June 18, 1996

President William J. Clinton
The White House
1600 Pennsylvania Avenue
Washington, DC 20500

Dear Mr. President:

The appropriate role of the Federal government for investing in science and technology has been widely discussed and debated in Congress and the media. While there is general agreement on the government's role in the funding of science, there are many differing viewpoints on the appropriate government role in funding advanced technology. However, there is a consensus that leadership in advanced technology matters for our Nation's economic security.

Your Committee of Advisors on Science and Technology (PCAST) offers the enclosed Principles on the U.S. Government's Investment Role in Technology for your consideration. These PCAST Principles provide a framework and criteria for those areas where the Federal government has a clear role to play in advanced technology. We intend that these principles be helpful in forging a bipartisan consensus and thereby in supporting government actions.

We would be pleased to discuss these with you. In the meantime, please let me know if we can be of further assistance.


Leadership in advanced technology matters. In the United States, technological innovations and a high level of advanced development create new industries and sustain existing ones. Technology intensive industries provide a wide range of professional, technical, and manufacturing jobs, increase economic productivity, and strengthen our competitiveness. As never before, the U.S. is embedded in a global economy. Our U.S.-based companies must compete with companies of other nations for world markets. A strong position in advanced technology is a key element of our competitiveness.

The Federal government affects the levels of advanced technology investment in certain areas both by creating incentives for private firms to invest and by supporting advanced technology in key areas where private participation is inadequate. There are also other government policies that affect advanced development indirectly. Protection of intellectual property and access to markets overseas are two examples where the outcome affects U.S. firms' ability and willingness to invest in R&D.

There will always be areas where public benefits of R&D substantially exceed the returns that can be realized by private investment alone. Federal investment is essential in these areas. The President's Committee of Advisors on Science and Technology provides the following criteria for government investment in technology:

  1. Technology that achieves well-defined public goals such as national security, protection of the environment, new energy sources, better health and education for all Americans, and training of the workforce.

  2. Areas of national importance where the marketplace alone cannot justify a sufficient level of technology investment by private industry:*

    1. Where the benefits are too widely spread for any one company to recover its investment at a profit;
    2. Where the cost or risk is too great for any individual company to bear alone;
    3. Where the potential benefits are too far in the future to pass the threshold of private investment criteria.

  3. Efforts that ensure our nation benefits from our investments and leadership in basic research. The Federal government can facilitate the transfer to industry of the benefits from basic science investments by encouraging partnerships and by promoting the exchange of people and ideas between industry, academia, and government.

* Examples from the past, which fit in one or more of the categories of criterion II, include aeronautics research, the Global Positioning System (GPS), the Internet, satellite development, agricultural research on disease or pest-resistant food crops, and the development of vaccines for diseases such as Hepatitis-B.

[PCAST Documents]