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Deputy Secretary Daniel Poneman's Remarks at the Council on Competitiveness 25th Anniversary Summit -- As Prepared for Delivery

December 8, 2011 - 2:34pm

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Thank you, Sam, for the introduction.  And thank you to the Council on Competitiveness for giving me the opportunity to speak here today.

Congratulations on your 25th anniversary.  For a quarter of a century, you have fostered dialogue and promoted ideas that have helped keep America competitive in the global economy. I applaud your focus on strengthening U.S. manufacturing and I appreciate the collaborative effort your members have undertaken to produce the report that the Council is releasing today. To say that its publication is timely would be an understatement.

Around the world, countries are moving aggressively to develop and produce clean energy technologies. 

The United States faces a stark, but simple, choice: We can either make and sell these technologies today – creating American jobs in the process – or we can import these technologies tomorrow.   

While the global competition is fierce, President Obama believes we can – and must – lead in clean energy. 

Department of Energy National Labs

Today, I want to focus on the key role the Department of Energy’s National Labs play in boosting our economic competitiveness by partnering with universities and businesses to discover and deliver new technologies.

The national labs came into the world out of necessity.  In the 1940s, our Nation was at war, confronting imperialist Japan and Nazi Germany.  Roosevelt knew that to win World War II, America needed to mobilize our science and engineering community to make game-changing advances in chemistry, physics, industrial processes and more. 

He knew that success in these fields would require the most brilliant minds, the greatest breakthroughs, the highest levels of national achievement.  And so he tapped the scientific talent at America’s greatest universities.  That kind of effort produced new technologies such as radar, the computer, the proximity fuze, and the atomic bomb, which proved decisive for the Allied victory.

But he knew that brilliance alone would not suffice.  Two other ingredients were essential: sufficient resources, which at that time, only government could provide, and industrial capabilities, which could harness scientific breakthroughs and translate them into applied technologies.

I was fortunate early in my career, while working in the National Security Council, to regularly visit the national labs, where I was able to see many of the wonderful things they were doing – far beyond the things I was familiar with from my work in national security.  From nanotechnology to biometrics, to gene sequencing, our National Labs are at the cutting-edge of science and technology.  They are truly the jewels in our crown.

It turns out we have entered another era with challenges in many ways just as difficult and, indeed, just as consequential for our future, as those we faced in the dark days of World War II and the Cold War.

Once again, we must gear up the great machine of American innovation to secure our prosperity, our security, and our planet in the decades to come.  Our national labs have a vital and vibrant role to play in addressing not just our security challenges, but our energy and economic challenges.

As we look at this challenge, it’s important to recognize how the various piece fit together. 

Our energy assets are predominantly in private hands.  It is the private sector that designs, constructs, and operates the overwhelming majority of our energy production and transmission facilities.  For example, public marketing administrations, along with public and cooperative utilities make up less than 25 percent of the nation’s generating capacity and 20 percent of transmission.  And while the private sector will be the one to ultimately drive the clean energy revolution, the national labs have tremendous capabilities and a unique role to play in support of American industry.

Just consider some of the breakthroughs spawned in our national labs.  We revolutionized medical diagnostics by inventing cancer-detecting nuclear imaging devices and the magnets in MRIs.  We pioneered the high efficiency windfoils that have drastically reduced the cost of wind power to near grid parity in many regions.  We engineered the first Radio Frequency Identification (RFID) chips that have transformed supply chain management and made just-in-time delivery a reality.  We created the world’s toughest ceramic by mimicking mollusk shells, delivering a strong lightweight material perfect for energy and transportation applications.

This is just a very small sampling of the incredible breakthroughs that our national labs have produced.  Just turn them loose on a problem, and they will bring that unique combination of creative thinking, insights, determination, and sheer hard work that have defined their work and have helped make them the envy of the world’s innovation community. 

Urgent Challenges

But the end of the Cold War and the advent of the new challenges of the 21st Century have necessarily changed the way we think about the national labs.  In order for the labs to continue to help America achieve its full potential, we need to find ways to make sure that the technology, ingenuity and creativity of our scientists and engineers are more easily and widely available to the private sector.

To compete in the 21st century global economy, we need to make it easier for businesses to move great ideas from the drawing board to the marketplace.  We need to assure that the world-class scientific and engineering facilities found at the labs can be mobilized to support American entrepreneurs and businesses that can help move ground-breaking innovations from the lab to the commercial marketplace.  That way, we can make sure that clean energy technologies are not just invented in America, but made in America.

Given the urgency of the challenges we face, President Obama is committed to taking strong, swift action to strengthen U.S. competitiveness. In October, the President issued a memorandum directing agencies with federal laboratories to accelerate technology transfer and commercialization of research, and to take steps to increase partnerships between businesses and laboratories.

The Department of Energy is already aggressively cutting red tape to make it easier for industry to partner with our labs and bring breakthroughs to the market.  For example, earlier this year, Secretary Chu launched America’s Next Top Energy Innovator Challenge, which makes it quicker, cheaper and easier for entrepreneurs to obtain option agreements to license technology developed at national laboratories.

Agreement for Commercializing Technology

Today, I am proud and gratified to be able to announce another measure to help transform the President’s vision into reality.  And what better place than the Council on Competitiveness to launch a new technology transfer tool, which the Department of Energy will now use to allow our national laboratories to work more closely, more quickly, and more easily with private industry, in order to accelerate the transfer of job-creating technologies to the commercial marketplace.

We call this new tool, quite simply, Agreements for Commercializing Technology.  I am not a big fan of acronyms, but I like this one: ACT.

This is a new, more flexible type of contract, designed to encourage research and development efforts where other contracting options fall short. In designing this new type of contract, we listened carefully to what industry has been telling us, and we have tried to make it easier for businesses to work with the laboratories under terms that align better with industry best practices.  We also recognize that meeting today’s challenges require new ways to pursue the most promising technological opportunities.

The Energy Department will announce the laboratories selected to participate in the pilot next month. This initiative will streamline contract negotiations and add to the menu of options available to America’s most promising innovators, whether they work for a tiny start-up, a large company, or a research university.

Under ACT, the laboratory contractors and their partners in industry can directly negotiate commercial terms of agreement – such as payment, compensation, and performance milestones – allocating risks and rewards among the parties. In exchange for accepting specific risks, the laboratory contractors are authorized to receive additional compensation directly from their industry partners.  At the same time, ACT transactions are designed to assure the Energy Department can fully recover costs, so that there is no additional risk to the taxpayers.

ACT also opens new avenues for intellectual property disposition that expand on those offered by current contracting options.   This will make it easier for start-ups to partner in consortia with larger companies and labs to ensure that the most promising opportunities receive the support and resources they deserve.

We are confident that by providing more options to help labs and industry align their interests and needs, we will encourage new partnerships and stimulate innovation. To solve our technological and economic challenges, we must find ways to come together to seek solutions. 

Conclusion

Our nation’s strategic research and development efforts, and the national labs themselves, are at a critical juncture. To paraphrase Winston Churchill, this is not the end, it is not the beginning of the end, it is perhaps the end of the beginning.

This is the beginning of a new era in which we can continue to tap into the wellspring of innovation in our national labs in order to drive the advances that this country needs. 

It’s the beginning of an era in which we’re cutting through the cumbersome red tape that has sometimes stood in the way of transferring taxpayer-owned technologies to the companies who can best put them to work solving national challenges. 

The beginning of an era in which we will, once again, see the expansion of U.S manufacturing and where products that are “made in America” will bring jobs and prosperity back to our communities.

And the beginning of an era where the United States will harness the greatest intellectual content in the world to solve the toughest challenges in the world, to promote our prosperity, protect our environment, and strengthen our security. 

Whether we fully realize the vision described in this era will depend, at the end of the day, not on a particular invention or investment, not on a particular breakthrough or insight, but rather on whether we can, as a Nation, enlist the efforts of all parties – scientists, inventors, investors, operators, process engineers and more – to our common purpose. 

If we can do that, it will be because organizations like this one, the Council on Competitiveness, and the people and companies and institutions it brings together, will join together to address our common challenges.    

Whether you are from academia, from industry, from labor – or from the national labs themselves – it is up to you to take advantage of the more flexible framework we are introducing today, to form the partnerships and consortia that will win the race for a clean energy economy.

Countries in Asia, in Europe and throughout the Western Hemisphere are moving at full speed to develop, produce and sell the clean energy technologies that the world demands.  In the United States, we can afford to do no less.

If we’re going to lead in the 21st century, we have to fight to keep these technologies here.  That’s why today’s announcement represents such a great opportunity to harness the power of our national labs to support American industry and to assure America’s technological edge in the world economy. 

We have an opportunity to win the clean energy race. This is an opportunity we should seize.  If we do, our families and friends will enjoy greater prosperity, greater security, and a cleaner environment.  So will our children, and so will theirs.

Let’s work together to make that dream a reality.  Thank you.

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