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Raymond G. Kammer
House Committee on Science
March 9, 2000
Chairwoman Morella, Members of the Subcommittee, I appreciate this opportunity once again to appear before you to discuss the plans and achievements of the National Institute of Standards and Technology, an agency of the Commerce Department's Technology Administration.
This is something of a special occasion, as we are discussing the 100th annual budget for NIST, the oldest of the Federal laboratories and the only one with a mission specifically mandated by the Constitution. We're all understandably excited at NIST to be celebrating our century anniversary in 2001. There is a natural expectation that anything 100 years old will be rather inflexible and slow-moving, but by the time I finish I think you will agree that NIST has positioned itself to be an agile and responsive resource for U.S. commerce and industry as we enter our second century.
Over the past century, NIST has helped to ensure America's technological superiority and economic prosperity through myriad achievements that have advanced the measurements, standards, and technology needed by U.S. industry to make world-class products. The budget requested for fiscal year (FY) 2001 will enable NIST to work on the cutting-edge science and technology infrastructure needed to strengthen and safeguard America's prosperity and ensure its industrial competitiveness in the 21st century.
The Administration's FY 2001 budget request to Congress includes $713 million for NIST, an increase of about 12 percent over its FY 2000 budget of $636 million.
The NIST FY 2001 budget request includes:
The NIST Labs
The links between science and technology on the one hand, and commerce and trade on the other, are old. Measurement technology is the foundation of commerce, which requires two things at a minimum: a trusted medium of exchange — money — and a trusted system of measurement.
For 100 years the NIST Measurement and Standards Laboratories have provided this essential scientific and technological foundation for commerce to the Nation and the world.
You cannot achieve this by being a passive custodian of dusty weights and measuring sticks. Modern technology, with advances in electronics, information technology, biotechnology, materials, and industrial processing coming at an extraordinary rate, and modern commerce, with global markets and global competition, both demand our utmost efforts to meet the metrology needs of industry in a timely fashion.
This effort often takes NIST researchers to the frontiers of theory. Some research highlights of the past year include:
As CD-ROM databases suggest, the on-going revolution in information technology continues to impact how we do business, offering new opportunities to deliver services faster, cheaper and more efficiently. Last year, I told you about our work on SIMnet, an Internet-based, interactive system that allows metrologists in laboratories throughout the Americas to collaborate on real-time comparisons of measurements. Just over a month ago, we inaugurated "MEASUREnet-gov", also an Internet-based, interactive system, to support training and collaborative work between NIST and state weights and measures laboratories. For the first time, state and local metrology labs will be linked to NIST in an interactive system, including video conferencing, where they can get technical assistance, collaborate with NIST staff and get immediate validation of their calibration procedures.
We began the process of benchmarking our measurement and calibration services, comparing our capabilities to other national metrology institutes. These are not feel-good exercises, but rather rigorous comparisons of capability and performance. I am pleased to report that out of the 40 different types and ranges of calibration we have benchmarked thus far, NIST provides the nation "best-in-the-world" measurements in 24 areas, and "state-of-the-art" (comparable to best of other nations) in 15 other countries.
These "just weights and measures" are not only virtuous; they pay off in economic benefits for the country. Economic impact studies testify to this. Recent studies have documented, for example, that:
The pace of modern industry and commerce leaves us with no time to rest on our laurels. The FY 2001 budget will enable NIST to continue our long tradition of service to science and industry and to lay the necessary groundwork for the future. Our priorities for 2001 include, among others:
Our budget request includes a $10 million initiative to accelerate the commercialization of nanotechnologies by developing measurements and standards for nanodevices, nanomagnetics, nanomanipulation, and nanocharacterizations. Support for the semiconductor and electronics industries with new measurement techniques, and standards needed for new microelectronic devices — including atom-based dimensional standards and measurement procedures for the next-generation micro- and nano-electronic devices. In rapidly changing industries like semiconductor lithography we do not have the luxury of waiting to see what directions technology will take and then developing the necessary measurement support. Often we must pursue two or even three possible paths simultaneously without knowing which one will finally be adopted by the industry in order to ensure that the necessary measurement capabilities will be there when needed.
We propose a $4.5 million initiative to support the increased use of combinatorial research methods in chemical, materials and biotechnology industries. Combinatorial methods, in which hundreds or thousands of experiments are conducted in parallel with key parameters varied systematically, have been used in the pharmaceutical industry to dramatically cut research costs and time, but they have yet to be widely adopted in other industries. Our initiative will support development of measurement and test methods, standards, and data management and mining methods to support the broad use of combi-methods by U.S. industry, universities, and other government agencies.
I observed earlier that commerce and trade have relied for centuries on two fundamentals, a trusted currency and a trusted measurement system. That remains true today, but the information age has added a third element: we now also require a trusted communications and information infrastructure.
For FY 2001, we are proposing $60 million in initiatives as part of the President's National Plan for Information Systems Protection. This major effort includes:
The NIST Manufacturing Extension Partnership continues to demonstrate its worth as the only national system of its kind, providing technical assistance and access to industrial resources, services, and expertise for our small and medium-sized manufacturers.
These valuable extension services are within reach of manufacturers in all 50 states, the District of Columbia, and Puerto Rico. Through more than 400 MEP centers and field offices nationwide and in partnership with state and local governments, NIST and local extension services provide manufacturers with cost-effective access to best practices, manufacturing methodologies, and training geared to the needs of local industry. In 1999, the network's more than 2,000 manufacturing, engineering, and other specialists provided services to more than 26,600 enterprises.
We are finding that making these services broadly available is paying off for the Nation's economy. A review of over 2,800 MEP client companies estimated that in FY 1998 alone MEP services generated at least $327 million in new sales, $33 million in labor and material savings, and $24 million in inventory reductions, while also leveraging approximately $266 million in additional capital investment by client firms.
This past year saw an excellent example of the value of the MEP. Working closely with the U.S. Department of Agriculture and the Small Business Administration, the MEP helped to distribute nearly 340,000 Y2K preparedness software kits developed to help companies "trouble-shoot" their information systems and to devise corrective responses. Training programs and bi-lingual, 24-hour telephone hot-lines also were set up. This partnership played a key role in ensuring that the millennium rollover was a non-event for the Nation's small business community.
Building on this successful partnership, we are this year proposing a $14 million initiative — including $6 million from the MEP base funding — to enable the MEP to work with the USDA and SBA on an e-commerce outreach program. The internet has opened vast commercial opportunities, but it also brings a whole new set of challenges for business design and security.
A recent National Association of Manufacturers' survey cited roughly 80 percent of manufacturers as having Web sites, but only about 30% of small manufacturers are actually using the web for e-business transactions. We have discovered that many of them are "bewildered" by the technology, and are not able to make informed purchases. An excellent example of this comes from an anecdote told to us at the Manufacturing Summit held last year. A small mid-western manufacturer told one of our centers that when it came to IT he didn't have a clue. The manufacturer said he is able to make the value judgment of whether to buy a $50 thousand or a $20 thousand truck. But when it comes to a decision between one proposal for a $5 thousand email system versus another for $50 thousand - he just doesn't understand the technology well enough to make an informed decision.
Part of our initiative includes $8.8 million to hire approximately 200 information technology experts to be located in our MEP field centers to provide immediate hands-on help for small businesses seeking to adopt e-business practices. Field staff at the centers will assist small manufacturers in understanding, developing, and implementing their eBusiness strategy.
The remainder of the funds will be used in support of work with the USDA for development, delivery, and maintenance of eBusiness training workshops, operating the eBusiness Help Center, and producing eBusiness Jumpstart Kits and training materials. All of these activities will be in direct support of the field staff funded by the above mentioned $8.8M including the field staffs of other DOC bureaus, the SBA, the USDA, and those providing direct support to small manufacturers in all 50 states and Puerto Rico. This initiative will increase the number of small manufacturers using e-commerce technologies, increase the survival and competitiveness of small business in manufacturing supply chains, reduce costs, and increase supply chain efficiency.
The MEP effort will be complimented by a $4 million effort in the NIST labs to support interoperability standards for electronic data exchange and measurement technologies, and a $1 million program on standards for interoperability and characterization of antennas and microcircuits to support wireless IT systems. Electronic data exchange among businesses is becoming more common, but the process remains far from smooth. Failures in interoperability cost at least $1 billion per year in the automotive supply chain alone. The more than 100 eCommerce related standards currently under development threaten to further fragment the market with incompatible and competing standards. Working closely with industry, NIST will provide the leadership and technical expertise required to harmonize standards and provide the infrastructure required for continued U.S. preeminence in eCommerce.
Advanced Technology Program
Last May, the National Institute of Justice announced that police officers soon would be able to use a device the size of a credit card to test crime scenes for DNA evidence. It is based on a novel DNA-analysis "biochip" developed by the San Diego company Nanogen using technology developed by the company under the NIST Advanced Technology Program.
Three weeks later, PE Biosystems announced plans to commercialize a new DNA analysis technology developed in collaboration with several companies and universities, primarily the Weill Medical College of Cornell University. Their new technology is based on a "universal array" of DNA probes on a chip, also developed with support from the ATP.
Two announcements in a single month makes the point: an ATP achievement in the rapidly expanding field of DNA analysis isn't a fluke, it is a trend. Indeed, Neil Swan stated in an article in Nature Biotechnology, "Some observers say ATP is a "godfather" of the fledgling US biochip industry." For example:
Going into its tenth year, it is becoming more and more clear that the ATP has been a good investment for the nation as well. Its support for high-risk, high-economic impact industrial R&D has enabled important technical advances across a broad landscape:
Our budget request includes $31.8 million in new funding to enable the ATP to expand its efforts while continuing multiyear projects selected in previous years. The new funding, when combined with anticipated carryover and prior year recoveries, will provide $65 million for new awards.
Baldrige National Quality Program
Frankly, I just can't think of a better bargain to be had anywhere for the tax dollar than the Baldrige National Quality Program. The annual $5 million federal investment is leveraged by over $100 million of private-sector contributions, including more than $10 million raised by private industry to help launch and maintain the program. The time and effort volunteered by thousands, largely from the private sector, attests to the value of this partnership.
In managing the Baldrige National Quality Program for 12 years, NIST has helped U.S. businesses and other organizations adopt continuous quality improvement plans that enhance their competitiveness and productivity, delivering better value to customers while improving overall organizational effectiveness. Collectively, Baldrige Award recipients, examiners, and NIST staff have given approximately 50,000 presentations at conferences worldwide, and more than 1.7 million copies of the Criteria for Performance Excellence have been distributed. This figure does not include copies that are available in books, or from state and local award programs, or downloaded from the World Wide Web.
If imitation is the sincerest form of flattery, then it is our most flattered program. State and local quality programs — most modeled after the Baldrige program — have increased from fewer than 10 in 1991 to 55 in 1999. Forty-three states currently have programs. Internationally, nearly 60 quality programs are in operation. Most are modeled after ours, including one established in Japan in 1996.
And it is no wonder, because quality works. Customers are delighted, employees are enthusiastic and energized, and it shows in the bottom line. A survey of CEOs 19 months ago found that 79 percent believe the Baldrige criteria and awards are extremely or very valuable in stimulating quality improvements in U.S. companies, and 67 percent believe the criteria and awards are extremely or very valuable in stimulating improvements in the competitiveness of U.S. business. For six years in a row, the "Baldrige Index," made up of publicly-traded Baldrige Award winners has outperformed the Standard & Poor's 500 — this year by almost 5 to 1.
Baldrige awards can be earned in the categories of manufacturing, service, small business, and, beginning this past year, in education and healthcare. This is an exciting development, and one which the education and health care communities eagerly sought for several years.
Although no Baldrige Award recipients were named this year in either of the new categories, I am delighted that our nation's schools and health care organizations are now full partners in the Baldrige program. I am proud of the 16 education and nine health care organizations that participated in this first year's program.
I think Barry Rogstad, the past chairman of the Baldrige Award's Board of Overseers and president of the American Business Conference, probably said it best: "The Baldrige public/private partnership has accomplished more than any other program in revitalizing the American economy."
NIST, as an institution, will be turning 100 next year. There will be speeches, reminiscences, and respect paid to some of the memorable staff members and achievements of the past century. But that is, after all, the past, and our vision has to be fixed firmly on the future. We have proposed an ambitious program of initiatives to meet the nation's industrial and commercial needs in the new millennium. We are addressing issues — electronic commerce, information infrastructure protection — that were not even imagined when we first opened our doors. We are moving aggressively in new, rapidly developing fields such as nanotechnology and combinatorial chemistry to ensure that U.S. industry has the measurement and analysis tools it needs. Through the Advanced Technology Program we are partnering with industry to deliver tangible results in the form of innovative new technologies that are bringing economic benefits to the nation — benefits made possible by those technologies and the program that made them happen. Through our outreach programs like the Baldrige National Quality Program and the Manufacturing Extension Partnership, we are promoting quality business practices, and improved performance and productivity nationwide. Above all, we are striving to provide the nation's scientific, engineering, and business communities with what they have been able to count on from us since 1901: technical excellence. Thank you for your time. I would be happy to answer any questions the Subcommittee might have.