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OCR for page 114
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CHAPTER V11
CONTROL OF RESEARCH EXPENDITURES IN INDUSTRIAL
LABORATORIES
The material on which this section is based is largely that collected
by Mr. Maurice Holland of the Engineering Division of the National
Research Council in a survey of the research laboratories of the
American Telephone and Telegraph and the Western Electric Com-
panies, the General Electric Company laboratories at Lynn and at
Schenectady, the Dupont laboratories, and the Edison laboratories,
This information which Mr. Holland kindly placed at the disposal of
the writer was supplemented by conference with Mr. Edward B. Craft,
Chief Engineer of the Western Electric Company in charge of the
Bell System laboratories; and by correspondence with Dr. S. E.
Sheppard of the Kodak Company laboratory at Rochester, New
York. As the Thomas A. Edison laboratories center about Mr. Edison
personally, the following paragraphs, which undertake to give some
general conclusions on the methods of financial control of the indus-
trial laboratory, do not include those laboratories.
Research in industrial laboratories is projected on a scale far greater
than that found in any one state government, and probably greater
than in all of them combined. The annual expenditures for research
in the principal industrial laboratories range from one million to ten
million dollars. While state research is figured in terms of thousands
of dollars, industrial research is figured in terms of millions. The
Telephone research laboratories occupy the whole of a thirteen-story
building in New York, comprising a floor area of 400,000 square feet.
The personnel is made up of more than three thousand workers, of
whom about sixteen hundred are scientists, engineers, and technicians,
the remainder draftsmen and other assistants.44
Industrial research has been accepted by the great corporations as
an indispensable element of their business organization. It has proved
its value in the financial return which comes from the investment. In
this respect it occupies a more favorable position than research in state
governments, where the financial return from support of research
laboratories is evident only in indirect results which cannot readily
44A description of this laboratory may be found in an article by E. B. Craft,
The Bell System Research Laboratories, in Electrical Communication, vol. II,
no. 3, pp. 153-163, January, 1924.
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IN STATE GOVERNMENTS
115
be figured. Boards of directors appropriate for research as they appro-
priate for maintenance of a sales or production force.
In-the industrial laboratory there is a fairly sharp separation of the
scientific and administrative phases. The head of the laboratory is
usually a scientist who devotes himself almost exclusively to the con-
duct and supervision of scientific investigation. The assistant director
of the laboratory is usually also a man of scientific training, but he
gives his attention primarily to matters of administrative concern, such
as the recruitment of personnel, the making of the budget, assignment
of space, handling of supplies and materials, and similar work. It is
generally accepted that the two types of work call for different types
of mind.
The industrial laboratories are financed by the manufacturing units
or by the affiliated corporations which support the laboratories. In
every case there is a reasonably well-defined yearly program which is
the basis of the budget estimates. The budget is made up usually by
the administrative head of the laboratory and before being sent to the
Board of Directors is submitted to a high administrative officer or
committee for approval. It is usually based on past expenditures with
such additions as seem desirable; the largest item is naturally personal
service.
The choice of projects is determined in; part by problems arising in
the field. The laboratories exist for the purpose of improvement of
the processes involved in each case, and their work is naturally
directed either to eradication of defects in service or to economies
in production or operation, although much attention is necessarily
given to new discoveries. Priority of projects is usually determined
by the head of the laboratory; but in the case of the American Tele-
phone laboratories it is determined by Mr. J. J. Carty, Vice-President
in charge of research and development.
Authorization for the use of funds set aside for research is usually
made by an administrative authority outside of the laboratory. In
the case of the General Electric Company this authority is an Engi-
neering Committee; in the Telephone Company it is the Department
of Research and Development, of which Mr. J. J. Carty is the vice-
president in charge. Special authorization is uniformly required for
an increase of funds over the original estimate; but in no case is a
project limited to this estimate. A record of expenditures is frequently
kept against the per cent completion of various projects. Purchasing
of general supplies is usually handled by the Purchasing Department;
special equipment and supplies are ordinarily purchased directly by
the laboratory. Much of the special apparatus is constructed by the
laboratory itself.
.
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116
FINANCIAL CONTROL OF RESEARCH
The question of printing is not a problem with the industrial labora-
tory. In many cases publicity is not desired or permitted; in other
cases the professional journals carry the results of the experiments.
The technical personnel is drawn from the various technical insti-
tutions, scientific and engineering societies and from recognized spe-
cialists in different fields. The professional requirements are ordi-
narily fixed by the administrative head of the laboratory. Promotion
is usually wholly from within the service by successive stages, but
there exists no rigid classification. Salaries are adjusted to the special
circumstances that may prevail. The range of salaries is much wider
than in either the State Bureau or the University. The qualifications
of candidates for research positions are passed on both by the director
of the laboratory and by the administrative head, and sometimes by
the group leader with whom the candidate will work.
In general it may be said that research is organized much more
effectively in industry than in state government. The idea of research
is accepted in industry as an indispensable adjunct to the business and
is supported on a much more generous scale than in government.
Salaries are higher, there is wider opportunity for promotion and
advancement, and there exists an esprit de corps which comes from a
large group of highly trained men engaged in research work. In the
industrial laboratory the petty irritations which loom perhaps too high
in state government are largely absent. The necessity for an annual
or biennial appearance in search of funds before a body of laymen,
or before politicians, does not exist. Administrative and scientific
work are much more edectively separated. Nor is the industrial
laboratory hampered by any of the public responsibilities in the way
of regulating conduct which sometimes fall to the government labora-
tory; and the equipment of the industrial laboratory on a scale
which the government laboratory cannot parallel.
Representative terms from entire chapter:
industrial laboratories
