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Introduction

SCIENCE AND TECHNOLOGY
Shaping the Twenty-First Century

"We live in an age of possibility. A hundred years ago, we moved from farm to factory. Now we move to an age of technology, information, and global competition. These changes have opened vast new opportunities for our people, but they have also presented them with stiff challenges.”

-President Bill Clinton

The elements of rapid societal and institutional

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change are easily recognizable as we approach the twenty-first century. The end of the Cold War, the emergence of highly competitive economies in Europe and Asia, and the pervasive consequences of the information revolution have stimulated a significant ongoing reexamination of our national priorities and of the scope and scale of government needed to address them.

Science and technology have clearly been among the principal determinants of change and agents of progress. Not surprisingly, therefore, participation in the front ranks of research and innovation has been and will continue to be essential for our national capacity to capture the gains of scientific and technological advances. In the United States, half of our economic productivity in the last half century is attributable to technological innovation and the science that supported this innovation. The knowledge-based society of the next century only increases the centrality of research, innovation, and human capital as our principal strengths, placing important continuing responsibilities on the Administration and Congress:

• America's world-leading science and technology enterprise must be sustained and nurtured.

• We must strengthen our science, math, and engineering education and ensure their broad availability. • The fiscal and regulatory environment for research must be sound and responsive to rapidly changing societal and business conditions.

• We must retain a long-term commitment to research, education, and innovation even in this period of budgetary constraint.

• The Federal government has an important role in each of these areas, but must be viewed only as one partner in the nation's effort.

These imperatives drive the Administration's strong commitment to an integrated investment agenda in scientific research, technological innovation, business environment, and education. Many elements of that agenda represent continuing commitments that have long enjoyed bipartisan support. However, the investment portfolio must also evolve in response to the knowledge-based, information- and technology-driven, globally competitive borderless economy. With knowledge as the key resource, there is a tremendous premium on human capital development and on new ways of doing business. With global linkages growing stronger, the rapid movement of people, goods, and information. has permanently altered commerce, national security, demographics, and health. With human activity noticeably affecting natural systems, for instance, by changing the concentration of atmospheric gases, and with global population growing substantially, we need to improve our understanding of the environment's capability to absorb the impact of human activity. Further, the global nature of environmental impacts raises the need for transnational approaches. Not surprisingly, the science and technology investments driven by these

challenges to established societal structures are in many ways those that still lack bipartisan consensus. Achieving that consensus is an important element of this Administration's plan to take us to the threshold of a new century and enable a bright future in the decades beyond.

This science and technology biennial report to the Congress summarizes the Administration's research portfolio, notes some of the advances and initiatives from the last four years, and identifies many key areas of opportunity that will help shape the twenty-first century.

SCIENTIFIC RESEARCH

Science is an endless frontier, a uniquely human activity without limits. Advancing that frontier and exploring the cosmos helps feed our sense of adventure and our passion for discovery. Research at the limits of human knowledge also is essential for training the scientists and engineers who are the source of future discoveries and innovation.

This need to develop the next generation of scientists and engineers through cutting-edge research requires a continuing focus for our basic research investment in our nation's colleges, universities, and medical schools. Because of this educational role, our unparalleled system of research universities is the bedrock of the science and technology enterprise. National laboratories and research institutes play important complementary educational roles by providing unique research capabilities for young scientists and engineers and extensive postdoctoral training opportunities.

The Administration is unequivocally committed to maintaining leadership across the frontiers of scientific knowledge. The nation's prior investment has yielded a scientific and engineering enterprise without peer, whether measured in terms of discoveries, citations, awards and prizes, advanced education, or contributions to technological innovation. This scientific strength is a treasure that we must continue to build on. Thus, even as the Federal budget deficit is eliminated, the Administration has protected the level of investment in key Federal basic science programs, not only those in the National Science Foundation and the National Institutes of Health, but also those in numerous mission agencies, such as the Department of Energy and the National Aeronautics and Space Administration (see budget table).

This basic research portfolio enjoys a good deal of bipartisan support. However, investments in some areas pertinent to current policy debates have been

questioned. An example is provided by several aspects of environmental research, such as that elucidating the influence of human activity on global systems. We must establish an extensive scientific knowledge base as the foundation for future policies relating to natural resource management, climate change, protection of endangered species, and other environmental issues. The Administration looks forward to working with the Congress in support of the entire research portfolio. The quality of life of future generations of Americans depends on continuing leadership across the scientific frontiers.

EXAMPLES OF KEY AREAS OF OPPORTUNITY Cognition/Neurobiology, Space Science, Molecular Biology, Earth and Ecological Sciences, Structure of Matter, Materials, Major Scientific Facilities

TECHNOLOGICAL INNOVATION AND A HEALTHY BUSINESS ENVIRONMENT Technological innovation has been America's competitive edge for improving health, prosperity, and quality of life and for providing national security. The Federal government has traditionally supported technology development in areas for which it is the principal customer, such as national defense and space. Our civilian technology base has more complex roots - exploratory research supported by industry, basic and applied research in universities and national laboratories, and "spin-offs" from the technological capability developed in pursuit of Federal mission goals.

Several factors have changed significantly over the past decade. Defense technologies depend increasingly on the commercial sector, both to make cutting-edge technologies available and to reduce the cost of defense procurements. In the commercial sector, the information revolution and globalization have irreversibly affected the nature of industrial research and development. Dramatically shortened product cycles, competition for customers and from companies everywhere, and the pressure for product quality improvements have, among several factors, focused commercial research and development on shorter-term business goals and away from exploratory research.

The appropriate Federal response to these changes must recognize that it is crucial to maintain our position at the forefront of technological innovation.

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The Administration response is multi-pronged: sustaining our research leadership position; strengthening a business environment that supports private sector research and development; investing in technological infrastructure; and advancing critical technologies, often in partnership with industry.

The Administration has advanced numerous initiatives to improve the business climate for technology development. Examples include telecommunications reform, open trade policies, intellectual property rights protection, regulatory reform at the FDA, procurement reform at the DOD, support for the research and experimentation tax credit, and cost-shared, industry-led research and development partnerships. However, the overarching priority, as expressed consistently by business, is deficit reduction. The annual deficit has been reduced from nearly $300 billion to almost $100 billion while preserving the research and education investments that underlie future technological innovation. The deficit reduction accomplishments play a significant role in sustaining today's healthy economy.

LOS AL

NATIONALL

President Clinton peers into the plasma-source ion implantation (PSII) chamber in a facility at the Los Alamos National Laboratory. PSII technology, being developed in a national laboratory-university-industry partnership with General Motors and ten other companies, the University of Wisconsin, and Los Alamos is used to harden material surfaces and extend the lifetimes of some products as much as a hundredfold. Cooperative research and development agreements serve commercial as well as military needs. An enormous number of industries can benefit from such surface modifications the annual U.S. domestic market for machine tools alone is $5 billion. The U.S. Navy also uses this facility to improve the wear and corrosion properties of a variety of defense systems.

The Federal government has a longstanding responsibility to support the nation's essential infrastructure. A modern infrastructure is a critical element of economic competitiveness. The Administration continues to invest significantly in the new kinds of infrastructure needed for the twenty-first century - upgrading the national information infrastructure, developing intelligent transportation systems, expanding the human genome database, and reinventing our air safety system. Indeed, the Global Positioning System, based on Federally supported research and development, is rapidly developing into a new essential infrastructure for a wide set of commercial, defense, and personal activities.

Advancing the development of enabling technologies is increasingly significant as the time horizons of industrial research and development grow shorter. While a shortterm research focus can sustain a globally competitive position for some time, it does not provide the break

through technologies that generate new industries. One important Administration response is increased emphasis on government-industry partnership programs aimed at mid- to long-term technology development in both the public and private interest. Industry takes the lead in identifying promising directions and, after independent merit review, government shares the risk. These partnership programs have experienced significant partisan differences. The Administration will work actively to pursue partnership programs in a pragmatic bipartisan spirit. In particular, the programs are now approaching a level of experience that should permit definitive review and optimization of future investments.

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