The Department of Energy Superconductivity Initiative

By Merrifield, D. Bruce; Evan, William M. | Research-Technology Management, November/December 1998 | Go to article overview
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The Department of Energy Superconductivity Initiative

Merrifield, D. Bruce, Evan, William M., Research-Technology Management

Catalyzed and seed-funded by the US. government-but managed by the private sector-the superconductivity consortial model may be worthy of wider replication.

OVERVIEW: The US. Department of Energy s high-temperature superconductivity program is demonstrating a sophisticated model of government-industry collaboration. DOE has catalyzed the formation of, and seed-funded, several vertically integrated consortia, which importantly are private-sector-managed and operated. These consortia would not have been formed without the DOE catalytic and funding roles; consequently, another major US. innovation would not likely remain US.-based. The model can be replicated widely, with significant benefits for many organizations.

Three-quarters of the companies originally listed in the Fortune 500 are no longer listed, including many famous names that have simply disappeared. Others are likely to disappear over the next decade. Moreover, continued survival-let alone profitable growth-will become increasingly difficult in a hyper-competitive global marketplace with rapidly vanishing borders.

Sustainable growth today requires a sophisticated management strategy that not only involves annual investments for incremental improvements to existing operations, but also simultaneous investments in proprietary next-generation systems that are deliberately designed to obsolete current investments, even before their useful lives have been realized. This is a basic reality, not yet widely acknowledged.

Unfortunately, few organizations alone can hold captive all the diverse skills and resources needed to move a basic next-generation discovery, such as high-temperature superconductivity, from the laboratory through multiple stages of development and scale-up to commercialization, or can justify the long negative cash flows involved. As a result, collaborative efforts will often be needed that pool skills and resources to accelerate development times and reduce the risks for participants (1). These collaborations need to be vertically integrated, and to include research support, component suppliers, an integrator-producer, and end users.

The management of consortial efforts is a specialized discipline, better understood than practiced, with a number of well-defined failure modes that can be avoided (2). An important government role exists to help catalyze the formation of cooperative efforts and to fund them in the early, high-risk stages of development. However, such programs are best defined, managed and operated in the private sector.

Effective consortial models currently are being demonstrated through the U.S. Department of Energy's "Superconductivity Program Initiative" (SPI). These programs are government-catalyzed and seed-funded, but private-sector managed. They are models that can be widely replicated (3).

Survival Issues

The current global forces of change are unprecedented in magnitude. They include both remarkable demographic, as well as technological, transformations that are producing serious discontinuities for many businesses. The U.S. has an unprecedented competitive advantage in its advanced technology base, which can provide sustainable growth and industrial competitiveness. This advantage stems from a trillion-dollar investment, made since World War II, in U.S. universities and Federal laboratories. Moreover, this investment has built a basic research infrastructure that is both unmatched and not easily replicated in any reasonable time.

As a result, the U.S. now spends about $25 billion each year for basic research-more than the rest of the world combined. Consequently, the U.S. wins most of the Nobel prizes and makes most of the seminal discoveries. In recent years, these have generated several dozen "critical technologies" (4). These advanced technologies (Table 1) are so important that they likely will restructure most industries over the next decade or two, and will dominate the early 21st century.

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