Value Of Space Technology Transfer Assessed By RFF

April 03, 1997

WASHINGTON, DC -- As the launch date nears for the first commercial remote sensing satellite, Resources for the Future (RFF)is helping the National Aeronautics and Space Administration (NASA) find a reliable way to measure the economic return from its transfer of formerly-classified space technologies to the public and private sectors.

RFF's Molly Macauley, with support from NASA, is studying the economic implications and commercial possibilities of satellite remote sensing. She is using methods that have been developed by RFF for the valuation of hard-to-measure assets, such as clean air or a national park.

"NASA must now give Congress and the American public evidence of the gains from the agency's investments in technology research and development," says Macauley. "We're trying to find a good way for the government to accurately assess the value of these new technologies that were developed in government labs when they are applied to commercial ventures and not exchanged using traditional market prices."

"This is a formidable task because so much of NASA's research and development involves the pursuit of scientific knowledge, say, through planetary exploration," says Macauley. "For example, how do you determine the value of information about the Earth's climate gleaned from some of the observations that the new remote sensing satellites will make? Such intangible benefits must be carefully modeled and measured."

In some NASA programs, value has been measured by the increase in productivity within a firm that utilizes government technology or increases in the size of its commercial market as a result of offering a new product or service. It also has been quantified when firms, using government funds, develop new technologies that are then used by government agencies to improve their own performance. But there is no uniform agreement nor workable approaches for measuring the returns the government can expect to recoup from technology transfers, says Macauley.

Macauley is also addressing the legal and political questions, involving such issues as privacy and national sovereignty, raised by the government's decision to license remote sensing technology. Her earlier research with colleague Timothy Brennan, currently on leave from RFF to serve as a staff member in the President's Council of Economic Advisors, on privacy issues suggests that the new satellites should be neither banned nor unregulated. Rather, a middle ground can be staked out under the prevailing legal standard in the U.S. that gives individuals "a reasonable expectation of privacy."

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In addition to her research on technology transfer and remote sensing, Macauley is working with RFF researchers Michael Toman, David Austin, and David Simpson to assess ways that NASA's Jet Propulsion Laboratory (JPL) can measure the benefits and costs of international participation in U.S. government-funded research and development. In a separate project for JPL, Macauley and Austin co-chaired a workshop this past winter on measuring the economic return to government-funded space activities. The two researchers also have a grant from the California Institute of Technology for broader research into the economics of space technologies.

Macauley has authored two op-ed essays on space-related issues: "A Merger of Science and Commerce" (Space News, 3/31-4/6/97) discusses an opportunity for unprecedented collaboration between climate change researchers and the emerging commercial remote sensing industry with NASA's expected offer of $50 million for researchers to purchase climate data from private sources rather than government ones; and, "Managing Orbital Debris" (Space News, 9/30/96) discusses the rapidly growing problem of space junk and various options for regulating space activity and mitigating space debris.

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Satellite remote sensing is the collection of data on land use, industrial activity, weather, climate, geology and other processes through Earth observations from satellites in outer space. Until recently, remote sensing was used but by a few nations to spy from outer space on the military activities of other nations.

Today, as many as a dozen commercial remote sensing satellites, licensed to private American companies by the U.S. Department of Commerce, may go into orbit over the next decade. The first satellite is scheduled to be launched in Spring 1997 by Earth Watch, a subsidiary of Bell Aerospace.

For the first time, American commercial spacecraft will have the right to zero in on objects as small as an automobile and sell the resulting images to anyone who cares to purchase them. The images are estimated to cost as little as a few hundred dollars and are foreseen to have many purposes, including cartography, disaster relief, law enforcement, environmental compliance monitoring, oil exploration, and urban planning. Current restrictions are few, and include the government's right to require companies to turn off commercial cameras during war or international tension and its right to deny access to some foreign customers.

Technology transfer is the process by which existing knowledge, facilities or capabilities developed under federal research and development funding are utilized to fulfill public and private needs. It includes a range of formal and informal cooperations between federal laboratories and the public and private sectors. The purpose of the transfer is to strengthen the nation's economy by accelerating the application of federal laboratory technology and resources to private and public needs and opportunities. Results of successful technology transfer efforts include product improvement, service efficiencies, improved manufacturing processes, joint development to address government and private sector needs, and the development of major new products for the international marketplace.

The federal funding of commercial spinoffs for technologies such as remote sensing is a relatively new but growing trend. Since about 1980, Congress has written legislation supporting government agencies that promote technology transfers, and significant federal funding has also been allocated expressly to technology transfer projects. For example, by 1994, this support totaled nearly $2.7 billion and involved more than 70 programs at 10 agencies. However, such funding has been controversial, with critics questioning why taxpayers should underwrite commercial ventures. If the government-developed technologies have the potential to be commercial successes, these critics argue that private companies should develop the markets using their own money.

While such opposition has eliminated some activities and reduced the budgets of others, a host of arguments are used to fuel federal involvement. These include concerns about international industrial competitiveness, a desire by taxpayers to maximize the value of federal investments in science and technology, and the military's increasing dependence on civilian technologies.

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Resources for the Future (RFF)

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