As ATP Fights Off Elimination, Some See Opportunities

Following fiscal year 1998 congressional appropriations hearings, a budget of about $185 million has been proposed for the Department of Commerce's Advanced Technology Program (ATP), slightly less than the Clinton administration's proposed figure of $275 million. While no one can be sure what the final budget appropriation will be, some observers see the amount as evidence of new bipartisan support for the program, which for the past two years has been dubbed "corporate welfare" and marked for elimination by congressional Republicans. At the same time, many officials and participants say that ATP remains a political hot potato whose future status is difficult to predict. BULLISH: ATP's Lura J. Powell is confident of the program's success in both the short- and long-terms. ATP is a six-year-old government-industry partnership that funds development of high-risk, innovative technologies with potentially broad commercial application. Administered by the Commerce Department's National Institute of Standards and Technology, ATP invests in emerging technologies that will have long-term economic payoff, explains director Lura J. Powell. Awards typically are for three to five years and may reach as much as $2 million a year. The government, however, provides only a portion of funding for any given project; the other portion is invested by private companies. ATP solicits two types of proposals: One is for a general competition, in which proposals for all types of enabling technologies that would create opportunities for new, world-class products, services, and industrial processes are considered. The other is a focused program competition, in which companies submit funding proposals for projects in a particular field. ATP selects program areas based on suggestions from industry. Proposals are reviewed by scientists and engineers in the subject area. ATP advocates argue that it is a unique program that jump-starts development of novel technologies that companies would be unable to finance themselves. It also enables scientists to further their own research in conjunction with corporate participants. "[ATP] primes the pump for future federal and venture capital support," contends Francis Barany, a professor of microbiology at Cornell University Medical Center in New York. Barany collaborates with Foster City, Calif.-based Perkin Elmer Corp. and EG&G IC Sensors of Milpitas, Calif., in an ATP-funded program. The project aims to develop automated benchtop and portable DNA analysis systems. Yet critics contend that ATP is a waste of coveted federal research dollars for private interests. Some scientists maintain that ATP funds go primarily to large companies that hardly need such support. Others are wary of commercial interests influencing research laboratories' results, and see little value in participating in ATP. "If you did a poll at Cornell [University], more scientists [than not] would say to put money in basic research rather than manage a corporate process," says Norman Scott, vice president for research and advanced studies at Cornell. ATP has been marked by budget ups and downs since its inception in 1988. As part of the Omnibus Trade and Competitiveness Act, its initial budget for FY 1989 was only $10 million. When President Clinton took office in 1993, he raised ATP's profile by pledging to increase its budget several-fold. By 1995, Congress appropriated $441 million for ATP, with a planned increase to $680 million by fiscal year 1997. But congressional Republicans-among them, former House Committee on Science chairman Rep. Robert Walker (R-Pa.)-took the program to task, calling it a vehicle for corporate welfare. Republican budget slashers scaled back the program in FY1995 to $341 million and set the FY1996 budget at zero. At the same time, Republicans attempted to eliminate the entire Commerce Department, which proved difficult, especially because both Commerce and ATP had strong administration backing. This eventually led to a compromise FY1996 ATP budget of $221 million. President Clinton proposed a FY1998 budget hike to $275 million, or 22 percent more than the FY1997 figure of $225 million. SELF-STARTER: Battelle's Christopher Coburn sees ATP as a "catalyst" for more public-private partnerships. Current House Committee on Science chairman Rep. F. James Sensenbrenner (R-Wis.) has said he plans to keep an open mind about ATP. Still, at a news conference in February, when the administration's budget was released, he commented to a reporter that he was "concerned that the growth in the Advanced Technology Program has been eating away at the dollars that could be used in other areas of scientific research." An Industry Catalyst Despite the controversy over the value of the program, many see ATP's value as a relationship-builder. Christopher Coburn, vice president of technology partnership practice at Battelle Memorial Institute in Cleveland, believes that ATP is a key catalyst for American industry to "help companies achieve strategic partners and help speed private-public partnerships. If ATP is seen only through its return-on-the-dollar investment, then that's only a government venture capital fund." While few academic and federal laboratory scientists probably consider ATP as a source of potential funding, "those in the private sector who think of collaborations outside the organization see it as a friendly tool to build such relationships," says Coburn. RISKY BUSINESS: BF Goodrich's Victoria Haynes contends that ATP "promotes risk taking" and "out-of-box thinking." Victoria Haynes, vice president for R&D at BF Goodrich Co. in Brecksville, Ohio, thinks that ATP facilitates economic growth because "technology development is often too complex and expensive" for a company to do alone. ATP "helps accelerate technology development" because "it promotes risk-taking and out-of-box thinking." Goodrich currently has no ATP-supported projects, though the company has received awards in the past. Haynes sees ATP's value in international terms. She argues that without such a program, "the country could fall behind Japan and Europe in its technology-based competitiveness." She contends that governments abroad are "doing much more in [supporting] advanced technology development in aerospace, pharmaceuticals, and other fields" than the United States. Yet many scientists don't see ATP as relating to their own work. They are wary of commercial involvement in research or don't see potential commercial use of their investigations. Rosalie Ruegg, director of the ATP economic assessment office, is convinced that some scientists may be critical of ATP because they might think that the "science quality might be compromised" by commercial interests. Other criticisms may "come from the fear that [in today's ultra-competitive research funding environment], ATP's gain might be someone s [funding] loss." Some see ATP as little more than government-sponsored product development. Henry I. Miller, a senior research fellow at the Hoover Institution and a consulting professor in the Institute for International Studies at Stanford University, thinks "federal bureaucrats have . . . become pseudo-venture capitalists, picking winners and losers among high-tech projects." Miller contends that much of the work funded by ATP could be supported by private industry because it amounts to "product development." Others welcome ATP as another alternative to traditional federal funding sources. Though many of the projects focus on applied technologies in areas such as component-based software, digital data storage, and manufacturing composite structures, some life scientists see opportunities as well. "I don't note any reluctance" from life scientists in participating in ATP, notes Stanley Abramowitz, who manages ATP's Tools for DNA Diagnostics funding program. He sees few "barriers between the laboratory and the biotech industry." His program is aimed at developing technologies that help create cost-effective methods for sequencing, interpreting, and storing DNA sequences for diagnostic applications including health care, agriculture, and environmental monitoring. BAD BUSINESS: Commerce’s Gary Bachula thinks the nation’s economy would ultimately suffer from an ATP shutdown. But ATP is not for every scientist, stresses Barany, who is involved in an ATP project as a subcontractor. "It's for the scientist who straddles the fence of basic and applied research." Barany notes that ATP projects allow researchers to prove concepts. From there, a scientist has initial data with which to pursue future funding. Ruegg notes that many companies will collaborate with university scientists because the company may not have the "wherewithal" to conduct the needed laboratory research. More than 180 of 280 ATP- supported projects involve university researchers. "You look often to the university scientists to make sure you're state-of-the-art and are on top of the latest advances," Ruegg explains. However, ATP doesn't directly fund academic researchers. University scientists may be subcontractors of companies they collaborate with. The program boasts some successes. According to Abramowitz, the DNA diagnostics program has been extremely prosperous to date. "Our activity in the area has hastened much of the arrival of [recent advances in] DNA technology as we know it," he points out. Nanogen Inc., a San Diego-based firm that performs DNA analysis, recently received a second ATP award. The company has nearly tripled its number of employees in the last two years, thanks in part to the ATP grant. The company prepares DNA samples for analysis. According to James P. O'Connell, vice president of research, the two-year, $2 million award enabled the company to simplify sample testing and analysis. While O'Connell is pleased with the program, he wonders if it should be limited to small startups or companies worth less than $10 million. "It makes more sense to have smaller companies be able to receive the awards, as opposed to say, General Electric, which might not need it as much," he notes. ATP has given 288 awards since its inception. Of 741 total participants, 268 have been small businesses. ATP helps companies make "a difficult transition from technological innovation to product commercialization," notes Greg Merril, president and CEO of Rockville, Md.-based HT Medical Inc., which creates virtual-reality surgical simulations for education and training. "Unproved technology is difficult to market." Now in the second year of a three-year project, Merril says that his company could not have commercialized its product without ATP's help. Though ATP put in only some $560,000 as opposed to the more than $1.2 million the company contributed, he stresses that venture capitalists would not touch the company because the technology was new and untested. The ATP contribution enabled the company to develop the technology and produce the T-Vox, which is an education and training tool for medical imaging visualization in 3-D. One complaint has been that ATP successes and the long-term benefits in facilitating partnerships among industries and companies are difficult to measure. Haynes contends that "overexaggerated claims of corporate welfare come because people in Congress don't understand the technology-development process." EXCLUSIONARY? Arkansas' John Ahlen thinks that ATP should scale down its projects to allow smaller states to participate. John Ahlen, president of the Arkansas Science and Technology Authority in Little Rock, argues that states with predominantly rural populations are left out because they may not have the resources to put together proposals for expensive, high-risk innovative technologies. "ATP does not [work] well with small and medium-sized firms in small, rural states," explains Ahlen. He notes that a typical company contribution to an ATP-supported partnership would be more than $500,000, which is more than most Arkansas industries could afford. ATP should change its criteria, he contends, to allow more rural-based companies to participate. IMPORTANT ISSUE: MIT's J. David Litster thinks that ATP would be more viable for universities if they could share patent rights. Many life scientists are wary of participating in ATP-supported projects because of a concern about patent rights, contends physicist J. David Litster, vice president and dean of research at the Massachusetts Institute of Technology. Patents for ATP-backed work go only to for-profit companies. Scientists and university officials dispute this regulation, claiming that it violates the Bayh-Dole Act of 1980, which mandates that universities generate patents for science supported by the federal government. "If the industrial partner owns the intellectual-property rights, the investigator loses control of the work, which then forecloses future research opportunities," Litster states, noting that university scientists frequently "use patents to attract future support." Losing intellectual-property rights thus "removes the incentives for inventors to invent." Litster believes that more scientists might be interested in ATP if the intellectual-property issues were resolved, allowing the university scientists to share in patent ownership. While the program's future remains in doubt, some argue that six years is hardly enough time for ATP to prove its mettle. "Politically, we have to give it [ATP] time and stability to allow companies to find out that we're here and what they can participate in," notes Ruegg. Two studies-one by a consulting firm, Silber and Associates of Clarksville, Md. ("Survey of Advanced Technology Progam 1990-92 Awardees: Company Opinion About the ATP and Its Early Effects," January 1996), and one by the U.S. General Accounting Office (U.S. General Accounting Office Report to the Ranking Minority Member of the Committee on Science, House of Representatives, Measuring Performance: The ATP and Private Sector Financing, GAO/RCED-96-47, January 1996)-found that most companies surveyed said they probably could not have attempted projects of the same size, scope, and pace without ATP support. However, "the bulk of the projects have been funded in the past three years, so it's a little early to give a report card," notes Deputy Undersecretary for Technology Gary Bachula. Bachula maintains that U.S. economic growth would suffer if ATP were eliminated: "There are those who don't understand the process of technological innovation, and would separate it into university science and industry, and think the government has no role," Bachula points out. "But think about all of the technological development in our history-communications, transportation, even space travel-much of it would not have been possible without private and public collaboration."

As ATP Fights Off Elimination, Some See Opportunities

Become a Member of

Meet the Author

Steven Benowitz

Published In

April 1997

Related Research Resources

How Do Embryos Know How Fast to Develop

Research Resources

Podcasts

Webinars

Videos

Infographics

eBooks

Become a PCR Pro

Embracing Polypharmacology for Multipurpose Drug Targeting

Genetic Insights Break Infectious Pathogen Barriers

Navigating Cold Storage Solutions

Products

Product News

Zymo Research Launches the Quick-16S™ Full-Length Library Prep Kit

BIOVECTRA is Honored with 2025 CDMO Leadership Award for Biologics

Gilead’s Capsid Revolution Meets Our Capsid Solutions: Sino Biological – Engineering the Tools to Outsmart HIV

Meet the Upright ULT Built for Faster Recovery - Stirling VAULT100™