For Risky R&D, A Sweetener From Uncle Sam

James M. Daughton nearly was a victim of the growing aversion to long-term research. In 1989, he left Honeywell Inc. to start Nonvolatile Electronics Inc., based in Minneapolis. But when his company ran short of money, Daughton's dream of making a memory chip that "remembers" even when the power is off began to fade.

Then, aid arrived from an unlikely source: the Commerce Dept. Through its new Advanced Technology Program (ATP), the agency doled out 11 initial awards, worth $45.7 million, in April, 1991. Daughton got $1.7 million over three years, Nonvolatile developed a one-megabit chip, and Daughton is now working on a better version. Alone, the program won't make a dent in the nation's basic-research deficit. Still, its ripples might. Many awards go to consortiums or other groups. That makes companies cooperate on projects, boosting efficiency.

The ATP's ultimate goal is to fund technologies with wide benefits but with risks or costs too steep for companies to undertake alone, says Arati Prabhakar, director of Commerce's National Institute of Standards & Technology (NIST). To make sure companies are serious, they must risk their own money as well. The program barely survived the Bush Administration, which hated any hint of industrial policy. But it's a darling of Congress and the protechnology Clintonites. The ATP's budget rose from $68 million in fiscal 1993 to nearly $200 million in 1994. Clinton plans to raise it to $450 million in 1995. "Our dollars are a catalyst for change," says Prabhakar.

One believer is physicist John E. Bjorkholm at AT&T Bell Labs. Bjorkholm was working on a practical effort: developing X-ray lithography for printing ultrasmall circuits. But not even Bell Labs was willing to build a crucial and expensive part of the device--superprecise mirrors to reflect and focus the X-rays. After Bjorkholm won a $2 million ATP award, Bell Labs threw in $2.4 million. Most of the money has gone to small optics companies that are building the mirrors. Bjorkholm says that whatever happens, the money was well spent: "Even if they can't get to the point we need to--which would be a disaster for our program--the improvements they make will benefit the entire optics industry." Such efforts fall short of filling U.S. industry's R&D gaps, however. So to focus the ATP's impact, Prabhakar plans to select four areas for most of its funding.

BAD PICKS? The program isn't home free yet. Universities worry that boosts for industry eventually will mean less for them. And other challenges await the ATP once the honeymoon ends. Supporters fret that each failure--one company in the first round has already folded--will be cited by free-marketers as evidence that Washington shouldn't pick winners and losers.

Another worry is that companies turned down for ATP awards will complain of favoritism to Congress or, worse, persuade home-state lawmakers to earmark the ATP's money for pork-barrel projects. "There is constant pressure from the Hill," says Prabhakar. "But the power of this program is that it is merit-based. And we're committed to making sure it stays that way."

If she can do that, the ATP will make a difference for more Daughtons and Bjorkholms--and may help cure America's R&D ills.

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