A Message from the ACR Administrator

I am pleased to present the Annual Report of the Southwest Research Institute (SwRI) Internal Research and Development (IR&D) Program for the Year 2000. This year, SwRI invested $4.8 million in developing technologies and new capabilities that increase the Institute’s ability to perform contract R&D for its clients in industry and government. Although this amount is less than the $5.3 million funded in 1999, it represents a significant investment in the future of the Institute. Furthermore, this decrease in IR&D funding reflects the record level of contract R&D performed in 2000, rather than waning support for IR&D. Because the client continues to come first, staff engaged in client-funded projects are not as readily available for IR&D as we would like.

An unusual challenge for the IR&D program, and the Institute overall, was an abnormally high level of turnover of staff at all levels, including technical professional staff members. The IR&D program experienced some setbacks because of the loss of key technical staff. It is worth noting that the Institute was not alone in this challenge. Technology companies across the United States faced the same problem; the Institute fared better than most. We believe, and this belief is supported by interviews of Institute staff, that it is the nature of applied R&D work that attracts innovative people to SwRI and keeps them here. The Institute has an inquisitive, creative staff that thrives on a continuous variety of new problems to solve. The IR&D program serves as a great outlet for that creative energy that benefits the Institute and its clients as well.

Despite these problems, the interest and commitment of the staff to IR&D remain undiminished. Thanks to the diligent efforts of the Advisory Committee for Research (ACR), the quality of IR&D proposals and projects continues to grow. The ACR, by keeping a watchful eye on the market for our services, has ensured that the Institute’s effectiveness in leveraging IR&D to obtain contract R&D continues to improve. I am particularly pleased with the number of programs featured at the Institute’s Annual Trustees Meeting for the Year 2000 that trace their roots to the IR&D program. For example, all the projects discussed at the minisymposium on bioengineering originated with IR&D, all resulted in new patent applications, and all are moving toward commercialization with industrial clients.

In recognition of the increasing importance of intellectual property to the Institute and its clients, the ACR held a retreat to review the Institute’s business practices and other business models. Many of the Institute’s contemporaries have abandoned contract R&D in favor of license royalties, equity ownership, and other variations of capitalizing on intellectual property. The Institute continues to focus on contract R&D, but more often than ever our clients ask us to develop and demonstrate new technologies before they will pay for applications. When we do this on IR&D, we create new intellectual property. By recognizing that our IR&D program creates real value in the form of new technologies and intellectual property, we are better able to transfer these technologies to our clients. What we strive for is the ability to use intellectual property to stimulate contract R&D.

Once again I thank the ACR for a job well done. These scientists and engineers who have reached the highest technical rank at the Institute make the IR&D program a success. It is a great honor and pleasure to work with them. My special thanks go to Dr. Walter Huebner, who served with distinction as chairman of the ACR during 2000.

Walter D. Downing
Advisory Committee for Research

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