past 2 years" were available from other sources. Most said they obtained calibrations from NBS "to ensure traceability" and/or because they believed NBS calibrations were "superior." A third questionnaire sent to users of NBS' standard reference materials 1/ showed that about 46 percent (33) of the primary user group (industry) that responded to one question said that the reference materials they obtained from NBS "during the past 18 months" were also produced by others. About 29 percent (21 respondents) said that during the 18-month period they obtained from others standard reference materials available at NBS. NBS officials acknowledged in February 1980 that NBS had on occasion transferred activities, such as calibrations to States and regional groups. According to these officials, transfer of services from NBS to others is essential to dispersing accurate measurements, and NBS resources can then be devoted to higher priority measurement problems arising from changing technology. The subcommittee may wish, therefore, to explore with NBS the possibility of (1) encouraging Government agencies to have others perform that work which can be done outside NBS and (2) limiting the services it provides to industry that are available elsewhere. Expand grant program The Federal Grant and Cooperative Agreement Act of 1977 (41 U.S.C. 501) provides that Federal agencies will use a procurement contract whenever the principal purpose is the acquisition of services for the direct benefit or use of the Federal Government. Grant agreements are to be used when the principal purpose is the transfer of money, property, services, or anything of value to a recipient in order to accomplish a public purpose of support or stimulation authorized by Federal statute. NBS makes research grants of about $2,491,000 annually--only $491,000 is NBS-funded--primarily for three programs. --The Extramural Fire Research Program, which is 1/Actual materials in their solid, liquid, powdered, or gaseous state certified as to their chemical composition, chemical property, and/or physical property. which obtains funds from the Federal Emergency Man- --NBS precision measurement grants totaling $150,000 is funded from the NBS Director's reserve fund. --A grant is made annually to fund visiting scientists at the NBS/University of Colorado Joint Institute for Laboratory Astrophysics. This grant totaled $341,000 in fiscal year 1980. Additional grants other than for research totaling $447,866 in fiscal year 1980 were made by NBS' Office of Standard Reference Data to support data compilation and evaluation centers. Also, a $57,250 grant was made to support a data advisory board and committee. In addition, other agencies' funds were used to make grants totaling $203,797 for data compilation and evaluation. NBS officials expressed the belief that an expanded grants program could be beneficial in expanding NBS' scientific efforts. Also, other advantages cited were: --A synergistic reaction between NBS in-house programs --Ability to attract the best scientific talent available. --The provision of resources to encourage training These officials also stressed the importance of maintaining NBS' position as a research laboratory by restricting the grants program to a relatively small percentage of its resources--10 to 15 percent ($9-$14 million) was suggested. Also, one of the officials said that any increase in the grants program should include an increase in resources to fund the program. Otherwise, resources would have to be diverted from in-house programs, thereby negating the advantages of an increased research grants program. In addition, the official stressed the importance of retaining, as an in-house activity, work on measurement standards--where NBS must often act as an independent third party. CHAPTER 3 NBS' ROLE IN PRODUCTIVITY AND INNOVATION In response to the growing concern about the Nation's rates of productivity and innovation, 1/ the House Subcommittee on Science, Research and Technology is exploring the possibility of adding new roles to NBS that would contribute to improving productivity and enhancing innovation. Specifically, the subcommittee is interested in (1) NBS' current role and involvement with other Federal agencies in the areas of civilian technology research and development, productivity, and innovation, (2) identifying potential new roles for NBS, and (3) assessing the NBS organic act to determine what changes, if any, would be needed to add new roles to NBS. Our investigation of the subcommittee's concerns revealed that the broad wording of NBS' organic act provides no explicit basis for defining the relationship of its statutory mission to productivity and innovation roles. Also, potential conflicts exist between any new roles and several organizational characteristics that make NBS an effective institution. Given the importance of many of NBS' current functions, we believe new roles that would significantly impair its ability to perform these functions should be avoided. Before new roles are added, we believe it essential to understand what role NBS currently plays in productivity and innovation and what impact new responsibilities could have on its ability to fulfill its current roles. In considering new roles for NBS, this chapter examines the following: 1/Productivity, as used here, is a measure of output per Innovation, as used here, is a developmental process --NBS' current contribution to productivity and --Organizational characteristics essential to NBS' --Potential new NBS roles affecting productivity --Implications of new roles for the NBS organic act. NBS ACTIVITIES CURRENTLY MAKE A UNIQUE Current NBS activities that affect productivity and innovation may be divided into two categories: support of the science and technology infrastructure, 1/ and research more directly targeted to affect productivity and innovation. Research that supports the science and technology infrastructure has important effects on productivity and innovation, although these effects are indirect and often long term. Research with a more readily observable impact on productivity and innovation is underway at NBS in automation, chemical engineering, and electronics. Supporting the science and technology infrastructure Much of NBS' work supports the science and technology infrastructure. Examples of NBS' contributions to the infrastructure include providing standards, developing testing and measurement procedures, disseminating scientific tables and equations, and generating formal communication mechanisms in the form of scientific journals, symposia, and peer associations. By supplying standards and testing procedures, NBS assists the private sector with such industry functions as 1/The science and technology infrastructure, as used here, refers to the underlying foundation of scientific and technical knowledge, instrumentation, and organizational networks upon which the Nation's scientific and technical community depend. The organizational networks facilitate the dissemination of scientific and technical knowledge, which is essential both in the creation of that knowledge and in its effective use. The term "infrastructure" thus refers both to the social network through which knowledge is created and used and to the knowledge itself. (1) controlling product quality, (2) selecting materials, (3) designing production processes, (4) reducing transaction costs, and (5) protecting workers and the environment (via designing environmental monitoring instrumentation). Through providing such services, NBS has continually contributed to industrial productivity and innovation, but its effect is usually indirect in contrast to the effect of a direct change on a production line. These indirect effects are often complex, long term, and somewhat obscure. As an example of research with an indirect impact on productivity and innovation, NBS might design a new device for calibrating tolerances more accurately in manufacturing machined parts. This device would monitor the variation in dimensions of the machined parts. Parts within the specified tolerances would be accepted, while the others would be rejected. As a more accurate instrument for gauging dimensions, it should improve the productivity of the manufacturing process both by rejecting fewer parts that actually fall within acceptable tolerances and by accepting fewer parts that actually fall outside of acceptable tolerances. In the first case, productivity is improved through conserving resources; in the second case, by enhancing the quality of the final product--the machined part has a higher probability of effectively performing its function. In the above example, the impact on productivity might seem less obvious than for an invention such as a new drill press with a faster cutting rate that would directly increase the speed at which those machined parts could be manufactured. However, though more subtle, the effect on productivity of devices such as more precise measurement instruments may be just as beneficial as technologies with more readily perceived productivity impacts. 1/ We believe this insight is fundamental to understanding how the type of research NBS performs affects both productivity and innovation. 1/NBS has recently contracted with Charles Rivers Associates to verify empirically the economic impact of its standards and measurement activities. Also, the NBS Planning Office has recently completed two short papers, "The Impacts of Private-Sector Standards on Industrial Innovation and Growth" and "The National Bureau of Standards Support of Industrial Innovation and Growth," both of which attempt to establish a framework for analyzing the economic impact of NBS activities. |