[House Hearing, 106 Congress]
[From the U.S. Government Printing Office]





EMERGING TECHNOLOGIES: WHERE IS THE FEDERAL GOVERNMENT ON THE HIGH TECH 
                                 CURVE?

=======================================================================

                                HEARING

                               before the

                 SUBCOMMITTEE ON GOVERNMENT MANAGEMENT,
                      INFORMATION, AND TECHNOLOGY

                                 of the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 24, 2000

                               __________

                           Serial No. 106-197

                               __________

       Printed for the use of the Committee on Government Reform


  Available via the World Wide Web: http://www.gpo.gov/congress/house
                      http://www.house.gov/reform

                                 ______

                    U.S. GOVERNMENT PRINTING OFFICE
70-548 DTP                  WASHINGTON : 2001
_______________________________________________________________________
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                     COMMITTEE ON GOVERNMENT REFORM

                     DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York         HENRY A. WAXMAN, California
CONSTANCE A. MORELLA, Maryland       TOM LANTOS, California
CHRISTOPHER SHAYS, Connecticut       ROBERT E. WISE, Jr., West Virginia
ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
STEPHEN HORN, California             PAUL E. KANJORSKI, Pennsylvania
JOHN L. MICA, Florida                PATSY T. MINK, Hawaii
THOMAS M. DAVIS, Virginia            CAROLYN B. MALONEY, New York
DAVID M. McINTOSH, Indiana           ELEANOR HOLMES NORTON, Washington, 
MARK E. SOUDER, Indiana                  DC
JOE SCARBOROUGH, Florida             CHAKA FATTAH, Pennsylvania
STEVEN C. LaTOURETTE, Ohio           ELIJAH E. CUMMINGS, Maryland
MARSHALL ``MARK'' SANFORD, South     DENNIS J. KUCINICH, Ohio
    Carolina                         ROD R. BLAGOJEVICH, Illinois
BOB BARR, Georgia                    DANNY K. DAVIS, Illinois
DAN MILLER, Florida                  JOHN F. TIERNEY, Massachusetts
ASA HUTCHINSON, Arkansas             JIM TURNER, Texas
LEE TERRY, Nebraska                  THOMAS H. ALLEN, Maine
JUDY BIGGERT, Illinois               HAROLD E. FORD, Jr., Tennessee
GREG WALDEN, Oregon                  JANICE D. SCHAKOWSKY, Illinois
DOUG OSE, California                             ------
PAUL RYAN, Wisconsin                 BERNARD SANDERS, Vermont 
HELEN CHENOWETH-HAGE, Idaho              (Independent)
DAVID VITTER, Louisiana


                      Kevin Binger, Staff Director
                 Daniel R. Moll, Deputy Staff Director
           David A. Kass, Deputy Counsel and Parliamentarian
                    Lisa Smith Arafune, Chief Clerk
                 Phil Schiliro, Minority Staff Director
                                 ------                                

   Subcommittee on Government Management, Information, and Technology

                   STEPHEN HORN, California, Chairman
JUDY BIGGERT, Illinois               JIM TURNER, Texas
THOMAS M. DAVIS, Virginia            PAUL E. KANJORSKI, Pennsylvania
GREG WALDEN, Oregon                  MAJOR R. OWENS, New York
DOUG OSE, California                 PATSY T. MINK, Hawaii
PAUL RYAN, Wisconsin                 CAROLYN B. MALONEY, New York

                               Ex Officio

DAN BURTON, Indiana                  HENRY A. WAXMAN, California
          J. Russell George, Staff Director and Chief Counsel
                Bonnie Heald, Professional Staff Member
                           Bryan Sisk, Clerk




                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on April 24, 2000...................................     1
Statement of:
    Davies, Richard N., president and chairman, Western Disaster 
      Center, Inc................................................    66
    Huttner, Susanne L., Ph.D., director, industry-university 
      cooperative research program, University of California.....    71
    Louie, Gilman, president and chief executive officer, In-Q-
      Tel........................................................    14
    Popper, Dr. Steven W., associate director, Science and 
      Technology Policy Institute, RAND..........................    31
    Rudee, Lea, Ph.D., director of the fellows program, 
      California Council on Science and Technology...............    83
    Shank, Dr. Charles V., director, Lawrence Berkeley National 
      Laboratory.................................................    24
    Venneri, Sam, Associate Administrator for Aero-Space 
      Technology, National Aeronautics and Space Administration..     4
    Vorreiter, Patricia, mayor, city of Sunnyvale, CA............    48
    Williams, J. Richard, Ph.D., P.E., professor of mechanical 
      and aerospace engineering, California State University.....    59
Letters, statements, etc., submitted for the record by:
    Davies, Richard N., president and chairman, Western Disaster 
      Center, Inc,, prepared statement of........................    69
    Horn, Hon. Stephen, a Representative in Congress from the 
      State of California, prepared statement of.................     3
    Huttner, Susanne L., Ph.D., director, industry-university 
      cooperative research program, University of California, 
      prepared statement of......................................    76
    Louie, Gilman, president and chief executive officer, In-Q-
      Tel, prepared statement of.................................    19
    Popper, Dr. Steven W., associate director, Science and 
      Technology Policy Institute, RAND, prepared statement of...    35
    Rudee, Lea, Ph.D., director of the fellows program, 
      California Council on Science and Technology, prepared 
      statement of...............................................    85
    Shank, Dr. Charles V., director, Lawrence Berkeley National 
      Laboratory, prepared statement of..........................    27
    Venneri, Sam, Associate Administrator for Aero-Space 
      Technology, National Aeronautics and Space Administration, 
      prepared statement of......................................     8
    Vorreiter, Patricia, mayor, city of Sunnyvale, CA, prepared 
      statement of...............................................    52
    Williams, J. Richard, Ph.D., P.E., professor of mechanical 
      and aerospace engineering, California State University, 
      prepared statement of......................................    63

 
EMERGING TECHNOLOGIES: WHERE IS THE FEDERAL GOVERNMENT ON THE HIGH TECH 
                                 CURVE?

                              ----------                              


                         MONDAY, APRIL 24, 2000

                  House of Representatives,
Subcommittee on Government Management, Information, 
                                    and Technology,
                            Committee on Government Reform,
                                                      San Jose, CA.
    The subcommittee met, pursuant to notice, at 10 a.m., at 
the NASA Ames Research Center, Building 3, Moffett Field, San 
Jose, CA, Hon. Stephen Horn (chairman of the subcommittee) 
presiding.
    Present: Representatives Horn and Ose.
    Staff present: J. Russell George, staff director; Bonnie 
Heald, professional staff member; and Bryan Sisk, clerk.
    Mr. Horn. The hearing of the Subcommittee on Government 
Management, Information, and Technology is called to order.
    Mr. Ose is on his way, should be here in 10, 15 minutes, 
and will join us, and perhaps some of the local members will 
join us.
    But we are here today to take a glimpse into the future. 
Many of our witnesses are leading expeditions into the new 
frontiers of science, from newer, faster computer power to the 
most fundamental elements of life. This diverse array of 
expertise is woven together through their scientific research 
that will profoundly affect the society in the 21st century and 
beyond.
    Despite technological advancements in other nations, the 
United States remains very solid in terms of its scientific 
research. It is vital to the Nation's economy and social fabric 
that it retains that lead.
    We will examine the Federal Government's role in this 
hearing and a whole series of hearings probably in Washington 
and some in the field in terms of the Nation's wealth of 
emerging technology. We want to know what type of governmental 
policies are needed, if any, to encourage scientific research 
and what policies may have a chilling effect on innovative 
scientific pursuits.
    Over the past several years, the subcommittee has learned 
that antiquated computer systems have inhibited the departments 
and agencies of the executive branch from being the efficient, 
effective, and financially accountable agencies that taxpayers 
want and deserve.
    NASA, I might say, is a rare exception from some of the 
agencies that are not working well. We give them an A in terms 
of their financial management. We give them an A in any numbers 
of areas. So it is great to be at this center.
    Today we will examine some of the emerging technologies 
that may enhance government operations and operations generally 
all over the Nation, and thus benefit the American people.
    We welcome our witnesses today. Let me tell you a little 
bit about how this subcommittee works. This is the Subcommittee 
on Government Management, Information, and Technology. I am 
Stephen Horn, the chairman.
    [The prepared statement of Hon. Stephen Horn follows:]
    [GRAPHIC] [TIFF OMITTED] T0548.001
    
    Mr. Horn. Mr. Ose is one of our key members who will arrive 
here soon, and we are delighted to have this wonderful group of 
witnesses, and I thank Samuel Venneri, Associate Administrator 
for Aero-space Technology of the National Aeronautics and Space 
Administration, whose help has been very invaluable, and I 
might add that the way we do business is we call on you in the 
agenda, and once we call on you, your full statement is 
automatically in the record. So you do not have to request it. 
It goes into the record.
    We would like you to look us in the eye and summarize it in 
5 to 10 minutes if you could because we cannot just read the 
statements or we will be here until midnight. So we would 
appreciate that if you could just summarize them, and your full 
statement will be here for the record and printed and will be 
part of a report that we will give to the full House of 
Representatives.
    And I might add that we will also keep the record open for 
another week at the end of this so that any of you going home 
after the meeting who want to write something else, you can 
file it with us, and anybody in the audience or other people in 
Silicon Valley, we would welcome the comments on this area.
    We do as a tradition in the Government Reform Committee 
have all witnesses swear and affirm to an oath, and that is to 
tell the truth. So if you would stand and raise your right 
hands, and if there is anybody also behind you, some of your 
people that might talk, get them to stand, too, so that I do 
not have to have three baptisms going here.
    [Witnesses sworn.]
    Mr. Horn. The clerk will note that the nine witnesses have 
affirmed the oath.
    And we are delighted to start with Samuel Venneri, 
Associate Administrator for Aero-space Technology, National 
Aeronautics and Space Administration.

  STATEMENT OF SAM VENNERI, ASSOCIATE ADMINISTRATOR FOR AERO-
SPACE TECHNOLOGY, NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

    Mr. Venneri. OK. Thank you, Congressman.
    It is a pleasure to be here. If it's OK, I would like to 
use some audiovisual to summarize the written statement we 
turned in.
    Mr. Horn. Please proceed.
    Mr. Venneri. Well, yeah. Thank you, again, for the 
opportunity to do this.
    And like I said, our written statement is turned in for the 
record, as you mentioned.
    What I'd like to do today is talk about the technology for 
the 21st Century. We have a $2 billion technology budget in 
NASA, but what I want to focus on is really what we see as the 
revolutionary technology for the next century, including where 
the next industrial base is coming from, and we look at it as 
three primary areas: biotechnology, nano technology, and 
information technology.
    But the way we're structuring it is really look at the 
synergistic coupling between those areas and the type of 
products that you can achieve if one develops each leg of this 
triangle and then looking at the implications of integrating 
these technologies at a system level. But you see at the middle 
is really where we're moving toward, putting intelligence, 
evolvability, and adaptive both at the system level and 
subsystem level of what I mean by this new technology base, and 
I'll illustrate that as I go forward.
    This is an example of the breakthrough in nano technology. 
What you see here are carbon nano tubes that were accidentally 
invented in 1992 at NEC by the Japanese. Subsequently there's 
investments going around the world, both the United States, 
Europe, and Asia, dealing with understanding this phenomenon, 
and what does this mean in terms of the implication to both 
electronics and structures?
    And the key difference is you're looking at things that are 
on the order of atom's size, and for the first time we're 
talking about building things from atoms up, not etching 
material down, and as for structural applications, we run the 
numbers, and if we could make a graphite composite out of 
carbon nano tubes, you would have something that would be 100 
times the strength of steel at only one-sixth the weight.
    And for us, a single staged orbit space vehicle would have 
its weight cut in half if that material was available today.
    This is really what I meant to illustrate in terms of this 
idea of building from the atom up. We're really not starting at 
the end item here of a system of a final vehicle, but, in 
effect, building the system, the electronics, really at the 
quantum level, and building this idea of thinking into the 
system.
    So think of this as our future spacecraft and other 
products other than aerospace would really have a central 
nervous system, a hierarchy of intelligence and evolvability, 
repairability as you start to move some of the biologically 
based systems together.
    And, again, what this means is the era of using silicon as 
our only source of developing the next computer opens up the 
whole possibility of quantum computing, hybrid computing that 
actually brings DNA into a computing algorithm, and really 
moves us into approaching what the brain can do today and the 
massive amount of information we can process.
    One of the things we're also looking at in this information 
world, and this kind of gives you an example, future developers 
will be basically manipulating and visualizing processes at the 
atomic scale, and that's basically how all structures are put 
together.
    Failure mechanisms start really at the atomic level. We 
tend to have engineering theories today that approximate that 
behavior, but fundamentally we would be working at that sources 
and, in effect, using nano tweezers to move this material 
around.
    One of the aspects that I want to illustrate this as part 
of this revolution in information, if I compared where we are 
today with the e-commerce, the Internet, this is like 
television in the 1930's as far as the impact on society and 
what does it mean. So you haven't seen anything as to what the 
true Information Age is going to mean in terms of the impact 
not only in our products, but in society as a total.
    And what I depict here is something that shows researchers 
and working with an intelligent agent. This young woman 
manifesting itself is really our idea of what the ultimate in 
intelligent agent would be, where you're talking in a natural 
language. You're visualizing your product. You're walking 
through the product at any scale. This is the sort of thing you 
would have to have if you were going to build a nano device up, 
but more importantly, how people work and interact in the 
computing environment.
    We don't deal in our everyday life sitting at keyboards and 
artificially constraining our senses in our everyday life. So 
we're looking at how our full human senses can be brought into 
the information technology of the future.
    This is an example of some of the things from our 
perspective of what nano and biotechnology means and where you 
start looking in terms of our systems, from nano structured 
engineering to this idea of biomimetics, where you're starting 
to mimic engineering functionality with biological processes 
and perhaps even looking at something like artificial DNA being 
used for us to have our spacecraft, in effect, repair and 
replicate themselves.
    And this is really kind of a more detailed listing of the 
type of things we would do, from smart materials, electronics, 
the human centered computing systems that I showed that 
illustration of people working with the computing environment 
differently with multi-faceted interfaces. This has huge 
implications of how we do space missions and how we actually do 
the thing that we have the most concern about, of humans and 
long duration space missions.
    How do we see that they get the health care that they need 
when there's no lifeline tied to Earth? So we clearly have to 
revolutionize the technology, which again brings it back down 
to what we would do on Earth.
    Now, last week we just signed an agreement with the 
National Cancer Institute in terms of a cooperative program in 
technology dealing with aspects of what I'm referring to here. 
They're interested obviously in cancer detection and treatment, 
and we talk about these nano phased materials coupled to 
biology. You start to thinking about treatment now at the 
cellular level, not dosing whole bodies with chemotherapy.
    So you're looking at manipulation and dealing things at 
single individual cells and being able to implant vaccines and 
dosages into the cell. Now, again, we're doing it from human 
space flight. It has huge implications to health care delivery 
systems that's totally different than what we've done up to 
now.
    And so in summary here, we're really looking at this 
revolutionary technology vision, this zone of convergence, as 
we call it, which is really taking three distinct industrial 
bases today, looking at where that industrial base is going, 
and then creating of an industrial base of the future that is 
within each of these legs that I have depicted.
    But, more importantly, it's going to really create a 
baseline of the 21st century industry based on the research 
that's being developed today.
    And I want to leave this on a summary though. The first 
bullet said that's what we're really looking at. These three 
areas will impact all of society and the world.
    It's going to really require a new industrial base. As I 
said, these materials are not made for structural applications 
the way we make today, and we're no longer talking about a 
silicon based computing industry. So you really are looking at 
a new industrial baseline that hasn't been generated yet, and 
the educational system.
    The training of the work force of the future is an absolute 
requirement to work with the universities today, and our 
secondary schools in bringing the work force and the society 
that understands this technology push will be the society that 
reaps the economic benefits of the future.
    We're working, innovative government, academia, industry 
partnerships today. We clearly would like to work with an 
industry that really doesn't exist today to produce and make in 
bulk property these carbon nano tubes so that we could start 
looking at structural applications, as well as electronic 
applications in these systems.
    And the last bullet on here, it's something we've been 
thinking about, and I just want to mention what we are going to 
implement. Obviously when I had that first chart, I used the 
word ``intelligence evolvability`` of some of our systems. 
That's getting close to human ethics, and it's getting close to 
concerns if you look what happened with these genetic plant 
materials. I think if things would have been addressed 
differently then, you wouldn't have this uproar today over this 
misunderstanding about genetically engineered crops.
    We have that same concern when we start talking about 
attributes of intelligence in our systems. So we're forming a 
technology ethics subcommittee under the NASA advisory 
committee structure. This is the way the NASA Administrator 
gets outside input from a very formal, structured way of 
bringing people from industry, universities into NASA.
    We're going to form a subset under some or with some 
religious leadership involved in that to really look at this 
whole idea of technology ethics in the future and to make sure 
that we look at the implications of some of these technologies 
that we're describing today as our vision for 5 to 10 years 
from now, that we're on solid ground that the ethics of 
technology and how it's applied, how it could be misused is 
also addressed from the grassroots, from the day that we start.
    So thank you very much for this opportunity, and you know I 
would entertain any comments today now.
    [The prepared statement of Mr. Venneri follows:]
    [GRAPHIC] [TIFF OMITTED] T0548.002
    
    [GRAPHIC] [TIFF OMITTED] T0548.003
    
    [GRAPHIC] [TIFF OMITTED] T0548.004
    
    [GRAPHIC] [TIFF OMITTED] T0548.005
    
    [GRAPHIC] [TIFF OMITTED] T0548.006
    
    [GRAPHIC] [TIFF OMITTED] T0548.007
    
    Mr. Horn. Well, thank you very much.
    Can you hear me in the back? I do not know how these 
microphones work, but here we are. Now it might work.
    You have mentioned the information technology. You have 
mentioned the biotechnology. I would like you to spend just a 
few paragraphs because I think the one that people do not 
understand at this point is the nano technology. So if you 
could just pull together a few nonscientific paragraphs of what 
this all means, I would appreciate it.
    Mr. Venneri. OK. Ever since, you know, the beginning of 
time, we've had people look at material development. I guess it 
goes back to King Arthur days of making better steel. Up 
through the 1950's and 1960's, we have a whole engineering 
technology baseline of making metals, making things out of 
plastics.
    And what we tend to do is we develop understanding of 
processing at that scale that's really at a level above 
molecular level. What we found is that we can artificially 
produce fundamental building blocks of material for both 
electronic and structurally that the world has never seen 
before.
    This was projected in ideas that you could make atom type 
little building blocks. You have the fundamental, strongest 
material because everything here in this room is made 
fundamentally of atoms joining.
    For the first time we're able to build, replicate, and have 
a manufacturing process that makes these tubes the same way 
every time you turn the process on. You know, in anything that 
you're going to make commercially, you have a process that has 
to be repeatable. It can't be a one time fluke in a laboratory.
    So what we can do is manufacture carbon bits that are on 
the order of a few atoms in size, and then be able to 
manipulate and make these things form up, and hopefully by next 
year, we would like to be able to have carbon nano tube fibers, 
equivalent to what you see graphite fibers today, the things 
that you see in airplanes and golf clubs.
    And we will have a material system that is absolutely built 
upward from atoms, not being formed at another scale and size. 
So we're talking about designing, working, and manipulating 
fundamental bits of things that are like manipulating atoms, 
and that's the major difference.
    When you hear the word ``nano technology,`` what people are 
referring to is manipulating things at the atomic scale, not on 
another scale going higher up in feature size.
    Mr. Horn. I thank you for that. That is very helpful.
    Our next witness is Gilman Louie, the president, chief 
executive officer of In-Q-Tel.
    It is a pleasure to have you here.

   STATEMENT OF GILMAN LOUIE, PRESIDENT AND CHIEF EXECUTIVE 
                       OFFICER, IN-Q-TEL

    Mr. Louie. Thank you, Mr. Chairman. I appreciate the time 
and the effort the committee has put to allow us to speak 
today.
    I have some overheads and some graphics that will help us 
through my presentation.
    I just want to start off by saying that In-Q-Tel is a 
nonprofit corporation, formed for the express purpose of 
helping the CIA, was chartered by the CIA, to find and acquire 
new technologies using methods that the technology sector uses 
today to develop and acquire new technologies for the 21st 
century.
    Next slide, please.
    Now, the CIA has a five-step process in which it uses to 
collect, process, and disseminate information, and do its 
analytical work, and what the CIA has realized is that unlike 
over the last 30 years in which information technology was an 
important tool, going forward it's going to be a requirement 
for its basic core mission of operations, and without adequate 
information technologies, the CIA will not be able to perform 
its central and core mission in providing useful information 
and analytical information to the President and to the staff in 
order to make good decisions for the government.
    Next slide, please.
    Now, the CIA has a lot of challenges. Fundamentally, if you 
were to look at the CIA as you would look at many of the other 
Federal institutions, you would find that its information 
technology infrastructure is lagging behind best commercial 
practices today. It was very much built in the 1950's and the 
1960's around the concept of providing information in a secure 
fashion and protecting its information, and its fundamental 
security is based on what we call air gaps, the physical 
removal of the systems, the information systems, from the 
outside world.
    The challenge today is that more and more of the 
information, particularly open source information, comes from 
the outside world, and whereas this air gap used to provide a 
level of protection for the CIA, it's now inhibiting its 
ability to complete its mission and for it to get the 
information on a timely basis.
    Next slide, please.
    Now, the CIA, as expressed to In-Q-Tel, and you have to 
remember that In-Q-Tel is one of many solutions that the agency 
is looking toward to provide a vehicle to get the best quality 
of information technology into the agency.
    Our focus, we focus on four primary areas: the safe and 
secure use of the Internet; information security; how to use 
attributed architecture; and how to bridge those distributed 
architectures from within the agency; and how to provide 
knowledge from all of the terabytes of data that it collects.
    Next slide, please.
    One of the things that we realized is that when we began to 
look at the CIA's fundamental problems, it's that the agency's 
value is not so much that it has an ability to give contracts 
and spend money, but the problems themselves have huge 
commercial values, and what I mean by that is if a commercial 
company or group of commercial companies are able to solve some 
of the problems that are core to the agency's information 
technology needs, those organizations would have what we call 
first mover advantages in the marketplaces.
    So if you were to look at the CIA, you would say, ``Gee, 
its current technology infrastructure is behind the curve, but 
its needs are ahead of the curve.``
    And what In-Q-Tel's mission is to do is to focus in on the 
intersection where there is commercial world needs to agency 
problems. The agency has other information technology problems 
that do not have commercial viability. Those are being served 
by other organizations within the agency.
    We're focusing in on the intersection of those two spheres.
    Next slide, please.
    Now, what is our role? There's been a lot of press about 
In-Q-Tel being a venture capital fund. Let me first start off 
by saying we're more of a solutions house. The reason why the 
nomenclature of venture capital was pinned to our title is 
fundamentally that's the language of the Valley. That's the 
language of information technology. That's the language of the 
12 different high tech centers throughout this country that 
they understand.
    We are really a combination, a hybrid between a strategic 
venture capitalist like a corporate venture capital fund, and 
an incubator, and we use incubating techniques, which is 
nurturing companies to solve the problems of the agencies and 
help them through their development path that also brings their 
products to a commercial world.
    Now, that has a huge advantage for the CIA. In the old days 
the CIA would give out contracts directly to individual 
contractors and professional services organizations, of which a 
solution would solve a particular problem.
    The problem with that model is it requires 100 percent of 
the dollars from government to supply to those organizations to 
solve the problems.
    On top of that, the total cost of ownership is much higher 
than if government was able to get commercial companies to 
build off-the-shelf solutions, in which COTS could be an 
effective tool of solving the agency's problems and using 
industry standards to provide a natural form of migration, of 
upgrades, and migration of technologies.
    Next slide, please.
    So why venture capital? Why not other models? Why not use 
an FFRDC? Why not create a research center? Why not create and 
just simply streamline our ability to acquire technology and 
streamline the FAR?
    I think fundamentally today as you look around at the 
landscape of this country and also the global economy was it 
moves to a knowledge based economy, we're beginning to realize 
that what's driving corporations is no longer simply the 
ability to turn a profit, but to build a new paradigm in which 
knowledge had value.
    And if you look at that, you have to begin to realize that 
you need to align the strategic needs of corporations with that 
of your problem set, and if you're successful and if you're 
able to do so, you'll be able to leverage not only your own 
government dollars, but commercial dollars, commercial 
research, commercial talent, who today is not particularly 
interested in doing government contracting, who's out pursuing 
the Dot.com universe and the knowledge based universe that 
we're beginning to create around it, and if we don't align that 
language with the way government operates, it will never be 
able to get in front of the power curve.
    Next slide, please.
    Now, strategic investment takes a lot of forms, but one of 
the things that In-Q-Tel realizes is that it must not get in 
the way of a corporate--corporation's strategic mission. We 
have to be able to say, ``If you solve this problem, when you 
make it strategic to why you exist, you can have first mover 
advantage in the marketplace.``
    For example, we have terabytes of data right now within the 
agency, multilingual, geospatial, voice, video, images. Whoever 
creates that next search engine technology that allows the 
agency to pick out that needle out of the haystack of data it 
also would have huge commercial value. And so instead of having 
the CIA foot the entire of bill of creating that technologies, 
which could cost hundreds of millions of dollars, let the 
venture world use their dollars, let the commercial world use 
its dollars and leverage their efforts to solve the agency's 
problems.
    Next slide, please.
    Now, this requires what we call in the venture world a 
vetting process. This is not a notion that's very understood by 
government, and that's the notion of failure. This model is 
built around the concept that companies and ideas are allowed 
to fail, and at the end of the day from what you start off with 
is huge value.
    Now, the way we start our process is we may do 15 different 
incubators in the particular period of time. Of those 15 
incubators, in which we'll invest anywhere from $50,000 to 
$500,000, we'll migrate them down to 8 prototypes, and we'll 
use a spiral technique of having companies build rapid 
prototypes of their ideas so that we can actually touch and 
feel them.
    And of those, we migrated down to four or five successful 
commercialization solutions. This allows us to very quickly 
from idea to marketplace deliver real products of real value in 
a time span that most organizations use to actually create an 
RFP process.
    Next slide, please.
    Now, in order to make this model work, we actually have a 
joint partnership between the CIA and the nonprofit 
organization In-Q-Tel. In-Q-Tel is responsible for doing what 
we call competitive intelligence or landscaping. We go out and 
tell the world that we are a venture capital fund, and they 
submit to us all sorts of wonderful, interesting, new ideas 
that may have value.
    In fact, to date we've had over 300 inquiries, 200 
submissions from 31 different states of technologies that may 
fall within our technical need. The agency tells us what their 
problems are. We try to do a match between their problems with 
those potential solutions.
    We manage the portfolios. We make strategic bets. We ask 
companies in our Q3 and Q4 process to develop rapid prototypes. 
Those prototypes are then driven by the agency back into the 
building, and In-Q-Tel helps those companies commercialize and 
provide COTS solutions.
    Next slide, please.
    This is a kind of hard to read slide, but this shows the 
range of programs that we're working on and the kinds of 
companies that we're working with. As you can see, there are 
very large, traditional government contractors that we're 
working with who are actually working in a very unique way with 
us in that they're providing technologies with the concept and 
hope that they can spin those technologies off to new 
commercial ventures, as well as working with very small startup 
companies trying to break through and create new technologies 
for the government.
    We have technologies from MEMs, micro electronic systems 
that do micro sensors all the way through broad band search 
engines. So we have the full gambit of technologies and the 
full gambit of players, as well as reaching out to 
universities.
    Next slide, please.
    Now, our fundamental advantage in the marketplace from 
other institutions is that we use the language of the Valley to 
engage technology companies. We negotiate and work on their 
terms, and we use a series of strategies from venture capital 
to convert mechanisms to equity, to licenses, things that are 
very different from government, but really allows us to really 
excite the market space.
    Next slide, please. That's it.
    So with that, I think that In-Q-Tel--let me just finish up 
with a couple of comments. In-Q-Tel is an organization designed 
to take risks, and the reason why we have to take risks is 
because that we are right now in a risky game of knowledge 
management and information technology, and using kind of the 
government approach of no risk, zero tolerance of failure, 
we'll never be able to reach out there and plot those 
destructive technologies that can make fundamental change in 
how we live our lives and could affect our national security.
    So our motto is to engage organizations, to embrace risk, 
to take the changes that are necessary to yield success, and 
our goal is to use venture capital as a way to acquire 
technology not purely for returns on investments.
    Thank you.
    [The prepared statement of Mr. Louie follows:]
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    Mr. Horn. I thank the gentleman.
    And we now move to Dr. Charles Shank, the director of the 
very prestigious Lawrence Berkeley National Laboratory at the 
campus of the University of California, Berkeley.
    Welcome.

STATEMENT OF DR. CHARLES V. SHANK, DIRECTOR, LAWRENCE BERKELEY 
                      NATIONAL LABORATORY

    Mr. Shank. Thank you very much, Mr. Chairman and members of 
the subcommittee.
    It's my pleasure to be here this morning to share my 
thoughts on a number of specific emerging technological areas 
and their tremendous benefit for government operations. I want 
to focus on scientific developments at the Lawrence Berkeley 
National Laboratory where we made major contributions in the 
areas of energy, information technology, health, and the 
environment.
    Many of our technologies for improving energy efficiency 
are delivering major cost savings at both public and private 
sectors of the economy. For example, in the area of building 
technologies, we have developed a computer based energy 
analysis tool, advanced fluorescent lighting, novel windows, 
new appliance standards, and these are all saving in aggregate 
more than $2 billion a year annually in energy costs, and we 
estimate the government share of these savings at about $80 
million.
    Recently we concluded the first U.S. demonstration of 
highly efficient, automated, electrochromic smart windows at 
the Ronald Delums Federal Building in Oakland. These windows 
offer the prospect of saving up to 40 percent of the lighting 
and cooling needs of typical offices, while reducing glare and 
improving the comfort of the work space.
    At the Phillip Burton Federal Building in San Francisco, we 
are now completing the world's largest demonstration of an 
integrated office lighting system. This effort indicates that 
if we made use of 50 percent of our buildings and actually took 
advantage of this technology, we could reduce energy use in the 
country by 55 terawatt hours annually, and this is almost 10 
percent of all the national lighting energy consumption.
    Our vision is that every Federal building will employ our 
technologies and further reduce costs by hundreds of millions 
of dollars per year, thus contributing to the Federal goal of 
reducing energy use by 35 percent between 1985 and the year 
2010.
    The Berkeley Lab is the home of National Research 
Scientific Computing Center, one of the world's most powerful 
civilian scientific computing facilities used by thousands of 
scientists across the country to tackle very complex research 
problems. It is a tool for scientific discovery.
    We also operate the Department of Energy's Energy Sciences 
Network, which serves the DOE laboratories and thousands of 
government, industry, and university scientists.
    Berkeley Labs research also would include pioneering 
contributions to networking technology whose advancements have 
made the Internet a powerful--a more powerful and useful tool. 
For example, we at the Berkeley Lab helped develop the multi-
CAS backbone protocols that enable such things as the video CAS 
that is taking place right now over the Internet of this 
hearing.
    This advance allowed one to be able to broadcast over the 
Internet without bringing the Internet down by saturating all 
of its lines. It's quickly becoming the standard for electronic 
connectivity, allowing government staff at widespread locations 
to engage in effective deliberations, and without the time and 
expense of travel to widely distributed resources.
    We're also involved in a number of technologies of current 
interest here in the Silicon Valley. In partnership with the 
Sandia Laboratory, the Lawrence Livermore Laboratory, we've 
been working with a limited liability corporation funded by 
Intel, Motorolla, Advanced Micro Devices, and Micron, and are 
developing a new photolithographic tool using extreme 
ultraviolet lithography.
    Now, this program is well on its way, and we have high 
hopes to be able to develop systems to produce computer chips 
that will have feature sizes less than 70 nanometers, which is 
quite an advance from where we are today.
    The technology that we're working on can shrink the 
critical dimensions of a chip features by a factor of four and 
greatly improve the power of these chips. We expect that this 
technology, if all goes well, will be employed in the year 
2005.
    And as I'm talking here today, we are in the midst of a 
great revolution in biology, and one of those very important 
events that is about to take place is that we have nearly 
deciphered the human genome, often termed the ``book of life.`` 
The genome contains 3 billion pieces of information that 
describe our entire genetic make-up.
    In 1986, Charles Delisi of the Department of Energy took 
the bold step of proposing that we begin a project to decipher 
the human genome and determine the complete DNA sequence of 23 
human genomes.
    Now, this was considered a major challenge. The way in 
which technologies were being used to actually begin this 
project did not give one great hope that this would be 
accomplished in any time soon. In fact, I remember when I 
became Lab Director and people began to talk about this, they 
thought this was a task best done in a penal colony rather than 
in laboratories.
    And, in fact, whole new ways of deciphering the genome have 
been produces. New informatics tools have been created, and we 
are well on our way to finishing this task. It was a prodigious 
task to produce the sequencing of 3.2 million base pairs.
    Our original effort was to complete by 2005. We're going to 
complete that schedule well ahead of that. We at the Berkeley 
Laboratory and our partners have just reported three of the 
chromosomes that have been completed in their first initial 
rough draft, and they'll be finished before the end of the 
year.
    Now, what are the implications of this revolutionary 
advancement? Well, the availability of a complete genome is a 
major breakthrough in fundamental biology as scientists compare 
entire genomes, gain insights into biochemical and 
physiological and disease pathways.
    And last month at our, DOE's, Genome Institute, we 
described this new draft of the three chromosomes, and we've 
determined that these chromosomes estimate--have about 10,000 
to 15,000 of the nearly 100,000 genes that are important for 
actually producing the protons--the proteins that make our 
bodies work.
    Defects in these genes lead to genetically linked diseases 
such as kidney disease, prostate, colorectal cancer, leukemia, 
hypertension, diabetes, and arteriosclerosis, but maybe more 
important is what we're going to see in the future.
    Remarkable capabilities will soon exist for physicians to 
understand their patient's individual genetic make-up. This is 
going to enable a new epoch in health care and we think about 
individualized diagnosis and treatment at lower cost and drug 
reactions that often affect only a small fraction of the 
people. Such drugs might even be able to be used in the future 
where your generic make-up will indicate that they are useful 
for you and maybe not for others.
    In summary, our research and development, strongly rooted 
in the physical and natural sciences, now offers the prospect 
of transforming government operations in many ways. The 
continued benefits will be a more informed government 
delivering more effectively managed public resources for the 
nation.
    Thank you.
    [The prepared statement of Dr. Shank follows:]
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    Mr. Horn. Thank you very much.
    That's a marvelous bit of leadership in terms of helping 
the business community, the building community, and the Federal 
offices where we'd like to spend less and get more of a result.
    So we can discuss that some more.
    We now have our fourth presenter, Dr. Stephen Popper is the 
associate director of Science and Technology Policy Institute 
at the Rand Institute in Santa Monica, and are you part of the 
group that now has a sort of graduate school there, or there is 
an overlap?

STATEMENT OF DR. STEVEN W. POPPER, ASSOCIATE DIRECTOR, SCIENCE 
             AND TECHNOLOGY POLICY INSTITUTE, RAND

    Dr. Popper. Yes. I, in fact, teach a course in the RAND 
Graduate School.
    Mr. Horn. Yeah, I thought that was a great opportunity. I 
once spent a lot of my scientific time at the Brookings 
Institution, and they did that in the 1930's, and you sort of 
carried on that for people that are policymakers, and we read 
your studies when they come. You have a very good person in 
Washington to make sure we get all of your booklets.
    So we're glad to have you here.
    Dr. Popper. Thank you very much, Mr. Chairman. Thank you 
for the opportunity to appear before you and contribute to the 
question of how emerging technology may enhance government 
operations.
    But I think it's important to point out that technology is 
going to be a double edged sword for government, that the rate 
of technological change not only raises new possibilities for 
enhancing government operations, but an era of constant and 
continuous change will pose many challenges to these same 
operations. There will be troubling new issues, reduced 
response times, and changes in the nature and effectiveness of 
governance.
    So in many ways the question is not whether, in fact, to 
apply emerging technologies to government operations. It's more 
a question of how and the best way to meet the inevitable 
challenges.
    I applaud the subcommittee for beginning to explore these 
questions.
    Outside of the sphere of national security, there are 
really three broad functions for governance where both 
prospects for new capability and for challenges to effective 
operations arise. These are in the allocation of funds and 
effective management of their expenditure, monitoring and 
regulation, and agenda setting and policymaking.
    In my written testimony I attempted to offer some examples 
of applications of new technologies to government operations, 
emphasizing near term actionable opportunities. Some of these 
are clear: more effective use and management of Federal data 
bases and information systems; creating institutions and 
infrastructures for effective use of e-mail communications 
between the government and the electorate.
    But even for these obvious wins, there will be some 
subtleties. There's going to be great temptation to overlay new 
technology on existing processes, whereas in many cases we 
would be better advised to rethink those very processes in the 
light of emerging technologies.
    In the balance of my oral comments, I'd like to dwell on 
two applications that I think do possess a little more 
subtlety, that do require rethinking of fundamental processes 
of government operations in order to weave in new technological 
means.
    The first is the use of Web-based media to create and 
manage what has been called by a number of people a ``hyper-
forum,'' which is nothing less than an on-line, asynchronous, 
structured virtual expert panel. There may be more need for 
this type of mechanism than first appears.
    One of the hallmarks of the increasing tempo of 
technological change is an increasing need for interaction 
between government, the general public, stakeholders, 
possessors of expertise and so on in order to generate 
discussions, create connections, permit feedback.
    In the work that we did which led to our study ``New Forces 
at Work,`` which was subsequently issued as the fourth National 
Critical Technologies Report, when we asked members of 
industry, CEOs, CTOs, and so on, where they thought there was 
an important role for the government in the area of emerging 
technologies, they pointed out a need to have government 
perhaps act as a convener, a provider of auspices, an occasion 
for early discussion over issues such as standards, technology 
foresight, and so on .
    But these types of discussions are frustrated by the 
practicalities of time, the direct costs, the opportunity cost, 
and perhaps more, given these constraints, there's very often a 
need to drive to a perhaps too early consensus. Much 
information is pared away. It's difficult to reclaim a lot of 
the nuance, from the transcripts and the records.
    Further, these conversations tend to be rather episodic and 
exceptional by their very nature. So they are very difficult. 
They are divorced from daily processes both in government and 
in business. Using the type of means that I have described, a 
Web-based hyperforum, would lead to structured discussions, 
allowing for exchange of visions, exchange of information, 
would provide new opportunities for evolving reflection on a 
group basis, for the opportunity to examine side issues, 
sustain an ongoing engagement, help define and craft collective 
views, and support a process that would segue more naturally 
into implementation.
    The other example I wanted to speak about lies in the realm 
of policymaking and computation. Consider how the process of 
policy analysis and formulation occurs today. Very often, when 
considering policy we are forced to pretend we know the 
unknowable: what will be the budget surplus or deficit in 15 
years or even 10? What will be the state of Medicare or Social 
Security in 25 years? How much will global warming increase 
over the course of the next half century, and how much of an 
effect may that have on our economy.
    The result frequently is an engagement in largely fruitless 
debates over factors that no one can know about. We argue over 
competing predictions generated by this think tank versus that 
think tank, none of which are either provable or refutable.
    We're trapped into these corners because the means that we 
have for our analysis and even the rhetoric we use for 
discussing policy was formed under conditions of relative 
computational poverty when computers were rare and CPU was 
dear.
    What we then do is we use best guess estimates. We use a 
lot of ingenuity and creativity to create the best possible 
model, the best possible representation of the future, 
statistical approximations; in short, to come up with some sort 
of a solution that is optimal, in quotes.
    Of course, in doing so, we've really only illuminated a 
single point in space in the vast space of uncertainty we face, 
and our best guess is almost certain to be wrong.
    At this point, the analytical process and the political 
process become uncoupled from one another, and then politicians 
are left to moderate, to compromise, to do those sorts of 
things that they receive precious little thanks for, and yet 
this is precisely how humans confronted with uncertainty 
reason. They try to be adaptive. They try to be flexible. They 
try to seek middle ground.
    So the question for us becomes how can we use analytical 
means, use computers to support precisely what--use computers 
to support what humans naturally do. In an era of relative 
computational richness, there are ways. Quite simply, the 
insight is that when considerable uncertainty prevails, one can 
be neither sure of trusting a single model as the best 
plausible representation of some underlying system or having 
sufficient information available to use transitional 
quantitative, analytical looks.
    What is required are means to examine the full multi-
dimensional landscape that are defined by the very 
uncertainties that create the problem. We need means for 
conveniently and uniformly generating and examining many 
thousands of plausible specifications.
    We at Rand and elsewhere have used these means, constructed 
new approaches for this type of policy analysis that have been 
applied to some policy problems that have traditionally 
resisted traditional means of analysis and have come to some 
fairly strong conclusion.
    So this has particular relevance in the realm of public 
policy because it permits public policy decisions to be 
examined within the context of the problem. That is, it is 
possible to look at the effect of different policy choices, 
different strategies of implementation across a wide range of 
plausible future scenarios.
    We have the ability to then explore and craft strategies 
that explicitly from the outset are designed to be flexible and 
adaptive. It gets away from the need to make predictions and, 
instead, supports precisely the type of reasoning engaged in by 
humans when confronted with uncertainty, namely, trying to find 
solutions that are robust, that will lead to the least regret.
    And finally, this sort of approach would lend itself to the 
realities of the political process, supporting discussion among 
stakeholders, but identifying and validating points of 
legitimate interest.
    Let me just sum up in 30 seconds by pointing out that we 
ought to be aware of technology magic bullets, that any 
technology needs to fit within the context of its use, which 
frequently will involve rethinking of fundamental processes and 
government operations.
    Second, to point out that in many areas our technical means 
frequently outstrip our understanding based on cognitive 
psychology of how humans will use technologies to interact with 
one another.
    And then finally, I think we should be aware of paradox, 
that introducing new technologies and supporting the costly 
infrastructures that they will require may put pressure on 
mission agency budgets, and that may come at the expense of the 
basic research that was not only the source of these 
technologies to begin with, but also the wellsprings of our 
future prosperity.
    Thank you, Mr. Chairman.
    [The prepared statement of Dr. Popper follows:]
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    Mr. Horn. Well, thank you.
    We're going to skip a couple of witnesses now because the 
mayor of Sunnyvale is with us, and she leaves for court, and we 
want her well prepared when she goes to court. You have an all 
American city, as I remember, at least a decade ago, and it's 
quite dramatic in terms of Sunnyvale, and we're delighted to 
have you here.

 STATEMENT OF PATRICIA VORREITER, MAYOR, CITY OF SUNNYVALE, CA

    Ms. Vorreiter. Thank you, Mr. Chairman, and it's a pleasure 
to be here, and we really thank you for coming to Silicon 
Valley this afternoon and also for the opportunity to share 
with you some of our thoughts on technology and government.
    And while I will share some examples of how the city of 
Sunnyvale has used technology to enhance our services to the 
community, the bulk of my testimony is on the critical role 
that government can play in fostering technology and the 
importance of partnerships.
    Over the past 50 years, the combined research achievements 
of universities, laboratories, and private industry have made 
the United States the undisputed world leader in science and 
technology. Propelled to a great degree by Federal investments 
in defense and space related activities, American R&D efforts 
and their spinoffs have greatly benefited the security, health, 
and economic welfare of both the Nation and the world.
    While R&D policy must respond to new realities in terms of 
public funding, the highly positive impact of the bay area's 
R&D infrastructure on the region's and the Nation's economy and 
technological leadership remains clear.
    The bay area's economy is knowledge based, innovation 
driven, predominantly high technology, and it is important to 
note that this knowledge based strength not only includes 
silicon valley, with the largest concentration of technology 
oriented firms in the world, but it also includes a broad 
distribution of computer and electronics, bioscience, 
telecommunications, and multimedia firms throughout the region.
    The Bay Area Economic Forum, a nonprofit, public/private 
regional partnership of business, government, academia, and 
community and labor leaders, has created a collaborative effort 
called Bay Area Science Infrastructure Consortium to document 
the region's research infrastructure as a critical element in 
this economy.
    Research and development makes the bay area a model for the 
emerging regional economies that form the building blocks for 
our national economy, and its profile includes a very highly 
trained and educated work force, a pronounced culture of 
entrepreneurism, flexible and plentiful sources of investment 
capital, for example, with only 2 percent of the country's 
population in the bay area attracts 35 percent of the venture 
capital moneys.
    And finally, an abundance of new ideas that are generated 
by the region's immense concentration of universities, Federal 
research, and technology oriented companies.
    The bay area's regional research and development 
infrastructure yields a powerful technological continuum that 
connects the research universities, the Federal research 
institutions, and private industry, and while these three have 
different goals and different cultures, each adds to and 
significantly benefits from the strengths of the others.
    For example, while the region's research universities are 
the heart of its scientific excellence, the cross fertilization 
of ideas generated by the highly educated, experienced, and 
creative people that transfer among these three sectors adds an 
immensely important element to the region's extraordinary human 
resources, and their interaction continues to lead the bay 
area's significant contribution to the Nation's technological 
leadership and we believe our economic success.
    The presence of so many private industry research 
facilities in the bay area further demonstrates how Federal and 
State support can be leveraged to create an ever larger 
resource of R&D facilities.
    Enhanced bay area science and technology research 
capabilities contribute directly to commercial select growth 
and the creation not only of new companies, but we're seeing of 
entire new industries.
    The important role of private industry in the Nation's 
overall R&D enterprise is clear. The relationship among 
universities, laboratories, and commercial sector R&D 
activities is an important issue from the standpoint of 
national economic competitiveness. For a knowledge based 
economy, such as that of our San Francisco Bay area with its 
huge R&D presence, this issue takes on particular special 
significance.
    However, the intense competition results from the emergence 
of the global economy, and industrial deregulation has created 
dramatic changes in the private sector's R&D function. 
Competition has forced our local companies to focus on rapid 
innovation and product development. The time space from 
laboratory to manufacturing has been shortened dramatically, 
which means that the emphasis has shifted from exploratory 
basic research to more directed research, and from basic 
research to applied research and product development, a 
significant shift.
    Given the importance of the Federal private industry R&D 
interface, there are several key issues that should be 
addressed for us to achieve an even greater value from our R&D 
investment: Strong Federal support for exploratory research; 
Federal support for R&D tax credits; intellectual property in 
the context of public-private collaboration; and, finally, 
exploration of new models for collaboration.
    Several important factors affirm the need for continuing 
public investment in R&D. One, basic knowledge is a public 
good. Much of economic analysis concerns how market mechanisms 
can lead to the efficient production and the distribution of 
private goods, commodities that are met for the exclusive 
consumption of individual.
    But some goods are more public in nature. For example, 
street lights in a city benefit any and all who pass by at 
night. Once the street has been lit for one person, it does not 
cost any more to light the street for additional people.
    The cost of knowledge, big science, big risks. Market 
pressures may minimize or eliminate the opportunity for profit 
relating to a great many areas of R&D. The public sector, 
through its pooled resources can better support big science 
projects and accept large risk projects since it is not as 
threatened by a single project's failure.
    Once a fixed is incurred for a project, such as space 
exploration, society benefits broadly from the knowledge 
spinoffs that can follow.
    The need for public support of private investment. Some 
applied research leads to the discovery of product and process 
improvements which spill over to other firms that can free ride 
on the discoveries.
    In summary, the bay area's economic strength and our 
competitive advantages in the global marketplace are 
inextricably linked to the region's research and development 
infrastructure. The Nation, the State, and the world have 
derived enormous health, technological, and economic benefits 
from the bay area's unique clustering of public and private 
research facilities.
    A special strength of this concentration is the 
technological innovation and the entrepreneurial spirit that's 
generated by the interactions and the interrelations between 
the three sectors.
    The strength of scientific and technological 
infrastructures in the bay area, and in other similar regions 
across the United States, provides a critical research base for 
the entire country.
    The bay area is, and we hope will remain, a key participant 
in the national science and technology investment strategy for 
the 21st century. Through the leadership of the Bay Area 
Economic Forum, local governments, national laboratories, 
private universities, and private businesses have created this 
regional collaborative.
    The bay area has, in my opinion, one of the strongest 
partnerships between the public and private sectors. There is a 
strong appreciation, respect by the public sector for the 
improvements in the quality of life that these companies have 
brought to our region and to our world, and the private sector, 
in return, looks to their government representatives to make 
their communities the type of place that is attractive for 
doing business and desirable for their employees.
    We at the local level work very closely with our businesses 
to make that happen. The Federal Government has a key role to 
play as well by insuring that the basic R&D is funded and that 
the research infrastructure is maintained.
    Sunnyvale, a city of 130,000 people in the heart of Silicon 
Valley, has benefited tremendously from the public and private 
investments in technology. We are now providing services to our 
citizens in ways not even imaginable just a few years ago. For 
example, our council agendas, reports, and minutes are 
available on the Web, as is a tremendous amount of other 
information about our city.
    We will soon be going to a paperless system where council 
members get their agenda packet by way of a soft book.
    In addition, Sunnyvale recently inaugurated an e-permit 
system, which allows residents and businesses to apply for, 
receive, and pay for building permits electronically. This was 
part of a regional smart permit effort, a collaborative of 
public, private, and nonprofit organizations, and it has moved 
things to market significantly, which in the private sector 
particularly, time to market is critical. So we are very proud 
of that.
    A final example is our defibrillator program. Thanks to 
advances in technology, we have initiated a program so that 
these life saving devices are available in all of our city 
buildings, available on all of our police and fire vehicles, 
and since the program was initiated, 15 lives have been saved 
through the use of our city defibrillators.
    We thank you for coming this afternoon and for recognizing 
the importance of Silicon Valley in our national and world 
economy.
    [The prepared statement of Ms. Vorreiter follows:]
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    Mr. Horn. Well, thank you, Mayor Vorreiter. We appreciate 
your coming here.
    Just one question since you will not be around for the 
questioning.
    Ms. Vorreiter. Certainly.
    Mr. Horn. Other consortia in the area like the one you talk 
about in the bay area, have they contacted you to form similar 
consortiums because you have got----
    Ms. Vorreiter. Do you mean in other regions?
    Mr. Horn. Right, other regions.
    Ms. Vorreiter. Not to my knowledge. Ours is rather unique, 
and probably even a more directly unique relationship is the 
collaboration that the cities of Sunnyvale and Mountainview 
have with Aims Research Center and the entire Moffett complex. 
Recognizing the presence of the military and our local 
universities, NASA-Ames, and our two cities, we have put 
together what we believe is quite a unique and a very special 
relationship.
    And the Federal Government, NASA in particular, plays a key 
role in that relationship.
    Mr. Horn. What's the role of the community colleges in the 
bay region and major engineering schools, such as San Jose 
State University, that often their people are hired first, 
before a lot of other well known universities?
    Ms. Vorreiter. Certainly we are now in the process of 
working with NASA-Ames in their redevelopment of the Moffett 
complex to attract some university presence that will stem from 
a nexus of the basic research that some of the universities 
have that they can bring to the working information technology 
and the Astrobiology Institute that are going on here at Ames.
    And with the Navy's departure from the Moffett complex, 
there is space available for us to build that relationship. So 
the universities play a very key role in this relationship.
    Mr. Horn. I now yield to the gentleman from California, Mr. 
Ose.
    Mr. Ose. Thank you, mr. Chairman.
    Is this on?
    Mr. Horn. Yeah, just pull it toward you. There. I think 
that will do it.
    Mr. Ose. How is that?
    Mr. Horn. Can you hear in the back of the room?
    Mr. Ose. I want to extend my appreciation to the chairman 
for making this meeting possible. I know he has an abiding 
interest, and that is putting it mildly, in seeing that these 
things get examined.
    I am particularly fascinated with the mayor's comments, and 
I am struck by in a very real degree how it is whether a 
chicken or an egg on some of these things. Which do you do 
first?
    And I want to applaud you for acting here in Sunnyvale and 
Santa Clara and in this area, rather than waiting for, you 
know, an endless amount of time.
    Coming from a city where we struggle with that, I am 
complimentary of that.
    One question I do have is as it relates to your e-permit 
process. Having come from the development business, you 
highlight the significant improvements from that process in 
time to market.
    Ms. Vorreiter. Yes, sir.
    Mr. Ose. Just where I come from it is at least 90 days to 
get a permit to do anything. What's the e-permit process? Give 
me some quantifiable order.
    Ms. Vorreiter. Yes. We have developed a system with a--
before the e-permit process that was an interim development in 
this one stop, one stop shop, if you will, where as many as 90 
percent of the permits that were issued to residences and 
businesses were issued in a 1-day time period.
    We have just developed the e----
    Mr. Ose. One day?
    Ms. Vorreiter. One day. Now, those, of course, are the 
permits----
    Mr. Ose. Garages and pools?
    Ms. Vorreiter. Yes, that would not necessarily require some 
significant plans, that would not require Planning Commission 
and/or city council approval. So more complex developments most 
certainly require and demand our extensive scrutiny.
    But we pride ourselves in this process, and it has been of 
great benefit to our business community particularly, and also 
our residents.
    Mr. Ose. Thank you.
    Thank you, Mr. Chairman.
    Mr. Horn. We thank you, and, Mayor, you are excused. Thank 
you very much.
    Ms. Vorreiter. Thank you very much.
    Mr. Horn. Good luck in court.
    Ms. Vorreiter. My client will be very pleased to not be 
there by herself.
    Mr. Horn. Well, thank you.
    Ms. Vorreiter. I appreciate that. Thank you.
    Mr. Horn. We will now go back to the regular order, and 
that's Dr. Richard Williams, the former dean at the College of 
Engineering, now distinguished professor in mechanical 
engineering and astronautics, and that is California State 
University, Long Beach.
    Dean Williams, 5 minutes.

  STATEMENT OF J. RICHARD WILLIAMS, Ph.D., P.E., PROFESSOR OF 
    MECHANICAL AND AEROSPACE ENGINEERING, CALIFORNIA STATE 
                           UNIVERSITY

    Mr. Williams. Mr. Chairman, Congressman Ose, I thank you 
for the opportunity to address issues relating to new and 
emerging technologies for enhancing security of government 
operations.
    The U.S. Government operations are increasingly threatened 
by terrorists and criminal elements that endanger people and 
property. Rapidly increasing world trade and passenger 
transportation, accompanied by international and domestic 
terrorism, require application of appropriate new technologies 
to counter these threats. These include safe and effective, 
automated, nonintrusive inspection and identification 
technologies, including biometric devices for identification; 
new types of scanning systems; and new techniques for assuring 
the security of communications and government information 
systems.
    The three elements of identifying individuals can be summed 
up as what you have, what you know, and what you are. An 
example of what you have could be a credit card or an ID card. 
An example of what you know could be a password or a PIN 
number, and what you are is addressed by the new emerging 
biometric devices.
    Biometric devices positively identify individuals by their 
personal characteristics, whereas identification cards can be 
stolen and passwords can be transferred. It is very difficult 
to transfer the personal characteristics that biometric devices 
can measure.
    These human attributes and behavioral characteristics 
include fingerprints, the thermal or visual image of the human 
face, voice characteristics, hand geometry of vein patterns, 
the iris or retina, DNA, and keystroke or signature dynamics. 
Fingerprint biometric systems have been in use by the 
government for over a decade, and the price has fallen from 
over $3,000 each to less than $100 each. Other types of 
biometric devices are coming into use, and standards are being 
developed to insure interoperability.
    Advanced sensing technologies are becoming available that 
will enable the government to insure a higher degree of 
security for government and other facilities. For example, new 
x-ray devices have been developed that can provide detailed 
information on the content of a vehicle or container with a 
total x-ray dosage far, far less than that of a conventional 
medical or dental x-ray.
    A variety of other advanced sensing systems that are safe 
and effective are also becoming available. Appropriate new 
technology sensors, as part of an integrated, automated system 
for nonintrusive inspection, can be deployed to facilitate 
effective interdiction of illegal or inappropriate materials 
and weapons.
    For example, INS and Customs are currently pursuing a 
number of technology initiatives to improve their inspection 
and processing capabilities. A variety of nonintrusive 
technologies that lessen the physical invasiveness of searches 
for drugs and other contraband, as well as saving time, money 
and reducing the tensions of a search, are also being developed 
and deployed.
    Large x-ray scanners examine entire railroad cars 
permitting much more rapid inspection than manual searches. 
Fixed site cargo search x-ray machines that are currently being 
deployed scan the contents of a tractor-trailer in minutes 
using a pencil sized beam of x-rays that produce both a 
transmission image and a backscatter image which provide an 
excellent view and analysis of the contents.
    A person would have to pass through the system 100 times to 
receive the same dosage exposure as a typical medical x-ray. 
This nonintrusive search technology is safe to operate and 
quickly pinpoints concealed contraband or weapons.
    Likewise, body search machines deployed at some major 
airports use x-ray backscatter technology to detect both 
metallic and organic materials concealed underneath clothing 
with a radiation dose comparable to the amount of radiation 
received from a normal airplane flight of 2 hours.
    Through the application of new technology, suspects can 
remain fully clothed as they walk through a large scanning 
device that can detect contraband or weapons under their 
clothing. Radiation detectors the size of a pager can alert 
government inspectors to the proximity of radioactive 
materials.
    An array of advanced technologies are being deployed to 
guard against threats of weapons of mass destruction. In 
addition, a variety of hand operated devices are being deployed 
to examine people and commercial conveyances, including density 
detection devices, fiber optic scopes, vapor/particle 
detectors, and laser range finders.
    Sensors and scanners can send information directly to 
computer systems for automated processing. New technology 
systems can be deployed so that instead of overloading 
operators with the huge amounts of data from various sensors, 
computers can analyze and filter data, noting potential 
security risks that need special attention.
    If the security systems are tied into this type of 
communication system, inspectors can actuate barriers remotely. 
Having sensors, transponders, and security systems communicate 
with a computer network allows automated actuation of security 
measures when problems are encountered.
    Classification technologies, including automated vehicle 
identification second scanning systems can help vehicle 
inspection stations pursue the dual goals of efficient and 
effective operation.
    An example of this is the Transportation Automated 
Measuring System developed and demonstrated at Fort Bragg by 
the California State University, Long Beach Center for the 
Commercial Deployment of Transportation Technologies. This 
technology, particularly deployed with additional censors, can 
have broad applications when deployed nationally as required.
    New electronic tags, seals, and transponders can be used to 
allow properly secured vehicles, containers, and packages 
inspected at the ports of origin to bypass further inspections.
    Automated security systems can be designed to help assure 
the safety of government operations.
    The California State University, in collaboration with the 
Ports of Los Angeles and Long Beach, and the Alameda 
Transportation Corridor Authority, which is responsible for the 
major transportation corridor serving the two ports, in 
collaboration also with INS and Customs, have proposed a 3-year 
program specifically designed to demonstrate advanced 
technology prototype systems that once demonstrated, could be 
deployed to expedite the flow and throughput of people and 
goods at border crossings, at air and seaports and other 
inspection stations throughout the United States.
    This project would employ advanced technologies to identify 
persons attempting to illegally enter the United States or 
transit points where security is required. The project could 
also provide an increased ability to identify containers 
entering ports by utilizing advanced sensing technologies for 
automated container inspection that would enable inspectors to 
assess container content, including human cargo and improved 
targeting of selected containers for manual inspection.
    The same technologies that are available to the government 
to assure safe, secure government operations is increasingly 
available
to well financed criminal and terrorist organizations. The U.S. 
Government agencies must keep on the cutting edge of technology 
applications and ensure the widespread deployment of effective 
systems that ensure the security of government operations.
    Thank you, Mr. Chairman.
    [The prepared statement of Dr. Williams follows:]
    [GRAPHIC] [TIFF OMITTED] T0548.036
    
    [GRAPHIC] [TIFF OMITTED] T0548.037
    
    [GRAPHIC] [TIFF OMITTED] T0548.038
    
    Mr. Horn. Thank you very much. Appreciate it.
    We are going to have to have a recess now. We have some 
technological situations with our equipment that needs to be 
done, and so we will take a 10-minute recess. I think it is now 
roughly 12:57 by my watch, and we will say at 1:07 or so ought 
to be about it.
    So we are in recess.
    [Recess.]
    Mr. Horn. The committee will resume. The recess is over, 
and we will go back to the regular order, which is Mr. Richard 
H. Davies, the president and chairman of the Western Disaster 
Center.
    Mr. Davis.

STATEMENT OF RICHARD N. DAVIES, PRESIDENT AND CHAIRMAN, WESTERN 
                     DISASTER CENTER, INC.

    Mr. Davies. Thank you, Mr. Chairman and Mr. Ose, and thanks 
for the opportunity to discuss the Western Disaster Center 
project and some new thinking at the Federal level concerning 
disaster management.
    Disasters today are recognized as a real national security 
issue. Disasters on foreign soil can dramatically impact the 
U.S. national security interests. Two very quick examples come 
to mind. The event in Turkey last year almost brought down the 
Turkey Government. The big earthquake in Taiwan could have been 
used by China as an opportunity to move across the straits, but 
actually ended up being an opportunity for cooperation between 
Taiwan and China.
    In the United States disasters cost the Federal taxpayer, 
us and everybody else, about $1 billion per week. This is a 10-
year average that's been going on awhile now. So it's well 
defined; it's well understood, and that's $50 or $60 billion a 
year of Federal direct costs. Indirect costs are probably 
another $50, $60 billion.
    There has just been a recent report that says severe 
weather disasters in the United States have increased over 300 
percent in cost. We're also faced with a big change in manmade 
disasters, be they terrorism or be they just somebody playing 
on the computer like we just saw a couple of weeks ago here 
locally.
    I know the committee did a lot of work on Y2K. That was 
very useful.
    The Western Disaster Center is a not-for-profit research 
center working to develop two strategic efforts: the Western 
Disaster Information Network and the Institute for Crises 
Management.
    As the risk and associated costs of disasters continues to 
grow, it is imperative that technological advances be harnessed 
to aid the State and local disaster managers in reducing loss 
of life and property. It is frequently forgotten that the real 
war fighter, the real front line troops in disaster response 
and recovery is the local disaster manager. It is those 
organizations that are supported by the State and Federal 
agencies when their resources are exceeded.
    The revolutionary advances in technologies and information 
technology communications and computing in changes in Federal 
defense and intelligence policy now enables the sharing and 
distribution of disaster related data and information as never 
before.
    Now, today it is actually possible to use classified 
imagery in the defense or--excuse me--in the response to 
disaster management. There are processes in place and on the 
shelf to take classified imagery and make it what is called 
derived product.
    One of the frustrations I'd like to point out to this 
subcommittee is there's actually, although that policy is in 
place and is utilized, there is no process in place to get that 
information quickly into the hands of the State and local 
disaster managers. Again, they're the real front line troops. 
The Federal process is in place. The concerns are still in the 
intelligence world to release that to the Federal and State 
people.
    The advances in commercial remote sensing are well 
understood, and the one meter resolution satellite built at the 
Lockheed Martin facility just across the road here are going to 
dramatically change how we do disaster management.
    The technologies of geographic information systems, GPS, 
and satellite communications, are also now just taken for 
granted. I think it's quite remarkable that we drive down the 
street today, and we actually know where we are. I mean it's 
just a few years away that that, you know, wasn't true, but 
it's taken for granted now.
    These are real utilities. So if we can actually incorporate 
all of this information in the disaster management process.
    The Western Disaster Center is working on the development 
of a U.S. National Disaster Information Network. There's also a 
program to have international links up of this process, and 
that's called the Global Disaster Information Network.
    In fact, this week the third Global Disaster Information 
Network conference is taking place in Turkey. We, the Western 
Disaster Center, is an active participant in this process.
    In a recent independent study of the National Disaster 
Information Network concept, the National Research Council 
endorsed the idea. This is a program that has been reviewed and 
studied for the past 5 or 6 years with many, many reports. So 
there is no policy lacking.
    I'd like to point out that in the same time period this 
program has been thought about at the Federal level, a company 
called Netscape started in MountainView right up the street 
here. Since that time, Netscape grew, declined, grew, and was 
recently sold for a couple of billion dollars.
    We are still waiting for the National Disaster Information 
Network to take fruition.
    The U.S. National Disaster Information Network is being 
built on a framework that involves public and private 
stakeholders. In forming this long term organizational 
structure, this process has begun, but as I mentioned, it is 
slow. There is an integrated program office. There is an 
executive committee that oversees operations, and today this 
activity is working under the U.S. National Security Council.
    There is a Pacific Disaster Center. It was first proposed 
in Hawaii in 1993. It reached initial operating capability in 
1996, and has actually received between $20 and $30 million of 
funding through the DOD.
    The Western Disaster Center concept actually started to 
evolve in 1997. We established ourselves as an independent 
nonprofit in March 1999. Just last week, in fact, I was 
contacted by some people who live in Colorado Springs, and they 
were interested in the Midwest Regional Disaster Center.
    We are a not-for-profit. We are working on two efforts. As 
I said, the Western Disaster Information Network; we're also 
working on an applied R&D component of this effort we call the 
Institute for Crises Management. This evolved from a 
recommendation of a recently published President's Information 
Technology Advisory Committee report to establish Enabling 
Technology Centers.
    We have actually proposed a very unique process or 
procedure to fund this concept. This is where we think we're 
different. We propose using the American Red Cross as our 
business model. Under the Stafford Act, which is the governing 
Federal legislation controlling how the Federal Government 
reacts to and responds to disasters, the American Red Cross has 
the responsibility to provide disaster relief. That 
responsibility is defined in a document called the Federal 
response plan.
    So when you see a disaster and you see the American Red 
Cross set up and doing their work, it's not just the goodness 
of their heart. They're there because the law says they have to 
be there. They are the lead agency required to do that mission.
    What's unique about that is they are not a government 
agency. They're a not-for-profit, public-private enterprise.
    We propose reinventing the National Disaster Information 
Network concept along these same guidelines. We are advocating 
the change of the Stafford Act to incorporate the National 
Disaster Information Network concept and to define that it be 
developed as a public-private, nonprofit enterprise.
    We believe there's no better place to do that than here in 
Silicon Valley. We have been working with some of our industry 
partners on the development of that concept. We do have some 
frustrations obviously for the slow development of this process 
and are looking forward to working with your subcommittee and 
other subcommittees and other organizations within the Federal 
Government on the development of the National Disaster 
Information Network.
    Thank you.
    [The prepared statement of Mr. Davies follows:]
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    [GRAPHIC] [TIFF OMITTED] T0548.040
    
    Mr. Horn. Thank you very much.
    Our second to the last speaker is Dr. Susanne Huttner, the 
executive director of the Industry-University Cooperative 
Research Program of the University of California.

  STATEMENT OF SUSANNE L. HUTTNER, Ph.D., DIRECTOR, INDUSTRY-
    UNIVERSITY COOPERATIVE RESEARCH PROGRAM, UNIVERSITY OF 
                           CALIFORNIA

    Mr. Huttner. Thank you, Mr. Chairman and members of the 
subcommittee, for inviting me to participate today. It's a real 
honor to be here, and we're pleased----
    Mr. Horn. You are going to have to get that microphone 
close to you.
    Mr. Huttner. Closer.
    Mr. Horn. Close. If you cannot hear in the back, put your 
hands up so that we can make sure you can hear.
    OK. Go ahead.
    Mr. Huttner. In addition to being the executive director of 
the Industry-University Cooperative Research Program, which is 
a $60 million a year, 3-year partnership between the State of 
California, U.C., and California industries in six different 
sectors of the California economy, I am also the director of 
two system-wide biotechnology programs and am going to largely 
focus my comments today on the life sciences.
    I had expected, given the high tech theme, to be the only 
person who was talking about the life sciences, but I shouldn't 
have been so surprised to hear people whom I would have 
expected to talk about physics to be talking about life 
sciences because there's a dramatic convergence happening today 
between the life sciences and other fields of science and 
engineering, and the extent to which we can capture and direct 
that convergence, we're going to get dramatic new developments 
both in terms of public benefits and in terms of economic 
growth in the United States and our competitiveness in 
worldwide markets.
    The United States continues to grow in the development of 
new sciences and that often leads to new convergences, but 
those convergences depend upon careful attention because there 
are cultural differences between different fields of science. 
They don't naturally readily work together. Funding comes from 
different agencies, and that tends to keep scientists apart.
    So we need to come up with new ways to create opportunities 
for them to work together more often, but let me return to 
biotechnology. The United States is a world leader on 
commercial biotechnology, and California is the principal 
driver.
    California is host to one out of every three U.S. 
biotechnology firms, and in fact, you'll find that one-third of 
all U.S. companies are clustered very closely around University 
of California campuses, Stanford, Scripps Research Institute, 
the Salk Institute, and CalTech.
    There's a very intimate relationship between the emergence 
of commercial biotechnology and public investment in basic 
research and graduate education. In fact, you see co-
localization geographically between excellence in basic 
research and graduate education and the emergence of commercial 
biotechnology companies.
    In California, we've gained 50,000 new jobs with average 
salaries of about $65,000 a year, and these jobs largely didn't 
exist as recently as 15 years ago. This has been an important 
contributor to our recovery from the very serious economic 
recession that hit California over the last decade.
    Now, the effect is truly dramatic when you look at the way 
these linkages play out between publicly funded research 
activities and commercial activity in a new knowledge based 
sector of an industry. There's a study that was undertaken by 
an economist at the University of California, and what she 
found is that one out of every four California biotechnology 
firms was founded by a University of California scientist, 
either one of our faculty members or one of our alumni, and 
more than 85 percent of California's biotech firms hire people 
with advanced degrees from the University of California.
    As she expands this study to include Stanford and CalTech. 
and the other major research institutions, I think it's likely 
we're going to find that every company in the State has a 
direct and essential linkage to publicly funded research in the 
State of California.
    Now, all of this can be traced back to a strong history 
that's more than 40 years long of Federal investment in the 
life sciences. That's an important part of the policy that has 
created the foundation on which a remarkably broad array of 
companies have been founded. This is not a series of companies 
that have a lot in common. In fact, this is a highly 
diversified industry where there are many opportunities to run 
with the best and brightest ideas that happen to come forward.
    So just to summarize the background, it's worth noting that 
success in biotechnology here in the State of California and 
other parts of the United States has been based on four 
critical factors that are also common to high technology 
sectors.
    One is world class basic research in graduate education 
institutions that are supported strongly by Federal investment.
    The second is strong sources of venture capital and other 
investment funds that are willing to invest in new ideas.
    The third is a community of experienced entrepreneurs, and 
the fourth is an infrastructure that addresses the needs of the 
young, promising, but usually cash strapped companies, and 
that's what you see in regions of the State of California where 
there's been dramatic growth of bioscience or high tech 
companies.
    Silicon Valley, of course, is the premier example, but you 
need only look down to San Diego, where the economy had 
essentially gone belly up, and it has completely recovered, but 
with companies that had never existed before because they were 
able to create the appropriate kind of business infrastructure.
    The future prospects for biosciences is really remarkable. 
Analysts say that just as the last century was marked by 
advances in physics and chemistry, the 21st century will be the 
life sciences century, and that will be based not just on 
advances in health care, but also in the kinds of applications 
that you heard from our earlier speakers that apply information 
about biological systems to a remarkable array of applications.
    I'll just give you very brief descriptions of four areas 
that I've discussed slightly more in my testimony. Of course, 
there's medicine and health care. The human genome project is 
laying an important substrate, but we're just at the threshold. 
We're going to be able to identify the individual nucleotide 
sequences in the genome, but that won't tell us what the genes 
do, and it won't tell us how they interact in complex systems 
like tissues.
    It also doesn't tell you how they behave in health and 
disease. There's a great deal of complex research that has to 
go on next to take advantage of the information that's been 
developed in the human genome project.
    A second area is food and agriculture. It's natural to 
apply advances in genetics to plant breeding, and, in fact, 
American farmers have already increased farm income 
dramatically using genetically engineered crops that have 
reduce input costs in farming.
    There will be in the next 5 years a wide array of crops 
that are specifically tailored to improve nutrition, flavor, 
and other kinds of characteristics that are valued by 
consumers. All of this is being fueled in part by the National 
Science Foundation plant genome initiative.
    Energy and environment is another area of tremendous 
potential in the life sciences. There are biological strategies 
for environmental clean-up, natural resource conservation, and 
for using biological sources as renewable sources of energy.
    And finally, another area is law enforcement and forensic 
science. Everyone saw what was used in the O.J. Simpson trial. 
In fact, DNA fingerprinting is being used throughout the United 
States, and the advances in biochemistry that are being used in 
law enforcement today are giving us a wide array of tools for 
more specifically analyzing the make-up of biological evidence.
    Now, the impact of Federal policy on the ways in which life 
sciences could advance in any of these areas and others is 
important, and I'd like to just very briefly touch on it.
    First, the funding policy of the Federal Government has 
been important, and I strongly encourage you to stay the 
course. What has worked and will continue to work is broad 
based Federal support for investigator initiated research, not 
targeted research; investigator initiated research that allows 
for a great deal of serendipity to occur in research and 
supports the kind of incremental enhancements in knowledge that 
has led us to where we are today.
    And in fact, if we had leaders of the biotechnology 
industry here today, they would tell you that if 20 years ago 
the Federal Government had started to target funding for 
agencies like NIH to where there seem to be trends today, we 
may not have had the biotechnology industry develop.
    There is an area in the Federal funding arena that does 
deserve your attention. The work force requirements today are 
very different than they've been as recently as a decade ago. 
We need to train scientists in a completely different way that 
enables them early in their research training to get experience 
in the physical sciences and information technologies, but we 
need to have incentives to develop those kinds of programs.
    With that kind of funding, we're going to have the leaders 
who will be flexible and adaptive and can move forward a 
variety of industries in the future.
    A second area of policy that's very important is 
intellectual property. I'll only say that the Bayh-Dole Act has 
had a dramatic enabling effect on the biotechnology industry. 
It has enabled companies to reach into university research 
laboratories and take advantage of new knowledge that we're 
creating, provides them market protection for a period of time, 
and since the early participants have been in the 
pharmaceutical area, and they typically have product 
development schedules of 15 years or longer, that's been 
extremely important.
    Another area that's very important to considering how 
advances in the life sciences will play out is regulatory 
policy.
    To date we've seen tremendous advances in biomedicine and 
in the biotechnology industry, and in my view that was fueled 
in part by the Food and Drug Administration's early 
announcement way back in 1980 that they were going to treat the 
products of biotechnology the same as other similar products 
and create no new regulatory barriers.
    That sent a strong signal to investors, and as you saw, 
there was enormous investment in the 1980's in biotechnology 
startup companies. We benefited from that in California. It 
provided us opportunities to take knowledge out of the 
University of California, Stanford, Scripps, Salk, and USC and 
get it out into the economy rapidly, but they had to make sure 
that they were going to be treated fairly, and they were.
    The situation in agricultural and environmental sciences is 
very different. Both USDA and EPA created new regulations 
specifically targeting the use of our newest and best genetic 
methods. They've increased the cost of early stage R&D, and 
that has discouraged investment.
    You haven't seen robust growth of entrepreneurial companies 
in agricultural and environmental sciences, and yet the 
opportunities are arguably as great as they are in biomedicine. 
We need to revisit these policies and consider their 
reasonableness.
    About a week ago Congressman Nick Smith of Michigan, who is 
chairman of the Basic Research Subcommittee of the House 
Science Committee, released what I consider to be a landmark 
report on biotechnology policy. That subcommittee considered 
very carefully the issues of risk that have been circulating in 
the public arena over the last few years, brought scientists in 
to address them, and came to the conclusion that the risks 
associated with these new genetically engineered crops and 
microorganisms are the same as the risks associated with crops 
or microorganisms that are modified using older and more 
familiar genetic techniques.
    It strongly encourages revisiting the regulatory structure 
and providing some incentives to get these sectors moving.
    Now, the opportunities and challenges that face the Federal 
Government are tremendous. I'd like to end my comments by just 
noting that there has been a tremendous culture change in the 
private sector, and you see it just about anywhere you go in 
Silicon Valley and in other pockets of the State where there 
have been dramatic developments of entrepreneurial, high tech, 
or bioscience companies.
    This culture is fueled by small businesses made up of 
people who are real risk takers, who know how to capture new 
knowledge and take advantage of it. This culture of risk taking 
is what we need to understand better, and we need to reinforce 
it.
    If government wanted to take advantage of new technologies, 
you have to recognize that bureaucracies have a tendency to 
tamp down any change. We have to hire the kinds of scientists 
who will support that same kind of culture of creativity and 
risk taking if we're going to take these new technologies and 
move them into government.
    And if we do that, I can foresee where you would be able to 
leverage dramatically your investments in various Federal 
agencies by getting them to work together better. The National 
Institutes of Health present a remarkable model on how to both 
support the development of new knowledge and technologies and 
utilize it effectively through communication and 
interrelationships with agencies.
    But not all agencies have been able to participate in that 
the same way. The Environmental Protection Agency has a culture 
that views new technologies, in my view, as risky by 
definition. If it's new, it's something we're not familiar 
with, and it undoubtedly includes some kind of risk in their 
view.
    I think that's a problem. If we want to solve environmental 
problems, we've got to capture this new technology.
    Thank you very much.
    [The prepared statement of Dr. Huttner follows:]
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    Mr. Horn. Well, we thank you. That's a very good 
presentation.
    And our last presentation is by Dr. Lea Rudee, the director 
of fellows program at the California Council on Science and 
Technology, which is based at the University of California, 
Riverside.

STATEMENT OF LEA RUDEE, Ph.D., DIRECTOR OF THE FELLOWS PROGRAM, 
          CALIFORNIA COUNCIL ON SCIENCE AND TECHNOLOGY

    Dr. Rudee. Thank you, Chairman Horn, members of the 
committee.
    I'm Lea Rudee, as you heard, director of the Fellows 
Program of the California Council on Science and Technology. 
That's a part-time job. I'm also a professor of material 
science at the University of California, San Diego, where I do 
research in nano technology as an individual faculty member. I 
was the founding Dean of the Jacobs School of Engineering as 
UCSD.
    The California Council of Science and Technology is an 
independent, nonprofit organization that is modeled in part 
after the National Research Council. The CCST was established 
by State legislation in 1988 to actively represent the State's 
science and technology interests.
    It is currently comprised of 120 science and technology 
leaders from industry and academia. Since its creation, the 
California Council for Science and Technology members have 
worked with State and Federal agencies, government officials, 
and others to help implement policies that aim to maintain 
California's technological leadership in a vigorous economy.
    One of the things the council did starting a couple of 
years ago was create a major study of the science and 
technology infrastructure of the State of California. It was 
the first comprehensive study of its kind done. It ended up 
having 12 investigators and teams from a variety of public and 
private institutions, which led to a major report. I have both 
the executive summary and the short form of the report with me 
today for people who would like it. A lot of the data is 
reproduced in my statement here, which I will not read to you.
    However, in this report, which is now called the Crest 
Report, California Report on the Environment for Science and 
Technology, there were two items uncovered which we feel are 
ones that affect Federal policy, and are affected by Federal 
policy, and that should be brought to the attention of the 
subcommittee.
    One of them is, as just about everybody notes, that 
California is a real leader in the science and technology 
research and development world. What the study showed was that, 
California does about 20 percent of the Nation's R&D, and 
that's been constant over the last 30 years. Of course, it has 
all grown, as everything has grown.
    But when you look in detail at this, there has been a major 
shift in the last 15 to 20 years. That is not in the total 
amount of industrial based R&D. Currently virtually all of the 
industrial R&D is supported by the industry itself, where in 
prior years, a decade or so ago, before the fall of the 
aerospace industry, much of industrial R&D was supported by 
Federal dollars, mostly from Defense and NASA.
    One of the changes that's occurred is that the industrially 
supported R&D has a much shorter time horizon. Companies want 
to support work that will affect their bottom line, certainly 
in the term of office of their CEO, and more often in the 
present quarter.
    So the character of the research has changed. It's led to a 
higher number of patents. But leaders in this area in academia 
and industry are worried that the shorter term view will mean 
that we're, in some sense, eating our seed corn. We're not 
going to come up with long term ideas out of industry that had 
occurred before.
    And so we strongly urge that the Federal Government, in 
various ways, support more long term R&D at industries.
    Another problem area, where the Federal Government 
certainly can play a role, is that of producing a skilled labor 
force.
    One of the key things we've uncovered was that the total 
undergraduate science and engineering degrees in California, 
and this is across all segments of higher education, private, 
public, Cal. State, and the University, has dropped 18 percent 
in the last decade. The biggest drop has occurred in the Cal. 
State system where the number of engineering degrees has 
dropped by 25 percent. That's very important because 40 percent 
of the State's engineers have come from the Cal. State system 
over the long haul. This is a significant problem, we believe, 
for the future of California's science and technology industry.
    In order to remedy this, we need to work better at the K 
through 12 level. We have to insure that students have a proper 
grounding in math, science, and technical skills.
    One of the ways to attack this, we believe, is to 
incentivize people to get their teaching credentials with a 
background in science, and not encourage people who are 
teaching outside their study area with temporary kinds of 
certifications. The Federal help, we feel, can come through 
more scholarships in this area, both for engineering and 
science students, so that we can even out the need based 
support. We can encourage more students to get into education, 
and to take teaching jobs at the--that have the proper 
background in science and math at the K through 12 level.
    We think that--and it was not part of this report--that 
some of the developments that NASA-Ames is proposing in their 
research park, etc., will help on both of these issues in 
getting Federal support to do basic research in industry, and 
to work toward improving the K through 12 system.
    Thank you again for the invitation, and I will be happy to 
answer any questions.
    [The prepared statement of Dr. Rudee follows:]
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    Mr. Horn. Well, thank you very much.
    We will now start with questions, and I am yielding 10 
minutes to Mr. Ose, and then I will take 10 minutes, and then 
he will take 10 minutes. So please proceed. The gentleman from 
northern California.
    Mr. Ose. Thank you, Mr. Chairman.
    As is usual in our committee meetings, we take our 
questions or pose our questions in typically the order that 
you've all appeared. So I'm going to work through that 
accordingly, and that is not to just say--the first are first 
because they are first and not on any other reason.
    On the nano technology stuff, which I believe Mr. Venneri 
spoke about first, it is so cutting edge, I wonder how it is 
that we insure an adequate discussion, if you will, amongst the 
scientists of that technology.
    And I am reminded of our difficulty in Congress in trying 
to write rules, regulations, or laws, if you will, that require 
an institution of higher education who might do research to 
share that technology in an adequate fashion.
    How do we achieve that goal?
    Mr. Venneri. Well, let's see. There are a couple of phases 
of that. This administration has organized among all the 
Federal Government a national nano technology program that 
required all of the Federal agencies to get together and, in 
effect, produce one document that said, ``Where are the 
investments today and where should they be going?''
    We're in the process of looking at worldwide investment. 
We're trying to develop government policy today to get at the 
issues that you're bringing up, namely, not one of just doing 
basic research, but the policies required to go from basic 
research to demonstrations of technology insertion, all the way 
to encourage industry investment into radically new industry 
processes that would have to use this new technology baseline.
    So it really spans the gamut. We're at a fundamental 
exploration stage now of research where scientists and 
engineers are beginning to understand that basic property, and 
there clearly needs to be overlaid on that a policy of 
government investment, industry partnerships, and then bringing 
the universities in because, quite simply, the work force that 
would exploit that technology base really isn't available.
    Mr. Ose. If I may followup on that, it almost seems like we 
have a very large challenge there, my concern being that we may 
inevitably end up trying to do too much or lacking an adequate 
focus of being a clearing house. That may not be the right 
word, but a clearing house, if you will, for this information.
    Now, does the nano technology institute that you are 
talking about that we are in the process or have completed 
setting up have sufficient focus to make sure that that 
information or that knowledge base is distributed?
    Mr. Venneri. It's really NSF that is the lead agency. 
Agencies like the Department of Energy, and NASA are on this 
team of people of senior executives in the government. We're 
trying to really use the modern Information Act to get the 
information out there, and then the usual means of workshops 
and scientific conferences.
    And I share your concern because it takes more than just 
published papers and standard workshops. There needs to be 
other mechanistic approaches that include innovative 
investments and perhaps bringing the venture capital community 
in that would look at ways of putting this technology into an 
industrial policy, and that's the gap that you're referring to.
    Mr. Ose. Mr. Louie, is there a shortage of venture capital 
in these area?
    Mr. Louie. Actually, there's billions of dollars of venture 
capital in these areas, and they're all very competitive, 
trying to see the best new technologies and companies to invest 
in.
    Mr. Ose. Well, I have to admit I was, as a private sector 
person, I was somewhat interested in why the Federal Government 
would commit $60 million to a venture capital instrument, given 
my understanding that there is a substantial amount of venture 
capital out there looking for homes.
    And I regret missing your testimony. If I could, I am 
trying to figure out how it is the government, Federal 
Government in this case, in a venture capitalist role could 
properly identify what its financial objectives are either in 
terms of end of the process profit or rate of return or any 
other conventional standard you'd care to introduce.
    Mr. Louie. Let me kind of do a review of some of the 
comments I made at my presentation. That may answer some of 
your questions.
    I think, first of all, that the CIA particular needs in 
four areas of information technologies are areas that are--
currently has large sums of venture capital investing in those 
particular technologies. One of the challenges the CIA has is 
since it doesn't, quote, unquote, swim in the valley, as George 
Tenet would say, it's unaware of many of the developments and 
technologies that are happening in here.
    The venture capital community is very small, very tight. 
People know each other. It's a very well regarded network from 
all the different technology centers throughout this country. 
And there was an opportunity and is an opportunity for the 
Federal Government by tapping into those existing networks, can 
find out those destructive technologies early on.
    In many cases these early investments that we have made--we 
are making were brought to our attention by other venture 
capital funds, what we call the A level funds, who have come 
across technologies that may be interested to the Federal 
Government, and what we do is we use a variety of traditional 
strategies like terrain mapping. We look at a particular 
company who approaches us and take a look at everybody who is 
in that competitive space.
    We invite companies to come and talk to us, but 
fundamentally the reason why we're doing it is because in many 
of these cases we're able to take a million or a few million 
dollars of Federal Government money, leverage it against $20, 
$30, $50 million of private sector venture funds, develop 
technologies which are specifically applicable to what we're 
doing, and in many cases companies have provided us their 
technology at cost and told, at least in terms of the research 
component, that they would rather not take dollars from us, and 
if we could put $1 million in investments, they could raise the 
$20 million necessary to do the research from other sources. 
Yet we get all of the technologies we need for the CIA.
    Mr. Ose. I am willing to take more information on this, but 
we are going to move on. I am not convinced that using $60 
million for venture capital achieves perhaps the same bang for 
our buck as a focused $60 million in basic research.
    You need to understand that's probably a philosophical 
issue more than it is anything else.
    Mr. Louie. Yes, I don't think there's a substitute for pure 
research. I think this is $60 million that they might have to 
spend hundreds of millions of dollars in acquisitions. It's a 
different goal.
    Mr. Ose. But there is no lack of venture capital in the 
market is what I----
    Mr. Louie. No. In fact, many of those venture funds at 
teaming with us on many of our deals.
    Mr. Ose. OK. Dr. Shank, if I could, you have touched on a 
subject that is near and dear to my heart. You talked about in 
your testimony the O&M savings from building ownership in terms 
of energy usage, operations, and maintenance. And I'm curious. 
I see the testimony on the cost savings, but I did not see, for 
instance, the relative cost per square foot construction.
    For instance, if a standard building in today's environment 
under a conventional energy plan costs $100 a foot and we're 
going to look at a building that's going to have 30 to 40 
percent less expensive energy operations after it's built, what 
would its relative cost be, 120, 140?
    Mr. Shank. I think that the cost savings that I gave in my 
testimony, in fact, included the cost of the capital that went 
to achieve those cost savings.
    Mr. Ose. Right, but I do not see a comparison, if you will, 
on a, pardon the basic terminology, on a per foot basis. I 
mean, I am a building. All right? I build a building, and it 
costs me X number of dollars a foot using conventional 
technology and energy measures. You are going to have to put it 
in layman's terms for me.
    If I were to use the technology that you have highlighted 
here, that would generate savings on lighting costs and energy 
and overall utilities. Would I be at something more or 
something less than what I would call a traditional----
    Mr. Shank. Well, I think one has to look at the service 
life of the building and the aggregate cost of building the 
building, plus operating the building, and from the government 
point of view, you want a building that you've paid for and you 
operate. The up-front cost is a piece of that.
    I think that the cost savings that I gave there include the 
additional investments that have to be made in order to utilize 
those technologies, and that is part of the net investment in 
order to get the return for any of the cost savings, and many 
of the things that we have done in this area, for example, 
windows that have insulation properties of walls, those windows 
and the cost of those windows and the amortization of those 
costs depend on from product to product.
    But if you are going to talk about cost savings, you have 
to include that initial investment.
    Mr. Ose. That is what I am trying--I do not----
    Mr. Shank. Each technology will have a different--I can't 
give you an answer to dollars per square feet. I could take the 
aggregate cost of the building that you have there and tell you 
what the ultimate savings would be, assuming a cost of energy, 
but I cannot tell you what that increased cost would be for the 
building.
    I'd be delighted to provide that information to you if 
you'd like in terms of what it would cost to make an investment 
to get these returns.
    Mr. Ose. That is the information I am trying to get to.
    Mr. Shank. And I can provide you with that, but the 
aggregate cost that is quoted there, the numbers of we hope to 
see billions of dollars of savings will come about because we 
use less energy. We made an investment up front in order to use 
less energy to accomplish the goal of higher energy efficiency, 
and each of those will have a cost recovery time line, and 
those are the appropriate numbers.
    But I would be delighted to provide that information to you 
and show you where we are in terms of taking advantage of the 
investments that we have made in this area and have produced 
cost savings.
    Mr. Ose. As a landlord, I can tell you for a fact building 
is one thing. Operating it is the second step, and I would 
welcome to have that information not only available to 
Congress, but to the--I mean I know contractors look at this 
all the time as well as building owners, but to make it part of 
the record, Mr. Chairman.
    Mr. Shank. I would be delighted to do that.
    You will also notice that there are tools that we have 
developed, software tools for designing energy efficient 
buildings. Those tools are widely available from the Department 
of Energy, which are standard tools now for energy design, 
lighting design, and those tools themselves add the ability to 
produce avoided energy cost with very little investment.
    Mr. Horn. Without objection, the letter you send back on 
the data on this will be put in the record at this point.
    And that is very helpful. I agree with Mr. Ose completely, 
having gone to the legislature many a time to get a building on 
the Long Beach campus, and we never lost one, but we always 
heard about, ``You guys always spend too much money on this and 
that,'' and so forth.
    The capital outlay is a drop in the bucket compared to the 
operation. The operation will chew you up in a couple of years, 
and the amortization usually on capital outlays is sort of 
crazy if you aren't looking at the operational costs.
    Now, as I remember, doesn't Berkeley have a School of 
Architecture?
    Mr. Shank. Berkeley does have a School of Architecture. 
They have collaborated with the lab and, of course, many of the 
tools that we use are ones that are used by folks who are 
teaching architecture.
    Mr. Horn. That is great because usually it does not work 
that way. Usually they are off in the clouds somewhere, and I 
am delighted to hear they are working it into the students' 
understanding of how you can save 40 percent on electrical 
cost. That to me is a terrific achievement.
    Mr. Shank. We have an architect actually who heads this 
program in our lab.
    Mr. Horn. Yes, that is great.
    Mr. Ose. Mr. Chairman, if I might.
    Mr. Horn. Yes.
    Mr. Ose. I went to Berkeley, and I think I was the last 
Republican that graduated from there. [Laughter.]
    Mr. Horn. You and the Young Republicans in 1964.
    Mr. Ose. That is right. We were tight, let me tell you, but 
the program that Dr. Shank is referring to was so successful 
that the information made it into the business school, and I 
have been trying to utilize it ever since.
    Excuse me. I did not mean that. My time is up.
    Mr. Horn. Well, you always ask great questions. We will get 
back to you.
    And let's talk a little bit about the nano technology that 
Mr. Venneri and I had an exchange on. I think you are probably 
in the best place right now to give me an answer to this 
question, which is: what are the social benefits of the 
emerging technology? And what do you see as the potential 
dangers down the line and how we prevent them from occurring.
    Mr. Venneri. Yeah, that's an astute question. Let me be 
brief with an answer. That's something we're thinking about. 
We're not taking that lightly. It's really those three 
technology areas, and one of the--two of the other witnesses 
today alluded to that, too. It is really the coupling of nano 
technology with the information technology and biotechnology, 
that really each one separately will have an advancement in our 
base, but combined will put us at another technology decision 
point that really does effect our products.
    In our case, we're looking at it for thinking spacecraft 
and machines that assist astronauts in harsh environments, but 
the potential for that technology to be abused is very high, 
too, and to be used in products that could be one case 
benefiting society and the other case hurting society or the 
potential to hurt society is there.
    We think that is something we need to look at, and it is 
something that I alluded to in terms of this technology ethics, 
and it goes back to, you know, when we invented atomic energy, 
and actually the scientists in the 1930's had that same 
question, if you recall, when Dr. Oppenheimer was trying to 
stop the use of nuclear weapons after World War II.
    We're at, I think, another brink or another bifurcation 
point of needing to go back, and that is not just NASA, but 
government as well, both the congressional side and the 
executive side. I think there needs to be some thinking in 
terms of how we address the potential breakthroughs and 
pitfalls of technology, and perhaps a dialog.
    It was alluded to the benefits of genetically altered 
plants, but look at the controversy, the lack of information, 
the lack of clear policy that really rippled through not only 
this country, but around the world over where that was totally 
misunderstood, and that was something benign.
    This is something that is not necessarily benign. I think 
maybe the science fiction writers tend to elevate it higher, 
but it's something I think we need to address.
    Mr. Horn. Anybody else want to comment on that question? 
Any other thoughts on answers on that?
    [No response.]
    Mr. Horn. Well, let me move to a point that Dr. Huttner 
noted, the FDA, Food and Drug Administration, which is an 
agency within the cabinet office, cabinet department of Health 
and Human Services.
    Now, a lot of problems have occurred over the years with 
the FDA, and often it has been 11 years before they could ever 
clear a project that is a pharmaceutical, and when we ask 
pharmaceutical companies, ``Why can't you lower your costs? 
When you go to Mexico, you lower them. When you go to Canada 
you lower them. How come we are having to pay this, this, and 
this, and particularly senior citizens?''
    So we are now going to add a pharmaceutical cost solution, 
shall we say, on the Medicare program. We will do that in the 
next 2 or 3 months because we have to, and that is because the 
price of pharmaceuticals is immensely high when you're trying 
to get at the diabetes problem and all the rest of it that 
senior citizens seem to increasingly have.
    So the problem would be to what degree do you think the FDA 
is in a position to really deal with nano technology, and what 
do you think would be the problems, if any, and what should 
Congress do or give them either a different type of authority, 
or how do we deal with this so that technology is not, shall we 
say, put under the stamp of the bureaucracy and you do not see 
it for years when you have an evolving technology?
    Mr. Venneri. Yeah, if it was strictly nano technology, then 
I wouldn't see the FDA involved, but I think you're using that 
in the term of this revolution and this convergence of 
biotechnology and engineering coming together in the forms of 
miniaturization at that scale.
    Right now you don't want to have agencies like ourselves 
and DOD that are technology based being totally in that 
decision mode. I don't think the FDA has the expertise or the 
background either to address it. It's really perhaps beyond any 
one agency, and that's what I was suggesting in terms of the 
political process, which really sets government policy driving 
it.
    I don't think any one government agency and the regulatory 
agencies that exist today are really structured or have the 
expertise in them to deal with it in the form that we're 
talking about.
    Mr. Horn. Well, if you had your druthers, how would you 
structure the review agencies to deal with the very difficult 
questions? Some will be ethical, and just like cloning and what 
that's done in the Congress. How would you put it together?
    Granted it is interdisciplinary with different focuses and 
people that should be neutral to be able to look and see is 
there an impact that we should worry about or is that just sort 
of hyperbole that we shouldn't worry about?
    Mr. Venneri. Well, actually to get our hands around it, 
we're actually going to set up a structured subcommittee under 
our advisory process that brings in a cross-section of people 
in most likely to be led by a non-technocrat, but someone with, 
you know, religious training in the life sciences. If you want 
a sense of ethics, and to actually do that ourselves, we will 
use that process to gather information, then use that as a way 
for us to structure policy that we think makes sense.
    And I'm suggesting perhaps on a national scale, that model 
ought to be followed.
    Mr. Horn. In a sense that's what universities do with their 
ethics committees, is to have people that have different 
perspectives and review the type of research that's going on. 
So would it be such as those research----
    Mr. Venneri. That's correct, and in our case, we would 
identify what we would think would be potential problems to be 
concerned about in investments, in protecting information. You 
know, we know how to do things to protect nuclear weapons 
information, but this is much more complex because this 
information isn't falling under the national security. So it's 
out in the public, and it's out in all of the universities.
    What we're talking about is being done on a worldwide basis 
now. So this is not within the confines of the U.S. Government.
    Mr. Horn. To what degree would the National Institutes of 
Health be involved with NASA in this?
    I am asking that question because the National Institutes 
of Health, we've poured several billion more than anybody 
thought into them in the last 2 or 3 years, and obviously there 
is a major sort of rush, shall we say, and I agree with some of 
it, to have the genetic side of NIH pursue these various and 
sundry things. And they are sort of squeezing one of the 
laboratories they have had within the NIH, which would deal 
with pharmaceutical companies in terms of, say, plant life, 
marine life, and so forth as it relates to some of their 
diseases, cancer, AIDS, in particular.
    And they have the authority from Congress to move money 
around, and the question would be how do we deal with that when 
you have got NASA and you have got Agriculture, and if you want 
to get into the genetics of some of the plants, one of the able 
Secretaries of Agriculture was pretty good at it, a guy named 
Henry Wallace, who brought us hybrid corn.
    And our European friends do not have a strong Academy of 
Sciences, which would allay a lot of the fears that they put up 
simply to keep our products out of there, but how do you feel 
you would move on that, on some of those? Maybe energy is 
included in this, but in terms of I guess what the behavioral 
sciences would talk about with all of this matrix that we need 
to bring the best of every agency to look at this and to have 
an opinion on it, but not be able to block it.
    Mr. Venneri. I really believe that to get at the issues you 
are saying falls into one particular camp: OSTP; I think, 
whatever the next administration is. I think that is relevant 
policy for them to undertake coming this fall, and actually for 
the next Congress.
    Your subcommittee, I think, is a good starting point to 
actually focus in on that particular issue. It's no longer 
technology, but the ethics of technology, and structuring a 
government coordinated effort. It really emanates from the 
administration and Congress to make sure that agencies are 
working together and they are putting in place the safeguards 
and what I would call the peer reviewed ethics, and to not have 
it be each agency do their own thing, but really falling under 
a government framework that can be an articulate policy for 
this country, and hopefully the other parts of the world would 
follow that.
    Mr. Horn. Now, how has the Office of Science and Technology 
been as you have seen it just on NASA matters and the Science 
Advisor to the President, which is a key position few people 
know about, talk about or anything else?
    But I remember under President Eisenhower, he had a very 
distinguished professor of chemistry from Harvard that did a 
lot of good work in those days. But is that enough for the 
White House or should there be something within the Office of 
Management and Budget that parallels?
    Because they have regulatory authority of either holding up 
regs, or not implementing them, and of course, they presumably 
survey the administration, but they also sit on things, too, 
like other bureaucracies.
    And so you think the OST, Office of Science and Technology, 
is the one that ought to be because of the knowledge base that 
would come to that with them?
    Mr. Venneri. Yeah, I would agree with that, and OMB works 
with them now on actually two initiatives in this 
administration. One, Dr. Neal Lane, who is the head of that 
activity, pushed a national nano technology program, and in 
reacting to the information technology lack of investment by 
the Federal Government, roughly a year and a half ago they 
structured a Federal-wide activity in information technology 
R&D that was lacking in the country.
    Now, this is moving at very high speed, what we're talking 
about, and the issues of technology ethics really came in our 
mind about 6 months ago when we saw the implications of some of 
the things we're postulating for products, and it was also in 
our interactions with National Institute of Health, 
particularly with Rick Klausner, who runs the National Cancer 
Institute.
    We told him our plans about this technology ethics, and his 
reaction is: good idea. We want to work with you on it.
    Mr. Horn. Of course, he has left now, hasn't he?
    Mr. Venneri. Well, he was still there last week.
    Mr. Horn. Oh, was he?
    Mr. Venneri. He was thinking of leaving.
    Mr. Horn. I thought he had left.
    Mr. Louie, do you have a comment on any of this?
    Mr. Louie. You know, I think ethics and how all of this--
advances of technology are moving so fast and so quickly that 
historically in which you can contain technologies in our 
universities and in our Federal research centers, I think the 
rules have changed. I think the commercial market space has 
really put trillions of dollars into investing in these new 
technologies. So the genie is out of the bottle.
    The question is: how do we manage that? How do we be 
responsible? How do we as a government lead by example and get 
corporations, especially in the global marketplace, to 
understand the impacts of their technologies?
    This is not an easy challenge that can be legislated. It's 
something that we're going to put a lot of energy behind. It's 
not an easy problem.
    Mr. Huttner. Mr. Chairman.
    Mr. Horn. Yes.
    Mr. Huttner. Can I just make a comment?
    Mr. Horn. Sure.
    Mr. Huttner. I can't help but reflect on our experience in 
biotechnology here, and I'd hope that we had learned something. 
Back in the mid-1970's there was a certain amount of debate 
that was promoted by the research community about the safety of 
using the new gene splicing techniques, and what we failed to 
understand at that time was that we weren't making it clear to 
the public, especially to the media that, in fact, these 
techniques weren't so different.
    They were incremental enhancements over other technologies. 
So we had lost the opportunity to explain that this was a 
continuum of advances, and we had a lot of experience with 
earlier technologies, and we could use that experience to judge 
how best to use the new advances.
    So as we're moving forward in the area of nano technology, 
which is quite a buzz word these days without a lot of 
definition attached to it. I think we need to be cautious to 
build the right context around it and bring it into focus for 
the specific applications and research targets that we're 
talking about.
    Mr. Horn. Do you want to add anything to that, Dr. Rudee?
    Dr. Rudee. No, thank you.
    Mr. Horn. Mr. Davies.
    Mr. Davies. No, sir.
    Mr. Horn. Dr. Williams.
    Mr. Williams. Yes, I think on the genetic engineering of 
food there's a lot of talk and controversy. If a food product, 
whether it be plant or animal, is genetically engineered to be 
tastier, to be more nutritious and that's all that's done, or 
to be more productive in the case of cattle or crops, then 
that's good.
    The concern I would have is when genes are added to perhaps 
make a plant that people eat contain a pesticide that will kill 
bugs. This, of course, is being talked about. If this is done, 
then you are introducing a new substance, not necessarily 
nutrition, into the food product. That needs to be looked at 
very, very carefully to insure that this new substance that's 
being introduced, which is called it a natural pesticide, if 
you wish, is, in fact, safe; absolutely 100 percent safe for 
human consumption.
    Mr. Horn. Dr. Popper, do you want to add anything to that?
    Dr. Popper. Yes, Mr. Chairman. I think you quite rightly 
point out the problem of coordination that exists in this field 
and, indeed, in many other emerging fields of technology and 
science.
    There are a couple of other institutions within government 
that try and affect this coordination, one, of course, being 
the National Science and Technology Council, where the national 
nanotechnology initiative was incubated, as well as PCAST, the 
President's Council of Advisors on Science and Technology.
    I can't recall precisely in which document. I don't know 
whether it was on the formal recommendation by PCAST or the 
actual national nano technology initiative as it was announced, 
but I believe they deliberately called for a set-aside, for a 
certain proportion of the funding precisely to focus on better 
understanding of the social, cultural, moral, ethical issues 
that would result from developments in this area of technology.
    Mr. Horn. Dr. Shank, any words of wisdom?
    Mr. Shank. Only to say that the ethical issues are really 
only a part of the problem. I think that we at the society have 
developed a set of fears about technology, some based on fact 
and some based on fiction, and I think that gaining the trust 
of the people in the country about applying these technologies 
is an extraordinarily difficult thing to do, and I think that 
contemplating the ethical issues is certainly important, but 
also providing people with enough interest--enough information 
to be able to make informed judgments.
    I think we're all facing problems in our research 
environments where there's a great deal of concern, and these 
concerns tend to go in waves, in fashion. There was a period of 
time as just was pointed out that biotechnology was going to be 
banned. I live in a city that banned biotechnology and moved 
all of the biotechnology companies out of the city. Now they'd 
like them to come back.
    I think that these are issues of fear. We have to have 
patience. It takes time, and I think that all of these efforts 
are appropriate and need to be done.
    Mr. Horn. Gentlemen, we thank you, and the gentleman from 
California, Mr. Ose.
    Mr. Ose. Thank you, Mr. Chairman.
    I want to go back to one particular thing. I think, Dr. 
Huttner, you mentioned it. Congressman Smith's report on risk 
in the food supply as a result of changes in the regulatory 
structure over seeing biotechnology versus what I would call 
classical Mendellian genetics indicates that there's no 
evidence to suggest that biotechnology foods have any greater 
or less degree of risk than those that are created through 
classic Mendellian genetics.
    Mr. Huttner. That's right.
    Mr. Ose. That is accurate?
    Mr. Huttner. That's accurate.
    Mr. Ose. Is it accurate to say that in a very real sense, 
the development of biotechnology in these added attributes to 
plants, for instance, basically accordions or compresses the 
time during which genetics could otherwise be used to improve a 
plant?
    Mr. Huttner. Yes.
    Mr. Ose. In other words, are we achieving through 
biotechnology what we're going to achieve anyway through 
classic Mendellian genetics?
    Mr. Huttner. Yes, with greater precision. The difference 
between classic breeding techniques is that you take two 
sexually compatible plants and exchange hundreds of thousands 
of genes in a random fashion between the two plants in the new 
progeny, and as a result of that, you'll get some of the traits 
you're looking for, but you often get other kinds of traits 
that you didn't want.
    So just like drugs, it takes a long time to develop a 
cultivar that's going to be useful in agriculture. It can take 
as long as a decade or longer for a new kind of plant to be put 
into production agriculture.
    Mr. Ose. It is like children, you know. Sometimes you get 
what you want. [Laughter.]
    Mr. Huttner. That's right.
    Mr. Ose. Last night we did not.
    Mr. Huttner. But with the new techniques, you can identify 
the genes that are encoding the trait that you're interested in 
and isolate just that gene and manipulate it without changing 
the rest of the genome of the plant, and so the findings of the 
National Academy of Sciences and the National Research Council 
in 1987 and 1989 are clear. Because we know more about the 
kinds of genetic changes that we're making, we're in a better 
position to judge safety and risk than we ever have been with 
traditional breeding.
    And I'd just like to add a point of clarification. There's 
not a food that's derived from plants that we're eating today 
that doesn't include genes to protect it against insects and 
diseases, and if you want to call them pesticides, you can, but 
I personally would rather not think of them that way, but 
they're plant defense mechanisms.
    Now we're able to identify defense mechanisms wherever they 
occur in nature and move them into our crop species. That 
doesn't make them inherently different or less safe.
    Mr. Ose. I just want to make sure I understand this. I sit 
on the Agricultural Committee. So I have more than a passing 
knowledge of this, but do you know of any evidence of a peer 
reviewed or otherwise--excuse me--I should say scientifically 
peer reviewed basis to indicate that we have a higher or lower 
degree of risk when you compare biotechnology food products 
with non-biotechnology or traditional Mendellian type of food 
products?
    Is there any difference or any evidence, any difference in 
risk to the consumer?
    Mr. Huttner. No, there's no evidence in the scientific 
literature that has demonstrated that there's significantly 
greater risk of using genetically engineered plants in farming 
or in food production when it's used in the typical situation 
of plant breeding standards, food processor standards, and FDA 
oversight mechanisms in producing the new food for sale in the 
marketplace.
    Mr. Ose. Thank you.
    Let me, if I may, kind of change tracks here, and this is 
more of an open question to all of you, though I'm going to 
start with Dr. Popper.
    You talk about the standards or creating the standards to 
bring certainty to industry within the technology, and then we 
have a lot of testimony today that the technology is moving so 
fast it's almost impossible to establish a standard. How do you 
reconcile that?
    And I'd appreciate any input from anybody on this one.
    Dr. Popper. Yes, Mr. Chairman, Congressman Ose, you raise 
precisely the point. This is exactly why this is such a 
troubling issue.
    On the one hand you have technologies developing quite 
rapidly. On the other, there is a sense, a growing sense at 
least based upon the sort of interviewing that we did that in 
many cases there is a difficulty in finding that fine line 
between when you actually establish standards that might, in 
fact, allow greater pace of technological development by 
introducing a certain amount of certainty versus the risk of 
setting standards too early that might freeze development and 
thereby cutoff opportunities that might otherwise arise.
    And it is precisely because of that complexity that we find 
that people in industry feel the need to be having 
conversations at a very early stage of the development process, 
conversations which are difficult for them to engage in not 
only between the potential producers of goods, but also 
conversations with upstream suppliers of components and 
technologies, and conversations with the downstream end users 
of these products for legal reasons, for practical reasons.
    They find it very difficult to engage in this sort of 
discourse and suggested that, in fact, this is an area where 
government could lend a hand, not in terms of setting 
standards, not in terms of imposing standards, but in terms of 
providing an occasion, providing venue, acting as a convener, 
so that the people who have interest in this area can engage in 
precisely that discussion. Do we need standards? When do we 
need them? What sort of sign posts should we look for, etc?
    Mr. Ose. I think the classical example that I am familiar 
with had to do with the cellular technology where we've 
basically yielded the manufacturing process to either Ericcson 
or Nokia.
    Dr. Popper. Yes, that is precisely the example that comes 
up frequently, an instance where to this day European 
manufacturers are able to move more rapidly, to introduce more 
advanced technologies to the benefit of their customers than 
our United States firms precisely because of lack of standards.
    Mr. Ose. Does anybody else have any input on that?
    Mr. Louie. Yeah. You know, standards are always a tricky 
issue because it in some ways is required to enhance 
competition. I look at standards like rice patties. There are 
these plateaus in which you want to have standards so that 
people can kind of harvest the rice, and there are times when 
you want the kind of legal standards behind and zoom up the 
other end of the curve.
    I think the government needs to understand its kind of role 
in helping out companies decide to put together standards that 
are good for industry, as well as good for government.
    And if you look at the government dollars that are spending 
in acquisitions, the U.S. Government may not be once like it 
was 10 or 30 years ago in terms of influencing technologies by 
straight investment, by commercial acquisitions, but still has 
a role to play, and we just made an investment in a consortium 
called Open GIS, which is data fusion for 3D space. It's a big 
problem that everybody is running around trying to map the 
globe.
    Mr. Ose. Did you mean we made an investment?
    Mr. Louie. ``We'' being taxpayer dollars.
    Mr. Ose. OK.
    Mr. Louie. Going into a consortium of companies because the 
Federal Government had the interest to make sure that all the 
different technologies that deal with maps talk to all the 
other technologies.
    And so instead of waiting for somebody that sees the 
standards, we notice that there was this momentum in the 
marketplace to form a consortium. So what we did was we just 
added some more dollars into the pot to encourage that 
development in the publishing of those open standards for the 
rest of other companies to use without actually writing the 
standards ourselves that we think we could use in a variety of 
technology fronts to encourage open standards, but at the same 
time not trying to be the governing body that dictates what 
those standards are.
    Mr. Ose. If I might interrupt for a minute, I want to yield 
2 minutes to the chairman.
    Mr. Horn. I know that Dr. Venneri has to go, and before you 
leave, I want to thank you for all you've done to help this be 
a very useful forum.
    Now, we've touched some of these areas, but we haven't had 
much resolution on them, and I just wondered. You know the 
whole works on the nano technology. What do you think we should 
cover that we haven't said anything about?
    Mr. Venneri. Right now we're--I tried to coach my 
presentation to say we're at the embryonic stage of a 
technology baseline for the next century, and at the beginning 
stage of this, I can't predict what's going to work out or not. 
I'm not sure 5 years from now if I'm going to have these ultra 
lightweight, super strong materials that, you know 10 years ago 
was the realm of science fiction articles.
    The problem, the challenges I think we see, I think we 
touched upon in some respects, and let me try to summarize. We 
have a society that I don't think understands technology. So we 
have a problem. My friends and colleagues that I work with, 
we're a very small, skewed part of this society. In some cases, 
I think this is a technologically adverse society we're in. We 
don't do a very good job of explaining technology to the U.S. 
taxpayer, the U.S. citizen. So I think we have a long way to go 
toward explaining the technology vision for this society, how 
it relates to their quality of life, not in technocrat terms. 
It needs to be clear government policy and be clear investment.
    We have a responsibility, on the other hand, particularly 
in the Federal Government, to do that risk mitigation of 
inventing the next baseline of technology. Most companies we 
find do not invest in the long term, high risk, high payoff. 
They simply will not invest in it. You know, the return on 
profits or profitability, and they're in a very competitive, 
get next year's product out, particularly the electronics 
industry.
    So we're really looking at what the Federal Government role 
is in high risk research with a high payoff, and that research 
needs to be gears toward how it translates from the laboratory 
into the industrial base.
    My career in the government, I've seen a lot of ``gee 
whiz'' technology ideas, would not have a chance of making it 
into any sort of technology baseline simply because it wasn't 
thought through enough. The issues of repeatability wasn't 
there. The impact on our products were not thought through. So 
it's the application sense, understanding the system 
application, and then really looking at the policy because 
we're in this technology for the next century.
    I think you saw the beginnings of it in the biotechnology 
controversy that started in the 1970's and is still going on to 
this day. It shut stem cell research down in this country by 
the Federal Government, and so what we're concerned about is 
this biology coupling with engineering which we believe is 
going to be a reality.
    We're on another plateau of a new engineering, scientific 
foundation. It's going to be this biology revolution coupling 
to traditional engineering, which is why I draw that triangle.
    And the implications of that, I think we need to work as 
this technology ethics, as we develop the research 
infrastructure. We almost need to start that now. It's too late 
10 years from now to talk about how the computer from 2001 and 
the implications of what that would mean in terms of society.
    And so that's why we're looking at this as an embryonic 
stage of industry.
    We need to do something about our education system. I agree 
with the assertion over what we see coming out of our education 
system, and it's simply not just get more people going to 
college. We need to go back to the grassroots. We need to look 
at our math and science foundations at the K through 12. We 
need to stimulate our young children to move into the 
university environment, not bemoan the fact that we don't have 
people in the university environment.
    So I think there almost needs to be a national policy on 
education that goes back at the K through 12 level toward a 
society that is becoming more and more technology driven, and 
an educational system that doesn't address that from the 
grassroots is going to leave people short here in the next two 
decades.
    So those are the issues that I have.
    Mr. Horn. Well, I agree with you, and I was planning to 
raise the one on education because I feel very strongly that in 
this State, which once was a leader in public education, we 
have without question fallen back in the K-12 operation on 
science and understanding of technology and the community 
college system, which is about 107 campuses in this State. They 
are doing some excellent work, and we need to if Silicon Valley 
or Nano Valley or whatever we can to call it now, but Silicon 
Valley should be working with those 107 community colleges on 
what type of programming and on the electronic side, but 
getting into this on the biological side, we need to stress the 
same thing.
    And it just infuriates me when some bill comes in that 
says, ``Well, we want 200,000 people from abroad because we 
don't have anybody here.'' That is nonsense. We have got them, 
and those are good jobs. Those are $60,000 a year jobs right 
now in Silicon Valley, and we need to be educating people.
    And if you told them that was $60,000, there would be a 
real focus because they could see a future somewhere, and the 
State never has enough money to get the latest generation for 
the classroom or the laboratory. So that ought to be their 
contribution, and ours ought to be to really educate people so 
they can bring people together at the third grade at least and 
get basic science concepts there and think in that terms.
    And in kindergarten there ought to be decisionmaking, to 
start with, in the school system, which they seldom do, but, 
you know, what are the consequences if I do this, and little 
students ought to know that. You know, they memorize baseball 
cards. They could learn another foreign language, which they 
ought to do, and one of them ought to be the scientific 
language and the mathematics language. Those are all languages.
    And yet we don't see the leadership here that's putting 
that together, and if we don't do it, we're going to really be 
in problems of shortage of skilled people, and as you say, we 
don't want to be a bunch of Luddites. Those are the people in, 
I think, around 1810 in England that just went in and smashed 
all of the machinery because they thought their jobs were 
going, and we have a lot of that in this society. You are 
taking my job away.
    And yet we are creating new jobs, and I thought your 
testimony was excellent on that in terms of what it has done in 
San Diego where they had some real problems in the aerospace 
industry. Although they are loaded down with the Navy there, 
but they have certainly moved ahead, and Southern Los Angeles 
has not yet moved ahead, whereas Silicon Valley recovered.
    Fairfax Silicon Valley in Virginia is going to be a major 
place. Every time I go to Dulles I see a new building popping 
up, and that is about once a week or every other week.
    So I thank the gentleman for permitting us to ask that 
question and partially answer it, but thank you again, Sam. 
Appreciate it.
    And the gentleman from California.
    Mr. Ose. I have but one more, Mr. Chairman.
    Mr. Horn. OK.
    Mr. Ose. Dr. Rudee, you talked about the inputs, if you 
will, now, the teachers that open up young minds to all of this 
new thought and new training. I know that we have in particular 
one bill we passed off the floor of the House, the Teacher 
Empowerment Act, I believe, that would give grants to 
localities or to teachers themselves to go get that extra 
training as the generations move through and there's higher and 
higher and higher expectations.
    Could you expand on how we make sure our teachers, those 
people you remember from first, second, and third grade that 
just kind of crafted our lives, if you will; how do we make 
sure we help them meet our objectives?
    Dr. Rudee. Well, I am not an expert at the K through 12 
system. My observation is that there's no magic bullet. You've 
got to do a lot of different things.
    I think teachers are still underpaid. It doesn't attract 
people. You heard the $60,000 number. You know, that doesn't 
translate to any of our school districts.
    One of the reasons we have to pay better, is that in the 
days when I went to school, teaching was one of the few jobs 
women could aspire to, and that's no longer true. Half of our 
medical schools now are women.
    And so we've got to pay more to get more people to want to 
be teachers who are choosing between options. It's a very 
difficult problem.
    One thing would be to have some scholarships that 
incentivize students to be math and science teachers.
    I think your issue about the community college is that they 
get lost in the shuffle in many ways, Chairman Horn. You know, 
you hear about the universities; you hear about K through 12, 
and then there's that 13 and 14. Well, they're doing a terrific 
job and a very needed thing for the society. I think it all too 
often drops through the cracks. Federal policy doesn't seem to 
focus on it. They sometimes get lost in the debate in 
Sacramento.
    So I can't say any one thing. The people in the educational 
business that I've talked to, deans of schools of education, 
all say that. There's no one thing that will do it. It needs a 
lot of activity on a lot of different fronts.
    Mr. Horn. Well, I think one of the main things is that 
basic liberal education, which includes science, social 
science, and the humanities, and that ought to be carried 
through all of the K-12 system, and it also ought to be carried 
through in the universities and the colleges because this is 
the type of interdisciplinary world we're going into, and you 
can't just be locked into some very narrow field because that 
narrow field is going to change dramatically.
    So I thank you for a lot of the points you had made. I want 
to just ask a couple of things here. I was particularly 
fascinated by the disaster area in relation to the Red Cross as 
implementing it, and I guess, Mr. Davies, the disaster area, 
taking it from FEMA, I do not know. For the first time we have 
had a first rate person running FEMA, and so how do you deal 
with that?
    I mean, if the Red Cross isn't there when the flood 
happens, FEMA has been so far, to my knowledge, in the 6, 7 
years I've been in Congress, and they have done an excellent 
job.
    Mr. Davies. Yes, sir. First off, let me give you some of my 
background. I am not a disaster manager. As of a few years ago, 
I was actually an expert in the intelligence community and got 
into this business because of the application of all source 
information.
    Our interests are in the information network aspect of 
things. So that's what we're working toward. You talked about 
FEMA and the Red Cross. That is all under this Federal Response 
Plan. That document defines which Federal agency is responsible 
for doing which chore during the disaster.
    A good example is clean-up, cleaning up debris after a 
hurricane or after an earthquake.
    Mr. Horn. But isn't that coordinated by FEMA?
    Mr. Davies. FEMA under the Stafford Act has responsibility 
for preparing the Federal response plan.
    Mr. Horn. Right.
    Mr. Davies. Like for clean-up, as I said, it's the Army 
Corps of Engineers. FEMA also has some lead responsibilities. I 
think there are 13 emergency support functions that are 
supported under the Federal response plan, and FEMA is lead in 
some of those. Other agencies are lead in others, and the 
American Red Cross is lead in the one.
    That's where we suggested the possibility of establishing a 
disaster information network. We believe you need a dedicated 
disaster information network. The infrastructure exists. It's 
the Internet, but you have to partition part of that with an 
Intranet type of concept.
    You need the security, and you need the dedicated system. 
The way I view the world and the disaster world is you have a 
bunch of end users, the war fighters, and again, I'm going back 
to my old career as the Defense Intelligence world.
    After Desert Storm, there was this concept that suddenly 
appeared called the war fighter, and the intelligence community 
realized that they had failed in supporting the war fighter. 
Those were the ultimate end users, the folks in Desert Storm. 
We couldn't get them the intelligence information they needed.
    Well, the war fighter in the disaster world is the first 
responder. It's the fireman. It's the police man. It's the 
first person on the scene the person who has to do the work.
    Now, the last thing you want to do is to give him, you 
know, a gigabyte image satellite picture of the disaster scene. 
You want to give him useful information, something he can react 
on.
    Well, there's a whole other world over here who knows how 
to generate that useful information. It's the USGS. It's FEMA. 
It's the universities who are the experts in that sort of 
domain. The two are not connected. Sure, they can go on the 
Internet. That's one of the rationalizations.
    Sure, we'll just give the disaster manager a computer, give 
him the Internet, and he can go surf and find that information. 
He doesn't have the time to do that. He has no interest in 
doing in that.
    So the disaster information network concept has evolved to 
say, ``Well, this is what's going to link everybody together,'' 
and that's kind of what we're working toward.
    Mr. Horn. Well, I think there is a lot to that. On the 
other hand, the way you get disaster aid is when the--in 
Paramount City in my district, the other day we had a tornado. 
Did anyone ever hear of a tornado in southern California?
    Mr. Davies. Actually there was a tornado in Sunnyvale about 
2 years ago.
    Mr. Horn. Really? Well, you're way ahead of us. [Laughter.]
    It's moving south is right.
    Mr. Davies. Right.
    Mr. Horn. Anyhow, it wiped out and wrecked many of the 
mobile homes in one mobile park, and last year we had a tornado 
that took the roof of the Lucky's store off in Long Beach, and 
usually when that happens, then the city will say, ``Hey, we 
have got a real problem here,'' and it will either escalate to 
the county and they will say they have got a real problem and 
go to the Governor, and the Governor is the one that has to 
certify it to get FEMA moving on anything if there is a real 
problem with life and death and so forth, and not being able to 
get into your home.
    Well, we did not have it that difficult. It is just an 
awful nuisance that people's homes had been hurt and they got 
off their foundation and all of the rest, but the question 
would be: does the Red Cross--can they do all of those 
functions that FEMA does or do they just have one little area 
of it?
    Mr. Davies. The Red Cross just has one small 
responsibility, and they are the lead agency for disaster 
relief. So they provide----
    Mr. Horn. What is that, a check?
    Mr. Davies. No, it's housing.
    Mr. Horn. With housing? OK.
    Mr. Davies. Right. I think it is FEMA who comes in for, you 
know, if your house has been destroyed. It is FEMA and the 
Small Business Administration who come in and supply the loans.
    Mr. Horn. Well, yes, and they have all done their thing. It 
is like housing with HUD and this kind of thing, and that is 
why I am just curious. It is the first I had heard of that, and 
you are saying that is now what, policy?
    Mr. Davies. No. The Stafford Act is law. It has been law 
for a long time, and it very specifically defines which agency 
is both lead and supportive in this process.
    Mr. Horn. Yes.
    Mr. Davies. We also bring out the observation today if the 
Red Cross didn't exist, you know, it's one of those things we 
would say, ``Well, of course, we need that,'' and we would all 
get together and invent the Red Cross, and that's the argument 
we're making about our disaster information network.
    People kind of think it is already out there, but it's 
quite remarkable for somebody who just got into this community 
to see that there is no such thing, and the local disaster 
managers are really overwhelmed because of the changing world 
of technology. They just can't catch up.
    Mr. Horn. Well, yeah. The Red Cross and the Salvation Army 
and a number of groups, such as HUD, they do a very fine job in 
many of these, but it just struck me that there is a matter of 
timing here, and when you have got a government-to-government, 
presumably they ought to be faster than going through a lot of 
other groups that might not be ready, might be on vacation. Who 
knows?
    So I have one last question, and that is what the 
subcommittee is working on over the last few months and will be 
working on a few months more, and that is computer security, 
and that relates to every type of research and it relates to 
privacy, and the question is: what should the computers that 
are owned or leased or whatever by the Federal Government from 
various types of electronic action, whether it be computers or 
others, and the question would be what are the standards that 
should exist in any Federal, State, local computer where it is 
subsidized by the Federal Government that they have certain 
things they have done to control access to that computer.
    And we all know we have got a problem, and one of the 
problems is nobody is willing to talk about it when they have 
had all of these hits by either the amateur 17 year old who 
wants to show he really knows how to get into a privately 
controlled or very--well, let's take the Department of Defense, 
for example, is a favorite of many of them.
    And then you got foreign powers that also have the money 
and the computer capacity if they want to make mischief, and 
that would be perhaps to get into your venture capital aspects, 
and I do not know if any of you have had your own computers 
sort of raided by others, but the problem we face is trying to 
get some standards that the Federal Government executive branch 
part would have to conform to as a way to reduce the impact of 
the mischief makers.
    And I would welcome any thoughts on that, and there are 
other questions we might have to send you. We would 
particularly appreciate it if you could spend a little time 
with us on the answers, and we will put them at this place in 
the record.
    But on that standards, I would welcome any thoughts right 
now on that and any of you that are dealing with it.
    Mr. Davies.
    Mr. Davies. One of the outreach efforts we've been working 
on with the development of the disaster information network is 
the FBI Infraguard program.
    Mr. Horn. Right. We have worked with them.
    Mr. Davies. This is kind of a new outreach effort by the 
FBI to become friends with industry, universities, and 
government agencies, and the idea the FBI has is really to 
buildup a relationship. It's a relationship marketing effort 
that the FBI is going through, and they're going to have an 
Infraguard program in every regional office.
    We are actively working with the San Francisco Infraguard 
program, and we approached this for two reasons. We wanted, 
one, to protect our disaster information network from these 
people, but we also felt that it is the disaster information 
network that can be used by the FBI to help distribute 
information, and that's one of their primary concerns now.
    They're actually afraid to turn on the Infraguard Web site 
because they realize as soon as they do that, it will be the 
prime site to be hacked.
    Mr. Horn. Yes.
    Mr. Davies. That's one of the other things. As the public-
private partnership, we've kind of offered them help in hosting 
that Web site, and we're not the FBI. So if we get hacked, it's 
part of the learning curve.
    One of the things I've learned working with the development 
of this information network, the Federal Government is afraid 
to fail. A lot of the organizations within the government are 
afraid to fail. Well, industry is used to failing. So that's 
how you make success.
    So you fail a few times and move forward. So we're kind of 
working with that with the FBI. They're afraid.
    Mr. Horn. Any other thoughts on this, on the standard? Any 
of you been raided and now know how to diminish it a little 
bit?
    Mr. Shank. Well, certainly any national laboratory is under 
constant assault. I would like to caution against setting 
standards. I believe that each computing facility is 
sufficiently different, that the risk needs to be matched to 
whatever protection policy you have in place, and that one 
standard that applies to all computers could be more harm than 
good.
    The rate at which the world is changing in computer 
security is such that a standard set today is almost irrelevant 
tomorrow. I think that performance metrics in protecting data 
certainly is something you should be concerned about, and I 
would be concerned about what your actual losses are and have 
you put enough resource to protect whatever needs to be 
protected.
    If it's a Web site that just provides information, that's 
one level of worry. If it's information that's proprietary or 
government sensitive, that is certainly another level of 
protection.
    And I'm very worried about having a standard that we put in 
today and one 15 year old kid makes it obsolete tomorrow, and 
we could be spending a lot of money doing things that really 
aren't allowing us to fight the battle.
    So my encouragement is to say we have an expectation that 
you will protect the following things, and we would like to 
measure what your losses are and what your failure to protect 
is rather than trying to put together a standard because no one 
knows how to make a standard.
    At our laboratory, we have invented something called an 
intrusion detector. We want our laboratory to be open. It's 
unclassified. We would like people to have access to what we 
have. We protect our data, and that's not connected. It's air 
gapped from the system, and the way we work is that we let 
people in, and then we watch their behavior, and if they're 
doing something like trying to go into a machine, we kick them 
off the network.
    Another approach is to put a firewall up and not let people 
in. These tradeoffs between the ease of use and the standard of 
protection are almost a fungible quantity. You can have an 
extremely protected system which is very difficult, if not 
impossible, to use, and you can have one that's unprotected and 
easy to penetrate.
    Making that decision point for each different computer is 
really the key issue, I think, in world class cyber security.
    Mr. Horn. Mr. Louie.
    Mr. Louie. Information security is one of the areas that 
we're spending a lot of energy in. A couple of pieces of 
information for the committee. Over the next 3 to 4 years 
there's probably going to be in the neighborhood of $30 to $40 
billion invested in information security by the commercial 
marketplace.
    I also agree with Dr. Shank that it's dangerous to set 
standards. The CIA tried to set a standard in the old days 
called the Orange Book. It was kind of an interesting exercise. 
The moment it got published, the book was pretty much 
irrelevant.
    And one of the things that you learn in information 
security, that it isn't standards. It's processes and being 
able to communicate with other individuals about what risk 
assessments are.
    There are some things that we could do as the Federal 
Government that could actually improve the overall security of 
our infrastructure. One is providing appropriate 
communications, what we call certs, to make sure that people 
discuss with each other what are the current vulnerabilities of 
the systems, report attacks as soon as they happen, begin to 
identify patterns.
    The other areas that I think the Federal Government can 
encourage is industry to adopt standards, standards which 
certify different levels of performance based on the quality of 
protection against known attacks and to update that and provide 
necessarily additional funding if necessary to constantly 
change and update those certifications processes so that the 
people understand what they're getting.
    The average person today who buys a home computer and plugs 
into a DSL or cable modem doesn't realize how vulnerable they 
are or how their personal computers can be used in a large 
scale attack.
    A lot of this is education. A lot of this is communication, 
and I think that's an area that the Federal Government can take 
leadership in.
    Mr. Horn. Any other thoughts here on the computer standard 
process issue?
    [No response.]
    Mr. Horn. Well, if you think of any, let us know.
    Let me now thank those that really worked hard to set up 
this hearing. First I want to thank Dr. Henry McDonald, the 
Director of the NASA-Ames Laboratory, and his staff. We really 
appreciate the hospitality that they have provided here.
    And I have thanked already Sam Venneri, but he is Associate 
Administrator, and he has done a fine job in Washington. I 
think those of you with NASA ought to know that Dr. Golden is 
without question one of the best administrators and visionaries 
in Washington, and I have known that every day I have been in 
Congress. So you do a great job with NASA.
    And William Berry and Ken Christensen here, and Sheila 
Johnson, Lisa Lockyer and Laura Lewis have been very helpful in 
the hospitality area, showing us around your very important 
campus here.
    And then for the Subcommittee on Government Management, 
Information, and Technology, J. Russell George, staff director. 
Well, he is to my left there, and Bonnie Heald to my left, 
professional staff member, director of communications, and then 
Brian Sisk on the right side here, the clerk for the 
subcommittee, and the court reporter this morning and this 
afternoon is Toma Brisbane.
    So we thank the court reporter for this fine work because 
we have had a lot of witnesses, and we have had a lot of 
questions. So thank you all for spending this time with us, and 
I believe Ames has done that. You are invited to lunch, 
courtesy of the Ames Center here.
    So with that, we are adjourned.
    [Whereupon, at 2:50 p.m., the subcommittee was adjourned, 
subject to the call of the chair.]

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