Pre-Competitive R&D Consortia

Pre-Competitive R&D Consortia

Foster Large-Scale Industrial Innovation

Create a framework for pre-competitive research and development partnerships to encourage private-sector R&D collaboration and match whatever funding industry invests in a consortium with federal funds.

The United States has lost its position of global leadership in advanced manufacturing and innovation, surpassed in fields like semiconductors, aerospace, and telecommunications by other nations that have pursued global competitiveness through large and heavily subsidized national champions. In addressing this challenge, government and academia can lead the way in basic research, but they lack the incentives and market focus to translate breakthroughs into products or establish efficient production processes. For their part, even the largest individual firms often lack the resources and know-how to continually incorporate scientific breakthroughs into existing platforms, let alone develop new ones. Such necessary investments are risky, have long payback periods, require enormous amounts of capital, and even when successful may never offer the kinds of returns available from asset-light business models.

In pre-competitive R&D, competing firms collaborate to develop common technology platforms, sharing the resulting intellectual property‚ÄĒfrom which they can develop differentiated products and compete against each other. The collaboration pools resources and expertise, mitigating the risks and reducing the costs that otherwise prevent those firms from pursuing such research. Such efforts have an impressive track record in industries like semiconductors, aerospace, and biotechnology that depend on sophisticated technology platforms far upstream from final competitive products. Public policy can play a critical constructive role in convening and subsidizing this research without ‚Äúpicking winners and losers.‚ÄĚ

Congress should establish a framework for Pre-Competitive R&D Consortia (PCCs), including waivers of antitrust prohibitions and requirements that resulting IP and production capacity must remain in the United States. Rather than target specific industries with funds, the program should be open to any industry that sees value in participating, with public funding limited to a match of funds that the industry’s members are willing to commit themselves.

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