How to Unlock the Potential of the Advanced Research Projects Agency Model
Summary
America faces a host of daunting problems that demand forward-looking solutions. Addressing these challenges will require us to unleash the full potential of our research and development community, leveraging new approaches to innovation that break through both technical and institutional barriers and initiate wholly new capabilities. The Advanced Research Projects Agency (ARPA) model has resulted in exactly this kind of high-impact innovation in defense, intelligence, and energy. This model can be applied to other critical societal challenges such as climate, labor, or health. But an ARPA must have the right core elements if it is to create the fresh solutions the country needs.
The ARPA model is distinctly different from other federal agencies in mission, operations, and culture. ARPA organizations are part of a much broader ecosystem that spans from research to implementation. Their role is to create breakthrough, paradigm-shifting solutions and capabilities. In order to position a new ARPA for success, Congress, the Administration, and the agency’s founding leaders must understand the unique properties of an ARPA and the process by which ARPAs approach and manage risk to develop game-changing advances.
To establish a strong foundation for a new ARPA to do this work, Congress and the Administration will need to address four factors:
- Purpose: Clearly and succinctly define the vital national purpose for the new ARPA.
- Operations: Set the agency up to function autonomously, with its own budget, staff, and operating practices.
- Authorities: Give the new ARPA flexible hiring and contracting authorities to draw new and extraordinary talent to the nation’s challenges.
- Leadership: Appoint an exceptional leadership team, hold them to a high standard for impact, and create room for them to deliver on the full potential of the ARPA model.
Over the course of a few years, a new ARPA can grow into a powerfully effective organization with people, practices, and culture honed to create breakthroughs. If well implemented, new ARPAs can be extraordinary additions to our R&D ecosystem, providing unimagined new capabilities to help us meet our most essential societal challenges.
Challenge and Opportunity
America faces some daunting problems today. Many millions of Americans are unable to access our nation’s rich opportunities, leaving all of us poorer without their contributions. Dozens of other countries have longer life spans and lower infant mortality rates, although we spend more per capita on healthcare than any other country. We are not yet on track to contain the damages of a changing climate or to manage its impacts. Global competition has resulted in more and more U.S. research advances being used to create jobs elsewhere. R&D alone won’t solve any of these problems. But every one of these challenges demands creative new solutions.
However, America’s phenomenally productive R&D ecosystem—with its half a trillion dollars spent annually by the public and private sectors—is not aimed at these large, society-wide challenges. How do we create a generational shift in our innovation ecosystem so that it contributes as much to meeting this century’s challenges as it did for those of the last century? What can we learn from our successful R&D history, and what approaches can we adapt to address the problems that we now face?
One part of the answer lies in the Advanced Research Projects Agency (ARPA) model for innovation. This kind of innovation knocks down both technical and institutional barriers to create transformational new capabilities. ARPA organizations are part of a much broader ecosystem, spanning from research to implementation, in which their role is to create breakthrough solutions and capabilities that fundamentally change what we define as possible. In pursuit of revolutionary advances, they accept and manage a level of risk for which companies and other government agencies have no incentive.
The first ARPA, the Defense Advanced Research Projects Agency (DARPA), was launched in 1958 at the height of the Cold War. DARPA shifted military capabilities from mass bombing to precision strike with GPS, stealth technologies, and integrated combat systems. These innovations recast defense systems, changed military outcomes, and shaped geopolitics over decades. Meanwhile, DARPA’s programs in enabling technologies also seeded artificial intelligence, developed advanced microelectronics, and started the internet. In recent years, DARPA programs have built the first ship able to navigate from the pier and cross oceans without a single sailor on board,1 created a radical new approach to reconfigurable military capabilities to outpace global adversaries,2 developed the first systems—now in operation by the Port Authority of New York and New Jersey—for cities to continuously monitor for dangerous nuclear and radiological materials,3 and created a rapid-response mRNA vaccine platform4 that enabled the astonishingly fast development5 of today’s mRNA vaccines for COVID-19.
We are also starting to show that the ARPA model can be successfully adapted to other national purposes. In 2006, the Intelligence Advanced Research Projects Activity (IARPA) was formed to serve the intelligence community. One of IARPA’s programs has developed methods to overcome individual cognitive biases by weighting and synthesizing the judgments of many analysts. This approach provides important gains in prediction and is a new paradigm for forecasting events in a complex world. In 2009, the Advanced Research Projects Agency–Energy (ARPA-E) launched in the Department of Energy. Its programs have created new power semiconductors, new battery technologies, and new methods to improve appliance efficiency, making vital contributions to our clean energy future. Both ARPAs have invigorated R&D communities by connecting them to hard, important problems and giving them a pathway to drive impact.
Implementing the ARPA model to meet other critical challenges could have enormous impact. Indeed, President Biden has already proposed ARPAs for health and climate,6 and others have advanced visions for ARPAs for agriculture,7 labor8 and education. In addition, the Endless Frontier Act9 takes inspiration from the ARPA model in its vision for an expanded technology function at NSF to address economic competitiveness.
Behind each call for an “ARPA for X” is a yearning for R&D that throws open new doors to radically better solutions. But the ARPA model is very different from other federal agencies and unlocking its potential will require much more than affixing the name. The starting point is an understanding of how ARPAs generate their outsized advances.
Though specifics vary according to the mission of a new ARPA, the essential operating model is based on these elements:
- An ARPA designs and conducts programs that run for limited periods, typically 3-5 years. Each ARPA program sets out to achieve a specific, bold goal that may seem impossible but that, if demonstrated, can initiate a major advance. Each ARPA program contracts with companies, universities, and other organizations to execute R&D efforts. It also engages the parties who can implement and scale successful program results.
- An ARPA requires exceptionally talented program managers with a rare combination of expertise, vision, and the ability to execute and deliver results.
- ARPA leadership approves a series of individual programs, constructing and overseeing a full and diversified portfolio.
ARPA Programs
An ARPA generates major advances through intelligently managed risk-taking. The fundamental unit of work for an ARPA is a solutions-oriented R&D program that aims at achieving a previously unimaginable goal. Each program has a fixed term, typically 3-5 years, and each is designed, executed, and transitioned by an ARPA program manager.
Design
The program manager designs the program to achieve a bold goal—one that may seem impossible but that, if demonstrated, could catalyze a major advance. They build a rigorous plan to achieve the goal. A set of questions known as the Heilmeier Catechism10 (from an iconic DARPA director in the 1970s) guides program development:
- What are you trying to do? Articulate your objectives using absolutely no jargon.
- How is it done today, and what are the limits of current practice?
- What is new in your approach and why do you think it will be successful?
- Who cares? If you are successful, what difference will it make?
- What are the risks?
- How much will it cost?
- How long will it take?
- What are the mid-term and final “exams” to check for success?
These questions are easy—even obvious—to ask, but surprisingly difficult to answer well. Program managers typically grapple with them over 6-12 months to design a strong program, and agency leaders use them to guide their judgement about the potential of a new program for approval. The questions also guide program execution.
Execution
Once a program is launched, the program manager contracts with whichever organizations are needed to achieve the program’s goal. That typically means companies, universities, nonprofits, other parts of government, and other organizations with the talent and capacity to conduct the necessary R&D. Contracting this work has the obvious benefit that the ARPA doesn’t have to hire staff and provide facilities for this R&D. But even more important is the fact that this approach mobilizes individuals and organizations. Over the course of the program, these participants become a community that not only delivers the program vision but can help drive it forward beyond the term of the ARPA program.
The work of the program is to weave the threads of research from multiple domains together with lessons from the reality of use and practice in order to develop and demonstrate prototype systems or capabilities. The program rigorously evaluates how well its innovation works, how it works in specific environments, and how it can be scaled.
An ARPA program often draws on basic research and often generates fresh research, but research is an input rather than the objective. Unlike the management of basic research, these programs drive to a specific goal. They may sometimes resemble product development, but for a prototype product that serves a public purpose rather than a visible market opportunity. Often, they require a much higher degree of risk than product development because they reach for a barely feasible goal.
An ARPA program aims to demonstrate that a powerful new approach can work despite the risk inherent in trying something radically different. This requires actively managing the multiple efforts within the ARPA program. An ARPA program manager accelerates lines of work that show great promise and redirects or stops work that is not yielding results. They nimbly reallocate resources to keep wringing out risk and driving to the program’s objective.
Transition
In parallel, the program manager engages the decision makers who can advance, adopt, implement, and fully scale the results of the program. If the breakthrough will require commercialization, that could include additional companies, investors, and entrepreneurs. If full-scale implementation requires changes in policies and practices, that means engaging regulators, policy makers, and community organizations. Understanding the needs and realities of implementers is important from the early stages of program design. It is sometimes the case that these implementers are skeptical about the program’s bold goal at the start. As the program unfolds, they are invited to program reviews and demonstrations. The program strives to address their concerns and may even provide support for their internal analyses, evaluations, and trials. When these engagements work well, the ARPA program manager is able to bring implementers along on the journey from wild dream to demonstrated reality. Successful transition starts when they change their minds about what’s possible. And the ultimate societal impact of the ARPA program comes when these implementers have fully scaled the ARPA breakthrough.
A fully successful program ends with a convincing demonstration of a new capability; a community that can carry it forward; and decision makers who are ready to support and fund implementation in products, services, policies, and practices.
The structure of a hypothetical ARPA program
A labor-oriented ARPA program aimed at a new training approach might fund (1) a handful of university and company teams to advance promising research, (2) a company to develop a prototype that integrates research results into a practical system, and (3) a nonprofit to conduct and evaluate trials with people seeking to upgrade their skills. In parallel, the program manager would engage other agencies at the Department of Labor and other levels of government, both to learn from their perspectives and, as the program develops, to show them the progress and possibilities if the program is successful. The program manager would also engage companies and investors that can commercialize tools coming from the program. A fully successful program would demonstrate a training approach that is far more effective, takes a fraction of the time, and costs significantly less than current approaches, with robust evidence about how it works for people with different backgrounds and for different kinds of training. The program would end with companies, workforce boards, DoL, community organizations, and employers energized to implement the new approach and taking steps to scale it.
ARPA program managers
None of this can happen without exceptionally capable program managers. An ARPA organization hires program managers on fixed terms to design, manage, and transition these high-impact programs. ARPA leadership coaches program managers, helps build partnerships and remove obstacles, and approves and oversees all programs. But it puts enormous responsibility and authority on the shoulders of program managers.
ARPA program managers come from backgrounds in companies, universities, nonprofits, and other parts of government, and they serve at different times in their careers. They bring a “head in the stars, feet on the ground” blend of these key characteristics:
- The program manager is an expert in a relevant area.
- They see the big picture and navigate easily from details to strategic outcomes.
- They are driven to achieve a major impact. Sometimes this is manifested as a constructive impatience with the limitations of conventional organizations and approaches.
- They are able to project a vision.
- They are able to build and lead a community to accomplish goals.
- They have a sound ethical core.
ARPA portfolios
ARPA leadership approves a series of individual programs, constructing and managing a full portfolio that is diversified to maximize total impact despite the risk inherent in each program. Every program learns, not all succeed, and failure is accepted as integral to the mission.
Plan of Action
Based on these core elements of a successful ARPA model, we offer four recommendations for policy makers as they establish new ARPA organizations.
Purpose
Clearly and succinctly define the vital national purpose for the new ARPA. An ARPA exists to create breakthroughs for an important public need. For DARPA, this is national security. For ARPA-E, it is economic and energy security, and for IARPA, it is national intelligence.
Operations
Set up the agency to function autonomously, with its own budget, staff and organization, and operating practices. An ARPA is a deliberate counterpoint to work already underway, originating from a recognition that something more and different is needed to achieve our national goals. An ARPA will not succeed if it is tightly integrated into its parent organization. Ironically, it may be more difficult to start a successful new ARPA in an area that already has robust federal research, because of the inclination to fit the square-peg ARPA into round-hole traditional research methods. The ARPA model is completely different than our well-honed approach to sponsoring fundamental research. The ARPA solutions-driven approach would not work well for greatly needed and highly valued basic research, and conversely, funding methods for fundamental research will not lead to ARPA-scale breakthroughs for our societal problems. This work is different, and it will require different people, different practices, and a different culture to succeed.
Independent funding is also necessary. To develop a portfolio of programs with the potential for high impact, an ARPA requires funding that is sufficient to achieve its programs’ objectives. ARPA programs are sized not just to generate a new result, but to convincingly demonstrate a new approach, often across a variety of circumstances, in order to prove that the method can succeed and scale.
The agency’s chain of command and Congressional authorizers and appropriators provide important oversight. However, the ARPA organization itself must bear the responsibility for designing, selecting, managing, and transitioning its programs. A new ARPA should report directly to the cabinet secretary to maintain independence and secure the support needed to achieve its mission.
Authorities
Give the new ARPA flexible hiring and contracting authorities to draw new and extraordinary talent to the nation’s challenges. Flexible hiring mechanisms have proven to be very valuable in allowing ARPAs to attract the rare combination of expertise, vision, and execution required in great program managers. In addition, program managers must be able to contract with exceptional people and teams in companies, universities, nonprofits, and other government entities to achieve their aggressive program goals. ARPAs have used flexible contracting mechanisms to move fast and work effectively with all kinds of organizations, not just those already designed to work with government.
Flexible hiring and contracting authorities are extremely helpful tools for an ARPA organization. It’s worth noting, though, that flexible authorities by themselves do not an ARPA make.
Leadership
Appoint an exceptional leadership team, hold them to a high standard for impact, and create room for them to deliver on the full potential of the ARPA model. A new ARPA’s director will be responsible for building an organization with people, practices, and culture honed for the mission of creating breakthroughs. This person must bring fresh and creative ways of looking at seemingly impossible problems, a rigorous approach to managing risk, a drive to achieve outsized impact, and an ability to lead people. A strong ethical orientation is also essential for a role that will grapple with the implications of powerful new capabilities for our society.
The person to whom the ARPA director reports also plays an essential role. This individual must actively prevent others from trying to set the agenda for the ARPA. They enable the ARPA organization to hire program managers who don’t look like other department staff, undertake programs that conventional wisdom decries, manage programs actively, and develop a culture that celebrates bold risk-taking in pursuit of a great national purpose. They hold the ARPA organization accountable for the mission of creating breakthroughs and create room for the unconventional methods needed to realize that mission.
Note that these four recommendations about purpose, independence, authorities, and leadership are interconnected. All are necessary to build the foundation for a successful new ARPA, and cherry-picking the easy ones will not work.
Conclusion
A total of 87 years of experience across three different ARPA organizations have provided many lessons about how to build and run an organization that creates breakthroughs for an important national purpose. In establishing any new ARPA, both Congress and the Administration must create the space and allocate the resources that will allow it to flourish and realize its mission.
Like its programs, a new ARPA will itself be a high-risk, high-reward experiment. If our challenges were modest, or if our current innovation methods were sufficient, there would be no need to try these kinds of experiments. But the problems we face today demand powerful new approaches. Adapting the ARPA model and aiming it at the most critical challenges ahead can create breakthroughs that redefine what is possible for our future. Let’s do everything possible to start new ARPAs on the right track/
ARPAs create radically better approaches to hard problems by conducting solutions-oriented R&D. The Department of Defense (DOD)’s Defense Advanced Research Projects Agency (DARPA), now in its seventh decade, conducted the pivotal R&D for new military capabilities such as stealth and precision strike and, more broadly, for new information technologies ranging from the internet to artificial intelligence. DARPA’s track record inspired the establishment of the Department of Energy’s ARPA-E and the Office of the Director of National Intelligence’s IARPA. Both of these new ARPAs are well underway, with robust portfolios of R&D programs and encouraging results. They show that it is possible to adapt DARPA’s model for different public purposes.
For the independence, authority, and responsibility that a new ARPA requires, its Directorship should be a senior appointment reporting directly to the Secretary of the appropriate department. If this role is filled by a Senate-confirmed Presidential appointment, it will be important for stability to have a civil servant to serve as the Deputy Director.
ARPA leaders and program managers communicate with their entire ecosystem: other parts of government, the R&D community, and the entities that can implement and scale ARPA results. An ARPA holds the responsibility for selecting and executing its programs.
solution for a social problem may come from implementing new insights from behavioral science.
It is helpful to think about the desired future state a program will aim to realize, and then work
backwards to the new approaches, methods, or tools that could enable it, as well as the
institutional changes that will be needed. These solutions may or may not involve technology.
the customer. But the internet, miniaturized GPS receivers, microelectromechanical systems,
and new waves of artificial intelligence did not make their mark through Pentagon procurement. As part of the design of an ARPA program, the program manager needs to think
through how their advance could be adopted and fully scaled. That could involve a
government agency that procures a product or service, companies that commercialize the
results, policy makers or regulators who can design rules and laws that are more effective
because of the program’s results, and/or other avenues
A health-oriented ARPA could help the U.S. address challenges like antimicrobial resistance
To help catalyze innovation in the health and biomedical sciences, research and development (R&D) paradigms with a track record of producing ‘moonshot’-scale breakthroughs – such as the Advanced Research Projects Agency (ARPA) model – stand at the ready. The Biden Administration has recognized this, proposing the establishment of an ARPA for health (ARPA-H) as part of its fiscal year 2022 budget request. Done right, ARPA-H would be created in the image of existing ARPAs – DARPA (defense), ARPA-E (energy), and IARPA (intelligence) – and be capable of mobilizing federal, state, local, private sector, academic, and nonprofit resources to directly address the country’s most urgent health challenges, such as the high cost of therapies for diseases like cancer, or antimicrobial resistance. During a recent House Energy and Commerce Committee hearing, Chairwoman Anna Eshoo (D-CA) raised the Administration’s proposal for ARPA-H with Department of Health and Human Services (HHS) Secretary Xavier Becerra, expressing her interest in exploring how to best position a potential ARPA-H for success.
Keys to the ARPA model
The success of the ARPA model is attributed in part to the high level of autonomy with which its program leaders select R&D projects (compared to those at traditional federal research agencies), a strong sense of agency mission, and a culture of risk-taking with a tolerance for failure, resulting in a great degree of flexibility to pursue bold agendas and adapt to urgent needs. Policymakers have debated situating a potential ARPA-H within the National Institutes of Health (NIH), or outside of NIH, elsewhere under the umbrella of HHS. Regardless, it is essential that ARPA-H retain an independent and innovative culture.
The first ARPA – DARPA – was established in 1958, the year after Sputnik was launched, and is credited with developing GPS, the stealth fighter, and computer networking. DARPA continues to serve its customer – the Department of Defense – by developing groundbreaking defense technologies and data analysis techniques. Nevertheless, DARPA operates separately from its parent organization. This is also true of ARPA-E, which was launched in 2007 based on a recommendation from a National Academies consensus study report which called for implementing the DARPA model to drive “transformational research that could lead to new ways of fueling the nation and its economy,” and IARPA, created in 2006, to foster advances in intelligence collection, research, and analysis.
If ARPA-H is organized within NIH, it is essential that it maintain the innovative spirit and independence characteristic of established ARPAs. NIH already has some experience overseeing a partially independent entity: the National Cancer Institute (NCI). Compared to other NIH institutes, NCI’s unique authorities include:
- Direct access to the president;
- A requirement to submit a completely separate budget proposal to the president each year without getting approval from NIH or HHS; and
- The ability of the NCI director to form new cancer centers and training programs, establish advisory committees, and independently collaborate with other federal, state, and local entities.
This level of independence has contributed to NCI achieving a number of significant milestones in cancer treatment, including developing a chemotherapy treatment to cure choriocarcinoma (a rare type of cancer that starts in the womb), publishing the now-widely-used Breast Cancer Risk Assessment Model, and creating an anticancer drug for ovarian cancer that was unresponsive to other treatments.
If the NCI model were to be used as the foundation for the launch of ARPA-H, insulation from political considerations, whether those of Congress or the Executive Branch, would be critical. With DARPA-like autonomy, a potential ARPA-H could help push the boundaries of enrichments to human health.
Antimicrobial resistance as a case study for an ARPA-H
An example of a grand challenge that an ARPA-H could take on is addressing antimicrobial resistance, a worsening situation that, without intervention, will lead to a significant public health crisis. Antimicrobial resistance occurs when “bacteria, viruses, fungi, and parasites change over time and no longer respond to medicines, making infections harder to treat and increasing the risk of disease spread, severe illness, and death.” Microbes have the potential to gain resistance to drugs when not all of the pathogens or parasites are killed by a treatment, either because the treatment was the not correct option for the illness (like using antibiotics for viruses), or refraining from completing a prescribed course of an antimicrobial drug. The organisms that are not killed, presumably because they harbor genetic factors that confer resistance, then reproduce and pass along those genes, which make it harder for the treatments to kill them.
The most immediate concerns regarding antimicrobial resistance come from bacteria and fungi. The CDC considers some of the biggest threats to be Acinetobacter, Candida auris, and C. difficile, which are often present in healthcare and hospital settings and mainly threaten the lives of those with already weakened immune systems. Every year in the U.S., almost 3 million people are infected with antimicrobial-resistant bacteria or fungi, and as a result, more than 35,000 people die. While the toll of antibiotic resistance in the U.S. is devastating, the global outlook is perhaps even more concerning: in 2019, the United Nations warned that if no action is taken, antimicrobial resistance could cause 10 million deaths per year worldwide by 2050.
Developing new and effective antibiotics can help counter antimicrobial resistance; however, progress has been extremely slow. The last completely new class of antibiotics was discovered in the late 1980s, and developing new antibiotics is often not profitable for pharmaceutical companies. It is estimated that it takes $1.5 billion to create a new antibiotic, while the average revenue is about $46 million per year. In addition, while pharmaceutical companies receive an exclusivity period during which competitors cannot manufacture a generic version of their drug, the period is only five to ten years, which is too short to recoup the cost of research and development. Furthermore, doctors are often hesitant to prescribe new antibiotics in hopes of delaying the development of newly drug-resistant microbes, which also contributes to driving down the amount pharmaceutical companies earn for antibiotics.
Early last year, the World Health Organization reported that out of 60 antibiotics in development, there would be very little additional benefit over existing treatments, and few targeted the most resistant bacteria. Moreover, the ones that appeared promising will take years to get to the market. This year, Pew Research conducted a study on the current antibiotic development landscape and found that out of 43 antibiotics under development, at least 19 have the potential to treat the most resistant bacteria. However, the likelihood of all, or even some of these products making it to patients is low: over 95 percent of the products in development are being studied by small companies, and more than 70 percent of these companies do not have any other products on the market.
There is both a dire need for new innovations in the space, such as using cocktails of different viruses that attack bacteria to treat infections, and a gap between the research into and commercialization of new antibiotics – a perfect opportunity for a potential ARPA-H to make an impact. With this new agency, experimental treatments could be supported through the technology transfer process and matured to the point that the private sector is able to take the baton and move a new antimicrobial to market. This would be revolutionary for public health, and, combined with improved messaging around best practices for the use of antibiotics, save many lives.
Moving forward
The need for, structure, and possible priorities of a potential ARPA-H will continue to be discussed over the course of the congressional appropriations process, with consultation between the Legislative and Executive Branches. We encourage the CSPI community to serve as a resource for Members of Congress and their staffs to ensure that the new agency will be properly positioned to contribute to significant advances in human health and biomedical technologies.
Creating an Advanced Research Projects Agency (ARPA-L) for the Department of Labor
To create fresh and powerful new approaches to the complex challenges that America’s workers face, Congress and the Biden-Harris Administration should invest $100 million per year for 5 years to launch an Advanced Research Projects Agency for Labor (ARPA-L). ARPA-L’s mission will be to conduct high-impact R&D programs that create breakthroughs to meet America’s workforce challenges.
The COVID-19 pandemic has deeply exacerbated longstanding problems for America’s workers. Mismatches between workers’ skills and employers’ needs alongside persistent racial and gender inequities have long undercut opportunity. Moreover, work has continued to change due to technology and automation, globalization, and shifting relationships between workers and employers. Even before the COVID-19 crisis, many millions of Americans were not earning enough to support themselves and their families. These Americans are missing out on gainful work, while our economy and our society are missing out on their full contribution.
With current advances in information technology, data science, applied social sciences, and learning science, this moment calls for an ambitious initiative to tackle the longstanding challenges for America’s workers. The Federal Government should launch an ARPA-L to research, develop, and test breakthrough approaches that boost workers’ skills and harness data to open new opportunities. By drawing from the operating model of prior ARPA organizations and adapting it to these challenges, ARPA-L’s programs can make it possible to ameliorate underemployment and unemployment and transform the future of work.
To initiate ARPA-L, Congress should provide a budget of $100 million per year over a five-year period. The Biden-Harris Administration and the Secretary of Labor should appoint a highly qualified director and provide that individual with the support needed to succeed. By creating this independent agency at the Department of Labor (DOL), Congress, the White House, and DOL can create opportunity for the U.S. workforce for decades to come.
The Challenge
The COVID-19 pandemic has exposed and deepened labor market problems that had already been compounding over decades.
A mismatch between workers’ education, skills, and training and the shifting needs of employers has led to shortages in high-demand occupations. The demand for digital skills has increased. In addition, local and regional economies across the country are experiencing shortages of workers in emerging and evolving trades vital to economic activity — such as clean energy and manufacturing — that increasingly require new technical capacities. And in some cases, a worker has the skill to succeed in a job but doesn’t have the credentials that the company has tied to that position. Without intervention, the skills gap will continue to grow larger within the labor market. For millions of Americans displaced from traditionally high-employment sectors such as light manufacturing and data processing, the need for reskilling and relocation to emerging sectors requires rethinking traditional models and experimenting with new approaches. To break the cycle of long-term unemployment and underemployment, new approaches to skills training, education, and credentialing are needed.
Although existing policies and practices have made progress in addressing inequity, these problems continue to plague the U.S. workforce, precluding many from gainful, meaningful employment. Today, women still earn less than men on average, while Black and Latina women experience even greater disparities. Men without college degrees, and especially men of color, have been disproportionately impacted by decades of shifts in the labor market compared to men with college degrees. Challenges in traditional education reinforce barriers to obtaining well-paying jobs with upward mobility for young people of color and those from low-income backgrounds. Inequities only persist as workers age, adding pressure when rapid upskilling and retraining is needed and leaving displaced workers even further behind. These communities of workers cannot continue to be left behind.
The term “future of work” encapsulates the anticipated disruption to jobs and the workforce from emerging technologies, global economic change, and the changing relationship between employer and worker. In reality, this disruption is already occurring, and U.S. workers in every sector of economy are feeling its effects. To save on labor costs, employers continue to outsource jobs to overseas workers and automate any task that a machine can handle. As computing technology and artificial intelligence proliferate and mature, this disruption will spread to more and more different types of jobs. Non-traditional workers, such as rideshare and delivery drivers, now form a significant percentage of the workforce, but antiquated labor practices and policies do not address the uncertainty of their work lives. As more and more Americans participate in the gig economy, we must change our approach to solving workforce issues and diversify how we craft solutions to solve them.
The COVID-19 pandemic has both illuminated and exacerbated these challenges. Service sector industries such as retail, tourism, restaurants, and hotels have been decimated by the pandemic, and many of these jobs will be slow to return. Other jobs can be done remotely, but many workers lack the digital skills to thrive while working from home. Furthermore, barriers to the digital economy stand tall: across America, too many workers lack reliable broadband or even a personal computer. Already at a disadvantage, underserved communities are falling further behind in their education and career development, undermining their opportunities in the years to come.
So where has all this left us? A failure to address long-standing labor problems has led to job instability and prolonged underemployment and unemployment that can be seen in the labor market today. Efforts to improve worker outcomes have met with only limited success. To address today’s pressing labor issues, the Federal Government must invest in the capacity to create powerful new solutions that can scale to reach the broad population of workers.
The Opportunity
Today, advances in information technology, data science, and the behavioral and social sciences provide new hope for these kinds of hard problems. Further, numerous regional and pilot projects are showing results from new approaches to training, certification, and matching workers to jobs. These are promising signs, but we are not turning the tide of national-scale labor problems. The purpose of an Advanced Research Projects Agency for Labor (ARPA-L) is to weave research advances together with lessons from the real world to create fresh, potent, broadly scalable new approaches for our workers’ challenges.
ARPA-L would be fully responsible for identifying promising opportunities and then designing and executing its programs. These are some examples of the types of high-impact programs it could undertake.
Next-generation Skills Assessment and Training
An ARPA-L would take a creative, experimental approach to closing the skills gaps. For example, ARPA-L programs could:
- Develop and validate diagnostic systems to improve skills assessment and enable workers to better understand how their skillset matches with the needs of employers.
- Demonstrate accelerated skill development that uses information about an individual— e.g., age, initial skill level, and prior experience—to devise an optimized training regimen that best fits them.
- Explore and evaluate new ways to personalize and accelerate the training process by building on advances in learning science and neuroscience.
- Advance and test the effectiveness of emerging innovations like human-computer interaction and mixed reality for training for complex tasks.
- Experiment with and assess alternative certifications and micro-credentialing programs to train and upskill youth and displaced adult workers around the country and connect participants directly to employers.
Such advancements would not only improve the effectiveness of training and skills assessment. They can also dramatically reduce the time and cost for workers to gain new skills and connect to good jobs, directly addressing major barriers to scale.
Information to Illuminate Better Decision Making
Today, all kinds of data about workers and jobs is everywhere: rigorously collected labor statistics, employee ratings of employers on crowdsourced websites, internal company data about employment, the records of community colleges and other service providers, and administrative data such as tax and census records. We have barely begun to use this data tsunami to address workforce challenges. ARPA-L could transform data into clear information that allows workers, employers, training providers, and policymakers to find new pathways and make better decisions.
For example, ARPA-L programs could:
- Experiment with and test data tools personalized for each worker, combining information on local job postings, wages, and training requirements with information about available credentialing and training services—giving workers the most meaningful and actionable information for their career goals in real time.
- Assemble data from public and private sources on regional labor trends and test its effectiveness in enabling employers to make more impactful, targeted, and timely investments in workforce development opportunities in their area.
- Collect and analyze diverse datasets to identify targeted, effective leverage points for innovative labor policy interventions.
- Develop and validate data analysis tools for policymakers to directly assess the progress of pilot workforce policy initiatives, tailor them to different regional and demographic needs, and then scale the initiatives to meet the needs of workers across the country.
Armed with a data-driven and experimental mindset, an ARPA-L would develop prototypes, conduct demonstrations, and rigorously evaluate their effectiveness, resulting in breakthrough methods targeted at solving workforce problems. The agency will perform this work by contracting with companies, universities, nonprofits, and other government organizations to harness and integrate their different capabilities. ARPA-L will also engage with a broad community of actors so that these solutions are ultimately implemented and scaled by a combination of commercialization by the private sector, policies created by federal state and local actors, and new practices adopted by other stakeholders such as employers and community colleges.
Plan of Action
The Biden-Harris Administration should work with Congress to establish ARPA-L as an independent agency in the Department of Labor. To institute ARPA-L, Congress should appropriate an initial investment of $100M per year for the first five fiscal years. ARPA-L’s mission will be to conduct high-impact R&D programs that create breakthroughs to meet America’s workforce challenges. To this end, ARPA-L will adopt and adapt the core elements of the ARPA model.
To succeed in its unique mission, ARPA-L should be led by a Senate-confirmed Director who reports to the Secretary of Labor as well as a career civil servant Deputy Director. Within DOL, ARPA-L would need to be an independent organization. ARPA-L would collaborate with other parts of DOL, as well as federal, state, and local agencies. ARPA-L would draw on their expertise and that of other labor market ecosystem actors to understand workforce issues and current practices. These organizations will often be ideal partners to fully implement and scale successful ARPA-L program results.
Conclusion
An ARPA-L at DOL would conduct solutions-oriented R&D to create fresh, powerful approaches to the pressing workforce problems of today and tomorrow, such as market disruption, unemployment, and worker reskilling/upskilling. With the support of Congress, the White House, and the Department of Labor, this new organization can deliver bold advances that ultimately change what’s possible for America’s workers.
Creating the Health Advanced Research Projects Agency (HARPA)
Summary
The federal government can directly address the massive market failures at the center of our healthcare enterprise by establishing a new Health Advanced Research Projects Agency (HARPA)1 modeled after the Defense Advanced Research Projects Agency (DARPA)—the agency the Department of Defense uses to build new capabilities for national defense.
The need for HARPA is twofold. First, developing treatments for disease is difficult and time consuming. HARPA will provide the sustained drive needed to push through challenges and achieve medical breakthroughs by building new platform technologies. Second, the U.S. healthcare system largely relies on the private sector to leverage national investments in basic research and develop commercially available treatments and cures. This model means that diseases for which investments are risky or downstream profit potential is low are often ignored. HARPA will step in where private companies do not, addressing market failures with direct investments that ensure that all patients have hope for a brighter future.
HARPA will leverage existing basic science research programs supported by taxpayer dollars, as well as the efforts of the private sector, to develop new capabilities for disease prevention, detection, and treatment and overcome the bottlenecks that have historically limited progress. To do this, we have to think and act differently about how we address human health challenges. HARPA would support research that directly affirms, refutes, or otherwise changes current clinical practice. It would do this using milestone-driven, time-limited contracts as the central mechanism for driving innovation. This will ensure efficiency, transparency, and optimize success.
Challenge and Opportunity
Every year, the United States spends more than $3.4 trillion on healthcare and tens of billions of dollars on biomedical research. Yet we only have treatments for around 500 of the approximately 10,000 known human diseases.2 30 million people in the United States—half of whom are children—suffer from a rare disease for which no treatment has yet been developed.3 There are no ongoing efforts to develop treatments or cures for the overwhelming majority of these diseases. That massive market failure is the big secret of the biomedical research enterprise and is simply unacceptable. We need bold action to correct this massive market failure and revolutionize how we attack disease.
In 1958, the United States created the Defense Advanced Research Projects Agency (DARPA) at the Department of Defense. This new government agency was designed to make pivotal investments in breakthrough technologies for national security and directly address market failures that were impeding innovation. The establishment of DARPA launched a new era in defense innovation that led to countless innovations, including the Internet, stealth aircraft, GPS-based precision navigation, night vision, autonomous vehicles, speech recognition, and robotic prostheses.
We need to take the same aggressive entrepreneurial approach to health innovation as we have in protecting our nation from foreign threats. Creating a new Health Advanced Research Projects Agency (HARPA) would fundamentally transform the way the United States approaches treating the majority of human diseases, and would directly address many of the shortcomings of our healthcare and biomedical research systems.
Imagine being able to predict and intervene before someone has a mental health crisis; diagnose cancers at their earliest stages when treatments are most effective; end deaths from antibiotic-resistant bacterial infections; and provide treatments for rare genetic diseases. That is the promise of HARPA.
By applying the same tools that DARPA uses to develop new capabilities for defense (Section 3), HARPA would be engineered to close the gap between basic research and real-world needs. HARPA initiatives would target the diseases that affect millions of Americans but are going unaddressed because of risk aversion and short-term, perverse incentives in academia and the private sector. These initiatives would be funded through large milestone-driven timeline limited contracts needed to take on transformational projects, and would be led by top experts recruited for focused stints at the agency. The result will be an institution designed from the ground up to finally solve the most pressing healthcare issues of our time: skyrocketing drug prices, the tragic shortcomings of our mental-health support systems, the opioid crisis, unconscionable waiting lists for organ donations, medical errors, and many more. DARPA enabled the United States to lead the world when it comes to defense innovation. HARPA will do the same for healthcare.
Function
Federal funding for medical research is primarily allocated though the National Institutes of Health (NIH). Through its $41 billion annual budget, NIH funds basic science and clinical research through grants. Grants are typically awarded to individual projects at academic institutions. Collectively, these projects form the bedrock of our knowledge about biology, health, medicine, and disease.
Importantly, NIH is not designed to develop marketable disease treatments or cures or to develop new platform technologies that are intended to revolutionize medicine. NIH funding is used to support therapeutic and technology development, but not in a way that prioritizes quick, efficient commercialization of new discoveries. Moreover, NIH does not include a mechanism for ensuring commercialization. SBIR grants flail at the challenge of commercializing innovations with woefully inadequate funding. Simply put, the current path from NIH-funded basic science to applied research to viable commercial product is too slow, and it does not address massive market failures that define health research and development today, leaving many human diseases without dedicated efforts to uncover solutions. Funds for basic science and clinical research through grants—awarded to academic institutions that pursue particular, individual interests in discovery—are great for uncovering truths about biology, but are an extremely inefficient way to drive toward therapies that make their way into the clinic.
Private companies, on the other hand, only scale up and market economically viable therapies. Therapies that are potentially effective but have a limited market remain inaccessible to the public at large or come with astronomical price tags that patients simply cannot afford.
Effectively bringing new innovations to the market requires alternative approaches to the bottom-up grant funding common to NIH programs. Again, this is not to say that the NIH dollars are poorly spent. The dollars spent on research are essential to understanding health and disease. But an alternative model is needed to advance research toward the development of necessary technologies and treatments to cure disease.
HARPA would close these gaps. Just as NIH brings federal resources to bear on basic science and early-stage research, HARPA would bring federal resources to bear on applied science and later-stage development and deployment. HARPA would have three guiding functions:
- Launch and manage large-scale health-research initiatives. Although multiple federal entities4 work on health research, there is little coordination among these entities regarding research priorities, activities, or progress. HARPA would work with these entities—as well as with the private sector, academia, and states and localities—to launch and carry out targeted, multi-stakeholder research initiatives aimed at our most pressing underserved health challenges. Using milestone driven and timeline limited funding contracts, HARPA will be able to ensure rapid continuous progress. These initiatives would integrate the diverse capabilities of participating institutions to make real progress on persistent and pressing health problems.
- Invest in transformational platform technologies. HARPA’s focus will be on projects that have direct impact on clinical care. Basic science tends to advance methodologically and incrementally. This partly reflects the nature of the field (one set of experiments informs the next) and partly reflects the nature of incentives in academia (moving too far and too fast away from an established knowledge base decreases the likelihood of publishable findings). By contrast, HARPA will only support transformative research that will substantially improve clinical practice and this is how potential impacts will be evaluated. Pushing for such platform technology breakthroughs is a high-risk, high-reward enterprise. HARPA will focus on the uncertain but potentially transformational medical technologies and therapies that tend to go underfunded today.
- Support development of treatments and cures for all diseases. All taxpayers contribute to federally funded medical research. But not all taxpayers reap the benefits. Relying on the private sector to bridge the gap between basic research and commercially available products means that those with rare or difficult-to- treat diseases are often ignored. HARPA will correct this market failure by supporting development of treatments and cures for all diseases—especially those that are being neglected by the existing healthcare ecosystem.
Structure
HARPA would be modeled on DARPA. DARPA is considered the “gold standard” for innovation and accountability within the federal government. DARPA is also distinct from other federal agencies that fund research and development in that it is focused on building capabilities rather than simply advancing knowledge. This unique mission requires DARPA to have a unique set of attributes and operating principles, including the following:
- Contracts large enough to provide a critical mass of funding. While most federal grants for academic research are on the order of tens to hundreds of thousands of dollars annually, DARPA funds projects at $1–$5 million per year. These large contracts enable DARPA affiliates to pursue goals that would simply be out of reach at lower funding levels.
- Minimal bureaucracy. DARPA’s entire staff consists of about 220 government employees. This includes DARPA’s ~100 program managers (PMs), who collectively oversee about 250 research & development projects funded at total of about $3 billion per year. All actual research and development activities are conducted by public, private, and academic affiliates. DARPA’s small staff size and flat organizational hierarchy makes the agency effective and nimble, able to move quickly on priority issues in a limited amount of time. Moreover, the fact that DARPA is not organized around disciplines allows PMs to pursue unconventional but productive cross-disciplinary collaborations.
- No entitled constituencies. While funding from other federal grant programs may only be accessible to certain recipient classes (e.g., academic institutions), DARPA does not predetermine which types of institutions are eligible for funding. Funding projects at a wide variety of institutions—including universities, national labs, public and private companies, state and local government agencies— enables DARPA to access the full breadth of talent, expertise, ideas, and resources that the nation has to offer. For example, DARPA funding in the start- up community has yielded advances that may have been difficult or impossible to achieve in other sectors. DARPA uses flexible procurement tools like “Other Transaction Authority” to make it easy for small businesses and nontraditional defense contractors to participate in the agency’s initiatives.
- “Portfolio approach” to high-risk, high-reward efforts. DARPA understands and accepts that frequent failure is the price of success when it comes to achieving transformational breakthroughs. DARPA PMs have the resources and authority to invest in multiple approaches to a given goal. DARPA proposals are openly competed, but PMs can strategically select the winners in a way that creates a diversified, risk-mitigating project portfolio.
- Government control of contracts. DARPA negotiates contracts that enable control over performance. Contracts specify milestones and “go/no-go” decision points to ensure that scientific progress is made in an efficient and timely manner. This enables PMs to better manage funded projects and to cut funding if a project is not yielding desired results.
- Top-notch talent. DARPA attracts world-class PMs recruited from academia, industry, and government agencies. DARPA benefits from expedited direct hiring authority for science and engineering experts.
- High turnover. PMs are hired for limited stints (generally 3–5 years), and there are no career PMs. This approach keeps DARPA talent fresh—ensuring that the agency is scientifically current and flexible to new avenues of investigation—and fuels an urgency for PMs to “achieve success in less time than might be considered reasonable in a conventional setting.”5
Many, if not all, of these characteristics could be carried over to HARPA. HARPA could also adopt DARPA’s funding-management model. Under this model, all funding allocations would be left to the discretion of the HARPA Director while all funding oversight would be entrusted to HARPA PMs. Funds would be awarded as milestone- driven contracts that give PMs the capacity for early termination if a particular project is not yielding desired results. This almost never happens with traditional federal grants for research and development.
Because HARPA will differ in structure and function from traditional research-funding agencies, it is sensible for HARPA to have a reporting chain of command separate from NIH. We believe that HARPA would be best situated directly under the Secretary of Health and Human Services (HHS) or under the HHS Assistant Secretary for Health. The Biomedical Advanced Research and Development Authority (BARDA) provides precedent for placement directly under the Assistant Secretary for Preparedness and Response.6
Path to Establishment
HARPA could be established under existing authorities, but, ideally, would be established through authorizing legislation and new appropriations. There are several steps the federal policymakers could take to kick-start the establishment process. First, the president could issue a Memorandum or Executive Order directing the HHS Secretary to develop a blueprint for HARPA’s establishment as well as a strategic plan for HARPA’s activities. These documents would include identification of priorities and goals; analysis of global markets, policies and production capabilities; structure and accountability; and initial funding recommendations. Ideally, they would be developed by a short-term Federal Advisory Committee (FAC)—comprised of top physicians, health researchers, and innovative thought leaders. It is important that the FAC include avenues for external input, including providing and promoting a public comments period and convening stakeholder for a across the country. After these documents are developed, the president could urge Congress to deliver a bill establishing HARPA.
Alternatively, the President could include funds for HARPA in an annual budget proposal under the Assistant Secretary for Health or Assistant Secretary for Preparedness and Response. (If Congress appropriates those dollars, HARPA could be established without authorizing legislation.7) We believe that a minimum budget of $100 million for HARPA in its first year and $300 million in its second year would be sufficient to get the agency started and to establish high-impact programs, but to be truly transformational, the agency should ramp up to several billion in research expenditures annually. Throughout this process, the president should use high-profile speeches and events to publicly explain the need for HARPA, and to advocate for its creation.
Vision
With a DARPA-inspired structure, HARPA would achieve rapid translation of biomedical discoveries into patient-care capabilities. HARPA’s mission and activities would be synergistic—not duplicative or competitive—with existing federal research efforts. In particular, HARPA would use fundamental scientific understanding developed with NIH support as a foundation for developing breakthrough medical advances.
HARPA would operate in a health ecosystem that includes biotechnology, pharmaceutical, and healthcare companies, venture capital and philanthropy, academic institutions, and government and regulatory agencies. HARPA would address two of the most prominent shortcomings of this ecosystem: (1) the aversion to failure that limits the willingness of academics and the private sector to pursue high-risk, high-reward projects, and (2) profit incentives that limit the willingness of the private sector to develop therapies for rare or difficult-to-treat diseases. HARPA would provide the capital and supportive, focused research environment needed for experts from all sectors to demonstrate “proof of principle” for various medical innovations. In doing so, HARPA will drive explosive growth in the number of technologies, treatments, and cures that cross the so-called “valley of death” separating lab-scale insights from commercially available products.
HARPA would focus on developing transformational technologies that fundamentally change the way we do health research and deliver care. By focusing on the development of tools and technologies to transform the way we approach diseases, HARPA can establish mechanisms that ensure wellness and curing disease are prioritized, while correcting the perverse incentives in the market that limit the country’s ability to receive treatment.
There is a rich history of under-funding the development of such technologies even though they are often quickly engrained into the healthcare enterprise, making it difficult to imagine life without them. They enable breakthroughs that even inventors did not anticipate, create entire new fields of research, and often result in Nobel Prizes. They establish jumping-off points and serve as accelerants for progress. Such work is typically high-risk, high-reward and aims to build transformative capabilities rather than incremental discovery-based research that is commonly funded by the NIH. While NIH does a tremendous job of funding basic science and clinical research, HARPA will build new capabilities on the foundation that agencies like NIH and the Department of Veterans Affairs establish through their funding.
For instance, HARPA could drive the following:
- Technologies that allow clinicians to identify and quantify every protein in a drop of blood, completely transforming disease diagnosis, health monitoring, and care.
- A next-generation diagnostic imaging machine that makes it possible to detect a myriad of diseases at much earlier stages that is substantially cheaper, higher-resolution, and more portable than current MRI machines enabling broader use.
- A cortical eye prosthesis that communicates directly with the brain, making it possible to restore sight to the 7 million individuals (including 160,000 veterans)living with a visual disability in the United States.
- New classes of antibiotics to fight the enormous international public-health andeconomic threat posed by antibiotic-resistant bacteria.
- A series of clinical trials for the most expensive marketed drugs, aimed atdeveloping alternative treatment regimens to improve outcomes by reducing toxicities while dramatically reducing treatment costs. Such de-escalation studies of marketed oncology drugs have been shown to improve outcomes and dramatically reduce costs to save billions of dollars.
- A massive effort to repurpose already approved drugs for new applications. There have only been about 2,400 drugs ever been approved for use in humans. Exploring new applications of drugs that are already known to be safe and effective—instead of only focusing on creation of new drugs—could save billions of dollars on research and development and uncover novel uses for drugs that are already known to be safe and effective for other indications.
Beyond Health
It has not escaped our notice that the same market and institutional failures that created the valley of death and need for DARPA and HARPA exist in other areas of research and development. Our nation is facing unprecedented challenges associated with climate change and the need to provide a better world for all. We feel strongly that the federal government should establish additional Advanced Research Projects Agencies (ARPAs) to complement the efforts of other federal agencies and the private sector. Doing so would enable the government to take a leadership position in tackling monumental challenges.
We believe that, in addition to HARPA, the nation needs to establish capabilities in agriculture (AgARPA), the environment (EnARPA), and transportation/infrastructure (TARPA). Fleshing out the details for establishing each of these entities should fall upon the White House Office of Science and Technology Policy in coordination with the Office of Management and Budget, the President’s Council of Advisors on Science and Technology (PCAST), and the leadership of the appropriate federal agencies. Creating these new capabilities will kickstart new industries, create the jobs of the future, and improve our ability to be better stewards of the Earth. Without them, the nation risks continuing its piecemeal approach to addressing our most pressing challenges, while slipping further behind other nations investing heavily in innovations aimed at solving these global challenges. Establishing ARPA capabilities across the federal government would create a network of forward-thinking agencies prepared to address intractable challenges, while building an extraordinary, lasting legacy.