July 1997 Office of Strategic Planning and Economic Analysis Function and Organization Plan This office provides economic expertise for NIST-wide policy analysis and planning activities. Its objectives are (1) conduct cross-cutting strategic planning, economic impact, and economic role/policy studies that benefit several operating units (OUs) or NIST as a whole, and (2) provide methodological assistance to OUs conducting their own economic analysis. The office also represents NIST in external economic policy exercises where topics are NIST-wide in scope. The Office of Strategic Planning and Economic Analysis is located under the NIST Associate Director for Programs. Introduction: The increasing use of technology as an economic strategy among the world's economies has placed two different types of pressure on NIST. One is the growing demand to provide infrastructure support for industry's technology-based economic strategies. The other is derived from the need to balance the Federal budget to free capital for private investment and to maintain a strong currency, which thereby constrains the resources available for developing this infrastructure. The conflict between these two pressures means that NIST, as a key element of the technology-based infrastructure supporting the U.S. economy, must excel in stating its roles and measuring its performance. Because NIST's legislated mission is to leverage private-sector economic activity, NIST must be able to understand, characterize, and interpret this activity in order to define, prioritize, and justify its programs and resource allocations. Such an understanding is not enough, however. In this era of GPRA(1), budget competition, and increasing attention to economic growth strategies, NIST must be able to describe the past and projected economic outcomes of its efforts in sound analytical ways and it must provide an empirical basis for this analysis. Pressures to do so come not just from GPRA, but from the Congress, OMB, the NIST Visiting Committee on Advanced Technology, the S&T policy establishment, and industry. One can argue over whether all NIST programs directly target economic growth as their objective, but certainly the majority do so. As U.S.-based companies shift strategic foci from "downsizing" and "restructuring" to a greater emphasis on economic growth, the needs for technology infrastructure are both expanding and shifting. Industry support, as well as support from the policy community and ultimately the budget process, require a continual demonstration by NIST that it understands these and other trends. Moreover, NIST must show that it is responding by accurately identifying the points in the evolution of industrial technologies where technology and supporting infrastructure have the most economic leverage. Finally, to most effectively serve U.S. industry's needs for technology development and acquisition support, NIST must become more proactive in identifying and understanding the range of technical and economic barriers that impede private investment in the technology-based sectors of the U.S. economy. A more proactive mode requires significant analyses, produced in a timely manner, and communicated to industry and government policy makers in a form that can be understood and acted upon. In a more operational context, to leverage its existing knowledge on industry's behalf and to enhance the Institute's visibility and contribution to S&T policy arenas, NIST needs to develop a more general techno-economic analysis capability. NIST is frequently asked to help policy makers when industry's access to and use of technology is being considered. In the past, NIST could draw to a significant extent upon relevant technology assessments and economic analyses from the Congressional Office of Technology Assessment, the Congressional Budget Office, the Department of Commerce's International Trade Administration, and the National Science Foundation. The contributions from these sources have either been reduced in scope and depth or eliminated entirely. Regardless, of the availability of external sources of relevant analysis and expertise, NIST needs to participate directly in the policy process and influence policy outcomes. To this end, NIST requires an internal economic analysis capability to (1) monitor both technology and economic trends, contribute to the development of government-wide S&T policies required by these trends, and demonstrate that economic growth based on technology requires a range of technical infrastructure roles by NIST, (2) provide economic impact projections for proposed research programs and technology transfer services, and (3) conduct ex poste economic impact assessments of approved programs to provide credibility for future program initiatives. These elements of technology assessment and economic analysis are undertaken with varying scope and depth by NIST operating units (OUs) and interact with each other, as indicated in the above figure. However, a central organizational unit is also needed to integrate the several required analytical disciplines and achieve minimum efficient scale and scope of operation required for broad, cross-cutting technology assessments and economic analyses that benefit more than one OU. In addition, a central office enables the development, evaluation, and transfer of appropriate methodological expertise to other operating units. Purpose: The purpose of a strategic planning and economic analysis (SPEA) function is to provide NIST OUs with cross-cutting and multidisciplinary strategic planning and economic analysis assistance in support of NIST's mission to deliver a range of enabling technologies, technology-based infrastructure, standards, and technology transfer services to U.S. industry.(2) In all cases, the SPEA activities will be carried out in consultation and collaboration with the NIST OUs, who are at once customers for these activities and participants in them. Such studies will not duplicate analyses of OU internal economic functions. Strategic planning consists of assessments of technology and economic conditions and trends in order to (1) characterize and estimate the importance of technologies and supporting technical infrastructure to U.S.-based industries within and across different sectors of the economy, (2) assist NIST management to rank-order investments in alternative major technology areas and categories of infrastructure for a particular economic sector, and (3) assess alternative mechanisms for transferring or diffusing appropriate technologies or infrastructure to different industrial groups or sectors. Technology assessments will be conducted to provide long-term trend perspectives on mature and emerging technologies. These assessments will generally be broad in scope and focus on the industry and multi-industry levels to provide inputs for (1) NIST role development and other policy-related exercises, and (2) economic analysis and strategic planning that complement similar activities by operating units. Economic analysis is undertaken to provide inputs to internal strategic planning and to government-wide policy exercises where the economic roles of technology are a major element of policy development and where issues arise with respect to the economic importance of technology and the use of alternative policy instruments to support industry investment (e.g., direct funding of R&D vs. tax incentives). Economic impact assessments are conducted to provide (1) management input for program content adjustments and future strategic planning; (2) the economic and S&T policy arenas with evidence of the efficiency of NIST's roles in supporting technology-based economic growth; and (3) quantitative and qualitative metrics that can be adapted for use in meeting GPRA and other government efficiency requirements. To accomplish these objectives, economic rationales are developed for government support of generic, enabling technologies and supporting infrastructure in specific technological areas or industries. Estimates of economic benefits to industry through activities such as laboratory research, cost-sharing of industrial research, and more rapid diffusion of technology are compiled and updated, or methodologies for such analyses are developed or evaluated and then transferred to NIST OUs that conduct such analyses. The economic basis for the efficient transfer of appropriate technologies to industries in different sectors of the economy is also analyzed. In summary, the thrusts of SPEA's activities will be (1) analyses of broad-based and long-term technological, economic, and policy issues that transcend and/or complement more focused analyses by NIST's major operating units; (2) specialized studies for OUs, when requested, such as strategic planning and economic impact studies; and (3) development and assessment of methodological expertise, which will be made available to operating units for incorporation into their own internal analysis efforts. SPEA Functions: Technology Assessment: Long-term, major trend projections/analysis as input for economic analysis and strategic planning Monitor and provide OUs with long-range and cross-cutting assessments of new technologies/industries that may require support in the future Organize and characterize elements of a subject technology to facilitate economic analysis for strategic planning or policy development Economic Role Analysis: Microeconomic analysis (technology, industry, and economic sector levels) Help OUs develop economic-based rationales for each major technology development/infrastructure role at NIST Demonstrate integration into broader S&T and economic growth policy strategies Contribute to S&T and economic growth policy development Strategic Planning: Basis for programmatic and budget initiative development Provide mechanisms for synthesizing industry needs into forms acceptable to NIST management, economic policy, and budget arenas Combine technology assessment and microeconomic analysis into rationales for specific programmatic activities Develop NIST wide planning documents, such as the NIST Strategic Plan Economic Impact Assessment. Evidence of efficiency in role implementation Supplement OUs efforts to document economic impacts in terms acceptable to and understandable by the policy and budget processes, as well as by industry Provide feedback to NIST management on implications for project selection and assistance in communicating impact assessment results to constituents NOTES: 1. Government Performance and Results Act (1993). 2. Technology-based infrastructure can be defined broadly as any element of an industry's technology that is used by several firms simultaneously and noncompetitively to carry out their individual market strategies. An industry's underlying or generic technology; measurement, test methods, and other infratechnologies; scientific and engineering data; interface and other standards; and so on are examples of technical infrastructure. However, many analysts do not refer to generic or "enabling" technology as infrastructure.

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