The Technology Innovation Program
Wendy H. Schacht
Specialist in Science and Technology Policy
November 14, 2011
Congressional Research Service
7-5700
www.crs.gov
RS22815
CRS Report for Congress
Pr
epared for Members and Committees of Congress
The Technology Innovation Program
Summary
The Technology Innovation Program (TIP) at the National Institute of Standards and Technology
(NIST) was established in 2007 to replace the Advanced Technology Program (ATP). This effort
is designed “to support, promote, and accelerate innovation in the United States through high-
risk, high-reward research in areas of critical national need,” according to the authorizing
legislation. Grants are provided to small and medium-sized firms for individual projects or joint
ventures with other research organizations.
While similar to the Advanced Technology Program in the promotion of R&D that is expected to
be of broad-based economic benefit to the nation, TIP appears to have been structured to avoid
what was seen as government funding of large firms that opponents argued did not necessarily
need federal support for research. The committee report to accompany H.R. 1868, part of which
was incorporated into the final legislation, stated that TIP replaces ATP in consideration of a
changing global innovation environment focusing on small and medium-sized companies. The
design of the program also “acknowledges the important role universities play in the innovation
cycle by allowing universities to fully participate in the program.”
The elimination of ATP and the creation of TIP have renewed the debate over the role of the
federal government in promoting commercial technology development. In arguing for less direct
federal involvement, advocates of this approach believe that the market is superior to government
in deciding technologies worthy of investment. Mechanisms that enhance the market’s
opportunities and abilities to make such choices are preferred. It is suggested that agency
discretion in selecting one technology over another can lead to political intrusion and industry
dependency. On the other hand, supporters of direct methods argue that it is important to focus on
those technologies that have the greatest promise as determined by industry and supported by
matching funds from the private sector. They assert that the government can serve as a catalyst
for cooperation. As the Congress makes appropriation decisions, the discussion may serve to
redefine thinking about governmental efforts in facilitating technological advancement in the
private sector.
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The Technology Innovation Program
Contents
Introduction...................................................................................................................................... 1
Funding............................................................................................................................................ 2
Background...................................................................................................................................... 3
A Different Approach....................................................................................................................... 4
Issues and Observations................................................................................................................... 4
Contacts
Author Contact Information............................................................................................................. 6
Congressional Research Service
The Technology Innovation Program
Introduction
The Technology Innovation Program (TIP) at the National Institute of Standards and Technology
(NIST) was created to “to support, promote, and accelerate innovation in the United States
through high-risk, high-reward research in areas of critical national need,” according to the
authorizing legislation. The intent of the program is to provide grants to small and medium-sized
firms for individual projects or joint ventures with other research organizations to undertake work
that
(A) has the potential for yielding transformational results with far-ranging or wide-ranging
implications;
(B) addresses critical national needs within the National Institute of Standards and
Technology’s areas of technical competence; and
(C) is too novel or spans too diverse a range of disciplines to fare well in the traditional peer-
review process.1
NIST published the final rule prescribing the policies and procedures for the TIP activity on June
25, 2008 (15 C.F.R. Part 296). Small or medium-sized for-profit firms are eligible for individual
project awards of up to $3 million over three years. Collaborative research ventures including
small or medium-sized companies, national laboratories, universities, or other non-profit research
institutions may be funded for a total of up to $9 million over five years. A competitive, merit-
based process is to be used to make grants of up to 50% of total project costs. In January 2009,
nine awards were announced for “new research projects to develop advanced sensing
technologies that would enable timely and detailed monitoring and inspection of the structural
health of bridges, roadways and water systems that comprise a significant component of the
nation’s public infrastructure.” According to TIP, $42.5 million in federal money was expected to
be matched by $45.7 in private sector support. Twenty more awards were announced in
December 2009 totaling almost $71.0 million in NIST financing with approximately $145.7
million in funding from other sources. Of the projects selected for the two solicitations, thirteen
were in the area of monitoring and inspection of civil infrastructure; four were in the area of
advanced repair of civil infrastructure; eleven were in the area of process scale up for advanced
materials; and one was in the area of predictive modeling for advanced materials. Nine additional
projects in various areas including biopharmaceuticals, electronics, nanotechnology, renewable
energy, and energy sources received awards of more than $22 million in December 2010. Federal
funding for these projects is expected to be matched by approximately $24 million in private
sector support.2
According to NIST, no new TIP projects were funded in FY2011. The $44.8 million appropriated
for the program in P.L. 112-10 was to be used for the continued support of ongoing TIP and ATP
projects.3
1 P.L. 110-69
2 National Institute of Standards and Technology, NIST Announces $22 Million in Funding for Advanced
Manufacturing Research in Electronics, Biotechnology and Nanotechnology, December 15, 2010, available at
http://www.nist.gov/tip/tip_121510.cfm.
3 See http://www.nist.gov/tip/.
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The Technology Innovation Program
Funding
The Technology Innovation Program was authorized by the America COMPETES Act (P.L. 110-
69) and replaced the Advanced Technology Program (ATP). The FY2008 Consolidated
Appropriations Act, P.L. 110-161, provided the initiative $65.2 million (with an additional $5
million in unobligated balances from the FY2007 ATP appropriation). This was 17.6% less than
FY2007 funding for ATP. According to NIST, the major portion of FY2008 support was to be
used to meet previous ATP funding commitments.
The FY2009 budget request did not contain any financial support for TIP. During the 110th
Congress, no final FY2009 appropriations legislation was enacted for the program; P.L. 110-329,
the Consolidated Security, Disaster Assistance, and Continuing Appropriations Act, 2009, funded
TIP at FY2008 levels through March 6, 2009. FY2009 funding of $65.0 million was subsequently
provided by P.L. 111-8, the FY2009 Omnibus Appropriations Act.
For FY2010, $69.9 million was appropriated for TIP by P.L. 111-117, the Consolidated
Appropriations Act, 2010, an increase of 7.5% over the previous fiscal year. The figure reflected
that amount included in President Obama’s budget request and H.R. 2847 as originally passed by
both the House and the Senate.
The Administration’s FY2011 budget included $79.9 million for TIP, a 14.3% increase in support
over FY2010. In the 111th Congress, S. 3636, the FY2011 Commerce, Justice, Science
appropriations bill reported from the Senate Committee on Appropriations, would have funded
TIP at the FY2010 level of $69.9 million, 12.5% below the Administration’s proposal. No
FY2011 Commerce, Justice, Science appropriations bill was reported from the House
Appropriations Committee during the 111th Congress.
TIP remained funded through several Continuing Resolutions until a final appropriations bill was
enacted. The last CR, P.L. 112-6, included support for the program at the FY2010 level of $69.9
million. Under H.R. 1, as passed by the House (the “Full-year” CR), TIP would have received
$44.9 million, 35.8% less than FY2010.
The final FY2011 appropriations legislation, P.L. 112-10, provided $44.8 million for TIP which
represented a decrease of 35.9% from FY2010, was 43.9% less than the President’s request, and
almost the same as the amount in H.R. 1.
The Administration’s FY2012 budget proposes $75.0 million for TIP, 67.4% more the FY2011
appropriation. Neither H.R. 2596, as reported from the House Committee on Appropriations, nor
the FY2012 consolidated appropriations bill covering the Department of Commerce (among other
agencies) passed by the Senate, H.R. 2112, provide any funding for TIP.
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The Technology Innovation Program
Background
The Technology Innovation Program replaced the Advanced Technology Program4 which was
established by Title V of the Omnibus Trade and Competitiveness Act (P.L. 100-418). ATP was
intended “to serve as a focal point for cooperation between the public and private sectors in the
development of industrial technology” and to help solve “problems of concern to large segments
of an industry,” as noted in the conference report to accompany the bill. Located within NIST, in
recognition of the laboratory’s ongoing relationship with industry, ATP provided seed funding to
single companies or to industry-led consortia of universities, businesses, and/or government
laboratories for development of generic (broad-based), pre-competitive technologies that had
applications across industries. Awards, based on technical and business merit, were for high-risk
work past the basic research stage but not yet ready for commercialization. Market potential was
an important consideration in project selection.
Awards were for either product or process technology development. Individual firms were
restricted to funding of $2 million over three years. Money was to be used only for direct R&D
costs. Large firms provided at least 60% of total (direct and indirect) projects costs; small and
medium-sized companies were not required to cost-share direct costs. Joint ventures could
receive up to five years of financing for any amount, limited only by availability. In such cases,
the private sector provided more than 50% of funding. While universities and federal laboratories
could participate in collaborative work, the ATP grant was made solely to companies.
According to NIST, through the end of 2007 when ATP was terminated, 824 projects had been
funded, of which about 28% were joint ventures. Approximately $1.6 billion in federal funds
have been matched by $1.5 billion from the private sector. Small businesses or cooperative efforts
led by such firms made up almost 68% of the awardees. (The legislation creating TIP required
that the Director of NIST “continue to provide support originally awarded under the Advanced
Technology Program, in accordance with the terms of the original award and consistent with the
goals of the Technology Innovation Program.”)
Financing for ATP was a continuing issue in the appropriations debate prior to the elimination of
the program. Opponents of ATP cited it as a prime example of “corporate welfare,” whereby the
federal government invested in applied research activities that, they emphasized, should be
conducted by the private sector. Others defended ATP, arguing that it assisted businesses (and
small manufacturers) in developing technologies that, while crucial to industrial competitiveness,
would not or could not be developed by the private sector alone.
TIP appears to have been designed to avoid what opponents of the ATP program argued was
government funding of large firms that had no need for federal support for R&D activities. The
House Committee on Science and Technology report to accompany H.R. 1868, part of which was
incorporated into the COMPETES Act, stated that TIP replaces ATP in consideration of a
changing global innovation environment focusing on small and medium-sized companies. The
structure of TIP also “acknowledges the important role universities play in the innovation cycle
by allowing universities to fully participate in the program.”5
4 For additional information on ATP see CRS Report 95-36, The Advanced Technology Program, by Wendy H.
Schacht.
5 U.S. Congress, House Committee on Science and Technology, Technology Innovation and Manufacturing
(continued...)
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The Technology Innovation Program
A Different Approach
While similar to ATP in the promotion of high-risk R&D that would be of broad-based economic
benefit to the Nation, there are several differences in the operation of TIP primarily associated
with the size of eligible companies. Financial support under TIP is limited to small and medium-
sized businesses whereas grants under ATP were available to companies regardless of size. In
addition, the Advanced Technology Program required that joint ventures include two separately
owned for-profit firms and could include universities, government laboratories, and other research
establishments as participants in the project but not as recipients of the grant. In the TIP initiative,
a joint venture may involve two separately owned for-profit companies but may also be
comprised of one small or medium-sized firm and a university (or other non-profit research
institution). A single company could receive up to $2 million for up to three years under ATP;
under TIP, the participating company (which must be a small or medium-sized business) may
receive up to $3 million over three years. In ATP, small and medium-sized companies were not
required to cost share (large firms provided 60% of the total cost of the project) while in TIP there
is a 50% cost sharing requirement which, again, only applies to the small and medium-sized
businesses that are eligible. There were no funding limits for the five-year funding available for
joint ventures under ATP; the TIP limits joint venture funding to $9 million for up to five years.
The Advisory Board that was created to assist in the Advanced Technology Program included
industry representatives as well as federal government personnel and representatives from other
research organizations. The Advisory Board for the Technology Innovation Program would be
comprised of only private sector members.
Awards are made for work in areas of “Critical National Need” defined by NIST as:
An area that justifies government attention because the magnitude of the problem is large
and the societal challenges that need to be overcome are not being addressed, but could be
addressed through high-risk, high-reward research.6
To identify the needs for which TIP awards grants, the organization solicits input from
government agencies, advisory groups, industry organizations, universities, and NIST.7 These are
further refined by TIP working groups and specific topics are selected. Current areas include civil
infrastructure and manufacturing while future areas of interest include advanced robotics,
complex networks, energy, healthcare, sustainability, and water.8
Issues and Observations
The effort to terminate the Advanced Technology Program, along with additional attempts to
withdraw government support for certain other technology development efforts, appeared to
reflect a philosophy that eschewed direct federal financing of private sector R&D efforts aimed at
(...continued)
Stimulation Act of 2007, Report to accompany H.R. 1868, H.Rept. 110-115, April 30, 2007, 21.
6 Slides provided by Lorel Wisniewski, Deputy Director, Technology Innovation Program, NIST, May 19, 2010, 2.
7 National Institute of Standards and Technology, Technology Innovation Program, Transforming America’s Future
Through Innovation, Annual Report 2008, December 2009, 4.
8 Slides, 4.
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The Technology Innovation Program
the commercialization of new technologies and production processes. Such activities are seen by
opponents as “industrial policy,” the means by which government rather than the marketplace
“picks winners and losers.” Instead, measures that would occasion a better investment
environment for industry to expand their innovation-related efforts would, proponents argue, be
preferable to government funding.
The current approach, including the new Technology Innovation Program, involves varied
mechanisms to facilitate technological advancement. Legislation has created a body of laws,
programs, and policies that involve both indirect and direct measures to stimulate technology
advancement in the private sector. Indirect incentives include a research and experimentation tax
credit; changes to the antitrust laws to encourage collaborative R&D and cooperative
manufacturing ventures; alterations of patent ownership policies to facilitate government-
industry-university interaction; and practices to promote technology transfer. Direct measures
involve, among other things, federal funding for TIP and the Small Business Innovation Research
Program. These cost-shared programs have been supported, in part, because of what proponents
argue is their potential contribution to the country’s national or economic security.
The elimination of ATP and the creation of TIP have renewed the debate over the role of the
federal government in promoting commercial technology development. In arguing for less direct
federal involvement, advocates believe that the market is superior to government in deciding
technologies worthy of investment. Mechanisms that enhance the market’s opportunities and
abilities to make such choices are preferred. It is suggested that agency discretion in selecting one
technology over another can lead to political intrusion and industry dependency. On the other
hand, supporters of direct methods argue that it is important to focus on those technologies that
have the greatest promise as determined by industry and supported by matching funds from the
private sector. They assert that the government can serve as a catalyst for cooperation.
Technological progress is important to the nation because of its contribution to economic growth
and a high standard of living. How best to achieve this continues to be debated. Critics viewed
ATP as a means for a federal agency to select commercial firms and/or technologies for support.
They maintained that the absence of market-generated decisions will result in technologies that
can not be utilized productively by participating companies. Such a program, they argued,
encourages selection of well-written proposals rather than assistance for truly important
technologies. However, proponents stressed that ATP was market driven and that the technical
areas for investment had been developed in conjunction with industry. In addition, companies
were required to put up significant amounts of funding and survive a rigorous business review;
procedures that made the ATP different from other federal efforts. Replacing ATP with the
Technology Innovation Program may be one response to criticisms that large firms should not be
recipients of this form of federal research funding, support that should be reserved for small and
medium-sized companies which do not have the financial resources available to major
corporations. However, it should be noted that neither the FY2012 appropriations bill reported
from the House Committee on Appropriations nor the appropriations bill passed by the Senate
include any funding for TIP.
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The Technology Innovation Program
Author Contact Information
Wendy H. Schacht
Specialist in Science and Technology Policy
wschacht@crs.loc.gov, 7-7066
Congressional Research Service
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