Grants eye emerging tech

The Advanced TechnologyProgram's 2000 Project Awards

The Commerce Department made millions of dollars in awards this month through

its Advanced Technology Program, which helps fund risky technology projects

often overlooked by venture capitalists and established research institutes.

The department's National Institute of Standards and Technology runs

the ATP program to support commercial high-risk research and development

proj-ects on a cost-shared basis. However, it continues to encounter critics

who claim ATP is simply corporate welfare.

ATP looks for technologies that have a potential for broad-based social

benefits but may not have a market. "As we make our decision about funding

a project, we look at societal benefits and impact, not just the bottom-line

return on investment," said ATP director Alan Balutis.

Robert Sienkiewicz, an economist with the ATP program, points to early

investments in Commerce One Inc. and Vitria Technologies Inc. as examples

of ATP success stories. "We were in business-to-business before the venture

capitalists were there," he said.

Large companies have also benefited from program funding. For example,

ATP money helped General Electric Co. reduce the manufacturing costs associated

with developing the first all-digital mammography system. "We funded a portion

of the project that made the system a lot cheaper," which in turn gives

it broader appeal, Sienkiewicz said.

Often, "ATP money tips the scale" in a company's decision to proceed

with a proj-ect and allows companies to cooperate on joint research efforts

without antitrust concerns being raised, Balutis said.

NIST hopes the 54 projects that received ATP funding this month will

have the same success, although on average nearly 20 percent of them fail.

If carried to completion, the 54 projects will receive about $130 million

from private industry and about $144 million from ATP.

NIST received more than 400 proposals for the ATP awards program this

year. The winning projects cover technologies including pharmaceutical design,

tissue engineering, industrial catalysts, energy generation and storage,

manufacturing technologies, electronics manufacturing and computer software.

Most of the 40 winners were small businesses, receiving awards either

for single-company projects or as joint venture leaders. At least 30 universities

are involved as joint-venture partners or subcontractors. Since 1990, ATP

has provided about $1.5 billion in federal matching funds to support 486

projects.

ATP is not without its critics. In the past two years, the House of

Representatives has not allocated any money for the program, but the funds

were eventually restored last year, and the same is expected this year.

The battle is still brewing. In a letter sent late last month, a group

of representatives asked the chairman of the House Appropriations Subcommittee

on Commerce, Justice, State and Judiciary to terminate funding for ATP.

"Given the lack of adequate funds for other, higher priority needs, it is

time for Congress to stop supporting a program which cannot demonstrate

its benefits exceed, or are likely to exceed, its costs," the letter said.

Government plays an important role in supporting basic and other research,

the authors said, but ATP "has not proved its worth over more than a decade"

and is obsolete because America has become the "leader of the global economy."

"I think it's difficult to sell [ATP] to appropriators now, when companies

are investing incredible amounts of money in research and development,"

said Scott Rayder, senior technology policy analyst at The Heritage Foundation.