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Clinton Presidential Records
Digital Records Marker
This is not a presidential record. This is used as an administrative
marker by the William J. Clinton Presidential Library Staff.
This marker identifies the place of a tabbed divider. Given our
digitization capabilities, we are sometimes unable to adequately
scan such dividers. The title from the original document is
indicated below.
Varmus - Human
Subject Protection
Divider Title:
5405-1997 1 : 18PM
FROM
P.2
REVISED
Testimony of
Harold E. Varmus, M.D.
Director, National Institutes of Health
Before the
Subcommittee on Human Resources and Intergovernmental Relations
Committee on Government Reform and Oversight
United States House of Representatives
Thursday, May 8, 1997
Rayburn House Office Building, Room 2247
10:00 a.m.
FOR RELEASE UPON DELIVERY
5-05-1997 1 18PM
FROM
P.3
Mr. Chairman and Members of the Subcommittee:
I am Harold Varmus, Director of the National Institutes of Health. I am pleased to
appear before the Subcommittee to describe our system of protection of human research subjects,
a responsibility of enormous weight. While the collection of scientific data to expand our
knowledge of the causes of human ills is the ultimate aim of medical research, of importance is
the protection of the individuals who assist us through their participation in research studies.
Without these individuals, it would have been impossible for us to have made such remarkable
progress in the development of effective treatment and prevention strategies for a host of human
diseases and conditions.
History of Human Subjects Protection
May 30 marks the 22nd anniversary of the formal promulgation of the Department of
Health and Human Services' (DHHS) regulations for Protection of Human Subjects in research
(Title 45 Code of Federal Regulations Part 46). This vigorous system of protections, designed to
preclude the very problems we will discuss today, is guided by a set of principles-respect for
persons, beneficence, and justice-which are the three quintessential requirements for the ethical
conduct of research involving human subjects. It is based on a succession of judgments made by
a variety of individuals in the context of DHHS regulations. Scientists, ethicists, lawyers,
advocacy group members, and, most importantly, public citizens 100k at research protocols and
weigh risks and potential benefits.
Let me take a moment to give you some background on the development of human
subjects protections. Our modern-day system began with the Nuremberg Code, which was
developed for the Nuremberg Military Tribunal to provide standards by which to judge the
human experimentation conducted by the Nazis. Many of the Code's principles regarding the
ethical conduct of research involving human subjects still are followed today. It was followed in
1964 by the World Medical Association's Declaration of Helsinki: Recommendations Guiding
Medical Doctors in Biomedical Research Involving Human Subjects; and in 1966, NIH issued
"Policies for the Protection of Human Subjects, which established the institutional review board
(IRB) as one mechanism through which human subjects would be protected.
As I have mentioned, it was in May 1974 that the DHHS regulations were issued,
elevating to regulatory status NIH's "Policies." Then in July 1974, the National Research Act
was enacted, which established the National Commission for the Protection of Human Subjects
of Biomedical and Behavioral Research. The activities of the National Commission, which was
active from 1974 to 1978, culminated in the development of the Belmont Report: Ethical
Principles and Guidelines for the Protection of Human Subjects of Research. The Report set
forth the three basic ethical principles underlying the acceptable conduct of research involving
human subjects, mentioned above, which continue to guide us today. Over the years, the DHHS
regulations have been revised six times, adding additional protections for vulnerable populations.
1
Whose Responsibility Is The Protection of Human Subjects of Research?
Who is involved in protecting human subjects? The architecture of the current system
involves at least half a dozen levels of protection. Ultimately, protection depends on several
principles. First, the clinical investigator must be scientifically well-trained and also aware of his
or her ethical responsibilities as a researcher committed to both the advancement of knowledge
and the welfare of research participants. The initial planning of the research protocol is a vital
part of the protection of human subjects, during which time the researchers perform a thorough
review of the literature in order to develop a research plan and also to identify any potential risks
associated with the research. The investigators address both benefits and risks associated with
the research, and formulate an appropriate process to inform potential participants, to obtain
informed consent for participation, and to document the consent.
Second, there is review and approval of the research protocol by a local IRB, a
requirement of the DHHS regulations for Federally-supported research. Although non-Federal
research is not covered by these regulations, you should be aware that the DHHS regulations are
in general use by others as well. Following IRB review, additional review responsibilities rest
with 1) the executive official of the research site; 2) the scientific review group at the NIH
(generally, within the Division of Research Grants, or within an NIH Institute or Center [IC]);
the Advisory Council or Board of the funding IC; and 4) the executive official of the funding
entity. Each has the authority to raise concerns about human subjects issues and to request
further evaluation and correction of any problems found.
Once multiple review of the proposed study design and informed consent documents has
been accomplished, and the proposal is funded, there is the crucial interaction between the
research volunteer and the research investigator. It is at this point that the informed consent
process begins - when the research volunteer is apprised of what will be required for his/her
participation in the study, including known associated risks. The informed consent document is
only one component-the written component-of the informed consent process. I will describe
the particulars of informed consent later. There also may be several individuals involved with
the research volunteer during the process of obtaining informed consent, and throughout the
course of the study, such as the nursing and scientific staff, as well as a physician. There also
may be a consent auditor or monitor, or an advocate for the research subject to ensure that
research subjects understand and are kept informed of any proposed changes or risks.
IRB Review
As I mentioned earlier, IRB review is required by DHHS regulations. The IRB must be
established at the local level and have a minimum of five people, including at least one scientist,
one nonscientist, and one person not otherwise affiliated with the institution conducting the
research study. Having the IRB at the research site is the cornerstone of our system of protection
of human subjects. IRB review is a prospective and continuing review of the research by a group
of individuals with no formal interest in the particular research study, who are in the best position
2
to know the resources of the institution, the capabilities and reputations of the investigators and
staff, and the prevailing values and ethics of the community and, thus, the likely subject
population. No human subjects research may be initiated, and no ongoing research may
continue, in the absence of an IRB approval. The NIH cannot provide funds for human subjects
research unless an IRB approves the protocol for such studies.
Once research is initiated that involves human subjects, IRBs have continuing
responsibilities. These include the conduct of continuing review at intervals appropriate to the
degree of risk, but not less than once per year; the authority to observe or have a third party
observe the consent process and the research; prompt reporting of any unanticipated problems
involving risks to subjects or others, or any serious or continuing noncompliance with the IRB's
requirements or determination, or with the regulations; and authority to suspend or terminate IRB
approval of research that is not being conducted in accord with the IRB's requirements or that
has been associated with unexpected serious harm to subjects.
Data Safety Monitoring Boards
An additional layer of review that is sometimes employed is an independent Data and
Safety Monitoring Board, or "DSMB," appointed to oversee and to evaluate the research
investigation. Size and make-up of DSMBs vary; however, most include physicians with
expertise in the disease under study, gained either through patient care or in the conduct of
research, statisticians, and experts in scientific specialities. A patient advocate also may be
included among the members of a DSMB. At periodic intervals during the course of a research
study, the Data and Safety Monitoring Board reviews the accumulated data and makes
recommendations on the continuation, or modification, of the study. When a study is stopped
prematurely because of a toxic effect or because a strong positive effect was seen, and it would
be unethical to continue with some subjects not receiving the test article that has demonstrated
benefit, it is likely due to the intervention of a Data and Safety Monitoring Board.
Institutional Officials
The final responsible party at the applicant/grantee institution is the institutional official,
who signs-off on the research project when the application is submitted to the funding agency
and assumes responsibility for the research project on behalf of the institution when the award is
accepted.
Those directly involved with the protection of human subjects on behalf of the NIH are
the members of peer review groups, the Director and other staff of the funding institute or center,
and the Office of Protection from Research Risks (OPRR). Located administratively and
logistically at the NIH, OPRR exerts extensive oversight of the entire process of human subjects
protection for HHS-supported research. Among its many responsibilities, the OPRR develops
and monitors, as well as exercises compliance oversight relative to, DHHS regulations;
establishes criteria and negotiates for Assurances of Compliance with institutions engaged in
3
5-05-1997 1:21PM
FRUM
DHHS-supported research involving human subjects; conducts programs of clarification and
guidance for both the Federal and non-Federal sectors with respect to the involvement of
humans; and evaluates the effectiveness of DHHS policies and programs for the protection of
human subjects. OPRR plays a major role in ensuring that human subjects of research are
informed and protected and that thorough investigations of human subjects concerns are
conducted. OPRR also investigates complaints from research subjects and others concerned with
their welfare, and conducts a national program to educate the research community about human
subjects protections.
Members of NIH scientific review groups and advisory councils evaluate the proposed
involvement of human subjects in the research and identify comments or concerns regarding
protections for human subjects. NIH program staff work with the principal investigator and the
institution to resolve any human subject comments or concerns prior to award. Grants
management staff confirm that an applicable Assurance of Compliance and IRB approval have
been obtained prior to award. Once these steps are completed, the Institute or Center Director
makes the decision whether or not to fund the research project.
A Perfect System?
While I have emphasized the multiple layers of protection inherent in this system, I
know you are most concerned about the possibility that this system can somehow fail. We
acknowledge that despite our best efforts, there are occasions when the systems for protection are
not perfect or the individuals charged with ensuring adequacy of these protections are unable to
foresee potential problems. What is the possibility of a failure in human judgment running
through six or more layers of review? Certainly, the successes far outweigh the failures.
Nevertheless, there have been research studies that have required further evaluation for human
subjects concerns. To give you a sense of the kinds of problems we have encountered, I will
relate brief accounts of selected research studies involving human subjects concerns and
highlight actions taken to address them.
In one well-publicized instance, concern was raised about the proper explanation of risks
in the informed consent process for a study involving research subjects with schizophrenia at the
University of California at Los Angeles (UCLA). After extensive review of concerns voiced,
and of the institution's informed consent practices in general, it was determined that the IRB did
not exercise sufficient oversight of the informed consent process. The institution was directed to
revise the informed consent process. In addition, OPRR instituted close monitoring of the
institution's human subjects activities, and issued a report on the investigation of UCLA activities
relative to this protocol. As a result of this occurrence, the Acting Director of the National
Institute of Mental Health (NIMH), the funding entity for the study, sent correspondence to more
than 200 clinical investigators to provide each with a copy of the OPRR report and to request that
they carefully scrutinize all informed consent documents for full compliance with the OPRR
recommendations. In 1995, the Institute released a program announcement-Informed Consent
in Clinical Mental Health Research-to expand upon previously funded research on informed
4
5-05-1997 1 22PM
FROM
P: 7
consent. NIMH also has sponsored, and co-sponsored with advocacy groups, a number of
workshops and conferences aimed at addressing issues specific to mental illness in clinical
research.
In a second instance, concern was expressed about the misuse of an expedited IRB review
process. OPRR identified failure of leadership within the IRB as the root of the problem,
resulting in resignation of the IRB chairman. Sometimes, an OPRR review leads to a finding
that the concerns were unfounded as in the case of another institution. OPRR followed up on
concerns that were raised about whether a particular IRB was properly conducting the required
annual review of continuing research. The institution demonstrated to OPRR that some 2,000
research protocols involving human subjects had, indeed, received continuing review by the IRB
in accord with DHHS regulations.
Protection of Vulnerable Populations
Let me return briefly to the specific responsibilities of the IRB and the concerns IRBs
must address. IRB review assures that risks are minimized; risks are reasonable in relation to
anticipated benefits; selection of subjects is equitable; there is proper informed consent; and the
rights and welfare of subjects are maintained in other ways, as well. This is particularly
important when subjects are likely to be vulnerable to coercion or undue influence.
What populations are judged to be vulnerable? IRBs pay careful attention to research
involving children, prisoners, pregnant women, individuals with mental disabilities, individuals
who are economically disadvantaged, and individuals who are educationally disadvantaged.
The DHHS regulations provide extra protection for vulnerable subjects in several ways.
If an IRB regularly reviews research that involves a vulnerable category of subjects,
consideration must be given to including as IRB members one or more individuals who are
knowledgeable about and experienced in working with the vulnerable population. When some or
all of the subjects are likely to be vulnerable to coercion or undue influence, IRBs must see that
additional safeguards are included in the study protocol. Specific, detailed protections are
actually written into DHHS regulations pertaining to pregnant women, fetuses, human ova
fertilized in vitro, prisoners, and children. I would like to highlight a few additional protections
in place for several of these vulnerable groups.
Children
Recognizing the need for special attention to pediatric subjects of research, it is assumed
that children are incapable of providing informed consent. As such, special protections are
mandated for this vulnerable population. As required by regulation, parents or legal guardians
must give proxy consent for their children to participate in research protocols. In protocols
involving only minimal risk or those involving greater than minimal risk but which have the
prospect of direct benefit to the child, only one parent must give consent. In protocols involving
5
a minor increase above minimal risk or more than a minor increase above minimal risk in which
the child stands not to benefit, both parents must sign a consent form.
As an additional protection, within the intramural program of the NIH-with specific, rare
exceptions-children between the ages of 7 and 18 who are capable of understanding that they are
involved in a research project are required to sign an "assent" form, which acknowledges their
affirmative agreement to participate in a research protocol. Much care is given to writing assent
forms in readily understandable language that is age-appropriate and to providing simple oral
explanations, sometimes accompanied by visual demonstrations with dolls or by role-playing.
Research investigators and nursing staff are often assisted in the "assent" process by patient
advocates and assent auditors who are not involved in the research project in order to avoid any
possibility of coercing the child into participating in the protocol.
Persons with Mental Illness or Dementia
Although there are no DHHS regulations providing specific protections for persons with
mental illness or dementia, special attention is being given to informed consent issues related to
their involvement in research studies. Recognizing the many issues surrounding patients with
mental illness, the NIMH co-sponsored with the National Alliance for the Mentally Ill (NAMI) a
series of meetings, including a symposium at the NAMI annual meeting, to discuss ethical issues
concerning human subjects with mental illness in biomedical research. The NIMH and NAMI
now are planning co-sponsorship of a meeting with a broader group of participants to develop a
series of principles to guide informed consent with potentially cognitively impaired subjects.
NIMH also sponsored a conference, Ethical and Human Subjects Issues in Mental Health
Research with Children and Adolescents, to discuss the specific ethical challenges involved in
this research. In addition, the NIMH and OPRR co-sponsor regional workshops to focus on
issues specific to patients with mental illness in clinical research. These workshops, held
throughout the country, are attended regularly by approximately 1,000 IRB members and
researchers.
Issues of informed consent are of particular concern for the elderly population,
particularly with regard to Alzheimer's disease patients and others with diminished cognitive
capacities. The National Institute on Aging (NIA) is participating in a Request for Application
on informed consent in research involving human subjects, which I will discuss later. NIA is
particularly interested in the role of cognitive function in aging, and the ability of the elderly to
understand and remember so that information related to the consent process is meaningful.
In addition, the NIA issued an announcement in the NIH Guide to Grants and Contracts,
in October 1996 on "Implementation of Policies for Human Intervention Studies." This notice
codifies additional oversight on the part of NIA Program Administrators to ensure the safety of
participants in NIA-supported intervention studies.
6
Beyond these guidelines and the general NIH-wide guidelines on protection of human
subjects, the NIA has no formal written guidelines for informed consent for research with
Alzheimer's disease patients. However, efforts are being made to maintain consistent practices
across large multi-site clinical studies. For the Alzheimer's Disease Cooperative Studies
Program, the Principal Investigator reviews the consent forms from each site for consistency and
appropriateness.
In addition, the NIH Warren Grant Magnuson Clinical Center-together with the NIMH,
the NIA, the National Institute of Neurological Diseases and Stroke, and other NIH institutes--
has pioneered the concept of the durable power of attorney applied to research participation,
whereby individuals, while competent, could identify someone to represent their best interest and
provide informed consent should they later become cognitively impaired. The classic example of
when this would be used is with participants in a study of progressive dementias.
Drug Users
The National Institute on Drug Abuse recognizes the importance of drug users to drug
abuse research and the special attention that must be given to ensuring informed consent in this
special population. In addition to the roles that the IRB and OPRR play in ensuring the
protection of participants in NIDA research studies, the Institute adheres to the basic principle
and provides guidance that the investigator has the primary responsibility for the protection of
vulnerable subjects. The investigator must give adequate consideration to the mental and
physical conditions and motives of the individuals in terms of their ability to fully understand the
context of the informed consent. If there is a question about a potential subject's ability to give
meaningful and informed consent, an independent clinician, ethical consultant, or uninvolved
third party with appropriate qualifications should be asked to evaluate this ability if the subject is
to be entered or continued in the study.
Those most necessary to drug abuse research are drug abusers. Recidivism is a key issue
in drug abuse treatment research, and relapse cannot be studied without the use of individuals
who have taken drugs. Research that requires administration of drugs to individuals who are
addicted to drugs warrant special attention, however. There are a number of extremely important
principles which need to be addressed by anyone considering or evaluating requests to conduct
research using drug-addicted individuals. Medical and mental examinations and screenings must
be made to ensure the absence of any medical or mental condition for which further drug
exposure would be contraindicated. A thorough assessment of the risks entailed if the participant
is to be exposed to a higher dose, rate of administration, and/or new route of administration than
they would normally encounter by their own choice in their usual circumstance must be made.
Finally and most importantly, investigators must make a serious and concerted effort to link
these individuals to drug abuse treatment
The effects of drug use on adolescents is a major issue in drug abuse research and
children are often involved in drug abuse prevention research. If the hypothesis being tested
7
requires the involvement of individuals under age 18 and the risk/benefit assessment is favorable
the investigator must: (1) obtain the individual's consent and/or assent to participate in the study;
(2) obtain permission from the parent(s) or guardian for the individual to participate in the study;
and (3) comply with any applicable local laws governing such research.
Assurance of Compliance With Human Subjects Regulations
The DHHS regulations for Protection of Human Subjects are not a set of rules that can be
applied rigidly to make determinations of whether a proposed research activity is ethically
"right" or "wrong." Rather, they are a framework in which investigators, IRB members, and
others can ensure that serious efforts have been made to protect the rights and welfare of research
subjects.
OPRR oversees implementation of the regulations in all DHHS facilities as well as
domestic and foreign institutions or sites receiving DHHS funds. OPRR requires that each
DHHS agency and extramural research institution that conducts research involving human
subjects set forth the procedures it will use to protect human subjects in a policy statement called
an "Assurance of Compliance." An Assurance statement is a formal, written commitment to: 1)
widely-held ethical principles; 2) the DHHS regulations for Protection of Human Subjects; and
3) institutional procedures adequate to safeguard the rights and welfare of human subjects. The
terms of the institution's Assurance are negotiated with OPRR. The detailed, written Assurance
statement becomes the instrument that OPRR uses to gauge an institution's compliance with
human subject protections if there is a problem.
At OPRR's discretion, institutions with large research portfolios and demonstrated
expertise in human subjects protection may be granted a Multiple Project Assurance (MPA). An
MPA, as the term implies, is an institution's pledge of full human subject protections for multiple
projects at the institution. More than 450 institutions currently hold an MPA. As an agency
regulated by OPRR, the NIH Intramural Research Program, with 14 Institutional Review Boards
overseeing research conducted at the NIH itself, has earned a Multiple Project Assurance from
OPRR.
Informed Consent
All present today know how integral, and how crucial, the process of informed consent is
to the protection of human subjects, whether in research or in other situations where medical
assistance is necessary. Many have a general picture of informed consent, and it is useful to add
higher resolution to that picture. DHHS regulations specify 14 elements of informed consent.
Of these, eight are required and are designed to ensure that research subjects are fully informed
8
about the studies in which they are to enroll, the risks and benefits, if any, as well as their rights
with regard to participation in DHHS-sponsored research. These are highlighted below.
1) A statement that the study involves research, an explanation of the purposes of the research
and the expected duration of the subject's participation, a description of the procedures to be
followed, and identification of any procedures that are experimental.
2) A description of any reasonably foresecable risks or discomforts to the subject:
3) A description of any benefits to the subject or to others that may reasonably be expected from
the research.
4) A disclosure of appropriate alternative procedures or courses of treatment, if any. that might
be advantageous to the subject.
5) A statement describing the extent, if any, to which confidentiality of records identifying the
subject will be maintained.
6) For research involving more than minimal risk, an explanation as to whether any
compensation will be paid, whether any medical treatments are available if injury occurs, and, if
so, what they consist of, or where further information may be obtained.
7) An explanation of whom to contact for answers to pertinent questions about the research and
research subjects' rights, and whom to contact in the event of a research-related injury to the
subject.
8) A statement that participation is voluntary, that refusal to participate will involve no penalty
or loss of benefits to which the subject is otherwise entitled, and that the subject may discontinue
participation at any time without penalty or loss of benefits to which the subject is otherwise
entitled.
A researcher who seeks to recruit an individual for research without conveying these
elements of information in language understandable to the potential subject is not obtaining
informed consent.
Implementing informed consent is a dynamic endeavor, and we are always seeking new
perspectives. For example, a June 2, 1997, conference co-sponsored by the National Cancer
Institute, the NIH Office of Research on Women's Health, the National Action Plan on Breast
Cancer, and others, will seek to identify principles and models for prospectively obtaining,
storing, and utilizing stored tissue specimens for research. Also, the National Bioethics Advisory
Commission (NBAC), which is charged with providing guidance to Federal agencies on the
ethical conduct of current and future human biological and behavioral research, is reviewing all
9
P. 12
of the human subjects protections for their adequacy and appropriateness today. You will hear
more about this from my HHS colleague, Dr. William Raub.
Special Considerations in Informed Consent
With any set of regulations, situations arise that require special consideration. DHHS
regulations for Protection of Human Subjects do provide avenues for such occurrences.
recognizing that certain consent procedures with IRB approval may not include or may alter
some or all the elements of informed consent, or that a waiver of the informed consent
requirement may be made. These avenues may only be used in certain narrow circumstances.
The DHHS regulations (45 CFR 46.116(d)) provide for waiver of the requirements to obtain
informed consent when all four of the following circumstances pertain:
the research involves no more than minimal risk to the subjects;
("Minimal risk" means that the probability and magnitude of harm or discomfort
anticipated in the research are not greater in and of themselves than those ordinarily
encountered in daily life or during the performance of routine physical or psychological
examinations or tests [45 CFR 46.102(I)].)
the waiver, or alteration, of consent will not adversely affect the rights and welfare of the
subjects;
the research could not practicably be carried out without the waiver or alteration; and
whenever appropriate, the subjects will be provided with additional pertinent information
after participation.
IRBs are required to make and document these judgments.
You will hear about waivers and informed consent in emergency situations from Mary
Pendergast, Deputy Commissioner, Food and Drug Administration.
Research on Informed Consent
Despite the specificity of Federal regulatory language on informed consent, its endurance
through many years, and the enthusiasm with which we all adhere to it, there is little empirical
work in existence to document the degree of understanding achieved by research participants.
There is a scarcity of data that bear upon, for example: 1) research subjects' comprehension of a
study's methods and procedures; 2) subjects' understanding of relative risks and benefits of
participation; 3) subjects' understanding of confidentiality and any exceptions to confidentiality:
and 4) subjects' understanding of the implications of withdrawal from a study. Such data are
needed to aid in designing informed consent procedures that are readily comprehended by
prospective participants and, at the same time, impart all critical information.
10
1:25PM
FROM
In this vein, the NIH has joined with the Department of Energy and the Department of
Veterans' Affairs in a Request for Applications (RFA) for original research proposals in the area
of "Informed Consent in Research Involving Human Participants." The sponsoring organizations
are jointly issuing this RFA because voluntary informed consent is the defining aspect of
interactions between researchers and participants, and is integral to the conduct of the scientific
research funded by all of these organizations. One of the goals of this RFA is to bring together
perspectives of these different agencies, since their different research foci reflect a diversity of
issues relating to informed consent. Of course, many facets of understanding the informed
consent process are shared, and hence a combined effort is efficient for the agencies and
scientists alike. Such data should be useful in designing informed consent procedures that are
readily comprehended by prospective participants and impart all critical information. The goal
of the present initiative is to develop and test alternative strategies for obtaining informed
consent in diverse populations and determine optimal ways to obtain informed consent for
research participation.
The three agencies have set aside funds in FY 1997 to support projects in response to this RFA.
More than 80 proposals were submitted by the March 11, 1997, closing date for receipt of
applications. These three agencies are igniting the engine of research in an area that has for too
long been under explored.
Conclusion
In the final analysis, Mr. Chairman and Members of the Subcommittee, research
investigators, institutions, NIH, and DHHS are stewards of a trust agreement with the people
who volunteer to be research subjects. We have a system in place that to the greatest degree
possible 1) minimizes the potential for harm; 2) enables and protects individual, autonomous
choice; and 3) promotes the pursuit of new knowledge. By doing so, we protect the rights and
welfare of our fellow citizens who make a remarkable contribution to the common good by
electing to volunteer for research studies. We owe them our best effort.
Thank you, Mr. Chairman. I will be pleased to answer any questions you may have.
11
Clinton Presidential Records
Digital Records Marker
This is not a presidential record. This is used as an administrative
marker by the William J. Clinton Presidential Library Staff.
This marker identifies the place of a tabbed divider. Given our
digitization capabilities, we are sometimes unable to adequately
scan such dividers. The title from the original document is
indicated below.
Satcher - Human
Subject Protection
Divider Title:
DRAFT
TESTIMONY OF
DAVID SATCHER, M.D., PHD.
CENTERS FOR DISEASE CONTROL AND PREVENTION
PUBLIC HEALTH SERVICE
BEFORE THE
COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
SUBCOMMITTEE ON HUMAN RESOURCES
U.S. HOUSE OF REPRESENTATIVES
MAY 8, 1997
DENI
INTRODUCTION
Good morning, I am Dr. David Satcher, Director of the Centers for Disease Control and
Prevention (CDC).
I am pleased to have the opportunity to testify before the Subcommittee on Human Resources on
the very important topic of informed consent in government-sponsored research.
CDC is one of the Federal agencies in the Department of Health and Human Services that is
actively engaged in conducting research involving human subjects. CDC conducts public health
research which includes, but is not limited to, clinical trials, epidemiologic studies, health status
surveys, laboratory studies, and intervention studies. We, therefore, are particularly concerned
with protecting human research subjects and in assuring that an informed consent process is used
that allows individuals to decide freely whether to participate in a research study.
In thinking about the mission of CDC and the role that research plays in achieving that mission,
two points need to be made that relate to this hearing. The first is that we must maintain clear and
unwavering respect for the dignity and worth of all Individuals. The second is that there is no /
substitute for good, rigorous science. Our ethics that ensure the rights and welfare of study
participants must bo as sound as our science.
CDC is committed to protecting all persons who agree to participate in research studies We
2
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202 685 0.40,#28
believe strongly in the ethical principles that underlie the conduct of research delineated by The
National Commission for the Protection of Human Subjects of Medical and Behavioral Research
in The Belmont Report- that individuals are autonomous and are capable of making decisions
about their lives, that individuals should be protected from harm, that benefits should be
maximized to individuals, and that there is fairness among individuals in the distribution of risks
and benefits. We also make every effort to comply fully with Title 45, Code of Federal
Regulations, Part 46 for Protection of Human Subjects, known as the Common Rule. We are,
however, aware of incidents indicative of lapses in our efforts to protect individuals who have
participated in research we have conducted. I am confident that the corrective actions we have
taken are working to protect research subjects.
PROTECTION OF HUMAN RESEARCH SUBJECTS
Excellence in science requires a mastery of the ethical principles that address the protection of
human subjects and a mastery of the scientific method. We strive for excellence although we
have sometimes failed to achieve it. For example, the Department of Health and Human Services
continues to deal with the aftermath of the Tuskegee Syphilis Study. This study was conducted
by the U.S. Public Health Service in 1932 to 1972 to learn more about untreated syphilis. In so
doing, treatment was withheld from a group of poor black men infected with the disease. In
addition, the participants were not informed about the study and their voluntary consent to
participate was not obtained.
Recognition of the ethical violations committed in this study led the Federal government to
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delineate ethical principles for guiding research and to develop Federal regulations outlining
policies and procedures for protecting human subjects. We are doing a better job of protecting
persons who participate in research. However, the legacy left from the Tuskegee Syphilis Study
continues to affect negatively the willingness of minorities to participate in research. We must
learn from this study and move beyond it 80 that we restore trust in the research process.
I would like to describe to the Subcommittee what CDC does to protect human research subjects
In addition, I will discuss human subject protection issues related to a measles vaccine study we
conducted in Los Angeles and two hepatitis A vaccine studies we conducted in North and South
Dakota.
There are six institutional review boards (IRBs) that review research protocols that are developed
in the various components of CDC and ATSDR Some of the IRBs are headquartered outside of
Atlanta, such as at the National Center for Health Statistics (NCHS) in Hyattsville, Maryland and
at the National Institute for Occupational Safety and Health (NIOSH) in Cincinnati, Ohio. The
work of the IRBs is coordinated by the Deputy Associate Director for Science to facilitate
consistency in protocol review across the IRBs.
When the IRBs review research protocols, they examine the risks associated with the study, the
potential benefits, if any, that the study participants may receive, and whether the risks are
justified in light of the potential benefits to be gained from the study. They pay careful attention
to the selection of subjects, particularly the inclusion of traditionally under-represented
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sociodemographic groups, such as women and minorities. How participants are enrolled and how
informed consent is obtained are areas of particular concern.
Informed Consent Process
Because informed consent is essential to conducting ethical research, I would like to review the
informed consent process and how CDC assures that an effective consent process is used in each
research study. Informed consent is a process of interaction between the researcher and the
participant that begins when the participant is initially approached to participate in the study. The
researcher explains the study and may provide written information about the study. During this
phase of the process, the researcher fully discloses information about the study to the potential
participant. This is done in a way that the potential participant can understand the information.
Often, the potential participant asks questions and seeks out information about the study which
may not be included in any written material about the study; research staff then provide that
information to the participants. At the point where potential participants believe they understand
the study and the researcher believes the potential participants understand the study, the
researcher asks the potential participants whether they wish to participate in the study. A written
consent form is signed by the participants, unless explicitly waived by the IRB.
The informed consent process does not end at this point, but continues with the researcher
providing information to the subject throughout the life of the study. New information is
provided as it becomes available and any questions are answered that the subject may have. In
this manner, the consent process is an ongoing exchange of information during the duration of the
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study.
CDC's IRBs review studies to make certain that an adequate consent process is in place.
Although our IRBs focus heavily on the written consent document, they also review all
information that accompanies the consent document, including scripts used by researchers to
present information verbally about the study. Our IRBs require that certain key elements are
included in all consent forms, as specified in the Common Rule. In addition, we require that
consent forms be written at a reading level appropriate to the study population, generally at the
8th grade reading level. In studies involving vulnerable populations such as children or
incarcerated persons, we take extra precautions such as requiring assent to participate from
children 7 years and older as well as parental consent, and we make every effort to ensure that, if
incarcerated persons are to be included in a study, they are not coerced to participate.
Improvement in Human Subjects Protection Efforts
In recent years, we have taken several major steps to improve our human subjects protection
efforts, some of which pertain directly to obtaining informed consent. Three of the most
important steps are as follows. First, we have developed clear and consistent policies and
guidelines about protecting human subjects. For example, there is a policy for including women
and minorities in research, guidelines for defining research and non-research activities in public
health, a policy describing the roles of management for making decisions about human subjects
review, and a policy describing what types of research must be reviewed by an IRB. These
policies communicate a clear message about CDC's determination to protect human subjects and
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the role that investigators, managers and IRB members have in assuring that sound, ethical
research is conducted. The policies reinforce the Common Rule and the Bolmont Report by
stating the rights of individuals to have full disclosure of information related to the study in order
to decide whether to participate in the research.
Second, we have increased training on conducting ethical research and protecting human subjects
for CDC staff. We have sponsored workshops, and we will be introducing a multimedia,
computer-assisted training program. Our training is designed not only to increase knowledge and
awareness about the methods to assure the protection of subjects but also to create a workforce
that understands, appreciates, and values the rights of human beings who participate in research.
Third, we have changed the composition of our IRBs to assure that members reflect the race,
ethnicity, gender, and experiences of the persons who volunteer to be subjects in our studies. By
having IRB members who represent the study populations, issues about consent are raised from
the study population's perspective and the consent process and consent form can be tailored to
meet the needs of the study population.
DETAILS ON TWO SPECIFIC CDC RESEARCH STUDIES
Comparative Trial of Different Schedules of Edmonston-Zagreb (EZ) and Moraten Measles
Vaccines in the United States (EZ Measles Vaccine Study)
You have asked me to respond to issues of informed consent regarding two specific research
studies conducted by CDC. The first is a measles vaccine study we conducted in Los Angeles
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between 1990 and 1991. generally known as the EZ measles study. EZ stands for Edmonston-
Zagreb, the strain of virus used to make the vaccine. The second are studios of hepatitis A
vaccine we conducted in North and South Dakota in 1991 and 1992. I will address the EZ
measles vaccine study first.
From 1989-1991, the United States experienced a measles epidemic with more than 55,000 cases
and more than 120 deaths, most in young children. Many cases occurred in children too young to
be vaccinated with the standard Moraten measles vaccine, which has low efficacy among children
younger than 12 months of age, which is the routine age for vaccination in the US.
During the 1980s, multiple studies conducted around the world indicated that EZ measles vaccine
administered in a 10- to 100- fold greater potency than the standard dose for measles vaccine,
showed promising results in children below 12 months of age. The EZ vaccine was not a new
vaccine. It was being produced in several countries, including some European vaccine
manufacturers, and approximately 200 million doses of the vaccine had been administered as part
of routine immunization programs in many countries. What was new in the United States,
however, was its use in children under 12 months of age, as well as its use at a higher potency.
Based on a growing body of evidence, the World Health Organization (WHO) had recommended
in 1989 that high potency EZ vaccine be used routinely at 6 months of age in areas where there
was a substantial risk of measles mortality among young children. Because of measles cases and
deaths in children less than 12 months old, CDC undertook a study in May 1990 in U.S. infants
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to determine whether the results found in other countries could be duplicated in this country.
Beginning in June 1990, under the auspices of the Kaiser Foundation Research Institute and the
Los Angeles County Health Department, approximately 1500 children were enrolled and
randomly allocated into 5 different study groups to receive elther high or standard doses of EZ
vaccine, or standard doses of the Moraten vaccine. Approximately 1200 children were ultimately
vaccinated with one of the study vaccines at either 6, 9, or 12 months of age. The EZ vaccines
that were used were approved for investigation by the Food and Drug Administration (FDA)
following the procedures that FDA uses to approve any new drug for investigation of safety and
efficacy. In addition, the protocol for the study was reviewed and approved by the IRB at CDC
prior to awarding a contract to Kaiser Permanente and was later approved by the IRB at Kaiser.
The parent or parent's representative for each child enrolled in the measles study signed the
consent form which described the purpose of the study, the procedures to be followed, and the
benefits and risks of participation. Thus, the parents of the children who participated in the study
were aware they were participating in a vaccine study. However, we later acknowledged that the
consent form was deficient because the EZ measles vaccine was not identified as experimental,44
and parents were not given an adequate description of the foreseeable risks of vaccination and
alternative treatments.
During the time the EZ measles study was being conducted, data became available from a study in
Senegal, West Africa, suggesting lower survival in girls who received high potency measles
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vaccines compared with girls who received standard potency vaccines. In November 1990, CDC
staff attended a meeting in Senegal to review the status of the Senegal measles vaccine study It
was recommended at that time, that WHO should convene a group of independent consultants to
review data from the study and other similar studies.
Tn February 1991, WHO convened a panel of experts to review data from studies in Senegal and
Guinea Bissau which showed lower survival in girls (but not boys) who received high potency
measles vaccines; studies in other locations, however, showed no differences in survival. The
WHO concluded that the data did not support a change in the recommendation to continue use of
high potency measles vaccines. Reasons were that the studies were not designed to assess
mortality, the statistical methods limited interpretation, there was no specificity in the causes of
deaths, and the disproportionate mortality in girls did not have biological plausibility. In May
1991, CDC consulted with outside experts who reviewed the evidence from the studies showing
lower survival in children who received high potency vaccines and the experts recommended that
the Los Angeles measles vaccine study should be continued.
In October 1991, additional information became available from a study of high potency measles
vaccine in Haiti which suggested that girls vaccinated with the higher potency measles vaccines
were at increased risk of dying in the two to three years following vaccination. No serious
adverse effects were attributed to standard potency vaccines, including EZ. Because of this new
information on high potency measles vaccine, CDC stopped all use of EZ vaccine in the Los
Angeles study in October 1991. Eight months later, in June 1992, the World Health
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Organization reached a similar conclusion and recommended that high potency measles vaccines
of any strain should not be used to vaccinate children. EZ vaccine in standard doses continues to
be used around the world.
Following the termination of the EZ measles vaccine study, all children who participated in the
study were asked to enter a follow-up study to determine whether the vaccine had any adverse
health effects. Parents were informed of the reason for the follow-up study, including the fact that
some studies had found lower survival in those children who received the high potency vaccine.
Most have been medically followed and evaluated until reaching fours years of age.
To date, of all the children who have been evaluated, no child who took part in this study and
received the high potency EZ vaccine has suffered a significant health problem that can be
associated with the vaccine. CDC estimates that 95 percent of the children who were followed
up and revaccinated have serologic evidence of protection against measles. One child died
approximately 1 year after receiving a dose of standard potency EZ measles vaccine. Experts
reviewed the death certificate, the circumstances surrounding the death, and the autopsy report
and all agreed with the conclusion that the death was in all likelihood unrelated to the vaccine.
Standard potency measles vaccine has never been associated with higher mortality in any of the
vaccine studies. Recently, CDC working with Kaiser has conducted 4 special mortality search to
identify children who were in the study and died. A second death has been identified due to child
abuse. The child had received the Moraten vaccine at 12 months of age.
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In a thorough review of this study, the Office for Protection from Research Risks (OPRR)
concluded in 1995 that the EZ measles vaccine study was "scientifically and ethically justified".
however, the consent form was deficient because it failed to include a) an adequate explanation of
the purposes of the research and identification of the EZ vaccine as experimental, b) an adequate
description of the foreseeable risks of the experimental EZ vaccine and the standard Moraten
vaccine, and c) adequate disclosure or description of alternative treatments. Parents were
informed that any new vaccine may have side effects and risks which are currently unknown and
unforesecable; however, they were not told specifically about the potential risk of a failure to be
protected by the vaccine. Instead, parents were told that if their child was not protected, he/she
would receive a dose of the standard Moraten vaccine.
In light of these findings, OPRR required that a letter be sent to the parents describing the current
status of the research, plans for completion of the research and notification of subjects about
results, and any reasonably foreseeable future risks of participation in the research. In response to
the recommendations from the OPRR report, A letter signed by Kaiser Permanente was sent in
June 1996 covering the topics required by OPRR and approved by the IRB's at both institutions.
In addition, CDC and Kaiser Permanente sent a jointly signed letter of apology in September 1996
to the parents of the children enrolled in the study. In this letter, an apology was made for the
mistake on the consent form of the study, acknowledging that the parents who enrolled their
children in the study were not adequately informed.
CDC, in collaboration with Kaiser Permanente, is continuing follow-up of children who
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participated in the original study and analysis is ongoing. Analyses are expected to be completed
by the summer of 1997, at which time CDC will convene a group of experts to review the results.
Following the experts' review, CDC will inform parents about the conclusions from the study.
We acknowledge that we were in error by not fully informing parents of children who participated
in the EZ measles vaccine study. In addition to the steps takon to inform parents and following
the report of OPRR, CDC developed written information for investigators about the IRB review
process which included a checklist of elements to be included in consent forms. The number of
IRBs was increased, an additional member from the community was added to each board, the
number of staff who work with the IRBs was increased, and training on human subject
protections was implemented.
Evaluation of the Safety, Immunogenicity and Protective Effloacy of an Inactivated Hepatitis A
Vaccine in Healthy Children (North and South Dakota)
Now I would like to discuss the studies CDC and its collaborators conducted to ovaluate the
performance of inactivated hepatitis A vaccine prior to its licensure. These studies were done
primarily among American Indian populations living in North and South Dakota.
Prior to 1970, nationwide epidemics of hepatitis A occurred approximately every 10 years and
approximately 50 percent of persons born before 1950 have been infected. While the incidence of
hcpatitis A has declined substantially since the 1950's, more than 28,000 cases were reported to
CDC in 1996. CDC estimates that more than 150,000 Americans are infected with hepatitis A
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virus each year. Most people become infected because of community-wide epidemics that often
go on for several years. In addition, rates of hepatitis A vary among racial and ethnic groups.
American Indians and Alaska Natives have 8 rate of hepatitis A infection that is 20 times higher
than for whites and African Americans. Epidemics of hepatitis A occur approximately every 6 to
8 years in American Indian and Alaska Native communities throughout the United States, and
more than 80 percent of adults in these populations have been infected with the hepatitis A virus.
Prevention of hepatitis A has been somewhat problematic and has primarily relied on
improvements in hygienic conditions, including improved waste disposal, food sanitation, and
general living conditions. Until recently, the only immunization against hepatitis A was the use of
immune globulin, which only provided short-term protection and was not useful in preventing
community-wide epidemics. In the 1980's, a number of prototype hepatitis A vaccines were
developed and offered the potential to control and prevent this disease.
The most widely evaluated hepatitis A vaccines have been those produced in the same manner as
inactivated polio vaccine - hepatitis A virus is grown in tissue culture and is then inactivated
(killed) and formulated into a vaccine. In the late 1980's, experts in hepatitis questioned whether
the immunity produced by inactivated hepatitis A vaccine would protect against hepatitis A in
human populations. This question and the best means to evaluate the protective efficacy of
hepatitis A vacoine were discussed at several meetings, including an international mooting of
hepatitis, public health, and infectious disease experts which was co-sponsored by NIH and CDC
in November 1989. The consensus among the experts was that double-blind, placebo-controlled
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olinical trials should be conducted to determine the protective efficacy of hepatitis A vaccines. To
determine whether these vaccines protected against infection and/or disease, these studies had to
be carried out in populations that experienced high rates of hepatitis A virus infection. Since
these studies had to be carried out when these infections were occurring and because high rates of
hepatitis A do not occur uniformly over time, the best time to perform these studies was during a
community-wide epidemic.
As I previously indicated, CDC's national surveillance for viral hepatitis showed that the highest
rates of hepatitis A were in American Indian/Alaska Native populations. In addition, CDC and
Indian Health Service (IHS) epidemiologists had collaboratively characterized the epidemiology
of hepatitis A among various Native American populations. They had identified these high rates
of infection and the recurrent nature of community-wide epidemics in these populations, and they
had accurately predicted when these epidemics would occur in some of these communities. It was
anticipated that several American Indian communities in North and South Dakota would have
hepatitis A epidemics during the early 1990's. The evaluation of hepatitis A vaccine in controlled
clinical trials during those predicted epidemics could determine the vaccine's efficacy, its potential
to provide long-term protection against hepatitis A, and its potential to control these epidemics.
These epidemiologic issues and the logistics of such trials were discussed in a 1989 meeting of
CDC epidemiologists and laboratory scientists, IHS clinicians and epidemiologists, and scientists
from the vaccine manufacturers. It was the predicted recurrence of epidemic hepatitis A on
reservations in the IHS Aberdeen Area in South and North Dakota and the need to determine the
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efficacy of inactivated hepatitis A vaccine in preventing hepatitis A that led to the collaborative
effort between CDC, IHS and SmithKline Beecham (SKB).
The study was designed to determine the efficacy of inactivated hepatitis A vaccine in protecting 3
to 12 year-old children against hepatitis A. Children participating in the study were to receive
either the investigational, unlicensed (for commercial use) hepatitis A vaccine or the licensed
hepatitis B vaccine produced by SKB. Because hepatitis B vaccine does not provide protection
against hepatitis A, it was used as a placebo treatment in the study. The protocol, the consent
forms, and the informational materials were reviewed and approved by the CDC and IHS IRBs.
The study was also approved by the IHS Aberdeen Area Research Committee.
Participation in the study was voluntary and only occurred after the child's parent provided
written informed consent, and children 7 years and older gave assent. In addition to the
requirement of individual informed consent for participation, it was also required that all studies
conducted among American Indians be approved by the local tribal council or health board. This
was also done for these studies. In obtaining consent for participation in the study, every effort
was made to ensure that the parents understood the reason for the study, the potential risks and
benefits of the study, and what was expected if their child participated. They were told the
number of shots their child would receive, the number of blood specimens that would have to be
drawn, and that neither they nor the study nurse would know which vaccine was being given to
their child until the study was completed or unless the child experienced an adverse event. While
most of the informational material was written in English, some materials were written in the
16
Lakota language. In addition, most of the study nurses were tribal members and Lakota-speaking
personnel were available, if needed.
Studies to evaluate the efficacy of inactivated hepatitis A vaccine were initiated on two
reservations. The first study was conducted on the Pine Ridge reservation in South Dakota where
it was approved by the Pine Ridge Ogiala Sioux Tribal Council in June 1990. An estimated 2400
children were needed for the study and recruitment began in April 1991. Written informed
consent had been obtained from parents of more than 500 children and assent obtained from
children 7 years and older when the Pine Ridge Ogiala Sioux Tribal Council rescinded approval of
the study in October 1991 as a result of concerns raised by residents of one reservation
community. At the time the study ended, only one child had been vaccinated. During 1991, the
epidemic of hepatitis A on the Pine Ridge reservation went on unabated with more than 500 cases
and one death from hepatitis A.
In February 1991. the Standing Rock Sloux Tribal Council gave approval for the same study to be
conducted on the Standing Rock reservation in North Dakota. Between then and the summer of
1991, extensive community education was undertaken through radio talk shows, newspaper
articles, and Information pamphlets. Participant recruitment began during the summer of 1991
and was conducted by three study nurses who were American Indians. As was the case in Pine
Ridge, written informed consent was received from parents for their child's participation in the
study; children older than 7 years provided assent. A total of 245 children were enrolled in the
study, 41 percent of whom were not American Indian.
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In February 1992, the Standing Rock Tribal Council passed a resolution halting the study,
although many parents wanted the study to continue. In March 1992, the tribal council decided
that children who were already enrolled in the study could continue but no further enrollment
could take place. However, the IHS and CDC decided that, given the interruption of the study
and the limited number of children enrolled, a scientifically valid determination of the efficacy of
the hepatitis A vaccine could no longer be made. Therefore, the study on the Standing Rock
reservation ended and the codes were broken to reveal which vaccine was received by each child.
For those who received hepatitis B vaccine, they were given the opportunity to receive the doses
needed to complete the vaccination series. For those who had received hepatitis A vaccine, they
were offered the complete hepatitis B vaccination series and informed they could receive the
remaining doses in the hepatitis A series when a hepatitis A vacoine was licensed for commercial
use. These children were offered the hepatitis A vaccine series when it was licensed in 1995.
On both reservations, the studies were stopped when the tribal councils withdrew their support.
The tribal councils rescinded their approvals of the studies because a small group of citizens on
each reservation raised concerns about the conduct of government research in the American
Indian population. Among their concerns was that informed consent was not obtained. However,
in these studies the written consent forms identified the study as research, contained all the
information about the vaccines and the study, and provided the parents with full disclosure. The
consent forms were typed on stationary identifying the vaccine study as the Hepatitis A Vaccine
Prevention Program and may have been perceived as a misrepresentation of the study to the
participants. The use of the stationary was an oversight by the CDC and IHS investigators.
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In 1995, the inactivated hepatitis A vaccine we attempted to evaluate in these studies was licensed
for commercial use by FDA based on efficacy data obtained in a clinical trial conducted in
Thailand. CDC's Advisory Committee on Immunization Practices (ACIP) currently recommends
that children 2-14 years of age in American Indian or Alaska Native communities, or other
communities with high rates of hepatitis A, be routinely vaccinated to prevent and control this
disease. Currently, widespread hepatitis A immunization programs are being conducted in the
IHS Aberdeen Area and in other American Indian and Alaska Native populations and have
effectively interrupted and prevented community-wide epidemics in those areas.
Mr. Chairman, I would like to describe to you the importance of conducting vaccine-related
research. Vacoines are the most powerful tools to prevent infectious diseases like measles and
polio. The introduction of polio vaccine into the childhood immunization program has led to a
reduction of wild virus induced disease from about 20,000 cases annually to zero in the United
States. Widespread use of measles vaccine has decreased reported measles from more than
500,000 cases annually during the decade prior to vaccine availability to less than 1,000 cases per
year from 1993 to 1996 in the United States. Vaccines have led to the worldwide eradication of
smallpox, and the elimination of polio from the Americas.
Currently, according to a CDC maintained database using manufacturer reports of net doses
distributed, approximately 140 million doses of the most commonly used vaccines are distributed
each year in the United States. These vaccines are used for both children and adults. The current
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immunization schedule calls for children to be protected against 10 diseases using 8 vaccines.
Research is one of the best strategies to improve those products and develop new ones which are
essential for the health and well-being of America's children and adults. Vaccine-related research
has been an ongoing activity at CDC for many years and will continue to be a central focus; it is
critical to preventing diseases and saving lives. While continuing this very important research
endeavor, we will continue to work toward perfecting the informed consent process.
SUMMARY
I want to close by iterating several points. Good, ethical science is the foundation of sound public
health practice. We cannot carry out our public health mission without the benefit of the
knowledge gained through research and we cannot carry out research that does not protect the
individuals or communities who participate. Assuring the rights and welfare of persons who
participate in research is of paramount importance and the informed consent process is integral to
assuring individuals' rights.
Concerns about the EZ measles vaccine study and the hepatitis A vaccine study have heightened
sensitivity to issues surrounding the protection of human subjects. Moreover, these studies point
to the important and significant role the community has in conducting research. We have made
changes in our human subjects review process and will continue to make changes to achieve the
best review process possible. We are also exploring ways to improve involvement of the
community in the research process. Just as it is Imperative to inform individual subjects, it is
imperative to inform the community from which the subjects come and to encourage active
20
participation of the community in the conduct of research. The quality of research is greatly
enhanced by the community's participation and trust in the research.
CDC's goal is to ensure the fullest possible disclosure and the greatest possible protection from
harm for persons and communities who participate in public health research studies. We are
committed to building and maintaining the trust that is necessary between researchers and persons
who participate in health studies.
I would be glad to respond to any questions that the Subcommittee may have.
21
Clinton Presidential Records
Digital Records Marker
This is not a presidential record. This is used as an administrative
marker by the William J. Clinton Presidential Library Staff.
This marker identifies the place of a tabbed divider. Given our
digitization capabilities, we are sometimes unable to adequately
scan such dividers. The title from the original document is
indicated below.
Gulf War
Divider Title:
Garmanee
of
Research
Final Report
4
PAC Gulf War vet Illnesses
EXECUTIVE
SUMMARY
President Clinton established the Presidential Advisory Committee on Gulf War Veterans' Illnesses
in May 1995 to ensure an independent, open, and comprehensive examination of health concerns
related to Gulf War service. The Committee, a 12-member panel made up of veterans, scientists,
health care professionals, and policy experts, held 18. public meetings between August 1995 and
November 1996. We heard invited testimony and received public comment at each meeting. Staff
held in-house consultations, received briefings, conducted literature reviews, interviewed veterans,
and reviewed government documents throughout our tenure. We analyzed information on the full
range of activities specified in our charter research, coordinating efforts, medical treatment, out-
reach, reviews conducted by other governmental and nongovernmental bodies, risk factors
(exposure and health effects), and chemical and biological weapons to reach our findings and rec-
ommendations. The Final Report presents the Committee's conclusions in three major parts:
an evaluation of the government's response to Gulf War veterans' illnesses;
an evaluation of available data on the nature of Gulf War veterans' illnesses; and
an evaluation of available data on the health effects of Gulf War risk factors.
Findings and recommendations specific to the needs of Gulf War veterans appear throughout the
Final Report and are summarized here.
The Committee's primary focus was on Gulf War veterans' illnesses, but parallels with the health
concerns of Vietnam veterans became increasingly obvious over time. Thus, the Committee also
decided to include in its analysis, recommendations on how to anticipate and avoid post-conflict
health concerns.
ADDRESSING GULF WAR VETERANS' ILLNESSES
Overall, the Committee is encouraged by the government's response to the range of health-related
problems experienced by Gulf War veterans. We found the Vet Centers and Persian Gulf Family
Support Program established by the Department of Veterans Affairs (VA) to be effective outreach
programs and recommend that these field-based initiatives serve as models for health education
and risk communication campaigns.
The Committee agrees with the Institute of Medicine's conclusion that the clinical evaluation pro-
grams of the Department of Defense (DOD) and VA are excellent for the diagnosis of Gulf War veterans'
illnesses. We found some shortcomings in the availability of treatment, particularly with regard to mental
health and reproductive health, and recommend better follow-up care in these areas.
Presidential Advisory Committee
The Committee found that the government's research portfolio is appro-
priately weighted toward epidemiologic studies and studies on stress-related
disorders that are likely to improve our understanding of Gulf War veterans'
illnesses. To close gaps in the current knowledge base, we recommend addi-
tional research on the long-term health effects of low-level exposures to chem-
ical warfare agents and on the synergistic effects of pyridostigmine bro-
mide - a chemical warfare agent pretreatment - with other Gulf War risk fac-
tors. We also recommend more emphasis on basic and applied research on
the body's physical response to stress.
The existing knowledge base, including results from epidemiologic studies
of Gulf War veterans, data from clinical evaluation and treatment programs
for Gulf War veterans, and published literature from decades of toxicologic
research, enabled the Committee to reach some conclusions about the nature
and causes of Gulf War veterans' illnesses. We found that:
among the subset of the Gulf War veteran population examined
in the ongoing clinical and research programs, many veterans
have illnesses likely to be connected to their service in the Gulf.
current scientific evidence does not support a causal link between
the symptoms and illnesses reported today by Gulf War veterans
and exposures while in the Gulf region to the following environ-
mental risk factors assessed by the Committee: pesticides, chemi-
cal warfare agents, biological warfare agents, vaccines, pyri-
dostigmine bromide, infectious diseases, depleted uranium, oil-
well fires and smoke, and petroleum products.
stress is known to affect the brain, immune system, cardiovascu-
lar system, and various hormonal responses. Stress manifests in
diverse ways, and is likely to be an important contributing factor
to the broad range of physical and psychological illnesses cur-
rently being reported by Gulf War veterans.
Currently, the extent of service-connected illness among Gulf War vet-
erans is unknown, but the Committee anticipates results from the large,
population-based epidemiologic studies now underway will shed light on
this issue. In addition to the government's existing research, the Commit-
tee also recommends that mortality studies of Gulf War veterans con-
tinue, since some health effects, such as cancer, would not be expected to
appear until a decade or more after the end of the Gulf War.
Although somewhat slow to act at the end of the Gulf War, the govern-
ment is now providing appropriate medical care to Gulf War veterans and
has initiated research in the areas most likely to illuminate the causes of
their illnesses. The Committee identified ways to fine-tune those efforts,
but found that, for the most part, the government has acted in good faith
to address veterans' health concerns.
The Committee takes issue with the government's performance in one
key area: investigation of possible exposures of U.S. troops to chemical
Final Report
and biological warfare agents in the Gulf. We found substantial evidence of
site-specific, low-level exposures to chemical warfare agents. Moreover, we
found DOD's investigations to date superficial and unlikely to provide credi-
ble answers to veterans' and the public's questions. DOD's failure to seriously
investigate chemical warfare agent exposures also adversely affected deci-
sions related to funding research into possible health effects of low-level ex-
posures to chemical warfare agents. At the Committee's final meeting in
November 1996, DOD announced plans to revamp its investigatory and re-
search programs related to low-level chemical warfare agent exposure. The
Committee believes these efforts-combined with independent, high-quality
oversight-could begin to restore public confidence in the government's in-
vestigations of possible incidents of chemical warfare agent exposure. Given
that these steps come too late for the Committee to evaluate, however, we
emphasize the importance of the following recommendation:
To ensure credibility and thoroughness, further investigation of
possible chemical or biological warfare agent exposures during
the Gulf War should be conducted by a group independent of
DOD. Openness in oversight activities-including public access
to information and veteran participation-public notice of meet-
ings, opportunity for public comment, and regular reporting are
essential. Full public accountability is critical.
The government has a significant amount of ground to recover with Gulf
War veterans and the American public, who have come to question whether
a lack of data - on possible chemical warfare agent exposures, on the pre- or
post-deployment health of veterans, or on the location of troops in-
theater-indicates a lack of commitment to veterans' health. We recognize
the many laudatory actions taken to address the concerns of Gulf War veter-
ans, but the Committee believes the government can do a better job of antici-
pating and avoiding these types of problems. We offer the following find-
ings and recommendations in that spirit.
AVOIDING POST-CONFLICT HEALTH CONCERNS
The Committee was impressed by the professionalism of the individuals re-
sponsible for the government services we evaluated. We believe the exper-
tise needed to improve technical performance and implement policy and
procedural changes resides within the government, but we also believe that
underway
DOD and VA have much to learn from their peers in other agencies. There-
fore, the Committee recommends that:
A Presidential Review Directive (PRD) be issued to instruct the
National Science and Technology Council (NSTC) to develop an
interagency plan to address health preparedness for and readjust-
ment of veterans and families after future conflicts and peacekeep-
ing missions. The President's Committee of Advisors on Science
and Technology and other nongovernmental experts, as appropri-
ate, should be asked to review the plan 12 months after the PRD is
Presidential Advisory Committee
issued and again at 18 months to ensure national expertise is brought
to bear on these issues.
The NSTC's agenda should include the following recommendations
for better communication, data, and services, which were developed
during the Committee's evaluation of issues related to Gulf War veter-
ans' illnesses (see Final Report, chapters 2-4).
Better Communication
Clearly, the volunteers who serve in defense of our Nation deserve complete
and accurate information about the risks they face. An open democracy de-
mands that the public, as well, has the opportunity to engage in policy de-
bates that accompany the commitment of troops abroad. Therefore, the Com-
mittee recommends that:
DOD and VA immediately develop and implement a comprehen-
sive risk communication plan. This effort should move forward in
close cooperation with agencies that have a high degree of public
trust and experience with risk communication, such as the Agency
for Toxic Substances and Disease Registry and the National Institute
for Occupational Safety and Health.
FDA
FDA solicit timely public and expert comment on any rule that per-
mits waiver of informed consent for use of investigational products
in military exigencies. Among the areas that specifically should be
revisited are: adequacy of disclosure to service personnel; adequacy
infame
of recordkeeping; long-term followup of individuals who receive in-
cangerts
vestigational products; review by an institutional review board out-
side of DOD; and additional procedures to enhance understanding,
oversight, and accountability.
Better Data
Many of the health concerns of Gulf War veterans may never be resolved
fully because of the lack of data. The Committee identified problems related
to missing medical records, the absence of baseline health data, inaccurate
records of troop locations, and incomplete data on the health effects of what
should have been viewed as reasonably anticipated risks. To help prevent
similar problems in the future, we recommend that:
DOD officials at the highest echelons, including the Joint Chiefs of Staff
and the Commanders in Chief, assign a high priority to dealing with the
problem of lost or missing medical records. A computerized central
database is important. Specialized databases must be compatible with
the central database. Attention should be directed toward developing a
mechanism for computerizing medical data in the field (including classi-
fied information, if and when it is needed). DOD and VA should adopt
standardized recordkeeping to ensure continuity.
Final Report
the Persian Gulf Veterans Coordinating Board and other appropri-
ate departments and agencies be charged to develop a protocol to
implement the following recommendation, which was made in the
Committee's Interim Report: Prior to any deployment, DOD should
undertake a thorough health evaluation of a large sample of troops
to enable better postdeployment medical epidemiology. Medical
surveillance should be standardized for a core set of tests across all
services, including timely postdeployment followup.
the government develop more accurate and reliable methods of
recording troop locations to facilitate post-conflict health research.
DOD should make full use of global positioning technologies.
the government plan for further research on possible long-term
health effects of low-level exposure to organophosphorus nerve
agents such as sarin, soman, or various pesticides, based on studies
of groups with well-characterized exposures, including: a) cases of
U.S. workers exposed to organophosphorous pesticides; and b)
civilians exposed to the chemical warfare agent sarin during the
1994 and 1995 terrorist attacks in Japan. Additional work should
include followup and evaluation of an appropriate subset of any
U.S. service personnel who are presumed to be exposed during the
Gulf War. The government should begin by consulting with ap-
propriate experts, both governmental and nongovernmental, on
organophosphorus nerve agent effects. Studies of human popula-
tions with well-characterized exposures will be much more reveal-
ing than studies based on animal models, which should be given
lower priority.
the government continue to collect and archive serum samples
from U.S. service personnel when feasible.
research on possible causes and methods of prevention of ex-
cess mortality from external causes among veterans receives
high priority.
the government consider methods for routinely sampling military
populations regarding reproductive health so that an appropriate
baseline exists for evaluating reproductive outcomes following de-
ployment. In particular, DOD should consult with the National
Center for Health Statistics and strongly consider implementing its
National Survey of Family Growth and related methodologies for
collecting data.
the entire federal research portfolio place greater emphasis on ba-
sic and applied research on the physical effects of stress and on
stress-related disorders.
Presidential Advisory Committee
Better Services
The Nation has long provided care to veterans for service-connected
health problems. Unfortunately, the government continues to give short
shrift to veterans' legitimate concerns about reproductive health, and soci-
ety at large continues to stigmatize mental health concerns. Therefore, the
Committee recommends that:
the government conduct a thorough review of VA's policies concern-
ing reproductive health and seek statutory authority to treat veterans
and their families for service-connected problems. When indicated,
genetic counseling should be provided - either via VA treatment fa-
cilities or referral - to assist veterans and their families who have re-
productive concerns stemming from military service.
the government continue and intensify efforts to develop stress
reduction programs for all troops, with special emphasis on de-
ployed troops.
CONCLUSION
Approximately 697,000 men and women answered the call to serve in Opera-
tions Desert Shield/Desert Storm. In many important ways - through medi-
cal care, outreach, and research - the Nation has begun to pay its debt to these
service members. It is essential, now, to move swiftly toward resolving Gulf
War veterans' principal remaining concerns: How many U.S. troops were
exposed to chemical warfare agents, and to what degree?
A continued and sustained commitment to a healthy future for Gulf
War veterans - for all current and future veterans - is a priority for all
Americans. This Final Report represents the Committee's contribution to
that goal. We have given our full dedication to President Clinton's charge
and have appreciated the opportunity to serve Gulf War veterans and
their families.
20 Presidential Advisory Committee
vices. The surveillance process shall be specifically configured to as-
sess the effects of deployment on the health of the service member.
Rest
Finally, DOD has informed the Committee that it is completing a revi-
sion of its accession and retention physical standards. New policies and
separation review procedures for members who do not meet physical stan-
dards are under review. Moreover, the frequency of routine physical exam-
inations is now five (rather than' four) years, with increased emphasis on
the annual certificate of physical fitness.
Intern
Use Of Investigational Products
During Operations Desert Shield/Desert Storm, DOD anticipated the
threat of exposure of U.S. military personnel to chemical and biological
warfare. DOD used two investigational products in the Gulf War as pro-
phylactic measures against chemical and biological warfare agents: pyri-
dostigmine bromide (PB), a drug that is classified as an anticholinesterase
that binds reversibly with acetylcholinesterase, and botulinum toxoid (BT)
vaccine. Anthrax vaccine, an approved (licensed) product, also was used
as a prophylactic measure during the Gulf War.
DOD used two
Since PB and the BT vaccine were investigational product as used in the
Investigational products
Gulf War, DOD could not have administered them under normal circum-
in the Gulf War as
stances without the informed consent of the military personnel who re-
prophylactic measures
against chemical and
ceived them. The Food and Drug Administration (FDA), however, issued
biological warfare agents:
a new regulation in December 1990 that permitted use of these products
pyridostigmine bromide
without informed consent under specific military circumstances. Contro-
(PB) and botulinum
versy exists about whether creation of a waiver of informed consent mech-
toxold (BT) vaccine.
anism for these circumstances and use of these particular products with the
waiver was appropriate from an ethical, regulatory, and military perspec-
tive.
Issuance of the New Rule. An October 30, 1990, letter from the DOD Assis-
tant Secretary of Defense (Health Affairs) to the Department of Health and
Human Services (DHHS) Assistant Secretary for Health, requested an
amendment to FDA's informed consent regulations to include a combat
exigency as a circumstance in which medical professionals could deem it
"not feasible" to obtain the informed consent of a person receiving an in-
vestigational drug or vaccine. In response FDA formed a task force of gov-
ernment employees that concluded it would be possible to develop a rule
that would meet DOD's needs and be protective of the health and welfare
of military personnel. FDA published an interim final rule on December 21,
1990, that took effect immediately because of the urgency presented in the
military situation; the rule was upheld by the courts.
Under the interim rule, DOD initiates the process of obtaining the waiver of
informed consent for a combat exigency by filing a written request with FDA
along with an investigational new drug application (IND), a treatment proto-
col, and evidence that an institutional review board (IRB) has reviewed and
Interim Report 21
approved the use of the investigational drug or vaccine without in-
formed consent in the specific circumstances. Subsequently, the Com-
missioner of Food and Drugs may find that informed consent is not fea-
sible (and thus may be waived) only when withholding treatment
would be contrary to the best interests of military personnel and there is
no available satisfactory alternative therapy. The rule stipulates four ad-
ditional, nonexclusive criteria the Commissioner must consider: 1) the
strength of the evidence of the safety and efficacy of the drug (or vac-
cine) for the intended use; 2) the context in which the drug will be ad-
ministered (e.g., battlefield or hospital); 3) the nature of the disease or
condition for which the preventive or therapeutic treatment is intended;
and 4) the information to be provided to the recipients of the drug con-
cerning its potential risks and benefits.
Implementation of the New Rule. One week after the interim final rule
was issued, DOD requested waivers of informed consent for PB (30 mg
tablets) and BT vaccine. The request followed months of delibera-
tions - encompassing political, diplomatic, resource, logistical, and ethi-
cal considerations - within DOD. Ultimately, the decisionmaking in-
volved the Secretary of Defense, the Joint Chiefs of Staff, and Central
Command (CentCom) in what has been characterized as an intense
timeframe extending from August through December 1990. After exten-
About 8,000 troops
sive consultation and scientific analysis, the Commissioner of Food and
received BT vaccine.
Drugs approved DOD's waiver requests for BT vaccine and PB on De-
Approximately 250,000
military personnel took
cember 31, 1990, and January 8, 1991, respectively.
at least one dose of
Decisions about who would actually receive BT vaccine or take PB
PB, according to DOD
estimates.
were made by CentCom based on perceived threat and unit locations.
Although FDA issued a waiver of informed consent for PB and BT vac-
cine, CentCom determined that service personnel designated to receive
the BT vaccine should be given a choice as to whether they received the
vaccine. CentCom's decision was based on concerns about the ethics of
giving investigational vaccines to service personnel and on the insuffi-
ciency of vaccine supplies. The perception about PB appeared to dif-
fer - i.e., even though this drug was investigational for use in theater, it
had been widely used as an approved drug in other populations and,
therefore, absence of informed consent was not a cause for concern.
DOD estimates 150,000 service members received at least one dose of
anthrax vaccine (an approved biologic) between January 23 and Febru-
ary 28, 1991. About 8,000 troops received BT vaccine in the same period.
Approximately 250,000 military personnel took at least one dose of PB,
according to DOD estimates.
DOD currently is pursuing approval of BT vaccine and PB. DOD also
has asked FDA to make the interim regulation permanent.
22 Presidential Advisory Committee
Medical Recordkeeping in Theater
During the deployment period for the Gulf War, both active and reserve
personnel who developed medical problems were evaluated, treated and
returned to duty, hospitalized and returned to duty, or evacuated from the
theater of operations. Interactions between deployed forces and medical
care providers were recorded in'a paper-based system, and much of this
information was not incorporated in service members' permanent health
records. This breakdown was particularly common for the recording of im-
munizations given in the theater of operations.
DOD guidelines required field units to maintain rosters of personnel
receiving vaccines that included name, Social Security number, rank, and
unit. In addition, vaccinations could be recorded on PHS-731 (Yellow shot
record) or on SF-601 (Immunization Record).
The secrecy of the vaccination program complicated recordkeeping and
created some confusion and fear among service members. Medical person-
nel in the field received instructions that receiving the shots was classified
"Secret" and that the shots were not to be discussed with anyone. DOD
The secrecy of the
asserts the secrecy protected troops since it limited Iraq's knowledge of
vaccination program
U.S. defensive capabilities.
complicated
recordkeeping and
When the vaccinations were recorded in medical records retained by
created some confusion
and fear among service
individual service members, they were encoded to eliminate document
members.
classification problems. Some medical officers have suggested, however,
that field personnel were unprepared to deal with what appeared to be
classified entries in centrally-maintained medical records, presenting a se-
rious obstacle to proper records management.
According to testimony presented to the Committee, in the flurry of person-
nel anxious to come home at the end of the Gulf War, much of the documenta-
tion about vaccinations was lost or destroyed. DOD maintains rosters of a frac-
tion of the service members who received anthrax and BT vaccines; most are
missing. DOD also has reported to the Committee that it is not possible to de-
termine with certainty who actually ingested PB, or in what doses, because
service members were supplied PB for self-administration.
FINDINGS
No uniformity existed among the services in their predeployment
or demobilization policies and procedures at the time of Operation
Desert Shield/Desert Storm.
There is little evidence that quality control procedures were em-
ployed to ensure that existing policies were actually carried out
during deployment or demobilization.
Interim Report 23
DOD's policies and procedures were not adequate in all cases
to prevent members with preexisting conditions from deploy-
ing or to identify health problems extant at the time of demobi-
lization, and these conditions could have contributed to some
current health concerns.
FDA and DOD undertook an urgent and orderly course of ac-
tion under the circumstances to devise a means to address the
real threat of chemical and biological warfare in the Gulf War.
FDA has not been proactive in addressing public comments on
the interim final rule or in devising better long-term methods
for governing military use of drugs, vaccines, devices, and an-
tibiotics intended for chemical and biological warfare defense.
When a waiver of informed consent is granted, the government
has a strong obligation to conduct long-term followup of mili-
tary personnel who receive investigational products.
DOD did not keep adequate records on who received anthrax
and BT vaccines and PB in the Gulf War theater. There is little
possibility now of developing reliable data about which or how
many persons received those products.
DOD and VA admit to problems with missing or lost medical
records, but neither system appears to place a priority on cor-
recting these problems.
DOD's rationale for the requirement that records of vaccina-
tions be kept secret was not well understood. This requirement
confused and complicated recordkeeping procedures and hin-
dered systematic followup of health issues.
The issue of accurate medical and vaccination records is central
to the concerns of many ill veterans, and the absence of records
has been suggested by some as evidence that the government is
engaging in a cover-up of its own predeployment practices.
RECOMMENDATIONS
DOD should regularly review and update the policies and pro-
cedures to govern the pre-, during, and postdeployment medi-
cal assessment of the Ready Reserve to ensure they are current
and adequate.
DOD should establish a quality assurance program to ensure
compliance with pre-, during, and postdeployment medical as-
sessment policies.
24 Presidential Advisory Committee
Prior to any deployment, DOD should undertake a thorough
health assessment of a large sample of troops to enable better post-
deployment medical epidemiology. Medical surveillance should
be standardized for a core set of tests across all services and in-
clude timely postdeployment followup.
Given that FDA's interim rule is still in effect, DOD should de-
velop enhanced orientation and training procedures to alert ser-
vice personnel they may be required to take drugs or vaccines not
fully approved by FDA if a conflict presents a serious threat of
chemical and biological warfare.
If FDA decides to reissue the interim final rule as final, it should
A
first issue a Notice of Proposed Rule Making. Among the areas
that specifically should be revisited are: adequacy of disclosure to
service personnel; adequacy of recordkeeping; long term followup
of individuals who receive investigational products; review by an
IRB outside of DOD; and additional procedures to enhance under-
standing, oversight, and accountability. The Committee, at this
time, withholds judgment on the adequacy of the current rule.
DOD should assign a high priority to dealing with the problem of
lost or missing medical records. A computerized central database
is important. Specialized databases must be compatible with the
central database. Attention should be directed toward developing
a mechanism for computerizing medical data (including classified
information, if and when it is needed) in the field. DOD and VA
should adopt standardized recordkeeping to ensure continuity.
Clinton Presidential Records
Digital Records Marker
This is not a presidential record. This is used as an administrative
marker by the William J. Clinton Presidential Library Staff.
This marker identifies the place of a tabbed divider. Given our
digitization capabilities, we are sometimes unable to adequately
scan such dividers. The title from the original document is
indicated below.
Tuskegee Legacy Report
Divider Title:
Bioething
#4
end
REPORT OF THE TUSKEGEE
SYPHILIS STUDY
LEGACY COMMITTEE
FINAL REPORT
VANESSA NORTHINGTON GAMBLE, MD, PhD, CHAIR
JOHN C. FLETCHER, PhD, CO-CHAIR
May 20, 1996
TUSKEGEE SYPHILIS STUDY LEGACY COMMITTEE1
In 1932, the United States Public Health Service (USPHS)
initiated the Tuskegee Syphilis Study to document the natural
history of syphilis. The subjects of the investigation were 399
poor black sharecroppers from Macon County, Alabama, with latent
syphilis and 201 men without the disease who served as controls.
The physicians conducting the Study deceived the men, telling
them they were being treated for "bad blood". 2 However, they
deliberately denied treatment to the men with syphilis and went
to extreme lengths to ensure that they would not receive any
therapy from other sources. In exchange for their participation,
the men received free meals, free medical examinations, and
burial insurance.³
On 26 July 1972 a front-page headline in the New York Times
read, "Syphilis Victims in U.S. Study Went Untreated for 40
Years. The accompanying article publicly revealed the details
1
The Committee was established at a meeting at Tuskegee
University, January 18-19, 1996. All communications with the
Committee should be addressed to the Chair of the Committee,
Vanessa Gamble, M.D., PhD, History of Medicine Department, 1300
University Ave., Madison, WI 53706 (608) 262-5319. FAX: (608)
262-2317; email: [email protected] A list of the
Committee members is attached. The Committee wishes to thank
report. Judith A. Houck for her assistance in the preparation of this
2The term "bad blood" encompassed several conditions including
syphilis, anemia, and fatigue.
³For a complete history see Jones, James H, Bad Blood: The
Tuskegee Syphilis Experiment, new and expanded ed., New York: Free
Press, 1993.
4Jean Heller, "Syphilis Victims in the U.S. Study Went
Untreated for 40 Years, " New York Times, 26 July 1972: 1, 8. The
story first broke the previous day in the Washington Star.
of the Tuskegee Syphilis Study - "the longest nontherapeutic
experiment on human beings in medical history"5. In the almost
twenty-five years since its disclosure, the Study has moved from
a singular historical event to a powerful; metaphor. It has come
to symbolize racism in medicine, ethical misconduct in human
research, paternalism by physicians, and government abuse of
vulnerable people.
The Tuskegee Syphilis Study continues to cast its long
shadow on the contemporary relationship between African Americans
and the biomedical community. Several recent articles have
argued that the Tuskegee Syphilis Study has predisposed many
African Americans to distrust medical and public health
authorities. The authors point to the Study as a significant
factor in the low participation of African Americans in clinical
trials and organ donation efforts and in the reluctance of many
black people in seeking routine preventive care. As one AIDS
educator put it, "so many African American people that I work
with do not trust hospitals or any of the other community health
care service providers because of that Tuskegee Experiment. It
⁵Jones, Bad Blood, 91.
'See for example, Asim, Jabari, "Black paranoia far-fetched?
Maybe, but understandable, The Phoenix Gazette February 23, 1993
Op-Ed: A13; Karkabi, Barbara, "Blacks' health problems addressed,"
The Houston Chronicle April 10, 1994 Lifestyle: 3; "Knowledge,
attitudes and behavior; conspiracy theories about HIV puts
individuals at risk," AIDS Weekly, November 13, 1995.
3
is like
...
if they did it then they will do it again.
The Tuskegee Syphilis Study Legacy Committee is dedicated to
preserving the memory of the Study while moving beyond it,
transforming the legacy into renewed efforts to bridge the chasm
between the health conditions of black and white Americans. To
this end, the Committee is pursuing two inseparable goals:
1) to persuade President Clinton to publicly apologize for past
government wrongdoing to the Study's living survivors, their
families, and to the Tuskegee community, and 2) to develop a
strategy to redress the damages caused by the Study and to
transform its damaging legacy.
In his recent apology for the government's role in human
radiation experiments (1944-1974), President William J. Clinton
claimed that "the American people
...
must be able to rely upon
the United States to keep its word, to tell the truth, and to do
the right thing," and that "when the government does wrong, we
have a moral responsibility to admit it. 118 President Clinton is
not alone in his belief that an apology for past wrongs is "doing
the right thing." Recently, the Southern Baptist Church
apologized to all African Americans for its stand on slavery
during the Civil War and the Prime Minister of Japan similarly
apologized to the people of the United States for the attack on
Thomas, Stephen B. and Quinn, Sandra Crouse, "The Tuskegee
Syphilis Study, 1932-1972: Implications for HIV Education and AIDS
Risk Programs in the Black Community," Am J of Pub Health. 1991;
81: 1503.
⁸President William J. Clinton, "In Acceptance of Human
Radiation Final Report," Washington, DC, October 3, 1995.
4
Pearl Harbor.9
And yet, these apologies do not merely acknowledge
wrongdoing: they act as a first step toward healing the wounds
inflicted. President Clinton, for example, saw his apology as
"laying the foundation stone for a new era"¹⁰ in trying to
regain the trust of the country.
It is within this context of doing the right thing,
redressing past injuries, and regaining trust that the Committee
adamantly believes that a Presidential apology to the victims of
Tuskegee is critical to heal the devastating wounds that remain
from this shameful episode in the history of medical research.
1. A Presidential Apology for the Tuskegee Syphilis Study
a) Moral and physical harms to the community of Macon
County
It is clear that the U.S. government scientists irreparably
harmed hundreds of socially and economically vulnerable African-
American men in Macon County, their family members, and their
descendants by deliberately deceiving them and withholding from
them state of the art treatment. When the Tuskegee Study began,
the standard therapy for syphilis consisted of painful injections
of arsenical compounds, supplemented by topical applications of
mercury or bismuth ointments. Although this therapy was less
⁹See for example, Niebuhr, Gustav, "Baptist group votes to
repent stand on slaves, " New York Times 21 June, 1995: A2 and
Watanabe, Teresa and David Holley, "Japan Premier offers apology
for WWII role, Chicago Tribune 15 August, 1995: A10.
¹⁰Clinton, 3 October, 1995.
5
effective than penicillin would later prove to be, in the 1930s
every major textbook on syphilis recommended it for the treatment
of the disease. After penicillin became available, the
researchers withheld its use as well. Published medical reports
have estimated that between 28 and 100 men died as a result of
their syphilis. 11 Due to a lax study protocol, we cannot be
sure that all the men had latent syphilis. It is therefore
entirely possible that the infected men passed syphilis to their
sexual partners and to their children in utero. 12 Thus physical
harm may not be limited just to the men enrolled in the Study.
b) No public apology has ever been made
In the aftermath of a Health, Education and Welfare task
force report, a Senate hearing, and an out of court legal
settlement, the U.S. government provided economic compensation
and continues to give free health benefits to the surviving
subjects and their families. However, no public apology has ever
been offered for the moral wrongdoing that occurred in the name
of government medical research. No public official has ever
stated clearly to the nation that the Tuskegee Syphilis Study was
morally wrong from its inception, and no public official has ever
apologized to the survivors and their families. Yet, an apology
is sorely needed. The Committee believes that an apology from
11 Jones, Bad Blood, 2.
12 Hammonds, Evelynn M, "Your silence will not protect you:
Nurse Eunice Rivers and the Tuskegee Syphilis Study, in The Black
Women's Health Book: Speaking for Ourselves ed. Evelyn C. White,
2nd ed., Seattle: Seal Press, 1994: 323-331.
6
the President could facilitate the healing of the victims and the
nation.
c) The harmful legacy of the Study
The historical record makes plain that African American's
distrust of the medical profession predates the revelations of
the Tuskegee Syphilis Study and involves a myriad of other social
and political factors. Nevertheless, the Study has become a
powerful symbol for the fear of exploitation in research and the
deprivation of adequate medical care that is widespread in the
African-American community. Recent articles argue that Tuskegee
has created a climate of suspicion that taints the relationship
between many African Americans and the medical profession. The
Tuskegee Study is offered as the reason why few blacks
participate in research trials, 13 why the need for transplant
organs by African Americans widely surpasses the supply,14 and
why African Americans often avoid medical treatment. 15 It is
also offered as an explanation as to why rumors about genocide
persist in the African-American community, ranging from the
notion that AIDS is a plot to exterminate black people to the
idea that needle exchange programs fuel a drug epidemic that
¹³Gamble, Vanessa, "A Legacy of Distrust: African Americans and
Medical Research, " Am J of Preventive Medicine, November/December
1993: 35-38.
14 Fear Creates Lack of Donor Organs Among Blacks," Weekend
Edition, National Public Radio, 13 March 1994.
¹⁵See for example, Voas, Sharon, "Aging black sick, scared;
past abuses, tradition keep them from clinic," Pittsburgh Post-
Gazette, August 27, 1995: B1.
7
disproportionately affects black neighborhoods. 16 For many
African Americans, the fact that the Tuskegee Study occurred at:
all proves that black life is not valued. The Committee believes
that an apology combined with a strategy for addressing the
damages of the Tuskegee legacy would begin the process of
regaining the trust of people of color.
d) The harm done to the community and the University
Because the name of the Study points to Tuskegee Institute
(now Tuskegee University) rather than the United States Public
Health Service, it clouds the funding and responsibility for the
Study. Although facilities and staff of the Tuskegee Institute
were involved, primary direction came from the government under
the auspices of the USPHS. The notoriety of the Study obscures
the achievements of the Tuskegee Institute in improving the
health care of African Americans. These achievements include
initiating the National Negro Health Week, building the John A.
Andrew Hospital, creating the John A. Andrew Clinical Society,
establishing a nurse training school, and organizing a school for
midwives.
¹⁶Bates, KG, "Is it Genocide?" Essence, September 1990: 76;
Thomas, Stephen, and Quinn, Sandra, "Understanding the Attitudes
of Black Americans,' In Stryker, J. and Smith, MD, eds.
Dimensions of HIV Preventions: Needle Exchange, Menlo Park: The
Henry J. Kaiser Family Foundation; 1993: 99-128; Kirp, David and
Bayer, Ronald, "Needles and Race, Atlantic. July 1993: 38-42.
8
The Apology: Context and Opportunity
The Committee urges President Clinton to apologize on behalf
of the American government for the harms inflicted at Tuskegee.
The apology should be directed to those most directly harmed: to
the elderly survivors of the Study, to their families, and to the
wider community of Tuskegee and its University. Also included
within the apology should be all people of color whose lives
reverberate with the consequences of the Study.
As the highest elected official of the United States, the
President should offer the apology for the Study which was
conducted under the auspices of the United States government.
The significance of a presidential apology was recognized
recently when the President apologized to those harmed by Cold
War radiation experiments as a way to regain confidence of the
American people. In the context of President Clinton's stated
desire to bridge the racial divide, this apology provides the
opportunity to begin to heal the racial wounds that persist in
this country.
Given the ages of the living participants and the period of
time since the Study was disclosed, we believe that the apology
should be offered swiftly. There are only eleven survivors; a
twelfth died as recently as March 3, 1996. We recommend that
the government issue the apology from Tuskegee University,
perhaps linked with an early meeting of the new National
Bioethics Advisory Commission (NBEAC) Because the Tuskegee
9
Study is a starting point for all modern moral reflection on
research ethics, a meeting of the NBEAC at Tuskegee in
conjunction with a presidential apology would be an ideal new
beginning.
2.
Transforming the Legacy
Although a public apology is necessary to heal the wounds of
Tuskegee, it alone would not be sufficient to assure the nation
that research like the Tuskegee Syphilis Study will not be
duplicated. Despite the significance of a Presidential apology,
it must not be an isolated event. Consequently, the Committee
also recommends the development of a mechanism to move beyond
Tuskegee and to address the effects of its legacy. The Committee
strongly urges the development of a professionally staffed Center
at Tuskegee University, focused on preserving the national memory
of the Study and transforming its legacy.
Regret for past mistakes must be accompanied by a
determination to prevent future wrongs. Until now for black
Americans the legacy of the Tuskegee Syphilis Study has been a
negative one - a symbol of their mistreatment within American
society. The proposed Center could help transform the legacy of
Tuskegee into a positive symbol for all Americans by
demonstrating the importance of acknowledging past wrongs,
rebuilding trust, and practicing ethical research.
The new Center's mission would be to preserve the national
memory of the Syphilis Study for public education and scholarly
10
research, and to analyze and disseminate findings on effective
and ethically acceptable ways to address the profound mistrust
that is the tragic and enduring legacy of this Study, especially
among African Americans and other persons of color. (See Appendix
1.)
Although the Committee sees the creation of a Center as the
most valuable attempt to redress the damages of Tuskegee, we
envision several possible concurrent programs. These include:
1) a Minority Health Initiative, similar in scope to
the newly established Women's Health Initiative;
2) training programs for health care providers to
better understand the social and cultural issues of
providing health care and of conducting research in
communities of color;
3) a clearinghouse to help investigators conduct
ethically responsible research.
The Committee recommends that funding for the Center must
combine government and private funding. The announcement of a
federal challenge grant would be very useful as a catalyst for
future fundraising efforts.
It is undeniable that the Tuskegee Syphilis Study has
adversely affected the attitudes that many African Americans hold
toward the biomedical community and the United States government.
But despite the long shadow that it casts, we now have an
opportunity to challenge this legacy and create a more beneficial
one.
11
APPENDIX 1
Possible functions for a Tuskegee research center:
a) to create and maintain a public museum in Tuskegee,
Alabama, to preserve the memory of the Study and to provide
a focal point for efforts to transform its negative legacy;
b) to provide a place for scholars to examine the ethical,
legal, and social significance of the Study and other issues
in bioethics;
c) to conduct public education on the Study and its legacy
in schools, community organizations, and medical
institutions;
d) to aid in the production of audiovisual aids for public
education that will place the Study within its broadest
social and historical context and provide suggestions for
transforming its past legacy;
e) to assure the rigorous preservation of presently
endangered documents and other records to further encourage
studies of race, ethnicity, and medicine;
f) to offer support for medical researchers seeking ways to
conduct research in diverse populations that is both
scientifically sound and ethically responsible.
12
APPENDIX 2
TUSKEGEE SYPHILIS STUDY LEGACY COMMITTEE
Ms. Myrtle Adams
Chairman, Macon County Health Care Authority
704 Patterson St.
Tuskegee, AL 36088
Ms. Patricia Clay
Administrator, Macon County Health Care Authority
PO Drawer 180
Tuskegee, AL 36088
Dr. James A. Ferguson
Dean, School of Veterinary Medicine
Patterson Hall
Tuskegee University
Tuskegee, AL 36088
Dr. John C. Fletcher, co-chair
Director, Center for Biomedical Ethics
Cornfield Professor of Religious Studies
University of Virginia
Box 348 HSC
Charlottesville, VA 22908
Dr. Vanessa Northington Gamble, chair
Associate Professor of History of Medicine and Family Medicine
University of Wisconsin Medical School
1300 University Ave.
Madison, WI 53706
Dr. Lee Green
Assistant Professor
University of Alabama
PO Box 870312
Tuscaloosa, AL 35487
Ms. Barbara Harrell
Director, Division of Minority Health
Alabama Department of Public Health
434 Monroe St.
Montgomery, AL, 36130-3017
Dr. Bill Jenkins
Epidemiologist
Centers for Disease Control and Prevention
1600 Clifton Road, NE, MS-E02
Atlanta, GA 30333
13
Dr. James H. Jones
Professor of History
University of Houston
2202 Swift Road
Houston, TX 77030
Dr. Ralph Katz
Professor
Department of Behavioral Sciences and
Community Health
School of Dental Medicine
University of Connecticut Health Center
Farmington, CT 06030
Ms. Joan Echtenkamp Klein
Assistant Director for Historical
Collection and Services
Health Sciences Library, Box 234
University of Virginia Health Sciences Center
Charlottesville, VA 22908
Dr. Susan Reverby
Luella LaMer Professor for Women's Studies
Wellesley College
106 Central St.
Wellesley, MA 02181
Dr. Reuben Warren
Associate Director for Minority Health CDC
Centers for Disease Control and Prevention
1600 Clifton Road, NE, MS-D39
Atlanta, GA, 30333
Mr. Anthony Winn
Program Analyst
Minority Health Professions Foundation
20 Executive Park Drive, #2021
Atlanta, GA 30333
14
Clinton Presidential Records
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indicated below.
S & T and Economy
Divider Title:
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Returns to R & D
Divider Title:
STT+ Economy
10/16/95
Scott Wallsten
-10/13/95-
RETURNS TO RESEARCH AND DEVELOPMENT
Increasing the productivity of the American workforce is the key to higher living
standards and stronger economic growth. Over the past two decades, the rate of increase
in productivity output per worker hour has been far lower than in the previous
decade. There is a general consensus that a principal reason for the productivity
slowdown is a slowdown in the pace of technological change -- the flow of new
innovations that enable the economy to produce more with less. Though the reasons for
this slowdown are not fully understood, we do know this: investments in research and
development (R&D) have large payoffs.
R&D yields new products, improving the quality of life, and new processes,
enabling American firms to reduce costs of production and become more competitive.
Indeed, investments in R&D are estimated to account for half or more of the increase in
output per person. I And increases in productivity are essential if we are to continue to
have increases in living standards.
The Federal role in the promotion of science and technology was recognized in the
science. Constitution, " which gave Congress the right to grant patents to "promote the progress of
However, the Founding Fathers could hardly have anticipated the
transformations in our economy that were to come in the following two centuries! Today,
technological advances most often occur not so much by individual inventors like
Benjamin Franklin, but in large research laboratories, often employing thousands of
individuals. The Federal government spends billions of dollars on research. And these
dollars yield high returns.
This paper documents the high returns to R&D investments and addresses the role
for government involvement. First, however, it is important to examine the amount of
U.S. expenditures on R&D, how they have been changing over time, and how they
compare with other countries.
U.S. INVESTMENTS IN R&D
The United States leads the world in absolute spending on R&D (see Chart 1). 2
world. This finding is not surprising, given that the U.S. economy is by far the largest in the
I
Chart 1
Federal R&D investments are obviously critical in the pursuit of many national objectives, such as
defense and the education of scientists and engineers. However, this paper will focus exclusively on
economic returns.
I
Griliches, Zvi. "The Search for R&D Spillovers." Scandinavian Journal of Economics. Vol 94,
supplement, pp. 29 - 47. 1992
2
Data for Charts I through 5 and Table 1, unless otherwise noted, are from National Science Foundation.
National Patterns of R&D Resources: An SRS Special Report. NSF 95-304. 1995.
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Scott Wallsten
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1992 Total Expenditures on R&D
(billions of dollars)
160
140
120
100
80
60
40
20
0
U.S.
Japan
Germany
France
A better comparison is R&D expenditures as a percentage of GDP, in order to account
for differences in the size of economies. Using this comparison, the United States is just
behind Japan and slightly ahead of (unified) Germany and France (see Chart 2).
Chart 2
1992 Total R&D Expenditures
as a Percentage of GDP
3
2.5
2
1.5
1
0.5
0
U.S.
Japan
Germany
France
But this does not really tell the whole story. We must look not only at how much we
spend, but on what we spend it. Aggregate R&D expenditures can be broken down into
defense and non-defense R&D expenditures. The United States falls behind Germany,
even further behind Japan, and remains just ahead of France in terms of non-defense R&D
expenditures (see Chart 3).
Chart 3
1992 Non-Defense R&D Expenditures
as a Percentage of GDP
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Scott Wallsten
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3
2.5
2
1.5
I
0.5
0
U.S.
Japan
Germany
France
As seen in Chart 4, the United States consistently has been behind in this measure over the
past two decades.
Chart 4
Non-Defense R&D Expenditures as a Percentage of GDP
3.0
2.8
2.6
Germany
2.4
2.2
Japan
2.0
1.8
1.6
1.4
United States
1.2
1.0
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
Although total expenditures on non-defense R&D have remained relatively
constant as a share of GDP in the last ten years (at a level well below those of Germany
and Japan), Federal expenditures on non-defense R&D in the United States actually have
fallen as a percentage of GDP over the last three decades (see Chart 5). 3
Chart 5
Federal R&D Spending as a Percentage of GDP
3
Defense and non-defense expenditures: 1961 - 1979: Office of Management and Budget: "Budget of
the United States Government: Historical Tables." Fiscal Year 1996; 1979 - 1994: NSF, 1995; GDP
figures from Council of Economic Advisers, "Economic Report of the President." 1995.
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1.4
1.2
I
Defense
0.8
0.6
0.4
Non-defense
0.2
0
1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
In the United States in 1994, the Federal government provided approximately 36
percent of all R&D funds and industry provided about 59 percent, with the balance
comprised of funds from universities and colleges and other non-profit organizations.⁴
Industry primarily funds product-related applied research and development, as these areas
are most likely to yield immediate payoffs. Government funds most basic research, since
the results of this type of research are the most uncertain and applications may not be
realized for quite some time. Table 1 details the breakdown of support for different types
of research.
While the rationale for the preeminent position of government in basic research are
set forth in the next section, the consequences are clear: cutbacks in Federal funding will
translate directly into cutbacks in basic research. Basic research is the basis of future
innovations. That quantum theory would lead to today's electronics or lasers, or that
investigations of DNA structures to genetic engineering and an emerging biotechnology
industry could not have been anticipated. These advances built upon the steady progress
of fundamental science.
Thus, reduced investments in basic research today will translate into fewer
innovations in the future. To be sure, we cannot tell if a researcher who was not be
funded might have discovered a cure for AIDS, or developed an idea that led to a
breakthrough in plant productivity, or would have formed the basis of an enormous
increase in energy efficiency, but we do know this: with less investment in R&D, there
will be fewer breakthroughs, the pace of science will slow, and long-term growth will be
slower than it otherwise would have been.
4
National Science Foundation. 1995.
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Scott Wallsten
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Table 1
Sources of Funds for R&D in 1994⁵
All R&D
Basic
Applied
Development
Research
Research
$ billions
percent
percent
Federal Government
62.20
36
58
35
29
Industry
102.05
59
26
58
70
Universities and Colleges
5.30
3
10
4
*
Non-Profits
3.00
2
5
2
*
TOTAL
172.55
100
100
100
100
* less than one percent
Current Congressional proposals would cut Federal R&D expenditures. The
impacts of reduced Federal R&D spending would not be trivial. A 1986 study confirmed
that increased investment in R&D leads to greater productivity and output. The study
concluded that the slowdown in the growth of R&D in the mid-1970s may have been
extremely costly to the economy in terms of lost opportunities.⁶
Today, we face not just the possibility of a slowdown in the growth of Federal
R&D expenditures, but that of unprecedented cuts from existing levels. The American
Association for the Advancement of Science estimates a cut of about 30 percent in Federal
support of R&D by the year 2002 if the Congressional budget resolution were to become
a reality. Chart 6 below details the estimated results of the Congressional plan.
Chart 6
Projected Congressional Non-Defense R&D Allocations 1990 - 2002
(billions of 1987 dollars)⁷
S
NSF. 1995.
6
Griliches, Zvi. "Productivity, R&D, and Basic Research at the Firm Level in the 1970s." American
Economic 7 Review. Vol 76, No 1. March, 1986. pp. 141 - 154.
1990 - 1995 are actual expenditures, 1996 - 2002 are estimated results of Congressional proposals;
deflators 1994 - 2000 are estimates from OMB, Analytical Perspectives: Budget of the United States
Government. FY 1996.
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27
C.
21
19
17
15
1990
1992
1994
1996
1998
2000
2002
By contrast, the Japanese government recently announced plans to double its R&D
spending by the year 2000. Chart 7 highlights the effect of Congress' plan and the
Japanese plan: by 1997 Japan will overtake the United Stated in government support of
non-defense R&D and in total dollars, not just as a share of GDP.
Chart 7
Estimated U.S. and Japanese Governmental Expenditures on
Non-Defense R&D
(in billions of 1987 dollars)
26
24
22
20
18
16
14
12
10
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
Japan
U.S.
THE ROLE OF GOVERNMENT INVESTMENTS IN R&D⁸
8
The Federal government has a long history of involvement in science and technology. For example, in
1842 the government appropriated $30,000 for Samuel Morse to build a telegraph line from Washington
to Baltimore to demonstrate the feasibility of his new technology. The Second World War brought great
technological advancements from government research, all in the name of the war efforts. Many of those
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Investments in R&D pay off in many key ways: through the devising of more
efficient ways to produce existing goods and services, the discovery of entirely new
products and processes, the increase in our knowledge base; and the education of world
class scientists and engineers. Consider, for example, the production of automobiles.
Because of technological advances, cars are produced much more efficiently today than
they were 30 years ago. New technology also makes today's cars vastly superior to those
produced 30 years ago.
Why does the government need to invest in R&D? The private sector on its
own will not commit the level of resources to R&D that is best for society or even for the
individual firms. A firm bases its investment expenditures, including those on R&D, on
how large is the expected return on that investment to that firm. Because firms realize
only a portion of the total returns to an investment in R&D, they will not invest enough
from a societal standpoint. R&D is a unique input in the production process.⁹ Its results
can spread quickly throughout the economy, with applications far beyond those imagined
by the original researcher -- the so-called "spillover" effect. Spillovers mean that an
individual firm or innovator will realize only a fraction of the total returns to an
innovation; that is, the innovation yields benefits to others for which the original
researcher is not fully compensated.
technological accomplishments had applications in civilian life, as well. President Franklin Roosevelt
recognized the potential of the R&D machine that had been built up during the war, and requested that
Vannevar Bush, director of the wartime Office of Scientific Research and Development, devise plans on
how to use the wartime experience in peacetime.
In response to President Roosevelt's request, Bush authored Science: The Endless Frontier in
1945, which became the guiding document for much of U.S. postwar science policy. But much of postwar
scientific research was driven by cold war concerns. In this post-cold war era, we must examine Federal
support for R&D to ensure that cuts do not have an inadvertent, but long-lasting detrimental impact on the
American economy.
9
The chain from idea to usable product or process can be long. R&D is comprised, most generally, of
basic research, applied research, and development. The National Science Foundation (Science and
Engineering Indicators, 1993) as follows:
Basic Research: The objective of basic research is to gain more complete knowledge or
understanding of the subject under study, without specific applications in mind. In industry, basic
research is defined as research that advances scientific knowledge but does not have specific
immediate commercial objectives, although it may be in fields of present or potential commercial
interests.
Applied Research: Applied research is aimed at gaining knowledge or understanding to determine
the means by which a specific, recognized need may be met. In industry, applied research includes
investigations oriented to discovering new scientific knowledge that has specific commercial
objectives with respect to products, processes, or services.
Development: Development is the systematic use of the knowledge or understanding gained from
research directed toward the production of useful materials, devices, systems, or methods, including
the design and development of prototypes and processes.
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Examples abound. Lasers and transistors are now a part of everyday life. The
inventors of the laser probably had no idea that it would eventually be used for removing
cataracts or for playing music in a compact disc player. Likewise, the American physicists
who invented the transistor at Bell labs in 1948 could not have imagined that their
invention would be used today in radios, computers, spaceflight and guided missiles, and
countless other electronic devices. In both cases, even if the inventors' imaginations did
reach such heights, today they receive no additional monetary benefit for the further huge
advantages that society reaps from their insights.
Sometimes the spillovers are far more subtle. The discovery of nylon showed that
it was possible to create man-made fibers with remarkable properties--and this knowledge
affected the direction of research efforts applied by thousands of other researchers.
The consequences of the presence of important spillovers is that private firms will
not invest in enough R&D from a national perspective. This point is not merely
theoretical: many studies have demonstrated that investments in R&D yield high returns
to investors and even higher returns to society. One recent review of econometric studies
concluded that the average private rate of return to an innovation seems to be between 20
and 30 percent, while the social rate of return is closer to 50 percent. 10,11 An earlier,
extensive, case-study approach found that the median private return to the innovations
studied was 25 percent while the median social rate of return was 56 percent. 12 While
estimates of the rates of return are just that -- estimates -- a wealth of studies over the past
13
two decades have confirmed these high private returns and even higher social returns.
In addition, some firms -- especially small ones that lack funds -- may not invest
enough in R&D even from their own perspective. To make R&D investments, a firm may
10
Nadiri, Ishaq. "Innovations and Technological Spillovers." NBER Working Paper Series. Working
Paper No. 4423. August, 1993.
11
Rates of return can be estimated by computing the benefits (including discounted future benefits) and
the costs of the innovation.
12 Mansfield, Edwin, J. Rapoport, A. Romeo, S. Wagner, and G. Beardsley. "Social and Private Rates of
Return from Industrial Innovations." Quarterly Journal of Economics. Vol 77, pp 221 - 240. 1977.
13
Sec, for example, the following studies in addition to those already cited:
Terleckyj, N. "Effects of R&D on the Productivity Growth of Industries: An Exploratory Study."
National Planning Association. Washington, DC. 1974.
Sveikauskas. L. "Technology Inputs and Multifactor Productivity Growth." Review of Economics
and Statistics. Vol 63, pp. 275 - 282. 1981.
Goto, A. and K. Suzuki. "R&D Capital, Rate of Return on R&D Investment and Spillover of R&D in
Japanese Manufacturing Industries." Review of Economics and Statistics. Vol 71, pp. 555 - 564.
1989.
Bernstein, Jeffrey and M. Ishaq Nadiri. "Interindustry Spillovers, Rates of Return, and Production in
High-Tech Industries." American Economic Review: Papers and Proceedings. Vol 78, pp. 429 -
434. 1988.
Scherer, Frederick. "Using Linked Patent and R&D Data to Measure Interindustry Technology
Flows." in R&D, Patents, and Productivity, Z. Griliches (cd.). University of Chicago Press, pp 417-
464. 1984.
Bernstein, Jeffrey and M. Ishaq Nadiri. "Product Demand, Cost of Production, Spillovers, and the
Social Rate of Return to R&D." NBER Working Paper No. 3625. 1991.
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need to go to capital markets for funding, and to provide these funds, financiers must have
sufficient information to be able to assess the risks of the investments. Firms may not
want io provide this information for fear of losing future private gains if somebody else
were to use that information. Thus, the firm must either pay higher interest rates for loans
or use its own funds to pay for the research. In fact, evidence suggests that small firms'
investments in R&D are limited by their internal cash-flow.
What is the Federal government's role? Because firms will underinvest in
R&D, there is an important role for the Federal government. The fact that there is a
government role in promoting science and technology has been long-recognized. The
earliest and most widely used government incentive for encouraging innovation is granting
patents, which essentially gives an innovator temporary monopoly rights on a new product
or process. Thomas Jefferson recognized that "in the arts, and especially the mechanical
arts, many ingenious improvements are made in consequence of the patent-right giving
exclusive use of them for fourteen years." Indeed, the recognition that innovation must be
encouraged is enshrined in the Constitution, which gives Congress the right to grant
patents "to promote the progress of science and the useful arts, by securing limited times
to authors and inventors the exclusive right to their respective writings and discoveries."
While important, patents alone are not a solution to the underinvestment problem.
Even with strong patent protection, inventors capture only a small fraction of the benefits
to society which accrue from their innovations, so that there will still be a problem of
underinvestment. This is particularly important for basic research and other research with
large spillovers and for research that yields results only far in the future or which is
extremely risky.
What should the Federal government do? Most people recognize the need for
government funding of basic, or fundamental, research. Indeed, as shown earlier in Table
1, the Federal government funds close to 60 percent of all basic research. The current
debate focuses on the role of Federal investments in R&D as it gets closer to the
marketplace. It is worthwhile to review the rationale for government support of basic
research and discuss the issue of where in the "development pipeline" government's
involvement in R&D should end.
Basic research is, by definition, not directed at solving an immediate problem or at
inventing a particular product. Returns from investments in basic research may be many
years away, and may not have applications bearing any similarity to what the researcher
originally thought. For these reasons, firms may be reluctant to invest in basic research,
implying that underinvestment is most likely to occur in basic research
Basic research ultimately can yield the highest returns of all to society. For
example, two physicists in 1946 discovered nuclear magnetic resonance as the result of
basic research. While they had no idea how this knowledge would eventually be used,
14
Himmelberg, Charles and Bruce Petersen. "R&D and Internal Finance. A Panel Study of Small
Firms in High-Tech Industries." Review of Economics and Statistics. Vol 76. Issue 1. 1994. pp. 38 51.
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others soon realized the potential applications of this knowledge. Today, most major
hospitals have magnetic resonance imaging (MRI) machines for use in noninvasive
scanning of patient's internal organs The MRI is a direct outgrowth of basic research
leading to the nuclear magnetic resonance discovery.
Universities and colleges comprise the largest single group of performers of basic
research, accounting for approximately 45 percent of all basic research in 1994. 15 This
research is funded primarily by the Federal government. Universities and colleges create
knowledge for knowledge's sake," help develop an educated population, and train the
scientific and engineering workforce. However, academic research itself also plays a
crucial role in industrial innovation.
Measuring academic research as an input into innovation is exceedingly difficult;
however, one researcher recently undertook just that task. 16 A study involving 76 major
firms representing one-third of all output in seven industries revealed that these firms
could not have developed approximately 11 percent of their new products and about 9
percent of their new processes without academic research conducted in the previous 15
years. Further, the study estimated the median social rate of return to academic research
to be 28 percent.
While the "28 percent" figure is clearly a rough estimate, it shows that the returns
to academic research are high. Moreover, this estimate is likely to be too low for two
reasons. First, the study used academic research done only in the 15 years prior to the
innovation -- much academic research may not be used in industrial innovations until more
than 15 years after the initial discovery or publication, or may continue to be used for
many years thereafter. Second, the study examined only seven industries. The academic
research useful for innovations in these industries likely was useful in other industries, as
well. Clearly, investing in academic research is another area with high payoffs.
Government support for academic research is crucial. In 1994, the Federal
government funded 60 percent of all R&D at universities and colleges. 17 Moreover, many
studies have shown a strong correlation between decreases in graduate fellowship support
and a drop in the number of Americans pursuing graduate studies in science and
engineering, and an increase in the proportion of foreign nationals entering engineering
faculties at U.S. research universities. 18
is
Universities and colleges actually performed close to 55 percent of all basic research when one
includes work done at Federally-funded research and development centers located at universities and
colleges.
16
Mansfield, Edwin. "Academic Research and Industrial Innovation." Research Policy. Vol. 20 1991.
pp. 1-12.
17
NSF, 1994. Table B-2. This estimate docs not include funding for Federally Funded Research and
Development Centers (FFRDCs) located at universities and colleges. Including FFRDCs brings Federal
support to almost 70 percent of all R&D done at universities and colleges.
18 Mowery, David and Nathaniel Rosenberg. Technology and the Pursuit of Economic Growth.
Cambridge University Press. 1989. p. 152.
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Scott Wallsten
10/13/95
The government's role should not end at funding basic research, however. While
government should not be involved in deciding what is commercializable, some R&D,
called "precommercial," has the potential to yield a useful new product or process but is
still too far from commercialization, and thus too risky, for a single firm to pursue.
Underinvestment is likely to be particularly severe in those cases where there is the
potential of significant spillovers to other applications. Government can help by absorbing
some of the risk of such precommercial research. These arguments become particularly
compelling when industry is forced to take a short-term view on their own R&D
investments. Any government involvement must, however, substantially involve the
private sector since government is unlikely to anticipate market outcomes correctly.
Returns to government R&D investments: It is difficult to measure the returns
to publicly-funded R&D, primarily because such a large percentage of Federal R&D
support traditionally has been defense-related. 19 The real impact of government-funded
R&D is not the returns to the individual involved in the research, but the returns to
society. Measuring such returns is not a simple task, since the results of public R&D.
weave their way through the economy in countless directions. Researchers have noted
that because of such spillovers, one must examine Federal research on a case-by-case
basis. 20 Because the Federal government can engage in high-risk, potentially high-payoff
R&D, some government programs will be failures. However, other programs will be
spectacularly successful, yielding enormous social returns.²¹
The aircraft industry is a prime example. The development of the United States
aerospace industry was largely government-funded. As late as 1986, close to 80 percent
of all R&D in this industry was Federally-supported.²² Today this industry is a large
employer and one of the largest exporters in the nation. 23
Other examples include:
19
In 1987, for example, about 70 percent of all Federal research was defense-oriented. Products
resulting from defense R&D generally are purchased by the government and are not subject to a market
test. Probably for this reason, studies have found private returns to publicly-funded R&D to be close to
zero (Hall, Bronwyn. "The Private and Social Returns to Research and Development: What Have We
Learned." June, 1995). Interestingly, however, one study of manufacturing firms found that increased
government funding for applied research is correlated with increased productivity (Mansfield, Edwin.
"Basic Research and Productivity Increase in Manufacturing." American Economic Review. Vol 70, No
5. December, 1980. pp 863-873). The unique feature of this study is that because it was not actually
focused on government funding, the results were based on firms not necessarily involved in defense
contracting.
20
Bartelsman, Eric. "Federally Sponsored R&D and Productivity Growth." Finance and Economics
Discussion Series, No 121. Federal Reserve Board, Washington, DC. April, 1990.
21
Some programs that do not meet their specified goal may officially be classified as failures. However,
even some "failed" projects can yield enormous positive spillovers.
22
Mowery, David and Nathan Rosenberg. Technology and the Pursuit of Economic Growth. Cambridge
University Press. 1989.
23
In 1994 the industry employed about 480,000 people. From 1990 to 1994, exports averaged over $30
billion per year.
DRAFT
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Scott Wallsten
10/13/95
The discovery of DNA. A small Federal grant in the early 1950s allowed a
microbiologist to study genetic exchange in bacteria. Although many observers were
skeptical, this work helped pave the way for the discovery of DNA -- perhaps the most
important discovery of the century.
The atomic clock and the Global Positioning Satellite (GPS) system. Super-
precise atomic clocks were invented to help answer fundamental questions about the
nature of the universe. However, a practical application for the atomic clock emerged.
The GPS is a system of 24 satellites that depend on computer chips, miniaturized radio
receivers, and atomic clocks. GPS, initially developed by the U.S. Air Force for
military navigation, allows users to determine their location and altitude anywhere on
earth to within 30 feet. Now GPS is also used for many civilian applications, including
coastal navigation, emergency rescue, and the tracking of commercial vehicles. Over
160 manufacturers are developing GPS-based systems for an emerging multi-billion
dollar industry.
The Hubble Space Telescope and cancer detection. The Hubble Space Telescope
was designed to gather more detailed information about the universe than is possible
from ground-based telescopes. It turned out to have another use, as well. The image-
processing software NASA developed to reconstruct and filter images can be applied
to a digitized mammogram, and likely will be useful in identifying suspicious areas
indicative of breast cancer.
The Internet and the Information Superhighway. The Internet was originally a
government-sponsored computer network designed to connect researchers. Today, it
is the backbone of what is commonly referred to as "the information superhighway."
Nobody knows exactly how the Internet will develop, but it is an increasingly active
area, with more and more business involvement.
Results and spillovers from specific Federally-funded projects do not, however, exhaust
the impacts of Federal funding. Federal funds have an additional benefit in that they
stimulate private R&D expenditures.
Federal R&D expenditures stimulate additional private R&D expenditures.
Many studies demonstrate that Federal spending on R&D stimulates additional private
spending on R&D. 24 This complementarity holds up in basic, as well as applied,
research. 25 In other words, an additional dollar of Federal R&D expenditures adds more
than a dollar of R&D investment to the economy.
24
Levy. David and Nestor Terleckyj. "Effects of Government R&D on Private R&D Investment and
Productivity: A Macrocconomic Analysis." The Bell Journal of Economics. Vol 14, No. 2. Autumn,
1983. pp. 551 - 561.
25
Robson, Martin. "Federal Funding and the Level of Private Expenditure on Basic Research."
Southern Economic Journal. Vol 60, No 1. July, 1993. pp. 63 71
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Scott Wallsten
10/13/95
Unfortunately, complementarity also implies that if the Federal government cuts
R&D expenditures, the private sector will cut R&D expenditures, as well. Chart 8 (below)
shows a clear correlation between changes in Federal R&D expenditures and changes in
private R&D expenditures one year later.
Chart 8
Percent Changes in Federal R&D Expenditures and
Private R&D Expenditures One Year Later
12
10
Private R&D, one year later
Federal R&D
8
6
4
2
0
-2
-4
-6
1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
This correlation means that if Federal R&D support is cut, the nation is likely to
lose future rewards not only from the Federally-supported R&D that will not be
undertaken, but also from the industrial R&D that will not be done as the private sector
scales back in response to Federal cuts.
CONCLUSION
Continued advances in R&D and technology are crucial to ensuring and increasing
economic growth. Many studies have shown that while returns to a firm from investing in
R&D are high, returns to society are even higher as new ideas are applied to areas far
beyond what the innovator initially imagined. However, such spillovers imply that private
firms will not invest in enough R&D from a national perspective. The Federal government
can step in to fill the gap between the private level of R&D investment and the level and
types of R&D investment that is best from the nation's perspective. Moreover, the nation
benefits not just from the results of Federally-sponsored projects, but also because Federal
R&D expenditures seem to stimulate additional private R&D expenditures.
Cutting Federal R&D expenditures conflicts with the goal of increasing economic
growth and prosperity. Less R&D will lead to lower productivity, lower economic
growth, and thus a lower standard of living for all Americans.
26 Hill, Christopher. "Private Funds are Unlikely to Replace Cuts in Public Funds for R&D in the U.S."
Mimeo. June 19, 1995
Data from NSF. "National Patterns of R&D Resources: 1992." NSF 92-330. October, 1992.
DRAFT
Page 13
Clinton Presidential Records
Digital Records Marker
This is not a presidential record. This is used as an administrative
marker by the William J. Clinton Presidential Library Staff.
This marker identifies the place of a tabbed divider. Given our
digitization capabilities, we are sometimes unable to adequately
scan such dividers. The title from the original document is
indicated below.
Supporting R & D
Divider Title:
Card
Subject: CEA Report on Economic Returns from R&D
Author: Rick E. Borchelt at ostp
Date: 11/1/95 3:15 PM
THE WHITE HOUSE
Office of the Press Secretary
FOR IMMEDIATE RELEASE
Contact: (202) 395-5084
November 1, 1995
CEA REPORT CONFIRMS HIGH PAYOFF OF R&D INVESTMENTS
The President's Council of Economic Advisers (CEA), in a report released today, confirmed one of
the basic tenets of the President's economic and national security strategy: Investments in research and
development yield high returns to the economy and need to be protected from severe budget cuts.
The CEA report is an analysis of economic research on the societal benefits of federal spending on
research and development (R&D). The report, "Supporting Research and Development to Promote
Economic Growth: The Federal Government's Role," stresses that every federal dollar spent on R&D adds
more than a dollar of R&D to the economy and brings social rates of return near 50 percent.
"Investments in research and development are the key to increasing productivity, accounting for half
or more df the growth in output per person"
in recent U.S. history, the report notes. "Successful R&D investments -
from the jet engine to transistors to lasers -- can and have changed the whole
economy."
Moreover, it explains, "maintaining or increasing this country's R&D effort is essential if we are to
increase the rate of productivity growth and improve American living standards." Continued R&D
investments "will provide the basis of the America of the twenty-first century," the report concludes.
In releasing the report, CEA Chairman Joseph Stiglitz explained that deficit reduction is a means to
an end goal of economic prosperity. "Cutting investments in R&D run counter to that end goal; without
protecting key investments you may end up with a balanced budget but slower economic growth," he said.
The long history of government support of research is threatened by Congressional proposals to
slash research funding by roughly 30 percent by the year 2002, the CEA says. At the same time, it warns,
Japan expects to double its R&D spending by the year 2000. Under this scenario, by 1997 Japan - for the
first time in history -- will be spending more in absolute dollars on non- defense R&D than the United States.
The report also notes that federal investments stimulate private R&D expenditures, and that cuts in
federal research will mean declines in private- sector R&D as well. Industrial spending on R&D already is
on the decline, it says, and even under the best of circumstances, market forces alone would be insufficient
to provide adequate investment in R&D.
The report is available from the Council of Economic Advisors at the telephone number above. It
will soon be available on the World Wide Web via the Internet at http://www.whitehouse.gov.
###
SUPPORTING RESEARCH AND DEVELOPMENT
TO PROMOTE ECONOMIC GROWTH:
THE FEDERAL GOVERNMENT'S ROLE
October 1995
A Report Prepared by
The Council of Economic Advisers
Federal research and development investments are obviously critical in the pursuit of many national
objectives, such as defense, health, and the education of scientists and engineers. However, this paper
focuses exclusively on economic returns.
EXECUTIVE SUMMARY
Increasing the productivity of the American workforce is the key to higher living standards
and stronger economic growth in the future. Investments in research and development (R&D)
are the key to increasing productivity, accounting for half or more of the growth in output per
person, and to the creation of new products and processes.
Investments in R&D have high rates of return. The social rates of return, which may be close
to 50 percent, exceed the high private rates of returns, of 20 to 30 percent, by a considerable
amount because of the "spillovers" - benefits that accrue in applications far beyond those
imagined by the original researcher. Because innovators realize only a fraction of the total
return to an innovation, there will be an underinvestment in R&D.
There has been a long record of successful government support for R&D, from its support of
Samuel Morse's original telegraph line from Washington to Baltimore in 1842 to demonstrate
the feasibility of his new technology, to the support of agricultural research, beginning with
the 1862 Morrill Act establishing the land-grant colleges, to the development in more recent
years of the Internet, the Global Positioning Satellite (GPS) system, and support of the basic
research leading to the discovery of DNA. Examples of successful Federal R&D investments
abound.
Federal R&D expenditures stimulate additional private R&D expenditures. An additional
dollar of Federal R&D adds more than a dollar of R&D to the economy, as the private sector
expands its R&D effort. Accordingly, a cut in Federal R&D expenditures is likely to cause
the private sector to cut back as well.
The Congressional budget resolution would cut Federal R&D expenditures by about 30
percent by the year 2002. The Japanese government, by contrast, recently announced plans to
double its R&D spending by the year 2000. While non-defense R&D expenditures in the
United States, as a percentage of GDP, are already smaller than in Japan, as a result of the
American decreases and the Japanese increases, the Japanese government will actually spend
more, in total dollars, than the American government on non-defense R&D by 1997.
Current debates not only focus on the level of support for R&D, but also on the composition.
Increased living standards and faster productivity depends on increased support for civilian
and dual-use research (that is, research that has both direct military and civilian applications),
not just support of "star wars" and other military research. Opponents of government support
for pre-commercial technological development erroneously characterize government efforts as
"picking winners," interfering with what would otherwise be efficient market allocations, and
try to draw a clear line between basic and generic research (which all agree government
should support) and applied research. In reality, there is a continuum, with many applied
research projects yielding significant spillovers, so that absent some government support,
there may be marked underinvestment. Government can aid the development of such
potentially high-payoff pre-commercial R&D with large spillovers, but must involve the
private sector in such efforts. These government investments can yield high returns.
INTRODUCTION
Increasing the productivity of the American workforce is the key to higher living
standards and stronger economic growth in the future. Evidence indicates that
investments in research and development (R&D) have large payoffs in terms of growth.
R&D yields new products, improving the quality of life, and new processes, enabling
American firms to reduce costs of production and become more competitive. Indeed,
investments in R&D are estimated to account for half or more of the increase in output per
person. 1. Maintaining or increasing this country's R&D effort is essential if we are to
increase the rate of productivity growth and improve American living standards.²
The largest part of R&D in the United States is funded by private industry. Small
entrepreneurs see an opportunity, raise funds any way they can, and take their chances on
an innovative idea. Large companies spend billions on R&D labs to develop a stream of
new products and processes. Private companies know the markets they serve and the
workers who must produce the products. Risking their own funds gives them a strong
incentive to avoid costly failures.
Since the founding of this country, the Federal government has had an important
role in the promotion of science and technology. Indeed, the Constitution gave Congress
the right to grant patents to "promote the progress of science, But in today's
complex and competitive world economy, promoting the progress of science goes beyond
simply the granting of patents. First, successful R&D in private companies depends upon
the flow of new ideas and trained people stemming from basic research and pre-
commercial R&D. 3 Federal support for these activities is vital. Second, the Federal
government sponsors much applied research to improve its own capabilities in such areas
as national security, health, and transportation. The government can then help transfer
technologies developed for its own use to the private sector.
This paper describes U.S. expenditures on R&D, how they have been changing
over time, and how they compare with other countries. It then examines the rationale and
role for government involvement in R&D and documents the high returns to R&D
investments. Finally, it projects the results of the Congressional budget resolution on
R&D expenditures and contrasts that projection with Japanese plans.
1
Griliches, Zvi. "The Search for R&D Spillovers." Scandinavian Journal of Economics. Vol. 94,
supplement, pp. 29 - 47. 1992.
2
Baily, M.N. and A. Chakrabarti, Innovation and the Productivity Crisis, Brookings Institution,
Washington, DC 1988.
3
Pre-commercial R&D may be loosely defined as R&D that is close to yielding a new product or process,
but is still far enough away from commercialization to require a firm to take on substantial risk in pushing
it towards the market, and may be such that the social returns to the investment will be much higher than
the private returns.
4
Industry also relies on the government to support the technical infrastructure - for example, standards
for weights and measures. Research in this area is essential for advancing commerce and trade.
Page 1
But this does not really tell the whole story. We must look not only at how much we
spend, but also at what we spend it on. Aggregate R&D expenditures can be broken
down into defense and non-defense R&D expenditures. The United States falls behind
Germany, even further behind Japan, and remains just ahead of France in terms of non-
defense R&D expenditures (see Chart 3).
Chart 3
1992 Non-Defense R&D Expenditures
as a Percentage of GDP
3
2.5
2
1.5
1
0.5
0
U.S.
Japan
Germany
France
As seen in Chart 4, the United States consistently has lagged behind in this measure over
the past two decades.
Chart 4
Non-Defense R&D Expenditures as a Percentage of GDP
3.0
2.8
2.6
Germany
2.4
2.2
Japan
2.0
1.8
1.6
1.4
United States
1.2
1.0
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
Although total expenditures on non-defense R&D have remained relatively
constant as a share of GDP in the last 10 years (at a level well below those of Germany
Page 3
Table 1
Sources of Funds for R&D in 1994⁸
All R&D
Basic
Applied
Development
Research
Research
$ billions
percent
percent
Federal Government
62.2
36
58
35
29
Industry
102.1
59
26
58
70
Universities and Colleges
5.3
3
10
4
*
Non-Profits
3.0
2
5
2
TOTAL
172.6
100
100
100
100
less than one percent
THE ROLE OF GOVERNMENT INVESTMENTS IN R&D
Why does the government need to invest in R&D? The private sector on its
own will not commit the level of resources to R&D that is best for society or even for the
individual firms. A firm bases its investment expenditures, including those on R&D, on
the expected return on an investment to that firm. Because firms realize only a portion of
the total returns to an investment in R&D, they will not invest enough from a societal
standpoint. R&D is a unique input in the production process.⁹ Its results can spread
quickly throughout the economy, with applications far beyond those imagined by the
original researcher -- the so-called "spillover" effect. Spillovers mean that an individual
firm or innovator will realize only a fraction of the total returns to an innovation; that is,
the innovation yields benefits to others for which the original researcher is not fully
compensated.
Examples abound. Lasers and transistors are now a part of everyday life. The
inventors of the laser probably had no idea that it would eventually be used for removing
NSF. 1995.
The chain from idea to usable product or process can be long. R&D is comprised, most generally, of
basic research, applied research, and development. The divisions between these areas is not always clear,
as they all interact in complex ways, with advances in one type of research influencing the direction of
research in others. For conceptual purposes, though, The National Science Foundation (Science and
Engineering Indicators. 1993) defines these terms as follows:
Basic Research: The objective of basic research is to gain more complete knowledge or
understanding of the subject under study, without specific applications in mind. In industry, basic
research is defined as research that advances scientific knowledge but does not have specific
immediate commercial objectives, although it may be in fields of present or potential commercial
interests.
Applied Research: Applied research is aimed at gaining knowledge or understanding to determine
the means by which a specific, recognized need may be met. In industry, applied research includes
investigations oriented to discovering new scientific knowledge that has specific commercial
objectives with respect to products, processes, or services.
Development: Development is the systematic use of the knowledge or understanding gained from
research directed toward the production of useful materials, devices, systems, or methods, including
the design and development of prototypes and processes.
Page 5
Table 2
Private and Social Rates of Return to Private R&D¹⁴
Author (year)
Estimated Rates of Return
Private
Social
Nadiri (1993)
20 30
50
Mansfield (1977)
25
56
Terleckyj (1974)
29
48 78
Sveikauskas (1981)
7 25
50
Goto-Suzuki (1989)
26
80
Bernstein-Nadiri (1988)
10 27
11 111
Scherer (1982, 1984)
29 43
64 - 147
Bernstein-Nadiri (1991)
15 28
20 - 110
In addition, some firms - especially small ones that lack funds -- may not invest
enough in R&D even from their own perspective. To make R&D investments, a firm may
need to go to capital markets for funding, and to provide these funds, financiers must have
sufficient information to be able to assess the risks of the investments. Firms may not
want to provide this information for fear of losing future private gains if somebody else
were to use that information. Moreover, R&D cannot be collateralized, in the way that an
investment in a building or a machine can be. Thus, the firm must either pay higher
interest rates for loans or use its own funds to pay for the research. In fact, evidence
suggests that small firms' investments in R&D are limited by their internal cash-flow. 15
The inadequacy of firms' incentives to invest in R&D creates an important role for
the Federal government. The goal of technology policy, however, is not to substitute the
government's judgment for that of private industry. Rather, the point is to correct a
genuine and significant problem -- underinvestment in basic research and in pre-
commercial R&D resulting from the divergence between private and social returns to
those activities. A complementary goal is to design the technology investments that the
government itself makes in public goods - national security, public health, education, a
clean environment, an efficient transportation system - in ways that maximize the
potential external benefits for the Nation's commercial technology base. In both cases,
support for technological innovation enhances the Nation's economic and social welfare.
Expanding the R&D tax credit provides an additional incentive to the private
sector to ameliorate the underinvestment problem discussed in this paper. 16 Indeed, the
tax credit can be effective in increasing private sector R&D expenditures, and is an
important component of a comprehensive technology policy.
14
Table adapted from: Griliches (1992), and Nadiri (1993).
15
Himmelberg, Charles and Bruce Petersen. "R&D and Internal Finance. A Panel Study of Small
Firms in High-Tech Industries." Review of Economics and Statistics. Vol. 76, Issue 1. pp. 38 - 51.
1994.
16
The R&D tax credit, officially known as the research and experimentation (R&E) tax credit, allows
firms to deduct from their income taxes a portion of their R&D expenditures beyond a certain base level.
Page 7
measure on government support. Students come from all over the world to learn from
U.S. scientists and engineers.
Funding basic research. Most people recognize the need for government
funding of basic, or fundamental, research. Indeed, as shown earlier in Table 1, the
Federal government funds close to 60 percent of all basic research. Basic research is, by
definition, not directed at solving an immediate problem or at inventing a particular
product. While basic research has immediate returns in adding to our knowledge base and
in educating scientists and engineers, economic returns from investments in basic research
may be many years away, and may not have applications bearing any similarity to what the
researcher originally thought. Since so much of the returns to basic research are not
appropriated by the innovator (and indeed, in many cases, the output of basic research is
not patentable), the gap between social and private returns is particularly large, and
therefore the problem of underinvestment is particularly severe. Firms are typically
reluctant to invest much in basic research.
Basic research ultimately can yield extraordinary returns to society. For example,
two physicists in 1946 discovered nuclear magnetic resonance as the result of basic
research. While they had no idea how this knowledge would eventually be used, others
soon realized the potential applications of this knowledge. Today, most major hospitals
have magnetic resonance imaging (MRI) machines for use in noninvasive scanning of
patients' internal organs. The MRI is a direct outgrowth of earlier basic research.
Universities and colleges comprise the largest single group of performers of basic
research, accounting for approximately 45 percent of all basic research in 1994. 20 This
research is funded primarily by the Federal government. Universities and colleges create
"knowledge for knowledge's sake," help develop an educated population, and train the
scientific and engineering workforce. However, academic research itself also plays a
crucial role in industrial innovation. One recent study of 76 manufacturing firms revealed
that these firms could not have developed about 11 percent of their new products and 9
percent of their new processes without research done at universities and colleges. This
study estimated the median social rate of return to research done at academic institutions
to be 28 percent. 21,22
20 Universities and colleges actually performed close to 55 percent of all basic research when one
includes work done at Federally funded Research and Development Centers located at universities and
colleges.
21 While the "28 percent" figure is clearly a rough estimate, it shows that the returns to academic
research are high. Moreover, this estimate is likely to be too low for two reasons. First, the study used
academic research done only in the 15 years prior to the innovation -- much academic research may not be
used in industrial innovations until more than 15 years after the initial discovery or publication, or may
continue to be used for many years thereafter. Second, the study examined only seven industries. The
academic research useful for innovations in these industries likely was useful in other industries, as well.
22 Clearly, investing in academic research is an area with high payoffs.
Mansfield, Edwin. "Academic Research and Industrial Innovation." Research Policy. Vol. 20. pp. 1
- 12. 1991.
Page 9
and environmental technologies, advanced materials, and a host of other commercially
successful technologies.
This system worked well as long as military requirements represented the leading-
edge applications of new industrial technologies. In many areas of basic research
supported outside the defense establishment, including biomedical research and the
development of pharmaceuticals, biotechnology, and medical diagnostic devices, the
system continues to work well.
The eircumstances that allowed the United States to rely primarily on a defense-led
model have changed. With the end of the Cold War, demand for new defense systems is
now less than it was. Commercial product spin-offs from military research have also
diminished from their heyday of the 1950s and 1960s, and American companies face
intense international competition from increasingly capable foreign firms. On the other
hand, these changes also create exciting new opportunities: innovative defense
technologies are now more likely to emerge first in commercial products and production
techniques, and American companies are taking advantage of expanded opportunities in
foreign markets. Accordingly, the Administration's technology initiatives are shifting the
composition of Federal R&D from military to civilian concerns, and the composition of
military R&D toward the development of so-called dual-use technologies - those with
applications to both military and commercial products.
Designing a successful program of technology support. The Administration's
efforts to promote innovative technology contain design features meant to limit the
possibility of government failure in the implementation of technology policy: in most
cases, firms participating in the Administration's programs must cover at least 50 percent
of the costs of the project; projects are initiated by private firms, which compete for
limited funding; outside experts in the relevant scientific, technological, and economic
fields evaluate competing proposals; and firms can compete for funds in a wide array of
technological fields, to ensure that support for pre-commercial R&D support does not get
"captured" by any particular technology or set of firms.
Even the best-designed technology program will have failures. Indeed, if it does
not, then it certainly is too cautious. In the final analysis, the returns to government-
funded R&D depend upon the returns to the successful projects outweighing the losses
from the unsuccessful ones. By incorporating the above design features, the
Administration's technology program provides the best chance for achieving high returns
that benefit American living standards.
Returns to government R&D investments: It is impossible to provide a reliable
quantitative estimate of the returns to publicly-supported R&D based upon historical data,
primarily because such a large percentage of Federal R&D support has been defense-
related, although as noted earlier the returns to other public investments have been
Page 11
processing software NASA developed to reconstruct and filter images can be applied
to a digitized mammogram, and likely will be useful in identifying suspicious areas
indicative of breast cancer.
The Internet and the Information Superhighway. The Internet was originally a
government-sponsored computer network designed to connect researchers. Today, it
is an important component of what is commonly referred to as "the information
superhighway." Nobody knows exactly how the Internet will develop, but it is
increasingly active, with more and more business involvement.
CONGRESSIONAL PROPOSALS CUT FEDERAL R&D EXPENDITURES
Today, we face the possibility of unprecedented cuts in Federal R&D expenditures.
The American Association for the Advancement of Science estimates a real cut of about
30 percent in Federal support of non-defense R&D by the year 2002 if the Congressional
budget resolution were to become a reality. Chart 6 details the estimated results of the
Congressional plan.
Chart 6
Projected Congressional Non-Defense R&D Allocations 1990 - 2002
(billions of 1987 dollars)³ᵉ
27
25
23
21
19
17
15
1990
1992
1994
1996
1998
2000
2002
By contrast, the Japanese government recently announced plans to double its R&D
spending by the year 2000. Chart 7 highlights the effect of the Congressional plan and the
Japanese plan: by 1997 Japan will overtake the United States in government support of
non-defense R&D - in total dollars, not just as a share of GDP.
30
1990 - 1995 are actual expenditures; 1996 - 2002 are estimated results of Congressional proposals;
deflators 1994 - 2000 are estimates from OMB, Analytical Perspectives: Budget of the United States
Government. FY 1996. Assumed 3.5 percent inflation from 2000 - 2002.
Page 13
Chart 8
Percent Changes in Federal R&D Expenditures and
Private R&D Expenditures One Year Later¹³
12
10
Private R&D, one year later
Federal R&D
8
6
4
2
0
-2
-4
-6
1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
This correlation means that if Federal R&D support is cut, the nation is likely to
lose future rewards not only from the Federally-supported R&D that will not be
undertaken, but also from the industrial R&D that will not be undertaken as the private
sector scales back in response to Federal cuts.
CONCLUSION
Continued advances in R&D and technology are crucial to ensuring and increasing
economic growth. Many studies have shown that while returns to a firm from investing in
R&D are high, returns to society are even higher as new ideas are applied to areas far
beyond what the innovator initially imagined. However, such spillovers imply that private
firms will not invest in enough R&D from a national perspective. The Federal government
can step in to fill the gap between the private level of R&D investment and the level and
types of R&D investment that are best for the nation. Moreover, the nation benefits not
just from the results of Federally-sponsored projects, but also because Federal R&D
expenditures seem to stimulate additional private R&D expenditures.
The competitive position of the United States - and indeed future increases in
standards of living -- depends on technological advances. These in turn depend on our
entire scientific and technological infrastructure, which includes our educational
institutions -- producing the scientists and engineers that will provide the creative
advances of the future -- our research universities, and our nation's laboratories, both
within the private and public sectors. Ideas flow from basic research, through pre-
competitive development, to concrete applications, producing new products and
developing new, better, and lower-cost production processes. Government has a vital role
33 Hill, Christopher. "Private Funds are Unlikely to Replace Cuts in Public Funds for R&D in the U.S."
Mimeo. June 19, 1995. Data from NSF. "National Patterns of R&D Resources: 1992." NSF 92-330.
October, 1992.
Page 15
Economic
Report
President of the
Transmitted to the Congress
February 1995
public
are in the financial benefits that accrue from the use
economically optimal level of R&D. Bolstering th
ncentive is
of the
arce. Auctions are compatible with the pursuit of other
therefore an important efficiency-enhancing fund
of govern-
societal goals: applicants can continue to be screened for basic
ment. Government can do so through enhanced patent protection-
qualifications, and license uses can be regulated as necessary to
while bearing in mind the potential inefficiencies in production and
protect public interest. Even with these restrictions, using auc-
innovation that can occur with even temporary market power-and
tions to license spectrum is more efficient and less costly than lot-
through public support for R&D.
teries and comparative hearings.
Even before this Administration came into office, historic
In 1993 the Congress authorized the FCC to invite competitive
changes in the global distribution of wealth and power had sparked
bids for initial licenses for spectrum dedicated to commercial sub-
a public reexamination of the nature and extent of Federal support
scription uses. The first auctions, for spectrum devoted primarily to
for the Nation's science and technology enterprise. Much of this at-
advanced and two-way paging, took place in 1994 and yielded sub-
tention focused on the implications for Federal R&D spending of
stantially more revenue to the government than some industry
the end of the cold war and the growing technical competence of
forecasters had predicted. Auctions for spectrum devoted to per-
foreign-based firms in areas where U.S.-based industry had tradi-
sonal communications services (PCS) are anticipated to generate
tionally been the world leader. To respond to these changes, this
billions of dollars over the next several years
Administration has reoriented the Federal R&D effort from pri-
marily defense-related investments toward investments in a broad-
SCIENCE AND TECHNOLOGY
er set of national goals, including health, prosperity, environmental
Scientific discovery and technological innovation play central
responsibility, and improved quality of life, in addition to national
roles in increasing productivity and economic growth. In the long
security. Although the United States is still in the midst of a major
transition in the way both the public and the private sector man-
run, it is the discovery of new ideas-better "recipes," as distinct
from merely more cooking in the traditional way with more of the
age the development and commercialization of science and tech-
same limited supply of ingredients-that reduces the cost to society
nology, recent changes are beginning to show positive results.
of producing any given amount of goods. Ultimately these cost re-
Trends in National R&D
ductions will translate into some combination of lower prices for
Together industry, government, and universities in the United
consumers, higher wages for workers, and higher profits for inves-
States have typically spent more money on R&D activities than
tors. Over time these changes can lead to significant, cumulative
their counterparts in any other country-an estimated $176 billion
increases in living standards. Today the pace of scientific and tech-
in 1994, or 2.6 percent of GDP. Indeed, in 1992, the most recent
nological progress is accelerating in tandem with the pace of the
year for which comparative data are available, the United States
product cycle in international markets. These twin accelerations
spent 28 percent more on R&D than did Japan, Germany, and
blur the lines and shrink the intervals that formerly separated
France combined. However, these countries collectively spent near-
basic from applied research, fundamental science from engineering
ly as much as the United States on nondefense R&D. As a percent-
and technical progress, and technological innovations from their
age of GDP, U.S. spending for civilian R&D stood at 2.1 percent in
initial commercial applications.
1992, compared with 2.4 percent in Germany and 2.8 percent in
Wherever they originate, in the laboratory or on the factory floor,
Japan.
new scientific and technological ideas are often expensive to dis-
Long-term real growth in U.S. R&D has also been slow: just 0.9
cover, yet cheap to replicate. It still costs something to draft the
percent per year on average between 1985 and 1993, compared
blueprint that captures the new idea, and something to make each
with 5.3 percent per year between 1975 and 1985. This slowdown
unit of the product that embodies it, but once created, the idea it-
of total R&D growth has been paralleled by slower growth in pri-
self is easily and often beneficially copied. Thus the economic re-
vate R&D. In 1994 R&D spending by U.S. industry decreased by
turns to one company's investment in innovation can pass quickly
0.5 percent in real terms; this followed an average annual real
to others. Economists have estimated that, because of this tendency
growth rate of only 1.2 percent between 1986 and 1993, compared
of new ideas to become rapidly diffused, innovators typically cap-
with a robust real annual growth rate of 6.7 percent between 1976
ture less than half the total social returns to their investments in
and 1985.
research and development (R&D). In short, the difficulty of estab-
Some of the slowdown in R&D spending may reflect the recent
lishing and enforcing property rights to new ideas reduces the eco-
recession. The slowdown may also reflect recent corporate cost-cut-
162
163
ting drives that have shifted R&D spending toward in-house devel-
vilian-military industrial base. The Administration is also
opment of technologies closer to commercialization and that have
reorienting the Federal Government's R&D portfolio toward the
prompted collaborative research, which is less costly to individual
achievement of important social objectives that would otherwise be
firms. (More than 350 multifirm collaborative research ventures,
inadequately addressed. These include the development of cleaner
among them many R&D consortia, have been created in the United
and more efficient transportation systems, more rapid and wide-
States since 1985, as well as more than 1,000 university-industry
spread diffusion of technological and managerial innovations to
research centers, 72 percent of which were established with State
small and medium-sized manufacturers, environmental remedi-
or Federal support.) Finally, the slowdown in R&D spending re-
ation, and pollution prevention.
flects the end of the cold war. R&D spending by industry is highly
The Administration's R&D strategy relies on a combination of
concentrated in the United States-eight industries account for
grant programs in which industry and government share the costs;
more than 80 percent of the total-and the top two, aircraft and
national initiatives in areas such as manufacturing, transportation,
communications equipment, are closely related to defense.
high-speed computing and telecommunications, and environmental
The deceleration of growth in spending for R&D has been accom-
technology; defense reinvestment efforts; and enhanced technology-
panied by a shift in the sources of R&D funds and a shift in where
transfer mechanisms (for example, the increased use of cooperative
the R&D is actually performed. Nongovernmental sources of fund-
research and development agreements, or CRADAs, which ease pri-
ing have become increasingly important. Universities' share of
vate companies' access to the scientific and technological resources
R&D performance rose to 12 percent by 1993 from just 9 percent
in U.S. Government laboratories). These programs require Federal
in 1985. Although Federal spending on all university research has
agencies to work more closely with commercial industry to
risen, the share of university research funding that comes from the
strengthen the technological underpinnings of the entire economy.
government has declined and recent financial problems of some
Reflecting cold war concerns, national security long commanded
universities may jeopardize their direct expenditures on research.
the largest share of Federal R&D funds. Spending priorities shifted
Meanwhile industrial support for academic research has grown
even further-dramatically so-toward defense programs in the
dramatically, from 3.9 percent of the total in 1980 to 7.3 percent
1980s. The defense share of Federal R&D spending reached its
in 1993. Industrial firms are still responsible for performing most
most recent peak in 1987, when it accounted for 69 percent of the
of the Nation's R&D-$125 billion worth, or 71 percent in 1994-
total. The defense share declined from 59 percent to 56 percent be-
but even if their increased support for academic research is in-
tween 1992 and 1994, indicating progress toward the Administra-
cluded, their share of the total national R&D effort has fallen since
tion's goal of restoring a 50-50 split by 1998.
1985.
The national security focus of U.S. R&D spending during the cold
Recent trends in U.S. R&D investment leave some analysts con-
war has also affected the agenda for government support of much
cerned that the Nation is spending too little on the basic research
industrial and university-based science. During the late 1980s, for
that will drive tomorrow's revolutionary breakthroughs. This con-
example, the Defense Department provided 32 percent of all funds
cern is supported by empirical evidence that suggests there are
for academic engineering research. While Federal funds account for
large unexploited economic gains to be realized from raising our so-
just one-fourth of the money private industry spends to support
ciety's level of scientific activity and technological research and de-
R&D, 76 percent of that Federal support goes to aerospace and
velopment; in the past, the social rate of return on such invest-
communications equipment firms, primarily for development of
ments has been high. As a central component and stimulus of U.S.
weapons and related systems of military application. The cold war
innovation, Federal R&D investment can lead technological innova-
emphasis on defense also affected the structure and objectives of
tion nationwide and affect the Nation's military posture, a variety
the Nation's Federal laboratory system.
of important social objectives, and the competitive performance of
In an era of increasing budget pressure-an era, too, in which
U.S.-based firms in domestic and foreign markets.
commercial technology development defines the leading edge in key
Confronting the Cold War Legacy
strategic areas-the maintenance of a defense industrial base sepa-
This Administration has realigned Federal spending for R&D so
rate from commercially oriented industry is in many areas eco-
that it more equally balances civilian and military priorities. The
nomically inefficient. Recognizing this, the Defense Department is
purpose of this shift is not only to strengthen civilian industry, but
now working more closely with firms engaged in commercial and
also to promote the cost-effective development of new technologies
dual-use production than in the past (dual-use goods are those with
for national defense and stimulate the creation of an integrated ci-
both military and commercial uses). Dual-use R&D programs, in-
cluding the Administration's Technology Reinvestment Project
Box 17 The National Flat Panel Initiative
(TRP), are a different-and more economically efficient-way of
carrying out the Defense Department's traditional R&D activities.
Today's computers display information in one of two ways:
The TRP has played a role in facilitating new partnerships between
on ubes. the bulky devices now-used intelevision
defense and commercial industry. Combined with the procurement
-sets and most desktop computers, or bndlat panel displays the
reforms discussed earlier, the program is expected to make the De-
thin light rugged cr used inslaptop computers Flat panel
fense Department a more attractive customer for civilian produc-
displays are components in many consumer prod
ers. It is also exposing traditional defense contractors to innovative
ucts: facsimile machines, por able telephones scompact disc
management and production techniques that can lower their costs
players, and videocasset tear ecorders, as well as Taptops: They
and encourage more rapid technology transfer from the commercial
will also transfor future tlefields, where will be used
to satisfy the huge demand for informationefrom myriad sen
sector.
Other important examples of Defense Department dual-use R&D
sora-providing in combatant in aircraft,
initiatives include the development of flat panel display technology
ships, tanks and the anfantry
(Box 4-7) and microwave and millimeter wave monolithic inte-
recently complet teragency study of flat panel displays
shows them to be increasingly importan in military applica-
grated circuit technology (MIMIC). Commercial applications for
tions, But with 95 percent of supply controlled by foreign pro-
MIMIC devices include their use in collision avoidance systems for
ducers whose willingness to work with the Defense Depart-
automobiles, satellite communications, and portable telephones.
ment cannot be taken for granted, access for the latest flat
The development of dual-use components that can be built on the
panel display technologies. for timel incorporation defense
same production line as the military-only versions has resulted in
systems is not assured. The Department of Defense requires
lower cost devices for the military and new, commercially market-
early certain and affordable accessiunrorder to integrate dis-
able products for U.S. firms. Commercial technology cannot supply
playsinto systems and to work out tactics for their use in mili-
defense needs in all instances-tanks and nuclear attack sub-
tary situations
marines, for example, require technology that is defense-unique.
To answer these national securit concerns the Defense De
But a great many defense needs can be served more efficiently-
partment implemen the National Flat Panel Display Ini-
and less expensively-by commercial firms and facilities. Indeed, as
tiative, 5-year, $587 million program of support for research
flexible manufacturing systems are developed and more widely
and development flat panel displays including research on
adopted, it will be increasingly possible to produce in a single plant
their manufacture. Part of this precompet funding is
both low-volume military equipment and high-volume commercial
focused on ensuring that the research leads to products
equipment.
that will be used in applications Aportion
Private Innovation and Public Goods
will innovative program in which ms with la dem-
Beyond reorienting the government's own R&D portfolio, this Ad-
onstrated commitment to build generation displays
ministration has worked on many fronts to increase the level of pri-
share with the Pent agon> the burden of developing dual-use
vate innovation-by supporting public-private partnerships for the
technology for next generation products and manufacturing
provision of industry-specific public goods, by supporting the exten-
processes Matching funds will be awarded in competitions
sion of the R&D tax credit (discussed in Chapter 3), and by propos-
open variety or at panel display technologies,
ing changes in intellectual property law that will increase the in-
centives for efficient creation and use of private inventions.
A similar logic is at work with regard to investments in industry-
Industry-specific public goods. It has already been noted that in-
specific public goods. Investments in a particular technological
dividual firms typically have too little incentive to invest in R&D,
breakthrough may create large economic benefits for the industry
because an innovation and its payoffs may pass quickly to other
as a whole, from which no single producer or subset of producers
firms and to consumers, who paid little or nothing to create the in-
can be excluded, even though the breakthrough was financed and
novation in the first place. The constant creation and rapid diffu-
achieved by others.
sion of scientific discovery and technological innovation are good for
The Commerce Department's Advanced Technology Program
the economy as a whole, but investment in innovation may not ap-
(ATP) is a policy experiment to test whether government-industry
pear to be a prudent move for any individual firm.
partners.
can overcome market barriers to the provision of in-
infringing on the latter's patent rights. Under some
amstances,
dustry-specific public goods. Take, for example, the barriers that
narrowing the scope of patent rights would increase aggregate in-
have impeded some potentially lucrative technical improvements in
novation rates. When an inventor's patent rights are broad in
the materials and manufacturing processes for printed-wiring
scope, extending to a relatively wide range of similar innovations,
boards (PWBs). PWBs comprise the backbone and much of the
later inventors will not be permitted to use their own innovations
nervous system of virtually every modern electronic product. Each
that fall within that broad penumbra of similarity, without the first
increase in the speed and complexity of electronic devices has in-
inventor's permission. Recognizing that such permission will fre-
creased the density of the PWB's lacework of copper lines, which
quently involve negotiating a payment to the first inventor (a nego-
must be embroidered to tiny plated holes. By the early 1990s,
tiation in which the second inventor will sometimes have little bar-
PWBs were beginning to reach the fundamental physical limits im-
gaining leverage), the second inventor may be discouraged from ex-
posed by both materials and manufacturing processes. PWB mar-
ploring his or her new ideas to begin with. Or, if the second innova-
ket analysts understood that relatively minor material or process
tion is produced but the first and second innovators dispute its
improvements could result in sizable cost savings for the entire in-
value, and in consequence are unable to reach a bargain, the sec-
dustry, yet no single company or group of companies was willing
ond innovation may not be used until the patent expires. Giving
to risk a large-scale investment.
broad scope to patent rights may thus discourage potential
The ATP stepped into the breach, agreeing to help finance a 5-
innovators from undertaking R&D effort in areas likely to produce
year research plan developed by an industry consortium, as long as
follow-on inventions. Yet in other cases, narrowing the scope of in-
the consortium's members were themselves willing to put up at
tellectual property rights would reduce aggregate innovation rates
least half of the money. The $28 million effort began in 1991. A
by lowering the value of initial innovations, thus reducing the in-
study conducted in 1993 found that after 2 years the project had
centive for initial innovation.
already saved the participants about $13.5 million simply by help-
In part to promote innovation, the U.S. Patent and Trademark
ing them to avoid redundant research, to share results more rap-
Office has proposed legislation to permit greater third-party par-
idly, and to access each other's specialized know-how and facilities.
ticipation in patent reexamination proceedings. Under this pro-
The ATP itself is only 4 years old, and the Administration is cre-
posal, industry experts and rivals would have a greater opportunity
ating long-term and intermediate performance measures in order to
to present information about novelty or obviousness to the patent
rigorously evaluate its economic impact. This effort to promote in-
examiner after a patent is issued. In addition, the Department of
novation in the private sector is itself an innovation in the relation-
Justice has drafted proposed new antitrust guidelines for the li-
ship between industry and the government, one that was begun
censing and acquisition of intellectual property. By clarifying the
during the previous Administration.
conditions under which trade restraints involving intellectual prop-
Intellectual property. Incentives for technological innovation are
erty, like those involving other forms of property, can harm com-
affected by the regime of intellectual property rights, including pat-
petition and run afoul of the antitrust laws, the Justice Depart-
ents and copyrights. Absent well-defined and effectively enforced
ment seeks to explain how antitrust law and intellectual property
intellectual property rights, rivals could readily duplicate new in-
protections can be harmonized to encourage innovation and effi-
ventions or writings without offering compensation; this reduces
ciency, and so benefit consumers.
the innovator's likely profit and mutes the incentive to develop and
market his or her creations in the first place.
CONCLUSION
The economics of patent protection have long been understood as
posing the following policy tradeoff: patent protection encourages
Adam Smith published The Wealth of Nations in 1776, the same
innovation, but that social benefit comes at the cost of allowing
year Thomas Jefferson wrote the Declaration of Independence.
some successful innovators to price the resulting products well
Since that time the United States has become a vastly larger and
above marginal cost. In recognition of this tradeoff, patent protec-
more prosperous Nation. One reason is that, throughout our his-
tion is granted for a limited term of years. Yet appropriate public
tory, government has worked in partnership with the private sector
policy toward innovation must also recognize a second tradeoff, in-
to promote competition, discourage externalities, and provide public
volving the scope rather than the term of patents.
goods. The policy challenges that face us vary from generation to
The scope or breadth of patents refers to the extent to which a
generation, and government institutions appropriate for addressing
new innovation must differ from an existing one in order to avoid
one era's problems must be reinvented for the next. But in every
era, the of government in helping remedy market failures re-
mains central for enhancing the Nation's well-being.
CHAPTER 5
Improving Skills and Incomes
BETWEEN 1973 AND 1994 the U.S. economy created 37 million
additional jobs. This growth in employment absorbed an unprece-
dented number of new entrants, including millions of baby-boomers
and women, into the work force and surpassed the record of the
other large industrial nations. During this same period, however,
slow productivity growth in the United States was reflected in slow
growth in average real compensation. Indeed, real compensation
per employed person increased more slowly in the United States
than in the other large industrial countries (Chart 5-1). Even
worse, income growth stagnated in the middle of the income dis-
tribution and declined sharply for those at the low end, causing in-
security and falling living standards for many Americans. The
large declines in the real wages of less educated and lower paid
workers were associated with increased inequality in family in-
comes and with growing rates of poverty among working families.
For a growing number of workers without college degrees or signifi-
cant on-the-job training, the American dream faded.
This chapter examines the factors that underlie the disappoint-
ing growth in the incomes of most American workers over the past
20 years and describes this Administration's policy responses.
The sluggish growth of incomes is due to dramatic changes in
technology and in global competition that have affected industri-
alized economies around the world, reducing the relative demand
for workers with less education and training. Industrialized nations
have differed in their response to these common changes. Since
1973, the U.S. economy has created more jobs than all of the Euro-
pean Community. But at the same time the other industrialized
economies have experienced more rapid growth in wages and pro-
ductivity and slower growth in inequality.
Although these differing patterns appear to suggest a trade-off
between rapid job growth and high wage and productivity growth,
this Administration believes that such a trade-off is not inevitable.
To sustain rapid job growth while increasing growth in wages and
productivity, the Administration has undertaken an ambitious
agenda of lifelong learning to help American workers respond to
the challenges and grasp the opportunities afforded by the new eco-
nomic realities.
Clinton Presidential Records
Digital Records Marker
This is not a presidential record. This is used as an administrative
marker by the William J. Clinton Presidential Library Staff.
This marker identifies the place of a tabbed divider. Given our
digitization capabilities, we are sometimes unable to adequately
scan such dividers. The title from the original document is
indicated below.
Technology in the
National Interest
Divider Title:
SAT+
Economy
FORCES OF GLOBAL CHANGE
"Our Nation faces significant economic
We live in an era of profound change-political, economic, and technological. Global
challenges. Markets are global, competi-
competition has reached unprecedented levels. With the end of the Cold War and the
tion is fierce, technological change is swift
demise of communism, new nations have emerged across the globe, building on a foun-
and unabating. Meeting these challenges
dauon of freedom, democracy, and free market principles. Today we compete not only
requires a strategy to equip American
with advanced industrialized nations such as Germany and Japan, but also with new com-
companies and workers to compete SUC-
petitors such as China, South Korea, Malaysia, and the states of the former Soviet Union.
cessfully in the 21st-century economy."
A new battlefield has emerged in the form of a global marketplace, and able competitors
John H. Gibbons
Director, White House Office of
from around the world are fighting for a share. International accords, such as GATT and
Science and Technology Policy
NAFTA, are fostering competition, opening new markets and expanding existing ones,
and bringing consumers more choices and higher quality at lower costs.
"The United States must invest in technol-
Technology is reshaping our world at a speed unimaginable just a few decades ago.
ogy and in our workforce if we are to meet
Competition to meet the increasingly high expectations of the world's consumers has
the challenges of intensifying global com-
accelerated the rate of technological progress to a breathtaking pace, with each advance-
petition. Our foreign competitors are shift-
ment more dazzling than the last. Technology plays an increasingly important role in the
ing into high gear in the race for the future.
global economy, in the lives of every American, and in our national defense.
They are rapidly expanding their technolog-
ical capabilities and developing the skills of
In the wake of these forces, the way we live, learn, and work is being forever transformed.
their people. Their governments are devel-
Each of these changes-the emergence of a global economy, unprecedented global com-
oping policies and programs to enhance
petition, and rapid advances in technology-would be revolutionary on its own, but
the competitiveness of their industries and
together they have produced staggering results that are deeply felt by Americans in all
attract the engines of economic growth to
walks of life.
their shores. America's future prosperity
depends on answering these challenges
loudly and clearly."
TECHNOLOGY AND THE AMERICAN ECONOMY
Michael Kantor
Technology is the engine of economic growth. It underpins America's fastest growing
Secretary of Commerce
industries and high-wage jobs, provides the tools needed to compete in every business
today, and drives growth in every major indus-
America's research-intensive industries-
RELATIVE CONTRIBUTION
trialized nation. Today, technological leader-
aerospace, chemicals, communications
SOURCES OF U.S.
ship often means the difference between suc-
equipment, computers and office equip-
ECONOMIC GROWTH
cess and failure in the global marketplace-for
ment, pharmaceuticals, scientific instru-
companies and countries alike.
ments, semiconductors, and software-
have been growing at about twice the rate
Capital
24%
Technical progress is the single most important
of the economy as a whole in the past two
determining factor in sustained economic
decades.
Labor
27%
growth, estimated to account for as much as
half the Nation's long-term economic growth
Technical
over the past 50 years. Increases in productivi-
technical progress is by far the most
Progress
49%
important source of economic growth of
ty have long been recognized as one of the pri-
the industrialized countries in our sam-
mary mechanisms by which technology con-
ple, accounting for half or more
Sourc Boskin andita
tributes to growth. It is estimated that technol-
ogy and advances in knowledge account for
Michael Boskin
Professor of Economics,
approximately 80 percent of total factor productivity growth. Ultimately, long-term, non-
Stanford University, 1992
inflationary growth is the only true path to real wage increases and an improved standard
(former Chairman, President Bush's
of living.
Council of Economic Advisors)
Technology in the National Interest
Chapter 1
12
The performance of individual companies-the agents through which economic growth
High-technology firms are associated with
occurs-is strongly linked to their use of technology. A recent Department of Commerce
high rates of improvement in value-added
analysis shows that the use of advanced technologies enhances manufacturing in virtually
manufacturing and success in foreign
every important performance category. Firms that use advanced technologies are more pro-
markets, which help support worker
compensation that is 20 percent higher
ductive and profitable, pay higher wages, and increase employment more rapidly than
than the average for manufacturing.
firms that do not. Between 1987 and 1991, employment at plants that used eight or more
advanced technologies grew 14.4 percent more than plants that used no advanced tech-
nologies, and production workers' wages were more than 14 percent higher.
Cellular Telephone
30
Technology is transforming the very basis of competition-enabling small businesses to
Subscribers Soar
25
perform high-quality design and manufacturing work that previously required the
20
resources of big business, while allowing big businesses to achieve the speed, flexibility,
15
and closeness to customers that were once the sole domain of smaller firms.
10
(in millions)
Technology provides the tools for creating a spectacular array of new products and new
5
services. It is creating new industries-advanced materials, mobile cellular communica-
o
tions, electronic commerce-and revitalizing old ones-steel, automobiles, textiles. The
1987
1988
1989
1990
1991
1992
1993
1994
1995
information industry as we know it now barely existed just decades ago. Today, however,
the communications and information industries are among America's largest, constituting
about 10 percent of U.S. gross domestic product and employing more than 4.5 million
Employment in the cellular telephone
people in the United States. The economic importance of these technologies extends
industry has grown from 7,100 in 1987
beyond the borders of the communications and information industries. By making it pos-
to 53,900 in 1994.
sible to manage vast quantities of information, these technologies are transforming every
sector of our economy-manufacturing and services, transportation, health care, educa-
tion, and government-and, in the process, changing forever the way people live, work,
In 1978, the cable television industry
and interact with one another.
employed 23,500; today, the industry
employs more than 112,000.
By the end of the 20th century, information will be the most important commodity in the
world's economic system. The speed with which we create knowledge and our ability to
put it to work for us will determine America's position in the international marketplace of
In 1985, there were only 300,000
the next century. Advances in information technology-software, semiconductors, micro-
registered e-mail users. In 1993, an
processors, telecommunications-are essential for managing this information explosion,
estimated 12 million Americans regularly
used e-mail and related on-line services.
putting a world of knowledge, global commerce, and communications at our fingertips.
Today, the number of e-mail users is
America is leading the world into the Information Age. The United States is laying the
estimated to exceed 27 million.
foundation for a National Information Infrastructure (NII) that will link schools and
homes, offices and factories, hospitals and clinics, and a myriad of other business, acade-
mic, and social institutions. This network will enable a colossal leap in knowledge shar-
It has been estimated that accelerated
ing, propelling scientific inquiry and discovery, business productivity, transportation sys-
deployment of the NII would increase
tem performance, and the education of our citizenry.
U.S. GDP by $100 to $300 billion over
the next decade.
The NII-and its international corollary the Global Information Infrastructure-will spur
the growth and creation of American companies and jobs, facilitate the conduct of business
worldwide, and accelerate the development of new products, services, and capabilities in
the United States. American companies, large and small alike, will be able to respond quick-
ly and flexibly to ever-changing global market demands with high-quality, customized goods
and services at competitive prices.
Chapter I
Technology in the National Interest
13
"We are not the only nation with compe-
TECHNOLOGY AND THE NATIONAL DEFENSE
tence in defense technology. To sustain
On the battlefield, technology can be the decisive edge. America's technological superior-
the lead which brought us victory during
ity has provided our men and women in uniform the wherewithal to protect the freedom,
Desert
Storm
recognizing that over time
democracy, and security of the United States. Beyond our own borders, U.S. military
other nations will develop comparable
strength-built on a foundation of high-technology-has enabled the United States to
capabilities, we must invest in the next
stand in defense of our allies, preserve the peace, deter hostilities, repel aggression, and
generation of defense technologies."
foster fledgling democracies across the globe.
William J. Perry
During the Cold War, an arsenal of advanced weapons allowed the United States to field
Secretary of Defense
a technologically superior force to counter the numerically superior Soviet threat. Today,
these high-technology weapons and the transportation and logistics systems that support
their deployment provide the United States with the ability to undertake global military
operations and conduct surgical strikes on strategic military targets-as in recent opera-
The top 15 U.S. pharmaceutical
tions in Iraq and Bosnia-while minimizing the risk to U.S. soldiers and civilians.
companies employed more than 350,000
Continued technological leadership is essential to U.S. national security, military readi-
people and earned profits of $13.3 billion
ness, and global influence.
on sales of $84.8 billion in 1994.
TECHNOLOGY AND AMERICA'S QUALITY OF LIFE
New technologies are also improving the quality of life for all Americans. Medical research
in pharmaceuticals, biotechnology, and medical devices promises new hope for the sick
and a healthier life for all. Environmental research offers cleaner air, water, and soil
through better monitoring, prevention, and remediation technologies. Advanced moni-
toring and forecasting technologies-from satellites to simulation-are helping save lives
and minimize property damage caused by hurricanes, blizzards, microbursts, and other
severe weather. Sophisticated traffic management systems for land, sea, and air trans-
portation enable the movement of more people and goods in less time.
Agricultural research is producing a cornucopia of safer, healthier, and tastier food products.
Automobile research is providing safer, cleaner, more energy efficient, and more intelligent
vehicles-saving lives, preserving natural resources, and keeping our environment cleaner.
Acronautical technology is making air travel safer, less expensive, and environmentally com-
patible. Energy research is helping to deliver cleaner and less expensive fuels, reduce
Safer poultry products.
American dependence on foreign resources, and tap alternative sources of energy-solar,
nuclear, geothermal, biomass, and hydroelectric. Information and telecommunications tech-
nologies have enabled instantaneous communications across the globe. And the ability to
telecommute allows many American workers to spend more time with their families.
By 2001, there will be an estimated
15 million American telecommuters.
Technology in the National Interest
Chapter 1
Clinton Presidential Records
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Scientific Freedom
Divider Title:
RESIDENT ASSOCIATE PROGRAM
SMITHSONIAN INSTITUTION
14 June 1977
Scientific Research: Determining the Limits
Statement
Gerard Piel
Publisher, SCIENTIFIC AMERICAN
A. The sovereignty of the citizen engaged in the public
business is declared in the unambiguous language of the
First Amendment.
1.) The enquiry of the scholar and scientist is the
supreme exercise of that sovereignty.
2.) The pursuit of objective knowledge has made good
the promise of sovereignty to the citizen
(qualified by the failure of our economic institutions
to secure equitable distribution of material goods).
3.) The proposal that "limits" somehow be set upon
scientific enquiry (into any question) must be
understood as imposition of limits upon the
sovereignty of the citizen.
a.) To what agency or power could the citizenry
delegate control over this crucial exercise
of sovereignty?
b.) What agency will display greater sensitivity to
the practical ("risk/benefit") and moral
("control of evolution") questions than the
scientific community?
B. Historically, self-government derives moral and pragmatic
sanction from the assertion of individual sovereignty by
scientists and finds the model of its deliberations in
the self-governing community of science.
1.) The autonomy of the scientist is absolute: he can
recognize no external authority over his judgement
and conscience.
- 2 -
2.) The exercise of that autonomy by the individual
scientist (his work) derives its meaning from its
relevance to the work of other scientists, and from the
degree to which it stresses and reorders the context
in which the work is done.
3.) The work of the scientist is supremely public business,
as demonstrated by the identity of "publication" with
the "doing" of the work.
C. Attempts to place limits upon science by creation of external
agencies provide instances of the tyranny that scientific
enterprise has otherwise so successfully helped to overthrow.
1.) The Nazi "doctors," as agents of the pathological
doctrines of a dictatorship that had destroyed the
autonomy of German science, performed bestial experiments
with no relevance to the context of the work in human
biology that has transformed man's comprehension of
his identity.
2.) The establishment of the Lysenko overlordship of USSR
agricultural research in the 1930's by the ignorant will
of the Stalin dictatorship eradicated a significant tradition
in genetics and set USSR agriculture on the disastrously
regressive course that is reflected in crop failures
of the 1970's.
D. Participatorily democratic "public" persons and organizations
that presume to frame and impose limits upon scientific
enquiry must recognize they are tampering with the moral and
- 3 -
pragmatic foundations of their own and of their fellow
citizens' freedom and welfare.
1.) Their surprise upon their belated discovery of supreme
issues in scientific research reflects their failure
as citizens to keep themselves informed on important
public business.
2.) If they are to contribute constructively to science
policy they must cure themselves of the defect in
their intellection that refers questions of truth to
science and questions of value to other increasingly
unspecifiable authority.
E. Scientists are also citizens. They are the members of the
public best qualified to frame science policy.
1.) Scientists have the obligation to inform their fellow
citizens of the nature and the implications of their
work; to conduct their deliberations in the full view
of their fellow citizens, and to invite the participation
of fellow citizens who take the trouble to make themselves
responsibly informed.
2.) On questions respecting the hazards that may attend
research, scientists will necessarily be the first to
recognize such hazards and to provide society's first
line of defense against them.
3.) With respect to the propriety of research enterprises
the open polity of science provides the surest institutional
restraint upon irresponsible or reprehensible individual
scientists.
-17-
Pam- AS provised- Vick
THE BOUNDARIES OF SCIENTIFIC FREEDOM
By. Harold P. Green
Professor of Law
National Law Center
The George Washington University
Two and a half years ago a group of scientists called upon their col-
leagues throughout the world to establish a moratorium on certain kinds of
experiments involving recombination of DNA molecules. This moratorium,
apparently universally accepted, the subsequent NIH guidelines imposing
positive restrictions on such experiments, 1 and prohibitions suggested or
adopted by various state and local governments, 2 have all stimulated discus-
sion as to whether such restraints in some way violate what has been charac-
terized as "the right to scientific inquiry." More specifically, it has been
suggested that scientists have a right to pursue knowledge and that this right
is of the same dignity as freedom of speech and of the press guaranteed in
the Constitution of the United States. 3
It is not surprising, therefore, that upon establishment of the AAAS
Committee on Scientific Freedom and Responsibility, 4 that committee would
turn its attention in part to the question whether there are in our American
system of government and law any boundaries to scientific freedom and, if so,
where these boundaries are to be found. Specifically, a Subcommittee on the
Boundaries of Scientific Freedom, of which I am Chairman, has been created
to look into this matter.
In this paper, I discuss these issues from my dual perspective as a
teacher of constitutional law and as a student of public policy for science
and technology. My focus is not on whether there are or should be any limits
on scientific freedom as a matter of morality or policy, but only whether
limitations are permissable as a matter of constitutional law.
To begin with, I am not aware of any precedent or legal authority that
clearly supports the proposition that there is a constitutionally protected
right to pursue knowledge or to engage in scientific inquiry. I believe,
and am prepared to argue, however, that such rights are implicit in the First
Amendment freedoms of speech and press; and for purposes of this paper it is
assumed that the Constitution guarantees and protects such rights to precise-
ly the same extent as speech and press. Parenthetically, it seems clear that
a right to scientific inquiry can have no greater constitutional dignity than
freedom of speech. Let us therefore explore the boundaries of freedom of
speech in the effort to understand the boundaries of scientific freedom.
It is impossible to offer a complete exposition of the boundaries of
freedom of speech as enunciated in Supreme Court decisions. Suffice it to
Based on a presentation at the Annual Meeting of the American Association
for the Advancement of Science, Denver, Colorado, February 1977.
say, some kinds of speech enjoy the protection of the First Amendment; other
kinds of speech do not. Even where speech does enjoy such protection, the
degree of protection is variable. A distinction of crucial significance is
that between speech and action. Speech emanating from the vocal cords is
generally protected, but amplified speech is not; 5 one is constitutionally
protected in cursing the flag or a draft card, 6 but not protected when rip-
ping or burning it; 7 one is protected by the First Amendment when engaged
in vigorous debate with a foe, but not when using language (fighting words)
calculated to provoke a violent response; 8 one may discuss aircraft hijacking
in one's own home or office, but perhaps not when sitting in a commercial
aircraft.
Such precedents are helpful in drawing the constitutional boundaries.
of scientific freedom. Surely a scientist has the freedom to think, to do
calculations, to write, to speak, and to publish. When, however, the scien-
tist leaves the area of such abstractions and turns to experimentation, he
moves within the range of action that may enjoy only some, or perhaps very
little or no, constitutional protection. To the extent that experimentation
could be constitutionally protected, freedom would vary inversely with the
degree of perceived impact on persons and the environment. Thus, where
scientific research involves experimentation with human or animal subjects
or where it impinges upon the community, it would clearly become subject to
regulation. It is interesting to note that Han Jonas reaches the same con-
clusion from the moral perspective. He tells us, eloquently, "The granting
of freedom to thought and speech does not cover action, even if subsidiary
to thought. Action is always subject to legal and moral restraints.
I think, so far as I have gone, scientists would sense intuitively that
what I have said is correct. They are, after all, surely aware of a multitude
of legal restraints on what they can do and where, when, and how they can do
it. Where many would probably part company with me is on the question of
where the burden of proof lies before government may properly restrict scien-
tific freedom.
Again, the freedom of speech analogy is instructive. When we are operat-
ing in the realm of pure constitutionally protected speech -- or abstract or
theoretical scientific research --- a proponent of restrictions must carry a
heavy burden of proof. 10 There must be a particularly strong governmental
interest in the restriction a clear and present danger to be protected
against) 11 and the restriction itself must be designed to intrude to the
minimum extent possible on the constitutionally protected right. 12 As, however,
we move down the scale towards action and experimentation, the burden shifts
dramatically, and no more than a rational basis will be required to sustain
the constitutionality of the restriction. For example, since obscenity is
not protected by the First Amendment, 13 it is not necessary for government to
show a clear and present danger before it acts to restrict obscene speech.
Obscenity may be prohibited without any showing that obscenity is harmful; 14
indeed, it is not even necessary to show that the government actually thinks
that obscenity is harmful; it is enough that there is some rational basis for
such a belief. 15 This attitude reflects the currently prevailing judicial
position that, at least where no constitutional limitation on government power
is operative, the courts will not second-guess the legislature or executive as
to the wisdom, desirability, or necessity for regulation. 16 Thus, there has
never been any doubt in my mind that a city's prohibition against recombinant
DNA molecule experiments within city limits does not violate any constitution-
ally protected right of scientific inquiry where the city may rationally ---
even though perhaps not reasonably -- have believed that such experiments
might endanger the health and safety of the public.
At this point it is necessary to draw another kind of distinction --
between government regulation of a scientific activity and a government deci-
sion not to fund that activity. We sometimes forget that government has no
moral or constitutional duty to support scientific research, no matter how
beneficial the hoped for results, 17 and that no scientist has a constitutional
right to have his research projects funded by the government. I am reminded
of Freeman Dyson's 1965 article in which he argued that NASA's decision not
to continue funding Project Orion represented "the first time in modern his-
tory that a major expansion of human technology has been suppressed for polit-
ical reasons. "18 In the same vein, some scientists seem to believe that it
is immoral or wrong if the government is really motivated by fear that result-
ing scientific knowledge will be misused. Personally, I do not understand why,
if it is legitimate for government to fund research because it hopes for con-
structive knowledge, it is illegitimate for government not to fund research
because of concern that the resulting knowledge will be destructive. Indeed,
as I have argued clsewhere, it is probably not realistically possible for our
democratic society to impose timely and effective regulation over abuse of
knowledge resulting from government-sponsored research and development. 19
-
When government, for whatever reason, chooses not to fund a particular
kind of scientific research, it is not interfering with scientific freedom.
Scientists remain perfectly free to do this research if they can find the
money elsewhere. However, a direct prohibition or restriction on scientific
research may indeed represent an infringement on scientific freedom.
It requires only a moment's reflection to appreciate that there is really
nothing new or novel in the NIH guidelines on recombinant DNA molecule experi-
ments, or the Cambridge restrictions on such experiments. We all realize, or
should realize, that government in the past has imposed restrictions on where
and when certain kinds of research may be conducted. Obviously, city zoning
laws may preclude experiments with explosives in the center of an urban popu-
lation center, and it would probably be regarded as a legal nuisance if the
explosives were experimentally detonated within earshot of the community at
2:00 a.m. We know that scientists are not free to experiment with human sub-
jects or the fetus as they see fit. We know that there have been restrictions
on the use of animals or cadavers in scientific research. We know that the
Food and Drug Act and the Atomic Energy Act restrict and regulate certain kinds
of research. We know that limits on the use of classified information may im-
pede or bar certain scientific research programs. Indeed, Dr. Barry Casper has
recently raised the question of a moratorium on development of laser enrichment
of uranium.
20
It'is not clear to me why, in the face of such precedents, the scientific
community has become so edgy about scientific freedom in recent months. The
Subcommittee on the Boundaries of Scientific Freedom, which I chair, hopes to
examine precedents such as those I have just enumerated in which significant
restrictions on scientific research have been adopted, some with the apparent
acquiescence, at least, of the scientific community. We hope it will be pos-
sible through examination of these cases to acquire a better understanding of
the decision-making and negotiation process through which such restrictions
have been developed.
At the outset, I emphasized that this would be a discussion of the boun-
daries of scientific freedom as a matter of constitutional law and not as a
matter of public policy. It is important to distinguish clearly between these
two concepts. For example, one could argue in favor of the constitutionality
of municipal prohibitions against recombinant DNA molecule experiments,
but also argue against such prohibitions on policy grounds. In recent years,
we have become excessively accustomed to looking to the courts to protect what
we perceive to be our rights, and we have lost sight of the fact that the first,
and in many cases the only, line of defense of these rights is our legislatures.
While an argument about a right to scientific freedom may be a useful piece of
rhetoric in political debate, we should not take the existence of such a right
too seriously. In short, the principal point that I wish to convey is that
the boundaries of scientific freedom, at least in terms of current issues, are
established primarily through the political process and are not rooted in con-
stitutional law.
NOTES
1. The chronology of events leading to the guidelines is summarized in the
introduction to the Decision of the Director. National Institutes of
Health, To Release Guidelines for Research on Recombinant DNA Molecules,
41 Fed. Reg. 27902 (7 July 1976).
2. See the report of the Science Policy Research Division, Congressional
Research Service, Genetic Engineering, Human Genetics, and Cell Biology:
Evolution of Technological Issues, DNA Recombinant Molecule Research
(Supplemental Report II), published as a Committee Print by the House Com-
mittee on Science and Technology, December 1976, PP. 47-53.
3. DeWitt Stetten, Jr., "Freedom of Inquiry," Science 189 (19 September 1975)
953. This editorial is a condensation of a longer paper titled "Freedom
of Inquiry" presented by Dr. Stetten before a meeting of the Genetics
Society of America on August 19, 1975.
4. Science 193 (3 September 1976) 877, 921.
S. Kovacs V. Cooper, 336 U.S. 77 (1949) Grayned V. City of Rockford, 408
U.S. 104 (1972).
ó. Street V. New York, 394 U.S. 576 (1969).
7. Id.; United States V. O'Brien, 391 U.S. 367 (1968).
Chaplinsky V. New Hampshire, 315 U.S. 568 (1942).
9. Hans Jonas, "Freedom of Scientific Inquiry: The Accountability of Science"
in the Hastings Center Report (August 1976).
10. Organization for a Better Austin V. O'Keefe, 402 U.S. 415 (1970) ; New
York Times Co. V. United States, 403 U.S. 713 (1971).
11. NAACP V. Button, 371 U.S. 415 (1963).
12. Shelton V. Tucker, 364 U.S. 479 (1960); United States V. Robel, 389 U.S.
258 (1967).
13. Roth V. United States, 354 U.S. 476 (1957).
14. Ginsberg V. New York, 390 U.S. 629 (1968).
15. Id.
16. Ferguson V. Skrupa, 372 U.S. 726 (1963).
17. See, for example, my exchange with Bernard Davis, Annals of the New York
Academy of Sciences 265, Ethical and Scientific Issues Posed by Human Uses
of Molecular Genetics (1976) : 176.
18. Freeman J. Dyson, "Death of a Project," Science 149 (9 July 1965) : 141.
19. See, for example, my paper "Law and Genetic Control: Public Policy Ques-
tions" in Annals of the New York Academy of Sciences 265, Ethical and Sci-
entific Issues Posed by Human Uses of Molecular Genetics (1976) : 170-175.
20. Barry M. Casper, "Laser Enrichment: A New Path to Proliferation, " Bulletin
of the Atomic Scientists (January 1977): 28.
ase
Clinton Presidential Records
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Quotes
Divider Title:
Lewis Thomas ( "Lines of a cell")
It may be too much to say that we will
become wise through such endrevate, but we
can at least come into possession of a level of
information upon which a new kind of wisdow
might be based. It is a gamble to bet on
science for moving aread, but it is, in my
view, the only game in town.
Tmazzaschi @ aamc.org
05/06/97 10:02:01 AM
Please respond to [email protected]
Record Type:
Record
To:
adhoc @ aamcinfo.aamc.org
CC:
Subject: Adhoc: Clinton's "Medical Research" Remark
For the record, here is the President's remark on medical research in his May 2 statement on the
budget accord:
"For more than four years now, I have worked hard to pursue a strategy that would keep our
economy growing and creating opportunity for the American people, giving people a chance to be
rewarded for their labors, and also imposing upon ourselves the discipline necessary to prepare for
the future and to relieve ourselves of a lot of the problems that had been accumulated over the last
several years, especially the deficit.
"Now, we have reached agreement in broad but fairly specific terms that I am satisfied will do that
with the Republican leaders today that would balance the budget by 2002, continue to increase our
investments in education, in science
and technology and
medical research, require us to continue to show great discipline in other areas and to continue to
downsize some government operations. "
Tony Mazzaschi
AAMC
50F
Education is the progressive
discovery of one's egnorance
L.Thormas?
516
In a letter he wrote in 1822, James
Madison said: "A popular govern-
ment, without popular information, or
knowledge will
the means of acquiring it, is but a pro-
Imens govern
logue to a farce or a tragedy; or. per-
ignorem
haps both L.A people who mean to
be their own governors, must arm
themselves with the power which
knowledge gives."³
3 writing, 4 your Madison" G.P. Putuans, 1900,
in a letter K W.T. Barry written in 1822
Chicag
"True science knows no bounds. It
penetrates into every domain without
fear and serves all men without prejudice
or favor. It's work is to substitute
facts for appearances, demonstrations for
impressions, and beneficial realities for
those many things ignorance and greed
proclaim to be impossible. For suffer-
ing humanity it is hope and promise."
0. W. Holmes (from Harry Caudill)
532
540
"Sooner or later we sit down
to a banquet of cousequences
Robst lamis Stevenson
545
The would we live in is made of an
immentaly complex and mysterious tissue
about which we know very little and which
we must treat with utrust humility.
Vaelav Hevel
N.Y. T. 6/3/92
555
"zeal without knowledge
is fine without light
Jolun Ray (07 naturalist) D.C. English
JFK
end
A.U. ~ 1963
586
"If we cannot now our differences, at least
we can help mole the would safe for diversity.
I realize that the personat of prace is not and
dramatic as the pursuit of war. and frequently
the words of the persuer fall ou deal cons -
But we have no more urgent task "
-X A.U. = american
University
"man masters nature not
664
by face but by understanding" w
Jacob Bronowski
795
Edas a progressive discovery of
one's own cgnarance
will Durant
1313
Dr. Gibbons quoting Jack Kennedy at
AAAS Annual S&T Policy Colloquium
As President Kennedy once reminded us, "Scientists
alone can establish the objectives of their
research, but society, in extending support
to science, must take account of its own
needs."
Clinton Presidential Records
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Carl Sagan's
Widow's Statement
Divider Title:
13:09
703 306 2000
NAT L SCIENCE BD
1.
002/002
Carl Sagan's Statement Widow's
Verbatim transcript from audiotape of remarks by
Ann Druyan accepting the posthumous
NSF Distinguished Public Service Award to Carl Sagan
May 7, 1997
Benjamin Franklin Room
Department of State, Washington, DC
My heart is bursting with pride tonight. The word 'passion' I note in the citation couldn't
be more apt. Carl used to say when people would ask him why he so energetically
pursued public science education, he'd say "When you're in love, you want to tell the
whole world." And that's how it was for him. It was a love for science, not as a barrage
of astonishing facts, but as a method of thinking, a way of looking at the world as the
single most revolutionary error-correcting mechanism that human beings have ever
devised. I can only think of the Bill of Rights as being a possible contender for that title.
Two error-correcting mechanisms that challenge authority, that make sure that the widest
number of people can be involved in decision making and in the great adventure of finding
out how nature is put together. When we educate the public about science we're not only
making sure that there will be future funding, or a career path, or a competitive edge for
our citizens-that's all completely true-but we're also doing something which means
that we will have citizens who can make intelligent decisions in a society that is completely
dependent on science and high technology. If we don't do this it's like saying that we
really don't seriously intend to have a democratic society in the future. And Carl believed
this so passionately and loved the liberating power of science which took him from
Brooklyn, New York from a family that had never even met a scientist, a hard working
family that had no access to higher education, and made it possible for him to become a
teacher to the whole planet. I feel that if he were he tonight he would say something that
would raise goosebumps and that you would never forget. And I feel, in a way,
inadequate to rise to the heights that I saw him rise to on countless occasions. But I do
know that he would tell you how profoundly honored he was. He believed that science
was its own reward, but I know that your respect and your esteem would have pleased
him so greatly. I humbly accept this Award on his behalf and thank you from the bottom
of my heart.
END
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Speeches
Divider Title:
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Clinton S & T Strategy
Divider Title:
Testimony of the Honorable John H. Gibbons
Director, Office of Science and Technology Policy
before the
Subcommittee on Science, Space, and Technology
Committee on Commerce, Science, and Transportation
United States Senate
March 30, 1995
CLINTON ADMINISTRATION SCIENCE AND TECHNOLOGY STRATEGY
Mr. Chairman, members of the committee, thank you for inviting me here today to
speak with you about the Clinton Administration's science and technology initiatives. These
initiatives are an integral part of the President's New Covenant -- his pledge to reinvigorate
middle class America.
We are now having a great debate about how we can best assure the American Dream
for present generations and for those of the next century. The choices we make will have
profound effects on our lives and those of our children and grandchildren.
In this historic era we have experienced the end of the Cold War, the dawn of the
Information Age, a globalized economy, an explosion of entrepreneurialism. We have before
us enormous opportunities. At the same time, we have profound challenges. We have
experienced almost 20 years of stagnant incomes in the United States. We have growing
inequality of incomes based primarily on educational differentials. We have challenges
abroad in terrorism, environmental destruction, population explosion, and the proliferation of
weapons of mass destruction.
Government has an important role to play as a partner in meeting the challenges of the
future. The role of government is to increase opportunity as we shrink bureaucracy, to
empower people to make the most of their own lives, and to enhance our security at home
and abroad. We aim to expand the middle class and shrink the underclass. And we have to
do it with a government that is smaller and less bureaucratic, but still effective.
The future is in our hands. We can have a globally competitive private sector that is
creating new, high-wage jobs and educated citizens ready to take those jobs. Or we can have
20 more years of stagnant incomes and watch our industries lose ground in the race for
global market share.
We choose prosperity, Mr. Chairman. Science and technology will help us cut the
straightest path from here to there.
Why We Invest in Science and Technology
In his biennial report to the Congress, which we are releasing today, Mr. Chairman,
the President reaffirms his belief that sustained investments in science and technology are
absolutely essential to our knowledge-based society. Thoughtful investments in science and
technology fuel economic growth, strengthen national security, and improve the quality of
life. This Administration is focusing its science and technology resources on high priority
areas, including:
Economic growth and job creation
Education and training
Environmental quality
Health
Information technology
National security
World leadership and cooperation in science, mathematics and engineering
Success in each area will depend on advances in fundamental science, continuing
technological innovations, and responsible governance.
Scientific knowledge is the key to the future. America's future demands an
expanding knowledge base, which requires investment in our people, institutions, and ideas -
shared broadly with our global partners. Science lies at the heart of that investment -- it is an
endless and sustainable resource with extraordinary dividends.
The public will receive a substantial return on this investment. While there is much
room for uncertainty in measuring the impact of federal research spending, repeated studies
suggest that the payoff to the Nation's economic welfare is great. The private rate of return
on research and development spending -- meaning the return to the firm performing the
research and development -- averages about 20 to 30 percent. But the social rate of return --
including spillovers to other firms and customers -- averages about 50 percent, or twice as
high.
The nation's commitment to world leadership in science, engineering, and
mathematics created the world's leading scientific enterprise, whether measured in terms of
discoveries, citations, awards and prizes, advanced education, or contributions to industrial
and informational innovation. Our scientific strength is a treasure we must sustain and build
on for the future.
Technology is the engine of economic growth. Over the past 50 years, at least a
quarter of U.S. economic growth -- possibly as much as half -- came from new technology
built upon earlier fundamental discoveries. These advances created millions of good new
jobs, a cleaner environment, better health and longer lives, new opportunities for individuals,
and enrichment of our lives in ways we could not imagine half-a-century ago. For example:
2
Early investments in ARPANet, the first national computer network, have brought us
to the 25th anniversary of the Internet, a prototype of the Global Information
Infrastructure. When it started out, ARPANet could transmit only 56,000 bits of data
per second. Today networks using technology several generations more advanced
routinely transmit 45 million bits a second -- almost a thousand times faster. The
federal government provided a relatively small catalyst (a few tens of millions of
dollars annually) that has been matched several times over by private-sector
investment in the Internet. The federal government deliberately set out to
commercialize and privatize the Internet. Today dozens of companies are investing
millions of dollars and competing to provide Internet connections and new services to
the tens of millions of Internet users around the world.
Public investments in biomedical research spawned a multi-faceted biotechnology
industry that already accounts for 100,000 jobs and $8 billion in annual sales. We
owe extraordinary advances in agriculture and in chemical and pharmaceuticals
processing -- as well as our ability to capture large markets in health care and other
industries -- to fundamental research in molecular biology and applied research and
development of advanced instrumentation funded by the U.S. government.
Our vision is of long-term economic growth that creates jobs while improving and
sustaining the environment.
Responsible government advances science and technology. Government is an
essential actor in making sure science and technology help the Nation reach its goals. Only
the federal government can bring the benefits of science and technology to nonmarket areas,
such as national defense, education and training, environmental quality, global health threats,
or world-class fundamental scientific research.
A government role also is vital in promoting, in partnership with the private sector,
those technologies critical to economic growth and to the creation of good jobs that cannot
attract sufficient private investment. The U.S. government always has stepped up to this
task. For example, federal investment in agricultural science and technology made it possible
for our farmers to feed us and much of the world -- and do it profitably. Our investments in
aeronautics helped U.S. companies capture global markets for aircraft and make air travel
accessible to most Americans. We cannot walk away from our responsibility to ensure
similar advantages are available to future generations.
A regulatory and economic environment favorable to capital formation and private-
sector investment in research and development also is essential to advances in science and
technology. To encourage private investment, the Administration has supported:
extension of the research and experimentation tax credit;
reduced capital gains taxes for small businesses;
reduced antitrust barriers to the formation of joint production ventures;
3 -
transfer to the private sector of a portion of the radio frequency spectrum previously
used by federal agencies and competitive bidding on new licenses;
liberalization of controls on the export of computers, telecommunications, and other
technologically sophisticated equipment;
bilateral and multilateral trade agreements that expand access to foreign markets for
America's high-tech companies.
As with all aspects of governance, however, we must make our science and
technology programs work better and cost less. We are already acting on this conviction, as
you can see in the reinvention efforts at NASA. That agency's 1950's-style infrastructure
will be brought into the information age at a likely savings of billions of dollars and
thousands of government jobs.
We have made an excellent start on this effort on a government-wide basis with the
National Science and Technology Council (NSTC). The NSTC is a virtual department - a
coalition of agencies that coordinate their efforts, divide tasks, and share resources to advance
science and technology. This mechanism for direct communication between agencies cuts
through bureaucracy and encourages the identification and coordinated pursuit of common
goals and objectives.
The NSTC process led to a decision to converge the polar orbiting environmental
satellite systems of the Departments of Defense and Commerce. This decision alone should
save the American taxpayer several hundred million dollars by the turn of the century.
Another Presidential Decision issued in 1994 directed continuation of the Landsat remote
sensing satellite program and restructured federal agency responsibilities for acquiring and
operating the next satellite (Landsat-7). That decision ensures the continuity and availability
of the Landsat remote sensing capability which is used for civil, commercial and national
security purposes. A third NSTC Presidential Decision articulated the new national space
transportation policy and established clearly delineated roles and responsibilities for the
principal agencies.
The NSTC is hard at work on science and technology initiatives designed to
strengthen America's middle class. Our priorities include a healthy economy, global
stability, and a cost-effective government. We have developed a conservative investment
portfolio that balances the need for deficit reduction and immediate benefits for our citizens
with the need to make long term investments in our country's future.
S&T Priorities in a Dynamic Economy
America's welfare hinges as never before on the way we manage the opportunities and
the hazards of new concepts in science and technology. We have sustained our commitment
to a strong fundamental science base and to science and technology in support of our national
security strategy. We now recognize, however, that national security depends on a globally
competitive economy that creates jobs and protects the environment as well as military
- 4
strength. And we intend to use science and technology to make government work better and
cost less.
Commitment to Fundamental Science. Science provides an endless frontier of
inquiry. Advancing that frontier feeds our sense of adventure and our passion for discovery.
The unfolding secrets of nature provide new knowledge to address crucial challenges, often in
unpredictable ways. These include improving human health, creating breakthrough
technologies that lead to new industries and high quality jobs, meeting our national security
needs, protecting and restoring the local, regional, and global environment, and feeding and
providing energy for a growing population. Science is a critical investment in the national
interest, and we have pledged to:
maintain leadership across the frontiers of scientific knowledge;
enhance connections between fundamental research and national goals, such as
economic prosperity, national security, health, and environmental responsibility;
stimulate partnerships that promote investments in fundamental science and
engineering and effective use of physical, human, and financial resources;
produce the finest scientists and engineers for the twenty-first century; and
raise scientific and technological literacy of all Americans.
Commitment to National Security. Science and technology support the
Administration's national security strategy in three important ways.
Advances in science and technology ensure the technological superiority essential to
maintaining our unparalleled military capabilities.
A vibrant, dual-use high technology industrial sector enhances our national economic
strength while also providing the technological base for advanced military capabilities.
Technology is central to our efforts to: prevent and counter the proliferation of
weapons of mass destruction and the means of their delivery; verify and monitor
existing and prospective arms control agreements; and ensure the safety and reliability
of our reduced nuclear weapons stockpile.
A strong domestic science base supporting a robust national security science and
technology program is critical to preserving technological advantage. OSTP addressed this
issue in the National Critical Technologies Report released last week. The report details the
current competitive position of the United States relative to Japan and relative to Europe for
each of 27 principal critical technology areas (from the broad areas of: 1) information and
communications; 2) "living systems;" 3) environmental quality; 4) energy; 5) transportation;
6) manufacturing; and 7) materials). Overall the report shows the United States at parity
with, or ahead of the positions of Europe and Japan in all areas. The report also shows,
however, that the rate of progress is greater in Japan and Europe -- meaning our tenuous lead
is shrinking in the midst of proposals to gut the core of our strategy to preserve American
preeminence.
5
Our strategy to retain our lead in these critical technologies is to apply resources
broadly at the basic research level and make further investment decisions as emerging
technologies reveal the most promising payoff areas. Many of the technologies we need for
advanced military capabilities are available in the commercial sector, and in some cases they
are more advanced and cost less. We are working to enhance our relationship with private
industry through partnerships that enable us to access and capitalize on those commercial
technologies that offer the greatest military application. The long-term payoff will be better
military capabilities at lower cost, and a strengthened economy.
Science and technology play key parts in our national strategy to stem the
proliferation of weapons of mass destruction and their means of delivery. Verification and
monitoring of compliance with arms control agreements is made possible by unique abilities
provided by American basic and applied science in fields as diverse as chemistry, optics, and
solid state physics. Technology also supports our policy goals of discouraging accumulation
of weapons usable fissile materials, strengthening controls on those materials, and reducing
global stocks. Science and technology also make vital contributions to the safe stewardship
of our own nuclear weapons. We have structured a science-based stockpile stewardship
program that will apply scientific understanding, predictive capability experiments, and
simulation to ensure the safety, security, and reliability of our enduring nuclear stockpile.
Commitment to a Healthy Economy. Our Nation faces significant economic
challenges. Markets are global, competition is fierce, technological change is swift and
unabating. Meeting these challenges requires a strategy to equip American companies and
workers to compete successfully in the 21st century economy. We have assigned high
priority to developing the information infrastructure necessary to compete in the global
economy, to enabling American manufacturers to produce globally competitive products that
meet environmental goals, and to preparing the workforce for the high-wage, high-skill jobs
of tomorrow.
Information Technology. Our Nation leads the world in developing and applying
information technology that is revolutionizing the way we live, learn, and work.
Because of the strategic value of these technologies and their role in fostering-
economic growth, nations around the globe are investing heavily in the development
and deployment of computer systems and telecommunications networks. Our vision
for federal investment in information technology is to accelerate the evolution of
existing technology and to nurture innovation that will enable its universal, accessible,
and affordable application to enhance America's economic and national security in the
21st century.
President Clinton and Vice President Gore have made development the National
Information Infrastructure (NII) at top priority because they believe that access to
advanced computing and communications technologies can dramatically improve the
quality of life for every American. The NII will:
6 -
Provide better access to health care.
Make American workers more productive.
Help our children learn.
Make government more efficient.
Create millions of new, high-paying jobs.
Provide us all with instant access to a huge variety of information and
entertainment.
As you and I have discussed, Mr. Chairman, the information highway is a great
equalizer. One of my favorite cartoons shows two dogs in front of a computer, with
one saying to the other, "On the Internet, nobody knows you're a dog." And it's
true. The information age means that what you know and how hard you work count
for a lot more than who you know and where you came from.
Rural states will compete more readily with urban states as the information age
progresses if we take care to ensure equality of access. This committee has been a
leader in telecommunications reform, and the Administration looks forward to
continued cooperation on an issue essential to the health of America's middle class.
Manufacturing Technology. The government is partnering with industry in a
variety of industry-led research and development initiatives, including
microelectronics, electronics manufacturing, aeronautics, and biotechnology. These
initiatives combine goals of competitiveness and economic growth with public benefits
of job creation, environmental protection, improved health and safety, and less
dependence on foreign sources of energy. The Partnership for a New Generation of
Vehicles (PNGV) is an example.
PNGV is one of the federal government's premiere ventures into cooperative civilian
technology development. In it, we are tackling a technological challenge as tough as
putting a man on the moon -- that is, to develop within 10 years a car with three times
the efficiency of today's automobiles with no sacrifice in cost, comfort, or safety. If
the project succeeds, the payoff to the public will be huge in terms of less dependence
on foreign oil and lower emissions of greenhouse gases. The project also holds the
promise of an extremely attractive car for world markets in the 21st century and a
thriving U.S. auto industry to produce them. The government (in this case, a
consortium of seven federal agencies) and industry (the Big 3 automakers -- Ford,
GM, and Chrysler -- and many suppliers of materials and equipment) are working
closely on a cost-shared basis to break highly challenging technological bottlenecks
where the benefits are at least as much societal as commercial. PNGV's research
priorities are:
development of advanced manufacturing techniques that make it easier to get
innovations into the marketplace quickly;
7
use of new technologies for near-term improvements in auto efficiency, safety,
and emissions; and
research leading to production prototypes of vehicles, including such advanced
technologies as fuel cells, ultracapacitors, and hybrid vehicle propulsion
systems.
Over the life of this partnership, funding will be shared roughly equally between
government and industry, with the government contributing a greater share to basic
research and to technologically riskier projects, and industry putting up the greater
share as practical results get closer.
Educational Technology. The most important measure of success of this
Administration will be its ability to make improvements in the lives of Americans.
Few enterprises touch the lives of as many people as do those concerned with
education and training. High-quality education and training benefit the individual
whose knowledge and skills are upgraded, the business seeking a competitive edge,
and the Nation in increasing overall productivity and competitiveness in the global
marketplace. It is essential that all Americans have access to the education and
training they need and that the teaching and learning enterprise itself becomes a high-
performance activity that is interesting and challenging to the participants.
The President has placed a high priority on upgrading the technology available in our
schools and businesses, in order to improve education and training. The
Administration recently announced a national program to help communities around the
country incorporate new educational technologies into their schools. He has also
directed that advanced information technologies developed by the Defense Department
that could be used for education and training be transferred to the Departments of
Education and Labor for civilian use. Unfortunately some rescission proposals hit
educational technologies especially hard, particularly the Star School program and the
Technology Learning Challenge.
Commitment to Efficient. Cost-Effective Government. Science and technology can
help this government serve its citizens better. One of the most important areas in which
S&T can contribute is in regulatory decisionmaking, and we will be briefing the Vice
President shortly on ways that regulatory reform can help produce a more conducive
environment for the conduct of business, research, and education. While we must not retreat
from our commitments to ensure the wellbeing of every American, policies to address risks
to public health, safety, and the environment must be fair, effective, and affordable. The
Administration has taken several steps to advance risk analysis, a key linkage between science
and policy, including establishing the following priorities for investigation:
Uncertainty analyses and risk characterization: research on methods for improvement
of risk characterization and transfer of scientific information about risks, and the
uncertainties in the information, to decision makers.
8
Criteria and indicators for ecosystem health: research to identify criteria and
indicators for risks to ecological health and sustainability.
Human and ecological exposure: research on chemical, physical, and biological
stressors, particularly for mixtures, multiple and/or cumulative exposures, and
alternative pathways of exposure.
Mechanisms of disease & ecological impacts: research to identify and predict the
magnitudes of new ecological risks and noncancer human health effects and to
understand better the biological effects of carcinogens at very low doses.
The Administration is working within and across agencies to improve the methods by
which risks are evaluated and the ways in which the resulting information is integrated with
economic, social, and other considerations in making decisions that will ensure the
appropriate and effective protection of public health, safety, and the environment.
These examples of the Administration's S&T priorities illustrate the critical roles
science and technology play in our society. We have produced a science and technology
program that, within the spending limits established by the new covenant with America,
ensures a better world for our children and their children. We have integrated federal
science and technology programs with efforts in the private sector and internationally in order
to maintain a strong, vibrant, sustainable economy.
Are We Ants or Grasshoppers?
Mr. Chairman, all of us need periodic reminders about the necessity to invest for the
future, but this country has an excellent track record of using science and technology
investments to do just that. Our global competitors in defense, aeronautics, medical devices,
pharmaceuticals, and computers have learned from our example. They now make similar or
greater investments.
The charts attached to this statement provide some R&D spending data shown in terms
of investment as a percentage of GDP, which helps us compare nations. This is similar to
comparing IBM with much smaller companies. IBM invests in R&D as a percent of sales to
support a big business. Small companies also invest a similar percent of sales in research and
development.
The United States supports an almost $6 billion economy. On the other hand, Japan
had a $2.5 billion economy in 1993.
As you can see from the charts, the U.S. still leads the world in total dollars spent on
research and development. However, Germany and Japan equal or surpass our level of
spending as a percent of GDP. As you can also see, they are far ahead of us in nondefense
R&D spending.
9 -
Our competitors are becoming more and more like Aesop's fabled Ants, who put
aside some seed corn for a cold, rainy day. We did that ourselves for many years. The
federal government saw opportunities to invest in a better future, persevered in those
investments, and reaped ample reward: For example:
Fiber optics was a germ of an idea in an obscure area of basic physics in 1966 but
now carry most U.S. long-distance telecommunications.
The Global Positioning System represents a confluence of basic research in physics,
software, communications, and high-speed electronics. First developed for military
purposes, it is now rapidly expanding into commercial markets for navigation and air
safety and monitoring Earth's large scale ecosystems.
Severe weather prediction emerged from the integration of space platforms, immense
computing power, and continued atmospheric science research to help prevent loss of
life and property.
DNA testing resulted from decades of basic research in molecular biology and
computer science and now provides a way to identify people in the best of times -- for
example, reuniting families after the civil unrest in Argentina -- and in the worst of
times -- for example, associating suspects with crimes.
But I fear we may become like Aesop's Grasshopper, who sang the Summer away. In
unison we sing "less government, lower taxes," but there's dissonance when we try to talk
about preparing for the future, about putting something aside for our children and
grandchildren. We must find some harmony, Mr. Chairman.
Scientific knowledge is the key to the future. Technology is the engine of economic
growth. Together, science and technology build new businesses, provide good jobs, improve
health and the quality of education, and protect us from threats as diverse as environmental
degradation and military force.
American mastery of science and technology will largely determine whether our
citizens capture new opportunities -- good jobs, a higher quality of life -- and continue to
enjoy basic amenities, including safe and affordable food and shelter. Innovations in myriad
products and processes Americans count on for a better life, such as heart surgery,
computing, and electric lighting, stem from scientific advances. The investments we make
today in basic and applied research will assure the continuous flow of knowledge needed to
develop new technologies for the future.
The federal government plays a crucial role in ensuring American leadership in
science and technology. The Nation's world leadership in science, mathematics, and
engineering fundamentally derives from federal sponsorship. Federal research investments
led directly to the technological leadership of U.S. firms in agriculture, aeronautics,
semiconductors, computers, communications, pharmaceuticals, and scores of other critical
areas.
- 10
We remain convinced that: 1) the Nation's future depends on advances in science and
technology; and 2) federal investment in research and development is an essential catalyst for
such advances. The Administration is determined to continue investments in the future
despite fiscal pressures today. We want to work with you in achieving this objective.
11
TOTAL EXPENDITURE ON R&D
US$ millions, 1992
USA 1
Japan 2
$109,825
$158,452
Germany 3
$49,103
France 4
$31,102
United Kingdom 5
$22,454
Total
JS
Italy 6
$16,916
5th
(
Japan
)
Canada 7
$8,517
czech, Switz
Sweden 8
$7,415
Pub.
Netherlands 9
$5,554
Switzerland 10
$5,070
Spain 11
$4,893
Australia 12
$3,974
Belgium/Lux. 13
$3,248
Korea 14
$3,209
Taiwan 15
$3,049
Austria 16
$2,848
India 17
$2,495
Finland 18
$2,319
Denmark 19
$2,205
Norway 20
$2,048
zech Republic 21
$1,028
South Africa 22
$1,007
Turkey 23
$798
USA
Poland 24
$543
Ireland 25
$456
G7 Countries
Mexico 26
$427
Other Countries
Hungary 27
$400
New Zealand 28
$372
Portugal 29
$365
Greece 30
$326
Argentina 31
$302
Indonesia 32
$289
Chile 33
$220
Venezuela 34
$188
Singapore 35
$178
Thailand 36
$104
Malaysia 37
$36
Brazil 38
Colombia 39
Source: The World Competitiveness Report 1994
Hong Kong 40
World Economic Forum
Philippines 41
Geneva, Switzerland
National Spending on R&D
(Percent of GDP)
3%
2%
1%
0%
1975
1980
1985
1990
1992
U.S.
Japan
Germany
National Spending on Non-Defense R&D
(Percent of GDP)
3%
2%
1%
0%
1975
1980
1985
1990
1992
U.S.
Japan
Germany
Pub. funded man-def. -def. R&D as %ODP
vs: 28th behind UK, fr Gar, It, Can ,tap.
KNA frees, Taiwan
Clinton Presidential Records
Digital Records Marker
This is not a presidential record. This is used as an administrative
marker by the William J. Clinton Presidential Library Staff.
This marker identifies the place of a tabbed divider. Given our
digitization capabilities, we are sometimes unable to adequately
scan such dividers. The title from the original document is
indicated below.
AAAS 1997
Divider Title:
Remarks of
JOHN H. GIBBONS
Assistant to the President for Science and Technology
Director, Office of Science and Technology Policy
AAAS Policy Colloquium
April 23, 1997
Washington, DC
Science and Technology Policy
in the Dawn of the Twenty-First Century
It is with special pleasure that once again I greet this distinguished
body. The range and depth of scientific talent gathered here represent
not only continued Anrerican leadership at the frontiers of science and
tec chilology, but a vital commitment to ensuring a better quality of life for
exprience
future generations of all Americans.
(i) 4th time in 5 years Deam gaining interest education
some
Everlent
Experience
Since I last addressed this colloquium, we have witnessed a
remarkable string of scientific discoveries and technological advances.
were
Hardly a week goes by without major breakthroughs reported in the
pages of that learned journal of science -- The Washington Post: possible
virtually for certain
water on our moon, and perhaps on one of the moons of Jupiter, the tantalizing
prospect of ancient life on Mars, cloning of a mammal from a fully
differentiated cell, confirming the existence of a third branch of life on
and carbon naw tubes 100 as strong as stall and
earth, first steps toward demonstration of an "atom laser," Just last
1/6 the way
and stmochenic
week, we read of the use of satellite data to document a significant
response by Northern Hemisphere ecosystems to global-scale warming
disturbingly
during the 1980s, which can be described as a longer growing season in
and sometimes troubling
high latitudes. The list goes on and on. All are magnificent discoveries.
all generating a new series of questions and possibilities, and challenges.
biennial seport]
Contrary to these recent noteworthy discoveries, it is remarkable
how much of the S&T policy discussion remains stuck on gloomy
"budget talk," agency fortunes, and the outyears. There have been
many dire predictions that balancing the budget would mean deep cuts
in civilian research programs, on the magnitude of one-third over the
next five years. Every year in this office, I have heard these rumbles.
I've even school some in
2
hype
aside,
And every year I have warned that our research budgets were in real
peril. This year is more hopeful, although the yellow caution flag is still
out.
I will return to the budget later, but I first want to dwell on the
we
serve
overarching national interest^ with an eye on the future and its
constituency. You are an integral part of that future and therefore have
a stake in the long view of policy that OSTP seeks to provide as
interagency coordinator and advisor to the President.
Budgetary and Policy Climate
First and foremost, let me assert that the President and Vice
President remain unwavering in their support for science and technology
as crucial investments in our future. They share our convictions that
such investments enable our nation to compete aggressively in the global
marketplace, protect our environment and manage our natural
3
resources in a sustainable manner, safeguard our national security from
emerging threats, and spur the technological innovation that has
contributed so much to our economic prosperity and quality of life.
Despite the prognosis of some pundits, last year we often sailed against
(even & the extent 9 closing drun government)
the wind,^ but we always held our rudder true. And, as a result, with a
maintaining
lot of help from outside government, we successfully held the line in^the
purchasing power of the aggregate Federal S&T budget. This is the
fifth year in a row that President Clinton has proposed to increase
research and technology funding, while at the same putting our country
on the path to fiscal sanity. This is especially encouraging news, and I
believe that once Federal spending is brought under control, our Federal
S&T investments should grow and track at least with the Gross
Domestic Product.
Within the scientific community and in Congress, there have been
calls for significant increases in federal R&D budgets above what the
President has requested. Some proposals are genuine. Others are little
4
more than nicely wrapped, rhetorically-filled, empty presents. Yet, these
calls for more research support signal an endorsement of one of the
Administration's priorities, and hint of a welcome return to the
traditional bipartisan political support for investing in future research.
I am heartened by those scientists, university and industry leaders.
and policy makers advocating greater Federal investment in R&D. Such
activism has made a difference by amplifying the scientific community's
voice. But make no mistake: the constraints on Federal research
funding are driven by a budget deficit and national debt that recklesslv
tripled during the 1980s, and that still stifles investment today. Would I
[Happiness cavitby
like to see an increase in federal funding for research?' Of course! Do I
believe that our nation's taxpayers and future generations would be well-
served by greater investments? Absolutely! Would better
understanding of how S&T changes the lives of our citizens help the
cause? Unquestionably! For I believe that the future is best-served if
science and technology are widely understood and valued.
5
We struggle with these difficult choices to ensure, as the President
consistently points out, that "the future does indeed have a
constituency." S&T funding is a high-stakes, high-leverage investment
in the Nation's continued stability and prosperity. Our President's
economic plan is working. Our deficits are lower. Our economic growth
solid.
is higher. And it is this steady growth that fuels the economy, making it
easier to increase S&T investments and still reach a balanced budget by
the year 2002. Look no further than the President's R&D budget
even a couple of year ago.
projections that are far more favorable than anticipated For the first
time since 1981, I repeat, since 1981, the budget deficit could slip below
$100 billion this year, thanks to a robust economy that is boosting tax
revenues. and that accouptidement is a let Tougher then in 1981
because in the 80's we themefully tripled the national debt, addies
about $150 B of annual interest charges to the bill.
6
Shaping the S&T Portfolio
How can you help shape the S&T portfolio? You need to continue
to be political activists in explaining the intricate processes and
beneficial outcomes, revealing the complexity, uncertainty, and
inherently long time horizons that characterize your research and
innovation. While the S&T enterprise may not be growing at the rate of
the 1980s, our job is still to nourish American science in all its vitality.
We are shaping an S&T portfolio that is consistent with existing budget
projections, that addresses national goals, and that is faithful to the
exciting opportunities we glimpse daily.
So how will we effectively expand the frontiers of knowledge under
current budget scenarios? As the Cheshire Cat pointed out in Alice in
Wonderland, "how you get there depends very much on where you want
to go." In the final analysis, our Federal S&T investment priorities must
be balanced against all other needs to invest in infrastructure such as
7
transportation and environment, crime prevention, national security,
housing, health care, and education.
Firit fill,
4
Even as the Federal budget deficit is tamed, the Administration has
protected the level of investment in key Federal basic science programs,
not only those in the National Science Foundation and the National
Institutes of Health, but also those in numerous mission agencies, such as
the Department of Energy, and the National Aeronautics and Space
Administration.
But
Our S&T leadership strategy is a national - not just a Federal -
strategy. The benefits of research are not fashioned in Washington, they
are forged in factories, laboratories, and universities and colleges across
must
America. We A are shaping a national program to address national goals.
Therefore, a centerpiece of the Administration's portfolio is our
commitment to S&T partnerships between the Federal government and
8
universities, states, and industry. Such collaboration is not only
desirable, it is essential. No sector, sponsor, or performer can do it
alone. The linkage of research and education - anchored in universities
many other public and private
but practiced in facilities built, staffed, and shared by state government
and industry
has proved an exceptionally effective public policy for
decades. From planning to execution to evaluation, we are bringing to
the table all the players in science and technology - the business
community, research universities, non-profit institutions, and state and
Federal governments.
In many research fields, the productive path to scientific advances
increasingly involves international collaboration. Major research
endeavors, such as space missions, particle accelerators, astronomical
observatories, the quest for fusion energy, climate change research, and
mapping the human genome, are so resource-intensive and necessarily
one-of-a-kind that international cost-sharing, exchanges, or in-kind
contributions have become commonplace. Reflecting the global growth
9
in sources of innovation, working with other nations on research
activities for mutual benefit has grown as a priority.
The Federal investment in university-based research is about $13
billion annually in university research alone. This investment has
yielded new knowledge, technological innovation, and a scientific and
technical workforce that is the envy of the world. But national, political,
corporate and education leaders have advised the President that the
Nation's universities are experiencing growing stresses and strains.
Such pressures stem from a constellation of changes, and the President's
Committee of Advisors on Science and Technology (PCAST)
recommended a government-wide policy and administrative review of
our university research system. In response, last September, the
President ordered a multi-agency review of the university-government
partnership to identify the principal areas of stress, and to recommend
ways of coping and adapting without sacrificing excellence or
productivity. This review will assist us in developing strategies that
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promote cost-effectiveness, allocate research costs fairly, strengthen the
research-education linkage, and develop appropriate measures of
accountability.
As many of you already know, the White House and the Nation's
governors recently agreed to work together in an Innovation
Partnership to promote economic growth by stimulating the
development and use of improved technologies in areas such as
advanced manufacturing, education, health care and electronic
commerce. We will also extend the capacity of the Manufacturing
Extension Partnership to help modernize the nation's 380,000 small-
and medium-sized manufacturers. We will continue the work we have
begun to streamline the regulatory environment for research and
technology.
We will also persist in our efforts to have Federal agencies work
more closely with each other, and with the private sector. We have had
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some notable successes, including the Partnership for a New Generation
of Vehicles, a cooperative effort among numerous government agencies
and the U.S. automobile industry, to produce a production prototype
vehicle capable of 80 miles per gallon by 2004. Another standout is the
Commerce Department's Advance Technology Program which forms cost-shared
partnerships with companies that have the greatest potential for
developing technologies to achieve broad-based economic benefits with
high rates of social return. These programs are now approaching a level
of experience that should permit definitive review and optimization of
future investments.
Other exciting initiatives interagency including the Global Climate
Change Research Program, the High Performance Computing
Initiative, convergence of civil and military weather satellites and
advanced aviation and space launch technologies, and a major effort on
Emerging and Re-emerging Infectious Diseases.
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I cannot stress enough that bipartisan support will be critical for
shaping a sustainable agenda. The American people want us to be
partners, not partisans, and the vast majority in Congress-support a
strong Federal research program. The scientific and engineering
communities also have the opportunity and the responsibility to help
forge consensus about the future's requirements for America's research
and education investments. History suggests that the cost of not making
these key investments in technical and human resources will be far
greater than that of moving alread.
Today, the challenge is to make the best use of the Federal investment
to make each public dollar purchase more scientific impact and attract
additional finding from other stakeholders in the R&D enterprise. Lean
but accountable research administration, both in the federal government
and in the performing institutions -- universities, medical schools, and
national laboratories -- will help sustain our competitive position, even
as expenditures are constrained. Consequently, the Administration has
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begun a process of management reforms to improve the effectiveness of
research
the investment. Examples include: revising and streamlining
regulations and agency directives; identifying
utdated add no automating research support functions; and
developing performance-based organizations. Identifiable goals,
measures of progress, and accountability for the outcomes achieved with
Federal S&T dollars are also needed -- and, I might add, a
responsibility of researchers. The Government Performance and Results
Act codifies this and will assure the investors in S&T, the American
public, that their tax dollars are well spent.
President's
In the'FY98 budget request, we continue to promote the growth of
programs that benefit basic research:
NSF and NIH would each be increased by 3%;
Basic research funded by DOE is proposed for a 4.6% increase above
FY97 funding levels (remember that previous out year projections
had DOE programs sharply decreasing);
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The peer-review competitive grant programs at both the USDA (the
NRI program) and EPA (the STAR program) are up 38% and 21%,
respectively;
DOD basic research in the 6.1 account is up by almost 8%; and
Science research at NASA is up 3%, including a projected 7%
increase in academic R&D.
Support for environmental research, as well as health, food and safety
research also rises.
Investments in computing and communications grow by 10 percent.
There is significantly enlarged support for programs to bring modern
technology to America's classrooms to raise students' achievements to
rigorous and challenging standards.
Investment increases are also included for R&D essential for ensuring
continued U.S. economic leadership and job creation.
In sum, to maximize balance and effectiveness of the S&T
investment portfolio, the Administration is promoting R&D programs
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that are: selected through a merit-based competitive process; are
planned, funded, and conducted jointly through partnerships; provide
realistic and objective measures of progress and performance; enable
technology development through sustained interactions with industry
and state and local governments; build professional capacity in the
workforce; and promote international cooperation.
The Research-Education Link
Let me return to an issue I only alluded to earlier. The S&T
portfolio must reconsider the linkage of research and education, the
connection between discovery and learning. In his recent State of the
Union message, the President clearly placed the next generation at the
top of his priority list. He has redoubled his commitment to excellence in
education and is establishing performance goals, starting with 4th grade
reading and 8th grade mathematics exams beginning in 1999.
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In a Directive issued last month, the President created an NSF-
Department of Education Working Group to Improve Math and Science
Education, coordinated jointly through OSTP and the Domestic Policy
Council. In June, we will recommend an action strategy to improve the
teaching and learning of mathematics and science pegged to
international benchmarks. We will focus on incorporating the best
practices in teaching, identifying challenging instructional materials, and
integrating technology into classrooms. Perhaps most importantly, we
will seek to mobilize the professional communities to convince students
that the math and science learned in the classroom today is critically
related to the skills they will be need in the jobs of the 21st century.
We need to think of science and math as part of a seamless web of
formal education not for a select few, but for all children who earn a
high school diploma, a two-year, or a four-year degree. Today's 11-
year-olds will be voters in 2004. They will need to understand and
routinely use what we in this room consider "specialized" knowledge.
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That is the legacy of the link between research and education, and
between science and social progress. The Nation's colleges and
universities must view their mission as the refinement of "works-in-
progress" that begin, as researchers at last week's White House
Conference on Early Learning reported, long before children enter
school. Thus, the process of recruitment and growth must start with
investments long before students arrive on a college campus.
Conclusions and Prospects
Over a half a century ago, the Manhattan Project demonstrated in
graphic terms the power of applying the tools of science and technology
to critical national needs. With a shift in our national priorities, our
science policies, traditions, and practices must also evolve. Together we
must seize the opportunity to shape our national research agenda and
secontifically and
tackle other large, technologically complex problems that enhance our
quality of life and national security. For while we respect the principles
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of excellence and competition that underpin the future health of U.S.
research, we must continue to nurture the human capital that educates,
invents, and administers - not just for the sake of science and
technology, but for our society as a whole.
Once again, allow me to underscore this Administration's vision
for science and technology:
Advances in S&T - spectacular and often built on partnerships -
are inseparable from the Nation's future.
Despite dire predictions, we have held the line in the aggregate
at this Collequium
purchasing power of Federal S&T. Two years ago; during a period
of S&T budget frenzy on Capitol Hill, I quoted the wise advice of
Thomas Jefferson who once counseled "A little patience, and we
shall see the time of witches pass over, their spells dissolve, and the
people, recovering their true sight, restore their government to its
The more recent signs are encouraging but not yet convin cring!
true principles" I believe that after we've finished the task of
getting the budget deficit under control, support for S&T should
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conditioned on
continued
grow and track at least with the GDP, stong with our success in
enotherer
public
demonstrating the added value from such'investments.
Research links with education are absolutely essential, and not just
in graduate school since developing human capital is a long-term,
overarching goal.
We are inventing new ways of doing business. By coupling
are
research choices more explicitly to national priorities, we'reshapeng
the S&T portfolio, with advances in fundamental knowledge at the
core.
Unless the scientific community stays involved and talks to its
"investors" - citizens and their elected representatives - we will
suffer in the budget wars through "silence" and forfeit our
competitive advantage.
This is part of a new social contract, one that demands explicit
links between knowledge production and its applications in policy and
practice. As President Kennedy once reminded us, "Scientists alone can
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establish the objectives of their research, but society, in extending
support to science, must take account of its own needs." I urge you to
look under, over, and beyond budget trend lines. We must emphasize
strategic thinking and organizational change, not budgets per se, since
resources will inevitably lag our aspirations and promising ideas. As
Congressman George Brown wisely points out that if we are to preserve
the future health of the nation, we need to focus on S&T policy, not solely
budget policy. The two are clearly linked, but too often we lose sight of
the long-term S&T policy while getting exercised annually over numbers
in the budget ledger.
However, in the dawn of the twenty-first century, I do not close on
a somber note, for ours has been a century of scientific conquest and
technical triumph.
Never in our country's short history or even in the longer history
of science has the prospect been brighter, or the need greater for
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collaboration between those in government shaping S&T policy and
those of you and lab beneh in the laboratory.
The challenges we grapple with today are without precedent in
human history. Let us always remember that wisdom is the child of
experience as we move toward a new era in which science will be
increasingly challenged to fulfill its promise. And as we lean into the
future, let us also resolve to encourage other talented young men and
women to join us in these disciplines which require so much from them
but which have so much to give to our citizens and to the people of the
world.
So to each of you I express my deep appreciation for your
contributions to the welfare of mankind, to the priceless storehouse of
knowledge, and to the options of new technology so essential for the
future.
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Finally, I am reminded of what the great French Marshall Lyautey
the mest day.
once said when he asked his gardener to plant a treea The gardener
protested that "the tree would not bear fruit for a hundred years. "In
that case," Lyautey responded, "then plant it this afternoon."
That is how I feel about your work. Godspeed to each of you, and
may the best be yet to come!
Thank you very much.
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