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.

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/

Just a small group of nationally-ranked universities are awarded the majority of federal research funding. In 2018, a study found that out of more than 600 colleges and universities that received federal funding for science and engineering research, about 22 percent received over 90 percent of the funds. The equity and accessibility of these funds was the focus of this week’s Senate Appropriations Committee hearing held to discuss the budget that could be allotted to the National Science Foundation (NSF) in fiscal year 2022. During the hearing, NSF director Sethuraman Panchanathan emphasized that addressing research disparities and establishing far-reaching partnerships were priorities for the agency.

Disparities in research funding

Disparities in research funding can greatly harm the ability of students to enter scientific careers, and diminish the potential of the country’s scientific workforce overall. The institutions that received over 90 percent of federal science funding in 2018 served only 43 percent of all students in the U.S., and only 34 percent of students from underrepresented groups. So two-thirds of underrepresented minorities and almost 70 percent of Pell grant recipients (who are undergraduates with “exceptional financial needs”) have more limited access to valuable opportunities to participate in scientific research. At the same time, researchers argue that incorporating diverse perspectives and talents leads to more innovative solutions, and that not including underrepresented minorities in science will only harm the U.S.’ competitiveness.

NSF’s most well-known program to address research funding disparities is the Established Program to Stimulate Competitive Research (EPSCoR). This program, which is now over 40 years old, partners with institutions of higher education to stimulate sustainable improvements in research and development capacity in specific states. States (as well as U.S. territories and DC) become eligible for EPSCoR funding if they receive 0.75 percent or less of total NSF research and related activities funding over the previous three years. Studies have shown that states with EPSCoR funding increase the quality of their universities’ publications, and that they become more competitive for future federal research funding competitions. However, more research needs to be done to fully assess the program’s impact.

Expanded access to research funding a priority for the Biden Administration

The Biden Administration has emphasized the importance of addressing research funding accessibility in the FY 2022 skinny budget request, which highlights the President’s top spending priorities for the next year in advance of the release of the full request for each agency. Specifically, President Biden is requesting $100 million for programs that “aim to increase participation in science and engineering of individuals from racial and ethnic groups, who are traditionally underrepresented in these fields.” This funding is intended to support increasing science and engineering research and education capacity at Historically Black Colleges and Universities (HBCUs) and other Minority-Serving Institutions (MSIs), as well as research on recruitment and retention methods, mentorship programs, and curriculum development. Studies by the National Academies of Science, Engineering, and Medicine (NASEM) have determined that this type of funding is critical to ensure the success of underrepresented minority students.

Director Panchanathan’s priorities for NSF

During the hearing, Director Panchanathan echoed (46:05) that more needs to be done to tap into the U.S.’ potential scientific talent. His two main priorities for NSF are to increase access to scientific research through regional innovation accelerators and to strengthen partnerships with other agencies, including the Department of Energy (DOE) and its national laboratories. The regional accelerators would rely on an expanded EPSCoR program, as well as support from other NSF directorates. NSF is also working to expand artificial intelligence (AI) research to every state to tap into as much talent as possible. Last year, NSF distributed grants to develop seven AI institutes which have operations in 20 different states. Director Panchanathan hopes (46:45) to expand this further in the coming years. This idea of widely-distributed hubs aligns with a new proposal from FAS’ Day One Project that suggests a path forward for the creation of innovation ecosystems that would launch new startup ideas and cultivate the next generation of research and development talent.

Regarding strengthening partnerships with DOE, NSF collaborates with the agency on a variety of programs, including the development of new algorithms to bolster the security and efficiency of modern power grids, the creation of collaborative robots to assist humans with a variety of tasks, and the advancement of basic plasma research and education. NSF historically focuses on basic research, while DOE, and its national labs in particular, drive the commercialization of new technologies. Director Panchanathan aims (1:22:06) to further develop relationships with the agency to more closely connect NSF’s basic research strengths with DOE’s expertise in technology transfer and ensuring cutting-edge research and technologies are commercialized in the U.S., instead of by other countries. By fostering closer cooperation between NSF and the other federal science agencies, the U.S. will be able to better compete with countries, such as China, that aim to supplant the U.S. as world leader in critical technology and science fields.

The future of research and development in the U.S.

Both the Biden Administration and Congress would like to accelerate science and engineering education and research to boost the U.S.’ domestic growth and global competitiveness. In the formulation of the FY 2022 federal budget for science funding, there will be more discussions on Capitol Hill about how to bolster the country’s expertise in high-priority fields such as AI, climate science, quantum computing, clean energy, and biotechnology, and harmonize the approaches of the executive and legislative branches. We encourage the CSPI community to get involved in future CSPI calls to action, and serve as a scientific resource for policymakers.

Summary

Rebooting the American Dream (RAD) is a proposed national challenge-grant program that funds “Regional Centers for Shared Prosperity” in emerging innovation ecosystems, with the intent of (1) accelerating startup creation, (2) developing the next-generation of talent, and (3) providing alternative capitalization models. It is expected that initially funding the program to award six regional challenge grants of $25 million each will yield at least a 3:1 return in private-dollar investments—for a total of $500 million—and create at least 21,000 jobs in underserved areas of the country. In light of the massive job losses induced by the COVID-19 pandemic, RAD grants will build momentum behind existing place-based initiatives and help surface the wealth of diverse human potential and innovation that exists across the United States. 

The RAD proposal aims to revive entrepreneurship across America by helping give every American, regardless of geography, race, gender, or socioeconomic status, the opportunity to build a competitive company. Advancements in internet capabilities, communication tools, and information technology have made entrepreneurship accessible to more people in more places than ever before. Yet massive job losses related to COVID-19 and ever-growing global competition require the United States to discover new ways to create sustainable jobs. Over the past decade, initiatives led by the federal government in partnership with academics and nonprofits have given policymakers a markedly better understanding of the issues facing entrepreneurs. RAD is directly informed by this body of knowledge. By supporting bottom-up, place-based investment and building a network of new ideas through RAD, the Biden-Harris Administration can simultaneously foster American dynamism and strengthen American economic competitiveness.

Summary

The Biden-Harris Administration should create the Local Innovation Unit (LIU) to catalyze and coordinate decentralized, city and county-based experiments focused on the most urgent and complex challenges facing the United States. Traditional “top-down” methods of policy design and problem solving are no longer effective in addressing our nation’s most pressing issues, such as pandemics, climate change, and decreasing economic mobility. The nature of these problems, coupled with an absence of tested solutions or “best practices” and ongoing partisan gridlock, demands a more agile and experimental “bottom-up” approach. Such an approach focuses on empowering coalitions of social innovators at the local level—including local governments, private-sector businesses, community-based organizations, philanthropists, and universities—to design and test solutions that work for their communities. Promising solutions can then be scaled horizontally (e.g., to other cities and counties) and vertically (e.g., to inform federal policy and action).

The LIU will be a place-based policy initiative consisting of two primary components: (1) multi-city and county experimentation cohorts organized around common problems, via which local coalitions design and test solutions within their communities, and (2) a digital platform, housed in the Department of Housing and Urban Development (HUD), that will help LIU participants connect, exchange materials and resources, help participants collect and visualize data, evaluate solutions, and publish lessons learned.

Summary

COVID-19 has reshaped every facet of our social and professional experiences. What began for almost all of us as a short-term work-from-home event has turned into a prolonged crisis that will have lasting effects on how we interact with each other and do business. Even as vaccine rollouts continue and offices slowly start to reopen, much work will continue to be remote. Employees are likely to work staggered schedules or in predefined groups in order to maintain social distancing for an unknown period of time. Many meetings and tasks that went virtual during the pandemic will likely stay that way. And employers of all types, including governments, will continue to rely heavily on technology to keep employees and customers connected and engaged.

The pandemic accelerated an already rapid ongoing shift to a tech-driven world. As a nation, we must similarly accelerate investments in information technology (IT) to support this new normal. COVID-19 has already exposed critical weakness in existing U.S. IT systems at the federal, state and local levels. Technical problems delayed millions of Americans from receiving unemployment benefits, and are now delaying millions more from receiving timely vaccines. Remote work is raising equity issues and cybersecurity concerns, and periodic internet outages have caused major disruptions to school and work.

The upshot is clear: our investments in IT modernization and cloud computing over the last 10 years have not been sufficient. It’s time to start talking about the next steps the United States can and must take to lead at the federal level, ensuring that our nation’s IT infrastructure and tools can securely and adequately support all remote workers while providing secure, reliable, and state-of-the-art online services.

The Biden-Harris Administration should expand the focus of the Department of Energy’s (DOE) Loan Program Office (LPO) to meet the demands of a changing energy industry. The LPO was established to serve as a backstop to private-sector financing for large-scale energy projects with embedded technology risk. The program’s success in scaling large scale power plants and manufacturing plants for next generation energy technologies is well documented. However, the energy industry has changed since the program’s beginning, and the needs for support from the Federal Government have evolved. For example, technology areas that were deemed risky in 2009 are now mature, and in some circumstances, for example in electricity generation, the industry structure that was historically highly centralized has become much more distributed. Modernizing the LPO is a critical means for advancing the Biden-Harris Administration’s climate agenda because the Office supports the development of clean energy projects at commercial scale, leverages private sector capital, and creates middle-class jobs. 

This memo recommends three important changes to the DOE LPO:

1. The aperture of the LPO must be expanded to include a much larger set of technology areas. In particular, energy storage, hydrogen production and carbon capture, utilization and storage, among other nascent fields, should be supported. Authorizing legislation should be changed to give the Program Office the opportunity to support a technological area at its discretion.
2. The Loan Program must reduce the cost of application to incentivize more deployment of smaller projects. This will expand the potential set of projects to be supported and align the Office with overarching trends in the energy sector.
3. The Loan Program should expand its purview to support projects impeded by other financing risks in the energy system. These could include grid modernization, system hardening or smart grid updates (which often do not pass traditional cost-benefit analyses), and electric vehicle infrastructure deployment.

Challenge and Opportunity

The proposed solution solves two impending challenges to the President’s climate agenda. First, while innovation is necessary to meet climate goals, the private sector is reluctant to fund first generation projects for novel clean energy technology. As the US embarks on a pivotal decade with respect to managing the national carbon budget, deploying new technology at scale will become even more critical. In particular, reaching 2050 carbon goals will require successfully innovating in hydrogen production, carbon capture, energy storage, and load-following electric power — most of which cannot be currently supported under the Loan Program’s authorization. Second, the nation’s overall infrastructure deficit has been estimated to require an additional $2 trillion of spending by the American Society of Civil Engineers in their most recent 2017 assessment. In the energy sector, ASCE estimated the requirement for additional electricity infrastructure alone to be $177 billion. Simultaneously, the economic returns to investing in our nation’s infrastructure are significant. Recent studies suggest that for every $1 million invested in energy infrastructure, the Recovery Act created 15 durable jobs. The multiplier effect from infrastructure spending varies based on economic conditions, but as the country emerges from the COVID-19-induced recession, enabling the LPO to fund a broad swath of energy infrastructure would be a viable asset for job creation in the coming years.

Currently, the LPO is restricted to financing only the first three deployments of new technologies, and new technologies that are highly capital intensive, such as concentrated solar power. The LPO exists to absorb financing risk for the private sector, risks which often stem from capital intensity or technology uncertainty. As we consider the energy transition in the coming decades, a new set of technologies needs support for initial commercial deployment. Additionally, however, a broad array of infrastructure investments continue to go unfunded by the private sector for other reasons as well, particularly in geographies where commercial markets for offtakers are not fully developed. Expanding the technology and stage aperture of the LPO to include a broader array of projects would attract private capital and accelerate the transition to a decarbonized future.

Plan of Action

The Biden-Harris Administration should expand the DOE’s Loan Program Office (LPO) to enable the Federal Government to quickly make investments in a broad range of infrastructure categories through the pre-existing contracting authorizations at the LPO. Accordingly, we propose three changes to the DOE’s LPO. First, the technology aperture of the Loan Program should be expanded to include a broader set of technologies, including but not limited to energy storage, hydrogen production, carbon capture, utilization and storage, and carbon dioxide removal. Program staff should be granted the flexibility to support a wide range of technology areas at their discretion, in a manner not dissimilar to ARPA-E in the breadth of technical fields within staff purview.

Second, the Loan Program must be adjusted to account for a more distributed energy industry by reducing the cost of application and the corresponding size of project to be supported. For example, the first deployment of a novel grid-scale energy storage technology could be financed at the $10+ million level rather than the $100+ million level. A company looking to deploy that technology would be currently discouraged from applying as a result of the upfront cost of application. The Loan Program should support projects across the capital scale, with flexible application requirements depending on the order of magnitude of public support being requested. 

Finally, the Loan Program should expand to support projects impeded by other financing risks in the energy system. These risks could include high-risk project cash flows from uncertain offtake agreements, as for example with public transportation infrastructure or grid modernization, system hardening, and electric vehicle infrastructure deployment. A comprehensive list of infrastructure to support should include:

• Existing planned projects and deferred maintenance on public transit systems;
• Identified grid modernization or hardening programs in state resource plans;
• Accelerated smart grid expansion;
• Building retrofits for both energy efficiency and carbon emissions reduction;
• Electric charging stations; and
• Addressing methane leakage in pipeline systems.

Conclusion

At the Roosevelt Project, we are developing action plans for communities that experience significant industrial upheaval, particularly in the context of forthcoming energy transitions. Though these transitions will vary in their nature as a result of local socio-economic realities, access to or distance from natural resources, and exposure to various climate risks, the transitions will most acutely affect communities of working-class, low-income, under-educated Americans. Federal support for the deployment of shovel-ready energy infrastructure can support the creation of high-quality jobs. For infrastructure deployment to positively contribute to both decarbonization and job creation, projects must be targeted to regions that are likely to be affected by the transition. The adjustments to the DOE LPO proposed here offer one important tool for quickly deploying infrastructure in the next four years.

Summary

The United States leads the world in the market share – and ‘mindshare’ – of massive digital platforms in domains such as advertising, search, social media, e-commerce, and financial technologies. Each of these digital domains features one or two dominant market players who have become big through the ‘network effect,’ wherein large volumes of customer activity provide data inputs to make these platforms work even better. However, the gains that big players enjoy from the network effect often come at the expense of the platform’s customers. The network effect is further amplified by platform lock-in, whereby new platforms are unable to interoperate with existing market players. A more serious risk manifests when the dominant platform provider provides the same services as that of businesses using the platform, thus becoming a competitor with a built-in information advantage. This prevents new entrants to the market from growing big, limiting the choices available to consumers and creating the conditions for harmful monopolies to emerge.

Therefore, the Biden-Harris Administration should advocate for legislation and enact policies designed to bring openness and transparency into the digital platforms marketplace. A key aspect of such policies would be to require a set of interoperability standards for large digital platforms. Another would be to require open Application Programming Interfaces (APIs) that allow customers (end-users as well as businesses) to seamlessly take their data with them to competitors. These actions will unleash greater competition in the digital marketplaces that are becoming the mainstay of the US economy and increase transparency, choice and opportunities that the US consumer and businesses can benefit from.

Summary

The United States is an invention and innovation powerhouse that has long produced remarkable achievements. Yet American invention is at a crossroads today. After more than a half-century of unrivaled global leadership in basic science, innovation, and manufacturing, the U.S. is losing ground throughout the innovation pipeline across a wide range of sectors. The COVID-19 pandemic has exposed this vulnerability, making brutally clear the need for innovation to address major challenges that arise and highlighting weaknesses such as our dependency on global supply chains. A strong Invention Ecosystem can power our path to economic recovery, sustained growth and societal resilience.

This report explains the functions of the Invention Ecosystem, presenting a framework that highlights the ecosystem’s main components and the inventor and innovation pathways that 1) inspire and prepare students and future inventors to address crucial challenges and thrive and support the innovation economy, and 2) build and sustain today’s inventors and entrepreneurs to enable value creation from their ideas in the form of products and businesses. These pathways together will yield a pipeline of people and businesses that create jobs, foster resilient economies, and produce solutions to our most pressing challenges.

The ecosystem is outlined in four sections, represented by its distinct pillars including K-12 education, higher education, entrepreneurship and industry. Each section describes the role of the pillar, features specific challenges related to the ecosystem, and offers a set of discrete policy recommendations for a policymaker audience to extract and optimize the full value of U.S. innovation.

This report was produced by the Day One Project with support from the Lemelson Foundation.

Summary

Comprehensive and reliable mortality data is vital for public health research. Improving our infrastructure for managing these data will generate insights that promote longevity and healthy aging, as well as enable more effective response to rapidly evolving public health challenges like those posed by the COVID-19 pandemic. A modernized mortality data system will ultimately be self-sustaining through access fees, but will require federal investment to update state reporting infrastructure and data use agreements. The Biden-Harris administration should launch an effort to modernize our nation’s infrastructure for aggregating, managing, and providing research access to mortality data.

The COVID-19 pandemic has highlighted the urgent need to address lags in American pharmaceutical manufacturing. An investment of $5 billion over five years will improve U.S. pharmaceutical manufacturing infrastructure, including the development of new technologies that will enable the responsive, end-to-end, on-demand production of up to half of the Food and Drug Administration (FDA) list of 223 essential medicines by year two, and the entire portfolio by year five. Spearheading improvements in domestic manufacturing capacity, coupled with driving the advancement of new adaptive, on-demand, and other advanced medicine production technologies will ensure a safe, responsive, reliable, and affordable supply of quality medicines, improving access for all citizens, including vulnerable populations living in underserved urban communities, rural areas, and tribal territories.

Challenge and Opportunity

Urgent Need to Strengthen U.S. Pharmaceutical Manufacturing

COVID-19 has served as a wake-up call and an opportunity to bring pharmaceutical manufacturing into the 21st century. Production factory closures, shipping delays, shutdowns, trade limitations, and export bans have severely disrupted the supply chain. Yet the demand for vaccines and COVID-19 treatment options worldwide continues to increase. However, recent advances in manufacturing technology can be deployed to create a 21st century domestic pharmaceutical manufacturing economy that is distributed, flexible, and scalable, while producing consistent high-quality medicines that Americans rely on.

To improve national security and achieve the goal of medicine production self-sufficiency, the Biden-Harris Administration has an opportunity to address legacy issues plaguing the pharmaceutical manufacturing industry and usher in a technology revolution that will leapfrog our legacy 19th century industrial manufacturing processes. The Biden-Harris Administration should prioritize:

Improving the domestic production of small-molecule medicines, including Key Starting Materials (KSMs) and Active Pharmaceutical Ingredients (APIs) in order to reduce dependence on foreign manufacturers. China and India together supply 75- 80 percent of the APIs imported to the U.S.¹ In March, during the largest spring spike in U.S. COVID-19 cases, India restricted the export of 26 APIs as well as finished pharmaceuticals. The U.S is the leading market for generic pharmaceuticals, with 9 out of every 10 prescriptions filled being for generic drugs in 2019, and a projected market value of $415 billion by 2023.² An aggressive race to the bottom in terms of price has driven the vast majority of supply chain manufacturing overseas, where lower production costs and government subsidies, particularly for exports, benefit foreign suppliers.

Improving the scale, efficiency, and effectiveness of domestic biopharmaceutical manufacturing. The past decade has ushered in a significant shift in the nature of pharmaceutical products: there is now a greater prevalence of large molecule drugs, personalized therapeutics, and a rise in treatments for orphan diseases. New approaches to developing vaccines, such as the mRNA COVID-19 vaccine, are setting a new paradigm for future vaccines using DNA, RNA, adenoviruses, and proteins. There is an urgent need to scale up the domestic manufacturing of biologics, including vaccines, to address biomedical threats. In addition, innovation in manufacturing technology is critical to improving both scalability and time to market. New technology will improve yields while lowering costs and reduce waste through green chemistry.

Additional benefits associated with establishing a robust domestic manufacturing base, including distributed manufacturing capability, include:

Reducing vulnerabilities associated with an over-reliance on centralized manufacturing and processing models. In the food industry, a COVID-19 outbreak in just a few chicken and pork processing plants led to a nationwide shortage of these important foods. A more flexible, resilient distributed manufacturing model, such as one utilizing additive manufacturing and 3-D printing, would have prevented the need for such a disruptive response. 3-D printing, for example, has successfully delivered more than 1,000 parts to local hospitals during the pandemic.

Improving the reliability of facilities and the quality of products for the U.S. market through the development and deployment of advanced manufacturing technologies. Low-cost, offshore manufacturing raises quality risks; more than half of FDA warning letters issued between 2018 and 2019 were sent to facilities in India or China.4 There are numerous examples of risks to both the health and security of U.S. citizens in the recent past. In 2007, a Chinese company deliberately contaminated the blood thinner Heparin and 246 Americans died. In 2015, the FDA banned 29 products after inspecting a Chinese pharmaceutical factory, although it exempted 14 products over U.S. shortage concerns. And in 2018, a Chinese vaccine maker sold at least 250,000 substandard doses of vaccine for diphtheria, tetanus, and whooping cough.

Improving access for vulnerable populations living in underserved urban communities, rural areas, and tribal territories. COVID-19 created unprecedented pressure on the federal system when requests from 56 State, Local, Tribal, and Territorial (SLTT) authorities nearly simultaneously requested medical supplies. According to testimony presented by the RAND Corporation, the quantities of material in the Strategic National Stockpile (SNS) were not nearly enough to fill all of the requests, resulting in a heated competition and a failure to deliver products to all of the different parts of the United States equitably.

Reducing critical drug shortages that have plagued U.S. health systems for more than a decade. With COVID-19 cases on the rise, and hospitalizations increasing in more than 40 states, critical drug supplies are waning, with 29 out of 40 drugs used to combat the coronavirus currently in short supply. In addition, 43% of 156 acute care medicines used to treat various illnesses are running low. In 2019 the U.S. experienced 186 new drug shortages; 82% of which were classified as being due to “unknown” reasons, largely because of the intentional opacity and secrecy of the upstream supply chain. According to the Center for Infectious Disease Research and Policy (CIDRAP) the U.S. health system spends more than $500 million a year on estimated costs related to drug shortages, with approximately $200 million in direct costs and up to $360 million on indirect costs.

Stabilize pricing by enabling ‘just in time’ manufacturing capability that reduces the need to stockpile large supplies of medicines and is more responsive to surges in demand. Furthermore, complex supply chains, procurement mechanisms, and the consolidation of U.S. buyers create ‘pay-to-play’ schemes that contribute to chronic drug shortages by driving manufacturers out of the market and contribute to price volatility. New technologies that enable responsive and efficient approaches to surges in demand, or to address drug shortages, will also stabilize pricing over time. Today, one in four Americans cannot afford their medication. Mylan, for example, increased the price of EpiPen by more than 500%, from $94 for a two-dose pack in 2007 to $608 in 2018.

21st Century Problems Require 21st Century Solutions

Advanced manufacturing technologies such as continuous flow, which allows for drugs to be produced in a continuous stream, can reduce the time it takes to manufacture a drug and ensure quality through advanced controls and process analytic technologies. These technologies can enable remote monitoring during production and real-time release testing. In addition, miniaturized manufacturing units that could easily fit in existing pharmacies would facilitate a distributed network for producing medicines that is flexible enough to rapidly pivot and make any therapeutic required for national security or emergency preparedness with short lead times. A distributed network of on-demand pharmaceutical manufacturing devices will improve supply availability without the need to stockpile large quantities of medications.

Automation will play a key role in advanced pharmaceutical manufacturing, as will 3-D printing. Automation will reduce manufacturing overheads and ensure quality, scalability, and increased outputs. It allows advanced connectivity of equipment, people, processes, services, and supply chains. The 3-D printing of pharmaceutical products, meanwhile, is accelerating following the FDA’s approval of the first 3-D printed drug in 2015. This technology accommodates personalized doses and dosage forms and other emerging technologies that enable bespoke tablet sizes, dosages, and forms (suspension, wafers, gel strips, etc.) to optimize patient compliance and ease of use. Another major advantage is the possibility of redistributed manufacturing–printing medicine much closer to the patient. 3-D printing and on-the-spot drug fabrication will have major implications in medical countermeasures and for medications with limited shelf-life.

Finally, investing in advanced biopharmaceutical manufacturing infrastructure and innovation would establish the capacity to produce domestically through a network of high-tech, end-to-end manufacturing and development solutions, which will ensure that the medicines of today and tomorrow, such as new vaccines, can be made quickly, safely, and at scale.

Plan of Action

The Biden-Harris Administration should launch a national adaptive pharmaceutical manufacturing initiative focused on the ambitious goal of achieving medicine production self-sufficiency. The Presidential Initiative should be led by an Ambassador who reports to the Secretary of Defense. The Secretary of Defense is already leading a whole-of-government effort to assess risk, identify impacts, and propose recommendations in support of a healthy manufacturing and defense industrial base – a critical aspect of economic and national security. The Department of Defense (DoD) coordinates these efforts in partnership with the Departments of Commerce, Labor, Energy, and Homeland Security, and in consultation with the Department of the Interior, the Department of Health and Human Services (HHS), the Director of the Office of Management and Budget, and the Director of National Intelligence.

Clear deliverables and timeline-dependent milestones are critical to the success of this initiative. New local manufacturing solutions — such as state-of-the-art facilities and devices for automated end-to-end pharmaceuticals to be deployed in a trailer — can augment ongoing efforts to reduce manufacturing ramp-up time, the need for strict environmentally controlled secure storage facilities, and waste from expired medications. Having stand-alone or mobile devices for automated end-to-end pharmaceuticals would empower local authorities to manage delivery and distribution protocols, ensuring that local populations have the lifesaving medicines they need when they need them.

To this end, the DoD, in collaboration with HHS and the FDA, should launch a national initiative to increase U.S. manufacturing capacity and accelerate the development of new technology, with an emphasis on the adoption of advanced analytical capabilities to ensure quality. These platforms should be able to produce precursors, APIs, and final drug products (small molecule and biologics) in multiple forms, enabling rapid response priority medicines on demand, targeting the creation of a self-sustaining domestic supply chain of the 223 medicines on the FDA Essential Medicines list, as well as new vaccines and medicines coming off patent in the next 5 years.

The establishment of a national pharmaceutical manufacturing network will facilitate a U.S. strategic asset that changes how we source, manufacture, and distribute medicines. This robust domestic network will mitigate drug shortages, ensure quality, and allow rapid response to emergency scenarios. Importantly, it re-establishes a domestic pharmaceutical manufacturing industry that relies less on overseas suppliers, advances our country’s innovation prowess, and will create thousands of new U.S. jobs.

Recommendations for the Department of Health and Human Services and the Department of Defense

To enable a more resilient, responsive and adaptive U.S. pharmaceutical supply chain and achieve medicine production self-sufficiency, the following actions are recommended.

First, sign an executive order that directs the formation of a Joint Interagency Task Force (JIATF) DoD, HHS and FDA, led by a Presidential appointee (Ambassador), with a $5 billion, 5-year funding commitment, to establish a more robust domestic responsiveness that includes advanced manufacturing technologies for biologics and small molecules. A key objective of the executive order and the formation of a JIATF is to ensure the U.S. can produce medicines stateside with improved responsiveness.

This initiative will:

• Identify a portfolio of products that can be rapidly deployed at a national, state or local level utilizing advanced manufacturing platforms, identify associated research and development agenda needs, and determine how this aligns with other initiatives such as the Strategic National Stockpile.
• Support targeted synthetic biology research and development to enable faster manufacturing of low-cost, on-demand vaccines and precision immunotherapies.
• Support the advanced development of green, modular, on-demand small-molecule manufacturing technologies that would accommodate small batch lines, with an ability to scale and produce higher volume when needed. • Support targeted advanced development of sensor technologies that can monitor online and real-time quality control.
• Support the acquisition and/or establishment of new U.S.-based manufacturing facilities.
• Support green technology solutions.
• Establish a center for excellence in advanced manufacturing at the FDA, to support and advance regulatory science.
• Identify new business models to support the economically sustainable domestic adoption and deployment of new manufacturing technology.
• Enact push and pull incentives to direct new medical countermeasure development funded by HHS (Biomedical Advanced Research and Development Authority, BARDA) and other federal agencies to utilize adaptive manufacturing practices as appropriate.

Key milestones and deliverables of this initiative include the following:

1. By year 2, ensure that 50% of the FDA’s Essential Medicines are manufactured from end-to-end in the United States, to include starting materials and APIs.
2. By Year 5, the FDA will have the capability to manufacture all Essential Medicines in the United States.
3. In this same time frame, the quality of every dose of the medicines produced can be provided to the FDA for oversight.
4. All starting materials are sourced domestically or from trusted allied nations.

Conclusion 

Expanding critical U.S. pharmaceutical manufacturing infrastructure and establishing an adaptive, transparent on-demand pharmaceutical manufacturing capability guarantees safe, secure, high-quality, and reliable supply of affordable drugs and would create thousands of new U.S. high-paying jobs. By utilizing green technology, it could reduce hazardous material waste by as much as 30 percent over conventional manufacturing. It would also improve transparency and supply chain efficiencies that could reduce shortages, lower costs, and improve the quality of medicines. A distributed, modular, on-demand manufacturing network capable of making biologics and small molecules cannot be disrupted by the loss of centralized facilities, natural disasters, pandemics, or adversarial actions. New local on-demand manufacturing solutions will reduce manufacturing ramp-up time, the need for strict environmentally-controlled secure storage facilities, and waste from expired medications. It will empower local authorities to manage delivery and distribution protocols, ensuring that local populations have the lifesaving medicines they need when they need them. In addition, it would offer the potential to improve warfighter resilience and recovery by providing the groundwork for producing medicines on demand, and at the point of care, whether it be on a C-5, submarine, or at a forward combat support hospital.

Summary

The Biden-Harris Administration should establish a National DeepTech Capital Fund (NDTC Fund) to bridge capital gaps and enable more DeepTech entrepreneurs to bring promising and beneficial technologies to market. 

Greater investment in DeepTech is critical in order to return the United States to the forefront of advanced science and technology research and development (R&D). “DeepTech” refers to companies and innovators building science-based, or R&D-based, products and services including hardware and advanced materials, robotics, manufacturing, and biotech. U.S. government investment in technology has declined by two-thirds in the past decades. Private capital typically eschews investment in advanced technologies, due to a combination of the additional expertise needed for and risks inherent to advanced-technology investment. Silicon Valley’s early days were cushioned by government risk capital at a time when the private sector could not see the value of investing in R&D. But relying entirely on Silicon Valley to drive investment in innovation has led the U.S. to a point where it risks being replaced by other innovation centers such as China. A National DeepTech Capital Fund would encourage and enable investment in companies building solutions to society’s greatest challenges, while ensuring that the United States remains at the center of global innovation.

Summary

Science and technology (S&T) must play a prominent and strategic role at all levels of United States foreign policy. On Day One, the Biden-Harris Administration should reinvigorate and reassert U.S. strength in science, technology, and data-driven decision making. S&T issues at the Department of State (Department) have historically been concentrated into specific offices and personnel, which has constrained the use of S&T as a tool to advance U.S. foreign policy goals. On Day One, the Administration can better identify, allocate, and elevate S&T issues and personnel throughout the Department. Building and rewarding diverse teams with the right mix of skills is good management for any organization, and could create significant progress toward breaking down the silos that prevent the realization of the full benefits of the S&T expertise that already exists among U.S diplomatic personnel.