The role of the National Bureau of standards in supporting industrial innovation

The role of the National Bureau of Standards is analyzed within the context of the innovation process and the various rationales for government support of this process. Industry is found to systematically underinvest in evaluated data and such nonproprietary technologies as measurement and test methods. Underinvestment by industry in measurement-related data and technologies results from both the nonproprietary character of these “infratechnologies” and from the existence of economies of scale and scope in the research process required to produce them. Efficiency gains therefore exist from provision of these infratechnologies by a single government laboratory. Much of the measurement technology developed by NBS is adopted by industry in the form of voluntary standards, which play the important economic roles of information provision, compatibility, variety reduction, and quality assurance. Role criteria are synthesized, based on the nature of the underinvestment phenomena, for a government laboratory conducting and transferring measurement-related data and technologies across a wide range of economic sectors. Industry impact studies of the NBS economic roles indicate aggregate rates of return at least as high as the average return from private sector innovations. Data and measurement technologies are found to leverage private sector activity at all stages of the technological change process: R&D, production, and market development. Finally, the nature of strategic planning for implementing the NBS role has some similarities with corporate strategic planning, but also has some unique elements due to the “public good” nature of the research output. Future technical and economic trends will affect government economic growth policies and thus NBS, which is itself an instrument of government policy as part of the technological infrastructure.