Do you think this is a problem, or if it is a problem, is it one that can be rectified in some fashion in your agencies? I'd ask you all to comment on it, if you will.

Dr. CHEN. Perhaps I could comment on this briefly.

I think that what's happened is that we're developing a whole new discipline, that is, technology transfer managers or administrators, and some of the best individuals that are suitable to this type of work in the government actually will have to be recruited from outside of the government.

The Bayh-Dole Act of 1989 has resulted in universities developing these types of individuals since some of them started out in life as other kinds of people, engineers or scientists, who have gone into the licensing and technology management areas.

Mr. Adler, who is our Director of the Office of Technology Transfer, started out life as a patent attorney. This training is very helpful to him, very valuable; but in fact, it is a new type of endeavor. The technology development coordinators that we have interspersed throughout the various components of NIH and the rest of the Public Health Service may be individuals with varied backgrounds, but for a variety of reasons, they are attracted to this or they are assigned this and so they're learning. And we have this kind of training system to develop their expertise.

Mr. BROWN. Well, it is a field that requires diverse backgrounds and it may be that a patent attorney or a research scientist or a good design engineer can all be very good at this field, but only a few of them would be motivated, and there'd be serious disincentives if they don't feel that they would be recognized professionally for their work in this very important field. And that's the point that I'm trying to get at.

Any other comments on this problem or do you-have you perceived it as a problem?

Dr. GIANNINI. Well, I don't want to be repetitious, but I think many of the things Dr. Chen said are true. It's a new entity. It'sit has not been clearly defined in terms of what-where the limitations of this authority would be in technology transfer because in many cases, if you have an aggressive engineer, a rehab engineer or a physician or a researcher, he would probably shepherd a great deal of this technology transfer himself, but there has to be support services in order to help him to do that.

So I think we have to take a real good look at what have we got to begin with, what do we need to make this an ongoing dynamic process so that it doesn't come upon demand. And I think that'sthat has to be sorted out.

Mr. BROWN. Go ahead, Mr.

Mr. RAK. I merely wanted to say that, as I said in my testimony, we're learning, still in the learning process. I think we can point to a number of examples in which we've been very successful in technology transfer through the structure that we currently have, but we rely fairly heavily upon the technology intermediary that I mentioned and would certainly encourage the States and the businesses in specific regions to form up themselves to provide an opportunity for that interface with our organizations and since we do have the focal points, if there are these independent agencies, organizations established outside of the Air Force, then we can get, I

think, a synergism and a transfer of information by providing that focal point.

But again, we're still learning as we go along in this area.

Mr. VALENTINE. Mr. Adler, did you have something you wanted to add?

Mr. ADLER. Mr. Chairman, thank you.

One point I wanted to add to the discussion deals with the measure of success that the Committee might use to see if we're doing an effective job, and I wanted to note for you that NIH, for example, focuses on basic research, which is a starting point for product development or applied research. Sometimes our basic research tells us how things work and that leads to product development, but many times, it tells us how things don't work and why they don't work, and this doesn't lead directly to product development, but is extremely expensive research and is very valuable information for the biomedical industry.

Companies aren't able to fund research that is just basic acquisition of knowledge. It's important for public health and its very appropriate for NIH to do the research, but the conclusion I would suggest is that the measure of success can't simply be what is our royalty income versus research funding.

I might offer, just to be a little more helpful than why you can't do it that way. One measure that the Committee or the GAO might want to look at is comparison statistics with the academic sector, which, since 1980, have been licensing technology and look at investments in staffing of offices and look at licensing transactions and see what sort of return on basic research funding the universities in 10 years have experienced, have been able to develop. That might be a better measure of success for the government at the present than simply how much money are we generating in royalties.

Thank you, sir.

Mr. VALENTINE. Thank you.

Mr. Brown.

Mr. BROWN. I might just comment that the degree to which basic research can be translated into technological development varies from field to field of science. In the biomedical sciences, it appears that basic research can be transformed much more readily into new services or practices or devices for one reason or another than perhaps in fundamental research in physics or astronomy. And, of course, we need to be aware of that and not set unrealistic expectations that attempt to apply certain expected results to every field of basic research, but of course, we're also concerned, not with just basic research, but applied research and technology development here, which are closer to, you might say, commercial application, but still face real difficulties in terms of the transfer process.

One or two of you have indicated that you are developing computer data bases or other ways in which to make this operate effectively, which reminded me of a data base that I ran into probably 15 years ago that the Navy maintained on failure, examples of materials failures, for example. This illustrates your point, Mr. Adler. Not everything always works and it's sometimes handy to know what doesn't work and under what circumstances a material will fail. You can frequently get large economic benefit from this kind

of negative information, and it's important that it be available on the widest possible basis, just as positive information should be available on the widest possible basis. I commend you for your efforts to ensure that there are methods of maintaining and disseminating this information, utilizing computer networks which I'm sure are going to be a key to getting a maximum involvement in this technology transfer process.

I have no further comments, Mr. Chairman.
Mr. VALENTINE. Thank you, Mr. Brown.

One-I don't want to belabor this, but one question to Mr. Adler or Dr. Chen. You raised, Mr. Adler, I think, an interesting matter when you talk about your research is concerned, of course, with what fails more so than what succeeds. Is there a difference in the way that you would go about making known to private industry all that you and your scientists know about the wheels that have been invented but didn't work? Can you tell us a little bit more about this? Is there a different way that you make known processes and experiments that you've gone through that lead you to a dead-end so that, hey, you guys here at this drug company, you don't need to do that; we've done it and it didn't work.

Can you tell us a little bit more about how you get that word out. Mr. ADLER. Well, Mr. Chairman, NIH publishes over 7000 scientific journal articles each year, many of which investigate and report on mechanisms of different disease processes or infectious agents or enzymes and the medical literature, the biomedical journals reflect a fairly thorough discussion of dead ends and what didn't work and what that tells us about the next step of inquiry. So we have a mechanism to transfer that information.

That information doesn't often lead to a product that a company might seek to develop.

Mr. VALENTINE. Thank you, sir.

All right, thank you all very much for your testimony here today and the time that went into the preparation and all that you do for

us.

We now come to panel number 3, which is the last panel, and it consists of Dr. Schmid, Dr. Princiotta and Mr. Moran.

With-before I recognize Dr. Schmid, let me issue a special and parochial welcome to Dr. Princiotta because he's from home, Research Triangle Park, the U.S. Environmental Protection Agency. There was nobody else to say that for me. [Laughter.] Mr. VALENTINE. Dr. Schmid.

STATEMENTS OF DR. LOREN C. SCHMID, CHAIRMAN, FEDERAL LABORATORY CONSORTIUM FOR TECHNOLOGY TRANSFER, PACIFIC NORTHWEST LABORATORY, RICHLAND, WA; DR. FRANK PRINCIOTTA, DIRECTOR, AIR & ENERGY ENGINEERING RESEARCH LABORATORY, U.S. ENVIRONMENTAL PROTECTION AGENCY, RESEARCH TRIANGLE PARK, NC; AND H. DANA MORAN, MANAGER, RESEARCH AND TECHNOLOGY APPLICATIONS, SOLAR ENERGY RESEARCH INSTITUTE, GOLDEN, CO

Dr. SCHMID. Mr. Chairman, and members of the committee, a year ago, I reported that all Consortium programs and responsibilities identified by the Federal Technology Transfer Act were oper

ational and effective. That continues to be true, so if I focused on that, it'd be the same old story.

Today I plan to focus on current and future steps that include training and a small business initiative the Consortium is taking to help obtain universal implementation of technology transfer legislation. Also, I will identify some remaining issues and the Consortium's response to them.

My written statement contains details of the material that I will only be able to highlight in my remarks.

Relative to some of the remaining issues, I would like to call attention to some institutional and process issues. Technology transfer legislation and Executive Orders have laid a strong base for technology transfer from the laboratory supply side. There are a few areas in the works where legislation would be helpful, such as copyrighting of software, but for the most part, the needed legislation exists.

Some institutional issues needing attention at the agency level include things like authorizing manpower levels specifically for carrying out existing legislation, establishing technology transfer actions and critical rating factors in personnel merit standards and evaluation reports and providing incentives to help K through 12 science and mathematics educators at the local level.

During the FLC national meeting next week, we will identify and consider some remaining process issues. A forum of representatives from Congress and the Administration will discuss what is under way or what might be employed to address the issues. For some issues included in my statement, it will be advantageous to have government or agency-wide guidelines to simplify procedures while maintaining the flexibility critical for successful technology transfers. This is important because technology seekers who deal with more than one laboratory or agency are expecting some consistency.

My thoughts about successful implementation conclude that highlighting successes is important and there were questions by the committee in that area as well. In 1988, we first published "Putting Technology to Work." It contained examples of successful transfers at member laboratories. This document was well-received because technology seekers who find a success at one laboratory look for additional opportunities at that laboratory and other laboratories where successes have occurred.

A new volume, "Putting Technology to Work, 1990," will be made available for the report of this hearing. In total, the two documents describe eight transfer mechanisms using 194 examples from 35 laboratories that represent 10 agencies.

The FLC also uses awards to encourage and highlight successful transfers. For the first time this year, we gave advance notice of the awardees to department and agency heads. The notice encouraged them to add their congratulations to the awardees. We did this because a congratulatory letter to the award recipient and his or her laboratory director reinforces the department's or agency's commitment to domestic technology transfer.

An awareness issue is the need to provoke activity and interest in technology transfer among the technology seekers and the potential laboratory providers. So we are making technology seekers

more aware of the role of the Consortium and potential benefits in accessing the Federal laboratories. Similarly, we are making FLC members and potential members more aware of the benefits of working together as a consortium.

Training and information distribution efforts continue to be a priority for the FLC. The efforts make laboratory and agency personnel aware of their technology transfer responsibilities and recommend ways to carry them out. We will continue training in areas of setting up cooperative R&D agreements, marketing laboratory technologies, electronic mail use and managing an Office of Research and Technology Applications.

During 1990, external experts will provide representatives with training in areas such as teleconferencing, dealing with the media and using broker organizations. Past sessions have included patenting and licensing, marketing technology and communications.

Some of these areas end up being issues related to issue areas, and others related to operational areas.

Relative to smaller businesses, a special challenge or issue, if you will, is working with them as a group and at the national level. Linkages that provide us opportunities for serving small businesses through State technical assistance providers have met the challenge. The Consortium first tried the approach in 1988 when it undertook a demonstration program with the help of the Oklahoma Department of Vocational and Technical Education. Since then, we have held additional workshops in Oklahoma, California and Washington. We are planning workshops for six other States.

The State groups we work with include vocational education groups, community colleges, universities, technical assistance centers and small business development centers.

The National Institute of Standards and Technologies is participating with us in these workshops and has taken the lead for the small business development center workshop. In addition, based on the experience of the NASA Stennis Space Center, we hold workshops that create well-informed technology transfer teams in the Southeast. The teams use existing local resources, such as extension agents, community colleges and State and local Federal laboratories.

Experience has shown that most of the small business requests for assistance can be met by information from computer data-based searches. In the cases where the information search does not meet the full need, a people search provided through the FLC is the next step. That search will result in a laboratory expertise, capability or special facility.

We are preparing a manual describing a unified technical support system for smaller businesses based on our experiences. It forms the basis for training workshops specifically designed to meet a participating State need. Several factors or issues prevent small- and medium-sized businesses from taking advantage of the Federal technology opportunities available to them.

They include a general lack of awareness of existing assistance and how to go about obtaining that; insufficient technical staff and time to understand the opportunities; a perception that government technologies support is complex and will result in more regu