Where Industry and Security Intersect
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To compete effectively in future years, U.S. AT companies must improve their performance on many fronts, including manufacturing, utilization of technology (commercial and defense), and the development and fielding of new products. In the face of rising competition and high labor and material costs, U.S. manufacturers have no choice but to learn to produce more efficiently to retain markets and remain profitable.
On a positive note, most of the 352 companies responding to a question on fielding new products, indicated that they were: 1) actively developing products themselves, 2) actively seeking to acquire new products, 3) or willing to evaluate new products. Only 20 percent of firms responding to the question stated that they were not willing to review new products–or were not developing or seeking new products.
The picture, however, becomes a bit more worrisome when comparing corporate attitudes against actual practices. Many U.S. AT manufacturers, data suggest, do not utilize modern manufacturing processes and technology in product development and production as effectively as they might.
Responses by AT survey participants indicate that many companies are not aggressive enough about seeking out new technologies that would enable them to create new products — or to maintain advantage in the marketplace for existing products. Failure to implement advances in manufacturing and marketing processes used by competitors only serves to thwart growth, and limits the ability to quickly respond to emerging trends in world markets.
Asked to describe their approach to deploying new technology, 62 percent of firms indicated that they are passive in their pursuit of new ideas -- or not interested at all. Some 183 AT companies (52.6 percent) said they were not actively seeking technologies but were willing to consider new technologies as they become available. Another 34 firms (9.7 percent) said they were not interested in seeking new technologies. Fewer than 40 percent of the 348 companies responding said they were "actively seeking technologies from outside sources." An examination of industry responses on AT product priorities by technology (see Chart 3) shows that interest in developing new technologies varies across AT product categories. Companies were generally most interested in pursuing or acquiring new technology that would support product development in the areas of mobility, orthotics and prosthetics, aids to daily living, and communications.
There appear to be clear opportunities for the AT industry to pursue the application of techno-logy to enhance their product development and manufacturing capabilities significantly. Survey responses suggest, however, that much of the industry is not utilizing the resources available to it. U.S. Government laboratories, for example, have a wealth of defense-related and civilian technologies available for transfer to private industry. These laboratories also offer extensive expertise and consulting services. Relatively few AT companies have used the capabilities of U.S. federal government laboratories to augment their own R&D and engineering capabilities. When asked whether they knew how to tap the expertise resident at federal R&D and technology centers, only 25 of 359 companies (less than 7 percent) said they have such experience and capability.
In response to a separate question on whether they had previously worked with private industry, universities, and government laboratories, or other outside institutions to develop AT products or related technologies, 46 of 338 companies said they had done so on one or more occasions. These 46 companies reported 98 such collaborations, 47 percent of which were with universities; 21 percent were with industry organizations; 18 percent with unidentified organizations; and 14 percent with government laboratories.
Even though only a small number of U.S. AT companies have sought to leverage the resources of federal R&D centers, there is an indication that firms might become more interested in utilizing federal capabilities where it makes sense. No less than 58 percent of 338 respondents to a survey question stated that they would be interested in working with federal R&D institutions.
These companies, in fact, want to pursue a range of relationships with federal research centers. Specifically, companies are looking for assistance in designing and developing products, and in refining manufacturing processes. AT manufacturers also expressed interest in acquiring intellectual property of all kinds through technology licenses. Access to federal laboratory software was a key priority for 9.5 percent of firms.
Survey participants showed a strong interest in various forms of research collaborations with federal laboratories. Their prime motivation is to tap into the defense and civilian technologies developed by the labs and to access the know-how of professionals employed there. In 23 percent of the responses received companies stated a desire to work with the labs through cooperative research and development agreements (CRADAs).
A number of AT companies also want to use federal facilities on a "work-for-others" basis, which can enable them to leverage unique government R&D capabilities for proprietary work. In these arrangements, a company typically pays all costs associated with conducting the research and retains all rights to the intellectual property and expertise developed in the research project. AT manufacturers also are interested in collaborations involving industry consortiums; and these firms want to pursue personnel exchanges that place their people at government laboratories for extended periods.
The inexperience that U.S. AT manufacturers have in working with federal research centers suggests several things. First, many companies, because of the nature of their products, may not really require, or benefit from, the involvement of federal labs. Second, the data indicate that significant numbers of companies simply are not aware of the resources that reside within the federal laboratory system–and the data show that relatively few AT firms have experience accessing these capabilities.
Why this is the case is hard to know. Survey data do not provide sufficient information to determine the cause of a seemingly low awareness of federal research centers. The findings, however, raise questions about how in touch AT companies are with respect to technologies and intellectual property available to them in commercial and university circles as well as that resident in federal defense and civilian laboratories.
Institutional change may be required in some U.S. AT companies to enable them to more effectively leverage thin R&D budgets so they may develop and field new products faster. As a part of any such effort, U.S. AT companies must develop a greater awareness of the public R&D resources available to them–and the R&D capabilities that are resident in private contract-research institutions as well.
It also may be appropriate for federal manufacturing assistance programs in DOD and civilian agencies and federal laboratories to undertake outreach programs to help familiarize AT manufacturers with their research, engineering, and technological capabilities. Activities might include on-site programs at laboratories that are focused on U.S. AT vendors; and participation by federal labs at any major meetings held by AT industry and related organizations.
Such an outreach program should include educating AT companies on the limitations that federal laboratories have in providing assistance to companies. Typically, research centers can only extend assistance in cases where the work would be consistent with the institutions’ R&D missions — and in instances where such assistance is not readily available from private contractors.
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