-40

3. OTA has extensively briefed Committee staff on the findings of Worker Training. In particular we have discussed with Senator Bingaman's office transfer of DoD training technology to the private sector and educational institutions. Although the 1992 Defense Authorization Act contains little on training, interest continues. Legislation is possible that would call for a National Commission, with DoD, DOL, DOC, DoEd and private sector/labor representation to (1) develop a list of ranked workforce skills needed in the private sector; (2) possibly undertake an inventory of training technology; and (3) identify DoD training technologies that might help achieve the critical skills. Interest also continues on policy alternatives for portable training approaches to reduce risks to employer investments in training, especially a pilot training consortia approach.

4. OTA staff assisted the Subcommittee on Oversight and Investigations of the House Committee on Energy and Commerce prepare for hearings on issues regarding domestic technology transfer, focussing on barriers to the successful transfer of taxpayer-funded technologies to U.S. industries for commercialization. OTA drew on its work in Making Things Better and its ongoing work on Technology Opportunities in Economic Conversion to help structure the hearings.

5. Elements of the 1992 National Defense Authorization Act reflect findings and options in Making Things Better (MTB). (1) The Act supports government -industry cooperation in drawing up "multi-year strategies" for supporting research and development in strategic and critical technologies -- the need for which was a key finding in MTB. (2) The Act creates a joint Defense Department/Commerce Department manufacturing extension program, authorized at $50 million (not funded), to assist small manufacturers through existing extension centers. The Act also authorized $50 million (not funded) to regional critical technology application centers, which will provide a range of technology services, particularly to small firms. A strong case was made for the importance of technology extension programs, and their severe underfunding was emphasized in MTB. (3) The Act estabishes a U.S.-Japan Management Training Program ($10 million) to teach U.S. managers and engineers Japanese and send them to Japanese research institutions. The Act also increased the authorization for MANTECH and authorized over $180 million for a university research initiative, with $50 million for science and engineering training (in addition to authorizing other money for science and mathematics education). The Act also authorized $30 million for a pilot mentor-firm/protege-firm program and authorized money to support computer-integrated manufacturing. These provisions are consonant with the importance placed on manufacturing education, technology diffusion to small and medium sized firms and advanced manufacturing technology development by MTB, and by the OTA Staff Paper U.S. Manufacturing Opportunities in Defense and Commercial Industries prepared for Senator Bingaman.

6. H.R. 1989, The American Technology Preeminence Act of 1991, authorized $100 million for the FY92 funding for NIST's Advanced Technology Program (ATP). Congress appropriated $47.4 million, up from the Administration request of $33.9 million. The growth of the ATP program is supported by the findings of Making Things Better and other OTA reports including Commercializing High Temperature Superconductivity on the importance of industry-government cooperation and cost-sharing in the development of pre-competitive, generic technologies.

7. H.R. 1989, the American Technology Preeminence Act of 1991 authorized an increase from $10 million to $15 million for NIST's Federal Manufacturing Technology Centers. The Senate bill (S. 1034) authorized $25 million. The purpose of the centers is to diffuse up-to-date technologies to small and medium sized manufacturers; five centers have been established, and a sixth will open soon. Again, the findings of Making Things Better strongly supported the need for increased technology extension and diffusion to small and medium sized firms. H.R. 1989 and S. 1034 also authorized increases (to $2 million and

-41

8.

The Foreign Critical Technology Monitoring and Assessment Act drew on a policy option presented in Commercializing High-Temperature Superconductivity to support the efforts of professional and trade societies to monitor Japanese technology. This was later included in the Defense Authorization Act.

International Security and Commerce

1.

OTA provided a classified briefing on the OTA assessment Technology to Counter Terrorism in January 1991 to the Subcommittee on Terrorism, Narcotics, and International Operations of Senate Committee on Foreign Relations and the Senate Committee on Governmental Affairs in February 1991. The House Subcommittee on Oversight of the House Public Works and Transportation Committee was also briefed.

2.

OTA staff briefed staff of the House Committee on Science, Space, and Technology on issues concerning space debris. OTA staff has also met several times with Committee staff to discuss possible hearings and oversight of legislative initiatives regarding reductions in the production of orbital debris. OTA also briefed the staff of the Senate Committee on Commerce, Science, and Transportation.

3.

OTA staff briefed staff members of the Subcommittee on Veterans Affairs, Housing and Urban Development, and Independent Agencies of the Senate Committee on Apropriations on the issues concerning orbital space debris. They also briefed the House Subcommittee on Veterans Affairs, Housing and Urban Development, and Independent Agencies as well as staff members of the House Committee on Science, Space, and Technology and the Senate Committee on Commerce, Science, and Transportation.

4. Redesigning Defense is being used as the conceptual framework for a series of six hearings on the future of the U.S. defense industry being conducted by the House Armed Services Committee's Panel on the Structure of the U.S. Defense Industrial Base. This Panel anticipates developing new legislation for the industrial base.

5. OTA staff testified on DoD's Manufacturing Technology Program before the House Armed Services Committee's Panel on Future Uses of Manufacturing and Technology Resources, November 1, 1991.

6.

OTA staff delivered testimony before the Senate Committee on Governmental Affairs and the Subcommittee on Terrorism, Narcotics and International Operations of the Senate Committee on Foreign Relations concerning terrorists threats to U.S. citizens and interests.

7. OTA staff briefed the staff of the Senate Select Committee on Intelligence for its deliberations regarding funding of R&D for countering terrorism.

8. Referring to Technology Against Terrorism, the Aviation Security Improvement Act mandated establishment of a FAA panel to review FAA's aviation security R&D as

- 42

10.5. Changes in Prior Plans for FY 1991 for the Energy. Materials, and

International Security Division

During Fiscal Year 1991, the Energy, Materials, and International Security Division essentially accomplished its goals, with approved modifications and additions to meet the changing needs of Congress. These changes reflect the inherent uncertainty of research and the attendant need to be able to make adjustments.

(Please see the chart on page 21 for the breakdown of the differences in estimated and actual Division spending for FY 1991.)

10.6. FY 1992 and FY 1993 Priorities for the Energy. Materials, and International
Security Division

A Division's work is determined by the expressed needs of Congressional Committees, so we cannot safely predict an agenda, but an illustrative list of subjects that are representative of the kinds of new assessments that we may be asked to undertake can be prepared. Such an exercise, using a wide variety of information sources, helps sharpen the discussions between OTA staff and Congressional Committees. It also reflects one of the charges Congress assigned to OTA: foresight about emerging technology. Of course each Division can undertake only a few new assessments each year, so this list should be viewed only as representative of potential subjects for the assessments that the Energy, Materials, and International Security Division may be asked to undertake in Fiscal Years 1992 and 1993. Because OTA works hard to be responsive to changing Congressional needs, new work is often significantly different from OTA's prospective list, but it usually does contain some of the identified issues.

Energy and Materials

ENERGY AND ENVIRONMENTAL TECHNOLOGY TRANSFER TO EASTERN
EUROPE

Large direct economic advantages could accrue to the United States from
energy/environmental technology assistance to Eastern Europe, and the indirect
advantages could be much larger. Direct advantages include the return on the sale of
valuable technology, products incorporating it, and increased trade in general. Indirectly,
increased world oil availability would benefit the U.S. with lower world oil prices and
lessened risk of disruption. Additional economic benefits could stem from the transfer of
technologies to improve the use of energy. Improving efficiency of use has the potential to
reduce pressure on world energy prices even more than improving production, because vast
amounts of oil and gas now being consumed unnecessarily could be exported. This study
will determine what energy technologies could be transferred, their impact on the
energy/environment situation in Eastern Europe, and the economic and political impact on
the United States. The first step will be to review the energy technology needs of the
Soviet Union, Hungary, Poland and Czechoslovakia. The second step will correlate these
needs with what the United States can supply. Insofar as possible, potential transfers will
be estimated in light of recent transactions and political/economic trends in each of the
countries studied. Then the probable results of these transfers on the
energy/environmental situation in Eastern Europe will be evaluated.

SOCIAL COSTS OF ENERGY CONSUMPTION

Energy policymakers frequently make choices -- through R&D funding, tax policy, regulatory changes, etc. - among energy systems without a clear understanding of their

- 43

economy. Decreasing energy security, faltering economic growth, and environmental degradation are making such a cost accounting ever more important if choices are to be made that are sensitive to externalities not captured in the market. In this study, OTA would examine and review past and present attempts at establishing such methods and examine the prospects for devising a credible and appropriate methodological framework appropriate to U.S. policy making for evaluating these comparative social costs of energy systems. OTA would then examine how this framework might be applied to selected cases in the United States to establish some baseline estimates of these social costs.

ENERGY RESEARCH AND DEVELOPMENT: RESPONDING TO CHANGING NEEDS The Federal Government spends about 230 million dollars per year on energy efficiency R&D, and about 265 million dollars per year on energy supply R&D. The energy efficiency research includes transportation, buildings, industry, and utilities. A rapidly changing external environment has shifted the efficiency-related R&D needs of the nation, but it is not at all clear that DOE's R&D planning methodology allows for these changes to be reflected in the R&D portfolio. In this project OTA will explore (1) how Congress and DOE allocates R&D funds both within sectors and across sectors, (2) alternative methods to allocate these funds (for example, by looking at how other R&D organizations allocate their funds), and (3) provide options to ensure that allocation of R&D funds can respond to changing national needs while still providing the long-term stability needed to bring technologies to commercial application.

ENERGY AND URBAN DESIGN

This study would evaluate how energy use, environmental impacts, and related systemwide capital investment and operating costs are influenced by urban design and how urban design is influenced by Federal, state, and local government policy. For example, zoning, real estate laws, and other factors may strongly influence a city to develop with a high rise urban core of office buildings surrounded by far flung suburbs. Because there is little overlap between jobs and residences, most people then travel relatively long distances to work. Because suburban areas have low population densities, effective and low cost mass transit systems are then difficult to support and, where available, may require driving to feeder stations. Finally, because the urban core must support a high density of roads and parking spaces for commuters, there is less space for parks, central plazas, or other amenities: this can lower the quality of life for residents in the urban core and encourage their flight to the suburbs.

NUCLEAR POWER PLANTS: THE NEXT GENERATION

This study would identify the promises, problems, and uncertainties associated with several different commercial nuclear power options, including the high temperature gas-cooled reactor, the heavy water reactor, inherently safe reactors such as the PIUS concept, the liquid metal reactor, and advanced, standardized versions of light water reactors. Scaleddown designs of each of these reactors will also be considered. The study will distinguish among those research requirements that could be resolved with analysis and those that would require construction of test facilities. It will then assess the costs and schedules associated with each set of activities. Furthermore, it will delineate possible government and private roles in funding and supervising the necessary development programs. This analysis should provide a guide for assessing the comparative costs and timing of each of

- 44

0

SMART POWER

Information can be substituted for both energy and materials. An on-board computer in a
car, for example, can both increase power (allowing the use of a smaller, lighter engine)
and increase energy efficiency. An energy management system (EMS) in a building can
reduce energy use through better control of heating and cooling systems while offering
other benefits, such as security and fire prevention. The ability to 'telecommute' may allow
for large changes in transportation systems. These information technologies are already
affecting the way we use energy. New commercial buildings use multi-function energy
management systems, cars have electronic controls, and industrial manufacturing makes
use of computer-based control systems. The future impact of these technologies may be
great, depending on technological advances and implementation rates. This study would
examine the energy-savings potential, as well as the non-energy benefits, of a number of
information technologies.

Industry. Technology and Employment

MULTINATIONAL FIRMS AND THE U.S. TECHNOLOGY BASE

The activities of major corporations make a real difference not only to the wealth of
nations, but also to the quality of life, liberty, and well-being of peoples. For the U.S., our
technology and manufacturing base is at risk. If we cannot induce the major corporations
of the world to design it and build it here, we cannot maintain our present standard of
living.

This assessment will examine the behavior of multinational corporations (U.S., European,
Japanese, and others) in the world economy. It will analyze policies that governments apply
to their own companies as opposed to foreign-owned companies. The assessment will
evaluate the kinds of technology transfer, foreign direct investment (FDI), and long-term
corporate R&D investments that are taking place. The assessment will address questions
such as: (1) Are some aspects of FDI more helpful or less damaging to the U.S. economy
than others? (2) Are some nations more adept at promoting the former and minimizing the
latter? (3) What can we expect from a wave of Japanese acquisitions of small high-
technology firms? (4) How do multinationals transfer technologies and what policies would
cause foreign firms to transfer advanced technologies to the United States? (5) what are
the likely consequences of long-term Japanese investments in R&D? and (6) Is it possible
to design a set of policies that causes all corporations doing business in the United States to
act in the interests of the United States?

WORKING AND LEARNING: NEW STRATEGIES FOR YOUNG PEOPLE
Young people going to work face poor economic prospects: an average unemployment rate
3 times greater than that for adults over age 25, and declining real earnings. A growing
proportion of families headed by youth have incomes below the poverty level. The low
quality of education, job placement, and training provided to young people contribute to
both their economic problems and declining U.S. competitiveness. Our major international
competitors in both Europe and Asia have well-developed systems for employing and
training young people.

Building on the report Worker Training: Competing in the New International Economy,
this study would include-1) An assessment of experiments in work experience for high
school students, including apprenticeship and pre-apprenticeship programs, cooperative
education, and Oregon's experiment requiring all students to pass a test demonstrating
attainment of basic skills at age 16; and 2) An examination of the extent and quality of
training that employers provide to workers under the age of 21. The study would present
policy options for schools and community colleges, state governments, and employer