology must move in a new direction to build 
economic strength and spur economic growth.  The traditional federal 
role in technology development has been limited to support of basic 
science and mission-oriented research in the Defense Department, 
NASA, and other agencies.  This strategy was appropriate for a 
previous generation but not for today's profound challenges.  We 
cannot rely on the serendipitous application of defense technology 
to the private sector.  We must aim directly at these new challenges 
and focus our efforts on the new opportunities before us, 
recognizing that government can play a key role helping private 
firms develop and profit from innovations.

       We must move in a new direction:

    Strengthening America's industrial competitiveness and creating 
jobs;

    Creating a business environment where technical innovation can 
flourish and where investment is attracted to new ideas;

    Ensuring the coordinated management of technology all across the 
government;

    Forging a closer working partnership among industry, federal and 
state governments, workers, and universities;


    Redirecting the focus of our national efforts toward 
technologies crucial to today's businesses and a growing economy, 
such as information and communication, flexible manufacturing, and 
environmental technologies; and,

    Reaffirming our commitment to basic science, the foundation on 
which all technical progress is ultimately built. 




For the American People

       Our most important measure of success will be our ability to 
make a difference in the lives of the American people, to harness 
technology so that it improves the quality of their lives and the 
economic strength of our nation.

       We are moving in a new direction that recognizes the critical 
role technology must play in stimulating and sustaining the long-
term economic growth that creates high-quality jobs and protects our 
environment.

       We are moving in a new direction to create an educational and 
training system that challenges American workers to match their 
skills to the demands of a fast-paced economy and challenges our 
students to reach for resources beyond their classrooms.

       We are moving in a new direction to dramatically improve our 
ability to transmit complicated information faster and further, to 
improve our transportation systems, our health care, our research 
efforts, and even the ability of our military to respond quickly and 
decisively to any threat to our nation's security.

       In these times, technology matters as well to an efficient 
farm, food processing, and food retailing industry that delivers a 
variety of low-cost, wholesome foods; to a construction industry 
that builds high-quality, affordable housing; and to an energy 
sector that balances energy efficiency with clean, affordable and 
efficient energy sources.

New Criteria


       We will hold ourselves to tough standards and clear vision.  
The best technology policy unleashes the creative energies of 
innovators throughout the economy by creating a market that rewards 
invention and enterprise.  We are moving to accelerate the 
development of civilian technology with new criteria:

       Accelerating the development of technologies critical for 
long-term economic growth but not receiving adequate support from 
private firms, either because the returns are too distant or because 
the level of funding required is too great for individual firms to 
bear;

       Encouraging a pattern of business development that will 
likely result in stable, rewarding jobs for large numbers of 
workers;

       Accelerating the development of technologies that could 
increase productivity while reducing the burden of economic activity 
on the local, regional, or global environment;

       Improving the skills offered by American workers by 
increasing the productivity and the accessibility of education and 
training;

       Reflecting the real needs of American businesses as 
demonstrated by their willingness to share the cost of research or 
participate in the design of initiatives;

       Supporting communities or disadvantaged groups in the U.S. or 
abroad who have not enjoyed the benefits of technology-based 
economic growth;

       Contributing to U.S. access to foreign science and 
technology, enhancing cooperation on global problems or U.S. 
successes in technology-related foreign markets.

Reaching Our Technology Goals

       The challenge we face demands that we set and keep focused on 
our goals:

                      LONG TERM ECONOMIC GROWTH THAT 
              CREATES JOBS AND PROTECTS THE 
              ENVIRONMENT


                        A GOVERNMENT THAT IS MORE 
              PRODUCTIVE AND MORE RESPONSIVE TO THE 
              NEEDS OF ITS CITIZENS

                        WORLD LEADERSHIP IN BASIC 
              SCIENCE, MATHEMATICS, AND ENGINEERING.

       We have the means to stimulate innovations that will bring 
economic growth and help us reach our goals and other important 
objectives.  Foremost is a sound fiscal policy that reduces the 
federal deficit and lowers interest rates.  But that is not always 
enough.  We must also turn to:

    Research and experimentation tax credits and other fiscal 
policies to create an environment conducive to innovation and 
investment;

    A trade policy that encourages open but fair trade;

    A  regulatory policy that encourages innovation and achieves 
social objectives efficiently;

    Education and  training programs to ensure continuous learning 
opportunities for all Americans;

    Support for private research and development through research 
partnerships and other mechanisms to accelerate technologies where 
market mechanisms do not adequately reflect the nation's return on 
the investment;                                                                 
        

    Support for contract  R & D centers and manufacturing extension 
centers that can give small businesses easy access to technical 
innovations and know-how;

    Support for a national telecommunications infrastructure and 
other information infrastructures critical for economic expansion;

    Department of Defense and other federal agency purchasing 
policies  designed to foster early markets for innovative products 
and services that contribute to national goals;


    Strong and sustained support for basic science to protect the 
source of future innovations;

    International science and technology cooperative projects that 
enhance U.S. access to foreign sources of science and technology, 
contribute to the management of global problems, and provide the 
basis for marketing U.S. goods and services;

    Dual-use Defense Department research and development programs; 

    National user facilities that make sophisticated research tools, 
such a synchrotron radiation and neutron beam tools, available to a 
variety of research organizations.

Managing Technology for Economic Growth

       Redirecting America's programs in science and technology will 
require major changes in the way we manage our efforts.   Tight 
management is essential to ensure the highest possible return our 
investments and to ensure that tax, regulatory and other efforts 
reinforce instead of frustrate our work.

       We are making major changes:

    Working with Vice President Gore, a reinvigorated Office of 
Science and Technology Policy will lead in the development of 
science and technology policy and will use the Federal Coordinating 
Council on Science, Engineering, and Technology, along with other 
means, to coordinate the R & D programs of the federal agencies;

    The new National Economic Council will monitor the 
implementation of new policies and provide a forum for coordinating 
technology policy with the policies of the tax, trade, regulatory, 
economic development, and other economic sectors.  

       As we move from traditional, mission-oriented R & D to 
investments designed specifically to strengthen America's industrial 
competitiveness and create jobs, considerable care must be taken to 
set priorities.  In many cases, it will be essential to require 
cost-sharing on the part of private partners.  In all cases, it will 
be essential for our government to work closely with business and 
labor.

       Our initiative in advanced manufacturing, for example, will 
not be successful without direct input from the private sector about 
which technical areas are most important.  We will conduct a review 
of laws and regulations, such as the Federal Advisory Committee Act 
and conflict-of-interest regulations to determine whether changes 
are needed to increase government-industry communication and 
cooperation.

       We also will work closely with Congress to prevent  
'earmarking' of funds for science and technology.  Peer review and 
merit-based competition are critical to the success of any science 
and technology policy.

       Effective management of technology policy also requires an 
effective partnership between federal and state governments.  The 
states have pioneered many valuable programs to accelerate 
technology development and commercialization.  Our efforts should 
build on these programs.

       And, every federal technology program, including those of 
long-standing, will be regularly evaluated against pre-established 
criteria to determine if they should remain part of a national 
program.   Major changes facing our nation's economy demand a 
searching re-examination of technology programs, particularly now as 
we move toward new efforts and a new emphasis in our technology for 
America's economic growth.

Building America's Economic Strength:  New Initiatives

       The challenges we face --  from our competitors abroad and 
from our people at home -- demand dramatic innovation and bold 
action that will not just revive our economy now but also ensure our 
economic growth well into the future.  Building America's economic 
strength through technology demands new initiatives that confront 
these challenges effectively, efficiently, and creatively.

    PERMANENT EXTENSION OF THE RESEARCH AND EXPERIMENTATION TAX 
CREDIT  to sustain incentives for the  R&E work so essential to new 
developments;

    INVESTMENT IN A NATIONAL INFORMATION INFRASTRUCTURE and 
establishment of a task force working with the private sector to 
design a national communications policy 

that will ensure rapid introduction of  new communication 
technology;

    ACCELERATED INVESTMENT IN ADVANCED MANUFACTURING TECHNOLOGIES 
that promote U.S. industrial competitiveness and that build on, 
rather than minimize, worker skills;

    RE-ESTABLISHING TECHNOLOGICAL LEADERSHIP AND COMPETITIVENESS OF 
THE U.S. AUTOMOBILE INDUSTRY through a major new program to help the 
industry develop critical new technology that can all but eliminate 
the environmental hazards of automobile use and operate from 
domestically produced fuels and facilitate the development of a new 
generation of automobiles;

    IMPROVE TECHNOLOGY FOR EDUCATION AND TRAINING by supporting the 
development and introduction of computer and communications 
equipment and software that can increase the productivity of 
learning in formal school settings, a variety of business training 
facilities and in homes.

    INVESTMENTS  IN ENERGY-EFFICIENT FEDERAL BUILDINGS to reduce 
wasteful energy expenses and encourage the adoption of innovative, 
energy-efficient technology.
     
    




Goal:  LONG-TERM ECONOMIC GROWTH THAT CREATES JOBS AND PROTECTS THE 
ENVIRONMENT

        Technology is the engine of economic growth.  In the 
United States, technological advance has been responsible for as 
much as two-thirds of productivity growth since the Depression. 
Breakthroughs such as the transistor, computers, recombinant DNA and 
synthetic materials have created entire new industries and millions 
of high-paying jobs.
        
        International competitiveness depends less and less on 
traditional factors such as access to natural resources and cheap 
labor.  Instead, the new growth industries are knowledge based.  

They depend on the continuous generation of new technological 
innovations and the rapid transformation of these innovations into 
commercial products the world wants to buy.  That requires a 
talented and adaptive work force capable of using the latest 
technologies and reaching ever-higher levels of productivity.   

        Modern production systems also make much more efficient 
use of energy and materials.  Advances in technology can lead to 
enormous reductions in the environmental emissions associated with 
automobiles, buildings, and factories.  And because pollution always 
signals inefficiencies and, because wasteful energy costs raise the 
price of doing business, these technology advances can also lead to 
increased profits.

        We can promote technology as a catalyst for economic 
growth by:

   directly supporting the development, commercialization, and 
deployment of new technology;
   fiscal and regulatory policies that indirectly promote these 
activities;
   investment in education and training; and,
   support for critical transportation and communication 
infrastructures.
        
Technology Development, Commercialization and Use

        Since World War II, the federal government's de facto 
technology policy has consisted of support for basic science and 
mission-oriented R&D -- largely defense technology.  Compared to 
Japan and our other competitors, support for commercial technology 
has been minimal in the U.S..  Instead, the U.S. government has 
relied on its investments in defense and space to trickle down to 
civilian industry.

        Although that approach to commercial technology may have 
made sense in an earlier era, when U.S. firms dominated world 
markets, it is no longer adequate.   The nation urgently needs 
improved strategies for government/industry cooperation in the 
support of industrial technology.  These new approaches need not 
jeopardize agency missions:  In many technology areas, missions of 
the agencies coincide with commercial interests or can be 
accomplished better through close cooperation with industry.


        This Administration will modify the ways federal agencies 
do business to encourage cooperative work with industry in areas of 
mutual interest.  President Eisenhower undertook a similar policy 
change in 1954, when he issued an executive order directing federal 
agencies to support basic research.  This new policy will result in 
significantly more federal R&D resources going to (pre-competitive) 
projects of commercial relevance.  It will also result in federal 
programs that go beyond R&D, where appropriate, to promote the broad 
application of new technology and know-how.

R&D.  At the level of technology development, the fundamental 
mechanism for carrying out this new approach is the cost-shared R&D 
partnership between government and industry.  All federal R&D 
agencies (including the nation's 726 federal laboratories) will be 
encouraged to act as partners with industry wherever possible.  In 
this way, federal investments can be managed to benefit both 
government's needs and the needs of U.S. businesses.

         This reorientation is particularly urgent for the 
Department of Defense, which accounts for 56 percent of all federal 
R&D.   A significant portion of DoD's research and development 
budget is already focused on dual-use projects --particularly 
projects supported by the Defense Advanced Research Projects Agency 
(DARPA).   Since a growing number of defense needs can be met most 
efficiently by commercial products and technology in the years 
ahead, this fraction will increase.   DoD is developing a strategy 
to improve the integration of defense and commercial technology 
development.

        All federal support for technology development is being 
reviewed to ensure that research priorities are in line with 
contemporary needs of industry and to ensure that strategies for 
working with industry are consistent.   

        To strengthen industry-government cooperation and to 
provide more federal support for commercial R&D:     

        The ratio of civilian and dual-use R&D to purely military 
R&D is significantly higher in President Clinton's economic plan.  
This is a first step toward balancing funding levels for these two 
categories.   In 1993, the civilian share of the total federal R&D 
budget was approximately 41% .  Under President Clinton's plan, the 
civilian share will be more than 50% by 1998.   Total spending 

for civilian R&D will rise from $27.9 billion to 36.6 billion during 
this period.

        The Commerce Department's Advanced Technology Program is 
expanded significantly.  Established in 1990, the ATP shares the 
costs of industry-defined and industry-led projects selected through 
merit-based competitions.

        The Defense Advanced Research Projects Agency (DARPA) will 
be renamed the Advanced Research Projects Agency (ARPA) -- as the 
agency was known before 1972.  The ARPA program in dual use will be 
expanded in ways that increase the likelihood that defense research 
can lead to civilian product opportunities.

        New Department of Energy programs designed to increase the 
productivity of energy use in industry, transportation, and 
buildings as well as renewable energy programs will ensure that the 
goals of environmental protection are fully consistent with other 
business objectives.  DoE, working with other agencies, will 
encourage industry R&D consortia in an effort directed at reducing 
pollution and manufacturing waste.

       Manufacturing R&D will receive particular attention from ATP, 
ARPA and other federal agencies.   SEMATECH, an industry consortium 
created to develop semiconductor manufacturing technology, will 
receive continued matching funds from the Department of Defense in 
FY94.   This consortium can serve as a model for federal consortia 
funded to advance other critical technologies.   Programs will be 
encouraged in the development of a new automobile, new construction 
technologies, intelligent control and sensor technologies, rapid 
prototyping, and environmentally-conscious manufacturing. 

       All laboratories managed by the Department of Energy, NASA, 
and the Department of Defense that can make a productive 
contribution to the civilian economy will be reviewed with the aim 
of devoting at least 10-20 percent of their budgets to R&D 
partnerships with industry. 

        Agencies will make it a priority to remove obstacles to 
Cooperative R&D Agreements (CRADAs) and to facilitate industry-lab 
cooperation through other means.


       The Federal Coordinating Council for Science, Engineering, 
and Technology (FCCSET) will be strengthened.  Initiatives are 
currently underway in the following six areas: improving our 
understanding of the climate system, advanced supercomputers and 
computer networks, math and science education, materials processing, 
biotechnology, and advanced manufacturing.

 Commercialization.  Although U.S. firms remain relatively strong in 
the invention of new technologies, foreign competitors are often 
first to commercialize and bring new products to market.  The 
reorientation of federal R&D can play an important role.  
Cooperative research is a powerful way to get technology and know-
how into the hands of businesses that are in a position to put them 
quickly to work.   The tax, regulatory, and other reforms described 
later also play a key role by creating a favorable investment 
environment for innovation.  But in many cases additional programs 
are needed, such as: 

       Regional Technology Alliances  explicitly designed to promote 
the commercialization and application of critical technologies in 
which there are regional clusters of strength to encourage firms and 
research institutions within a particular region to exchange 
information, share and develop technology, and develop new products 
and markets.

       Agile Manufacturing  programs expanded to allow temporary 
networks of complementary firms to come together quickly to exploit 
fast-changing market opportunities.  These programs support the 
development and dissemination of information technology and 
technical standards to make such networks possible.

Access and Use.  In addition to support for the development and 
adoption of new technologies, programs are needed to ensure that all 
American businesses have easy access to existing technology and best 
practices.  The Agriculture Department has historically devoted half 
of its R&D budget to the active dissemination of research results.  
The extraordinary productivity gains in American farming throughout 
this century owe a great deal to the close links between individual 
farmers and county extension agents.

        American manufacturing also needs an effective system.  
New manufacturing technologies and approaches are available that can 
lead to dramatic improvements in product quality, cost, 

and time-to-market.  But relatively few U.S. businesses have taken 
advantage of these new technologies and best practices.  The problem 
is particularly acute among the 360,000 small and medium-sized 
manufacturers, many of whom are still using 1950s technology.

        Workers should play a significant role in the use and 
spread of manufacturing technology.  Workplace experience makes 
clear that new technologies are implemented most effectively when 
the knowledge and concerns of workers are included in the process.

  To enhance the use of and access to technology, we will:

       Create a national network of manufacturing extension centers.  
Existing state and federal manufacturing extension centers managed 
through the Department of Commerce provide assistance to a small 
number of businesses, but service must be greatly expanded to give 
all businesses access to the technologies, testing facilities, and 
training programs they need.  Federal funds (to be matched by state 
and local governments) will support and build on existing state, 
local, and university programs, with the goal of creating a nation-
wide network of extension centers.

       Expand the Manufacturing Experts in the Classroom program to 
support manufacturing specialists from industry and labor teaching 
in technical and community colleges.  The goal is to strengthen the 
capacity of such institutions to serve regional manufacturing firms.

       Work through the Department of Labor to assist US firms in 
implementing the principles of high performance work organization.  
DOL will coordinate assistance in workforce literacy, technical 
training, labor management relations, and the restructuring of 
management and work processes.  Implementation will occur in part 
through the network of manufacturing extension centers. 




A World-Class Business Environment For Innovation and Private Sector 
Investment

        Increasing investment in civilian technologies is only one 
element of a strategy to restore America's industrial and 
technological leadership, and to create high-wage, high-skill jobs.  
The United States must also ensure that its tax, trade, regulatory 
and procurement policies encourage private sector investment and 
innovation.  In a global where capital and technology are 
increasingly mobile, the United States must make sure that it has 
the best environment for private sector investment and job creation.

        To improve the environment for private sector investment 
and create jobs, we will:

1.      Make Permanent the Research and Experimentation (R&E) Tax 
Credit:  The need for additional U.S. investment in R&D is clear.  
Currently, the United States invests 1.9 percent of GDP in non-
defense R&D, as compared to 3.0 percent in Japan and 2.7 percent in 
West Germany.  We will increase private R&E expenditures by making 
the Research and Experimentation tax credit permanent.  In the past, 
the effectiveness of this credit has been undermined by a series of 
six and nine-month temporary extensions.  The credit cannot induce 
additional R&E expenditures unless its future availability is known 
when the businesses are planning R&E projects and projecting costs.  
R&E activity, by its nature, is long term and businesses should be 
able to plan their research activity knowing that the credit will be 
available when the research is actually undertaken.  Thus if the R&E 
credit is to have the intended incentive effect, it should be 
permanent.

2.      Create incentives for long-term investments in small 
businesses:  The Administration will send legislation to Congress 
designed to provide incentives for those who make high-risk, long-
term venture capital investments in startups and other small 
enterprises.  These companies are the major source of job creation, 
economic growth, and technological dynamism in our economy.

3.      Create incentives for investment in equipment:  Currently, 
America's chief economic competitors are investing twice as much in 
plant and equipment (as a percentage of GDP) as the United States.  
Furthermore, studies show a high correlation between investment in 
new equipment and productivity -- since new technologies are often 
embodied in capital equipment.  To stimulate additional investment 
in equipment, the 

Administration will propose a temporary incremental investment tax 
credit for large businesses and a permanent credit for small 
businesses.

4.      Reform antitrust laws to permit joint production ventures: 
The Administration will forward legislation to Congress which would 
extend the National Cooperative Research Act of 1984 to cover joint 
production ventures.  Increasingly, the escalating cost of state-of-
the-art manufacturing facilities will require firms to share costs 
and pool risks.

5.      Ensure that U.S. trade policy strengthens high technology 
industries:  To remain competitive, America's high-tech industries 
need full access to overseas markets and effective protection of 
intellectual property rights.  The Administration is committed to 
multilateral and bilateral negotiations, and enforcement of existing 
agreements, that will accomplish these objectives.  The trade policy 
must also be consistent with a vigorous public research and 
development program.

6.     Review proposals to increase the supply and availability of 
patient capital:  A number of proposals have been made to increase 
the time-horizon of investments.  For example, the National Academy 
of Science has proposed creating a publicly-funded, privately run 
Civilian Technology Corporation.  The private-sector Council on 
Competitiveness has proposed a sweeping set of reforms to improve 
corporate governance and encourage long-term asset ownership.  The 
Administration will review these and other proposals in an effort to 
improve the environment for long-term investments.

7.     Ensure that federal regulatory policy encourages investment 
in innovation and technology development that achieve the purposes 
of the regulation at the lowest possible cost:    Regulatory policy 
can have a significant impact on the rate of technology development 
in energy, biotechnology, pharmaceuticals, telecommunications, and 
many other areas.   The caliber of the regulatory agencies can 
affect the international competitiveness of the industries they 
oversee.  At the same time, skillful support of new technologies can 
help businesses reduce costs while complying with ambitious 
environmental regulations.  A well designed regulatory program can 
stimulate rather than frustrate attractive directions for 
innovation.  We will review the nation's regulatory "infrastructure" 
to ensure that unnecessary 

obstacles to technical innovation are removed and that priorities 
are attached to programs introducing technology to help reduce the 
cost of regulatory compliance.  

Education and Training

        Technology policy can play a key role in supporting our 
commitment to improving the education and training opportunities for 
all Americans. 

        First, it is essential that priorities in research, 
regulatory, and other policies designed to encourage innovation and 
investment in the economy reflect the need to create high-
performance workplaces -- workplaces which offer all workers 
skilled, rewarding jobs with opportunities for growth.   These 
priorities are reflected in the design of the initiatives described 
earlier.  Our plan ensures that economic growth works to the 
advantage of all Americans in the workforce, not just an elite group 
of well-educated workers who have easy access to training in new 
skills. 

        Secondly, it is essential that all Americans have access 
to the education and training they need and that the teaching 
enterprise itself become a high-performance workplace.  Our 
initiatives in education and training follow four central themes:  
restructuring primary and secondary schooling, using youth 
apprenticeships and other programs to facilitate the transition from 
school to work for people who do not expect to go to college, making 
training accessible and affordable to all workers who need to 
upgrade their skills to keep pace with a rapidly changing economy, 
and programs specifically targeted to help workers displaced by 
declining defense budgets or increased international trade.  

        Technology policy can and must support all of these 
objectives. 

1.  Public investment will be provided to support technology that 
can increase the productivity of learning and teaching in formal 
school settings, in industrial training, and even at home.  New 
information technologies can give teachers more power in the 
classroom and create a new range of employment opportunities.  
Schools can themselves become high-performance workplaces.   


2. Public investment will also be increased for programs designed to 
provide needed skills in mathematics, science, and engineering.  
Programs will be supported in primary, secondary, college, post-
graduate schools and in a range of industrial training facilities. 
Particular attention will be paid to increasing participation by 
minorities and women.

3.  Defense capabilities in education and training represent an 
important resource.  New programs will accelerate transfer of this 
experience to civilian institutions.  The Department of Defense and 
NASA have invested heavily both in the hardware and software needed 
for advanced instructional systems, they have accumulated valuable 
experience in how to use the new technologies in practical teaching 
situations.  The Navy Training Systems Center and the Army 
Simulation, Training and Instrumentation Command together spend 
about $1 billion a year on training systems.  There are over 150 
defense simulation and training companies serving these needs in 
central Florida alone.  

        Specific initiatives include the following:

A.      Access to the Internet and developing NREN will be 
expanded to connect university campuses, community colleges, and K-
12 schools to a high-speed communications network providing a broad 
range of information resources.  Support will be provided for 
equipment allowing local networks in these learning institutions 
access to the network along with support for development of high-
performance software capable of taking advantage of the emerging 
hardware capabilities.

B.      An interagency  task force will be created from 
appropriate federal agencies to (i)  establish software and 
communication standards for education and training, (ii) coordinate 
the development of critical software elements, (iii) support 
innovative software packages and curriculum design, and (iv) collect 
information resources in a standardized format and make them 
available to schools and teaching centers throughout the nation 
through both conventional and advanced communication networks.  This 
task force will provide specific assistance to the interagency task 
force on worker displacement.

C.      Programs in the Federal Coordinating Council for Science, 
Engineering, and Technology (FCCSET) Committee on Education and 
Human Resources programs will be enhanced.   

These programs are designed to improve the teaching of science, 
mathematics, and engineering at all levels.  In K-12 schools, 
primary emphasis will be placed on teacher preparation, 
comprehensive organizational reform, and curriculum development.  
Programs for undergraduate education emphasize faculty preparation 
and organization and curriculum reforms but place heaviest emphasis 
on student incentives.  At the graduate level, most funding is 
directed for fellowships.

D.      Proposals will be encouraged for an industry consortia or 
regional alliance designed to develop new teaching systems (hardware 
and software) and work with training organizations throughout the 
nation to develop, install, and maintain state-of-the art systems.   
Firms now providing similar services to defense training 
organizations are likely to participate.

E.     Promote Manufacturing Engineering Education.  Traditional 
engineering education, with its focus on product design and 
analysis, has seriously neglected the management and operation of 
manufacturing activities.  This program provides matching funds for 
graduate or undergraduate programs in manufacturing engineering.  


        


" Information Superhighways"

New Options offered by Information Technology 
in Education and Training

--  Computers can create an unprecedented opportunity for learning 
complex ideas, creating an environment that can closely approximate 
real work environments or experimental apparatus.   
--  Interconnected systems can help students work together as parts 
of a team even if the members of the team are separated 
geographically.  
--  Training can be embedded as a part of new equipment.  Complex 
machine tools or software packages can be purchased with tutorials 
that bring new operators up to speed quickly, that provide quick 
refreshers for unusual events, and that allow operators to build new 
competencies during off-hours.  

--  Advanced systems permit instruction tailored to the learning 
needs of individuals.  This is particularly important for retraining 
adults that reenter a training environment with a great variety of 
learning needs and learning abilities.  And it is important in 
ensuring that minorities, women, people with disabilities, and 
others that may be disadvantaged by traditional approaches to 
instruction.
--  Communication technologies can bring a rich education and 
training environment to people isolated because they live in remote 
areas or because of the demands of work and family responsibilities.
--  Technology can reduce the burden of record-keeping and other 
paperwork that consumes so much teacher time in today's classrooms.  
It can also bring teachers and schools together in ways that 
facilitate the exchange of ideas and build a sense of community.

        Efficient access to information is becoming critical for 
all parts of the American economy.   Banks, insurance companies, 
manufacturing concerns, and many other business operations now 
depend on high-speed communication links.  Many more businesses can 
take advantage of such systems if they are reliable, easy to use, 
and inexpensive.  Such systems would also be of enormous value to 
schools, hospitals, and other public organizations.  Even the most 
remote school could be connected to state-of-the art information.  
Hospitals could call in experts for consultation even if the expert 
is far from the patient. 

        Accelerating the introduction of an efficient, high-speed 
communication system can have the same effect on US economic and 
social development as public investment in the railroads had in the 
19th century.  It would provide a critical tool around which many 
new business opportunities can develop.  

        Specific new programs include : 

A.     Implementation of the High-performance Computing and 
Communications Program established by the High-Performance Computing 
Act of 1991 introduced by Vice President Gore when he served in the 
Senate.   Research and development funded by this program is 
creating (1) more powerful super computers, (2) faster computer 
networks and the first national high speed network, and (3) more 
sophisticated software. This network will be constructed by the 
private sector but encouraged by federal policy 

and technology developments.   In addition, it is providing 
scientists and engineers with the tools and training they need to 
solve "Grand Challenges", research problems--like modeling global 
warming--that cannot be solved without the most powerful computers.

B.     Create a Task Force on Information Infrastructure.  
Government telecommunication and information policy has not kept 
pace with new developments in telecommunications and computer 
technology. As a result, government regulations have tended to 
inhibit competition and delay deployment of new technology.  For 
instance, without a consistent, stable regulatory environment, the 
private sector will hesitate to make the investments necessary to 
build the high-speed national telecommunications network that this 
country needs to compete successfully in the 21st Century.   To 
address this problem and others, we will create a high-level inter-
agency task force within the National Economic Council which will 
work with Congress and the private sector to find consensus on and 
implement policy changes needed to accelerate deployment of a 
national information infrastructure.

C.     Create an Information Infrastructure Technology Program to 
assist industry in the development of the hardware and software 
needed to fully apply advanced computing and networking technology 
in manufacturing, in health care, in life-long learning, and in 
libraries.  

D.     Provide funding for networking pilot projects through the 
National Telecommunications and Information Administration (NTIA) of 
the Department of Commerce.  NTIA will provide matching grants to 
states, school districts, libraries, and other non-profit entities 
so that they can purchase the computers and networking connections 
needed for distance learning and for hooking into computer networks 
like the Internet.  These pilot projects will demonstrate the 
benefits of networking to the educational and library communities.

E.     Promote dissemination of Federal information.  Every year, 
the Federal government spends billions of dollars collecting and 
processing information (e.g. economic data, environmental data, and 
technical information). Unfortunately, while much of this 
information is very valuable, many potential users either do not 
know that it exists or do not know how to access it.  We are 

committed to using new computer and networking technology to make 
this information more available to the taxpayers who paid for it.  
In addition, it will require consistent Federal information policies 
designed to ensure that Federal information is made available at a 
fair price to as many users as possible while encouraging growth of 
the information industry.

Transportation and other Infrastructure

        A competitive, growing economy requires a transportation 
system that can move people, goods and services quickly and 
efficiently.  To meet this challenge, each transport sector must 
work effectively both by itself and as part of a larger, 
interconnected whole.  With nearly one out of every six dollars of 
GDP now spent in transportation related activities, technologies 
that increase the speed, reliability, and cost-effectiveness of the 
transportation sector will also increase the economy's 
competitiveness and ability to create jobs.

        One of the greatest challenges we face is to rehabilitate 
and properly maintain the huge stock of infrastructure facilities 
already in place.  With this in mind, the Administration will 
consider establishing an integrated program of research designed to 
enhance the performance and longevity of the existing 
infrastructure.  Among other things, this program would 
systematically address issues of assessment technology and renewal 
engineering.      A strategic program to develop new technologies for 
assessing the physical condition of the nation's infrastructure, 
together with techniques to repair and rehabilitate those 
structures, could lead to more cost-effective maintenance of the 
infrastructure necessary to economic growth.

        Providing a world class transportation sector will require 
the nation to meet the challenges posed both by increased congestion 
in many parts of the transportation system, and by the need to 
rebuild and maintain a public capital stock valued at more than $2.4 
trillion.  To meet these challenges, the Administration's program 
includes increased investment in a number of areas:

A.      Upgrading the nation's highways and transit systems by 
providing additional funding authorized by the Intermodal Surface 
Transportation Efficiency Act of 1991 (ISTEA).  Improve mass transit 
services and facilities by investing an additional $600 

million in 1994 and $1 billion each year from 1995 to 1998 in 
transit capital projects.

B.      Investing in magnetic levitation (maglev) transportation 
and high-speed rail by providing funds for a maglev prototype and 
for start-up of private or state/local high-speed rail projects.

C.      Increasing research on new technologies that could lead to 
the development of "smart highways".  These efforts range from 
technologies that provide in-route planning and traffic monitoring, 
to those that would support a fully automated system.

D.      Increasing research on civil aviation technologies, 
including an examination of the economic, market, safety, and noise 
aspects of advanced aircraft.   We will also support advanced in-
flight space and ground-based command, navigation, weather 
prediction, and control systems.   US aeronautical, research and 
development facilities infrastructure such as wind tunnels will also 
be revitalized.

E.      Increasing research on new materials that will allow the 
construction of infrastructure facilities that are more durable, 
minimizing the frequency of costly reconstruction with its attendant 
disruption of traffic.

F.      Exploring new assessment technologies  for more accurately 
assessing the expected life of existing public infrastructure.    A 
number of new technologies from a variety of industries, including 
electronic, medical, space, defense, and manufacturing sectors, 
could be used to develop more-reliable, nondestructive methods for 
evaluating the condition of existing structures.  Since current 
assessment techniques are so unreliable, engineering decisions must 
include significant room for error and costly fail-safe features.  
The data made available by nondestructive evaluation and monitoring 
could be used to schedule better an ongoing program of cost-
effective maintenance and rehabilitation. 

G.      Supporting renewal engineering programs which target 
materials and construction methods that would lower the cost of 
rehabilitating and repairing structures.  




GOAL:  MAKING GOVERNMENT MORE EFFICIENT AND MORE RESPONSIVE

        The federal government must use technology to improve the 
efficiency of its own operations.   Many private businesses have 
used advanced communication systems to improve the efficiency of 
their operations and to make their businesses more sensitive to the 
needs of individual customers and clients.  The federal government 
must move actively to take advantage of these new opportunities.  
Similarly, the federal government is one of the nation's largest 
consumers of energy yet many of its buildings are far less efficient 
than structures owned by private firms and taxpayers are paying the 
bill.  

        The enormous purchasing power of the federal government 
can be used to stimulate markets for innovative products in many 
areas.  This power should be exercised in a way that is consistent 
with overall national technology objectives.  President Clinton is 
committed to reinventing government, to make government work better, 
harder, and smarter.  Technology can help us achieve that goal.

Information Technology

        Information technology will be used to dramatically 
improve the way the Federal Government serves the people.  
Government will become more cost-effective, efficient, and "user-
friendly."  In particular, we will use technology to improve the 
quality and timeliness of service, to provide new ways for the 
public to communicate with their government, and to make government 
information available to the public in a timely and equitable 
manner.   

        Fast communication makes it possible for teams to work 
closely on a project even if the team members are physically distant 
from each other.  Information technology presents an opportunity to 
flatten existing organizational structures, form effective cross-
disciplinary problem-solving groups, and expand the definition of 
the workplace and workforce via telecommuting.  But business 
organizations in many sectors have found that automating existing 
work processes based on a tradition of processing paper does not 
always provide the greatest benefits from investment in automation.   
Efficiency gains from the new technology often can only be captured 
if changes are made in the 

structure of their organizations and the way they are managed.  The 
administration will undertake a careful review of government 
management with a view to making the most efficient possible use of 
new information technologies. 
                             
        Improved quality and timeliness of service.   Information 
technology will eliminate errors generated in routine paper 
processes while reducing processing time. For example, the Internal 
Revenue Service (IRS)'s electronic filing program is reducing error 
rates on tax returns from 16 percent to less than 3 percent, while 
speeding up the delivery of refunds by as much as four weeks.  
Agencies are moving forward to convert many other paper processes to 
electronic form.
        
        Information on paper is hard to retrieve.  Automation is 
allowing the Social Security Administration to provide beneficiaries 
with "one-stop" service anywhere in the country from an 800 number.  
Better connections among Federal offices, in a manner that 
safeguards the privacy of individuals, will make it easier to get 
answers from the government.

        New ways to communicate.  In the past, citizens typically 
had to go to a federal office during business hours to receive 
benefits or services.  A government that uses technology to expand 
its hours of service and communicate with the public electronically 
will deliver services and benefits where people need them, not where 
the government provides them.  We will make it possible for people 
to communicate with a Federal agency using electronic as well as 
conventional mail.  Automated terminals may be placed in public 
locations such as shopping centers or post offices that could 
provide in-hours access to a variety of government services.

        Access to government information.  Government information 
is a public asset. Markets depend on sound and timely economic 
decisions.  Federal geographic and climatological information allows 
farmers to apply fertilizer more efficiently, local governments to 
formulate environmental policy, and public safety officials to 
prepare for natural disasters.  The government will promote the 
timely and equitable access to government information via a diverse 
array of sources, both public and private, including state and local 
governments and libraries.  The development of public networks such 
as the Internet and the National Research and Educational Network 
(NREN) will 

contribute significantly to this diversity, enabling government 
information to be disseminated inexpensively to a broad range of 
users.   
        
        Policy and technology infrastructure.  Many of the 
government's policies in such areas as privacy, information 
security, records management, information dissemination, and 
procurement will be updated to take into account the rapid pace of 
technological change.  In addition, the government must apply the 
economic principle of maximizing return on investment when acquiring 
information technology, and be able to acquire commercial, off-the-
shelf technology quickly and easily.

        In addition, resources are needed to provide a technology 
infrastructure to support these service delivery improvements.  The 
support for the IRS Tax System Modernization in the stimulus 
package, along with requests elsewhere for resources to support 
information technology, are examples of the government investing in 
technology to put people first.

Energy Efficiency

        The federal government is wasting tax dollars by operating 
inefficient buildings.  More than $2 billion could be invested in 
energy retrofits in federal buildings with average payback times 
less than 3-4 years.  California, Texas, Iowa, and several other 
states have successful programs which have profitably invested in 
state buildings during the past several years.  The programs have 
both increased the efficiency of state structures and stimulated the 
local construction industry. 

        HUD spends approximately $3-4 billion a year subsidizing 
the energy bills of about 5 million low income households.  At least 
$3 billion could be invested in energy retrofits with a payback less 
than five years.

        We are introducing a multi-year program designed to 
capture the economic benefits of energy retrofits, create new jobs 
in the construction industry, and to foster innovation in efficient 
building components and in the construction industry itself.

Procurement Policy


        The federal government, particularly the Department of 
Defense and NASA, is a gigantic customer for high technology 
products.  Historically, it played an important role in helping 
assure an early market for high-risk commercial technologies that 
were extremely expensive to develop. For example, the defense-space 
share of the U.S. computer hardware market was 100 percent in 1954, 
and it exceeded 50 percent until 1962.  Semiconductors, jet 
aircraft, and pharmaceuticals also benefited from this government 
investment.

        In recent years, DoD has ceased to be an influential 
"first customer" for commercial technology.  By and large, this is 
not due to differing technical requirements:  today's commercial 
capabilities often equal or surpass DoD requirements.  Rather the 
problem is a growing morass of procurement laws and regulations. 
Many commercial manufacturers refuse to do business with DoD 
altogether, and those that do often wall off their defense 
production.  As a result, the military and commercial worlds have 
grown increasingly segregated from one another.

        The cost of this segregation both to DoD and the nation is 
high, as a 1991 report by the Center for Strategic and International 
Studies plainly stated: 

"[It] results in higher prices to DoD (even when lower-cost 
commercial alternatives exist for the same requirements), loss of a 
broad domestic production base that could be available to defense 
for peacetime and surge demands, and lack of access to commercial 
state-of-the-art technologies. Additionally, the wall between 
engineers and scientists engaged in commercial and military work 
impedes the kind of shoulder-to-shoulder contact that is the essence 
of technology transfer and that is basic to achieving greater job 
stability and growth opportunities for the U.S. work force."

        The federal government will make it a priority to 
thoroughly review and reform its procurement policy, particularly 
(but not exclusively) defense procurement policy.  It will begin by 
reviewing the recommendations of the congressionally-mandated 
"Section 800 Panel" (after Section 800 of the FY1991 Defense 
Authorization Act), which recently completed a detailed study of DoD 
procurement practices.




        More specifically, the federal government will begin steps 
necessary to achieve the following reforms:

       Government purchases or government-contracted development 
should give priority to commercial specifications and products.

        Agencies should invest in and procure advanced technologies, 
where it is economically feasible, in order to facilitate their 
commercialization.

        Agencies should experiment with a portion of their 
procurement budget to allow them to procure innovative products and 
services incorporating leading-edge technologies.

        Agencies should evaluate bids based on their ability to 
minimize life-cycle cost rather than acquisition cost, including 
environmental, health and safety costs borne by the public.

        Agencies should obtain rights in technologies developed 
under government contracts only to the extent necessary to meet the 
agencies' needs, leaving contractors with the rights necessary to 
encourage private sector investment in the development of commercial 
applications.

        Agencies should use performance-based contracting strategies 
that give contractors the design freedom and financial incentive to 
be innovative and efficient.



        




GOAL:  WORLD LEADERSHIP IN BASIC SCIENCE, MATHEMATICS, AND 
ENGINEERING.


        It is essential to recognize that technical advances 
depend on basic research in science, mathematics, and engineering.  
Scientific advances are the wellspring of the 

technical innovations whose benefits are seen in economic growth, 
improved health care, and many other areas. The federal government 
has invested heavily in basic research since the Second World War 
and this support has paid enormous dividends.    Our research 
universities are the best in the world; our national laboratories 
and the research facilities they house attract scientists and 
engineers from around the globe.  In almost every field, United 
States researchers lead their foreign colleagues in scientific 
citations, in Nobel Prizes, and most other measures of scientific 
excellence.  

        This administration will both ensure that support for 
basic science remains strong, and that stable funding is provided 
for projects that require continuity.   We will not allow short-term 
fluctuations in funding levels to destroy critical research teams 
that have taken years to assemble. 

        But stable funding requires setting clear priorities.  In 
recent years, rather than canceling less important projects when 
research budgets have been tight, Federal agencies have tended to 
spread the pain, resulting in disruptive cuts and associated 
schedule delays in hundreds of programs.   We will improve 
management of basic science to ensure that high-priority programs 
receive sustained support. 

        University Research.  The National Science Foundation and 
the National Institutes of Health provide the vast majority of 
Federal funding for university research.  Since universities play 
dual roles of research and teaching, the long-term scientific and 
technological vitality of the U.S. depends upon adequate and 
sustained funding for university research grant programs at NSF, 
NIH, and other research agencies.  

        National Laboratories.  In fields like high-energy 
physics, biomedical science, nuclear physics, materials sciences, 
and aeronautics, the national laboratories provide key facilities 
used by researchers in academia, Federal labs, and industry.  In 
addition, in many fields, researchers at Federal labs are world 
leaders.  We will ensure that Federal laboratories continue their 
key role in basic research and will encourage more cooperative 
research between the laboratories and industry and universities.  
And we will develop new missions for our federal labs to make full 
use of the talented and experienced men and women working there in 
today's post-cold war era.


        Space Science and Exploration.   The resources needed for 
space exploration and research make government funding essential.   
We will continue to work with foreign partners to design missions 
needed to explore our solar system and the universe beyond.   
Research on micro-gravity and life-sciences as applied to the human 
in space program will also be supported.

        Environmental Research.  In FY93, the Federal government 
will invest in research to better understand global warming, ozone 
depletion, and other phenomena important to local, regional, and 
global environments.   This research is essential if we are to fully 
assess the damage mankind is doing to our planet and take effective 
action to address it.  Vital research on local and regional 
environmental problems will also be strongly supported at EPA, NOAA, 
NASA, DoD, DOL,  USDA,  and other agencies.





BUILDING AMERICA'S ECONOMIC STRENGTH:  NEW INITIATIVES

Permanent Extension Of The Research And Experimentation Tax Credit

Invest In A National Information Infrastructure

Advanced Manufacturing Technology

Facilitate Private Sector Development of a New Generation of 
Automobiles

Improve Technology For Education And Training

Investments In Energy-Efficient Federal Buildings






PERMANENT EXTENSION OF THE RESEARCH AND EXPERIMENTATION TAX CREDIT

Objectives

        The success of U.S. businesses depends on their ability to 
compete both in the development of innovative products and 
production processes and in their ability to bring new products to 
the market quickly and efficiently.  Unfortunately, the U.S. has 
fallen behind many of its foreign competitors in civilian research.  
Currently the U.S. invests 1.9 percent of GDP in non-defense R&D 
compared to 3.0 percent in Japan and 2.7 percent in Germany.   US 
investment in research and experimentation can be increased through 
a tax credit for R&E that can provide a stable basis for business 
planning.

        Increasing investment in research is important to foster 
economic growth and technological development and to improve 
international competitiveness.  But many of the benefits of research 
cannot be captured by the businesses making the investments.  
Instead, these benefits redound to competitors and to the public.  
In the absence of an incentive for research, businesses simply might 
not invest in research the way our economic goals demand.  The 
research and experimentation credit should be permanently extended 
to foster economic growth and technological development, create 
jobs, and improve international competitiveness.  R&D activity, by 
its nature, is long-term, and taxpayers should be able to plan their 
research activity knowing that the credit will be available when the 
research is actually undertaken.    

Actions

        The Administration will propose that the Research and 
Experimentation Tax Credit be made permanent.  The credit would 
apply to qualified research expenditures by businesses and 
businesses expenditures for university basic research paid or 
incurred after June 30, 1992.  The proposal also provides a basis 
for start-up businesses to qualify for the credit.






INVEST IN AN INFORMATION INFRASTRUCTURE

Objectives

       Today's "Information Age" demands skill, agility and speed in 
moving information.  Where once our economic strength was determined 
solely by the depth of our ports or the condition of our roads, 
today it is determined as well by our ability to move large 
quantities of information quickly and accurately and by our ability 
to use and understand this information.  Just as the interstate 
highway system marked a historical turning point in our commerce, 
today "information superhighway" -- able to move ideas, data, and 
images around the country and around the world -- are critical to 
American competitiveness and economic strength.

       This information infrastructure -- computers, computer data 
banks, fax machines, telephones, and video displays -- has as its 
lifeline a high-speed fiber-optic network capable of transmitting 
billions of bits of information in a second.  Imagine being able to 
transmit the entire Encyclopedia Brittanica in one second.

        The computing  and networking technology that makes this 
possible is improving at an unprecedented rate, expanding both our 
imaginations for its use and its effectiveness.  Through these 
technologies, a doctor who needs a second opinion could transmit a 
patient's entire medical record -- x-rays and ultrasound scans 
included -- to a colleague thousands of miles away, in less time 
than it takes to send a fax today.  A school child in a small town 
could come home and through a personal computer, reach into an 
electronic Library of Congress -- thousands of books, records, 
videos and photographs, all stored electronically.  At home, viewers 
could choose whenever they wanted from thousands of different 
television programs or movies.

       Efficient access to information is becoming increasingly more 
important for all parts of our economy.  Banks, insurance companies, 
manufacturing concerns, and many other businesses now depend on high 
speed communication networks.  These networks have become a critical 
tool around which many new business opportunities are developing.

       And, by harnessing the power of supercomputers able to 
transform enormous amounts of information to images or solve 
incredible complex problems in record time, and share this power 

with an ever-expanding audience of scientists, businesses, 
researchers, students, doctors and others, the potential for 
innovation and progress multiplies rapidly.  Supercomputers help us 
develop new drugs, design new products, predict dangerous storms and 
model climate changes.  They help us design better cars, better 
airplanes, more efficient manufacturing processes.  Accelerating the 
introduction of an efficient,  high-speed communication network and 
associated computer systems would have a dramatic impact on every 
aspect of our lives.  But this is possible only if we adopt forward-
looking policies that promote the development of new technologies 
and if we invest in the information infrastructure needed for the 
2lst Century.



Actions

A.     Implementation of the High-performance Computing and 
Communications Program established by the High-Performance Computing 
Act of 1991 introduced by Vice President Gore when he served in the 
Senate.   Research and development funded by this program is 
creating (1) more powerful super computers, (2) faster computer 
networks and the first national high speed network, and (3) more 
sophisticated software. This network will be constructed by the 
private sector but encouraged by federal policy and technology 
developments.   In addition, it is providing scientists and 
engineers with the tools and training they need to solve "Grand 
Challenges", research problems--like modeling global warming--that 
cannot be solved without the most powerful computers.

B.     Create a Task Force on Information Infrastructure.  
Government telecommunication and information policy has not kept 
pace with new developments in telecommunications and computer 
technology. As a result, government regulations have tended to 
inhibit competition and delay deployment of new technology.  For 
instance, without a consistent, stable regulatory environment, the 
private sector will hesitate to make the investments necessary to 
build the high-speed national telecommunications network that this 
country needs to compete successfully in the 21st Century.   To 
address this problem and others, we will create a high-level inter-
agency task force within the National Economic Council which will 
work with Congress and the private sector to find consensus on and 
implement policy 

changes needed to accelerate deployment of a national information 
infrastructure.

C.     Create an Information Infrastructure Technology Program to 
assist industry in the development of the hardware and software 
needed to fully apply advanced computing and networking technology 
in manufacturing, in health care, in life-long learning, and in 
libraries.  

D.     Provide funding for networking pilot projects through the 
National Telecommunications and Information Administration (NTIA) of 
the Department of Commerce.  NTIA will provide matching grants to 
states, school districts, libraries, and other non-profit entities 
so that they can purchase the computers and networking connections 
needed for distance learning and for hooking into computer networks 
like the Internet.  These pilot projects will demonstrate the 
benefits of networking to the educational and library communities.

E.     Promote dissemination of Federal information.  Every year, 
the Federal government spends billions of dollars collecting and 
processing information (e.g. economic data, environmental data, and 
technical information). Unfortunately, while much of this 
information is very valuable, many potential users either do not 
know that it exists or do not know how to access it.  We are 
committed to using new computer and networking technology to make 
this information more available to the taxpayers who paid for it.  
In addition, it will require consistent Federal information policies 
designed to ensure that Federal information is made available at a 
fair price to as many users as possible while encouraging growth of 
the information industry.





PROMOTE ADVANCED MANUFACTURING TECHNOLOGY

Objectives

        Manufacturing remains the foundation of the American 
economy.  Although the United States was the unchallenged world 
leader in manufacturing for many years, our performance has slipped 
badly in recent decades.  American firms still excel at 

making breakthroughs, such as IBM's discovery of high-temperature 
superconductivity, but foreign firms are often better at follow 
through: namely, turning technology into new products and processes 
both quickly and cheaply.

        Both American industry and government under-invest in 
manufacturing.  In contrast to their foreign competitors, U.S. firms 
neglect process-related R&D within their overall R&D portfolio.  And 
the federal government allocated only two percent of its $70 billion 
R&D budget to manufacturing R&D in FY92.

        We have also neglected the dissemination of existing 
technology and know-how.  New manufacturing technologies and 
approaches are available that can lead to dramatic improvements in 
product quality, cost, and time-to-market.  Although a few U.S. 
firms have begun to adopt these technologies and approaches, most 
firms still lag.  The problem is most acute among the 360,000 small 
and medium-sized manufacturers, who employ 8 million workers, but 
too often lack the resources or ability to gain access to the 
technologies that will help them grow, increase their profits, and 
create jobs.

        Finally, investments in manufacturing have not reflected 
the concerns and the knowledge of factory employees.  Firms should 
use technology to build on rather than reduce worker skills.

Actions:

A.      Provide increased funding for advanced manufacturing R&D.  
SEMATECH, an industry consortium to develop semiconductor 
manufacturing technology, will receive continued matching funds from 
the Department of Defense in FY94.   Industry consortia (including 
universities and government laboratories, where appropriate) will be 
the preferred performers of such R&D, to assure its commercial 
relevance.    Programs will be encouraged in the development of a 
new automobile, new construction technologies, intelligent control 
and sensor technologies, rapid prototyping, and environmentally-
conscious manufacturing. 





B.     Support Agile Manufacturing.  The new Agile Manufacturing 
Program (also known as "Enterprise Integration") is designed to 
capitalize on the emerging shift from mass production to flexible or 
"agile" manufacturing.  Agile manufacturing allows independently-
owned companies to form instantaneous partnerships with firms that 
have complementary capabilities in order to exploit market 
opportunities.  These partnerships -- called "virtual enterprises" 
or "virtual corporations" -- will leverage our nation's strengths in 
information technology.  This program supports both the development 
and dissemination of such technology for enterprise integration.

C.     Create a national network of manufacturing extension centers.  
Many small and medium-sized manufacturing firms in the U.S. have not 
taken advantage of new technologies and best practices, either 
because they are unaware of them or because they cannot afford them.  
Existing state and federal manufacturing extension centers provide 
assistance to a small number of firms, but service must be greatly 
expanded to give all firms access to the technologies, testing 
facilities, and training programs they need.  Federal funds (to be 
matched by state and local governments) will go to support and build 
on existing state, local, and university programs, with the goal of 
creating a nation-wide network of extension centers.

D.     Seed Regional Technology Alliances.  Manufacturing industries 
tend to cluster geographically, and the strength of these technology 
clusters is fast becoming a key to international competitiveness.  
This new program is designed to encourage firms and research 
institutions in a particular region to exchange information, share 
and develop technology, and develop new products and markets.  
Federal funds (to be matched by alliance members) will go to support 
applied R&D and a range of technology services oriented particularly 
to smaller firms (test facilities for new products and prototypes, 
design and management assistance, start-up incubators, education and 
training, export promotion and market monitoring, and quality 
testing and standards certification).

E.     Promote Manufacturing Engineering Education.  Traditional 
engineering education, with its focus on product design and 
analysis, has seriously neglected the management and operation of 
manufacturing activities.  This program provides matching funds 

for graduate or undergraduate programs in manufacturing engineering.  

F.     Promote Environmentally-Conscious Manufacturing.  The 
Departments of Commerce, Energy, Defense, and a number of other 
federal organizations will incorporate environmental goals in 
research and development consortia for manufacturing.  In addition, 
NIST, working with EPA, DoE, and state agencies, will undertake a 
technical support program in energy and environmental waste 
minimization for small and medium-sized firms.





FACILITATE PRIVATE SECTOR DEVELOPMENT OF A NEW GENERATION OF 
AUTOMOBILES

Objectives:

       The automobile plays a central role in U.S. manufacturing 
capabilities, in America's economy, and in the lives of most 
Americans.  If America's auto industry is to remain competitive and 
strong in the 21st century, preserving jobs, sustaining economic 
growth, and expanding its business, it must continue its exploration 
of new technologies that encourage the industry's growth and protect 
the environment.  Increasingly stringent environmental concerns both 
here and abroad make this effort increasingly more essential and the 
need for innovation and new ideas even greater.

       New fuels and new propulsion systems developed during the 
last decade offer promise as eventual replacements for the 
combination of gasoline and the internal combustion engine that have 
served so well for generations.  Given adequate investment in 
research and development, and adequate incentives for U.S. producers 
to invest in these technologies, a new generation of vehicles could 
be on the market -- preserving jobs, expanding growth -- that would 
be safe and perform as well,  if not better  than existing 
automobiles, cost no more to drive than today's automobiles, consume 
only domestic fuels such as natural gas and renewables, and produce 
little or no pollution.


       While the basic technology needed to achieve this goal is 
available, converting it to a practical vehicle represents an 
historic challenge.  The potential can only be captured under the 
leadership of the U.S. business community and the industry itself.  
Success must be defined by their ability to develop a vehicle that 
can be built and sold successfully in private markets.  They must 
play a central role in designing an efficient government-industry 
partnership in which the industry plays a leadership role in 
establishing priorities.

       If U.S. producers lead the world in introducing such a 
vehicle, the domestic industry would be able to meet expanding 
domestic and international markets with a machine that significantly 
reduces pollution and operates from domestic fuel sources.

       This initiative represents a bold and dramatic step toward a 
more profitable, and more environmentally sound future for one of 
America's most important industries.  



Actions

A.      Establish a "clean car" task force linking research efforts 
of relevant agencies with those of U.S. auto manufacturers.   This 
task force will immediately establish an advisory group consisting 
of technology leaders in the principle US automobile manufacturers, 
their principal suppliers, and US fuel suppliers.   It will oversee 
the establishment of cooperative research ventures in (i) fuel-cells 
and the control and other systems required for practical fuel-cell 
hybrid vehicle designs, (ii) advanced batteries, ultra-capacitors, 
advanced gas storage & delivery systems, and (iii)  production of 
methanol and hydrogen from natural gas, municipal waste and other 
waste products, energy crops, and the electrolysis of water

B.     The task force will establish a special advisory group 
consisting of key state officials and representatives of the 
participating Departments to (i) design a program for using the 
authority already present in the Clean Air Act revision of 1991 and 
the National Energy Act of 1992 to encourage introduction of 
prototype vehicles consistent with the objectives of this program, 
(ii) coordinate state regulatory programs designed to require low or 

zero emission vehicles, and (iii) propose federal regulations needed 
to supplement state efforts.   It will also design programs for 
managing federal vehicle procurement.

C.       Working with its private sector and state advisory groups, 
the task force will prepare a list of development requirements and 
conduct a systematic search for capabilities in national 
laboratories and defense facilities.   Capabilities identified will 
be integrated rapidly into the research teams.



IMPROVE TECHNOLOGY FOR EDUCATION AND TRAINING

Objectives

        This project will support the development and introduction 
of computer and communications equipment and software that can 
increase the productivity of learning in formal school settings, a 
variety of business training facilities, and in homes.  

Actions

A.      Access to the Internet and developing high-speed National 
Research and Educational Network (NREN) will be expanded to connect 
university campuses, community colleges, and K-12 schools to a high-
speed communications network providing a broad range of information 
resources.  Support will be provided for equipment allowing local 
networks in these learning institutions access to the network along 
with support for development of high-performance software capable of 
taking advantage of the emerging hardware capabilities.

B.      An interagency  task force will be created from 
appropriate federal agencies to (i)  adopt software and 
communication standards for education and training, (ii) coordinate 
the development of critical software elements, (iii) support 
innovative software packages and curriculum design, and (iv) collect 
information resources in a standardized format and make them 
available to schools and teaching centers throughout the nation 
through both conventional and advanced communication networks.  This 
task force will provide specific assistance to the interagency task 
force on worker displacement.

C.      Programs in the Federal Coordinating Council for Science, 
Engineering, and Technology (FCCSET) Committee on Education and 
Human Resources programs will be enhanced.   These programs are 
designed to improve the teaching of science, mathematics, and 
engineering at all levels.  In K-12 schools, primary emphasis will 
be placed on teacher preparation, comprehensive organizational 
reform, and curriculum development.  Programs for undergraduate 
education emphasize faculty preparation and organization and 
curriculum reforms but place heaviest emphasis on student 
incentives.  At the graduate level, most funding is directed for 
fellowships.

D.      Proposals will be encouraged for an industry consortia or 
regional alliance designed to develop new teaching systems (hardware 
and software) and work with training organizations throughout the 
nation to develop, install, and maintain state-of-the art systems.   
Firms now providing similar services to defense training 
organizations are likely to participate.

E.     Promote Manufacturing Engineering Education.  Traditional 
engineering education, with its focus on product design and 
analysis, has seriously neglected the management and operation of 
manufacturing activities.  This program provides matching funds for 
graduate or undergraduate programs in manufacturing engineering.  



MAKE ENERGY EFFICIENCY INVESTMENTS IN FEDERAL BUILDINGS

Objectives

        This project would increase the efficiency of government 
by making cost-effective investments in buildings where the energy 
bills are paid by the taxpayers.  The project would create a 
significant number of jobs in urban areas, create new businesses and 
job skills, stimulate markets for innovative energy efficiency 
equipment, and reduce the impact of the federal government on the 
environment.

Actions


        In the case of federal building retrofits, funding will be 
provided to the Department of Energy which will be responsible for 
managing the program.

        In the case of funds for federally subsidized housing, 
funds will be provided to HUD which will manage the fund with DoE 
providing technical guidance.

A.      Create an advisory group of key officials from states with 
successful state building retrofit programs,  representative 
building facility managers from federal buildings, and utility 
managers of successful "demand-side management" programs.   This 
group will ensure that the federal program is designed with the 
advantage of their experience and provide periodic evaluation and 
guidance.

B.      The managers of the funds will provide funding for 
preliminary "walk through" audits, following the experience in the 
Texas program.  Based on these preliminary studies, funding will be 
provided for more extensive audits.  Proposals made in these audits 
will be funded using the following criteria:
--   technical merit of the proposal;
--   extent to which all cost-effective savings (i.e. justified on a 
10%  real discount rate) have been captured;
--   cost-sharing by the agency, utility, or other source of 
financing;
--   in the case of federally subsidized housing, state and other 
non- program cost-sharing will be considered, including use of Low-
Income Home Energy Assistance Program (LIHEAP) and other funds -- at 
least a 1:1 match should be expected; and
--   the extent to which contractors invest in hiring and training 
new workers.

        In each proposal, at least 6% of the program cost will be 
set aside for monitoring and evaluation using regional centers that 
follow an agreed protocol established by a lead center

        Up to 10% of the program funds should be spent to create 
early markets for innovative technologies which represent a 
significant advance over existing systems and have the potential for 
large future applications.
