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National Research Council (US) Chemical Sciences Roundtable. Research Teams and Partnerships: Trends in the Chemical Sciences: Report of a Workshop. Washington (DC): National Academies Press (US); 1999.

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Research Teams and Partnerships: Trends in the Chemical Sciences: Report of a Workshop.

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Panel Discussion

John Ekerdt, University of Texas: My question is for Andrew Kaldor, who is a representative of the petrochemicals sector. I want to follow up on the presentation by Todd La Porte describing how the Plant and Microbial Biology Department at UC Berkeley entered into a partnership because it needed access to the agricultural genomic database that Novartis had. Let' s take this idea of desulfurization and say that the federal government mobilized laboratories and funding to people working on this problem. Will the industry, knowing what they know after over 50 years of working on desulfurization, open their vaults so that for the first ten years of the partnership people don't reinvent what has already been learned? What is the likelihood of this happening?

Andrew Kaldor, Exxon: At this point I can't give you an answer. Four or five years ago, the general position for much of the petrochemical and chemical industry was that environmental-related technologies were going to be used by everyone and that the competitive edge for environmental technologies was not very practical. So this was one example of a rather insular industry cooperating to produce an unfair, unlevel playing field solution. There was no way that the smaller companies, some of them oil refineries, could make the investment required to meet the regulations. As a result, the bigger companies, like Exxon, are forced to toe the line, and the smaller companies get stretched out over several years. Had the technology been broadly available to everyone at reduced investments, everyone would participate at the same time, and the excuse of working for a small company would no longer hold up. So the discussion could have taken place.

There was a situation in which the Environmental Protection Agency was heading toward regulations for very low sulfur levels, which was strongly supported by the automobile and engine manufacturers. Industry kept complaining about the huge investment that was required. One of the big companies said that they agreed with the investment requirement, but noted that if the problem could be solved by another route, that investment could be significantly reduced. This could almost start a national program on the basis that the objective is to reduce the cost of meeting the regulatory environment. I believe there is still an opportunity to worry about this because I don't believe that the current regulations are the final ones. We will probably head toward having no sulfur in the longer term. I am discussing this more from the point of view of a paradigm shift. Had such a discussion occurred, it probably would have made the companies open the coffers. Exxon has spent close to $40 million to fill the coffers because they were so bare.

Ashok Dhingra, Dupont: If you look at the past ten years of market economy, globalization has driven some of the investors such as textile, steel, and smoke stack industries overseas. The result has been that the United States has concentrated more on a highly technological knowledge economy and has worked well in general with a few bumps here and there. If this happens in the area of research—if catalysis is better done in Holland, England, or Japan, and similar technologies make sense—then what is wrong if the multicultural and multinational companies move overseas?

Nancy Jackson, Sandia National Laboratories: Coming from a security-oriented national laboratory, the first thought that I have is that the United States does not want to remain vulnerable regarding some technologies. It does not want to be dependent on any more foreign sources than it already is. We are already very dependent on foreign sources for oil. We certainly don't want to lose any key technologies as well. This could be construed as a national security issue. Perhaps catalysis is not important enough to be part of that, but certainly some information and other technologies will be.

Ashok Dhingra: That sounds like a self-serving or survival game. Take carbon fiber, for example, upon which the Department of Defense is heavily dependent for security systems. Look at the big supplies in this country, and you can see that it was economically more sound to get carbon fiber from Japan. So this debate has gone on for a long time. Market forces gave the sign that Japan was the best supplier of carbon fiber.

Nancy Jackson: This is a political decision. What the government wants from internal sources versus external sources is a political question, not a technical or researchers' decision.

Ashok Dhingra: It's a market decision.

Nancy Jackson: The options are driven by the market, but which materials or technologies we are to rely on is the decision that needs to be made politically.

Henry Kohlbrand, Dow Chemical Company: I tend to agree with Nancy Jackson. There are two elements that we have to look at: the industrial component and the political context. They are not easy to mix. It is easy to say that we should look at the nationalistic responsibilities of American companies in assessing how we should deal with this. However, defining what an American company is, in today's world of multinational companies, is difficult. One could define an American company to be one that was founded in the United States and then expanded to other parts of the globe. Today, in the chemical industry, the largest companies are European companies such as Bayer, Badische Aniline Soda Fabrik Corporation, and Hoechst. Even though they have significant operations in the United States, they did not originate here. What is their responsibility to support the national interests of the United States? These industrial and political issues need to be addressed separately and then an attempt should be made to bring them together. This will not resolve itself.

Joseph Cecchi, University of New Mexico: Maybe we should explore how general this situation is. I am familiar with Sandia partnerships in microelectronics, and they have been quite strong. That is not to say that every one has been successful, but realistically you wouldn't expect to measure success by having every interaction succeed, but rather by the long-term viability of interactions. Nancy Jackson mentioned the Extreme Ultraviolet Lithography Consortium, which is certainly the most prominent. And I think industry is going to Congress and saying, "We need the laboratories for this." As a side bar on that, it is interesting to look at the characteristics of that program because it has generated a lot of controversy because of the scale, the exclusivity—basically just a few companies and three labs—and the duration. So there are probably aspects of that this could be seen to overlap with the Novartis case. Could you comment more broadly on these other areas in which maybe Sandia has been successful, or perhaps it is just that certain areas have a more natural overlap with industrial interest? If you look more broadly, it may not be as dire from the standpoint of the federal laboratories.

Nancy Jackson: I agree. I tried to allude to that in the sense that historically the chemical and petroleum industries have had more of an adversarial relationship with the government. And that is not true as much with the microelectronics industry. As a consequence, there is a very strong interaction between the national labs and the microelectronics industry. Certainly they have a long history of that. And your point is good, that in those areas in which industries have a less adversarial relationship with the government, there is a very good, strong, and healthy interaction with the labs, and with the universities too, for that matter.

Joseph Cecchi: Just to follow up, you make quite a point of the factor being the adversarial relationship with government. Are you sure about that? Could it not be that there is just somehow more of an overlap in which industry finds that they are getting something in areas of microelectronics at a precompetitive level? I'm wondering if it has to do solely with the relationship of industry to government, which would be unfortunate, I think, or whether there are aspects to it that just have to do with the details of that particular need of that industry and what they find at the national level.

Nancy Jackson: I think that it is both. Within the chemical industry, certainly in the areas in which there are more precompetitive issues, we have seen in the past five or six years, certainly with Dow, that they have worked closely with the national labs in these precompetitive issues. The computational fluid dynamics consortium is a very good example. Separations is another good example; often there is a lot of precompetitive work in that area. There are large consortia in that area, not with Sandia, but with other national labs. But Sandia is doing a lot of work with industry on separations too. Yes, there are areas other then catalysis that are farther along with the chemical industry, but I am unsure if they are as far along as microelectronics.

Frank Feher, University of California, Irvine: I'm not doing catalysis research now, but I was trained to do catalysis research and I have actively followed it for many years. I am very uncomfortable with your characterization of catalysis research and the implications it might have outside of Sandia. The United States does not have the big centers for catalysis research that the Dutch have, but if you look at all of the major developments in catalysis, you will see that a good case can be made that the United States is still very much a leader in the field. And that is not likely to change any time soon. So Sandia may be looking for partners and trying to build up centers to survive, but it's unfair both to the other researchers in catalysis in the country and to the researchers at Sandia to paint such a bleak future for the present and future of catalysis.

David Schetter, University of California, Irvine: If Dow were to be given agreed-to royalty ranges up front for exclusive license and under certain conditions nonexclusive royalty-free licenses for other work that was more incremental or less a product in and of itself, how much of the intellectual property concern would that solve for Dow?

Henry Kohlbrand: This would need to be evaluated on a case-by-case basis. We do have some blanket agreements (and have established common principles for these agreements). But if you are talking about a project much larger than the support for one graduate student, a number of questions would be raised. What is the expected outcome? How strategic is the project? Is it precompetitive like some of the examples that Nancy Jackson gave? Depending on the answers to these questions, you can come up with a number of cases in which simple formulas will work very well. However, if we are talking about a development that is in the middle of a very important strategic technology development for the company, there would be less flexibility. If you look at the way we are capitalizing on recent technological developments, it is not by simply starting businesses within the company but through joint ventures or new companies involving several partners. Will a royalty-free exclusive license be able to be used in these more creative business constructs (less than 50 percent ownership by the primary company)? Can it be transferred easily to the new business entity? So what appears simple can be very complex. Our flexibility in negotiating terms for intellectual property is more a function of where the technology fits into the overall business strategy. If it is at a development stage, we tend to be very flexible. If this is close to or in commercialization, we are much less flexible.

Michael Chartock, Lawrence Berkeley National Laboratory: I would like to reiterate some of the strengths of the nation's scientific research in the area of catalysis. In our laboratory, the Department of Energy (DOE) has made major investments in terms of the Surface Science and Catalysis Laboratory; upgrades to the National Center for Electron Microscopy; and constructing, building, and operating the Advanced Light Source, which is very much dedicated to research in the science of catalysis. And so I see in many ways a real investment in this area of science. With the neutron source, which can do both bulk materials and look at surface properties as well, we have a tremendous opportunity. Perhaps the decreased operating budgets of the DOE and the limited increase in funding at the National Science Foundation don't compare with the redirection of the nation' s scientific expertise in life sciences that the national institutes have garnered. But overall there is a tremendous positive view and even support for the laboratories' mission. In our laboratory we do have a very important, strong mission, and the Office of Science at DOE strongly supports that.

Nancy Jackson: My presentation must have come off more negatively that I meant. I actually agree with you. I believe that the United States has good deal of exceptional research. What I am trying to say is that we have an opportunity, if we partner and do multidisciplinary research, to be truly extraordinary. When I talk to some of the people in Europe about a potential virtual laboratory or a collaboration within the United States, they know that we would be formidable competitors if we were to organize in the same way that they are.

Henry Kohlbrand: I would like to make a comment on the subject of doing research in the United States versus elsewhere. In the Dutch example, is appears that they have been very sensitive to the competitive situation in catalysis research globally. They have defined gaps that they are trying to fill and they are very open to collaboration. Sometimes in the United States we appear to be racing against ourselves. Rather than following the Dutch example and defining areas of work for each institution, we have a tendency to have several institutions running very similar programs. This has created some redundancy in capability and duplication of effort and has consumed resources that could have been used to help one institution reach a high level of capability. In the globally competitive environment in which we operate today, we can afford to do less of this than we have in the past. In the catalysis example, we should consider better organizing the efforts across institutions. We need to be sure that each institution understands what the other organizations are doing, what their strategies are, and how they fit into the overall picture. Hopefully, we can then assemble an effort that fits together smoothly rather than pulling against itself.

Christopher Hill, George Mason University: Earlier there was a dialogue on the causes of the relative collaboration levels between the chemical industry and other industries with the federal laboratories. In the ultraviolet lithography case, Berkeley's light source and Sandia's semiconductor manufacturing facility are extraordinary and unique capabilities of the laboratories that nobody else has and that make them critical partners in that cooperative research and development agreement (CRADA). What was not mentioned, of course, was the intention of one of the partners to transfer the resulting technology to Japan. This is where the controversy came from, not from the project's scope, scale, budget, or commitment of time. It is also true that the chemical industry was quite reluctant to join in collaboration. And, relative to other sectors, the chemical sector is new at the table. I was a member of the American Chemical Society Committee on Chemistry and Public Affairs where the first dialogues took place that led to Vision 2020. With the exception of one or two leaders from industry, the industry people were very reluctant. The Chemical Manufacturing Association's lawyers were very hesitant. That is something that other industries got past a long time ago. And so now we have some catching up to do.

Lura Powell, National Institute of Standards and Technology: That is an excellent lead-in to my comment. The Advanced Technology Program (ATP) covers a breadth of technology, and as director I see a similar thing occurring in our program. The chemical industry has been more reluctant to partner with the ATP than other industries. In fact, there wasn't much chemical industry participation at all until the catalysis and biocatalysis program started in 1995.

I would also like to raise an issue about roadmapping for the chemical industry. I have looked at many other industrial roadmaps, including those done in electronics and optoelectronics, in which they have been able to identify the science and technology advances needed to move the entire sector forward. These industries have been able to use their roadmaps very effectively to foster industry collaboration and leverage federal funding toward their goals. In the Vision 2020 document, the global vision is really good, but it needs to include more details about the science and technology research needed to realize the vision. Vision 2020 does not yet spell out what is needed to create the chemical industry of the next century—certainly, not in the same way and with the type of organization that I have seen in other roadmaps.

One of the issues that the Chemical Sciences Roundtable could grapple with, and that would advance this effort, is to look at the profile of collaboration and partnering in the chemical industry versus other industries. What can be done to take better advantage of the partnering opportunities that exist across industries and that include scientists from universities, national labs, and not-for-profits? I see collaboration as a tool for achieving real advances in the future. I think we have heard that from others as well.

Henry Kohlbrand: I would like to comment on some of Nancy Jackson's observations. One of the frustrations that I have had with Vision 2020 is the scope of the definition of the chemical industry versus the electronics, aluminum, or power industries. If we ask what constitutes the chemical industry, we come up with a number of different answers. To one person, it might be a group of specialty manufacturers with relatively small, geographically distributed facilities that make small-volume, highvalue products such as pharmaceuticals. To another it might be petroleum refining and commodity chemical production in very large facilities, to another it might involve plastics, to another fertilizer manufacture, and so on. The way that we define ''chemical industry" is very broad and covers thousands of processes and a large number of process technologies. It is probably unfair to expect that we will have the same focus for Vision 2020 in the chemical industry as we do in the aluminum or microelectronics industry. In aluminum and microelectronics, there are a small number of processes and fewer unit operations than we have in the chemical industry. Perhaps we need to divide the chemical industry into logical subgroups in order to address our concerns in a more orderly way. We have focused on some areas of technology in the chemical industry with extraordinary depth and virtually ignored others in our roadmap activities. Although we have made a lot of progress, there is more yet to be done. I don't think we have been fair in our expectations of the chemical industry, and we may need to take a different approach than we have in the more focused industries that have fewer processes.

Cheryl Fragiadakis, Lawrence Berkeley National Laboratory: Would William Millman be willing to make any comments about the importance of partnerships now and in the future for the research that he is directing? The question is directed more to the Office of Science because it is such a major factor in the research that we are talking about here. How do you measure their progress?

William Millman, U.S. Department of Energy: I cannot speak in general for the Office of Science, but I can certainly speak for the Chemical Sciences Division and maybe more generally for Basic Energy Sciences. As Nancy Jackson mentioned, the research budgets for the department over the past ten years have not kept up with inflation. As a result, funding at the laboratories has not kept up with inflation. Therefore, we have encouraged the programs that we support to look for other sources of funding, CRADAs being an important part of that. CRADAs have a unique advantage in that they can use part of our funding as a match for the industrial funding.

Cheryl Fragiadakis: Do you see a continuation of that basic philosophy? Do you have any order-of magnitude expectation that a small percent of the research is likely to be partnership material, or is it more like half of the research?

William Millman: It is all good partnership material. I see this trend continuing, because when I look at the 2000 budget for Basic Energy Sciences, the research part is down $17.6 million, at least in the presidential submission. So we will continue to encourage collaborations.

Joseph Gordon, IBM: I just want to say that Henry Kohlbrand is exactly right in regard to the electronics products group. There is only one process for making semiconductors. Another structural difference from chemistry is that the major manufacturers of semiconductors depend on a large number of smaller manufacturers to provide key components. So it is not detrimental to them to have a program in which other people retain intellectual property. In fact, that is a key to making the entire system work. The roadmap, in fact, is key to coordinating all of these other components. Without the roadmap, none of the other companies will know which improvements to make, what to develop, and so forth. But I don't see why a technology roadmap could not be done in the chemical arena to identify key areas, for instance, desulfurization catalysts for energy conversion. If we see a regulation coming along, why can't industry get together and define what is required to meet it? There may be a problem in that the people who finally produce the gasoline also want to control the production of the catalyst. So, in this case, there is only one entity involved and, if there is only one entity, there is no room for a consortium or cooperation. There needs to be an analysis of what is actually being looked for in these cases.

Copyright © 1999, National Academy of Sciences.
Bookshelf ID: NBK45055


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