U.S. R&D Public Procurement Innovation Policies & Practices

Transcription

1 2H 2 O 4H + + 4e - O Mn Mn O Mn O O Mn Mn O O O Mn Mn O O Mn O phtsystem II U.S. R&D Public Prcurement Innvatin Plicies & Practices Bill Valdez May 28, 2015 UNICAMP Wrkshp On Demand Side Plicies

2 Dimensins f U.S. PPI Federal Market Vnrtas (2015) defines the scpe f the U.S. PPI market t include gvernment prcurements that are custm prcurements f prducts and services, and pre-cmpetitive prcurement t supprt R&D with an intentin t purchase. By this definitin, a ptential Federal PPI market f mre then $700 billin exists, r 5% f GDP. Majr sectrs cvered by this PPI include: Public Safety (fire, plice, maritime, aviatin). Envirnmental Remediatin (nuclear sites, brwnfields, BP disaster). Energy (bulk pwer purchases, Energy Star, renewable energy). Infrmatin Cmmunicatin Technlgies (Internet, Big Data, High Perfrmance Cmputing) Cmmdities (metals, rare gases, il). Natinal defense. R&D ( technlgy push t private sectr and within Agencies).

3 PPI: U.S. R&D Mdel Since WWII, U.S. Public Prcurement Innvatin (PPI) plicies and practices that utilize gvernment funded R&D evlved int a distributed mdel that favred Federal gvernment prcurement f: Defense technlgies Defense technlgies were prcured by grants/cntracts and filtered int the civilian ecnmy thrugh a variety f PPI mechanisms. The gal was t cmmercialize key technlgies required by the defense sectr. This led t the rise f the Military/Industrial Cmplex. R&D develpment fr scial gds (energy, envirnment, health, safety, educatin, ecnmic develpment, etc.) Civilian technlgies were prcured thrugh grants/cntracts that carried the technlgies thrugh the develpment (pre-cmmercial) stage, but nt t full cmmercializatin. That was the respnsibility f the private sectr. Picking winners and lsers is the 3 rd Rail f U.S. industrial plicy.

4 Civilian PPI R&D Practices The U.S. Federal gvernment devtes mre than $150 billin t civilian R&D PPI thrugh a very cmplex set f financial instruments: Grants (limited r n gvernment versight) t universities, cmpanies, nn-prfits and state/lcal gvernments NIH, DOE, DOC, USDA, NSF, DOT, DED, DOL and NASA accunt fr 80% f civilian grants Cperative Agreements (sme versight) used fr centers/institutes viewed as public/private partnerships Evlved frm the DOE natinal labratry system, which uses a frm f a cperative cntracting agreement called a Management & Operatins cntract Cntracts (extensive versight) t prcure services and prducts Generally used by Federal agencies t prcure needed services and prducts (e.g. cybersecurity research, fld mitigatin technlgies, weather predictin) Subsidies/Lans (extensive versight) t stimulate investments derived frm gvernment PPI activities and plicies The Small Business Administratin (SBA), DOE, USDA and ther agencies have lan and subsidy prgrams that supplement PPI practices

5 Understanding Resurces 5

6 Spallatin Neutrn Surce Ttal Prject Cst: $1.4 Billin Mre than 2,000 scientists/year frm universities, industry and natinal labs use the SNS fr cutting-edge experiments.

7 Current Issues with Civilian PPI Plicies Pst WW-II civilian R&D PPI plicies have changed very little since 1945, but there is a grwing cncern that these plicies must be adjusted due t five challenges: 1. A gap between develpment and cmmercializatin. Technlgy Transfer has largely been a failure. 2. Plicy implementatin difficulties. Mstly in energy, climate, ecnmic develpment. Slar & Wind technlgies are facing the valley f death. 3. Offshring/Glbalizatin Distributed US PPI civilian mdel led majr crpratins t keep R&D in U.S., but seek lw cst manufacturing verseas 4. Changing energy dynamics. Fracking bm and lw il prices are increasing U.S. cmpetitive advantage in key industries and leading t a renaissance in rural/inner city cmmunities. 5. Restructured glbal financial markets. U.S. is increasingly seen as a haven fr risk adverse equity/prject finance. Cst f capital is cheap fr established cmpanies, but high fr start-ups.

8 Case Study #1: Advanced Manufacturing Ecnmic grwth thery in U.S. civilian R&D PPI plicy (Slw, et al) has widened the gap between develpment and cmmercializatin. Tday, this gap is being addressed in the manufacturing sectr thrugh the Administratin s Natinal Netwrk fr Manufacturing Initiative (NNMI).

9 Case Study #1: Advanced Manufacturing Key features f NNMI: Fcus n innvatin-riented strategy in prductin and reversal f innvate dmestically and prduce verseas mdel. Back t the Future in terms f the Industrial Revlutin Open, cmpetitive multi-agency (DOD, DOE, DOC, NASA, NSF) prcurements (initially $200 millin/year). 100% cst share requirement. DOL has a cmplementary $400 millin manufacturing wrkfrce training initiative Creatin f public/private institutes that functin as reginal hubs and use an integrated mdel f PPI t cnnect research, design and prductin. Fcus n prmting ecnmic develpment thrugh university/gvernment/industry netwrks that align advanced manufacturing centers with reginal resurce.

10 AVAILABLE INVESTMENT FUNDS Case Study #2: Lan Prgrams U.S. plicymakers have attempted t address The Valley f Death phenmenn since the passage f the 1980 Bayh/Dle Act. Three issues being addressed by Federal lan prgrams: Encuraging the uptake f gvernment-spnsred R&D. Prmting scial plicies, such as climate change and renewable energy develpment. Creating business/ecnmic develpment pprtunities. BRIDGING THE GAP Research & Develpment: DOE Grants, Natinal Labs, Private Funding Pilt Demnstratin Initial Cmmercial Deplyment: Initial Private Equity LPO DEBT FINANCING Cmmercial Deplyment Funding Gap CLEAN ENERGY TECHNOLOGY MATURITY Full Deplyment & Cmmercial Maturity Private Debt Financing & Equity LPO issues lans and lan guarantees t finance deplyment f innvative energy prjects and advanced technlgy vehicle manufacturing facilities in the U.S.

11 Case Study #2: Lan Prgrams DOE s Lan Prgram was created in 2006 t enable the cmmercial develpment f energy technlgies. This effrt was sparked by a 2009 Recvery Act prvisin fr lan credit subsidies fr renewable energy prjects (Slyndra). Sme results: Large scale nuclear, cal and transprtatin prjects were funded, but lw cst f private sectr capital and nerus DOE requirements have stalled prgress. Smaller scale renewable energy prjects benefited frm the credit subsidy during the Recvery Act perid ( ), but few prjects have been apprved since 2011 absent the credit subsidy.

12 Case Study #2: Lan Prgrams The experience f a bifuels prject illustrates the prblem. The cmpany received mre than $80 millin in prject develpment funding frm DOE. A site was prcured, permits develped, and equity/prject financing were sught. Bth USDA and DOE rejected the lan prpsal due t inadequate equity financing, amng ther issues. The bifuels cmpany s experience similar t dzens f ther renewable energy prjects that have cme t be knwn as stranded assets. Numerus barriers exist: Utilities are resistant t lng-term pwer purchase agreements that rely n subsidies. Renewable energy subsidies (renewable fuel standard, PV slar and Wind credits, etc.) are under attack. Small cmpanies requiring majr prject financing fr cmmercial scale prjects are shut ut f traditinal finance markets (banks, large institutinal lenders). DOE is rethinking the lan guarantee prgram, particularly fr renewable energy prjects, but is hamstrung by current regulatins and practices. DOE is simply nt nimble/flexible enugh t assist the emerging renewables market.

13 Case Study #3: Census TIGER System The U.S. rganizes a census every 10 years which cunts every resident f the United States census cntained many issues due t lack f gegraphic infrmatin. In respnse, U.S. Census Bureau develped the Tplgically Integrated Gegraphic Encding and Reference (TIGER) System Database cntains street address ranges, ZIP Cdes, and feature names In-huse applicatins: Cntributed t ther Census measurement system knwn as American Cmmunity Survey Outside applicatins: Cntributed t grwth f the cmmercial GIS (Gegraphic Infrmatin System) industry (MapQuest, Ggle Maps, etc.)

14 Three primary cnclusins: Cnclusins 1. US PPI plicies, in general, are nt crdinated and are a prduct f the missin requirements f U.S. Federal agencies. 2. US Civilian R&D PPI plicies are driven by desire t reslve scial cncerns public safety, envirnment, etc. and they are crdinated. 3. US Civilian R&D PPI plicies are underging fundamental changes due t natinal and internatinal external dynamics, such as lwer il prices, ffshring and changes in financial markets.