SPEAKERS       CONTENTS       INSERTS    
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73–318PS
2002
REINVENTING THE INTERNET:
PROMOTING INNOVATION IN IT

HEARING

BEFORE THE

SUBCOMMITTEE ON RESEARCH
COMMITTEE ON SCIENCE
HOUSE OF REPRESENTATIVES

ONE HUNDRED SEVENTH CONGRESS

FIRST SESSION

JUNE 26, 2001

Serial No. 107–38

Printed for the use of the Committee on Science

Available via the World Wide Web: http://www.house.gov/science

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COMMITTEE ON SCIENCE

HON. SHERWOOD L. BOEHLERT, New York, Chairman

LAMAR S. SMITH, Texas
CONSTANCE A. MORELLA, Maryland
CHRISTOPHER SHAYS, Connecticut
CURT WELDON, Pennsylvania
DANA ROHRABACHER, California
JOE BARTON, Texas
KEN CALVERT, California
NICK SMITH, Michigan
ROSCOE G. BARTLETT, Maryland
VERNON J. EHLERS, Michigan
DAVE WELDON, Florida
GIL GUTKNECHT, Minnesota
CHRIS CANNON, Utah
GEORGE R. NETHERCUTT, JR., Washington
FRANK D. LUCAS, Oklahoma
GARY G. MILLER, California
JUDY BIGGERT, Illinois
WAYNE T. GILCHREST, Maryland
W. TODD AKIN, Missouri
TIMOTHY V. JOHNSON, Illinois
MIKE PENCE, Indiana
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FELIX J. GRUCCI, JR., New York
MELISSA A. HART, Pennsylvania
J. RANDY FORBES, Virginia

RALPH M. HALL, Texas
BART GORDON, Tennessee
JERRY F. COSTELLO, Illinois
JAMES A. BARCIA, Michigan
EDDIE BERNICE JOHNSON, Texas
LYNN C. WOOLSEY, California
LYNN N. RIVERS, Michigan
ZOE LOFGREN, California
SHEILA JACKSON LEE, Texas
BOB ETHERIDGE, North Carolina
NICK LAMPSON, Texas
JOHN B. LARSON, Connecticut
MARK UDALL, Colorado
DAVID WU, Oregon
ANTHONY D. WEINER, New York
BRIAN BAIRD, Washington
JOSEPH M. HOEFFEL, Pennsylvania
JOE BACA, California
JIM MATHESON, Utah
STEVE ISRAEL, New York
DENNIS MOORE, Kansas
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MICHAEL M. HONDA, California

Subcommittee on Research
NICK SMITH, Michigan, Chairman
LAMAR S. SMITH, Texas
CURT WELDON, Pennsylvania
GIL GUTKNECHT, Minnesota
FRANK D. LUCAS, Oklahoma
GARY G. MILLER, California
JUDY BIGGERT, Illinois
W. TODD AKIN, Missouri
TIMOTHY V. JOHNSON, Illinois
FELIX J. GRUCCI, JR., New York
MELISSA A. HART, Pennsylvania
SHERWOOD L. BOEHLERT, New York

EDDIE BERNICE JOHNSON, Texas
BOB ETHERIDGE, North Carolina
STEVE ISRAEL, New York
LYNN N. RIVERS, Michigan
JOHN B. LARSON, Connecticut
BRIAN BAIRD, Washington
JOE BACA, California
DENNIS MOORE, Kansas
MICHAEL M. HONDA, California
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RALPH M. HALL, Texas

SHARON HAYS Subcommittee Staff Director
PETER HARSHA Republican Professional Staff Member
JIM WILSON Democratic Professional Staff Member
DIANE JONES, ARUN SERAPHIN Professional Staff Members
NATALIE PALMER Staff Assistant

C O N T E N T S

June 26, 2001
    Witness List

    Hearing Charter

Opening Statements

    Statement by Representative Nick Smith, Chairman, Subcommittee on Research, Committee on Science, U.S. House of Representatives
Written Statement

    Statement by Representative Eddie Bernice Johnson, Ranking Minority Member, Subcommittee on Research, Committee on Science, U.S. House of Representatives
Written Statement

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Witnesses

Professor Anita K. Jones, Department of Computer Science, University of Virginia
Oral Statement
Written Statement
Biography

Mr. Eric A. Benhamou, Chairman of the Board, 3Com Corporation
Oral Statement
Written Statement
Biography

Mr. Alfred R. Berkeley, III, Vice Chairman of the Board of Directors and former President of the Nasdaq Stock Market, Inc.
Oral Statement
Written Statement
Biography

Ms. Cita M. Fulani, Director, National Coordination Office for Information Technology Research and Development
Oral Statement
Written Statement
Biography

    Discussion
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REINVENTING THE INTERNET: PROMOTING INNOVATION IN IT

TUESDAY, JUNE 26, 2001

House of Representatives,

Subcommittee on Research,

Committee on Science,

Washington, DC.

    The Subcommittee met, pursuant to call, at 10:05 a.m., in Room 2318 of the Rayburn House Office Building, Hon. Nick Smith [Chairman of the Subcommittee] presiding.

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HEARING CHARTER

SUBCOMMITTEE ON RESEARCH

COMMITTEE ON SCIENCE

U.S. HOUSE OF REPRESENTATIVES
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Reinventing the Internet:

Promoting Innovation in IT

TUESDAY, JUNE 26, 2001

10:00 A.M.–12:00 P.M.

2318 RAYBURN HOUSE OFFICE BUILDING

1. Purpose

    On Tuesday, June 26, 2001, at 10:00 a.m. the Subcommittee on Research of the House Committee on Science will hold a hearing on the role of the federal government in promoting innovation in information technology (IT). The hearing will focus on:

 the need for federal investments in fundamental research in IT

 the effects of those investments on the nation's economy, workforce, and scientific enterprise

 the state of current federal programs in IT research and development (R&D), as established by past legislation, including the High-Performance Computing Act of 1991 and the Next Generation Internet Research Act of 1998
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 the need for Congressional action to update the authorization legislation of the current and future coordinated activities of federal agencies in IT R&D.

    Testifying before the committee will be experts from government, academia, and industry. An industry and academic representative familiar with federally funded research will discuss the role that federal investments play in technological innovation, scientific advancements, and in supporting industry efforts in IT. A representative from the Nasdaq stock market will discuss the relationship between fundamental IT research, technical innovation, and economic productivity. An Administration representative will describe current programs and future plans of coordinated agency activities in IT R&D.

2. Background

    It is well understood by most Americans that Information Technology (computers, computer networks, software, the Internet, the World Wide Web, wireless networks, etc.) is an integral part of our daily lives and a driving force in the global economy. In just a few decades, new computing and communication technologies have changed the way we live, conduct business, and support and perform scientific research. What is less well understood is the role that past federal investments in fundamental information technology research, for example in computing and communications, have played in creating the growing IT industry, ''dot com'' phenomena, and networked society that exists today. In order to continue the advances of previous decades, it is widely believed that a greater federal investment should be made in the fundamental research supporting information technology.

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Legislative and Program History

    The Federal Government's role in funding Information Technology research and development dates back to the World War II era, when the first digital electronic computer was developed and the federal government's overall investment in computing was less than $20 million ($185.2M in FY 1999 dollars) per year. Until the mid-1970s, computers were tools only of large corporations, research institutions, and the federal government, and computer science barely existed as a distinct academic discipline. However, the federal government's investment during this time in computing and the underlying disciplines—mathematics, engineering, physics, etc.—was significant.

    This investment in federal support for computing research expanded in the 1970s, and by the early 1980s many agencies had developed independent research programs. The High-Performance Computing and Communications (HPCC) Initiative was developed in the late 1980s in order to bring coordination to the federal support for computing research. This program, which involves a number of federal agencies, was initially focused on high-performance computers—those extremely fast and powerful machines used for specialized applications requiring immense numbers of mathematical calculations. Weather forecasting, fluid dynamics calculations, and nuclear energy research are all examples of problems requiring supercomputing capabilities. In fact, the original HPCC Initiative was focused on addressing a small number of ''grand challenges'' such as weather forecasting, aerospace vehicle design, and earth biosphere research. Since then, however, these goals have shifted and expanded to encompass the following objectives:

 extending U.S. technological leadership in high-performance computing and computer communications
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 supporting widespread dissemination and application of these technologies to speed the pace of innovation and improve national economic competitiveness, national security, education, health care, and the environment

 providing key enabling technologies for the National Information Infrastructure (NII) and demonstrating select NII applications

    These activities were formalized by the High-Performance Computing Act (HPCA) of 1991 (P.L. 102–194). This legislation authorized a five-year, multi-agency program of research involving the agencies already participating in the HPCC Initiative, which include the National Science Foundation, Department of Energy (DoE), Department of Defense, the National Aeronautics and Space Administration (NASA), the Environmental Protection Agency (EPA), the National Institute of Standards and Technology (NIST), and the National Oceanic and Atmospheric Administration (NOAA). While some of the research funded by these agencies is performed within government laboratories, a significant fraction is devoted to grants that fund researchers in academia and other non-governmental research organizations. These activities have traditionally been designed to complement those of industry, which is more focused on short-term, product-driven research.

    The High-Performance Computing Act also authorized a National Coordination Office for Information Technology Research and Development (NCO–IT) and the President's Information Technology Advisory Committee (PITAC). More information on the NCO–IT and PITAC, both of which will be represented at the hearing, is provided in the appendices, as is information on the activities of the various agencies involved in the HPCC Initiative.
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    The 105th Congress authorized the Next Generation Internet (NGI) program in the NGI Research Act of 1998 (P.L. 105–305), which amended High-Performance Computing Act. The NGI initiative is a multi-agency program focused on developing advanced networking technologies and associated applications, and demonstrating these capabilities on testbeds that are 100 to 1,000 times faster end-to-end than today's Internet. NGI was initially authorized for two years, through FY 2000, but funding for the component parts of the program has continued through FY 2001.

    More recently, the House passed the Networking and Information Technology Research and Development Act (NITRD) last year (H.R. 2086 and, in slightly different form, H.R. 4940). These bills amended the High-Performance Computing Act to authorize appropriations for FY 2000–FY 2004 for R&D activities in a number of agencies in connection with the HPCC Initiative. Agencies included in the bill were NSF, NASA, DoE, the National Institutes of Health, NIST, NOAA, EPA, and the U.S. Geological Survey. H.R. 2086 authorized funding for research on networking and information technology, including grants for IT research centers, the development of major research equipment, IT education and training, and internship programs, and also contained authorization for a program to develop IT applications for elementary and secondary education. As part of a larger package including legislation authorizing the doubling of the overall federal science and technology budget over a ten year period, the Senate passed its own version of NITRD in the 106th Congress—S.2046, which also reauthorized the NGI program through FY 2002. No single version of NITRD passed both chambers, however.

Current Information Technology Research and Development Programs

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    The current reality of the federal IT R&D program bears only a passing resemblance to the existing authorizing legislation—the High-Performance Computing Act of 1991. In fact, the precise nature of the term ''high-performance computing'' itself has changed remarkably since the inception of the program. What was ''high-performance''—and thus exclusively the domain of scientists and engineers at university and government laboratories—ten years ago is becoming standard technology on today's desktop models. The uses of high-performance computing have expanded as well to include not just massive computational abilities, but also new communications and data-intensive applications.

    Rather than focusing only on high-performance computing—or high-end computing, as it is now often referred to—the federal investment in IT R&D has broadened significantly to include research into other areas, such as software engineering and component technologies, networking, and socioeconomic issues. All of these areas are coordinated through the Networking and Information Technology R&D program, using an Interagency Working Group made up of representatives from the participating agencies. The areas of research investments are divided up into seven distinct but interrelated Program Component Areas, which are listed and described in Appendix V. The current Program Component Areas and the corresponding research programs funded by the various agencies that take part in the program are organized very differently than the research agenda and programs outlined in the 1991 Act and the 1998 NGI legislation.

    For example, the Office of Science and Technology Policy (OSTP) and the Office of Management of the Budget (OMB) now consider the NGI initiative as a part of one particular Program Component Area rather than as a stand-alone program. Other programs authorized and described in the 1991 High-Performance Computing Act are significantly different than originally proposed, such as the National Research Education Network. Furthermore, multiple changes in agency efforts and focus, and in initiative and program names and objectives, have created a confusing situation that makes it virtually impossible to track the overall federal IT R&D effort.
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The 1999 PITAC Report: Information Technology Research: An Investment in Our Future

    In a study released in February 1999, the President's Information Technology Advisory Committee (PITAC) concluded that while U.S. leadership in information technology provides an essential foundation for promoting economic growth, education and research, environmental stewardship, public health, and national security, there has been a erosion of support for long-term fundamental research in information technology. Calling the current federal funding levels ''seriously inadequate,'' the Committee also concluded that current research is too focused on near-term problems linked to agency missions. PITAC recommended that the Federal Government create a strategic initiative for long-term R&D, fund projects for longer time periods, establish an effective structure for managing and coordinating R&D, and increase spending over FY 1999 levels by $1.4 billion by FY 2004. PITAC's recommended funding increases for Fiscal Years 2000 through 2004 are provided in Appendix IV.

    Because the Interagency Working Group's Program Component Areas are only loosely related to the PITAC research areas, it is not possible to ''crosswalk'' between the funding table provided in the appendices in order to determine how closely PITAC's recommendations were followed in the FY 2000 and FY 2001 appropriations processes and in the President's FY 2002 budget request for information technology, which is summarized in Appendix VI. It is clear however that the increase in federal IT R&D funding since FY 2000 is not progressing at nearly the pace recommended by PITAC.

    A National Research Council panel concluded in their 1999 report Funding a Revolution that a primary factor in making federal support for research so effective in stimulating the information technology boom has been the federal government's focus on funding the long-range, fundamental research that industry has little incentive to pursue. The panel also cited the diversity of federal funding sources provided as a result of multiple-agency participation in IT R&D as an additional factor in this success. The recommendations of the PITAC report reflect and build upon these conclusions, suggesting a basis for future legislation aimed at ensuring the continued success of the information technology enterprise that more accurately reflects both the current state of IT research and the organizational structure of the federal government programs that fund it.
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3. Witnesses

    The following witnesses will address the Subcommittee:

 Dr. Eric Benhamou, Chairman and CEO, 3Com Corporation, and member of the President's Information Technology Advisory Committee (PITAC), will provide an industry perspective on the federal government's role in IT R&D and will comment on PITAC's recommendations for future IT research and development.

 Dr. Anita Jones, Professor of Engineering and Applied Science, Department of Computer Science, University of Virginia, will comment on the role of federal funding in academic research and the training of future scientists and engineers.

 Mr. Alfred R. Berkeley, III, Vice Chairman of the Board of Directors and former President, The Nasdaq Stock Market, Inc., will testify on the link between fundamental IT research and larger economic benefits.

 Ms. Cita M. Furlani, Director, National Coordination Office for Information Technology Research and Development; the White House office that coordinates current federal information technology research and development activities, will discuss the set of current programs, interagency collaboration, and funding levels.

    The panelists were asked to address the following questions in their testimony:
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 What are the benefits of increased federal investments in information technology to technological innovation, productivity increases, technical workforce training, global competitiveness, national security, and other areas?

 What are the current federal investment levels in information technology research and development? How are these investments coordinated among agencies and disciplines? How are these investments coordinated with the private sector, international partners and state and local governments?

 What recommendations do you have for Congress in developing authorization levels and broad policy guidance for a multi-agency federal information technology research and development research program? What are appropriate levels of federal investment over the next 5 to 10 years in information technology research and development? What specific areas of research should the federal government give high priority in developing a multidisciplinary approach to information technology research that addresses the needs of industry, the scientific community, national security, and social issues? What new mechanisms of coordination will be required?

APPENDICES

Appendix I. National Coordination Office for IT

    The National Coordination Office for IT (NCO–IT) coordinates planning, budget, and assessment activities for the Federal IT R&D Program. It reports to the White House Office of Science and Technology Policy (OSTP) and the National Science and Technology Council (NSTC). NCO–IT works with 11 participating Federal agencies through the Interagency Working Group (IWG) on IT R&D, and its Coordinating Groups, to prepare and implement the roughly $2B IT R&D annual budget crosscut. The IWG consists of a group of agency representatives, chaired by NSF, who provide policy, program, and budget guidance for research in the federal IT R&D portfolio.
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Appendix II. President's Information Technology Advisory Committee

    The President's Information Technology Advisory Committee (PITAC) is a special committee established in 1997 to provide the President, OSTP, and the Federal agencies involved in IT R&D with guidance and advice on all areas of high-performance computing, communications, and information technologies. Appointed committee members represent the research, education, and library communities and include network providers and representatives from critical industries. PITAC has released a number of reports that have called for increased federal investments in IT R&D, as well as examined a number of broader policy issues that stem from advances in IT.

Appendix III. Federal Agency Participation in IT R&D

    IT R&D programs have involved a number of departments and agencies including: NSF; NASA; DoE; NIST; NOAA; EPA; DARPA; NIH; NSA (National Security Agency); AHRQ (Agency for Healthcare Research and Quality); OSD/URI (Office of the Secretary of Defense University Research Initiative); VA; and Department of Education. According to the HPCC FY99–FY00 Implementation Plan (April 2000), the agency's activities included:

National Science Foundation—NSF efforts in HPCC include:

 Developing high speed networking services and capabilities for connecting universities, high schools, research laboratories, libraries, and businesses.

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 Providing early access to new generations of scalable parallel high-performance computers and software technologies in order to achieve performance of one trillion computer calculations per second.

 Creating a technical workforce knowledgeable in computational science and engineering and prepared to take advantage of new capabilities.

 Encouraging industrial partnerships.

    These activities are largely funded through the Information Technology Research (ITR) priority area, which funds individual investigators performing long-term curiosity-driven research; research teams; Science and Technology Centers; deployment of infrastructure; and major research equipment for terascale computing.

National Aeronautics and Space Administration—NASA IT R&D programs work to in high-performance computing and communications research and applications for the aeronautics, Earth and space sciences, and spaceborne research communities. There are five HPCC projects: Computational Aerosciences, Earth and Space Sciences, Remote Exploration and Experimentation, Learning Technologies, and the NASA Research and Education Network (NREN). NASA centers are working toward accomplishing a number of specific objectives including:

 Developing algorithm and architecture testbeds that are able to fully utilize high-performance computing and networking concepts and increase end-to-end performance;

 high-performance scalable computing and networking architectures;
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 demonstrating HPCC technologies on aeronautics, Earth and space science, and spaceborne community research problems;

 conducting pilot programs in education and the public use of remote sensing data.

Department of Energy—DoE work is focused on developing tools to address a number of agency missions, including:

 Replacing underground nuclear testing with modeling, simulation, and experimentation.

 Evaluating environmental risks resulting from nuclear weapons production.

 Promoting clean and efficient supply of energy.

 Providing supercomputer access and advanced communication capabilities to scientific researchers.

    The program has two major strategic thrusts:

National Collaboratories—developing tools for distributed scientific collaboration.

Advanced Computational Testing and Simulation—developing computer simulations to replace experiments that are dangerous, expensive, inaccessible, or politically infeasible.
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    DoE's programs include a number of Defense Programs activities, including the Accelerated Strategic Computing Initiative (ASCI) program, which is working to create the computational modeling and simulation capabilities required for maintaining the safety, reliability, and performance of the U.S. nuclear stockpile.

National Institute of Standards and Technology—The NIST HPCC program supports the agency mission through:

 Development of advanced information technology metrology and test methods for systems, components, and human machine interfaces.

 Application of IT to improve product quality and manufacturing performance, to reduce production costs and time-to-market.

 Development of algorithms and portable, scalable software for industrial problems.

 Promoting the development of IT to support the education, research and manufacturing communities and to increase the electronic availability of scientific and engineering data

 Development of voluntary standards that provide interoperability and common user interfaces

National Oceanographic and Atmospheric Administration—The NOAA program works to support IT advances to improve weather forecasting and climate prediction. This includes:

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 collection and dissemination of environmental information

 development of more accurate representations of the atmosphere-ocean system

Environmental Protection Agency—The EPA program supports agency efforts in human and ecological health risk management. Technology research includes scalable parallel numerical methods, reusable component technologies, rapid intelligent data access and synthesis, integrated visualization and geographical information systems capabilities closely tied to environmental modeling. The research program includes grants at universities and research institutions throughout the country as well as agency intramural research laboratories.

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Appendix V. Program Component Areas for the IT Research and Development program

    Current Program Component Areas for the cross-agency IT Research and Development program are:

    High-End Computing—research explores advanced concepts in quantum, biological, and optical computing. Work includes hardware and software innovations; algorithms for physical, chemical, and biological modeling and simulation of complex systems; and information-intensive science and engineering applications.

    Human Computer Interface and Information Management—develops advanced technologies that expand modes of human-computer interaction and improve the ability to manage and make use of information resources and computing devices. Speech technologies, digital libraries, and large scale modeling and simulation are recent initiatives in this area.
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    Large Scale Networking (LSN)—includes research on advanced network components and technologies for engineering and management of large-scale networks. Focus areas include wireless, optical, mobile, and wireline communications; research on scalability and modeling of the Internet; improving end-to-end network performance; software for efficient development and execution of scalable distributed applications, such as electronic commerce, digital libraries, and health care; and infrastructure support and testbeds. This PCA includes the NGI Initiative.

    Software Design and Productivity—research to develop software that is easier to design, test, maintain, and upgrade. Research topics will include security, survivability, availability, reliability, and safety of IT systems and assurance in software- and information-centric systems through research in theoretical foundations, development of techniques and tools, engineering and experimentation, and demonstrations and pilots.

    High Confidence Software and Systems—concentrates on developing systems that are highly accessible, reliable, and restorable and that provide for protection and security of information services. Current works includes research on assurance technologies, secure and survivable information, protecting the privacy of medical records, and secure programming languages for Internet-based applications.

    Social, Economic, and Workforce Implications of IT—includes assessment of the social and economic consequences of IT's transforming influence on the workplace as well as expanded research in lay public and student education and worker training issues resulting from the move to an information-based economy.
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Appendix VI. President's FY 2002 Budget Request for Networking and Information Technology Research and Development

    As part of its Fiscal Year 2002 budget, the Administration presented a crosscut of federal IT R&D programs under the title ''Networking and Information Technology Research and Development''. This crosscut contains programs that had been previously contained within HPCC, NGI, and the Clinton Administration's IT Initiative.

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    Chairman SMITH. The Subcommittee on research will come to order.

    Well, good morning and welcome to this hearing of the Subcommittee on Research. Reinventing the Internet, promoting innovation in information technology. Today the Subcommittee meets to consider the Federal investment in the fundamental information technology research and the effect of that investment on the nation's prosperity. We will also examine the state of current Federal programs and information technology research established by past legislation and explore whether legislation needs to be changed, how it should be changed, and reflect on the current structure and the needs of those information technology programs.

    It is generally accepted that IT is an integral part of our daily lives and a driving force in the global economy. Fast, capable computers, far-reaching networks enable instantaneous communications world-wide. Access to unimaginable volumes of information, and enough computational power to make American business and industry more efficient and more productive. And that is what we have been doing. Allen Greenspan, for example, has suggested that he believes that the remarkable performance in the advances in productivity are due to, and I quote, ''the resurgence of productivity growth'', which he credits to the revolution in information technology. IT is helping productivity from factory to consumer. It enables precision machinery and rapid prototyping, enhancing quality control in our factories. It allows companies to contact suppliers and distributors instantly, to track inventory quickly and accurately and efficiently. And it gets products and supplies where they're needed most, when they're needed most. And through the Internet enables consumers nationwide, world-wide efficient access to products and markets and information not otherwise available to them locally.
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    The Federal Government's role in funding information technology research and development dates back to he World War II era, when the first digital electronic computer was developed and the Federal Government overall invested in computing, at that time was less than $20 million a year. Since then, the Federal Government's investment in computing and the underlying disciplines, mathematics, engineering, physics, has been significant. In the 1970's Federal support for computing research expanded. And by the early 1980's many agencies had developed independent research programs. The high performance computing and communications, HPCC, initiative, which was developed in the late 1980's and the High Performance Computing Act of 1991, were designed to bring coordination to the Federal effort. They authorized a multi-agency program of research, including 7 Federal agencies, to be performed in government labs or devoted to grants to fund researchers in academia. The legislation also created the National Coordination Office for the Information Technology Research and Development to help coordinate the research between agencies, and the President's Information Technology Advisory Committee. And PITAC, of course, was to help set national priorities in IT research. And we are pleased to have representatives from both of those organizations here to testify today.

    And since HPCC and the HPCA, there have been a number of pieces of legislation that have amended the Acts to includes new responsibilities or reflect new program structures. The current reality of the Federal IT and R&D program is that it bears only a passing resemblance to the original acts. And today, we will hear about the current structure of IT and the research and development associated programs, and how it is coordinating among the agencies and disciplines. We will also discuss coordination with the private sector, our international partners and state and local governments.

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    I hope the witnesses will also provide some recommendations for us to develop authorization levels and broad policy guidance for a multi-agency IT and R&D effort program federally. What are the appropriate levels of Federal investment over the next 5 to 10 years? To what specific areas of research should we give high priority? And what new mechanisms of coordination will be required? I think it is an exciting but complex topic for the Subcommittee to take up, but one vital to our nation's future prosperity as well. To that end, I am pleased that the President yesterday indicated that he intends to nominate Marburger, John H. Marburger, III, to head the Office of Science and Technology Policy. I look forward to working with Dr. Marburger and hope to have him before the Subcommittee in the future as we continue to work on IT and other science policy issues.

    I thank the witnesses for appearing today. I look forward to your testimony. And would now recognize our Ranking Member of this Committee, Eddie Bernice Johnson.

    [The prepared statement of Nick Smith follows:]

PREPARED STATEMENT OF CHAIRMAN NICK SMITH

    Good morning and welcome to this hearing of the Subcommittee on Research, ''Reinventing the Internet: Promoting Innovation in IT.'' Today the Subcommittee meets to consider the federal investment in fundamental information technology research, and the effect of that investment on the nation's prosperity. We'll also examine the state of current federal programs in IT research established by past legislation and explore whether that legislation ought to be updated to reflect the current structure and needs of those programs.

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    It is generally accepted that IT is an integral part of our daily lives and a driving force in the global economy. Fast, capable computers and far-reaching networks enable instantaneous communications worldwide, access to unimaginable volumes of information, and enough computational power to make American business and industry more efficient and productive. Alan Greenspan, Chairman of the Federal Reserve, has said that he believes that the remarkable performance of the U.S. economy is due to ''the resurgence of productivity growth'' which he credits to the revolution in information technology. IT is helping productivity from factory to consumer. It enables precision machinery and rapid prototyping, enhancing quality control in our factories. It allows companies to contact suppliers and distributors instantly, to track inventory quickly and accurately, and get products and supplies where they're needed most, when they're needed most. And, through the Internet, it enables consumers nationwide—worldwide—efficient access to products and markets, perhaps not available to them locally.

    The Federal Government's role in funding IT research and development dates back to the World War II era, when the first digital electronic computer was developed and the federal government's overall investment in computing was less than $20 million a year. Since then, the federal government's investment in computing and the underlying disciplines—mathematics, engineering, physics—has been significant. In the 1970s, federal support for computing research expanded, and by the early 1980s, many agencies had developed independent research programs. The High-Performance Computing and Communications (HPCC) Initiative, which was developed in the late 1980s, and the High-Performance Computing Act (HPCA) of 1991, were designed to bring coordination to the federal effort. They authorized a multi-agency program of research including seven federal agencies to be performed in government labs or devoted to grants to fund researchers in academia. The legislation also created the National Coordination Office for Information Technology Research and Development (NCO–IT), to help coordinate research between agencies, and the President's Information Technology Advisory Committee (PITAC) to help set national priorities in IT research. We're pleased to have representatives from both of those organizations here to testify today.
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    Since the HPCC and the HPCA, there have been a number of pieces of legislation that have amended the Acts to include new responsibilities or reflect new program structures. The current reality of the federal IT R&D program is that it bears only a passing resemblance to the original acts. Today we'll hear about the current structure of the IT R&D program and how it is coordinated among agencies and disciplines. We'll also discuss coordination with the private sector, our international partners, and state and local governments.

    I hope the witnesses will also provide some recommendations for us as we develop authorization levels and broad policy guidance for a multi-agency IT R&D program. What are the appropriate levels of federal investment over the next 5 to 10 years? To what specific areas of research should we give high priority? And what new mechanisms of coordination will be required. This is an exciting, complex topic for the Subcommittee to take up, but one vital to our nation's future prosperity as well. To that end, I'm pleased that the President yesterday indicated that he intends to nominate John H. Marburger, III, to head the Office of Science and Technology Policy. I look forward to working with Dr. Marburger, and hope to have him before this Subcommittee in the future as we continue our work on IT and other science policy issues.

    I thank the witnesses for appearing today, and I look forward to your testimony.

    Ms. JOHNSON. Thank you, Mr. Chairman. I am very pleased that you have called this hearing to review Federal and agency research related to information technology. And I join you in welcoming our witnesses.

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    As you know, the Science Committee has a long history of support for research on information technology. In particular, it played a prominent role in the development and passage of the High Performance computing Act of 1991. This Act authorized a coordinated multi-agency program to advance computing network and technologies. And to attack—challenge computational science and engineering problems. It also put in place a process to develop a coordinated research plan and budget for the research activities carried out by the participating agencies.

    I believe this program has been largely a success. It has made a substantial contribution to moving computation to an equal place along side theory and experiment for conducting research in science and engineering. And it has developed the computing and network and infrastructure needed to support leading edge research and to drive the technology forward for the benefit of society.

    Naturally, the specific technical goals and research areas emphasized in the coordinated program carried out under the 1991 Act has evolved over time. For example, increased emphasis on network and research, and on providing high capacity network connections for academic institutions was carried forward under the next generation Internet initiative which was authorized during the 105th Congress.

    More recently, the President's Information Technology Advisory Committee carried out a comprehensive assessment of the Federal Information Technology Research Initiative. And issued a report with specific recommendations for improvement. This presidential advisory committee found that Federal funds for information technology research had tilted too much toward support for near term mission focused objectives. They discovered a growing gap between the power of high performing computers available to support agency mission requirements versus support for the general academic research community. And they judge the annual Federal research investment is an adequate by more the $1 billion. In its fiscal year 2000 budget request, the Clinton Administration proposed to address these recommendations. In line with this request, the Science Committee developed legislation to authorize the recommended changes and increased funding for the IT R&D program. Unfortunately, this bipartisan and widely endorsed legislation died in the Senate—has indicated his intentions to resurrect this legislation and to move it forward this year. I applaud this goal and am pleased that Chairman Smith has scheduled this hearing to begin a review of the current IT R&D program and its future needs.
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    Today we are interested in such questions as whether there is a proper balance between research targeted to support mission agency needs versus more generic long-term basis research needed to fuel future technological advances. We are interested in whether the current resource levels are sufficient to explore to important research opportunities and whether effective mechanisms are in place to manage these resources.

    Finally, we are concerned about the adequacy of access by academic scientists and engineering—engineers to truly leading edge scientific computers. The technical advances that lead to today's computers and Internet involved from past federally sponsored research in partnership with industry and universities.

    I look forward to our discussion today on how we can ensure that the store of basic knowledge is replenished and, thereby, enable the development the future generations of information technology products and services.

    Mr. Chairman, I thank you for calling this hearing. I join you in welcoming our distinguished panel.

    [The prepared statement of Eddie Bernice Johnson follows:]

PREPARED STATEMENT OF THE HONORABLE EDDIE BERNICE JOHNSON

    Mr. Chairman, I am pleased you have called this hearing to review federal interagency research related to information technology, and I join you in welcoming our witnesses.
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    As you know, the Science Committee has a long history of support for research on information technologies. In particular, it played a prominent role in the development and passage of the High-Performance Computing Act of 1991. This Act authorized a coordinated, multi-agency program to advance computing and networking technologies and to attack challenging computational science and engineering problems. It also put in place a process to develop a coordinated research plan and budget for the research activities carried out by the participating agencies.

    I believe this program has been largely a success. It has made a substantial contribution to moving computation to an equal place along side theory and experiment for conducting research in science and engineering. And it has developed the computing and networking infrastructure needed to support leading edge research and to drive the technology forward for the benefit of society.

    Naturally, the specific technical goals and research areas emphasized in the coordinated program carried out under the 1991 Act have evolved over time. For example, increased emphasis on networking research and on providing high capacity network connections for academic institutions was carried forward under the Next Generation Internet initiative, which was authorized during the 105th Congress.

    More recently, the President's Information Technology Advisory Committee carried out a comprehensive assessment of the federal information technology research initiative, and issued a report with specific recommendations for improvements. This presidential advisory committee found that federal funding for information technology research had tilted too much toward support for near-term, mission-focused objectives. They discovered a growing gap between the power of high performance computers available to support agency mission requirements versus support for the general academic research community. And, they judged that the annual federal research investment is inadequate by more than $1 billion.
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    In its fiscal year 2000 budget request, the Clinton administration proposed to address these recommendations. In line with this request, the Science Committee developed legislation to authorize the recommended changes and increased funding for the IT R&D program. Unfortunately, this bipartisan and widely endorsed legislation died in the Senate.

    Chairman Boehlert has indicated his intention to resurrect this legislation and to move it forward this year. I applaud this goal, and am pleased that Chairman Smith has scheduled this hearing to begin a review of the current IT R&D program and its future needs.

    Today, we are interested in such questions as whether there is a proper balance between research targeted to support mission agency needs versus more generic long-term basic research needed to fuel future technological advances. We are interested in whether the current resource levels are sufficient to exploit important research opportunities, and whether effective mechanisms are in place to manage these resources. Finally, we are concerned about the adequacy of access by academic scientists and engineers to truly leading-edge scientific computers.

    The technical advances that led to today's computers and the Internet evolved from past federally sponsored research, in partnership with industry and universities. I look forward to our discussion today on how we can ensure that the store of basic knowledge is replenished, and thereby, enable the development of future generations of information technology products and services.

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    Mr. Chairman, I again thank you for calling this hearing, and join you in welcoming our distinguished panel of witnesses.

    Chairman SMITH. Representative Johnson, thank you and thank you for your guidance and leadership as we move ahead. Were—we have roughly 10 minutes left in this vote. So we will be temporarily recessing. Representative Gutknecht of Minnesota has gone to vote early and he will return. So when he returns we will continue the hearing. But right now I think we have time to introduce the witnesses. Dr. Jones, Dr. Anita Jones, of course, is Professor of Engineering in Applied Science in the Department of Computer Science at the University of Virginia. And Dr. Jones is also vice-chairman of the National Science Board.

    All of the witnesses, we welcome you back because you have testified before this or other committees in the past.

    And for the next witness I would like to turn it over to Mr. Honda, the gentleman from California.

    Mr. HONDA. Thank you, Mr. Chairman. And for allowing me the opportunity to introduce to the Subcommittee Mr. Eric Benhamou, Chairman of the Board of 3Com Corporation. Mr. Benhamou's history with 3Com is long and impressive. He joined 3Com in 1987 when a company he founded, Bridge Communications, merged with 3Com. From 1990 to 2000 he ushered in a decade of growth in scientific innovation at 3Com and Palm, a 3Com spin-off. While Mr. Benhamou may have cemented his reputation as a Silicone Valley giant and his extraordinarily successful years as CEO of 3Com, his legacy in Silicone Valley extends far beyond his role at 3Com.

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    Mr. Benhamou belongs to a special group of individuals who pioneered advances in the networking, computing and communications. And set the stage for the Internet revolution, for which Silicone Valley has become internationally recognized. His influence extends to Cypress Semiconductors where he serves as Chairman of the Board, and at Legato, where he sits on the board. As well as, a great number of other outboards and companies that have sought out his expertise.

    And fortunately for our nation, his influence can be felt here in Washington, through his work on the President's Information Technology Advisory Committee. He joined PITAC at the request of former President Clinton. Since his appointment, Mr. Benhamou has been an eloquent advocate for Federal science R&D programs. I know. He has visited me several times. And in 1988, Mr. Benhamou was awarded the Ellis Island Medal of Honor, a recognition bestowed on individuals of various ethnic backgrounds who have distinguished themselves in this nation. I mention this award because I see a strong analogy between scientific exploration and traveling. There is uncertainty, risk danger and potential for extraordinary discoveries. Mr. Benhamou has traveled long and far. He is a worthy guide as we pursue our shared goal of positioning our nation on the forefront of cutting-edge scientific research.

    I trust him and I am supremely confident that the Subcommittee will benefit greatly from his testimony.

    Thank you, Mr. Chairman, for allowing me to make this introduction of Mr. Benhamou.

    Chairman SMITH. Mr. Honda, thank you very much. Our third witness is Mr. Alfred Berkeley, vice-chairman of the Board of Directors and former president of the NASDAQ Stock Market, Inc. Mr. Berkeley will testify on the link between fundamental information technology research and the larger economic benefits.
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    Our last witness is Mrs. Cita Furlani of the National Coordination Office for the Information Technology Research and Development of the White House office that coordinates current Federal IT and research and development programs.

    Thank you very much for all appearing today. And with that, before the start of the testimony, we are going to recess until we finish this vote. But when Mr. Gutkneckt returns, he will take the chair and we will keep going with—we will start our testimony. So with that, the Committee is in recess.

    [Recess]

    Mr. GUTKNECHT. [Acting Chair] I am going to take the prerogative of the vice-chair of the Full Committee and reopen the Committee hearing. We apologize. We probably will have votes off and on throughout the day. We are working on the appropriation process.

    I would like at this time to introduce our panelists. Okay. They have been introduced. I apologize. I ran over to vote so we could come back. Our first witness, Dr. Anita Jones. Dr. Jones, welcome to the Subcommittee. Members will be filtering in. But in the interest of time, if you would go ahead and present your 5 minutes.

STATEMENT OF DR. ANITA K. JONES, DEPARTMENT OF COMPUTER SCIENCE, UNIVERSITY OF VIRGINIA

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    Dr. JONES. I appreciate the opportunity to testify before you on the subject of promoting innovation in information technology.

    The first point that I would like to make is to highlight the economic effect. Today's favorable economy is to a great effect enabled by research in information technology. Ideas that emanated from university research, such as time sharing, networking, graphics, parallel computation and we browsers have each, each spawned million, multi-billion industries. And more are in the making. They are clearly traceable back to federally funded basic research.

    Information science and engineering has strengthened our economy, not just by creating these new industries, but essentially by amplifying the productivity of all other industrial sectors. My father was a petroleum engineer, so let me take that as a quick example. The ribbons of seismic recording papers that I used to color as a child has been replaced by highly accurate digital models of reservoirs. With those models, the industry has improved its ability to predict recovery. As a result, they drill fewer wells. The efficiency of on-shore drilling has gone from 11 to 18 percent. And for off-shore drilling from 13 to 28. And it is all due to information technology. And this story has been repeated in industry after industry. This same information technology has often given—has also given rise to new tools for performing research. And that is the computational science technologies.

    And that leads me to talking about the high-end computation infrastructure, a subject that I think great interest to this Committee. Research and computation advances at warp speed. To deal with that fast pace, some researchers need to work in what I would call a time machine. They conduct research using the largest, fastest computers and networks, and the highest resolution visualization systems. Such high-end environments or infrastructure approximate the capabilities that will be cost effective tomorrow. These environments thrust researchers into the future, there go the name time machine, where they can design the algorithms and build the software to effectively harness such capabilities. Software is always the long pole in the tent. It takes time.
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    Using this time machine research strategy is one way to assure national leadership in computer science and information technologies. As well as, in computational science and engineering across the many disciplines. Across the many disciplines, not just information technology research. The high-end time machine provides training for those who will lead the next waves of progress in both industry and academia.

    Let me turn to a specific. It is the National Science Foundation that provides the high-end computational engine for university science and engineering. And I want to express 2 concerns that you should consider as you consider this new bill. First, NSF has not been able to acquire the largest possible computers. Recent acquisitions have been at the 5 teraflop or trillion floating point operations per second. Extendible maybe up to 8 teraflops. And that is not competitive. Both in Japan, as well as, in our DOE stockpile stewardship program we see 12 teraflop machines on the floor that are expanding to 30.

    As a result of this shortfall, university computational scientists do not have access to the most capable high-end computation infrastructure. And there is a double-whammy here. First, the discipline scientists are not able to compete with researchers, particularly those abroad, who have a higher powered infrastructure. And second, the computer science that is conducted in conjunction with the NSF high-end centers will build a purer—a poorer computer science base for the future than would otherwise be possible.

    So I urge this Committee to increase the NSF high-end computation infrastructure budget by about $50 million annually in order to maintain competitive infrastructure. That is just what it takes.
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    My second concern for this very high infrastructure relates to management. The foundation perceives that Congress is directing it to perform annual competitions for the high-end infrastructure. And with all due respect, that is just not appropriate.

    Let me draw an analogy. If you want to build a city metro, another kind of infrastructure, with efficient passenger transports, you don't have a competition to award the construction of each next stop to go on the metro. But that is sort of what is happening. Maybe a little overstated, but that is sort of what is happening

    There should be competition. But it should be intermittent. Say, every 5 to 10 years. The annual competition is inefficient, it spreads resources among too many managing entities, and introduces instability. So I secondly, I urge this Committee to direct the Foundation to manage high-end computation infrastructure just like other major facilities. Annual competition should replaced with intermittent 5 to 10 year competition. So that is message 2.

    Third, I want to talk about fundamental research in computer science. Computer science has been hard-hit by its success. Some research advances translate almost instantly into new products and services. Google.com came out of Stanford. Akami came directly out of MIT. And there is a steady stream of faculty and students going in to start-up ventures never to return to the university and teaching. Now this is healthy. It is very good for our industry. But computer science departments are having difficulty maintaining their current faculty size, much less growing. The steady state production of Ph.D.s has been flat for the last decade at 1,000.

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    So I am concerned that we have too few computer science faculty to educate enough Ph.D.s and enough undergraduate computer science majors who have the technical work force in the future that the nation needs. A key element of this is faculty research in computer science. Federally funded computer science research and university needs to be at a high enough level to assure that there are enough faculty for education and also to provide this healthy stream of faculty moving into industry.

    But today, high quality proposals go unfunded. NSF's Information Technology Research Program can only fund about 11 percent of submitted proposals. So in considering your legislation I would consider—I would urge this Committee to more robustly fund fundamental computer science research.

    In summary, this Subcommittee, the House Science Committee, has oversight of one of the nation's crown jewels, the university research enterprise. And information science and engineering is one of those jewels that also happens to a swelled government's tax coffers. There is a direct relation to that funding and some parts of it need to come back to enable future economic growth and to assure continued U.S. leadership in information technology.

    It is crucial for this Committee to assure two things. An adequate basic research program and a variety of information technologies from photonics to software. And appropriate computational infrastructure for all kinds of research. I have highlighted the very high-end facility, which I think warrants special attention, but infrastructure for research across the board is an issue. And I dealt with that in my written testimony. I urge you to bolster what I consider a flagging infrastructure.

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    Thank you very much for allowing me to speak.

    [The prepared statement of Dr. Anita K. Jones follows:]

PREPARED STATEMENT OF THE HONORABLE ANITA K. JONES

    Mr. Chairman, members and staff of the Subcommittee, I appreciate the opportunity to testify before you. I am Anita Jones. I am Quarles Professor of Engineering and Applied Science at the University of Virginia, where I teach and do research in computer science. I also serve as the Vice Chair of the National Science Board. And from 1993 to 1997, I served as the Director of Defense Research and Engineering at the Department of Defense. I had oversight of the entire DoD science and technology program.

    I appreciate the opportunity to appear before you today to discuss innovation in information technology and the crucial role that federal investment in research has played in the advancement of knowledge and the U.S. economy. My own interests in science and technology span many fields, but I will restrict my remarks to the subject of Promoting Innovation in Information Technology (IT), as requested.

Federally funded research in IT has made a critical contribution to U.S. economy and to our quality of life

    Today's favorable economy, to a great extent, was enabled by the research in information technology in prior decades. The ideas that emanated from university research such as timesharing, networking, graphics, Reduced Instruction Set Architectures (RISC), parallel computing, and the Web plus browsers have each created multi-billion dollar industries. And more such multi-billion dollar industries are in the making, based on ideas that are clearly traceable back to federally funded basic research in information technologies.
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    As this committee well knows, the story gets better. Because almost all human activity involves the processing of information, information technology can leverage, inform and streamline those activities. Taken together, advances in information technology that came out of basic research are transforming our world: how we learn, work, play, think, care for, and relate to each other.

    So, IT is not just an end in itself, a useful area generating research and industrial products. It amplifies other areas. I want to illustrate with just one example. My father was a petroleum engineer so I picked the oil and gas industry. My father would be dazzled by the advances that have come to the oil and gas industry directly from research in information technology and innovative application within the industry. I want to define the term amplification to mean the kind of advances that the application of IT gives to an endeavor—in this case the petroleum industry.

    Because of the computerized recording and processing of seismic data, the industry has orders of magnitude better understanding of the geologic formations beneath the earth. Because of that, descriptions of reservoir location, 3–D structure and extent, as well as the related strata, the porosity, etc. of the surrounding earth are known to orders of magnitude better precision. Corporations like the Schlumberger well logging company and the oil and gas production companies such as Shell and Exxon have very sophisticated high performance computation activities that help with the crucial decisions of the companies.

    With vastly more accurate models of underground reservoirs, the petroleum industry has improved its ability to predict the size of reservoirs and the recovery of petroleum that will be possible with a given production investment. As a result, the industry drills fewer wells because they can both place them more accurately and know precisely where a deviated, or forked, borehole is with respect to the reservoir beneath the earth. The efficiency or productivity of that industry's investment has gone from 11% to 18% for onshore drilling and from 13% to 28% for offshore drilling. This one of myriad examples of how IT applied to an entirely different area of endeavor amplifies what can be done in that area.
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    Information technology amplifies research in other disciplines in a similar way. As this committee is aware, information technology gave rise to new tools for performing research, computational science techniques. Previously, research was experimental, observational or analytical. Progress in computer and information science and engineering not only advances information technology itself, but leverages advancement of knowledge in other areas. It shares this trait with mathematics. But most other disciplines like astronomy or geology do not offer such leverage.

    So, my first conclusion is that investment in the research in computer and information science and engineering has strengthened our economy not just by enabling entirely new products and industries, but by amplifying the efficiency and productivity of almost all other areas of our economy as well as amplifying the advancement of science and engineering research. It is extraordinarily productive.

High-end computing and networking—research and infrastructure

    Computer and information science and engineering research advances at warp speed! In hardware, software and algorithms, the half-life of knowledge is about three years. That means that if a researcher has not learned the new ideas and discoveries of the past three years, then that researcher is out of date. Industry sees the same rapid change.

    For that reason at least some researchers need to conduct research in the context of the most advanced IT systems in order to determine how to best utilize them. They need the largest and fastest computers, networking, visualization and storage hardware and the software tailored to exploit that high-end hardware. I will refer to this research strategy as living in a time machine. These very high-end environments are always unique, very expensive and very hard to make work. But high-end environments are the best approximation of the capabilities that will be cost-effective tomorrow. Broad classes of users will need them. There is a great challenge in building the algorithms and implementing the software to effectively harness the high-end hardware. Algorithms and software are the elements that take the most time to develop. The nation needs to have a talented group of researchers working in the time machine to develop the software, the algorithms and the understanding that the rest of us will inherit from them.
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    As a nation we need to make research progress at the high-end as rapidly as possible. There are three reasons for this. First, research is just as competitive as business. The time machine strategy helps the U.S. assure its national leadership in IT, as well as in science and engineering research generally because of the amplification effects that I cited earlier. Second, the high-end computation environment provide training for those who will lead the next waves of IT progress in both industry and academia. Third, this time machine strategy provides a head start to industry. It is well documented that IT product and service companies do lots of development, but little basic research. By and large, IT industry does not press for the creation of new knowledge as aggressively as the research community does. There are sound business reasons for this. But they will participate in selected research projects. For example, the first gigabit network was not established by the communications industry. Their customers were not asking for gigabit communication at the time. It was a federally funded research project sponsored by the Defense Advanced Research Projects Agency. Once the project was created some communications companies participated. They gained the knowledge learned through the project. This is an example in which research aggressively leads industry.

    These very high-end time machines are developed and supported by a fever very research centers funded by federal investment. Examples include DoE's Accelerated Strategic Computing Initiative (ASCI) and the National Science Foundation (NSF) two Partnerships for Advanced Computational Infrastructure (PACI).

    I use the science fiction notion of a time machine to emphasize that its users are thrust into the future. In the 1980s the time machine was a machine—it was called a supercomputer. All focus was on a single very large computer containing one or a handful of closely coupled processors.
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    Over time the high-end computation time machine changed. Today, it is a balanced system of multi-processor parallel computers coupled to very large secondary storage devices and high-end visualization systems. Components may be geographically distributed, but they must be connected with very high speed networks.

    This high-end computation time machine, or infrastructure, has two important properties:

 One application can utilize almost all of the resources simultaneously. (If the application could get by with substantially less for the ''stretch'' runs, then it should be run on lesser infrastructure.)

 The high-end infrastructure must be centrally managed, even though it may be widely geographically distributed. Only with the centrally managed configurations, interfaces, protocols and scheduling can the best value be realized from the infrastructure.

    So, a high-end computational infrastructure is a unique facility. It is a management challenge to realize the full potential of the system during the very short time that the components represent the state of the art.

    At the present time we are at an exciting juncture that I would like to describe. Historically, high-end computational infrastructure has been mainly used to model the behavior of natural or physical phenomena such as combustion, weather, fluid flow, earthquakes, and engineered artifacts.
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    Two advances are about to be made. First of all, as we move from the 10 teraflop range toward 100 teraflops we will finally have the computation, communications, and storage capacity to create full and high fidelity simulations of phenomenon like combustion. That requires simulating the detailed molecular activity, coupled with the turbulent flow, and flow constrained by the engineered nozzles and pistons. In the past many simulations have been artificially bounded and limited to modeling only one aspect of a phenomenon. We are moving into the era of complete modeling.

    Second, future high-end computation infrastructure will be able to couple virtual simulations to actual measurement and use feedback to calibrate and tune actual physical systems. This makes possible new ways to use computational modeling. Both of these aspirations are audacious and exciting. They build upon the results of several decades of high-end computation and communications research.

    It is worthwhile to take a closer look at the elements of a high-end computation infrastructure. Big computers, fast networks, storage and devices are the straightforward components. Such an infrastructure provides an environment and a service. And the most critical elements are people and software.

    In steady state the infrastructure staff maintain a service. They introduce new users to the service, create accounts, answer questions about the service and provide the substantial documentation about functioning and use of the systems. People define and maintain configurations, interfaces, protocols and scheduling. Much of this requires developing the software to cause the multiple complex components to work together to present a single integrated service to the user. Portions of the system software is always unique to the infrastructure.
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    A user may create an algorithm to solve some problem. But, key to using the large machines is having implementation of those algorithms that efficiently and effectively use the machines. Center staff work with users to debug and refine their application software to be efficient.

    There are two other elements to a high-end computation infrastructure. One is training. A center supporting a high-end computation infrastructure hosts students who are working on their degrees in high performance computation. They also develop and present courses in person and remotely. The training element of the high-end infrastructure is an important contribution to educating users across all the application sciences. Likewise, this is the training ground for personnel who will move into industry.

    The last element that must be part of the computation infrastructure is research in all facets of high-end computer systems. Over decades the centers, particularly those funded by NSF and DoE, have successfully incorporated computer science research, and thereby laid the groundwork for the next generations of high-end computing. Advances in compilers, message passing protocols, visualization, and numeric libraries contribute as much to advancing high-end computing as advances in hardware architecture, application algorithms, and microelectronics.

    High-end computation infrastructure is as complex to establish and manage as any other research facility, such as deep drilling ships and telescopes. But because IT leverages all other areas of research, the high-end computation infrastructures serve to advance not only computer and information science and engineering, but all computational disciplines. That makes it essential that the nation always field high-end infrastructure. It offers more leverage to all disciplines, not just one.
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    Congress has funded high-end computation and communications for a number of years, involving a large number of agencies. The largest investments have historically been made by NSF, DoD, DoE, NASA, and NSA. It is mainly NSF and DoE that have built the high-end infrastructures that support U.S. computational research. For a number of years, DoE has making substantially larger investments in that infrastructure through the Accelerated Strategic Computing Initiative (ASCI). As a result DoE laboratory scientists have access to the very largest computers built—12 teraflops going on 30 teraflops. NSF's infrastructure has not kept pace. Even recent awards are for five teraflop machines going on 8 teraflops.

    As a result the university research scientists do not have access to the most capable high-end computation infrastructure. There is a double whammy. First, the university researchers cannot compete with researchers whose machines are considerably faster—those in the national security community in DoE and other government agencies or with scientists abroad, particularly in Japan. University computational science will not advance competitively if this limitation persists.

    Second, the computer science that is conducted in conjunction with the NSF high-end centers is not being performed in the context of the state-of-the-art in high-end computing. The result is retardation over what is possible. That in turn builds a poorer computer science base for the next generation of high-end computation.

    I urge this committee to double the NSF high-end computation infrastructure budget from roughly $55 million to $100 million annually. That is more in keeping with more realistic funding levels in DoE. And it is what is needed.
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    I would like to raise a second issue with respect to the high-end computational infrastructure. Congress has been perceived by the National Science Foundation as requiring it to perform annual competitions. I discussed attributes of this most complex infrastructure above. I hope that that discussion makes it self-evident that annual competitions are inappropriate.

    Competition is indeed essential. But that competition should be intermittent, as it is in all other high-end research facility endeavors. Annual competition

 is inefficient. As I stated earlier, any highly tuned infrastructure that is to be used on single ''stretch'' applications must be centrally managed. Adding a new player who independently controls assets counters central management and spreads resources among too many managing entities.

 retards productivity. There are very few organizations that are capable of deploying and managing this kind of infrastructure. They should spend their time doing their job, not preparing for annual competitions.

 introduces instability. Building such a facility takes multiple years. If an individual grant lasts for just a few years, it is not possible to mature, for example, an excellent and extensive training program for permanent employees, application-focused users, and students who come for short courses. Long-range planning is essentially precluded.

    I urge this committee to give the National Science Foundation clear direction that high-end computational infrastructure should be managed like other major NSF facilities. Current annual competition should be replaced with intermittent competition, say every five and ten years.
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Interagency cooperation and collaboration

    There is a long history of interagency cooperation in computer and information science and engineering, especially at the high-end. Before Congress enacted the High-Performance Computing Act in 1991, the agencies collaborated through the Federal Coordinating Council for Science, Engineering and Technology.

    From 1993 to 1997 I chaired the interagency Computing and Information Committee that was part of the Presidential National Science and Technology Council. I was involved in a great deal of interagency cooperation during the more than four years that I oversaw the DoD science and technology program.

    Interagency coordination and cooperation on computing and information is more effective than in any other research area. The National Coordination Office for Computing, Information and Communications provides a very valuable service. They support the senior program managers who implement the initiatives that Congress directs: High-Performance Computing and Communications Initiative, the Next Generation Internet and the current Information Technology Research program. Over the years these senior managers have built a legacy of trust and cooperation that is unparalleled in my view.

Information infrastructure for all research—the ''middle-end'' infrastructure

    Now, I would like to turn to a different subject and that is the information technology infrastructure for the vast majority of science and engineering research. Just as business and many government activities have dramatically altered their processes for doing business enabled by IT, the conduct of research has changed by IT.
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    About a year and half ago the National Science Board asked each of the NSF Assistant Directors to talk to the Board about their main concerns. Each one, without exception, talked about the need to develop a stronger, more comprehensive IT infrastructure to support the majority of the university research performers in their areas of concern.

    Let me distinguish this from the high-end infrastructure that I discussed earlier by calling it the middle-end infrastructure. It supports the vast majority of researchers. It involves personal computers, networks, clusters of servers, visualization tools, workstations, software and modest databases. It is the research counterpart to the class of infrastructure that supports most government and business. While highly advantageous to connect each researcher and laboratory into the Internet, the central management required at the high-end is not necessary.

    The good news is that the middle-end infrastructure is much more affordable than high-end infrastructure because it draws from mass-produced hardware and software, yielding the economies of scale. Just as occurs with other communities the infrastructure elements are defined and acquired by different researchers in a way that is integral to their research program.

    In special cases there is a need for unique facilities, such as large data repositories (centralized or distributed), that are shared by an entire research community. These can typically be resources available across the Internet, managed by a center responsible for the repository. But, that center need not also manage the middle-end infrastructure used by those who access the repository. Performance constraints make that less necessary.
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    Of key importance is that this middle-end infrastructure include high, but cost-effective, speed networks. The nation is at a juncture in which large communications pipes are becoming cost-effectively available, but the research community and industry both need the applications and the software to make use of them. Much of the experimentation and training related to maturing such applications needs to come from those supported by the middle-end infrastructure.

    I should note that there are network interconnections between the high-end and middle-end infrastructures. Synergies will arise. But they are best considered as distinctly different. A middle-end user does not become a serious high-end infrastructure user because the speeds of the networks and processors in the two infrastructures prohibit the middle-end user from running an application that can simultaneously use all the resources of the high-end infrastructure. And that use is a distinguishing attribute of the high-end infrastructure.

    I urge this committee to consider the need to expand the middle-end IT infrastructure for U.S. research and to work with the agencies under its purview to accomplish this expansion. It is required for making progress in many programs.

Fundamental computer science research

    Computer science (CS) is a science in its own right. At the same time, it provides infrastructure for others. NSF's Directorate for Computer and Information Science and Engineering is responsible for both the research program in computer science and for providing network infrastructure and the high-end computation infrastructure for the rest of the Foundation's programs. Keeping these activities in the same directorate is appropriate. They reinforce one another when managed correctly.
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    But it produces stresses. The strain is especially difficult in the high-end computing area. There is a balance to be struck. Users of the high-end infrastructure want stable reliable service. They also demand ever-increasing services. CS research needs to be performed in the context of the high-end computation infrastructure both to learn how to better exploit the current short-lived resources and to prepare for future generations. But research, especially experimental research, can be disruptive. The two compete for a finite budget.

    My remarks have emphasized infrastructure for all of science and engineering, but there must be robust funding for fundamental CS as well. Today, there continue to be high quality proposals that go unfunded. That should be redressed.

    CS is especially hard-hit by its success. Some new advances translate almost instantly into new products and services. Google.com is a business that came directly out of Stanford. Akami came directly out of MIT. These are two examples of the steady stream of faculty (and students) going into start-up ventures, never to return to the university and teaching (or to complete their degrees).

    On the one hand, the fastest way to transition technology is to move the person with the knowledge into the place where that technology is to be used. This is good for the economy. But as a result, CS departments are stressed. Many are having difficult in maintaining their current faculty size because faculty depart to industry.

    Federally funded research activity in universities needs to be at a high enough level to assure that there are enough faculty in our research universities, even with a stream of faculty moving into industry. Likewise we need to assure that that sufficient students are trained—both for industry and academic positions.
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    Two decades ago the Feldman report recommended that the U.S. set a goal of graduating 1,000 Ph.D.s annually. That goal was met about a decade ago, and even with the rise of the Internet and large increase in the U.S. IT economy, the number of graduating Ph.D.s has not increased. It is flat. Likewise, I have concerns that the limited CS faculty are not sufficient to educate the number of undergraduate CS majors that the nation requires.

    I urge this committee to robustly fund fundamental computer science research.

Summary

    This subcommittee has oversight of one of the nation's crown jewels—it's university and laboratory research enterprise. In my lifetime, computer and information science and technology research has had immense impact on the many facets of life. Realized economic benefits from this research have swelled the tax coffers of government.

    To enable further economic growth in the IT area, and to assure continued U.S. leadership in computer and information science and engineering research, it is crucial for this committee to assure a vital, federal program in this area. There are two parts to such a program. First, we require a basic research program in a variety of information technologies—from photonics to software. Second, the research community requires appropriate infrastructure. For computational scientists, it is the high-end infrastructure with tens of teraflops and 40 gigibit communications from the user computer to each resource in the infrastructure. For other scientists it will be a middle-end infrastructure with cost-effective, commodity computers, software, and networks.
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    Both infrastructures require continual renewal. These infrastructures are critical because they form the training ground for students and staff. A work force well trained in information technology—not just in what exists today, but what will be tomorrow—contributes greatly to the advancement of our nation.

    Thank you.

BIOGRAPHY FOR ANITA K. JONES

    Anita Katherine Jones was born in Fort Worth, Texas. She received a Bachelor's degree from Rice University in mathematics, a Master of Arts degree in literature from the University of Texas, Austin, and a Ph.D. degree in computer science from Carnegie Mellon University. She then joined the faculty at Carnegie Mellon University. In 1988, Jones became a professor and chair of the Department of Computer Science at the University of Virginia. Her research focused on the design and implementation of programmed systems on computers, including enforcement of security policies on computers, operating systems, and scientific databases. She has published two books and more than 35 technical articles in the area of computer software and systems.

    In 1993, Jones was sworn in as Director of Defense Research and Engineering at the U.S. Department of Defense. In 1997, she returned to the University of Virginia as a University Professor. She was later appointed as Lawrence R. Quarles Professor of Engineering and Applied Science. She currently serves on the Board of Directors for Science Applications International Corporation, as a member of the Defense Science Board, Business Executives for National Security, and the Council on Foreign Relations.
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    Jones was elected to the National Academy of Engineering in 1993. She is a fellow of the Association for Computing Machinery (1995), the Institute of Electrical and Electronics Engineers (1996), and the American Academy of Arts and Sciences (2000). She received the Department of Defense Award for Distinguished Public Service in 1996 and the Distinguished Service Award from the Computing Research Association in 1997. She was appointed to the National Science Board in 1998 and elected Vice Chair in 2000.

    Mr. SMITH. Thank you, Dr. Jones. Mr. Benhamou. Am I saying that correctly? I am sorry. We welcome you to the Committee, and please present your testimony.

STATEMENT OF ERIC A. BENHAMOU, CHAIRMAN OF THE BOARD, 3COM CORPORATION

    Mr. BENHAMOU. Mr. Chairman and members of the Committee, I am speaking to you today both as an executive of the IT industry and as a member of PITAC, the Committee that was introduced previously. It is my privilege to wear both of these hats today as we discuss the critical need for strong Federal involvement in long-term research and information technology.

    With respect to the first 2 sets of questions you wanted me to address, let me begin with a quick word about PITAC. Established in 1997, PITAC advises the President, Congress and the Federal agencies involved in information technology research and development on all areas of high performance computing, communications and information technologies. And provides an independent review and assessment to the Federal IT R&D program. We are pleased and grateful that President Bush in recognizing the hard work this Committee has committed to our mission since the beginning, renewed the Committee earlier this year when its term expired.
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    In 1999 PITAC submitted to the President a comprehensive report finding that Federal information technology R&D investment is inadequate. Measured in constant non inflated dollars, Federal support in most critical areas has been flat or declining for nearly a decade while the importance of information technology to our economy has increased dramatically. Given that several key sectors of the IT industry literally owe their existence to basic research funded by the Federal Government in the 1960's and 70's. And there I am talking about the Internet itself, supercomputing, RAID disks, multiprocessors, local area networks and graphic displays. This retreat cannot be allowed to continue if we are to sustain our prosperity in the coming decades.

    Mr. Chairman, my written statement contains several relevant statistics in support of these points, which I will skip here for the sake of brevity. While the private sector by itself invests a significant percentage of it revenues under a rubric named Research and Development, over 90 percent of this investment focuses on short-term activities, such as product development and commercialization. Only a very small amount qualifies as pure research. And even a smaller amount yet focuses on the type of long-range, high risk, fundamental research that our industry and our nation as a whole need. The reasons behind this allocation of private funds have a lot to do with the continual requirements for reduction in product cycle times and the intense competition that have become the hallmark of our industry.

    Our industry is very good at building innovative products and solutions. U.S. firms have leading market shares in most of the sectors comprising the IT industry. This is in part because we have proved we are adept at leveraging the fundamental research carried out by universities and national labs for commercial purposes. And also for the purpose of creating shareholder value. The natural rewards and incentives that have shaped our industry have also made us very short-term focused, and very dependent upon our research partners for the long term.
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    Silicon Valley is a good example of the natural partnerships and interdependency that exit between three types of actors. First, research institutions such as Stanford University, NASA Ames, and the Lawrence Berkeley Labs, whose research activities have historically been predominately funded by the Federal Government. Second, the venture capital firms such as the ones that find along Sand Hill road, bordering the Stanford University campus. And third, the hundreds, literally hundreds of IT companies between San Jose and San Francisco, and of course, the entrepreneurial talent behind them. Silicon Valley is a jewel that the entire world envies and attempt to imitate.

    Should we fail to grow the Federal investments that fuel the research arm of this tripod, let alone reduce or eliminate them, this delicate equilibrium would be broken. What is today a source of competitive advantage for you nation around the world would become a handicap.

    So it is clear to me and to my industry colleagues that there is a legitimate and very useful role for the Federal Government to play in this ecosystem. Our nation needs significant new research on computing and communication systems. This research will help revive and sustain economic boom in information technology, address important societal problems such as education, crisis management, identify theft. And protect us from catastrophic failures of the complex systems that now underpin our transportation, defense, business, finance and health care infrastructures.

    If the results are to be available when needed, we must act now to reinvigorate long-term IT research. And if we don't take these steps, the flow of ideas that have fueled the information revolution over the past decades may slow to a trickle in the next.
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    You asked about the issues and barriers to innovation that are of concern to the IT sector. I have already spoken to the principal one, namely, the Federal Government's failure to adequately fund IT R&D. But there is another concern of equal significance. The failure of our educational system to produce a sufficient number of graduates with adequate training in math, science and IT literacy. Simply put, our research institutions must recruit more Ph.D.s to teach and undertake advanced research. And the private sector needs more Bachelor's and Master's to invent and build new IT products and solutions. We do not have sufficient time to discuss the weaknesses or our educational system here, but I felt I had to at least raise this issue once in response to your question.

    Mr. Chairman, let me now speak to you of the third set of questions, namely, your request for specific funding recommendations. I will reference again the work of PITAC, formally endorsed by Technet and the IT industry as a whole. In its 1999 report, PITAC recommended a cumulative increase in funding of $4.7 billion through 2004 dedicated to four key areas. One is software. Two is scalable information infrastructures. Three is high-end computing. And four, the related socioeconomic impacts.

    Building Federal IT programs suited to the needs of the nation of the 21st Century will require new management strategies, new modes of research support, and new implementation strategies. Some suggestions for implementing these recommendations included, A, encouraging the National Foundation to assume a lead role in basic IT R&D research. B, would be to designate a senior office for IT R&D. C, would be to diversify research support to include team-oriented projects of broader scope and longer duration. And, D, establish a program of enabling technology centers that will drive research by examination of critical applications areas.
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    Congress has taken steps to meet this need. Last year the House passed H.R. 2086, the Networking Information Technology Research and Development Act. This bill, sponsored by former Committee Chairman, Sensenbrenner, would essentially implement the PITAC findings and recommendations. I would urge the Committee to reintroduce this bill or some similar form of IT and get it passed and get this funding. And I know that the full Committee approved last week a couple of bill that would address some of these issues related to work force developments through NSF grants, to colleges and universities, and announced the commitment to craft an IT R&D defending bill over the next few weeks. We applaud and appreciate this commitment.

    In concluding, in a time like today, when the IT industry as a whole suffers from a severe down-turn far beyond the temporary correction of the so-called dot com bubble burst, we will likely see a significant reduction in the amount of IT R&D funds invested by the private sector in 2001. It is precisely a time like today that one realizes that the industry is in no position to be counted on to carry out the significant role in fundamental long range R&D IT research for the nation.

    Chairman SMITH. Mr. Benhamou, I am going to have to ask you to wrap it up. And then we will get, I am sure, with the questions much more.

    Mr. BENHAMOU. I'll finish with just a couple of sentences and wrap it up. The Federal and private sector roles are complimentary in my view, with the Government providing the initial critical spark for innovation, and the private sector building on the Federal investment to achieving important breakthroughs that advance science, engineering in a broad range of national goals.
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    Research and development funding is our seed corn. And without it there is no future harvest.

    Thank you, Mr. Chairman for the opportunity to testify. And I will be happy to answer questions.

    [The prepared statement of Eric A. Benhamou follows:]

PREPARED STATEMENT OF ERIC A. BENHAMOU

INTRODUCTION

    Chairman Smith, Members of the Committee, I am Eric Benhamou, Chairman of the Board of 3Com Corporation, a $2.5 billion networking equipment company, and Chairman of the Board of Palm Computing, a $1.5 billion handheld solutions company, both based in Santa Clara, California. I also serve on the President's Information Technology Advisory Committee—or PITAC, and on the Executive Council of Technet, a national bipartisan political network of 140 high tech industry leaders. I am speaking to you today both as an executive of the IT industry, and as a member of PITAC. It's my privilege to wear both of these hats today as we discuss the critical need for strong federal involvement in long term research in information technology and other physical and life science disciplines.

INNOVATION AT RISK

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    With respect to the first two sets of questions you wanted me to address, let me begin with a word about PITAC. Established in 1997, PITAC advises the President, Congress and the Federal agencies involved in information technology research and development on all areas of high performance computing, communications, and information technologies, and provides an independent review and assessment of the Federal IT R&D program. Comprising leading IT experts from industry, academia and the non-profit sector, the Committee helps guide efforts to accelerate the development and adoption of information technologies vital for American prosperity in the 21st Century. We are pleased and grateful that President Bush, in recognizing the hard work this committee has committed to our mission since the beginning, renewed the committee earlier this year when its term expired.

    In 1999, PITAC submitted to the President a comprehensive report, finding that Federal information technology R&D investment is inadequate. Measured in constant (non-inflated) dollars, federal support in most critical areas has been flat or declining for nearly a decade, while the importance of information technology to our economy has increased dramatically. Given that several key sectors of the IT industry literally owe their existence to basic research funded by the federal government in the 1960's and 70's—I'm talking about the Internet, supercomputing, RAID disks, multi-processors, local area networks and graphic displays—this retreat cannot be allowed to continue if we are to sustain our prosperity in the coming decades.

    Let me put a few numbers to the problem:

 According to ASTRA, the Alliance for Science and Technology Research in America, Federal R&D as a percentage of U.S. GDP has declined steadily from its high of 2% in 1961 to a low of approximately .8 percent in 1997.
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 Over that period, funding for engineering is down 21%; physical sciences down 29%; mathematics down 15%; but in that same period life sciences are UP 7%.

 Low funding contributes to an inadequate future workforce. For example, the overall number of college degrees earned since 1990 has increased 24%, but the number of high tech related degrees earned has declined 2%.

 The 30% decline in Federal research funding for electrical engineering is tracked by the 38% decline in EE bachelor degrees since 1967.

 Meanwhile, the Labor Department estimates a 108% increase in industry's need for computer engineers through 2008 and a 26% percent increase for electrical and electronic engineers.

 The U.S. has fallen to 6th in the world with reference to the percentage of 24-year-olds with natural science and engineering degrees, behind the UK, Korea, Canada, Japan and Taiwan.

 Industry's dependence on publicly funded science is heavy: 73 percent of papers cited by U.S. industry patents are public science—authored at academic, governmental, or other public institutions.

    While the private sector by itself invests a significant percentage of its revenues under a rubric named ''Research and Development'', over 90% of this investment focuses on short term activities such as product development and commercialization. Only a very small amount qualifies as pure research, and an even smaller amount yet focuses on the type of long range, high risk, fundamental research that our industry and our nation as a whole need. The reasons behind this allocation of private funds have a lot to do with the continual requirements for reduction in product cycle times and the intense competition that have become the hallmark of our industry.
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    Our industry is very good at building innovative products and solutions. U.S. firms have leading market shares in most of the sectors comprised in the IT industry. This is in part, because we have proved very adept at leveraging the fundamental research carried out by universities and national labs for commercial purposes and for creating shareholder value. The natural rewards and incentives that have shaped our industry have also made us very short-term focused, and very dependent upon our research partners for the long term.

    Silicon Valley is a good example of the natural partnerships and interdependencies that exist between three types of actors:

a) research institutions such as Stanford University, NASA Ames, and the Lawrence Berkeley Labs, whose research activities have historically been predominantly funded by the federal government;

b) venture capital firms such as the ones you find along Sand Hill Road, bordering the Stanford University campus;

c) and the hundreds of IT companies between San Jose and San Francisco, and the entrepreneurial talent behind them. Silicon Valley is a jewel that the entire world envies and attempts to imitate.

    Should we fail to grow the federal investments that fuel the research arm of this tripod, let alone reduce or eliminate them, this delicate equilibrium would be broken. What is today a source of competitive advantage for our nation around the world would become a handicap.
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    So it is clear to me and to my industry colleagues that there is a legitimate and very useful role for the Federal government to play in this ecosystem. Our nation needs significant new research on computing and communication systems. This research will help revive and sustain the economic boom in information technology, address important societal problems such as education and crisis management, and protect us from catastrophic failures of the complex systems that now underpin our transportation, defense, business, finance, and healthcare infrastructures.

    If the results are to be available when needed, we must act now to reinvigorate long-term IT research. If we do not take these steps, the flow of ideas that have fueled the information revolution over the past decades may slow to a trickle in the next.

    You asked about the issues and barriers to innovation that are of concern to the IT sector. I have already spoken to the principal one, namely the federal government's failure to adequately fund IT R&D. But there is another concern of equal significance: the failure of our educational system to produce a sufficient number of graduates with adequate training in math, science, and IT literacy. Simply put, our research institutions must recruit more Ph.D.s to teach and undertake advanced research, and the private sector needs more Bachelors and Masters to invent and build new IT products and solutions. We do not have sufficient time to discuss the weaknesses of our educational system, but I felt I had to at least raise this issue once in response to your question.

RECOMMENDATIONS

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    Mr. Chairman, let me now speak to your third set of questions, namely your request for specific funding recommendations. I will reference again the work of PITAC, formally endorsed by Technet and by the IT industry. In its 1999 report, PITAC recommended in increase in funding of $4.7 billion through 2004, dedicated to four key areas: 1) software; 2) scalable information infrastructure; 3) high-end computing; and 4) the related socioeconomic impacts.

    Building a Federal IT program suited to the needs of the Nation in the 21st century will require new management strategies, new modes of research support, and new implementation strategies. This new approach is demanded by the reality of Federal budget constraints, the need for more long-term cross-disciplinary team research, and the need to maintain a small, efficient, and coordinated research management process. It is essential that the Federal systems responsible for managing and implementing the new IT program be positioned to review the entire information technology research budget, to restore the balance between fundamental and applied research, to encourage long-term and high-risk collaborative research projects, and to employ a systematic review by participating Federal agencies and the private sector.

    Some suggestions for implementing these recommendation include: a) encourage NSF to assume a lead role in basic IT R&D research; b) designate a Senior Office for IT R&D; c) diversify research support to include team-oriented projects of broader scope and longer duration; and d) establish a program of ''Enabling Technology Centers'' that will drive research by examination of critical application areas.

    And it keeps coming back to money. If you look at actual funding for IT R&D across all agencies from 1995 through 1998, spending was basically stagnant at around $1 billion per year. Around the time PITAC was being created, the FY 1999 budget increased funding by about $300 million, with modest increases of a few hundred million in the succeeding years. But this simply can't be considered enough. It needs to be a national priority.
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    Congress has taken steps to meet this need. Last year, the House passed H.R. 2086, the Networking and Information Technology Research and Development Act. This bill, sponsored by former committee chairman Sensenbrenner, would essentially implement the PITAC findings and recommendations. I would urge the committee to reintroduce this bill or some similar form of it and get it passed, and get the funding. I note that the full committee approved last week a couple of bills that would address some of these issues, related to workforce development through NSF grants to colleges and universities, and announced a commitment to craft an IT R&D funding bill over the next few weeks. We applaud and appreciate this commitment.

CONCLUSION

    In concluding, I want to emphasize the importance of Federal involvement in basic R&D. This is the kind of long-term, high-risk research that industry cannot afford to undertake, given extreme stockholder and competitive pressures on quarterly earnings.

    In a time like today, when the IT industry as a whole suffers from a severe downturn, far beyond the temporary correction of the so-called ''dot com bubble burst'', we will likely see a significant reduction in the amount of IT R&D funds invested by the private sector in 2001. It is precisely in a time like today that one realizes that the industry is in no position to be counted on to carry out a significant role in fundamental long range IT research for our nation. And it is precisely in a time like today that IT companies need access to the results of ground breaking research in order to innovate their way out of the current downturn.

    The federal and private sector roles are complementary, with the government providing the initial, critical ''spark'' for innovation, and the private sector building on the federal investment to achieve important breakthroughs that advance science, engineering and a broad range of national goals.
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    Research and development funding is our seed corn. Without it there is no future harvest.

BIOGRAPHY FOR ERIC A. BENHAMOU

    Eric Benhamou's professional and personal accomplishments center on the creation and intelligent deployment of information technology, around the world, both in business and non-profit environments.

    Eric Benhamou is the chairman of the Board of Directors of 3Com Corporation, Palm Inc. He served as chief executive officer of 3Com Corporation from September 1990 until December 31, 2000. Previously, he held a variety of senior management positions in engineering, operations, and management at 3Com.

    In 1981, Mr. Benhamou co-founded Bridge Communications, an early networking pioneer, and was vice president of engineering until its merger with 3Com in 1987. Before joining Bridge Communications, he worked four years at Zilog, Inc., serving as project manager, software engineering manager and design engineer.

    In 1992, he received the President's Environment and Conservation Challenge Award, the United States' highest environmental award. In 1997, former President Bill Clinton appointed Mr. Benhamou to the President's Information Technology Advisory Committee which advises the President on research and development focal points of federal programs to maintain United States leadership in advanced computing and communications technologies and their applications.
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    In 1998 Mr. Benhamou was recognized by former Israeli Prime Minister Benjamin Netanyahu with the Foreign Investor Jubilee Award for investments and contributions made by the company in furthering the ongoing development of Israel's economy. That same year, Benhamou received the Ellis Island Medal of Honor, which pays homage to the immigrant experience, as well as individual achievement to U.S. citizens from various ethnic backgrounds. He is also a graduate of the American Leadership Forum which seeks to revitalize leadership within communities across the nation.

    Mr. Benhamou currently serves as chairman of the board of Cypress Semiconductor and as a member of the board of Legato. He serves on the board of directors of privately held companies, Intransa and Atrica. Mr. Benhamou serves on the executive committee of TechNet. In addition he serves on the board of directors of Stanford University School of Engineering board of advisors. He serves as vice chairman of the board of governors of Ben Gurion University and as chairman of Western Governor's University's National Advisory Board.

    Mr. Benhamou, 45, holds honorary doctoral degrees from Ben Gurion University of the Negev, Widener University and the University of South Carolina. He has a Master of Science degree in electrical engineering from Stanford University and a DiploAE3me d'Ingénieur from Ecole Nationale Supérieure d'Arts et Métiers, Paris.

    Chairman SMITH. And I would re-emphasize that part of the purpose of this hearing is writing the new information technology legislation and trying to update and decide where to go. And that is part of what we would like you to advise us on, the changes that we might pursue. Mr. Berkeley.
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STATEMENT OF MR. ALFRED R. BERKELEY, III, VICE CHAIRMAN OF THE BOARD OF DIRECTORS AND FORMER PRESIDENT OF THE NASDAQ STOCK MARKET, INC.

    Mr. BERKELEY. Thank you, Mr. Chairman. Let me deviate from my written testimony to pick up on these arguments and not be repetitive on any of the basis.

    Chairman SMITH. And for the record, all written testimony will be entered into the record in addition to your verbal statements.

    Mr. BERKELEY. I would like to first tell you where I am coming from. I am here in 2 capacities. One, I am vice-chairman of the NASDAQ Stock Market, which is a business that is dependent on technology in 2 ways. One, is we run our market, excuse me, on computer technology provided—providing the country with extraordinarily fast and efficient transactions. But more importantly and more to the point today, we trade the shares of companies who are by and large creatures of the technology investments and the research and development investment that were made 20 to 30 years ago. The great companies that trade in our stock market are in most cases companies that have developed commercial products out of research and development that was begun 2 or 3 decades ago, 4 decades ago.

    My second role is as a citizen. And I want to make that point strongly. Because I think that what this Committee does, more than any other committee in this Congress, decides what my children and my grandchildren's standard of living and quality of life will be 2, 3, 4 decades from now.
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    Let me tell you about 7 things very quickly that I think are relevant to the questions that the Committee asked. First of all, I want to say that this—and build on Mr. Benhamou's point, that there is a public/private partnership at work here. A very important concept in the United States. I am going to tell you that the venture capital community cannot do what the corporations have not—have dropped doing. And I am going to tell you why in both cases. Most people do not recognize that in spite of the billions of dollars that have flown from—flowed from pension funds into venture capital, the venture capital partnerships are legal creatures that typically have 5 or 10 year lives. In other words, they do not have the time to go for the very long build-out of basic research into commercial products. They will not do basic research. So do not look to the venture capital community. It is not in the character of the beast to pick up basic research.

    Secondly, for 2 important reasons corporations can no longer afford to do a lot of the basic research that we enjoyed in the heyday of regulation and of national markets. We are in an era of deregulation and global markets. And let me use the Bell System as an example. By public consensus we had a telephone system that enabled through regulation and nationally limited competition, we enabled the Bell System to support a cross subsidy of 2 things. One is the rural telephony, which did not pay for itself. And secondly, Bell Labs and the long-term research and development that was done under the corporate offices.

    As we went to deregulation and as we have gone to globalization, we have found that prices are being set in the market by new competitors who are not undertaking basic research, and are not undertaking social goals, like rural telephony. This is particularly pressing in the international arena. Prices are set by competitors in other countries, some of whom are subsidized. But even if they are completely free market competitors, they do not allow long term research and development in our corporate citizens.
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    So that globalization and deregulation have some together to stop what we—what many of us accept a norm, which is that our largest corporate citizens will do significant basic research and development. They will not.

    The other trend that is not talked about much, but which we see in the market, is the coming together of extraordinary large pools of investment dollars. The growth of pension assets and the growth of mutual fund assets are such that the competition for high returns in the financial community is extreme. And this has caused these large pools of assets to go after their highest rates of return that they can get, including on a very short-term basis. And this means that even the largest companies are not immune to being taken over and dismembered on short-term price fluctuations in the stock market. So there is another pressure that precludes them—precludes thoughtful managers from taking and making those long-term investments that we traditionally associated with research and development.

    Now there are things that need to happen that can improve what we have. One is, we can develop a protomarket in research and development dollars to better match the funding that is available for scientists. And I draw to your attention a project that I personally have been very interested in and involved in to all the Community of Science, which has pulled together about $33 billion of unspoken for, unawarded grant money around the world from many countries, creating a web based early-stage market for scientists finding money. And I think that is a useful model.

    I want to pick up on the issue of education that Mr. Benhamou mentioned. I think that this Committee should make sure that 2 things happen in the education arena. One is that there is market like transparency for grades coming out of school systems. And I find the fact that we have 16,000 school districts in this country that no one knows what the local school system's grade means. My children come home with a good grade or a medium grade or a bad grade and I have no idea what that means on a global market. Because we are competing in the global environment, it would be useful to know what those grades mean. And I suggest to you that projects like the one sponsored by the Council on Competitiveness, the Internet Learning Network, which took the TIMSS test which this committee is aware of, the test that was given in 41 countries to fourth graders, eighth graders and twelfth graders. And marked to a global market what each child's grade are worth. That TIMSS test in on the web and it is available for any child in any country. Over 500,000 children have taken the test in 110 countries.
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    The last thing that I would ask you to include is some hard research on how people learn, how knowledge is transferred from one human being to another. Because I think this gets at the heart of the education problem. We have not put the money into the basic issues of education that we have put into other areas of science. And, therefore, we do not have the professors and we do not have the workers who have the math and science background that we need.

    Thank you very much for this opportunity.

    [The prepared statement of Alfred R. Berkeley, III follows:]

PREPARED STATEMENT OF MR. ALFRED R. BERKELEY III

    Good morning, Chairman Smith and Members of the House Science Committee, I thank you for the opportunity to comment on the importance of government funding for basic research and development and its influence on the economy—specifically the ''new economy.''

    If we are to sustain our economic growth and competitiveness over the long term, the Federal government needs to make funding for basic research and development a national priority. Dependence on innovation for productivity improvements and overall economic prosperity is growing, and government investment in basic R&D is increasingly vital to nurturing tomorrow's breakthroughs.

    The government's role in the cycle of innovation is crucial. Government is better positioned to take the inherent risks of funding basic research because the ''pay-off,'' which may serve social as well as business ends, goes well beyond the time horizon of all but a handful of corporations.
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    Three trends especially have driven commercial enterprises out of basic research. Globalization of competition prevents even the largest domestic companies from significant spending on basic research. Large, sometimes subsidized international competitors, push pricing to levels too low to permit profits thereby squeezing out basic research.

    Deregulation has taken away market protection that permitted cross-subsidization. For instance, the Bell system, with tacit public agreement, made excess profits on business telephony and cross-subsidized both rural telephony and Bell labs. With deregulation the Bell system lost the protection that allowed for this.

    In the last 50 years, the massive growth in professional money management has lead to huge pools of liquid assets seeking higher returns. The ability of financial institutions to buy parts of corporations has lead corporate management to focus on maximizing short-term returns in order to retain access to capital sources.

    Companies cannot fund research that has no guarantee of practical application or they risk losing their competitive advantage. The increasing pressures of the marketplace brought on by globalization, deregulation and technological innovation have compressed turn around cycles for our nation's companies, where growth and survival lies in short-term results and meeting quarterly projections. While companies must look to competitive pressures for direction, only government can take a longer-term perspective, one that goes beyond a single company or industry.

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Trends in R&D Investment

    If future economic growth will be a function of total R&D investment—and I believe it will be—recent trends are disturbing. There has been a 3.5% annual reduction in federal investment as a whole each year since 1995.(see footnote 1) U.S. R&D investment, as a share of national wealth, is lower today than it was in 1985. Increases in R&D were slower in the last economic boom period than in any previous boom of the past 25 years.

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    In real terms the total federal contribution to the national R&D portfolio dropped from 46% in 1985 to 26% in 1999.(see footnote 2)

    Non-federal R&D investment has risen 5.5% faster than the economy as a whole each year since 1995, driven largely by industrial investment in product development.(see footnote 3) This reflects the rapid growth of the ''knowledge-based economy'' and a large infusion of venture capital in start-up companies. Current projections from the Industrial Research Institute show that research by major companies expands roughly at the same rate of growth of sales, and although industry investments offset the declines in federal funding, the bulk of industry investment was targeted on their priorities—development of the new products and processes—not on basic discovery.
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    There is no guarantee that that source of investment can or will continue. When companies need to control costs, R&D is one of the first places companies look to cut costs.

Impact on Productivity

    The U.S. Department of Commerce estimates that over the past four years, information technology industries contributed more than one-third of the growth of real output for the overall economy. In terms of productivity, the boom in capital investment was driven by investment in IT. Commerce further estimates that over the past four years, IT industries have contributed more than one-third of the growth of real output for the overall economy.(see footnote 4)

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    According to the Federal Reserve Study done by Stephen Oliver and Daniel Sichel, the use of information technology, including computer hardware, software and communication equipment, and technological advance in the production of computers, including the production of semiconductors, made a large contribution to productivity growth in the latter half of the decade.
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    The significance of this has many implications. The first is that the promise of increased productivity by the information technology sector took much longer than anyone expected, but the benefits have been tremendous. The growth in IT investment is not a temporary spike, but part of along term trend that will continue. The other important part of the equation is the relationship between higher IT use and productivity growth.

    The U.S. leads the world in productivity now, but as a previous figure shows, this has not always been the case, nor can we assume it will be in the future unless we focus on developing the tools that fuel productivity enhancements.

Global Trends in R&D Funding

    Historically, levels of R&D funding have reflected a national consensus of a threat our national security. The highest levels of government R&D funding as a percentage of the GDP were during the Cold War, where the threat to the national security was clear and represented by an easily identifiable threat. Absent such a nation-threatening circumstance, a realignment of federal R&D is as necessary as it is welcome. But the threat to our economic strength is very real and we need to be proactive in improving our economic position. Trends in Europe and Asia show that governments there have perceived the important economic benefit of technological innovation. For example, Japan has a higher ratio of R&D investment to GDP than the United States and others are investing likewise.

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    Almost as important as the dollars spent on R&D, is the investment in the renewal of our human intellectual capital that we have to make to remain competitive. For example, the pool of scientists and engineers is increasing more rapidly in other countries.

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    The rest of the world is catching up and it will take more emphasis in all fields of science if we want to maintain our position. But, it will take even more resources if we allow ourselves to be put into a position where we are forced someday to play catch-up. It is difficult to be first, but it pays.

Impact on the Marketplace

    The Nasdaq market has become the largest market in the world in terms of trading measures—trading volume and dollar volume. We have grown along with small biotechnology and high-tech companies that have become the powerhouses of today's economy. Importantly, many of these grew out of technologies funded by the government. A few examples make this point:

    Larry Ellison and Bob Miner founded Oracle Corporation in 1977. Both men were consulting on a CIA project code-named ''Oracle,'' whose purpose was to apply the new SQL language developed in an IBM white paper. Funding for the project ended, but Larry Ellison and Bob Miner saw an opportunity. They took the then-new Relational Database Management System (RDBMS) engine Oracle. They introduced the RDBMS first based on the IBM System/R model and the first database management system utilizing IBM's Structures Query Language (SQL) technology. Ironically, one of their first customers was the CIA. Today, the Oracle RDBMS is supported on over 80 different operating environments. It is the largest RDBMS vendor; with a market capitalization of over US$99 billion and revenues of US$10 billion last quarter. It employs 42,000 professionals in 93 countries.
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    Intel's Extended Ultra Violet lithography (deep EVU lithography) is an example of industry and government bridging the ''Death Valley,'' where the transfer of research from a government funded program to industry is typically problematic.

    This exciting technology is thought to be the foundation of the next generation of photolithography equipment for the production of integrated circuits. The technology uses wavelength in the range of 13 nanometers and will be used to create printed images below 0.1 microns.

    The basic research was done at the national labs (Sandia and Lawrence Berkeley), as part of early Star Wars research. Intel picked up the funding of this research when it the United States government cut its. Intel formed a group of six companies (Intel, Micron, IBM, Motorola, Infineon, and AMD) to commercialize the technology. The consortia has put some $250M into EUV and recently celebrated the first full scale demonstration of the technology at Sandia. The expectation is that the technology will be commercialized by 2005, thereby continuing to extend Moore's Law and allowing the semiconductor industry to continue its historical process of scaling down transistor sizes.(see footnote 5)

    As the examples suggest, there is a direct connection between economic development and basic R&D, though it is difficult to quantify. And there is no way to pinpoint what field of science will generate the next economic boom, which means that we must have a persistent research agenda across all fronts. Over 73% of US industry patents cite publicly funded science as the basis for the invention.
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    It is important for the public to understand the connection between basic R&D and our standard of living. This is hard because the typical 15–25 year delay between basic discoveries and commercial products in mass use obscures the motive force.

    For instance, few could imagine in the 1940's that the arcane field of quantum mechanics would launch the semiconductor revolution. More recently, the engineers developing time-sharing and packet switching techniques probably did not envision the worldwide web or e-commerce. Nonetheless, our greatest companies feed off basic groundbreaking research. If we do not sustain ''innovation capital,'' we will starve our industries, hobble economic development and slow the pace of prosperity.

    Thirty years ago the Vietnam War consumed the Nation's attention. At the same time, the basic research was underway that lead to the development of the Internet—one of most incredible advances of our or any time. Is research currently being funded that can have the same profound impact? Said differently, what is not being explored that for want of research dollars—federal and others—ought to be?

Going Forward: Things to Consider

    Explaining the importance of R&D funding is hard but studies like the ''Innovation Index,'' designed by researchers at Harvard Business School and MIT's Sloan School of Management is but one example of available material that can help. Likewise, easing the transfer between government funded research and industry is a crucial part of the equation. Companies like the Community of Science are using the Internet and new technologies to develop databases that help scientists find funding, promote research, access experts and explore the marketplace.
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    Strong intellectual property laws are a fundamental part of our countries ability to monetize innovation, as are tax credits that act as incentives for companies to spend more for research and development.

    The ''.com'' phenomenon should be viewed as the first phase of the Internet revolution; the beginning, not the end. It has undergone a phase of experimentation with new business models and the current consolidation reflects established companies having found ways to leverage the advantages of the Internet. The next stage promises a greater impact on productivity, where business models will be based on sound competitive advantages that reflect true value propositions and sustainable profitability potential.(see footnote 6) This is not a unique event in our nation's economic history—similar cycles happened with the advent of the railroad and telephone.

    But how will we get to this place if the nation, through its government, does not provide the vital early investment in R&D that publicly owned companies have had to trim drastically in the face of globalization, deregulation and the short-term dynamics of the financial world?

BIOGRAPHY FOR ALFRED R. BERKELEY, III

    Alfred R. Berkeley, III was appointed Vice Chairman of The Nasdaq Stock Market, Inc. on July 27, 2000. Since 1996, Berkeley had served as President of Nasdaq. As Vice Chairman, he continues his long-standing and successful efforts to both build Nasdaq and to communicate its values and strategies to the leading existing and potential issuers. Prior to Nasdaq, he was Managing Director and Senior Banker in the Corporate Finance Department of Alex. Brown and Sons, Incorporated, financing computer software and electronic commerce companies.
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    Berkeley joined Alex. Brown and Sons in 1972 as a research analyst. He became a general partner of Alex. Brown in 1983. From 1985 to 1987, he served as Head of Information Services for the firm. In that capacity, he was responsible for all corporate information services, including both the firm's back and front office technology. Berkeley then moved to Alex. Brown's Merger and Acquisition department where, from 1987 to 1989, he developed the firm's technology practice.

    Berkeley served as a Captain in the United States Air Force from 1968 to 1972. He is a graduate of the Wharton School at the University of Pennsylvania (MBA, 1968) and the University of Virginia (BA, 1966).

    Chairman SMITH. I would like Mr. Berkeley and everybody, of course, please review the legislations that we passed, H.R. 1858 and H.R. 100. And as we move those pieces of legislation that have now passed the Science Committee and have been sent to the floor, we would be receptive to amendments that you think might be constructive to be made into the processes they move forward. Ms. Furlani.

STATEMENT OF MS. CITA M. FURLANI, DIRECTOR, NATIONAL COORDINATION OFFICE FOR INFORMATION TECHNOLOGY RESEARCH AND DEVELOPMENT

    Ms. FURLANI. Thank you. Good morning. I want to thank Chairman Smith, Ranking Member Johnson, and the members of the Subcommittee on Research for the opportunity to come before you today to describe the Federal Government's multi-agency networking and information technology research and development effort or NITRD.
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    This program has had a profound impact on critical Federal responsibilities, such as national defense and national security, as well as, vital dimensions of the national interest such as economic growth and competitiveness, biomedical research and weather forecasting.

    It also helps the government support overarching public goals in education and training, as we have discussed, energy management, health care and other national priority areas. Bipartisan Federal support for IT R&D helped to launch the IT revolution some 50 years ago, long before the term information technology was even coined. And it pioneered many of the technologies that built U.S. leadership in advance computing and networking. I commend the Congress for its farsightedness in enacting the High Performance Computing Act of 1991.

    Since no one Federal agency cites IT R&D as its primary mission, it is important for agencies to coordinate, collaborate and cooperate to help increase the overall effectiveness and productivity of Federal IT research. The bipartisan HPC legislation established a powerful framework for Federal IT with specific requirements for interagency cooperation, coordination and the important partnerships with academia and industry.

    The Congress's original framework has evolved over this 10 year period into a very productive research enterprise. It involves 12 Federal agencies, including all the major Science and Research agencies, and collaborations with virtually all the major U.S. research universities, as well as, many companies involved in developing new information technologies and applications.

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    In the interest of time, I want to focus on the principal questions I was asked to address. This program has gone through a number of name changes over the 10 years since Congress passed the HPC Act. Figure one in my written testimony shows a bird's eye view of this evolution. But the core purposes of the program and its basic structure and budget process have not really changed. The program continues to conduct the long-term fundamental research that leads to technological breakthroughs advancing the science of information technology. That is the kind of work that made the U.S. the world leader in advance computing and networking in the first place. And it is the kind of work required to sustain U.S. preeminence over the long term.

    The Congress appropriates funding for the multi-agency IT research program through agency appropriations. And this funding is reported in a budget cross-cut. The Congress's prescient requirement for collaboration in the HPC Act is particularly significant. Because IT itself in an intensive, interdisciplinary scientific endeavor in which collaboration across many science and engineering fields is a necessity.

    The alignment of scientific and programmatic imperatives for cooperative work in the Federal IT research effort has stimulated precisely the kind of ongoing exchange of ideas and cross-agency initiatives that the Congress envisioned.

    Let me describe how the coordination works logistically. Figure 2 in my written testimony shows the program structure. First, the White House sets broad policies and priorities for Federal networking and information technology R&D, from the President through the Office of Science and Technology Policy and the National Science and Technology Counsel. In addition, the PITAC periodically makes recommendations that influence neither NITRD directions. So I am pleased to be here with PITAC's Eric Benhamou to say that the Committee has had a tremendously positive impact on the program.
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    The actual hands-on coordination of interagency IT research activities is handled by the interagency working group on IT R&D. This group is made up of representatives from each of the participating agencies and from OMB, OSTP, the NEC, and my office, the NCO. This interagency working group is chaired by Dr. Ruzena Bajcsy, the Assistant Director of the National Science Foundation and head of NSF's Directorate for Computer and Information Science and Engineering.

    The major research emphases of the NITRD effort are reflected in what we call Program Component Areas or PCAs. These are listed on pages 4 and 5 of my testimony. The work of each program component area is guided by coordinating group of program managers from participating agencies. These groups meet monthly to coordinate the objectives and activities in their specialized research areas. The technical and administrative support for the interagency working group and the coordinating groups is provided by the NCO. We provide similar support to the PITAC. The cost of operating the NCO is shared by participating agencies in proportion to their IT R&D budget. NSF serves as the host agency and has been extremely supportive.

    Planning and assessment processes are ongoing. They are carried out in year round meetings and detailed and formal documents. These include the annual supplement to the President's budget known as the Blue Book, the annual implementation Plan, which maps the PCA activities back to agencies internal programs and budgets, as well as, research planning papers. These research documents are developed from national workshops providing a forum for discussions with experts from academia and industry.

    It is difficult to track funding for this program back over time because of the many developmental changes in its scope as described in my written testimony. But the changes highlight the ability of the program to respond to an incredibly rapid development of a very complex research field. The program did not support digital libraries technologies 10 years ago, or for information assurance, microprocessor software, or wireless technologies even 5 years ago. But it supports them all today.
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    A significant form of guidance for the program has come from the PITAC. The agencies have been very responsive to PITAC's research recommendations. PITAC's influence shows, for example, in the substantially increased emphasis on fundamental issues in software, on scaling up the Internet, and on IT issues in education and work force development. These are detailed on pages 6 and 7 of my written testimony.

    Overall, I believe the program works very well. Its purposes and structure are the right ones. I have spelled out these attributes on pages 8 through 11 of my written testimony. So I will highlight a few. Federal IT R&D occupies a unique R&D niche. It is the nation's primary source of long-term fundamental IT research. It maintains the talent pipeline the nation needs to continue making technological advances. More than half of the NITRD budget is expended on university based research. The program is flexible and can respond quickly to changing R&D needs. Through interactions in this program the NITRD agencies have developed active trusting and efficient relationships for communication and cooperation. Such multi-agency coordination facilitate is innovative, collaborative research that individual agencies would not be able to tackle alone. Going forward it must continue to focus on fundamental research that is peer reviewed, well designed and tightly coordinated within the multi-agency framework. Details of current program funding on page 11 of my testimony. And I will be glad to try to answer any questions about that.

    My view is that the NITRD effort does not suffer from structural weaknesses. Coordination of these activities is now a standard part of the way participating agencies conduct their routine business. Each of the agencies has become committed to information technology research, and the cross agency coordination process. However, that strong coordination is indeed vital to this program. And it would be very beneficial of agencies gave more attention to the fact that the individual programs are part of a larger research portfolio.
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    We will be happy to work with Congress on specific issues associated with the underlying authorization legislation.

    I want to highlight just a couple of challenges the program does face. First, undertaking the R&D necessary to tackle IT problems at scale. Secondly, working with other Federal agencies on their IT problems.

    In conclusion, I believe the Federal investments we make in computing and networking research will help shape our long-term ability to succeed as a nation. These investments which unleash the brilliant skills of academia and industry are the keys to the future. I look forward to working with the Congress to fulfill that enormous promise. Thank you.

    [The prepared statement of Cita M. Furlani follows:]

PREPARED STATEMENT OF CITA M. FURLANI

    Good morning. My name is Cita Furlani. I am Director of the National Coordination Office (NCO) for Information Technology Research and Development. I want to thank Subcommittee Chair Smith, Ranking Member Johnson, and the members of the Subcommittee on Research for the opportunity to come before the Subcommittee today to describe the Federal government's multi-agency Networking and Information Technology R&D (NITRD) effort.

Overview

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    I am pleased to provide an overview of the NITRD program because I believe it is an important part of the Federal research investment portfolio. The Government's networking and information technology research has a profound impact on critical Federal responsibilities such as national defense and national security, as well as on vital dimensions of the national interest such as economic growth and competitiveness, biomedical research, and weather forecasting. Federal information technology (IT) research also helps the Government support overarching public goals in education and training, energy management, health care, and other national priority areas.

    Why is such an unadvertised effort so significant? Because, like the railway, highway, electrical, and telephone systems fostered by Federal investment in earlier eras, networking and computing technologies today constitute a critical new infrastructure for the Nation's overall development. This new infrastructure is arguably more powerful, corriplex, multidimensional, and far-reaching than any of its predecessors.

    IT R&D provides necessary foundations for the infrastructure. Without this fundamental research, we would not have the revolutionary computing and communication technologies that are driving innovation and rapid change across all sectors of government and society. In fact, bipartisan Federal support for IT R&D helped launch the IT revolution some 50 years ago—long before the term ''information technology'' had even been coined—and pioneered many of the technologies that built U.S. leadership in advanced computing and networking.

    In the national defense and national security arenas alone, for example, computing and networking technologies underpin virtually every advanced U.S. capability. IT uses in other sectors include:
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 Immediate on-site medical care, in the home and at remote locations

 Reliable, failure-resistant systems for such mission-critical applications as air-traffic control, financial transactions, life support, and power supply

 Industrial process and product modeling, visualization, and analytical capabilities, such as in aircraft design and production, automotive efficiency and safety, and molecular synthesis of new drugs

 Expanded e-commerce with assured security and privacy of information

 On-demand universal access to education and knowledge resources

 Advanced computing capabilities that underpin the Nation's leadership in science and technology, including the biotechnology revolution, and the success of critical civilian and national security missions of the Federal government

 More accurate weather forecasting and improved environmental analysis and decision-making

 High-performance networking and information systems for emergency and disaster management

 Access to information anytime, anywhere, with any device.

Goals of the Federal investment
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    Federal IT research helped fuel the computing revolution and the unprecedented U.S. economic prosperity of recent years. And it continues to spur major technological innovations in computing and networking, such as the development of optical networking and experimentation with nano-scale and quantum computing and conducting materials. These are results of the Federal effort to accelerate development of the underlying technologies—called ''enabling'' technologies—on which all computing and networking devices and systems are based. By accelerating advances in these fundamental, underlying technologies, IT R&D enables Federal agencies to accelerate their development and deployment of state-of-the-art advanced systems and applications needed for critical government missions. Federal IT R&D also is devoted to readying laboratory advances for deployment and strengthening experimental technologies through prototyping, testbeds, and evaluations.

The multi-agency program

    I commend the Congress for its farsightedness in enacting the High-Performance Computing (HPC) Act of 1991 (P.L. 102–194), which mandated a multi-agency research effort to carry on the unique Federal role in long-range IT R&D. Not only is this program scientifically vital, but it offers a remarkably successful example of effective collaboration among Federal agencies and with the private sector. The bipartisan HPC legislation established a powerful framework for Federal IT research, combining ambitious research goals with specific requirements for interagency cooperation, coordination, and partnerships with academe and industry. That framework has evolved over a 10-year period into a very productive research enterprise that involves all the major Federal science and research agencies and collaborations with virtually all major U.S. research universities and with many companies involved in developing new information technologies and applications. Technical and administrative support for the program is provided by the National Coordination Office for Information Technology Research and Development, which I direct.
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Brief history of the program (see figure 1)

    The 10-year history of the Federal multi-agency IT research effort is partly one of changing nomenclature and partly one of burgeoning research programmatic interests in this explosively growing and increasingly critical scientific field. These interests expanded the program's focus from high performance computing and networking to applications that make advanced computing and networking capabilities more widely available and easier to use. Beneath the name changes and the programmatic evolution, however, the structure and budget process for the program have not changed. Most significant, the focus of the Federal effort has remained constant to the Congress's wise intent: To conduct the long-term, fundamental research that leads to technological breakthroughs advancing the science of information technology. That is the kind of work that made the U.S. the world leader in advanced computing and networking in the first place. And it is the kind of work required to sustain that preeminence over the long term.

    From FY 1992 to FY 1996, this program was called the High Performance Computing and Communications (HPCC) Program. In FY 1997, it was renamed the Computing, Information, and Communications (CIC) programs. The programs' research groups, which had been called Components, were renamed Program Component Areas (PCAs) and were updated to reflect the growth of research needs beyond the HPCC Program's initial focus on high-end computing and advanced networking. In FY 1998, the Congress enacted a three-year Next Generation Internet (NGI) Initiative, which was included as part of the CIC budget crosscut. In FY 2000, the Administration sponsored an ''Information Technology for the 21st Century (IT) Initiative. In FY 2001, both the NGI and IT initiatives were incorporated into the renamed Information Technology R&D (IT R&D) Program. In the President's FY 2002 Budget, the program is referred to as the Networking and Information Technology Research and Development (NITRD) program.
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Participating agencies

    The participating agencies are, in alphabetical order:

Agency for Healthcare Research and Quality (AHRQ) of the Department of Health and Human Services
Defense Advanced Research Projects Agency (DARPA) of the Department of Defense (DoD)
Department of Energy (DOE) National Nuclear Security Administration (NNSA)
DOE Office of Science
Environmental Protection Agency (EPA)
National Aeronautics and Space Administration (NASA)
National Institutes of Health (NIH) of the Department of Health and Human Services
National Institute of Standards and Technology (NIST) of the Department of Commerce (DOC)
National Oceanic and Atmospheric Administration (NOAA) of DOC
National Security Agency (NSA) of DoD
National Science Foundation (NSF), and Office of the Deputy Under Secretary of Defense for Science and Technology (ODUSD [S&T] ).

    The Congress appropriates funding for the multi-agency IT research program through agency appropriations, and this funding is reported in a budget crosscut. References in this testimony to ''participating agencies'' refer to agencies included in the budget crosscut. Other agencies, such as the Federal Aviation Administration and the General Services Administration, participate in NITRD discussions but are not part of the budget crosscut.
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Program structure (see figure 2)

    The Congress's prescient requirement for collaboration in the HPC Act is particularly significant because information technology itself is an intensive interdisciplinary scientific endeavor in which collaboration across many science and engineering fields is a necessity. The alignment of scientific and programmatic imperatives for cooperative work in the Federal IT research effort has stimulated precisely the kind of ongoing exchange of ideas and cross-agency initiatives that the Congress envisioned.

    Let me describe how this works logistically in the research effort that has evolved out of the High Performance Computing and Communications (HPCC) Program established by the Congress in 1991.

    First, the White House sets broad policies and priorities for Federal networking and information technology R&D—from the President through the Office of Science and Technology Policy (OSTP) and the National Science and Technology Council (NSTC). In addition, the President's Information Technology Advisory Committee (PITAC), the group of IT leaders in industry and academe that provides independent advice to the President on IT issues, periodically makes recommendations about Federal R&D that influence NITRD directions.

    The hands-on coordination of interagency IT research activities is handled by the Interagency Working Group (IWG) on IT R&D. This group is made up of representatives from each of the participating agencies and from the Office of Management and Budget (OMB), OSTP, the National Economic Council (NEC), and my office, the National Coordination Office for IT R&D. The IWG is chaired by Dr. Ruzena Bajcsy, Assistant Director of the National Science Foundation and head of NSF's Directorate for Computer and Information Science and Engineering.
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    The major research emphases of the NITRD effort are reflected in the Program Component Areas (PCAs). The work of each PCA is guided by a Coordinating Group of program managers from participating agencies. These groups meet monthly to coordinate the objectives and activities of the multi-agency projects in their specialized research areas. They report to the Interagency Working Group (IWG). The PCAs evolve in response to changing research needs.

    The PCAs are:

 High-End Computing (HEC), which includes both HEC R&D and HEC Infrastructure & Applications (I&A)

 Human Computer Interaction & Information Management (HCI&IM)

 Large Scale Networking (LSN) LSN also has three subordinate teams—High-Performance Networking Applications Team (HPNAT), Joint Engineering Team (JET), and Networking Research Team (NRT)—that address specific technical issue areas. These teams include non-Federal members from academe and industry.

 Software Design and Productivity (SDP)

 High Confidence Software and Systems (HCSS)

 Social, Economic, and Workforce Implications of IT and IT Workforce Development (SEW)

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    In addition to the PCAs, the Federal Information Services and Applications Council (FISAC) is chartered to facilitate partnerships between the Federal IT R&D and non-R&D communities to promote early application of advanced computing, information, and communications technologies within the Federal government.

    The technical and administrative support for the Interagency Working Group and the PCA Coordinating Groups is provided by the National Coordination Office (NCO). We provide similar support to the PITAC. The cost of operating the NCO is shared by the participating agencies in proportion to their IT R&D budgets. The functionality of the NCO is authorized in the 1991 HPC Act. NSF serves as the host agency for the NCO and has been extremely supportive in that role.

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Program planning and assessment

    NITRD planning and assessment are ongoing processes that are carried out in the program's year-round meetings and detailed in several kinds of formal documents produced by the Interagency Working Group and the Coordinating Groups:

 The annual Supplement to the President's Budget, known as the Blue Book, documents the current year's research accomplishments and proposed scope of work for the next fiscal year, with budget estimates for the current year and budget requests for the next fiscal year, by agency and by PCA.

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 A more detailed mapping of PCA activities to agencies' internal programs and budgets is prepared in the annual Implementation Plan for the multi-agency budget crosscut.

 Research planning papers periodically prepared by the Coordinating Groups provide a basis for discussion of research focuses and approaches within each PCA and across the NITRD portfolio. Often, these documents are developed from national research workshops sponsored by the Coordinating Groups, providing a forum for discussions with experts from academe and industry about key issues and future goals in IT R&D. Reports of these meetings also are published and become part of the ongoing assessment of research directions.

Program budgeting

    Funding for NITRD activities is implemented through standard agency budgeting and appropriations processes that involve the participating agencies and departments, the Office of Management and Budget, the Office of Science and Technology Policy, and the Congress. Some activities are funded and managed by individual agencies. Others involve multi-agency collaboration, with mutual planning and mutual defense of budgets.

    The annual Supplement to the President's Budget and Implementation Plan together provide a roadmap from the annual Program Component Area budgets back to what each participating agency contributed, and in what agency program context. From year to year, this roadmap, if not wholly transparent, is clear to those who are familiar with the multi-agency effort. With the Administration's help, we are trying now to streamline the Implementation Plan so that it will be a more useful document. I think in reality the funding and Coordinating Group structure is not complicated—you just have to roll your sleeves up and spend some time with it.
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    It is more difficult to track funding for this program back over time because of the many developmental changes in its scope described in this testimony. But I think what really is at issue here is the rapid development of this entire field in an incredibly short period of time. Did the program support digital libraries technologies 10 years ago, or for information assurance, microsensor software, wireless technologies, or workforce implications of IT even 5 years ago? No. But the program is supporting these areas today.

President's Information Technology Advisory Committee (PITAC)

    A significant new form of guidance for the multi-agency program has come from the President's Information Technology Advisory Committee (PITAC), established in 1997 by Executive Order and renewed for a two-year term on May 31, 2001, by Executive Order of President Bush. The PITAC's 1999 report, ''Information Technology Research: Investing in Our Future,'' and the Committee's subsequent reviews of the Federal IT research effort have substantially influenced the thinking of agency managers about IT research topics and priorities.

    The PITAC's 1999 recommendations called for ''significant new research in computing and communications'' focused on ''long-term, high-risk investigations.'' The highest IT research priorities for this Federal effort, the PITAC said, were software, scalable information infrastructure (advanced networking), high-end computing, and socioeconomic impacts of IT such as on education and training. Directly as a result of these recommendations, the IT R&D effort was broadened to intensify research attention on issues in software development. Beginning in FY 2001, a new PCA was established—Software Development and Productivity (SDP)—and the charter of an existing PCA—High Confidence Systems—was expanded to include information assurance and safety, and that PCA's name was changed to High Confidence Software and Systems (HCSS). SDP is focused on the process of developing software, especially on reducing cost and improving quality. One special focus area is networked embedded systems of sensors that monitor physical surroundings and active physical devices. HCSS focuses on the software and systems technologies necessary to ensure that critical IT systems achieve extremely high levels of reliability, availability, protection, restorability, and security (protections against such problems as identity theft, for example). Integrating these attributes in software designs will help reduce the rate of significant software failures and reduce the skyrocketing costs of retrofitting systems with security services.
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    The Large Scale Networking PCA responded to the PITAC's concern about the lack of scalability in the Internet by expanding its research on that issue, including wireless and other technical strategies for expansion. As a result of the PITAC report's emphasis on the need for research on the educational and workforce development impacts of IT, the Education, Training, and Human Resources PCA evolved into the Social, Economic, and Workforce Implications of IT and IT Workforce Development (SEW) PCA. SEW became part of the budget crosscut in FY 2001, with an emphasis on education and training-related research.

Other changes in the program

    Prior to the influence of the PITAC, the most significant changes to the original HPCC initiative came as a result of the rapid diffusion of information technology in society during the 1990s. The HPCC Program had focused on high performance computing and high-speed networking. The significance of applications research grew as researchers realized that simply advancing computing and networking speeds, while vital, did not address the question of how to harness those capabilities to broad uses. But trying to create widely useful applications of advanced digital technologies also raised its own novel questions about how humans can most effectively use and interact with computing devices. That led to the evolution of a PCA on Human-Computer Systems. With the growth of issues in managing and utilizing the explosion of electronic information in the last few years, pointed to by the PITAC report, that PCA added information management to its research agenda, becoming the Human-Computer Interaction and Information Management (HCI & IM) PCA beginning in FY 2001.

    In FY 2000, the High-End Computing PCA subdivided its activities into two areas: High-End Computing Research and Development, which pursues advances in architectures and computational speeds, and High-End Computing Infrastructure and Applications, which focuses on expanding access to high-performance platforms for researchers and on developing advanced applications. This change reflected the distinction between research aiming to improve the technical capabilities and performance of high-end systems, and research focused on developing advanced applications for those systems, including distributed shared applications.
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    Goal setting in the multi-agency IT research enterprise also has changed since 1991. The original HPCC Program had one set of five-year goals. Since the beginning of the PCA structure in 1996, the PCAs have set their own timelines, reflecting the varying characteristics of their individual research areas.

Why the Federal IT research investment is so successful

    I have been asked to comment on how well the Federal program is working. I believe the program works, and works very well. The secret of its success is that its purposes and structure are exactly the right ones in the context of both government missions and the broader U.S. economy.

The right purposes

 Federal IT R&D occupies a unique R&D niche. It is the Nation's primary source of long-term, fundamental research on IT issues that must be addressed to advance the capabilities of computers, networks, and information systems generally. Industry and venture capitalists typically focus on short-term product development offering the likelihood of rapid returns on investment. Private-sector investment strategies therefore tend to bypass key technology areas that may be the most critical to Federal government missions and that help support the continuing superiority of the U.S. IT industry. These areas include high-end computing, mass storage, optical networking, interoperable systems and applications, security, privacy, new generations of embedded and large scale systems, improved processes for developing new software, and effective human uses of IT. In fundamental IT R&D, the research time horizons are much longer and there is no guarantee of the success of any one research path. IT industry leaders have been for many years among the most ardent champions of Federal investment in long-term, fundamental IT research—precisely because the U.S. government is a primary source of support for that kind of risky, pre-competitive exploration. It is not necessarily the case that the private sector should not have a strong role in the support of fundamental research, but the difficulty to the company in appropriating the returns makes commercial support of this research more difficult.
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 Federal IT R&D supports critical agency missions and national needs, including national defense and national security, critical infrastructure protection, energy systems, aerospace engineering, weather and climate forecasting, and advanced biomedical and other scientific research. National defense and national security needs alone require advanced IT research efforts on a continuing basis to equip the military with cutting-edge weapons technologies and secure communications systems and to accurately model and design these advanced systems.

 The research portfolio is diversified and balanced. Federal research responds to a basic reality of the interdisciplinary IT field: What can be accomplished using IT is determined by the weakest or the slowest technology, not by the strongest or the fastest. For that reason, Federal IT R&D pursues a balanced, diversified portfolio of research interests, seeking advances across the wide range of enabling technologies required for agency missions.

 Federal IT R&D produces broadly useful technologies and tools that spur innovation across the U.S. economy. It is an effective engine of technology transfer. The coordination of Federal IT R&D investments across many agencies and private-sector partnerships leverages mission-related research, producing general-purpose, broadly useful, and interoperable technologies, tools, and applications. Federal IT R&D has thus been a powerful engine of technology transfer, the direct result of its focus on widely applicable solutions to basic IT problems and its mechanisms of funding R&D. The large number of Federally funded breakthroughs subsequently commercialized in the private sector—often by graduates of U.S. research universities whose education was funded through the IT R&D Programs—leverage the Federal investments even further.
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 The Federal IT R&D program maintains the talent pipeline the Nation needs to continue making—technological advances. More than half of the NITRD budget is expended for university-based research. This work is peer-reviewed, which helps assure it is of the highest quality, and the research dollars help support the graduate training of new generations of highly skilled scientists, engineers, and technicians needed to work on national research challenges.

The right program structure

    The structure of the Federal research effort works well to support the NITRD goals for the following reasons:

 The multi-agency approach aligns well with the multidisciplinary nature of IT research issues.

 The NITRD effort involves the right Federal agencies. The program also draws in a variety of other interested agencies to participate in its meetings, research workshops, and other activities. Such agencies include the Bureau of Labor Statistics, the Department of Defense High Performance Computing Modernization Office, the Federal Aviation Administration, and the General Services Administration.

 Through interactions in this program, the NITRD agencies have developed active, trusting, and efficient relationships for communication and cooperation. For example, agencies now participate in each other's proposal review processes.

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 The missions of the participating agencies span all major IT R&D areas, ranging from fundamental research in broadly useful enabling technologies to applying those hose technologies to a wide variety of applications. NSF invests in fundamental research itself; some agencies invest in fundamental research in order to accomplish their agency's unique goals; and others use the technologies developed by these agencies to conduct R&D on their own agency's mission-driven applications. Individually, the agencies could not have accomplished all that the multi-agency effort has made possible. A special by-product of this collaboration is that NITRD technologies are able to interoperate, which benefits both Federal operations and U.S. economic competitiveness. So, for example, today each agency does not have its own stand alone network. Rather, the Federal government and the country have the Internet, a network of networks that is still evolving. Agencies are focusing on complementary efforts, making the coordinated program substantially greater than the sum of its agency parts.

 The Program Component Area system of organizing NITRD research emphases provides the program with the flexibility to evolve quickly in response to changing R&D needs. For example, even the PITAC's compelling 1999 recommendations for IT research made no mention of one key area—microsensors and embedded devices—that is now of paramount importance for national defense. The PITAC report made only passing reference to a second area—assurance and security in software—that is now viewed as a prerequisite for development of any mission-critical software. The PCAs are able to evolve their interests, as noted above, in a timely way to encompass such emerging research focuses.

 The multi-agency coordination process has facilitated innovative collaborative research efforts that individual agencies would not otherwise have been able to tackle. A notable example is the Large Scale Networking program, in which NSF, DARPA, NASA, NIH, DOE National Nuclear Security Administration, DOE Office of Science, NIST, NOAA, AHRQ, and ODUSD (S&T) collaborate in networking research and development. Since 1998, LSN research has boosted the end-to-end performance of shared end-user applications over networks from 1.5 megabits per second to 1 gigabit per second today. That is nearly a thousand-fold improvement in the end-to-end performance of networks for the Nation's scientific research community.
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 Collaborative efforts include industry partnerships. Critical networking integration activities in the LSN effort, for example, involve such corporations as AT&T, Cisco, MCI Worldcom, Nortel, Qwest, and Sprint. Representatives of Internet2 participate in the LSN specialized teams. Intel, Sun, and others are developing an automatically tuned application/network interface; Ciena and others are developing key optical networking components. NSF partnered with Compaq in the research to develop the terascale computing platform of the Pittsburgh Supercomputing Center. The terascale machine is the newest and most powerful addition to NSF's Partnerships for Advanced Computational Infrastructure (PACI) program. DOE/NNSA is collaborating with more than 20 organizations representing academia, industry, and government to develop a next-generation storage system based on commercially available products. Types of industry involvement include: CRADAs, collaboration, IPAs, consortia, start-ups, tech transfer, procurement, standards development, and advisory committees.

 The NITRD program is responsive to constituent research communities in universities and in industry. Its focused workshops, for example, draw the attention and participation of academic and industry researchers nationally and help shape or revise the research agenda in specific areas. Recent workshops on future directions in networking and on long-range issues in software design and productivity were well attended and enthusiastically endorsed by leading academic and industry experts in these fields.

 The Federal IT research investment has consistently received bipartisan congressional support and the support of the Executive Branch.

    It seems to me that this program structure has been quite effective in evolving to respond to important new research areas as they emerge. The PITAC's powerful overview of the needs in the U.S. IT research enterprise has been very influential in shaping important new research emphases—one example is software, where the issues are multiple and further research is important. The NITRD emphases going forward must continue to be focused fundamental research in enabling technologies. This research must be peer reviewed, well designed, and tightly coordinated within the multi-agency framework. The research priorities laid out in the PITAC report are sound and are serving us well in the near term.
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Program funding

    The estimated FY 2001 Federal investment in the NITRD effort totaled $1,929 million. The Department of Defense's FY 2002 levels are subject to change as a result of the FY 2002 Defense Budget Amendment. Until DoD can match up its FY 2002 Budget Amendment with the interagency IT definitions, we are using the placeholder projections that were shown in the Budget in April. This leads to an estimate of the NITRD program's total FY 2002 request, currently $1,969 million. With this request, information technology research increases by $40 million and includes the largest-ever contribution from the Department of Health and Human Services ($266 million). For your information, I have included synopses of some of the exciting NITRD projects that NIH is currently supporting at the end of my testimony. These projects include research on applications that could promote lower cost health improvement, which will be desirable especially in light of increasing health care costs. There have been healthy increases in IT research spending, including FY 2002.

Authorization of the program

    Coordination of NITRD activities is now a standard part of the way participating agencies conduct their routine business. Over the first decade of this program's development, each of the agencies has become committed to information technology research and the process that coordinates the effort across agencies.

    The current program structure provides important flexibility to agencies and Program Component Areas to respond to changes in the networking and advanced computing fields. My view is that the NITRD effort does not suffer from structural weaknesses. However, strong coordination is vital to the program, and it would be very beneficial for the collaborative enterprise as a whole if agencies gave more attention to the fact that the individual programs are part of a larger research portfolio. So raising awareness of the great significance of this effort to the Nation's well being is always a good thing. We will be happy to work with the Congress on specific issues associated with the underlying legislation.
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State and local government involvement

    Many state universities are participants in the Federal IT research effort. More than 50 percent of all NITRD funding is expended on research conducted on the campuses of research institutions nationwide.

What are some of the challenges ahead for the program?

    The following are challenges that receive discussion within the multi-agency program. This is not a complete list, and it is not in order of priority.

 Undertaking the R&D necessary to tackle IT problems at scale. For example, we have never built a network that is the size and complexity of the Internet. We do not know how to do that today. But when we think we do know how, we will need to experiment, test, and evaluate the model in order to make it work and work well. We will need large-scale R&D testbeds for this research.

 Providing infrastructure for research on high-end applications for the sciences and engineering (for example, growing the NSF Partnerships for Advanced Computing Infrastructure [PACI] ). Access to high-performance computing platforms and high-speed networks remains very limited today, constraining the ability of researchers to build and test the most advanced scientific applications. Access to computing cycles at the NSF supercomputing centers has declined as the demand for computing time increases.

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 Working with other Federal agencies on their IT problems. Some agencies do not have a research mission, but the IT transformation that they are undergoing requires that they take on new tasks, or tackle old tasks in new ways. This requires research, and the implementation of research-based innovations. The NITRD agencies are willing to work with other agencies on these issues.

 Helping the Congress and the U.S. public better understand how IT advances are contributing to advances in not just the sciences but also the humanities. Many benefits could flow from greater public understanding of IT, ranging from increased student interest in science, mathematics, and research, to broader awareness of the impacts of information technology on all of us.

Conclusion

    I believe that information technology is our future. The Federal investments we make in computing and networking research will help shape our long-term ability to succeed as a Nation. These investments, which unleash the brilliant skills of academia and industry, are the keys to the future for our children and grandchildren. I look forward to working with the Congress to fulfill that enormous promise.

    Thank you.

Examples of NIH Advanced Networking Applications Projects

Biomedical Tele-Immersion
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    By combining teleconferencing, telepresence, and virtual reality, Tele-Immersion enables teachers and students to interact with three-dimensional models, point, gesture, converse, and see each other.

    Contact: Jonathan C. Silverstein, MD, University of Illinois at Chicago, School of Biomedical and Health Information Services, 1919 W. Taylor, Chicago, IL 60612–7249; Phone: 312–996–5112; Fax: 312–996–8342

Connectivity, Security, and Performance of an NGI Testbed for Medical Imaging Applications

    This project implements an NGI testbed in Northern California's San Francisco Bay Area for medical imaging applications. The clinical applications include: impact of telemammography consultation service in a regional environment compared with a local level; and how real-time interactive teaching in breast imaging would improve the confidence level of general practice radiologists.

    Contact: H.K. Huang, D.Sc., University of California, San Francisco, Department of Radiology, 530 Parnassus Avenue, Rm. CL–158, San Francisco, CA 94143–0628; Phone: 415–476–6044

Indianapolis Testbed Network for NGI Applications to Telemedicine

    The Indianapolis Network for Patient Care (INPC) provides a testbed of NGI technologies including IP security (IPsec), Quality of Service (QoS) in televideo applications at a nursing home, and IP roaming capabilities with a portable wireless workstation.
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    Clement J. MacDonald, M.D.

A Multi-center Clinical Trial Using NGI Technology

    This project provides the infrastructure of a multi-center clinical trial of new therapies for adrenoleukodystrophy (ALD), a fatal neurologic genetic disorder. It enables the formation of a worldwide imaging network of clinical institutions to evaluate ALD therapies. Three centers collaborate on this project. The Imaging Science and Information Systems (ISIS) Center at Georgetown University Medical Center, the Kennedy Krieger Institute and the Department of Radiology at Johns Hopkins University. NGI technology will be used to speed the transmission and evaluation of high quality MRI images. The project provides procedures to ensure medical data privacy and security.

    Contact: Hugo W. Moser, M.D., Kennedy Krieger Research Institute, Inc., 707 North Broadway, Baltimore, MD 21205; Phone: 410–502–9405; Fax: 410–502–9839

Human Embryology Digital Library and Collaboratory Support Tools

    This application enables collaboration between multiple, distributed researchers and advances clinical and educational goals. It integrates existing data capture and analysis procedures at the National Museum of Health and Medicine (NMHM) into a high performance testbed network that includes a petabyte archive and analysis capability.

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    Contact: J. Mark Pullen, Ph.D., George Mason University, Computer Science MS 4A5, 4400 University Drive, Fairfax, VA 22030; Phone: 703–993–1538; Fax: 703–993–1710

Medical Nomadic Computing Applications for Patient Transport

    This project provides real-time transmission of multimedia patient data from an incident scene and during transport to a receiving center enabling diagnostic and treatment opportunities prior to arrival. It includes acute ischemic stroke and trauma scene response—to define a range of Quality of Service (QoS) requirements for multiple critical care applications.

    Contact: David M. Gagliano, TRW, Inc., One Federal Systems Park Drive, Fairfax, VA 22033; Phone: 703–345–7497

Next Generation Internet (NGI) Implementation to Serve Visible Human Datasets

    This project develops a production system to serve visible human datasets. These include a comprehensive set of interactive 2–D and 3–D browsers with arbitrary 2–D cutting and 3–D visualizations. An interactive Web navigation engine is deployed to create and visualize anatomic fly-through, under haptic control of the user.

    Contact: Brian D. Athey, Ph.D., University of Michigan School of Medicine, Ann Arbor, Michigan 48109–0616; Phone: 734–763–6150; Fax: 734–763–1166

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BIOGRAPHY FOR CITA M. FURLANI

    Ms. Furlani is the Director of the National Coordination Office (NCO) for Information Technology (IT) Research and Development (R&D). As NCO Director, Ms. Furlani is responsible for the coordination of planning, budget, and assessment activities for the Federal Networking and Information Technology R&D Program, which conducts the long-term, fundamental research that leads to technological breakthroughs advancing the science of information technology. Reporting to the White House Office of Science and Technology Policy and the National Science and Technology Council, the NCO works with 12 participating Federal agencies through the Interagency Working Group (IWG) on IT R&D, and its Coordinating Groups. In addition, the NCO supports the President's Information Technology Advisory Committee, comprising 22 industry and academic leaders.

    She has held several key positions, including Acting Director and Acting Deputy Director, in the Advanced Technology Program (ATP) at the National Institute of Standards and Technology (NIST), an agency of the U.S. Commerce Department's, Technology Administration. She also served as the Director of ATP's Information Technology and Applications Office. In this role, Ms. Furlani worked with industry in developing programs in areas such as information technology in healthcare, component-based software, manufacturing automation, photonics and microelectronics manufacturing, intelligent control, electronic commerce, adaptive learning systems, and semiconductor lithography.

    Before joining ATP, Ms. Furlani served as Chief of the Office of Enterprise Integration (OEI), Information Technology Laboratory, NIST. Ms. Furlani coordinated Department of Commerce activities related to enterprise integration. The OEI was responsible for promoting and advancing NIST's technical support for large and small companies developing applications to use on the national information infrastructure. Ms. Furlani also served as special assistant to the NIST Director in her role as Chair of the Committee on Applications and Technology of the Administration's Information Infrastructure Task Force. Previously, Ms. Furlani was on detail as technical staff to the Director of NIST in the position of Senior Program Analyst.
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    Prior to August 1992, Ms. Furlani managed research and development programs within the NIST Manufacturing Engineering Laboratory, applying information technology to manufacturing since 1981. She managed projects dealing with product data exchange, distributed and object-oriented data systems, system simulation, and material handling.

    She holds a Master of Science degree in Electronics and Computer Engineering from George Mason University and a Bachelor of Arts degree in Physics and Mathematics from Texas Christian University.

Discussion

    Chairman SMITH. Thank you, Ms. Furlani. Mr. Berkeley, Mr. Lamar Smith from Texas had to leave. But he would like the opportunity to submit to you a question in writing. And with your permission we will tell him that you have agreed to do that.

    Mr. BERKELEY. Certainly.

    Chairman SMITH. Let me just say that one of my personal goals is to get more, if you will, bang for the buck in our research dollar. You have indicated, Mr. Benhamou, Mr. Berkeley, that if the basic research in IT is going to be done and the Federal Government has got to do it. But somehow do you have any suggestions, and to all of the witnesses, in terms of technology transfer in terms of the way we operate licensing. If there is any area that it seems like that the application of the research is closer to the basic research, it very well might be in the information technology area.
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    So considering the fact that the average tax payer is now paying 41 percent of everything they earn in taxes at the local, state and Federal level, is there ways that we can have greater involvement of the public sector in terms of their contribution to this basic research? And maybe just go down the line for a quick comment starting with you, Dr. Jones.

    Dr. JONES. I think this information technology is something that all of the citizens now understand. Because it has affected everybody's life. You can see that. I think one of the problems that we have in this country is that the citizens do not typically understand what research is and how it is done and what the processes are.

    Mr. SMITH. Can we get the private sector to pay for more of it in one way or another?

    Dr. JONES. Two answers to that. The first answer is no. That the private sector makes sound business decisions and there are a whole host of reasons why research is not in their time frame, is not appropriable. And so they make sound business judgments. And I see nothing that the government could do that would change those kind of—those kind of aspects.

    Chairman SMITH. Okay. Mr. Benhamou.

    Mr. BENHAMOU. All right. Mr. Chairman, I believe that one of the mechanisms that should be encouraged through the legislative is the accelerated creation of government's private industry academia partnerships. These things happen spontaneously. They can be accelerated. I will give you 1 example. Last year in the State of California, a large research consortium emerged called, Cal IT Squared. It is another one of these acronyms. Which is largely funded by the State of California, but also funded by the private sector to the turn of about $100 million. This is an effort that focuses on the law of the IT disciplines that have been spelled out by my colleagues on this panel, as well as, by the PITAC reports.
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    Industry does not produce a conducive environment for carrying out truly basic research. We feel the pressure of earnings projections every quarter. On the other hand, you can create centers of excellence were very high quality international level research can be carried out. Where the private sector has a stake to make investments, creates affiliations and relationship that accelerate the flow of knowledge and the results of research back into industry.

    This happens around the large successful research universities, national labs, and this—I just give you this example. As a fairly spontaneous creation out of purely mutual interest. The state governments and the private sector.

    Chairman SMITH. Mr. Berkeley.

    Mr. BERKELEY. Mr. Chairman, that is a very interesting question. And my answer coming from a market is to look for a market mechanism to make that happen. We built the NASDAQ on 4 basic concepts. Liquidity, transparency, low cost and speed. And as I thought about answering your question, it occurred to me that there may be an opportunity to create a market for all those patents that have been patented, all those ideas that have been patented that are sitting fallow.

    It may be possible to have some sort of—some sort of government/private sector partnership that would say to universities that own patents that are not being used, or even to corporations that own patents that are not being used, if you will put those patents on the market and let other people see them, there could either be some tax benefits, or to the university, some direct subsidies. So there is a quick response. My guess is your question deserves a lot more thoughtful response. And I would be glad to work on that with you.
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    Chairman SMITH. Ms. Furlani.

    Ms. FURLANI. I just want to emphasize some of the techniques that the Federal Government funding already does. The fact that we publish everything and that is a source for the companies to take and use. And the mutual partnerships that Eric mentioned, I think is the other way that the Federal Government is actively collaborating with industry to try to move the research out into industry and make it as quick a transfer as possible.

    Chairman SMITH. But it would seem that to the extent that United States business and industry stay at the cutting-edge, if you will, of this kind of research. We have a temporary advantage in terms of the economic benefits that derive from that. But looking at what other countries do, it is relatively quickly that other countries try to pick this up. And I suspect or I imagine that if you chart the time period that I takes other countries to pick up on our technology, over the last 50 years you will see a much quicker response time to the extent that in the field of agriculture that I am very familiar with, we see agriculture in other countries now implementing the research and development ahead of our farmers in this country in any instances.

    So to the extent that it is going to result in the kind of benefits to this country, we need to explore ways that we hopefully can capture the longer period than we now see in parts of that industry. And this means, since my time is up, that we are going to have to do a second round of questions. Representative Johnson.

    Ms. JOHNSON. Thank you very much, Mr. Chairman. Mr. Benhamou——
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    Mr. BENHAMOU. Benhamou.

    Ms. JOHNSON. Benhamou. Has your—let me apologize for being away for a while. These schedules sometimes get to be hairy. Has your committee regularly reviewed or had an opportunity to make recommendations on the implementation plan for the Federal IT R&D program?

    Mr. BENHAMOU. Yes, we have. And in fact, we view it as an integral part of our charter to provide such a review. We are in the midst, in fact, of reviewing how the funds that were spent last year were used. And were they indeed—how closely they followed the recommendation we formulated. And the kind of results that came out of that. And we will probably complete that investigation in the September time frame.

    Ms. JOHNSON. Do you feel that the agencies are focused in the right direction or do they have enough resources to at least focus dynamically in a particular direction?

    Mr. BENHAMOU. In general, the whole gist of the PITAC recommendation that there was insufficient focus given to several disciplines with an IT. We singled out software as a very important such discipline.

    We strongly believe that the kinds of increases that we recommended can be made use of intelligently. It would not be a single penny wasted there.

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    Ms. JOHNSON. Thank you very much. Dr. Furlani, in your testimony I read where you indicate that there may be a problem with the agencies not paying sufficient attention to how the individual research program fit into the total Federal effort in information technology. Is there interagency collaboration or how can this be corrected? Do you have any specific recommendations?

    Ms. FURLANI. I think that people that actually participate in the interagency work are very good at collaboration and coordination with each other. And they see the value of it. Where they sometimes have difficulty is their agency's, particularly with new people above them, recognizing that this is a cross agency program and that it is the bigger picture. So they work through their agencies to get that understood. And we have just started that process again. But it is working. The agencies do understand it. But I think any visibility that can be added to that by any legislation that you are considering would really be of help.

    Ms. JOHNSON. Thank you very much. The President's Technology Advisory Committee did recommend steps to be taken to ensure that academic research has been given access to the leading scientific computers. And the approach being taken in the U.S. is very performance computing is to employ scalable computer architectures using thousand of commodity processes. Are these classes of research problems that are not well suited for this type of computer research or are we on the right track? Anyone.

    Dr. JONES. The architecture for very high performance computers has evolved over time. It started with single very fast processors. But it has now emerged to be exactly what you described, Congresswoman Johnson. It is collections of commodity microprocessors ganged together. That is the right architectural avenue certainly for now. It is more difficult to put some kinds of applications atop those parallel, massively parallel processors. But that is what the direction in which cost effective computation is going. And so it is one of the science challenges to devise the algorithms and to exploit everything we can out of the machines that we can build cost effectively. So it is a good route.
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    Chairman SMITH. The gentleman from Minnesota, the vice-chairman of the Science Committee, Mr. Gutknecht.

    Mr. GUTKNECHT. Thank you, Mr. Chairman. Now I want to sort of pursue a line that you started, Mr. Chairman. And that is about the whole idea that we can get a one-for-one or a million times return on our investment in basic research. And I want to come back to a point that I hope that you will, and perhaps I should pause here and just say to the staff and to you, we really do appreciate your being here today. I mean, we are honored to have you present and talk to us for a few minutes this morning about what I think really is a very important issue.

    But we all on this side of the desk start to fall into this trap into believing that if we invest a dollar in basic research we ought to get $100 return over, or at least some return for the American tax payer. Several years ago the person who is widely credited with developing the posted note, a gentleman by the name of Eugene Fry, he works for a little company in St. Paul, called 3M, said something incredibly profound. He said, if we knew what we were doing it wouldn't be research. And I think once in a while we do have to remind ourselves when we invest in basic research, and I want to come back to an analogy that you gave, Dr. Jones, relative to oil wells. I mean, even with the latest technology that we have today using the latest high speed computers and so forth, there are still some wells that we drill that come up empty. And I think we have to be willing to accept that risk.

    And I think we also have to acknowledge that there will be things that we will invest in in terms of public policy makers in basic research here in the United States that will be very quickly exploited by other countries around the world. And I think we have to sort of go into this with our eyes wide open realizing that, A, you can't predict what you are going to get out of basic research. And, B, the real return on an investment may accrue to people on other parts of the planet. But that is still not an excuse, it seems to me, to not make that investment.
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    We are today, and we stand on the shoulders of our ancestors, who did make that investment. And I am sorry, this sounds more like a speech than a question. But I would like you to all comment on that. Because I think that really is a very important question that we have to answer to our colleagues relative to the basic investments that we make in basic research. And perhaps you could start, Dr. Jones.

    Dr. JONES. I very much appreciate your recognition of the fact that if you are really doing high risk research there will be some faltering. But you sometimes even learn something from that. It is a basic tenet of science, unlike business competition, so publish what you learn. And that makes it easy for other nations to run with ideas that come out of U.S. federally funded research. But it's the right way to do science. And the challenge is to run faster. So when you falter, pick yourself up. And that has worked very well in this country for us. And I think that is still the way forward.

    Mr. BENHAMOU. Mr. vice-chairman, I want to pick up on the point that you mentioned before, which I think Chairman Smith also made earlier. Which is the time it takes for international competitors to catch up is getting shorter and shorter. And perhaps that should deter us from making more investments. I think this is a weak argument because cycle times get shorter and shorter regardless. We do not need to be ahead of our competitors by 25 years to feel comfortable.

    In order to feel comfortable we need to have well-funded research and a very good relationship or flow of, I think, the outcome of this research to private industry. You would not believe how many times, even today, I am asked to talk about what makes Silicon Valley, Silicon Valley.
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    I am asked to talk about this to by the French people, people in Israel who are trying to emulate what we do. The people in Scotland who have Silicon Gulch. What is it that still makes Silicon Valley so different. Well, there is a very, very carefully crafted equilibrium where people exploit each other. The venture capitalists, the university, the universities, private sector. And it is just the right amount that maximizes the effect endness of the flow. It has reached critical mass. It is always ahead of its competitors. In the field today, it is even more ahead of its competitors that it was 10 years ago. Because it has so much critical mass.

    Mr. BERKELEY. In the NASDAQ we always look at things as whether they are win/lose, or win/win. We are very interested in business models and approaches to products and services and inventions that can be win/win. We like particularly what are called network effects. Where the more people that are brought into something the more benefit there is free.

    And my guess is, is that we can sell the benefits of research and development to the country if we articulate the win/win nature of these fuzzy expenditures, where we do not know exactly which expenditure will win. I think that research and development, because it is long-term and because it has a family of owners, is one of the least marketed concepts to the American public. I think that there is a great opportunity for the private sector, and perhaps for the government to change the attitudes on the part of the general populace about the importance of these issues by using sophisticated marketing technology.

    Ms. FURLANI. I can only agree that the run faster mode is what the agencies have been accomplishing. Again, with the guidance of the PITAC. I want to compliment how quickly the PITAC responds and informs the agencies on new developments and ways that we should be redirecting our research. The cross agency work looks for ways to maximize the impact of the dollars we have. We look for the overlaps and cancel those out. We look for the gaps and move monies into those. We prioritize, we try to move as quickly as possible, both for the agency's own mission benefit and to maximize the public benefit in what the agencies are able to accomplish.
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    Chairman SMITH. Thank you very much. And just I see representatives of the National Science Foundation here. And just a reminder that you are pursuing a report on the results of the research that have benefited not only the economy in different industries, but also other agencies within Federal Government. And so I—my request through you to the administrator that you keep pursuing that effort. Mr. Honda.

    Mr. HONDA. Thank you, Mr. Chairman. I would like to apologize for not being here for all the testimony. But I read quickly through the presentation and listened to your oral presentation. What I am hearing right now, I guess to distill what I am hearing, is number one, we need to continue to keep infusing more money into primary research. And primary research is to be distinguished from research and development that is relative to product development commercialization marketing.

    So when we talk about in public policy arguments, when we talk about R&D credits and stuff like that, we need to be clear that we are talking about product development and commercialization. That kind of investment that companies make in order to be to market, be competitive. But we have to also understand, as what Mr. Berkeley said, is that government is not business. That government has a long-term role in the pri—in the area of primary research. And that is where we should be sort of, you know, buckling down and making that commitment for that long-term. Because you talked about the development we did in the 60's and 70's where we are experiencing the benefits today.

    So my sense is that besides putting out bills and saying that this is what we want in terms of funding, we are going to need to be able to speak as a choir and harmonize our voices in terms of public sentiment and develop, you know, public mindset so they also have an expectation of us to make sure that there is a distinction. And that we continue to make that kind of commitment on a Federal level so that we continue to create that mindset, that relationship between universities, private industry, and Federal Government. And it is that triad that we need to maintain so that we have that mind—that equal system, if you will, where we can develop and continue to be encouraged to put money into primary research.
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    I do not feel that a lot of times. Because I think that it is not clear to people when they say research, whether they are talking about research and development, from a tax credits or, you know, putting in the long-term investment that the Federal Government has to do in order for us to grow the economy to be competitive.

    That is the sense I get from you and that is the message I can sort of extract and distill from your comments. But if you have anything more than you can talk about, I would like to hear something that says how we engage the public in that mindset. We talked about education. But you know, we need to also have a public expectation from the media, from our individual constituents, from the business people and for ourselves. Because when we get into debate, we are talking about giving money back to the people versus reinvesting. We are talking about, you know, all kinds of other things which sort of dilutes really what this—what the primary focus of this Committee, is to make the right investments without fear. Any comments?

    Mr. BERKELEY. I would like to be very plain on what my interests are. While I think that the permanent R&D tax credit, for example, is a very important program, it would reinforce things that companies are doing to commercialize technology that is already available.

    What I think is the absolute critical item is the other part of your discussion, which is the National Science Foundation very early basic research and development that then becomes the seed corn for these downstream commercializations.

    The problem that I think we have in the country is that we do not articulate well the link between basic research and this high standard of living that we have. And there is a specific thing that I think we could go. And that is to catalogue in a very transparent way where basic research dollars have led to commercial products, drugs, higher standard of living, semiconductors, networking, software. And I will tell you an antidote. Two years ago I was called by the White House and asked for specific examples of government funded technology that became the heart of NASDAQ companies. And I went out and asked a number of our companies to give me examples, and indeed, we came back with some. But the fact that we did not have anywhere in the system that I could find or that the White House could find an easy repository of the payoff for these hundreds of millions of dollars that we spent over the years was appalling to me. And I think that would be one of the cheapest and easiest things we could do to document for the citizens how this has paid off over time. It is the time lags that make the links obscure.
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    Chairman SMITH. The gentleman's time has expired. But if there is a quick comment from the other witnesses. Mr. Benhamou.

    Mr. BENHAMOU. I would just like to give you an example that perhaps all of you can relate to. In your offices and your colleagues on Capitol Hill as well, you have computers that are connected to local area networks. This local area network is called the Internet. The technology was invented by Xerox Spark in collaboration with several universities on government—federal R&D funds. This technology was subsequent to commercialized by my company, 3Com. And since the late 70's we are going to do over 400 million such computers to local area networks. So the reason why all of you can send e-mail messages to constituents and to each other and to your staff is because of this piece of investment that was made around 1970.

    Chairman SMITH. The gentlelady from Illinois, Ms. Biggert.

    Ms. BIGGERT. Thank you, Mr. Chairman. Thank you for holding this hearing. I have a question for Mr. Benhamou. You mentioned in your testimony that the IT R&D bill that was introduced and passed by this house last year that was sponsored by our previous chairman, Mr. Sensenbrenner, would essentially implement the PITAC recommendations and findings. And was the bill different from any of those findings or the 1999 report, and did the bill leave anything out or-should we put the same sort of bill back together again?

    Mr. BENHAMOU. I think it would be an excellent starting point. I think there was no material difference between the PITAC recommendations and what the bill captured. I would encourage this Committee to look at this as a very valid, applicable today starting point.
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    Ms. BIGGERT. Is there anything else that we should include that would——

    Mr. BENHAMOU. There is one aspect that maybe I can elaborate on right now. One of the—it has been relatively easy to expand funding in the life sciences for basic research. Because perhaps it is easier to explain how to get the payback. IT is a key enabler to a fundamental research in life sciences as well. And I believe it would be good to look at IT research, not just amongst the physical sciences, but also across the life sciences as well. And ensuring that there is very good communication between agencies like NIH and others in terms of looking at the entire spectrum of portfolio of IT R&D.

    Ms. BIGGERT. Okay, thank you. Then you also talked about the down—the severe downturn that we have had and the bursting of the bubble. In terms of investment in research and development, what is the industry's reaction to this downturn likely to be?

    Mr. BENHAMOU. Well, the downturn is quite severe. This is the first time in its history, I believe, the IT industry is actually shrinking at the moment. Unclear how the year will end. But inevitably, despite industry's best efforts to preserve their R&D budgets, I believe that these budgets are at best stagnating. Some of them are shrinking. I know in the company that I am involved in, budgets are shrinking year after year. And it is inevitable because all companies are subject to public market pressures. And they have to cut down expenses accordingly. Some of the layoffs that you have heard about are not just administrative personnel. Some of these are also engineers.
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    Ms. BIGGERT. Do you think that increased Federal funding would have, for R&D, would have effect on the downturn, and if so, how long would it take for these——

    Mr. BENHAMOU. I do not believe that increased Federal funding would have any effect on the downturn right now. Had funding been more available years ago, perhaps we would have had more innovations to draw from. In general, industry expects to innovate its way out of this recession.

    Ms. BIGGERT. Mr. Berkeley, would you have anything to add to that?

    Mr. BERKELEY. I do think that there are Federal actions that would help with the downturn. And I think one of the ones that has been topical lately is having a large national effort to build out the broadband connections nationally. That is not basic research and development.

    Ms. BIGGERT. Okay. Thank you. Thank you, Mr. Chairman.

    Chairman SMITH. Mr. Etheridge.

    Mr. ETHERIDGE. Thank you, Mr. Chairman. I appreciate you holding this hearing. Mr. Berkeley, I was intrigued by your, of all the 4, you mentioned education. And I happen to agree with you. And in that light, because really what we are talking about Dr. Jones research and development at the basic level by in large is done, the bulk of it is done at our university level. Because if it is not done there as you indicated, Mr. Berkeley, it is not likely to get done because of the pressures of each quarter. I think sometimes we forget that. We want that quick return on the dollar. And yet if you look at our R&D budget at the Federal level, they are shrinking in terms of real dollars. So I get intrigued by the time I hear people talk about money and then you look at the budget and what they say, you know, there is a big slip between the lip and the hip. I does not intend to fit sometimes.
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    And my point is that if you get in trouble in public education and budgets get tight, the first thing you cut is staff development. The very thing you ought not to be cutting at a very time when want to back to have children learn the basic research. So let me quickly get to my question. Because I do believe of looking at R&D in a return to society, which is critically important whomever would benefit, whether it be us for a while and it goes to the world. Because if you look back at space research that was done in the 60's, and the military research that was done, we did not worry about what happened. It spawned computers and the list is long. I could not agree more that we really ought to do some cataloging, who does it and how we get it done, we really ought to do that so the public understands.

    My question is this though, what are the specific needs for fundamental research and information technology. And secondly, how is that information technology being addressed and coordinated among Federal agencies? I was in a meeting just yesterday with a number of researchers who said one of the problems is we have a bag case of tunnel vision. We have all these different research projects and for so many times we do not wire them together in the end. So we get synergy from all the pieces. Who would like to start?

    Dr. JONES. I could address the last piece. From '93 to '97 I served in the Department of Defense as the Director of Defense Research and Engineering which meant I oversaw the Science and Technology programs for the Department. Not just IT, but you know, engines, everything else. And I walked away from that experience believing that in the information technology area is the best coordination that I found. I think it is partly due from a long history of the agencies coming together under the 80's, the Federal Coordinating Counsel. And then through the encouragement of Congress to the High Performance Computing Act, with the creation of the National Coordination Office. There are senior program managers, the people who understand their programs down in detail. And they talk together all the time. And so interagency coordination can be problematical. I think it is better in this arena, certainly in my experience than in any other that I saw.
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    Mr. BENHAMOU. I would like to comment a little bit, amplifying what Dr. Jones just said about the quality of the coordination of work. Sometimes we are criticized on the ground that we have a fragmented effort to IT R&D. I believe actually we have very strength in having IT being carried out by so many different agencies. I think there is diversity, there is different approaches, different ideas. And I think that we can get the best out of both worlds if we keep these agencies with a different cultures and emphasis. But we have a strong coordination effort that oversees that. And I believe we are pretty close to having the best of both worlds today. And I think we should just keep doing it.

    Mr. ETHERIDGE. Before we finish with the last 2 comments. Do not get caught up just on the coordination because I want to cover the other pieces that relates to the additional funds so we get to where we need to do to benefit society over the next 20 or 30 years.

    Mr. BERKELEY. Mr. Etheridge, I think that the heart of the matter is, is that the kind of basic research that we need to be investing in is—will have unknown and indeed unknowable long-term effects. And that that is where the gap and faith comes. But I think that history has shown us that plunging ahead in the most basic of basic sciences really has the largest payoff. Mr. Chairman, may I be excused?

    Chairman SMITH. No. I am going to interrupt with your permission. If there is a quick question to Mr. Berkeley, we at 10:45 or 11:45, do you have a couple minutes for a couple of quick—Mr. Baird, do you or Mr. Larson have any specific questions for Mr. Berkeley?
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    Mr. BAIRD. I do, Mr. Chairman. I do not want to keep you, sir. But I was intrigued by a number of your comments.

    Chairman SMITH. He has to leave in 7, 6 minutes.

    Mr. BAIRD. I will be very brief. First of all, you mentioned discussion—many of you talked about the decline in investments from the private sector. It seems to me we need to supplement that conceivable with the public sector. In this body, we often hear that the people know how to spend their money better than government, therefore, we should cut your taxes. But I am hearing today that the government spent the money fairly well and we have got quite a significant return on our investment from that. Could you comment on that very briefly?

    Mr. BERKELEY. Yes. I think that the issue for basic research and development revolves around the concept of social goods. And the fact that no for-profit organization in the environment that we are talking about today with the high liquidity and the rapid response of the equity markets can take the personal or career risks of putting a 20 year horizon on investment.

    Mr. BAIRD. Can I ask one more quick question? Okay.

    Chairman SMITH. I do not think we have time. Mr. Larson, just a quick question to Mr. Berkeley and then—okay. Mr. Baird.

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    Mr. BAIRD. I thank my colleague. Very quickly, you raised a point that I have often been concerned about and that is the lack of a standard of cross school reports. Ironically, we just past an ESEA bill which mandates state level developed testing. But in that testing process will not satisfy your desire for some kind of a comparability. It is almost like we need NIST to intervene here. But my point here is this, every other industrialized democracy in the world has some form of a national curriculum that would provide for the kind of comparability that you addressed. What are your thoughts on that as it would impact your industry?

    Mr. BERKELEY. Well, I think that in theory I am not in favor of a national anything. I am in favor of the free market forces working. I think in the specific business of education we have one of several, but one of few monopoly situations where it really had not worked very well. What intrigues me about comparing our students to performance on a world market, which is where the jobs are competitive, is by bringing transparency, sort of a NASDAQ-like approach to grades. And what the NASDAQ does is let you open the paper in the morning and see what your 3Com is worth. And, no, there is nothing you can open up to say what is my child's grades worth. Except the early stages of this third international math and science survey writ large and any child in the world allowed to take it. So what appealed to me about that concept is it brought transparency to local grades with the force of global transparency but without any prescription as to how the school should remedy the issue.

    Mr. BAIRD. So in other words, a voluntary you could—my child could say because it is potentially important to my career, I would want to take this test as opposed to a Federal mandate that you have to take a certain test designed by the state.

    Mr. BERKELEY. Yes. That is the structure of the Internet Learning Network that the Counsel on Competitiveness has put up. There is no—they do not even take the child's name. The idea is strictly that you take it and you learn how well you are doing versus Singapore or Canada or England or Switzerland or the Untied States
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    Mr. BAIRD. That is a very——

    Chairman SMITH. Mr. Berkeley, we hope you do not miss your plane. And please excuse me for keeping you a couple minutes. And, Mr. Baird, you have the remaining 2 minutes.

    Mr. BAIRD. I really appreciate the chair. Mr. Berkeley, thank you for those insightful answers. Essentially, I think I have covered it, Mr. Chair. I will yield the time back to my colleague.

    Chairman SMITH. Mr. Johnson.

    Mr. JOHNSON. I think the questions that have already been asked have been asked already. I appreciate the consideration.

    Chairman SMITH. Mr. Larson.

    Mr. LARSON. My question, and first of all, to Ms. Furlani. With regard to all of the integration within the agency, was I mistaken and did I not see the Department of Education in that group.

    Ms. FURLANI. The Department of Education participated for a period earlier in the 10 year history, I think around the '94—I would have to—I mean, accurately reflect when they participated. But they are not a member of the cross cut right now. They will participate. Some of the—Department of Education, FAA, GSA, other agencies that are not part of the budget cross cut do participate in the coordinating groups in some of the different areas. But they are not funded through the cross cut.
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    Mr. LARSON. Is there any specific reason for that? I mean, it seems fundamentally to me that this is the most flawed thing that we have in the country. We have the Department of Commerce issued a report on a digital divide that exists in the country. It seems as though as have agencies where the left hand does not know what the right hand is doing. And especially as it relates to education where we really do need infrastructure improvement to bring our classes into the 21st Century so they in fact can be competitive globally, which is the question I wanted to ask Mr. Berkeley. But nonetheless, what prevents the—and this was true in the Clinton Administration as well, that the Department of Education seems to be on an island some place when it really should be, especially as it relates to IT. Especially as it relates to trying to get out to our rural areas and our urban areas with information technology and integrating that and curriculum and integrating that in terms of best practices in a more diagnostic way of teaching. And the Federal Government isn't talking to one another.

    Ms. FURLANI. One of the recommendations of the PITAC was to ensure that the research was done, the fundamental research that was also referred to by Mr. Berkeley of how people learn and how the—what the impact of information technology is and how it can be best identified and made use of. And so there is a cross agency coordinating group, the Social Economic Work Force Impact issues that addresses. It is active in looking at those research issues. It is led by a member of—that is a member of the National Science Foundation.

    Mr. LARSON. How would you react to this statement for the panelists. That the defense of the nation has continued economic prosperity and its education system are inextricably tied and linked. And we have no pipeline coming forward of highly skilled people coming out of our high schools prepared to compete in a global economy, or prepared to run the most sophisticated military and defense system ever assembled in the world.
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    Mr. BENHAMOU. I think it is a tragedy. And I think this is one of the only issues which every once in a while cause me to lose my optimism. I do believe that we have a very serious problem in this country with the quality of overall education system. When I was introduced earlier this morning, Congressman Honda mentioned that I was a member of Technet. Technet has chosen as its core issue, and this a completely—and enjoys bipartisan support, to help reform the educational system. I think it is out of enlightened self-interest. I think we need to put the focus in this country on this as a number one priority.

    We suffer from this as business people. We do have difficulties recruiting, training, retraining the people that we need. Just because there is a momentary downturn right now should not make us lose sight of the fact that we will have worker shortage as soon as the economy picks up again.

    Mr. LARSON. Dr. Jones.

    Dr. JONES. I think one of the largest challenges to the research community now is to understand how people learn, how people make decisions, how they evaluate complex situations. And I would hope that this Committee would support an aggressive learning program to be later appropriated into our education system. But a basic learning program that would help us train the forces better, that would help us make this step from the point that all these computers out there are things that we as human beings have to adapt to. They do not adapt to us and they ought to. And if we understood better the neuroscience, the cognitive psychology of how people think, we would be able to harness IT to support the human thinking and reasoning processes. And I think that could have tremendous——
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    Mr. LARSON. Could we put an annual figure on what Congress should be appropriating for research in general as a sinking fund that would go directly to the various entities, most of which were outlined in Ms. Furlani's testimony?

    Dr. JONES. I would be glad to take a look at just learning technologies and respond with an answer.

    Mr. LARSON. Could you put a number on that? That is what I am interested——

    Dr. JONES. I would have to go think about it. But I will do that for you.

    Mr. BENHAMOU. Mr. Larson, there has been a report published by PITAC on that very issue. And we have looked into how much the Department of Education invests in basic research on learning and teaching. And it is one of the lowest percentages ever seen. We have formulated recommendations. I do not have the number off the top of my head. But I would be happy to give you a copy of this report and point out the number.

    Mr. LARSON. Thank you very much. Thank you, Mr. Chairman.

    Chairman SMITH. Thank you. We will just take a couple minutes a piece to wind up. It is—on that point, it is my opinion that the greater the advancement in information technology, the greater the likelihood that prosperity is going to tend to fall to those countries and those areas that have the kind of quality, math and science students through education. So as we advance information technology, it would seem that even greater responsibility rests on us, if we are concerned about our prosperity to advance our math and science education.
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    I want to bring information technology back to normal people using this vast amount of information that is now available to them. Should we be also looking at some way to make these vast amounts of information more, if you will, practically useful to individuals? When I punch something on the Internet, I get—I could spend a whole year reading the answer. Somehow we need to bring that down and we need to have it in an understandable way what infor—people are looking for. I mean, any thoughts or suggestions?

    Dr. JONES. That is just the kind of thing that I was alluding to earlier. That you ask the computer something and it does not understand the content text of what you want. And so you get inundated in this example. I think if we again understood better how people learn, how people reason we could then use information technology to genuinely support human intellectual exploration.

    Chairman SMITH. Any other quick comments? And then we will pass it on. Mr. Benhamou.

    Mr. BENHAMOU. Mr. Chairman, I think you are absolutely right in pointing out the fact that a lot of the technology that has come out of our industry in our research labs is just way too cumbersome to use for the average citizen. One of the recommendations we formulated is to emphasize research on user interfaces, emphasizing simplicity of experience. The whole industry is moving toward humans into computing. There is a couple of acronyms which I think kind of capture this. We need to move from WIMP Interfaces to SILK interfaces. And the WIMP stands for windows, icon, mouse and pointing device. And SILK is sound, image, language and knowledge based interface. And it captures sort of the fundamental changing environment that we need to—that we need to achieve in order to get this human centered computing era.
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    Chairman SMITH. PITAC's last recommendation was '99. Will PITAC be coming out with new recommendations of funding levels and how that funding should be spent?

    Mr. BENHAMOU. There will be providing regular dates. And we do not anticipate that it will be any fundamental changes. But we might make minor changes to integrate recent events. In addition to this, we will be providing more details on some of the fundamental transformations that we outline in the first section of the report.

    Chairman SMITH. Mr. Baird.

    Mr. BAIRD. Thank you, Mr. Chair. I wish Mr. Berkeley were here because there is some opportunity for interesting dialogue between Mr. Benhamou and Mr. Berkeley on the following question. The ascertain that the current corporate reward structure is based on essentially fast turn-around profits. And that by suppresses ones incentive to invest in basic research as opposed to development, which I thought you articulated very well. Are there things that could be done to change that incentive structure. Do we need to change it from an R&D tax credit to an R tax credit, or are there other ways in which we can incentivise the private sector to maintain basic research investment. Because I am troubled by that. I would have been interested hearing Mr. Berkeley's dialogue with you on that. But I would be curious to hear thoughts, Mr. Benhamou.

    Mr. BENHAMOU. Well, I think there might be some interesting creative mechanism to be put in place. Let us keep in mind that all publicly traded companies expect to achieve—to operate within the narrow band of return vested capital. Conceivably, you could help companies invest more in fundamental research by perhaps matching some of the funds that they use in sponsoring university research. Often times private companies will be interested in not so much in funding research in the abstract, but funding a particular research program in a neighboring university where there are—other benefits that accrue. For example, relationship with a professor. The ability to recruit the students who work on the research program. If such investments were made—were matched, for example, or were—or if there was funding available to broaden the scope of these investments while keeping skin in the game for the company, I think this might have an interesting sort of amplifying effect.
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    Mr. BAIRD. One last question, if I may, Mr. Chair. Dr. Jones, or anyone, Dr. Furlani, as well. One of the interesting things that I have experienced on this Committee, particularly but in the short 2 years I have spent in Congress is the experience of the pace of technological change vastly outpacing the ability of Members of Congress to keep up with it. And yet we are tasked with trying to craft sound policy in areas which we scarcely understand once we finish—once we depart from our prepared text of our staff we are in trouble most of the time. Any thoughts on how we can better keep Congress informed of what is going on in technology? I applaud the Chairman for today's hearing. It has been most informative. But I am interested in your thoughts, particularly, as it pertains to IT.

    Dr. JONES. One thing that I think is effective that there are independent advisory bodies who make statements and formal reports that you can trust. And I think there is ample evidence that this Committee respects PITAC and organizations like PICAST. And there is also the national academies which were chartered to advise Congress. And so I think tasking those organizations or paying attention to their reports that they—they who may be experts in a particular area integrate and give a biased—an unbiased judgment is one way to get very good information.

    Ms. FURLANI. Again, the agencies, especially coming through my office, we can call in people that can bring the experts in and help you at any time. Provide—we support the PITAC at producing their reports. So we stay with them and understand where their goals and directions are. So we are a little handier, we are just down the street instead of having to come from across the country. But we can always help provide the resources to advise and give you information.
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    Chairman SMITH. Mr. Larson.

    Mr. LARSON. Thank you, Mr. Chairman. Very quickly following on that line of questioning I had before. It is a great—and I think the Chairman mentioned this earlier and or perhaps Gil did with regard to seemingly how we develop the technology and our global competitors usurp that technology and have—are moving closer and closer in global competition. In fact, I would contend that in many respects their leap-frogging us with our own technology. And especially in the education areas where you have nations like Costa Rica, Ireland, Israel, India that are further along than we are in our primary and secondary grades in terms of the introduction and exposure. And I did not quite get the acronym, SILK. But along the lines of integrating voice, video and data in such a manner that they are a more knowledge based focus than we in our country.

    I believe that we need nothing short of a technological marshall plan that focuses on the retraining efforts of teachers and the focus of looking at our infrastructure in schools that actually have that kind of capability. Notwithstanding the basics, notwithstanding the importance of testing and everything else. But just having the shear infrastructure that has been the foundation for our country's great success. How would you react to that?

    Mr. BENHAMOU. Well, Mr. Larson, I think it—we should not underestimate the magnitude of the reform that we intend to take to make our educational system more productive. And it is—what is sad is that there is nothing wrong with the technology produced. We have produced great technology. It has relevance to helping learning, helping teaching. But I do think there are many other impediments in the multi-variable system to creating a powerful educational system. Interesting analogy.
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    I referenced local Internet works earlier. Technology was pioneered by Xerox PARC in its—in what was one of the most outstanding fundamental research lab in the country. Xerox never had a chance to really explore this technology commercially. It was other companies who were more nimble, more focused, were able to create commercially successful products out of this fundamental research.

    It is quite possible that this country, unless it engaged in rapid reform of its educational system, of this sort of marshall plan urgency that you suggest. It is quite possible this country could have great technologies which are left unexploited by its educators and its administrators.

    So I commend you for continuing to raise a sense of urgency about that.

    Mr. LARSON. Dr. Jones.

    Dr. JONES. I too feel that you are raising a key national question. You mentioned infrastructure. I guess the first step I might think about is in terms of providing the infrastructure and the training as you alluded to earlier for the teachers. And building up their capability for delivering the material that—in the ways that they think will best help their students learn. In terms of IT infrastructure, I would first try to support the teachers.

    Mr. LARSON. Yeah. You can't have diagnostic teaching though if you do not have the skills readily available to assess how the individual is performing. And getting back to the point of all the research that needs to be done with respect to learning. And how people reason and how they think and how they are able to—you know, we have not even scratched the surface. As you might tell, I am a former school teacher, as well. And it is very frustrating to know that we have the technological wherewithal and ability but to see that we lack the national will or vision or purpose to reform dramatically. It seems to be death by incrementalism. And I fear that it is to the detriment of this country. And I do not know if Ms. Furlani wanted to comment as well.
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    Ms. FURLANI. I do believe that the research that agencies are going can contribute to solving this problem. And we need to be more assertive in ensuring that the information is being transmitted. I think the way that happens is the way the coordinating groups meet and the agencies come together and the information is transferred. And it has been very successful. We just need to keep doing it.

    Mr. LARSON. I want to thank the Chairman. Because a lot—and he alluded to earlier some of the legislation that he has introduced already and has invited us bipartisanly to join and I think are steps forward in this direction. But I think we all agree we have a long way to go.

    Chairman SMITH. If nothing else, maybe we can get more people's attention to the predicament and the seriousness of the problem.

    Before I close the meeting, I again would like to thank the witnesses for your time to come before this Subcommittee today. With your permission, we would like to send you some additional questions that you might consider answering in writing. And without objection, we will also hold the record open for 3 days for any additional comments or testimony from the members of this Committee.

    And with that, thank you again and this Subcommittee is adjourned.

    [Whereupon, at 12 p.m., the Subcommittee was adjourned.]

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(Footnote 1 return)
Massachusetts Technology Collaborative, ''Analysis of the Impact of Federal R&D: Investment Scenarios on Economic Growth'' September 2000.


(Footnote 2 return)
Ralph Gomory, ''Sustaining America's Prosperity'', National Innovation Summit, April 5–6, 2001.


(Footnote 3 return)
Massachusetts Technology Collaborative, ''Analysis of the Impact of Federal R&D: Investment Scenarios on Economic Growth,'' September 2000.


(Footnote 4 return)
Stephen D. Oliver and Daniel E. Schiel, ''The Resurgence of Growth in the late 1990's: Is information Technology the Story?'' Federal Reserve Board, February 2000.


(Footnote 5 return)
Craig Barrett, Intel Corporation.


(Footnote 6 return)
Michael Porter, ''Strategy and the Internet,'' The Harvard Business Review, March 2001.