For decades, Procter & Gamble (PG) has been creating petroleum-derived materials that are engineering marvels. Tide bottles that don't explode if dropped from a high shelf onto a Wal-Mart (WMT) floor. Shampoo emulsions that don't separate, whether they're shipped by plane at 30,000 feet or warehoused at temperatures of 120F. Billions of disposable diapers that absorb, breathe, and stretch exactly the same way—wrapped in packages that never fade.
Now P&G is joining the "go green" bandwagon. The problem, says Thomas J. Lange, the company's director of modeling and simulation: "Natural materials may not be as pure, as strong, or as stable over time" as petro-plastics. And developing replacements for them takes deep science that is beyond the ken of most companies.
Enter Los Alamos National Laboratory and Sandia National Laboratories. That's right, the fabled weapons-research centers in New Mexico that spawned America's nuclear arsenal. In a partnership that has lasted 14 years, P&G is tapping the labs' supercomputers and immense brain trusts to create new eco-friendly materials for consumer products. "These are the only places I can go in the world that have such a range of world-class physicists, chemists, biologists, production engineers, and computational scientists," says Lange. "These labs are national treasures."
Public-private collaborations such as P&G's are earning praise in many quarters. They're just what Congress had in mind two decades ago when it began pushing the nation's hundreds of national labs to transfer more of their knowhow to U.S. companies. Many of the facilities, which are dedicated to security, space, health, and energy research, jumped at the challenge. For one, they were eager to earn contract-research fees from corporations. And it was a chance to test their world-beating computer systems and software in some of the most demanding business settings.
After a burst of deals in the late 1990s, however, the number of new research collaborations and commercial spin-offs declined. Scientists say the joint ventures and startups suffered from too much red tape. They also faced a drop in federal subsidies, the bursting of the tech bubble, and the task of coaxing scientists to think in business terms. "Without market signals, the labs have shown a predictable capacity to be overtaken by bureaucracy," says Carl J. Schramm, president of the Ewing Marion Kauffman Foundation, which focuses on entrepreneurship. The casualties, Schramm says, are "speed, effectiveness, and inventiveness."
Now, as the idea of "innovation economics" gains currency in Washington, executives are once again turning to the national labs, especially those such as Sandia, Los Alamos, Lawrence Livermore, and others that belong to the Energy Dept. These centers are still committed to national security. But at a time when U.S. industries are under pressure to address America's energy crisis while facing ever-tougher competition abroad, the labs understand they have an important role to play.
Companies, for their part, know they can save on research costs when they partner with the labs. Together, Sandia and Los Alamos employ about 4,000 PhD scientists and thousands of engineers, and they have a long legacy of innovation in everything from biofuels and microelectronics to medical devices. P&G's collaboration with Los Alamos in computer simulation has saved the company upwards of $1 billion. Goodyear Tire & Rubber (GT) says Sandia helped radically speed up product launches, a key to its recent financial turnaround.
The labs aren't simply collaborating. They're spinning off new tech companies amid the mesas and deserts of New Mexico. An industrial park on 240 acres abutting Sandia's sprawling Albuquerque compound boasts 27 startups that employ 2,184 people and have attracted $234 million in investment capital.