prevailing conditions, the committee believes that the discrepancy is more complex.

Is it possible that research and development expenditures now include a broader range of categories? Shifting terminology may also be contributing to the discrepancy. Research has come to include work that is specific to a project and is not expected to reveal new concepts of broad-scale impact. Research and development productivity is increasingly measured in terms of time to market, and time horizons for projects have been progressively reduced (Business Week, 1994). This approach could have severe consequences for longer-range projects that provides for the future. Another industrial factor that is not healthy for science is the tendency to reduce central research organizations by assigning research and development people to specific product-line responsibilities. As the research staff is dispersed, the viable nucleus is destroyed. The staff becomes diffuse, and opportunities for essential cross-fertilization are lost. Documentation of these effects is difficult, but the committee is convinced of the reality of the danger to research at large and to polymer research in particular. A recent article (Business Week, 1994) comments: "U.S. industry has cut its long-term research by 15% since 1986." The article emphasizes the high rate of growth of Japanese research and development spending, especially that for basic research.

INTERNATIONAL COMPETITIVENESS

Polymers make up a major portion of the chemical industry in the United States. In 1992 the U.S. chemicals group posted exports of $44.0B and imports of $27.7B, for a positive balance of $16.3B (Chemical & Engineering News, 1993, p. 71). The corresponding figures for plastics were $10.3B and $4.3B, for a positive balance of $6.0B. (The aircraft industry is the only other major U.S. industry with a significant positive balance of trade.) This trade position is healthy and has been growing, but it may have peaked in 1991. It should be noted that U.S. chemical earnings, profit margins, and return on equity fell over the last 4 years, as markets declined in the recessionary economy (Chemical & Engineering News, 1993, p. 48). A detailed interpretation of these statistics is beyond the scope of this report, but it seems clear that the United States is strong in chemicals and in plastics and that this favorable position is in part the result of the U.S. chemical industry's consistent and vigorous commitment to research.

The United States is an acknowledged leader in the polymer markets. The 70 billion pounds of plastic and other polymeric materials produced by the United States annually represent well over half the world's output and more than double the product of the European Community (Chemical & Engineering News, 1993, pp. 44, 74, 80). However, of the world's largest chemical companies, all of which make polymers, 4 of the top 5 and 7 of the top 10 are based in foreign



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