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EFFector - Volume 3, Issue 8 - A Technology Policy For America: By President-Elect Bill Clinton


EFFector - Volume 3, Issue 8 - A Technology Policy For America: By President-Elect Bill Clinton

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####       ####       ####       |  A TECHNOLOGY POLICY FOR AMERICA
########   ########   ########   |  by President-Elect Bill Clinton
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EFFector Online           November 4, 1992                Issue  3.08
           A Publication of the Electronic Frontier Foundation
                            ISSN 1062-9424

          A TECHNOLOGY POLICY FOR AMERICA Six Broad Initiatives
                          by Bill Clinton
                        (September, 1992)

The Clinton-Gore technology policy consists of six broad initiatives 
that together will restore America's technological leadership: 

1. Building a 21st Century Technology Infrastructure.  

Infrastructure has traditionally been the responsibility of federal and 
state governments. Investing in infrastructure means more than repairing 
bridges, harbors and highways. Today, the United States faces a new 
series of communications, transportation and environmental needs for the 
21st century. The creation of a 21st century infrastructure program 
would serve as a critical technology driver for the nation. It would 
stimulate major new national R&D efforts; create large, predictable 
markets that would prompt significant private sector investments; and 
create millions of new jobs.

A 21st century infrastructure would address many practical problems. For 
example, the government can serve as a catalyst for the private sector 
development of an advanced national communications network, which would 
help companies collaborate on research and design for advanced 
manufacturing; allow doctors across the country to access leading 
medical expertise; put immense educational resources at the fingertips 
of American teachers and students; open new avenues for disabled people 
to do things they can't do today; provide technical information to small 
businesses; and make telecommuting much easier. Such a network could do 
for the productivity of individuals at their places of work and learning 
what the interstate highway of the 1950s did for the productivity of the 
nation's travel and distribution system.

Each year, I plan to devote a significant portion of my four year, $80 
billion Rebuild America fund to laying the groundwork for the nation's 
infrastructure needs in the 21st century. Federal funding for the 
National Research and Education Network is one example of how the 
federal government can serve as a catalyst for private sector 
infrastructure investment. We will also provide additional funding to 
network our schools, hospitals and libraries.

As part of the effort to assess U.S. needs and develop appropriate 
programs, the federal government must monitor, or "benchmark", what 
foreign governments are doing. For example, the Japanese government has 
committed to invest over $120 billion by 1995 to develop a digital 
broadband communication infrastructure called the Information Network 
System, and plans to invest another $150 billion to establish model 
programs for business and residential users.

A comprehensive infrastructure program must also include effective 
standards and regulations. By establishing reasonable standards and a 
constructive regulatory environment, the government can send clear 
signals to industry about important, emerging markets and spur private 
sector investment. For example, the digital standard that the Federal 
Communications Commission (FCC), in cooperation with industry, 
established for high resolution television provides an excellent 
indication of the future technical direction of the industry and will do 
much to facilitate private sector R&D.

A 21st century infrastructure program should consist of the following 
five elements:
     Funding the establishment of key networks and demonstration 
     Benchmarking U.S. programs against those of other major industrial 
     Establishing standards and a regulatory climate that fosters 
     private sector investment;
     Involving the federal labs, companies, and universities in 
     conducting R&D on key technical issues; and
     Providing training for users of networks and databases.

2.  Establishing Education and Training Programs for a High-Skill 

The U.S. education system must make sure that American workers have the 
requisite skills. The focus should be not only on the top American 
students who measure up to world-class standards, but also on average 
and disadvantaged students. It must also take into account the need to 
upgrade workers' skills and help people make the difficult transition 
from repetitive, low-skill jobs to the demands of a flexible, high-skill 
workplace. Unlike Germany, the United States does not have a 
sophisticated vocational education program, and unlike Japan, U.S. firms 
do not have a strong incentive to invest in the training and retraining 
of their workers. We need more of both, geared to meet the needs of the 
mobile U.S. workforce.

I will implement the following programs to strengthen the skills of 
America's workforce:
     Establish tough standards and a national examination system in 
     core subjects like writing, communication, math and science; 
     level the playing field for disadvantaged students; 
     reduce class sizes;and give parents the right to chose the public 
     schools their child attends.

     Establish a national apprenticeship program that offers non-
     college bound students training in a marketable skill.

     Give every American the right to borrow money for college by 
     establishing a National Service Trust Fund. Students can repay 
     their borrowing as a percent of their earnings over time, or by 
     serving their communities for one or two years doing work their 
     country needs.  

     Stimulate industry to provide continuing, high skills training to 
     its front-line workers.

For small manufacturers to compete today, it is not good enough simply 
to have access to new equipment and new technologies if their workers do 
not have the skills and know-how to operate them efficiently, and engage 
in truly flexible production. Yet, too much of our training is for only 
top executives or workers after they have lost their jobs. 

My plan calls for companies with over 50 employees to ensure that 1.5 
percent of their payroll goes to training throughout the workforce -- 
not just for the top executives. But we must do more for smaller 
companies who cannot afford to set up the training programs. These 
companies need to adapt to new technologies and new equipment and the 
constantly new demands. 

New production technology should be worker-centered and skill-based, not 
skill-eliminating. In the high-performance workplace, workers have more 
control over production and worker responsibility is increased. Some 
companies that have invested billions in new capital equipment have 
found that genuine employee involvement and good labor-management 
relations are ultimately more important. Therefore we need to undertake 
the following: 
     Manufacturing training centers:
     We need to promote private sector-led efforts to set up training 
     for small companies. These can be done by building off community 
     colleges training and should be an integral part of the network of 
     Manufacturing Extension provisions. These would also be integrated 
     with my Apprenticeship initiative so that young people will have 
     the opportunity to learn specific skills needed for specific 
     manufacturing jobs or industries. Councils including private 
     sector and academic leaders as well as workers would help decide 
     generic areas for training. 

     Certificate of training guarantees:
     In order to be eligible for federal funds for manufacturing 
     training centers, such centers would have to provide all future 
     employers with a Certificate of Guarantee. This would ensure that, 
     when workers do not pick up the necessary skills the first time, 
     these centers would provide additional training -- at no 
     additional cost to the employer.  

     Best Practices on Worker Participation:
     An integral function of the Manufacturing Extension Centers will 
     be to collect and disseminate information on "best practices" with 
     regards to worker participation. Increasing worker productivity is 
     one of the keys to increasing overall manufacturing productivity.

3.  Investing in Technology Programs that Empower America's Small 

A healthy and growing small-business sector is essential to America's 
economic well-being. America's 20 million small businesses account for 
40 percent of our GNP, half of all employment, and more than half of the 
job creation. My technology policy will recognize the importance of 
small and medium-sized business to America's economic growth with:
     Market-driven extension centers:
     Creating 170 manufacturing centers will put the best tools in the 
     hands of those companies that are creating the new jobs on which 
     the American economy depends by helping small- and medium- sized 
     manufacturers choose the right equipment, adopt the top business 
     practices, and learn cutting-edge production techniques. In order 
     to enhance U.S. industrial competitiveness, public policy must 
     promote the diffusion and absorption of technology across the U.S. 
     industrial base. Some state and local governments are already 
     involved in technology diffusion using manufacturing centers. They 
     are helping small businesses improve the productivity of their 
     existing machinery and equipment, adopt computer-integrated or 
     flexible manufacturing techniques, and identify training needs.

The Commerce Department has five Manufacturing Technology Centers across 
the country and has plans for two more. Unfortunately, these efforts are 
only a drop in the bucket compared to those of our major competitors. 
Germany has over 40 contract R&D centers (Fraunhofer Gesellschaft) and a 
broad network of industry associations and research cooperatives that 
effectively diffuse technology across industry. In Japan, major 
government-sponsored research projects, 170 kohsetsushi technology 
support centers for small businesses, and tight links between companies 
and their suppliers serve much the same function. There is no comparable 
system in the United States.

A Clinton-Gore Administration will build on the efforts of state and 
local governments to create a national technology extension program, 
designed to meet the needs of the millions of small businesses that have 
difficulty tracking new technology and adapting it to their needs.

The involvement of workers is critical to developing and executing 
successful industrial extension programs. In technology, as in other 
area, we must put people first. New production technology should be 
worker-centered and skill-based, not skill-eliminating. In the high-
performance workplace, workers have more control over production and 
worker responsibility is increased. Some companies that have invested 
billions in new capital equipment have found that genuine employee 
involvement and good labor-management relations are ultimately more 

No less than 25 of these new manufacturing centers will be regional 
technology alliances devoted to regions hit hard by defense cut-backs. 
These alliances could promote the development of dual-use technologies 
and manufacturing processes on a regional basis. Extending the Small 
Business Innovation Research Program (SBIR)

In addition to creating a national technology extension service for 
small and medium-sized businesses, I will also expand the Small Business 
Innovation Research Program. By requiring that federal agencies set-
aside 1.25 percent of their R&D budget for small businesses, this 
program has helped create billions of dollars of new commercial activity 
while improving the research programs of the federal government. Given 
this track record, the SBIR program should be doubled over a period of 
four years to 2.5% to accelerate the development of new products by 
innovative small businesses. 

Funding private sector-led training centers:
We also need a fundamental change in the way we deal with R&D and 
technology if we are to lead a new era of American manufacturing. 
Currently, our R&D budget reflects neither the realities of the post-
Cold War era nor the demands for a new national security. At present, 
60% of the federal R&D budget is devoted to defense programs and 40% 
percent to non-defense programs. The federal government should aim to 
restore a 50-50 balance between defense and non-defense R&D. That is why 
I have called for a new civilian research and development program to 
support research in the technologies that will launch new growth 
industries and revitalize traditional ones.

This civilian technology program will:  
     Invest in Private-Sector Led Consortia: When the private sector 
     creates consortia to share risks, pool resources, avoid 
     duplication and make investments that they would not make without 
     such agreements, government should be willing to do its part. 
     Support for consortia such as the SEMATECH, National Center for 
     Manufacturing Sciences and the Advanced Battery is appropriate. By 
     requiring firms to match federal contributions on at least a 50:50 
     basis, the government can insure that we are leveraging public 
     dollars and that they are market-led and market-oriented. Often 
     major companies are reluctant to invest in their suppliers and 
     assist them in quality management techniques, because they fear 
     they will go to another company. Private-sector-led consortia 
     allow the major companies to cure that problem by coming together 
     and agreeing on industry-wide efforts to invest in smaller 
     suppliers. Some of these consortia will be funded by the Advanced 
     Technology Program.   

     Inward Technology Transfer: While we must strengthen the links 
     between American R&D and American jobs, we must also develop a 
     strategy for acquiring, disseminating, and utilizing foreign 
     technologies. Our Government must increase the collection, 
     translation and dissemination of foreign scientific and technical 

4. Increasing Dramatically the Percentage of Federal R&D for Critical 

I will view the support of generic industrial technologies as a priority 
mission. The government already spends $76 billion annually on R&D. This 
funding should be refocused so that more resources are devoted to 
critical technologies, such as advanced materials, information 
technology and new manufacturing processes that boost industrial 

At present, 60% of the federal R&D budget is devoted to defense programs 
and 40% percent to non-defense programs. This level of support for 
defense R&D is a holdover from the massive arms build-up of the 1980s. 
At the very least, in the next three years the federal government should 
shift the balance between defense and non-defense programs back to a 50-
50 balance, which would free-up over $7 billion for non-defense R&D. 
Having achieved this balance, the government should examine whether 
national security considerations and economic conditions warrant further 

I will also create a civilian research and development program to 
support research in the technologies that will launch new growth 
industries and revitalize traditional ones. 

This civilian technology program will: 
     Help companies develop innovative technologies and bring new 
     products to market;
     Take the lead in coordinating the R&D investments of federal 
     and Cooperate and consult with industry, academia and labor in the 
     formulation and implementation of technology policy and R&D 

Advanced Manufacturing R&D:
The United States is currently underinvesting in advanced manufacturing 
R&D. The federal government should work with the private sector -- with 
the private sector taking the lead -- to develop an investment strategy 
for those technologies critical to 21st century manufacturing. 

Following the lead of my running mate, Al Gore, and several of his 
colleagues, we must do more to support industry's efforts to develop the 
advanced computer-controlled equipment ("intelligent machines") and the 
electronic networks that will enable American factories to work as 
quickly and efficiently as their Japanese counterparts. These 
technologies also include flexible micro- and nanofabrication, 
simulation and modeling of manufacturing processes, tools for concurrent 
engineering, electronic networks that allow firms to share business and 
product data within and between firms, and environmentally-conscious 
manufacturing. According to industry experts, the United States has an 
opportunity to capitalize on the emerging shift from mass production to 
flexible or "agile" manufacturing.

5. Leveraging the Existing Federal Investment in Technology to Maximize 
its Contribution to Industrial Performance. 

R&D conducted at the federal labs and consortia should be carefully 
evaluated to assure that it has a maximum impact on industrial 
performance. Furthermore, cooperation between universities and industry 
should be encouraged.

America's 726 federal laboratories collectively have a budget of $23 
billion, but their missions and funding reflect the priorities that 
guided the United States during the Cold War. Approximately one-half of 
their budget is directed toward military R&D. By contract, the budget 
for the National Institute for Standards and Technology (NIST) - the 
only federal agency whose principal mission is to assist industry - 
accounts for less than one percent of the total federal lab budget. 
Despite several years of legislative reform and many new directives, the 
labs still do not have the autonomy or funding to pursue joint ventures 
and industry aggressively.

These labs and other private non-profit research centers are national 
treasures because they house large, multi-disciplinary teams of 
researchers who have honed the skills of balancing basic and applied 
research for long-term, mission-oriented projects. It would take years 
to match these special capabilities elsewhere. Today, the labs and 
industry cooperate on defense needs; we need to change regulations and 
orientation to get this cooperation on technology development for 
commercial usage.

To remedy these problems, I propose the following: 
     The budget of the National Institute of Standards and Technology 
     should be doubled. Federal labs which can make a significant 
     contribution to U.S. competitiveness should have ten to twenty 
     percent of their existing budget assigned to establish joint 
     ventures with industry.

     Private corporations should compete for this funding through 
     review by panels managed by the labs and made up of corporate and 
     academic experts. Lab directors should have full authority to 
     sign, fund and implement cooperative R&D agreements with industry. 
     Some labs, such as NIST, already have this authority, but others 
     do not.

     Industry and the labs should jointly develop measures to determine 
     how well the technology transfer process is working and review 
     progress after 3 years. If these goals have not been met, industry 
     and the labs should reevaluate their involvement, and funds should 
     be redirected to consortia, universities and other organizations 
     that can work more effectively with industry for results.

     University research accounts for a large part of the federal basic 
     research budget. Funding for basic university research should 
     continue to be provided for a broad range of disciplines, since it 
     is impossible to predict where the next breakthrough may come. 

     While maintaining America's leadership in basic research, 
     government, universities and industry must all work together to 
     take advantage of these new breakthroughs to enhance U.S. 

Cooperative R&D programs represent another opportunity. Consortia can 
help firms share risks, pool resources, avoid duplication, and make 
investments that they would not undertake individually. By requiring 
that firms match federal contributions on at least a 50:50 basis, the 
government can leverage its investments and ensure that they are market-

Many industries are demonstrating a new found willingness to cooperate 
to meet the challenge of international competition: SEMATECH has proven 
to be an important investment for the industry and the Nation. It has 
helped improve U.S. semiconductor manufacturing technology, helped 
reversed the decline in world-wide market share of U.S. semiconductor 
manufacturing equipment companies, and improved communications between 
users and suppliers. U.S. automakers have recently formed the United 
States Council for Automotive Research to develop batteries for electric 
cars, reduce emissions, improve safety, and enhance computer-aided 
design. The Michigan-based National Center for Manufacturing Sciences, 
which now has 130 members, is helping to develop and deploy the 
technologies necessary for world-class manufacturing.  The 
Microelectronics Computer Technology Corporation (MCC) is developing an 
information infrastructure which will enable businesses to develop, 
manufacture, deliver and support products and services with superior 
speed, flexibility, and quality. U.S. steel-makers are cooperating to 
develop manufacturing processes which would use less energy, create 
fewer pollutants, and slash the time required to turn iron ore and coal 
into steel.

A Clinton-Gore Administration will work to build a productive 
partnership between government, research labs, universities, and 

6. Creating a World-Class Business Environment for Private Sector 
Investment and Innovation.

Changes in America's tax, trade and regulatory policies are also needed 
to help restore America's industrial and technological leadership. In a 
global economy in which capital and technology are increasingly mobile, 
we must make sure that the United States has the best business 
environment for private sector investment. Tax incentives can spur 
investment in plant and equipment, R&D and new businesses. Trade policy 
can ensure that U.S. firms have the same access to foreign markets that 
our competitors enjoy in the U.S. market. Antitrust reform will enable 
U.S. firms to share risks and pool resources. Strengthening commercial 
sections of our embassies will increase our ability to promote U.S. 
goods abroad. Streamlining export controls will reduce the bureaucratic 
red tape which can undermine competitiveness. And an overhaul of 
cumbersome defense procurement regulations will strengthen both our 
civilian and defense industrial bases. Permanent incentives for private 
sector investment:

Too many federal incentives meant to spur innovation are on-again-off-
again programs that industry views as unreliable. As a result, they have 
not realized their full impact. Several permanent tax measures should be 
put in place immediately to stimulate commercial activity. They include 
the following: 
     Make the R&D tax credit permanent to provide incentives for U.S. 
     companies that invest in developing new technology. 
     Place a permanent moratorium on Treasury Regulation 1.861-8: This 
     regulation increases the effective rate of U.S. taxation of R&D 
     and creates a disincentive for companies to conduct R&D in the 
     United States. 
     Provide a targeted investment tax credit to encourage investment 
     in the new equipment that we need to compete in the global 
     economy, and ensure that depreciation schedules reflect the rapid 
     rate of technological obsolescence of today's high-tech equipment. 
     Help small businesses and entrepreneurs by offering a 50% tax 
     exclusion to those who take risks by making long-term investments 
     in new businesses. 

An effective trade policy:
The Bush-Quayle Administration has failed to stand up for U.S. workers 
and firms. We need a President who will open foreign markets and respond 
forcefully to unfair trade practices. I will:
     - Enact a stronger, sharper Super 301 to ensure that U.S. 
     companies enjoy the same access to foreign markets that foreign 
     companies enjoy to our market. 
     - Successfully complete the Uruguay Round. This will help U.S. 
     manufacturers and high-tech companies by reducing foreign tariffs, 
     putting an end to the rampant theft of U.S. intellectual property, 
     and maintaining strong disciplines against unfair trade practices.
     - Insist on results from our trade agreements. Although the U.S. 
     has negotiated many trade agreements, particularly with Japan, 
     results have been disappointing. I will ensure that all trade 
     agreements are lived up to, including agreements in sectors such 
     as telecommunications, computers and semiconductors. Countries 
     that fail to comply with trade agreements will face sanctions. 
     - Promote manufactured goods exports by small and medium 
     companies: To promote exports of manufactured goods, I will 
     strengthen the commercial sections of our embassies abroad so that 
     they can promote U.S goods, participate in foreign standards-
     setting organizations, and support the sales efforts of small and 
     medium-sized businesses. We should also provide matching funds to 
     trade associations or other organizations who establish overseas 
     centers to promote U.S. manufactured goods exports. 

Streamline Exports Controls:
Export controls are necessary to protect U.S. national security 
interests and prevent the proliferation of nuclear, biological and 
chemical weapons. Nonetheless, these controls are often overly 
restrictive and bureaucratic, creating a mountain of red tape and 
costing the U.S. tens of billions of dollars in exports -- while 
undermining the competitiveness of the high-tech industries on which our 
national security depends. The United States should: 
     - Further liberalize East-West export controls that are 
     unnecessary given the end of the Cold War. 
     - Avoid unilateral export controls and controls on technology 
     widely available in world markets. Unilateral controls penalize 
     U.S. exporters without advancing U.S. national security or foreign 
     policy interests. 
     - Streamline the current decision-making process for export 
     controls. While our competitors use a single agency to administer 
     export controls, the United States system is often characterized 
     by lengthy bureaucratic turf wars between the State Department, 
     the Commerce Department, the Pentagon's Defense Technology 
     Security Agency, the Arms Control and Disarmament Agency, the 
     Department of Energy, and the National Security Agency. 

Antitrust Reform: 
Increasingly, the escalating cost of state-of-the-art manufacturing 
facilities will require firms to share costs and pool risks. To permit 
this cooperation, the United States should extend the National 
Cooperative Research Act of 1984 to cover joint production ventures. 

Civil-military integration: 
Department of Defense procurement regulations are so cumbersome that 
they have resulted in an unnecessary and wasteful segregation of our 
civilian and defense industrial bases. The military specification for 
sugar cookies is 10 pages long. Government procurement is so different 
from private sector practices that companies now set up separate 
divisions and manufacturing facilities to avoid distorting the 
commercial part of their business. The U.S. must review and eliminate 
barriers to the integration of our defense and civilian industrial base. 
These barriers include cost and price accounting, unnecessary military 
specifications, procurement regulations, inflexibility on technical data 
rights, and a failure to develop technologies in a dual-use context.

Taken together, the six initiatives discussed above comprise a 
technology policy that will restore economic growth at home, help U.S. 
firms succeed in world markets, and help American workers earn a good 
standard of living in the international economy.



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