Delivering Results:

ADVANCED TECHNOLOGY PROGRAM

"...we already are a world leader in this critically important field. It clearly would not have been possible without the ATP."

"We believe the Center for Advanced Fiberoptic Applications to represent a good example of how a single ATP award can evolve into an initiative affecting an entire industry."

"It enabled us to accelerate and expand our technology development and it put our company into a better internationally competitive position."

"Our entry into the telecommunications market has largely been as a result of the ATP ... The ATP award enabled us to take our technology, develop a prototype, and make it real."

"We sincerely believe that push for us was the ATP award. Today we are a growing company adding high-paying, highly skilled jobs."

"The consortium concept is not natural in our industry. ... To get in there, do hands-on work together, that shows commitment. It was tough to do that, given our conceptions of how the PWB industry did business. The National Center for Manufacturing Sciences/ATP project created a structure to make it happen."

Researchers in Aphios labs (Woburn, Mass.) load samples of virus-infected blood plasma in an experimental chamber charged with carbon dioxide. Temperature and pressure controls are adjusted to drive the carbon dioxide to the physical state called "critical fluid" -- both gas and liquid, neither one nor the other. After a few minutes exposure, the serum emerges none the worse for wear, with one important difference -- the viruses come out fatally damaged, their genetic material neutralized, stripped of their ability to infect. So far a dozen viruses have been tested, research analogues of HIV, hepatitis A, and other scourges. All neutralized. If the laboratory results prove out when the process is developed for commercial use, the Aphios technology will give the healthcare and biotechnology industries a powerful new generic process to clean blood-derived products and biotechnology-produced drugs of harmful viruses without harming the proteins -- such as immunoglobulins for immune-compromised (AIDS) patients. The market potential for applications of the basic technology by the end of the decade is approximately $1 billion with overall benefits to the U.S. economy ranging from $22 billion to $200 billion, estimates Aphios.

At Optex Communications (Rockville, Md.), researchers are testing a prototype of a novel high-speed, high-capacity data storage system. Trading on laws of quantum mechanics, the Optex drive can store up to 10 gigabytes of information -- 18 hours of digital video -- on a disk slightly larger than a conventional CD and transfer it at up to 120 megabits per second. If the prototype can be translated successfully from the laboratory table-top to a compact production device, the new system will be a major boon not just for Optex but also for the rapidly growing digital video market and the information revolution it is driving.

At several automobile assembly plants, Chrysler and General Motors workers have implemented new technologies to help them control variations in the fit of automobile body parts to 2 millimeters -- about the thickness of a nickel -- or less. The "2 mm Program" partnership of the Auto Body Consortium, a group of eight small automobile technology suppliers, together with Chrysler, GM, and two universities, produced new manufacturing technologies, practices, and training techniques. The ABC technologies are not only effective, they are "agile" -- readily adaptable to new models. The plants that have implemented the 2 mm Program have been rewarded with significant improvements in customer satisfaction scores. More importantly, they have been able to meet the challenge of foreign competitors, especially in Japan, that also have achieved variation control at 2 mm or better. International competitiveness is a life-or-death issue in the auto industry, which affects one in every seven jobs in the United States.

The common factor in these disparate research projects is the NIST Advanced Technology Program. The new technologies and capabilities these companies now have in hand would not have been available today without the support of the ATP. The business choices, the market strategies now open to them would not be there without the ATP.

Required Reading! -- Broad Economic Potential Sought

None of these projects has yet triggered major impacts on the economy. Because the ATP invests only in pre-product technology development, because it is still a very modest program in terms of the larger R&D enterprise, and because nearly all of the projects it has funded are still in the research phase, no one should expect to see major impacts on the economy this soon. But the ATP is demonstrating the early results that will lead to significant economic impact in the future as this research is commercialized and enters the marketplace in U.S. products.

In the few years since its inception, the ATP already has important technology developments to its credit. Among these:

• the development of the brightest, longest-lived, green light-emitting diodes (Eagle-Picher Research Laboratory, Miami, Okla.), important for optical data storage systems; fiber-optic communications; and cheap, compact, full-color displays;
• technology to permit a 50-percent reduction in the size of nonvolatile (retains data after the power is shut off) computer memory chips (Nonvolatile Electronics, Inc., Edina, Wis.), expanding the possibilities for new computer products;
• new techniques for fabricating and testing aspheric X-ray optics at unsurpassed levels of precision (AT&T Bell Laboratories, Homdel, N.J.), a key infrastructural technology for advanced optical electronics and communications products;
• a "bioreactor" that can preserve and culture human stem cells (bone marrow cells) outside the body (Aastrom Biosciences, Inc., Ann Arbor, Mich.), technology that potentially could reduce greatly the costs, risks, and pain in autologous bone-marrow transplants as part of cancer therapy;
• a design breakthrough in ion-implant technology (Diamond Semiconductor Group, Inc., Gloucester, Mass.), enabling faster processing of larger semiconductor wafers with better process control, all important factors in the production of high-end integrated circuit chips; and
• process improvements for growing large silicon-carbide crystals, a semiconductor material used for specialized optoelectronic devices such as the highly desired blue LEDs (Cree Research, Inc., Durham, N.C.), making possible greatly increased production of these devices with greater quality at lower prices.

These examples suggest the key contribution that the Advanced Technology Program makes to the U.S. economy: by working with industry to develop high-risk, challenging technologies that have the potential for a broad payoff for the nation's economy, the ATP enables industry to pursue promising technologies that otherwise would be ignored or developed too slowly to compete in rapidly changing world markets. In the highly competitive, fast-moving international marketplace, the ATP creates opportunity.

ATP Goals and Mechanisms

The NIST Advanced Technology Program is a unique partnership between government and private industry to accelerate the development of high-risk technologies that promise significant commercial payoffs and widespread benefits for the economy. The ATP provides a mechanism for industry to extend its technological reach, to push the envelope of what can be attempted in today's fiercely competitive marketplace. The ATP has several features that set it apart from other government R&D programs:

• The goal of the ATP is economic growth and the good jobs and quality of life that come with economic growth -- opening new opportunities for U.S. business and industry in world markets by fostering technologies that enable new, innovative products, services, and industrial processes.
• The ATP works by encouraging a change in how industry approaches R&D. Major forces -- globalization of markets and the pace of technol-ogical change -- continue to drive private R&D to a narrower, shorter-term focus. By sharing the risk of broadly enabling technology development, the ATP fosters projects that are expected to have a high payoff for the nation as a whole -- in addition to strong corporate rates of return. The nature of ATP projects, risky but broadly applicable, stimulates joint research ventures that link small suppliers with users or that link several firms to- gether to solve a generic problem common to all.
• The ATP is industry driven and, through industry, is closely tied to the world of commercial markets. Research priorities for the ATP are set by industry, not the government. For-profit companies conceive, propose, co-fund, and execute ATP projects and programs based on their understanding of the marketplace and research opportunities.
• The ATP supports the development of pre-product enabling technologies, but it does not fund product development. After a successful ATP project, private industry bears the costs of product development, production, marketing, sales, and distribution.
• ATP awards are made strictly on the basis of rigorous competitions designed to select the proposals that are best qualified in terms of the technological ideas, the potential economic benefits to the nation, and the strength of the business plan for commercializing the results. Expert reviewers (without conflicts of interest) drawn from the business community, government, and academe carefully examine and rate each proposal according to published selection criteria.
• The ATP has firm cost-sharing rules -- joint ventures must pay at least half of the project costs. Single companies working on ATP projects must pay all indirect costs associated with the project. This provision favors small companies, which often have much lower overhead rates than large firms.
• ATP support does not become a perpetual subsidy or entitlement -- each project and each major program area have goals and end points established at the outset.
• The ATP benefits companies of all sizes. Large firms can work with the ATP, especially in joint ventures, to develop critical, high-risk technologies that would be difficult for any one company to justify because the benefits would be spread across the industry as a whole. For smaller start-up firms, early support from the ATP can spell the difference between success and failure. To date, half of the ATP awards to single companies have gone to small firms, and over 70 percent of the awards to joint ventures have included small companies. Universities and non-profit independent research organizations also are active participants in ATP projects.

Since 1994, the majority of ATP funds have been committed to focused program areas, which are established by the ATP in response to industry proposals. These programs reflect widespread industry support for this approach, which maximizes the ATP's leverage by driving key strategic technologies identified by industry. Focused programs concentrate on specific technical and business goals that require a number of interdependent R&D projects. Eleven programs have been established to date: Catalysis and Biocatalysis Technologies, Technologies for the Integration of Manufacturing Applications, Component-Based Software, Digital Data Storage, Digital Video in Information Networks, Information Infrastructure for Healthcare, Manufacturing Composite Structures, Materials Processing for Heavy Manufacturing, Motor Vehicle Manufacturing Technology, Tools for DNA Diagnostics, and Advanced Vapor Compression Refrigeration Systems.

COMPANY SIZE PROFILE
ATP project leaders are about evenly divided between small companies and medium/large firms.

Results

The ATP has emphasized rigorous evaluation of its programs from the very start. This process has five elements:

• assessing the ATP's own internal operations for efficiency and responsiveness;
• developing portfolio profiles of applicants, recipients, technologies, and projects -- to assess how well the program covers U.S. industry;
• evaluating industry's implementation of both the R&D and business components of ATP projects;
• tracking short-term and intermediate project results; and
• measuring long-term economic impacts.

What NIST really cares about is the last category: long-term economic impacts. The primary goal of the ATP, and the real payoff, is the economic growth in the future that will come from the introduction of new products and industrial processes based on ATP-sponsored R&D.

But the major economic results of the ATP occur significantly later than the ATP projects that cause them. Companies must spend additional time, effort, and money to pursue product development and marketing. Because of the risks involved, some ATP projects will fail. Others may proceed faster than anticipated, and intermediate results may lead to marketable products even before the ATP project ends. Regardless of whether commercialization takes place before an ATP project ends or long after, the company must invest its own money to design specific products incorporating the technology and to pay any other costs associated with commercialization.

Beyond that, true economic impacts occur when ATP-fostered technologies enter the market -- and not just as products. Long-term evaluation of the ATP must take into account downstream effects of the technologies: higher productivity and lower reject rates for manufacturers using new processes and equipment based on ATP technologies; better medical care at lower costs from hospitals and clinics that benefit from ATP biotechnology projects such as the Aphios work or the ATP programs on Tools for DNA Diagnostics and Information Infrastructure for Healthcare; longer-lived, lower maintenance structures and equipment made possible by the ATP Manufacturing Composite Structures program. Such long-range effects are real -- but extraordinarily difficult to measure with any accuracy.

COMPLETION DATES FOR 177 PROJECTS
To date very few ATP projects have been completed.

Because the ATP is a young program that just recently expanded beyond a pilot scale, only a few of the earliest ATP projects have even completed their ATP-sponsored R&D stage.

The early results of the ATP include:

• important new technical capabilities in U.S. industry that would not exist today without the ATP;
• new commercial opportunities -- and some early growth -- for U.S. firms based on these new technical capabilities; and
• a fledgling R&D culture that encourages companies to take advantage of these new markets by teaming with other companies and government as partners rather than opponents.

New Technical Capabilities

The ATP has been successful in encouraging high-risk R&D projects that otherwise would not be attempted -- or would not have been pursued in the same market-critical time-frame.

• Case studies of three five-year joint ventures funded in 1990 reported that none of the sponsored research would have been pursued as quickly and as aggressively without the ATP support, and the majority of the research -- estimates ranged from 69 percent to 89 percent -- would not have been done at all in the absence of ATP support.
• A recent interim study of 40 ATP recipients reaches similar conclusions -- none of the companies felt they could have pursued the difficult, high-risk research as quickly or thoroughly without the ATP, and 70 percent thought it unlikely that they would have pursued the research at all without the ATP.
• Tissue Engineering, a small start-up company in Massachusetts, founded by a former MIT professor, came to the ATP with an innovative idea: create "prosthetic tissue" from animal by-products that are processed and woven like a cloth to make biodegradable implants that would serve as matrices where the body's own cells could grow and eventually replace damaged tissues. The research is at the leading edge of the infant science of tissue engineering, integrating advanced technologies in cellular biology and textile manufacturing. Far too risky for conventional financing, this ATP project could open up a whole new range of reconstructive treatments for damaged periodontal, connective, and vascular tissue.

Reduced Time to Market

Timing is everything -- and time has become enormously compressed in today's marketplace. Product cycles are shorter, and a lead time of only a few months can make the difference between success and failure in the introduction of a new product -- or an entire company. This is particularly important in the technology-driven industries most affected by the ATP.

By accelerating the development of high-risk technologies, the ATP helps U.S. industry compete in these time-critical markets. The ATP not only enables companies to pursue high-risk R&D that otherwise would be dropped entirely, it also makes it feasible for them to greatly accelerate research on technologies that, because of risk, otherwise would be relegated to the back burner.

EXPECTED REDUCTION IN TIME TO MARKET
New technology resources from ATP projects help companies speed new products to market.
Source: Quarterly business progress reporting system data from ATP participants.

• In a case study of the American Display Consortium project begun in 1990, one company reported that the underlying ATP research it had done had enabled it to develop and introduce a new product approximately 18 months earlier than it would have otherwise.
• In a case study of the ATP Printed Wiring Board joint venture, members reported that midway through the project new test equipment and software shared as a result of the project had been implemented and adopted by the participants 18 months sooner than if they had attempted to develop them individually. Nine separate tasks under the project reported an average savings in time to implement new practices of 12.7 months.
• Communication Intelligence Corp. (CIC) (Redwood Shores, Calif.) received an ATP award in 1991 to develop basic technology and development tools for systems that allow computers to recognize and process natural, cursive handwriting. A powerful, efficient, and reliable natural-handwriting interface for personal computers would be the springboard for a whole new family of computing products, particularly extremely small, high-powered data-entry and retrieval systems. CIC estimates that the ATP support accelerated the development of handwriting recognition systems by a year and a half to two years.
• In an early study of the first ATP projects, 69 percent of the companies reported that after only one year of research they already had saved time in solving a technical problem or meeting a need -- and 39 percent of these felt these savings were "critical" to the company.
• More recently, managers from 47 companies working on ATP projects reported that their companies expect significant reduction in time to market as a result of the ATP work. Considering 103 potential applications of the technologies being supported by the ATP, they estimated that 83 percent would be accelerated by more than a year.
• Preliminary results from a new survey under way are even more striking. Thirty-nine of the 40 respondents to date reported that the ATP award dramatically accelerated their R&D cycle for technology development. Ignoring those who said they couldn't estimate time savings because the technology wouldn't have been developed at all without the ATP, more than 77 percent of the respondents estimated that the ATP had shortened their R&D cycle by more than two years.

RESEARCH YEARS SAVED (ESTIMATED)
ATP participants report significant R&D time savings.
Source: Survey of ATP Pilot Program Awardees: Interim Report

New Commercial Opportunities

By helping to make new technologies and new technical capabilities available now, the ATP opens up new commercial strategies and gives U.S. companies new business opportunities.

A 1992 ATP award of just under $2 million to a small California company called Accuwave allowed the company to extend its new technology -- using laser holography to "write" very high-resolution optical elements such as filters in the interior of crystals -- to the rapidly growing fiber-optics communications industry. The work involves a risky extension of the base Accuwave technology to new wavelengths and more complex, integrated structures. The company did not have the in-house resources to fund this research, and since Accuwave was a small, new firm with no track record in the huge, highly competitive telecommunications industry, without the ATP it wouldn't have had external funding either -- the risks were just too high. With help from the ATP, Accuwave already has made important progress. Last year the company introduced three new products, early spin-offs of the ATP-sponsored technology: an optical network monitor, a wavelength standard, and a "wavelength locker." The new devices are small, not much bigger than a matchbox, and designed for use on circuit boards. They replace a tabletop full of optical equipment.

Diamond Semiconductor Group (DSG) credits the ATP with helping it to attract outside development capital from Varian Associates for a prototype ion-implant machine for semiconductor manufacture. "We spent a year and a half looking for funding, mostly from U.S. companies," according to DSG President Manny Sieradzki. "Winning the ATP award was absolutely crucial to us ... it's clear that without the ATP we wouldn't have secured domestic funding for this."

SDL, Inc., in partnership with Xerox Corp., received an ATP award in 1992 for a challenging project to develop integrated arrays of high- powered, multiwavelength laser diodes. Such devices would have applications across a broad spectrum of industries, but particularly in electronic imaging and printing. The infusion of ATP funds enabled the partnership to accelerate greatly the pace of their R&D and gave SDL the opportunity to develop three short-term spin-off products grounded in the ATP-sponsored technology. One, says SDL President Donald Scifres, probably would have been developed anyway, but over a much longer period. The other two, he says, "might never have happened without the ATP award."

The ATP award to Cree Research involved developing improved processes for growing large silicon-carbide (SiC) crystals, a semiconductor material used for specialized optoelectronic devices such as the highly desired blue LEDs. The SiC market in 1992 was limited largely by difficulties in growing large, high-quality single crystals. With the ATP support, Cree was able to double the wafer size, with significant improvements in the quality of the larger wafers. As a result of the increased productivity (larger wafers) and yield (better quality), Cree's average price on an LED dropped from 46 cents to 14 cents, and they anticipate halving that when all the production improvements from the ATP project are implemented fully. The increased quality and decreased price resulting from ATP-funded technology have driven the company's LED sales up 860 percent. Company revenues have more than doubled.

In Depth -- ATP Focused Program: Component-Based Software

Because the ATP only supports pre-product R&D for new technologies that enable or underlie possible products, companies generally must invest considerably more time and resources to develop, test, market, and sell new products based on the ATP technology. Before the R&D begins, ATP requires companies to have a credible commercialization plan to exploit the technology beyond ATP funding if the project is successful. In most current ATP projects, such product development activities lie in the future (assuming the R&D effort is successful). However, a recent ATP survey of 41 small companies funded for single-company projects under the first four ATP competitions found that many already had made significant progress toward exploiting the opportunities created by the ATP projects, including:

• incorporating improvements resulting from the ATP project into existing commercial products (30 percent);
• implementing an improved production process resulting from the ATP project (18 percent);
• producing and shipping to potential customers commercial prototypes of products based on the ATP-supported technology (38 percent);
• producing and selling to customers products derived from the ATP-supported technology (20 percent); and
• licensing ATP-funded technology for use by others (8 percent).

These numbers are expected to grow considerably as the results of ATP projects work their way into products.

Business Growth

An important indicator of the economic impact of the ATP is the growth of companies -- particularly the growth of jobs -- as a result of ATP technology development. Immediate job growth as new research staff are brought in to work on the ATP project is not a primary interest -- the ATP is not meant to be a jobs program for the research community. But when companies add new employees in production, marketing, sales, and other areas as a result of the use of ATP-sponsored technologies in commercial production, when companies increase production and lower costs as a result of these technologies, then the ATP has had a relevant economic impact:

• FED Corp., a small New York company involved in an ATP project to develop new manufacturing techniques to produce flat-panel displays, is actively working on the commercialization of results from the ATP project as well as from work developed for the Defense Department's Technology Reinvestment Project (TRP). FED plans to expand from its original staff of six to more than 500 employees when it moves into full production. "Within the next year," notes FED President Gary Jones, "the additional tax revenue generated by the larger employment base made possible by our ATP and TRP programs will more than repay the U.S. government's investments in our programs to date."
• Engineering Animation, Inc. (Ames, Iowa) received an ATP award in 1992 to develop ground-breaking computer modeling and visualization technology for a "virtual human" model, a technology that will have widespread applications in medicine, engineering, and product development. As a result of that work the company has been able to establish alliances with Johns Hopkins University and Silicon Graphics. The company has grown from fewer than 20 employees to 150 full- and part-time employees since ATP funding began (only 10 of whom are paid out of federal funds). Revenues have doubled every year since receiving the award. At least half the growth, according to the company, is directly attributable to the ATP project.
• Cree Research has doubled in size since it began work under the ATP, from 41 employees to 80 (not counting an additional 25 employees in a new Russian subsidiary). Cree attributes this growth in large measure to the ATP project.
• Diamond Semiconductor Group (DSG), which began as two partners in a converted barn, has expanded to 28 full- and part-time employees. "We're here now only because of the ATP," says DSG President Manny Sieradzki.
• Recent project-tracking data from 34 small firms working on ATP projects showed that over 90 percent expected to add new employees within five years as a result of ATP technologies -- nearly half of the companies expected to add more than 25 employees.

Promoting Industrial Alliances

One side effect of the ATP has been to encourage industry to form cooperative R&D ventures for large projects. Joint ventures encourage the rapid diffusion of the results of ATP projects throughout an industry. Thirty-two percent of ATP awards (and 59 percent of the funds) from general competitions have gone to joint ventures. Forty-one percent of the ATP awards (and about 72 percent of the funds) from focused program competitions have gone to joint ventures. Evidence from surveys and case studies indicates that most of the 61 joint ventures that have received awards to date were formed specifically for the ATP project.

The ATP has encouraged the formation of strategic R&D alliances both horizontally, among competitors, and vertically, between customers and suppliers. Alliances are formed both through joint ventures and through the use of subcontractors and other less formal alliances. A review of the proposals for 89 ATP projects initiated from 1990 to 1993 showed that 13 percent proposed horizontal alliances, 33 percent vertical alliances, and 35 percent hybrid vertical/horizontal alliances.

Preliminary results from a survey of companies working on ATP projects awarded from 1990 to 1993 also point to the ATP's impact in catalyzing new alliances. Twenty-four of the 40 companies interviewed to date said that as a result of the ATP project they are collaborating with companies with whom they've never done business before -- many with two or more new partners and one with 12.

Failures

That some ATP projects will fail is a foregone conclusion, given the high-risk nature of ATP research. The failure may be because the technical challenge cannot be overcome, because the business climate changes in unforeseen ways, or some combination of the two.

Just as it is too early in the history of the program to see the long-term economic effects of the ATP, it is too soon to see the true failure rate. To date, the ATP has cancelled two projects (out of 177). In one case the technical goals were not likely to be met. In another, the original proposal and partners changed substantially, and ATP decided not to proceed with the initial funding. Possible causes for termination include:

• the results of the research already completed demonstrate that the technical objectives are unrealistic;
• conversely, the technical challenges prove to be easier than anticipated and the planned research agenda is fully complete before the expected end of the project; or
• unexpected developments in alternative technologies render the technical focus of the project obsolete.

But projects can "fail" in the larger, business sense, sometimes long after the technical work is successfully completed and the ATP funding has ceased. Any number of economic or market obstacles can arise. Rapidly changing financial and market conditions can hamper the commercialization of ATP-sponsored technologies. The small, entrepreneurial firms that make up a sizable percentage of ATP winners are particularly vulnerable. One company was dissolved in bankruptcy -- for unrelated reasons -- after successfully completing the research in an ATP project. One firm withdrew from a promising ATP project when it decided it needed to focus its R&D efforts on solving a current product problem.

The challenge for the ATP is not to avoid all failures but rather to manage the project portfolio so that the successes much more than compensate for the failures. Once the ATP selects a project it will work actively with the company to make the project a success:

• ATP program managers are technical experts in their own right and, if necessary, can bring in the talents and resources of the NIST laboratories for specialized technical support.
• From NIST's national vantage point, program managers can sometimes help companies identify sources for needed technical resources.
• ATP programs provide a focal point for companies with common interests to come together.

The ATP also is experimenting with a pilot project to help companies obtain private sources of funding and necessary business alliances as ATP funding ends and the commercialization stage, with its large capital demands, begins. This fall the ATP will sponsor a "commercial opportunity showcase" of technologies that are nearing market readiness. The showcase will bring together ATP awardees that are seeking investor funding, strategic partners, and licenses, with prequalified investors.

The ATP Project Portfolio

To date, more than 400 organizations, including companies, universities, independent non-profit research organizations, and government laboratories, have participated directly in ATP projects. Several hundred additional organizations have participated as subcontractors and strategic partners. ATP managers have carried out a vigorous outreach program to make firms and economic development organizations in states and localities across the country more aware of the ATP, its potential, and its procedures.

The ATP portfolio is highly diversified. The 177 projects selected in the first 10 competitions span a broad array of critical technologies, with particular concentrations in information technology, electronics, biotechnology, and advanced materials.

ATP HAS A DIVERSE PORTFOLIO
177 ATP awards by technology area as a percentage of the $556 million awarded.

Since its inception in 1990, the ATP has conducted five general competitions (open to proposals from all areas of technology):

• A total of 1,307 proposals were submitted, and 121 awards were made.
• More than 270 organizations, including for-profit firms, universities, independent non-profit research organizations, and government laboratories, have participated directly in the projects. Several hundred additional firms have participated as subcontractors or as informal partners.
• Thirty-two percent of these awards went to joint ventures.
• Fifty-two percent went to small companies either as single applicants or as the leader of a joint venture.
• The 121 awards commit a total of $332 million in ATP funds and $370 million in cost- sharing funds from industry (assuming all projects are pursued to conclusion).

The ATP has received nearly 900 "white papers" from industrial firms and others detailing proposals for focused programs in particularly promising technologies. The ATP has conducted five focused program competitions to date, all in 1994:

• A total of 201 proposals were submitted, and 56 awards were made.
• One hundred forty organizations, including for-profit firms, universities, independent non-profit research organizations, and government laboratories, participate directly in the projects.
• Forty-one percent of these awards went to joint ventures.
• Forty-five percent went to small companies either as single applicants or as the leader of a joint venture.
• The 56 awards commit a total of $224 million in ATP funds and $229 million in cost-sharing funds from industry (assuming all projects are pursued to conclusion).

Industry's involvement in the ATP goes far beyond the organizations participating in the funded projects. Several thousand industry representatives have taken part in ATP workshops. As industry representatives have attested, these sessions are important not just in planning programs that reflect industry needs but in convening different segments of industry to discuss mutual goals and interests.

Fine Print -- Where Do The Data Come From?

Conclusions

At present, it is impossible to measure the full economic impact of the Advanced Technology Program simply because it is too early for such effects to have occurred. Success or failure of the ATP will depend ultimately on its ability to stimulate meaningful, economic impact for the nation. While only a handful of early projects are out of the R&D phase and entering commercial development, NIST has put into place systematic mechanisms to gather data and provide the analysis as the long-term effects unfold. These mechanisms include an information collection system for tracking the business progress and economic results of ATP projects, a series of microeconomic case studies of individual projects, the experimental use of macro- economic models for projecting outcomes, and the development of approaches and tools for estimating the benefits that go beyond the companies and institutions that directly work on a successful project to the industry as a whole, consumers, and the economy.

Having said that, the studies and data that are available today demonstrate that the ATP is on track to deliver significant economic benefits. These studies document:

• the successful, and accelerated, development of new technologies and technical capabilities as a result of the ATP;
• company projections of reduced time to market based on ATP-supported technologies;
• early progress toward commercializing ATP-supported technologies; and
• company expansion and projections of future growth based on ATP-supported technologies.

The ATP also is having a real effect on the industrial R&D culture, although this effect is necessarily small given that the ATP represents a very small fraction of the total R&D budget of the country. Results show that the ATP is:

• encouraging industry to pursue more high-risk, enabling R&D projects, projects that would not have been attempted in the same time-frame and scope without ATP support;
• encouraging companies to team with other firms to best take advantage of new opportunities; and
• promoting industrial R&D alliances both horizontally, among competitors, and vertically, between customers and suppliers -- alliances that are leading to increased efficiencies in R&D and reduced time to market.

Back to table of contents.