Federally funded research can be a solution to some of the nation's top challenges, say government laboratory executives.
Uncertainty over federal funding, the highly publicized failure of a government-backed solar energy company, demands for cuts in government spending, and a stalemate in Congress could test the convictions of any government researcher. However, participants in the 11th R&D Magazine roundtable discussion on federally funded research programs reinforced the role government research can play in protecting the nation, developing energy alternatives, and driving private-sector economic development.
Representatives of U.S. Department of Energy's (DOE) national laboratories and other government research facilities participated in the discussion, held Oct. 13 at the R&D 100 Awards in Orlando. Topics included funding, peer review, entrepreneurship, nanotechnology research, and communicating research missions in a social networking environment.
Paul E. King
Research conducted in the DOE laboratories and other government research facilities often is closely guarded, for national security reasons. For more public projects, government-funded research may not be well appreciated by researchers at private companies or the general public. While some critics point to duplication of capabilities within laboratories or between facilities, government research executives say the process for assigning projects is both delineated and merit based.
"Within NETL, we have a fairly well-defined mission in energy reliability and energy security," says Paul E. King, business and outreach manager, National Energy Technology Laboratory, Albany, Ore. "The lab director and the director of research are charged with maintaining those capabilities or identifying what new capabilities we might need to have in order to respond to a request, if you will, from the nation or from the secretary of energy."
At the National Renewal Energy Laboratory (NREL), work is assigned to laboratories in different ways, explains Bob Hawsey, associate laboratory director for renewable electricity and end use systems, NREL, Golden, Colo. "We have an annual operating plan process that undergoes a very rigorous review, a peer review process with our Department of Energy sponsors," he explains. "But also, we respond directly to funding opportunity announcements issued by the Department of Energy with peer reviewed proposals."
Los Alamos National Laboratory (LANL) is a capabilities-based national security science laboratory, explains David Pesiri, division leader of LANL's Technology Transfer Division in Los Alamos, N.M. "For topics that deal with national security, I think the role of the federal program office is central. And, that means that whether it is DOD (Department of Defense), or the intelligence community, or DHS (Department of Homeland Security), or other agencies, what's prescribed and what is assigned really has to do with the federal program," he says. "That's where our Los Alamos program offices pick up and they're really the lead. They really shape how our laboratory either responds or thinks about performing in this context."
National Renewable Energy Laboratory
As a federally funded research and development center (FFRDC), LLNL, like the other national laboratories, can propose work that has not come out as a request for proposal from the DOE, says Erik Stenehjem, director, industrial partnerships office, LLNL.
"Rather than assigning, I would say the bulk of our work is the result of PIs (principal investigators) and program developers going to the Department of Energy and now increasingly, other federal agencies, and proposing work to be done that they think needs to fill a gap in a mission area." he explains. "And so, we really are a laboratory of entrepreneurs because at the end of the day, we don't do work unless we sell it."
Competing for limited funds is also part of the process. "In many cases, our researchers develop proposals for projects that are aligned with our mission and based on our core capabilities, and then compete for funding from our sponsor, DOE," says Deborah L. Clayton, director, technology development and commercialization division, Argonne National Laboratory (ANL), Argonne Ill. "The Office of Science makes extensive use of peer review and federal advisory committees to develop general directions for research investments, to identify priorities, and to determine the very best scientific proposals to support."
NASA takes a slightly different approach, assigning some work based on competencies. Other programs submit to a competitive process. "It's a mixture," says Ramon (Ray) Lugo III, center director, NASA Glenn Research Center, Cleveland. "At least within NASA, we've allowed ourselves to become somewhat diluted. There's duplicate capability across all of the NASA Centers, to some extent. I don't think you ever want to get down to a single string; but, an appropriate level of duplication. You may have one and a half capabilities instead of two or more. If we did that, I think, we could get into a more coherent process of assigning work. I would suspect that would probably help, even in other government agencies."
Judging potential and performance
In the research community, peer review is used to maintain standards, improve performance, determine funding, and provide credibility. The panelists provided mixed assessments of the peer review process in their organizations.
"Argonne is deeply committed to publication of research conducted on our campus," says Clayton.
Last year, research at the laboratory's Advanced Photon Source produced more than 1,000 refereed publications, and Argonne scientists are consistently included in lists of researchers whose work is most widely cited, or has the greatest citation impact, she notes.
NASA presents a different story. "From my perspective in NASA, we don't use peer review processes effectively. In fact, at my Center, we have over 150 lines of research and it's a 3,300 person organization," says Lugo. "We can't be credible in that many lines of research with the number of resources we have."
Y-12 National Security Complex uses a set group of peer reviewers that evaluate projects, and brings in subject matter experts from other parts of the organization. External researchers also sit on technical review panels. Senior managers oversee the technical reviews to weigh in with the business-related input as appropriate. A portfolio of continuing or new projects ultimately goes up the line to the president, who reviews the projects with the senior executive at the NNSA (National Nuclear Security Administration) site office.
"At Y-12 we don't have what one would call a peer review process in the formal sense. What we do is related to our plant-directed research and development activities (PDRD)," explains Kevin Finney, deputy manager for program management and senior director for global security and technology programs, Y-12. "We try to make that process very transparent to the researcher as to how it works, who's involved, what are the rules, what's our grading criteria for a particular project, and all the factors that go into how they're going to be judged from a peer standpoint."
The DOE has been competing more and more for missions assigned to laboratories like NREL and that competition is, by definition, peer reviewed, says Hawsey. The results are determined, in part, by the reports from peer or "merit" reviewers who are subject matter experts. "In our experience at NREL, we've been pretty successful at this new way of doing business. But, it has required us to establish new methods for preparing proposals, reviewing them, and for submitting proposals," he explains.
"The peer review process, by definition, has to be somewhat secretive. When you think about something like solar energy, most of the good universities and good laboratories in the United States are already engaged in the DOE program. So, it's highly likely that DOE has to go to other organizations that have a less vested interest in the outcome. And, primarily, that might mean going to Europe, or Asia, or other institutions like that for quality peer reviewers," Hawsey explains.
LANL uses peer review in almost all of its R&D, says Pesiri, including published research and investments and capabilities evaluations. He does see some shortcomings in the process. "One of the things that we've tried to do recently is adopt a process that I think NIH (National Institutes of Health) does quite well. We use NDA (non-disclosure agreements) to inform our reviewers that information being shared is considered important to maintaining our competitiveness and must be kept in confidence," he explains.
"Not that signing a statement like that, either for our LDRD (laboratory directed research and development) review or for some of our other reviews eliminates the problem. What I do think it does is it heightens the idea that conflict is something that we need to manage as peers and as colleagues. We really need to treat this with the utmost sensitivity," Pesiri explains.
Tight budgets foster creativity
With funding uncertainties the new norm, researchers are taking different approaches to adjust to the new realities and create new opportunities.
"We don't deal very well with these uncertainties," says Lugo. "Part of the way we're trying to deal with the funding issue is, we have to create more awareness of the research we're doing, and obviously [the research] the other government labs are doing, and how that research could solve not only problems 20 years down the road, but problems in the nearer term.
"We need to be turning out technologies on a more regular basis and solving relevant social problems," he continues. "Energy, in my mind, is going to be key from both an economic and a national security perspective."
Y-12 and the other NNSA plant sites are authorized to have a PDRD that is analogous to LDRD. "Whereas we previously used plant-directed R&D as the flywheel for leveling our R&D workload, we now use plant-directed R&D as the primary source of both basic and applied research in our institution," explains Finney. "By necessity, we have grown the plant-directed R&D program at Y-12 over the past 10 years from $1.5 million to well over $20 million a year. And, we’ve pretty much run out of head space in terms of the congressional rules that specify how much we can invest in plant-directed R&D. So, our way of dealing with the funding dilemma has been to maximize that investment."
Another strategy is adopting a portfolio approach. The PDRD is used to address specific areas of interest for stakeholders, such as near- and medium-term problems that will be encountered in the manufacturing spaces. "And, those projects would all have champions in the manufacturing arena," Finney says.
Hawsey says that NREL has been dramatically increasing its work for other federal agencies, the private sector, and states, and is forging new alliances with organizations such as the Electric Power Research Institute. In addition, the laboratory supports the DOD and Department of Homeland Security goals to enhance the security and resiliency of the nation's electric grid.
Erik Stenehjem, Lawrence Livermore National Laboratory
"In addition, we've done things to help our staff be more entrepreneurial. I believe you can teach innovation, so we literally have been conducting classes for the staff on innovation and how to be more entrepreneurial, how to interact with companies that come to the laboratory for science and engineering support," Hawsey says.
LLNL also promotes an entrepreneurial spirit. The laboratory set up an Office of Strategic Outcomes with program directors who have responsibility to market the laboratory's capabilities to other federal agencies. "Increasingly we are investing our discretionary resources in building new capabilities in a select set of focus areas that reflect national priorities and needs. We market our capabilities to our DOE and non-DOE clients and essentially compete for work in these areas," Stenehjem explains. "This permits us to expand further on new capabilities and to maintain our core NNSA capabilities so they will always be available if needed."
Non-federal work for others, particularly industrial collaboration, is increasingly important at LLNL, and that meant physically opening the doors to the laboratory. "We took our eastern boundary—the guards and the gates—and we moved them into the interior," explains Stenehjem. "This newly opened space is now referred to as the Livermore Valley Open Campus where people from any nationality can come and interact with our scientists, our high-performance computing resources, our National Ignition Facility, and the intellectual property of the laboratory in a truly collaborative environment."
ANL is expanding its outreach to potential collaborators in industry, to raise their awareness of the laboratory's facilities and research expertise. "Through cooperative research and development agreements (CRADAs) and Work for Others agreements, we can provide unique research capabilities to industry," Clayton says. Industrial partners gain access to research opportunities that otherwise would not be available; ANL gains a revenue stream.
"Additionally, we are developing new models of licensing—both exclusive and non-exclusive—that will create revenues both today and going forward. However, she says, "our main focus always will be science and engineering in the public interest—and for that reason, the Department of Energy will remain the major sponsor of our work."
Risk versus reward
The highly publicized commercial failure of solar manufacturer Solyndra has placed the DOE and the government loan guarantee program in the media spotlight. To the average taxpayer, $500 million is a huge number. But many panelists explained that the Solyndra default must be examined within a larger context of a nation's energy research efforts.
Deborah Clayton Argonne National Laboratory
Many start-up technologies never get off the ground without federal loan guarantees, says Finney. "If I were the funding manager over the $38 billion that has been invested in loan guarantees since 2005, I wouldn't feel too bad. We're talking about $500 million out of $38 billion and this one of only a few companies that have gone belly up and had to default. That's a pretty good track record.
"I think if we going to compete on the world stage and we're going to continue to do the things that are right for our country, we have to step back and look at this in the grand scheme of things," says Finney. "But as we all know, the political and media response to this incident will slow the program down and it will take time to get over the hurdle."
"A failure's never good for research, particularly when precious taxpayer money is involved, but in reality failure is part of technology," says Pesiri. "I think we can all acknowledge—and I personally believe—that the large bets that the Department of Energy is putting on these grand energy challenges is completely appropriate. I also believe that the acceptance of risk, be it technical or market risk, is really what sets this nation apart from all others."
"Our basic technology research mission at NREL hasn't changed as a result of this particular business situation. Government-financed energy research is still critically important," says Hawsey. To provide perspective, Hawsey explains, "the top five Chinese photovoltaic companies received over $30 billion in outright bank loans, not loan guarantees, but outright bank loans from Chinese banks. So, this particular business failure pales in comparison to that."
Clayton cited statistics from the Energy Technology Innovation Project, at Harvard University's Belfer Center for Science and International Affairs. In 2007, Brazil, Russia, India, Mexico, China, and South Africa were collectively responsible for one-third of the world's energy consumption, driven by China's growing energy use. The data suggest that in 2008, the governments of those six countries invested at least $13.8 billion in energy R&D. China alone invested $7.2 billion. That year, the United States invested $4.1 billion.
"The United States simply cannot afford to fall behind in energy research. If we do, it will be a devastating blow to the future of our economy," Clayton says.
King cited another example of global competitiveness in energy research. In November 2010, NETL hosted a laboratory tour for the Chinese National Offshore Oil Co. (CNOOC), which was investing in green-field research laboratories and wanted to assess the state of research technology in U.S. facilities. In three years, CNOOC was investing $40 billion in infrastructure.
"I look at that, and I think about it, and I wonder who's paying attention to this. We're going to be left behind very, very quickly if we're not investing appropriately in our research and development capabilities, whether that's the national labs, private industry, or universities," he says. "We need to be cognizant of the fact that the rest of the world is investing heavily and they're using the state of our technology in our labs as their benchmark."
Both government research and private industry play vital roles in determining the market success of new technologies, panelists say.
Inventions are ideas made manifest; innovations are ideas made commercial, says Stenehjem. "The first is the domain of the scientist/engineer, the second is the domain of the entrepreneur. It's the job of the entrepreneur to look at the competitive landscape, to look at price points, to look at form and functional requirements, and methods of going to market," he says. "The fact that a particular invention doesn’t succeed in the marketplace is more likely to be a function of a failure of market diligence than technical diligence. The fact is we need more inventions and we need to encourage the entrepreneurship needed to move them from invention to innovation."
Ramon (Ray) Lugo III
Stimulating the economy
While government-funded research can drive economic growth, the panelists said, it may require changes in how research is conducted.
"If we can take the research that we’re doing and get it to the commercial marketplace faster, we can create a lot of new jobs and potentially create new products that will provide more sustainable growth in the economy," says NASA’s Lugo.
At Y-12, Finney says the challenge is "How do we effectively get it out into the hands of the right entrepreneurs? And then, how do we provide a support system that will help them be successful? That's the quality versus quantity type approach that we apply to tech transfer."
His facility is working with the local entrepreneurial groups and business incubators to find ways it can get involved with a technology accelerator—an organization that goes beyond just providing low-cost space for emerging businesses. "They provide mentoring and a business support structure that enables a new business to grow rapidly," he says.
Sometimes, outside expertise can help government researchers think outside of the proverbial box. King related an experience with a protective coating for extreme environments, which won NETL an R&D 100 Award in 2010.
"A university-based entrepreneurship program came to us and said, 'Why don't you apply this to barbecues because that's a huge market right now.' We would never have thought of that, and so they're actually doing their entrepreneurship project based upon this technology for their MBAs," King says. "What I think we need to do is figure out how to get industry to share some of the risk with us. We have very smart people, but we have mission-driven technology development. If we can get industry to give us a little bit more pull, then we have a better chance of success."
Part of NREL's core mission, Hawsey says, is to help reduce the investment risk that allows the private sector to help take technologies to market. The private sector can reduce investment risk and time to market by engaging with scientists and engineers and using equipment at national laboratories.
"What we really need is a team sport, what I would call unified, full spectrum research model. It's a team sport of engaging our scientists and engineers, not just with the science, but in engaging with the innovators and getting technology commercialized by the private sector," Hawsey says. "Part of this is a win-win for us, too, because by partnering with the private sector in this new, what I would call more unified model, we deliberately pick industrial partners that can help us accelerate our accomplishment of our mission specific-tasking we've taken on from the Department of Energy."
LLNL has established a group of more than 60 entrepreneurs who are interested in scouring through the technologies the laboratory has developed in search of the next new blockbuster product or service.
"They can see things in inventions that mere mortals often miss," Stenehjem says. "If they find something that looks interesting, something that they think has commercial potential, we challenge them to take it and we offer them an option to the invention for $1,000." If an entrepreneur is willing to conduct the market diligence needed to verify its commercial potential, LLNL helps by doing the technical diligence.
"Over the past half century, more than half of the growth in our GDP (gross domestic product) has been rooted in game-changing scientific discoveries, and the national laboratories are committed to making sure that the United States retains its global competitiveness," says ANL's Clayton.
"Although the United States still leads the world in computers, communications, biotechnology, aerospace, and other technology industries, we face real challenges in these areas, challenges that must be addressed by investment in R&D," she says. "We must work to revive U.S. manufacturing, particularly in high-tech, and we will succeed only if we out-discover and out-innovate our international competition."