Companies in the semiconductor industry have pioneered in creating a comprehensive approach to collaboration with government and universities, one that includes a corporation for funding R&D in universities and a detailed industry technology roadmap. OVERVIEW: Semiconductor companies have joined forces to address a variety of industry-wide problems. The first step was the formation of the Semiconductor Industry Association (SIA) in 1977 to work on common environmental issues. The Association worked closely with the federal government to resolve an adverse competitive situation vis a vis Japanese companies. In 1982, the SIA formed the Semiconductor Research Corporation with dual objectives of developing highly qualified technical personnel for employment in the industry and conducting a program of long-range, pre-competitive research and technology development. The program is carried out at a large number of universities, and is unique in its industry/university relations. Subsequently, in 1987, a corporation for conducting technology development, primarily by industry, SEMATECH, was formed. Finally, to guide the research funded by these two corporations, the SIA produced the Semiconductor Technology Roadmap, with the technical contributors coming from industry, academia and government. This comprehensive set of initiatives has resulted in excellent working relations with government and utilization of the university community, in addition to technology developed for the benefit of SIA members. This initiative can also serve as a model for other industries. The R&D world in the United States is going through a transition that has been triggered by the end of the Cold War, the movement toward a balanced federal budget, and the buildup of high-technology companies in other countries. The effectiveness of the nation in adjusting to this new environment is of critical importance to the health of our research universities and to the global competitiveness of our high-technology industry. The new international environment and a secular political swing, exacerbated by continued growth of government entitlement programs, is already producing pressures of unprecedented intensity on discretionary public spending at all levels of government. A central feature is that our political system is now thinking seriously about a balanced federal budget in the near future. One result will be that major government programs, including many with a significant R&D content, will be drastically curtailed if not eliminated. While the largest R&D budget reductions will occur in the Department of Defense (DOD), civilian agencies such as the National Science Foundation (NSF) and possibly even the National Institutes of Health (NIH) may also be impacted. At the same time, the competition with U.S.-based companies on the global stage is rapidly increasing. In order to be competitive, U.S. companies (1) are taking various actions to develop and produce products whose combination of quality and price advantages enables them to maintain and expand market share, while at the same time producing satisfactory profits. These actions include increased emphasis on short-term product and process development, with a decrease in funding for R&D with a longer-range time horizon (2,3). The net result of these changes in the U.S. R&D environment is a reduction in the rate of generation of science and long-range, generic technology, which provide the ultimate foundation for the development of industrial products and processes, and which are critical to maintaining the quality of advanced training in our university system. This is clearly a matter of import for the industrial and university communities. It is also a concern for government, since it may ultimately lead to a long-term decline in the global competitiveness of the nation's industry. The question then arises: What actions can be taken to maintain our level of competence in R&D, while recognizing the changes in the environment? …