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Appendix C
A STUDY OF THE RESPONSES OF INDUSTRY TO A LETTER OF INQUIRY FROM THE NAS PANEL ON SCIENTIFIC COMMUNICATION AND NATIONAL SECURITY

Edward L.Ginzton

INTRODUCTION

Dale R.Corson, Chairman of the National Academy of Science’s Panel on Scientific Communication and National Security, wrote to several leaders of large American companies seeking views from each company’s vantage point on the general topic of interest. It is the purpose of this paper to summarize their general views and their responses to the six questions below:

  1. To what extent is unwanted technology transfer via scientific communication a problem in your sector of industry?

  2. If it is significant, what are the critical technologies and/or stages of research, development and production that are vulnerable?

  3. What would be the impact of more stringent government controls on the affected industries?

  4. How would the overall pace of innovation and product development be affected within your industrial sector?

  5. How would the U.S. competitive position in international markets be affected by more rigorous controls?

  6. In comparing the possible private sector effects and the potential threat to U.S. national security, where, in your estimation, does the national interest lie?

Eleven very thoughtful and timely responses were received (1), from eight major companies, mostly multinational and high technology. One letter was from a consultant who had previously served as administrator of a highly technical government agency, NASA. The wealth of material made our task difficult, but insures a significant contribution to the Panel’s considerations.

The charge by the National Academy of Sciences to the Panel is relatively straightforward and narrow:

What is the effect on national security of “technology transfer to adversary nations by means of open scientific communications, either through scientific literature or by person-to-person communications…”?



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Scientific Communication and National Security Appendix C A STUDY OF THE RESPONSES OF INDUSTRY TO A LETTER OF INQUIRY FROM THE NAS PANEL ON SCIENTIFIC COMMUNICATION AND NATIONAL SECURITY Edward L.Ginzton INTRODUCTION Dale R.Corson, Chairman of the National Academy of Science’s Panel on Scientific Communication and National Security, wrote to several leaders of large American companies seeking views from each company’s vantage point on the general topic of interest. It is the purpose of this paper to summarize their general views and their responses to the six questions below: To what extent is unwanted technology transfer via scientific communication a problem in your sector of industry? If it is significant, what are the critical technologies and/or stages of research, development and production that are vulnerable? What would be the impact of more stringent government controls on the affected industries? How would the overall pace of innovation and product development be affected within your industrial sector? How would the U.S. competitive position in international markets be affected by more rigorous controls? In comparing the possible private sector effects and the potential threat to U.S. national security, where, in your estimation, does the national interest lie? Eleven very thoughtful and timely responses were received (1), from eight major companies, mostly multinational and high technology. One letter was from a consultant who had previously served as administrator of a highly technical government agency, NASA. The wealth of material made our task difficult, but insures a significant contribution to the Panel’s considerations. The charge by the National Academy of Sciences to the Panel is relatively straightforward and narrow: What is the effect on national security of “technology transfer to adversary nations by means of open scientific communications, either through scientific literature or by person-to-person communications…”?

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Scientific Communication and National Security Although the charge is narrow, the six questions stated above served to expand the areas of consideration and none of the respondents restricted their remarks to scientific communications alone. It was apparent that the respondents had difficulty in restricting their views to their particular company. One respondent first localized his remarks to his own company, then presented a more global view (12). One respondent wrote, “there are always going to be gray areas” (9). We found this to be correct. Differences in usage of words, particularly at interfaces, e.g., between science and technology, made it impossible for us to make a precise compilation of views. This imprecision sometimes led to a suggestion of contradiction even within a single letter. It would have been helpful to us in analyzing the gray areas if the views could be quantified. This is seen to be very difficult, as only one of the respondents attempted a numerical estimate to support his point (6). It is probably safe to say that the written responses reflect the individual’s gestalt image of the relationship between scientific communications and national security that he had built over time as the result of his own experience, both within and outside his company. It is likely that the details of a response from other senior people within a company might differ, but probably not in any important way. From a statistical point of view this sample is heavily biased as it is based on responses from very large companies. For this and other reasons, it is not felt that any meaningful statistical analysis can be performed, and these remarks are presented with the caveat that the conclusions may not apply to other subpopulations, e.g., smaller companies. The best that can be done is to record observations, some of which are based on views common to all participants, while others were mentioned by only one or two but yet may represent a consensus. It would be helpful to see if there is a consensus by asking the other participants for their concurrence with their peers’ views. CONTINUUM MODELS Two of the respondents, J.F.Bucy (9) and L.Branscomb (8), presented models as an aid to their discussion. In the first of these models Bucy established a continuum ranging from science, on the left, through technology to products on the right. “Science” is defined as a systematic pursuit of knowledge. “Technology” is the application of that knowledge to the production of specific goods and services. “Products” are the result of technology, but are not technology. The Branscomb model starts with universities on the left, industry in the middle, and military to the right. A “university” generally deals with the generation and dissemination of fundamental knowledge derived from basic research. “Industry” develops proprietary information which may or may not be shared. The “military” deals with operational use of equipment and systems, the knowledge of which is not shared.

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Scientific Communication and National Security These two models have a commonality in that universities deal mostly with research, industry deals mostly with technology, and the military deals mostly with products. The Branscomb model groups by cultural similarity, while the Bucy model groups by kind of information. The Bucy model may be more germane but suffers from problems of abstraction, while the Branscomb model is more pragmatic because it is work-center oriented. An attempt was made to infer and tabulate the answers to the six discrete questions. This was useful for correlations, but not for the purpose of drawing conclusions. From a careful reading of the letters, several inferences were drawn. The most striking but trivial is that the subject is complex, from which we can postulate that the solution may not be simple. COMMON OBSERVATIONS OF THE RESPONDENTS As we searched for commonality in the expressed views, it was not surprising to find that the strong consensus becomes clearer at the extremes of the continuum described above; therefore there are two consensuses. The respondents either stated explicitly or implyed that restrictions on scientific information would be deleterious to their companies innovative and worldwide competitive posture (2,3,4,5,6,7,8,9,10,11,12). Nearly all of the respondents mentioned that it was appropriate and necessary to restrict military information (2,3,4,5,7,8,11,12). Any consensus about the area in the center of the model—technology/industry—was much more difficult for us to determine, probably because the specific details of the technology become highly significant. Nevertheless, we did identify two views which seemed to be common—at least not in contention—to all respondents. The current export control system, as it has been administrated, is considered by several of the major companies to be acceptable (2,5,7,11,12), but a move toward greater restrictions would be deleterious, even though the respondents could only sense what the new constraints might be. One felt that military security is very lax (6). Generally the respondents felt controls should be minimal and be commensurate with the real problems (3,12). It was suggested by some that the government should analyze the Soviet need for and use of a specific technology and show that its transfer would be explicitly harmful to the national security (3,6,11). In short, to use an old expression, the rifle approach is preferred over the shotgun with its resultant scatter and harm to bystanders. MISCELLANEOUS VIEWS OF THE RESPONDENTS A number of important points were mentioned by only one or a few respondents; these probably are a consensus, but we could not be sure. Two respondents mentioned that the United States no longer has overwhelming technological superiority nor a monopoly on technical information (2,3).

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Scientific Communication and National Security Ideas from universities are more rapidly used in the United States than in the U.S.S.R. Several mentioned that shrinking military lead time was the productive approach to solving the national security problem (3,7). Direct business with the Soviet Union is not significant to those major companies surveyed (9). No respondents mentioned China, and so it is not clear whether or not China is viewed as an adversary. Some, but not all, mentioned the Soviets and the Eastern bloc, but only one used the term “communists” (9). Many technologies are dual-purpose, and commercial developments are commonly ahead of military (5,8). Two respondents felt that foreign policy (economic warfare) and national security needs should not be mixed in framing restrictive controls (9,12). One respondent mentioned that the U.S. government should not protect industry from itself through restricting information flow to U.S. allies or friends (9). One mentioned that COCOM restrictions have been used for nationalistic economic advantage (7). One respondent stressed the need to consider the Soviet reaction to any change in controls and expressed the belief that increased restrictions would hamper the West more than the Soviet Union. The increased cost to individual U.S. industries of obtaining technical information might be prohibitive, while the additional burden could easily be met by the Soviets (6). Respondents pointed up the value to the United States of East to West information flow and recommended that it be encouraged (12). One suggested a voluntary program be initiated for unusual technologies, like cryptology (4). CONCLUSIONS We find that the respondents from the eight major companies understand the need to restrict certain classes of technical information. This includes military information; application of certain technologies; and some fundamental work, e.g., cryptology. However, their consensus is: That controls on basic research would be harmful to their companies. The export control regulations are workable and acceptable when administered as they have been. Any tightening of regulations would reduce the effectiveness of the company, either by hampering its worldwide operations or by reducing its innovative and West-West competitive position vis-a-vis its non-U.S. based competition.

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Scientific Communication and National Security EDITORIAL COMMENTS Although many ideas were presented by the respondents, it occurred to me that some concepts had been left unstated, concepts which may be useful to the Panel. For this reason I have taken the liberty of adding some editorial comments. Smaller Companies The companies in the sample above are all major U.S. companies that have relatively few commercial sales to the U.S.S.R., either because the products are not suitable or because export licenses have been restricted by U.S. authorities. Some of the companies have shown interest in the U.S.S.R. market through high-level participation in organizations such as the U.S./U.S.S.R. Trade & Economic Council, a quasi-official organization, but have not devoted much effort to direct marketing. For these companies and their Western competitors, sales to the U.S.S.R. are miniscule compared to their commercial business and, therefore, are not significant to their overall health. This is not true for a large number of smaller high-technology companies in the United States, such as Varian, Hewlett-Packard, and other instrument companies. For these companies, the sale to the Soviet Union of an additional few units of a particular instrument is significant to that product line and, hence, to the company. The costs of preparing information for an export license and the uncertainty in its issue have reduced sales to such a low level that it is no longer feasible for most of the smaller high technology companies to market any products in the U.S.S.R. And the situation in China is approaching that condition. The loss of sales is important, but more devastating is the loss of market share as the German, French, or Japanese competitors take the orders. Without a market share on a worldwide basis, many high technology product lines of the companies cannot survive. Despite these differences, the smaller companies with which we have had contact would agree with the consensus and the views above, but with greater intensity. Should Restrictions Be Decreased? The sampling and the questions that were asked suffer from asking only “what if restrictions are increased?” and not “what if restrictions were decreased?” The possibility that a decrease in restrictions would have positive results is as a priori valid as the suggestion that an increase of restrictions is advantageous. This has to do with the complexities of enforcing restrictions, the ease of the Soviets’ gaining information, the difficulty with which the United States gains information about the Soviet progress, East-West transfer, slowdown in innovative and competitive positions of U.S. companies, and international

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Scientific Communication and National Security relations. Of course now that restrictions are in place, their removal should be used for a negotiating ploy. Is the Current Export Control System Optimum? It is difficult without further research to judge whether the current system of controls is about optimum in its benefit-to-cost ratio and, therefore, whether any change in either direction would tend to decrease this ratio. Further studies might determine whether 30 years of experience have produced a control system that is workable and socially acceptable, and whether any further tinkering with the system would only create problems. Since the system as previously administered worked, the burden should be on those who wish to tighten controls to prove that the benefits would heavily outweigh the costs. Cooperation It may very well be that a program of benign neglect of restrictions in certain technical areas may be cost effective. The cost of producing successful military systems may be minimized by observing Russian research results and benefiting from their experience. Once feasibility has been shown, the superior U.S. production system should be able to field equipment first. The gyrotron is a small case and the high thrust booster rocket is a large case in which this has happened. The tactic of active cooperation has been useful in fusion research, the success of which would have large-scale economic and military advantages. High-powered lasers are a dual-use technology in which cooperation, or at least elimination of restrictions, might be most cost effective. Breeder reactors are another technology in which this concept might apply. Lack of Information The entire area of export control lacks quantitative information, or even validated case histories, with the result that each participant interprets it almost wholly from his own experience. This makes it difficult to select the middle ground, which clearly is the proper operating arena. Free Market Tradition Several of the respondents implicitly suggested that the government should rationally select those specific critical technologies for which restrictions would apply. Although not stated explicitly, this is tantamount to affirming the Western free market tradition of “freedom of action unless it is expressly forbidden,” rather than the “action only if it is expressly permitted” view of the central planned countries of the Eastern bloc.

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Scientific Communication and National Security CORRESPONDENCE (1)   Due to space limitations, the actual letters are not included here. They are available for inspection however, in the panel’s office at the National Academy of Sciences. (2)   Ian M.Ross, President, Bell Laboratories. (3)   Robert D.Schmidt, Vice Chairman of the Board, Control Data. (4)   Edward E.David, Jr., President, Exxon Research and Engineering Company. (5)   Roland W.Schmitt, Vice President, Corporate Research and Development, General Electric Company. (6)   Richard L.Garwin, Watson Research Center, IBM. (7)   Lewis M.Branscomb, Office of Vice President and Chief Scientist, IBM. (8)   Same as (7). (9)   J.Fred Bucy, President, Texas Instruments. (10)   Thomas Paine, Thomas Paine Associates. (11)   W.C.Hittinger, Executive Vice President, RCA. (12)   Laurence J.Adams, Senior Vice President, Martin Marietta Corporation.