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Should Uncle Sam Get Involved in Technology as a Venture Capitalist?

Policy: A shake-up at a federal agency has fanned the debate over whether the federal government's links to industry should be expanded.

May 03, 1990|EVELYN RICHARDS, THE WASHINGTON POST

WASHINGTON — Little Lanxide Corp. was barely a spot on the map of the vast chemical and materials industry dominated by the likes of Dow and Du Pont until, less than a year after its birth in 1983, Lanxide was tapped on the shoulder by an obscure Pentagon agency.

Getting anointed with a mere $1 million from the government gave Lanxide the credibility it needed to attract $250 million more from private investors and big corporate partners, including its Delaware neighbor Du Pont Co.


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Today Lanxide employs 350 people and is on the verge of seeing its versatile ceramic materials incorporated into protective shields for soldiers and tanks as well as industrial uses ranging from airplane parts to mining equipment.

Stories like Lanxide's, of how a little money from the small Defense Advanced Research Projects Agency has made a big difference, are likely to be told with growing passion around Washington these days as the debate resumes over the role of government in sustaining certain industries.

Ignited by the abrupt removal late last month of the Pentagon agency's earnest director, Craig Fields, the squabble threatens to drag once-obscure DARPA into a messy political bout that insiders fear could irreparably damage what is widely acclaimed to be among the most effective of all federal agencies.

Although he probably never meant to play the role, Fields, in his year as DARPA's outspoken chief, had come to symbolize the view that the nation must make a dramatic shift away from the arm's-length government-business relationship that has seen it through four decades of stunning industrial growth.

Popular on Capitol Hill, but anathema to the Bush Administration, is the notion that government should somehow help shore up certain key industries--not specific companies, but underlying commercial technologies such as the making of computer chips and advanced materials--in the same way that it played a role in building a national transportation system of highways and railroads.

"There is a turning point," said Bell Laboratories President Ian Ross. "The government should not just be supporting basic research but it also should be supporting generic, precompetitive technology that does have an impact on our industrial strength."

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