Quantitative and theoretical analysis of the joint Department of Energy-National Institute of Standards and Technology Energy-Related Inventions Program from 1975 to 1995: Implications for development of public policy toward innovation

This dissertation presents 18 alternative models for computing the social rate of return (SRR) of the joint Department of Energy (DOE)-National Institute of Standards and Technology (NIST) Energy-Related Inventions Program (ERIP) from 1975 to 1995. The models differ on the on the choice of societal benefit, adjustments made to the benefits, accounting for initial investments in ERIP and annual program appropriations. Alternative quantitative measures of societal benefit include annual gross market sales of successfully commercialized ERIP-supported inventions, annual energy savings resulting from the use of such inventions, pollution-remediation cost reductions due to decreased carbon emissions from greenhouse gases associated with more efficient energy generation. SRR computation employs the net present value (NPV) model with the SRR being the discount rate that reduces the NPV of a stream of societal benefits to zero over a period of n years given an initial investment and annual program appropriations. The SRR is the total rate of return to the nation from public investment in ERIP. The data used for computation were assembled by Dr. Marilyn A. Brown and her staff at Oak Ridge National Laboratory under contract to DOE since 1985. Other data on energy use and carbon emission from greenhouse gas production come from official publications of DOE's Energy Information Administration. Mean ERIP SRR = 412.7% with standard deviation = +/-426.5%. The population of the SRR sample is accepted as normally distributed at an alpha = 0.05, using the Kolmogorov-Smirnov test.;These SRR's, which appear reasonable in comparison with those computed by Professor Edwin Mansfield, (Wharton School) for inventions and by Dr. Gregory Tassey (NIST Chief Economist) for NIST programs supporting innovations in measurement technology, show a significant underinvestment in public service technology innovation evaluation programs for independent inventors and small technology-oriented businesses. Moreover, it is argued that ERIP [with its participants] is a good representation of a larger community of independent inventors and innovators comprising a resource the writer calls the "national innovation infrastructure." This national innovation infrastructure, like ERIP, is underinvested in terms of public support. Thus, the nation would benefit from a large-scale, value-adding, public-service innovative technology evaluation program modeled on ERIP. Further, support of such technology evaluation programs at both state and Federal levels should be an important priority of public technology policy.