Daley Applauds National Benefits of Advanced Technology Program Detailed in New Report

The expected economic benefits from the Advanced Technology Program far outweigh program costs, according to a new report issued today by the Commerce Department’s National Institute of Standards and Technology. "The projected benefits to the nation’s economy from just three of these early ATP projects would pay for every ATP project funded to date," said Commerce Secretary William M. Daley. "This report is a portrait of a program that works."

"This new study fills in the details behind the statistical analyses of the ATP and demonstrates the overall success of the program," Daley said. "These pages say that the ATP is working. Industries as diverse as biotechnology, electronics, manufacturing and software have new technologies in place, today, that they wouldn’t have had here and now without the ATP."

The contract report, Advanced Technology Program Performance of Completed Projects, Status Report Number 1 by economist William F. Long of Business Performance Research Associates Inc. provides the most detailed examination to date of the outcomes of the earliest ATP projects. The ATP accelerates the development of innovative technologies for broad national benefit through R&D partnerships with the private sector. The program co-funds with industry high-risk research projects to develop enabling technologies that can form the basis for new and improved products, manufacturing processes and services. The ATP made its first awards in 1991.

The study covers all 38 ATP projects completed by the end of March 1997, documenting research accomplishments, subsequent work by the companies to commercialize the results and near-term outlooks for the technologies. It also lists the reasons for failure of 12 other terminated projects that had been selected between 1991 and March 1997.

The 38 projects surveyed in Long’s report cover a broad range of ATP investments. Most (34) were single-company projects, though many of them involved subcontractors. Of these, almost all were projects by small companies (28). The technologies were distributed over seven broad areas—chemicals and chemical processing; materials; discrete manufacturing; energy and environment; biotechnology; information, computers and communication; and electronics—with the majority in electronics. Industry provided more than half the funding. The ATP contributed $64.6 million to the 38 projects.

The new technologies fostered by the ATP include a merger of tissue-engineering and textile-weaving to help regenerate lost or damaged tissue in the body, an application of high-temperature superconductors to improve cellular phone service, and a suite of process-monitoring and control technologies that are cutting costs and improving quality throughout much of the U.S. auto industry, according to the report.

Other new technologies developed under the projects ran the gamut from a desktop bioreactor capable of growing large amounts of human stem cells isolated from bone marrow for cell replacement therapy, a device now in clinical trials, to a computer programming tool to simplify the task of writing software for parallel-processing computers, which already is in commercial use, and a new navigation system for mobile robots that is being used to guide delivery robots in hospitals.

Technical success has not always led to commercial success, according to Long. In a few cases, financial reverses or corporate takeovers have left technically successful projects in abeyance. Projects with medical applications generally have yet to be widely applied because they must go through a long process of clinical trials.

Others, however, have shown strong early returns. The process-monitoring and control technologies for the auto body industry, developed by a consortium of large and small companies, have been adopted in more than half of the Chrysler and General Motors plants in the United States and Canada. When the technologies are fully implemented—probably by the year 2000—annual savings in production costs are expected to range from $65 million to $160 million for one of the most important U.S. industrial sectors.

A project pursued by one small startup company developed a novel technology for processing very large semiconductor wafers, allowing the United States to be the first in the market with processing equipment for the next generation of 300 mm semiconductor wafers. A small New Jersey firm developed a new laser light source, which is the most powerful tunable source of laser light over much of the ultraviolet spectrum, and already has incorporated it in three new products for laser surgery and other applications.

In all, according to Long who cites previous economic studies, the potential benefits forecasted for just three of the projects in the study for which detailed economic analyses have been done far exceed the total ATP expenditures for all 50 projects in the report and, in fact, will likely exceed the total costs of the program to date.

Other results noted in the study include:

• Technology acceleration—Sixty-six percent of the projects reported that they would not have proceeded at all without ATP support; the remaining projects reported gains of a year and a half or more due to ATP support.
• Gains in technical knowledge as measured by technical achievement awards—seven projects figured in technical achievement awards for their companies, often for more than one award.
• Commercialization of new technology—For 24 of the 38 completed projects, a new product or service is on the market, or a new process is being used to improve the quality or reduce the cost of an existing product or service.
• Company growth—Of the 27 small, single-applicant companies, nearly 60 percent have more than doubled in size since their ATP award began, one from 20 employees to 400.
• Terminated projects—Twelve projects were terminated during the study period (out of 280 announced projects). Of these, financial consideration or changes in management led to the termination of five projects, five were canceled due to organizational problems in joint ventures, and two because of difficulties in achieving the technical objectives.

Copies of the Advanced Technology Program Performance of Completed Projects, Status Report Number 1 (NIST SP 950-1) may be obtained from the ATP Economic Assessment Office, (301) 975-2064, or e-mail to atp [at] nist.gov (atp[at]nist[dot]gov). The report is available on the web at www.atp.nist.gov/atp/pubs.htm.

NIST, an agency of the Commerce Department's Technology Administration, promotes economic growth by working with industry to develop and apply technology, measurements and standards through four partnerships: the Measurement and Standards Laboratories, the Advanced Technology Program, the Manufacturing Extension Partnership and the Baldrige National Quality Program.