Center for Science, Technology, and Economic Development (CSTED) > Selected Reports

The ERC program is now in its eleventh year since the first awards were made in 1985. Many Centers are now at or rapidly approaching the eleven year mark, at which point they are expected to "graduate" from the program and become self-sustaining without the continued financial support of NSF, unless they compete successfully for a new ERC award. In this context in which the three-way relationship is expected to attenuate to a two-way partnership in which the core financial support that to date has been provided by NSF is replaced by the private sector and other sources, the question of how current ERC industry sponsors view the likelihood of their continued participation in the ERCs becomes especially compelling.

Figure 14 shows respondents' expectations regarding the continued participation in the ERC by their companies in 1996 (one year following the fielding of the survey). Almost two-thirds of the industry sponsors (66%) reported that they probably or definitely would continue to participate in the ERC the following year. However, one out of six (17.1%) reported that they definitely or probably would not continue to participate in the ERC, and an additional 17% were uncertain.

Perceptions of the impact of ERC participation to date on overall company competitiveness have a similar correlation with expected future participation. As shown in Table 35, 84.2% of companies that have experienced a moderate or great deal of impact on company competitiveness as a result of their ERC participation to date report that they probably or definitely will continue to participate in the ERC the following year. This compares with only 53.0% of the companies where the perceived impact on competitiveness to date has been less. 

The longer a company has participated in an ERC, the more likely is it to expect to continue to participate in the future. As shown in Table 36, 42.4% of companies that have participated in an ERC one year or less report that they probably or definitely will continue to participate the following year; 61.1% of companies that have participated from two-to-four years, 74.5% of those that have participated five-to-seven years, and 85.7% of those that have participated eight-to-ten years expect to continue to participate the following year. 

Finally, again not surprisingly, the easier it is to obtain approval of company participation compared to three years earlier, the more likely it is that a company expects to continue to participate in the ERC in the future. As shown in Table 37, 95% of those respondents who reported that obtaining approval for participation is easier now than it had been three years earlier said that their companies probably or definitely would continue to participate the following year. About 87.0% who said that obtaining approval for participation is about the same as three years earlier and 48.0% percent who said that it is more difficult now said that their company probably or definitely would continue to participate the next year. 

Several of the ERC industry sponsors contacted for follow-up telephone interviews who were uncertain or doubtful about the future participation of their company in the ERC provided a bit of elaboration. One explained that it was due to internal cutbacks: "The weakening of formal ties to the ERC can be attributed to internal cutbacks. When you cut back, you seek to protect your own personnel, and discretionary R&D programs are the most vulnerable to cutbacks. I did everything possible to maintain ties with the ERC, and believe in the ERC concept. It provided a focused R&D program in a technical area parallel to the firm's interest, and offered us a leveraged return on its membership investment." Another said that it had to do with internal management changes: "Initially, the R&D section could decide on ERC participation on its own. Recently, the business units have the ultimate decision. If the business units can see a return on their investment, they will continue." A third said it was related to leadership changes at the ERC: "The leadership at the ERC is changing, and I'm not sure I'll maintain membership. It's the people that matter, not the structure. The new director is closer to one of our competitors, who is also a member. So I'm not very interested in maintaining membership."

Several also commented upon the eleven-year support limitation of the ERC program. One said, "NSF should eliminate automatic termination provisions for federal funding of those ERCs that continue to be productive: it is unrealistic to expect industry to offset reductions in NSF funding of ERCs -- indeed, it is the ability to leverage federal dollars that makes the ERCs an attractive investment." Another was even more negative: "Too bad that NSF doesn't recognize that after eleven years, there is still a need for support. A Center like this at a university cannot be self-sustaining. The Center has one of the strongest industry support of any ERC....It is disturbing to many of us that NSF has taken the stance it has. We feel there's an investment in the Center, and NSF has really abdicated its commitment to one of the leading organizations in the world."