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5
CONCLUDING OBSERVATIONS ON INDUSTRY AND GOVERNMENT MARITIME R&D
This concluding section provides observations on the roles of
public and private organizations in accomplishing improvements in
technology development and application in the maritime industry. The
most significant technology developments and applications in industry
have occurred under conditions of a strong market outlook and
favorable financial rewards from investment in research and
development or capital equipment. Those conditions occurred in the
segments of liner ship operating and marine terminals. More recently,
shipbuilders have been able to achieve major productivity and
management system improvements as the result of the Navy's fleet
buildup, which is still underway. Finally, the inland waterways
sector achieved dramatic increases in productivity through an
investment in towboats, barges, and fleeting methods between the 1940s
and 1960s. This investment was supported by an infrastructure
provided through the Corps of Engineers, an expanding demand for
movement of bulk cargos, until recently, and by heavy regulation of
railroads which hampered competition, also until recently.
All of these developments were accomplished by the operating
corporations in the industry, but the government played important
supporting roles in each case--providing the physical infrastructure
(Corps of Engineers built and maintained waterways and harbor
channels) and the market demand (Navy shipbuilding and Jones Act), and
facilitating technology transfer and innovation (Maritime
Administration).
Incentives for industries to invest in the R&D process are
strongest when they give the user a proprietary, competitive
edge--e.g., cost reduction on U.S. Navy shipbuilding contracts or
service advantages in international container traffic. This is
because, for industry, the R&D process involves financial risk, a
willingness to~make substantial capital investments, or a willingness
to change established management and operating structures and
practices. A depressed industry is less likely to take such risks on
its own.
Investors will support and make use of the R&D process when they
believe it is in their business interest to do so. With sustained
depressed conditions, the time may soon come when maritime managers
are no longer able to justify any investment in the R&D process
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because of the low level of expected return on investment. Under
these circumstances, collaborative, government-assisted R&D may become
an increasingly instrumental element to improving or at least
maintaining national productivity and competitiveness in the maritime
industries.
Much of MarAd's R&D effort in recent years has been directed at
such collaborative projects with industry. Through the SNAME it has
worked with industry to improve U.S. shipbuilding technology. With a
coalition of liner ship operators, it is supporting advances in cargo
handling technology. MarAd is also working with liner operators as
well as U. S . labor unions to facilitate the application of more
effective manning practices in U.S. vessels. These efforts have
achieved broad national benefits to the industry and the country by
facilitating technology transfer and the introduction and application
of available technology. As a consequence of these efforts, HarAd is
well positioned to continue to promote collaborative R&D within the
maritime industries.
Additionally, the MarAd should conduct substantially more R&D in
support of its own capabilities to promote the U.S. maritime
industries. It could focus on operational analysis, for example, to
better understand the effects of safety and economic regulation on
productivity and competitiveness. Similarly, impacts of structural
changes in the maritime industries should be investigated. A
particularly promising R&D area would be to provide the technical
basis for eliminating or improving regulations that adversely affect
the cost-effectiveness of the maritime industries; an example would be
analysis of the long-standing international requirement for a
dedicated radio operator on board ship and demonstration that the
requirement has been made redundant by advances in telecommunications
technology.
Finally, work performed at the MarAd-owned, contractor-operated
CAORF directly supports national requirements in harbor and waterway
development. Work performed at CAORF has facilitated the application
of simulators to, and improved the cost effectiveness of , waterway and
harbor design in the U.S. In this and other ways, the HarAd has
sought to strengthen the national capability to maintain and improve
the nation's maritime transportation infrastructure and maritime
technical capability.
Other federal agencies concerned with the maritime industries
(e.g., Coast Guard, Corps of Engineers, and Navy) have, in general,
directed resources to R&D to meet their own mission requirements.
The committee has carefully reviewed technology development and
application in the maritime industries and has shown that there are
serious concerns for the future. While the U.S. led the world for
many years in development and application of maritime technology, it
no longer does so. The modest sums available to the MarAd for
investment in R&D are insufficient for the creation of new knowledge;
they may be sufficient, however, to promote technology transfer. The
conclusions of this report, contained in Chapter 1, delineate the
roles and activities that industry and government should pursue If
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technology development and application in the maritime industries are
to be improved in the support of domestic productivity and
international competitiveness.
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Representative terms from entire chapter:
navy shipbuilding
