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Suggested Citation:"Front Matter." National Academy of Engineering. 1969. Impact of Science and Technology on Regional Economic Development: An Assessment of National Policies Regarding Research and Development in the Context of Regional Economic Development. Washington, DC: The National Academies Press. doi: 10.17226/18450.
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Suggested Citation:"Front Matter." National Academy of Engineering. 1969. Impact of Science and Technology on Regional Economic Development: An Assessment of National Policies Regarding Research and Development in the Context of Regional Economic Development. Washington, DC: The National Academies Press. doi: 10.17226/18450.
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Suggested Citation:"Front Matter." National Academy of Engineering. 1969. Impact of Science and Technology on Regional Economic Development: An Assessment of National Policies Regarding Research and Development in the Context of Regional Economic Development. Washington, DC: The National Academies Press. doi: 10.17226/18450.
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Suggested Citation:"Front Matter." National Academy of Engineering. 1969. Impact of Science and Technology on Regional Economic Development: An Assessment of National Policies Regarding Research and Development in the Context of Regional Economic Development. Washington, DC: The National Academies Press. doi: 10.17226/18450.
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Page R4
Suggested Citation:"Front Matter." National Academy of Engineering. 1969. Impact of Science and Technology on Regional Economic Development: An Assessment of National Policies Regarding Research and Development in the Context of Regional Economic Development. Washington, DC: The National Academies Press. doi: 10.17226/18450.
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Page R5
Suggested Citation:"Front Matter." National Academy of Engineering. 1969. Impact of Science and Technology on Regional Economic Development: An Assessment of National Policies Regarding Research and Development in the Context of Regional Economic Development. Washington, DC: The National Academies Press. doi: 10.17226/18450.
×
Page R6
Suggested Citation:"Front Matter." National Academy of Engineering. 1969. Impact of Science and Technology on Regional Economic Development: An Assessment of National Policies Regarding Research and Development in the Context of Regional Economic Development. Washington, DC: The National Academies Press. doi: 10.17226/18450.
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Page R7
Page viii Cite
Suggested Citation:"Front Matter." National Academy of Engineering. 1969. Impact of Science and Technology on Regional Economic Development: An Assessment of National Policies Regarding Research and Development in the Context of Regional Economic Development. Washington, DC: The National Academies Press. doi: 10.17226/18450.
×
Page R8
Suggested Citation:"Front Matter." National Academy of Engineering. 1969. Impact of Science and Technology on Regional Economic Development: An Assessment of National Policies Regarding Research and Development in the Context of Regional Economic Development. Washington, DC: The National Academies Press. doi: 10.17226/18450.
×
Page R9
Suggested Citation:"Front Matter." National Academy of Engineering. 1969. Impact of Science and Technology on Regional Economic Development: An Assessment of National Policies Regarding Research and Development in the Context of Regional Economic Development. Washington, DC: The National Academies Press. doi: 10.17226/18450.
×
Page R10
Suggested Citation:"Front Matter." National Academy of Engineering. 1969. Impact of Science and Technology on Regional Economic Development: An Assessment of National Policies Regarding Research and Development in the Context of Regional Economic Development. Washington, DC: The National Academies Press. doi: 10.17226/18450.
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Page R11

Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

Commission on Education - JH8.ll The Impact of Science and Technology on Regional Economic Development An assessment of national policies regarding research and development in the context of regional economic development NATIONAL ACADEMY OF SCIENCES NATIONAL ACADEMY OF ENGINEERING Published by NATIONAL ACADEMY OF SCIENCES Washington, D.C. 1969

Publication 1731 Available from Printing and Publishing Office National Academy of Sciences 2101 Constitution Avenue Washington, D.C. 20418 Library of Congress Catalog Card Number 74-601605

JanuarySl, 1969 Dr. Frederick Seitz, President National Academy of Sciences Dr. Eric Walker, President National Academy of Engineering The Committee which you have appointed to make a study of science, tech- nology, and regional economic development submits the attached report which summarizes its work. The members of the Committee have heard many presentations, and have read reports from many individuals and organizations, including carefully pre- pared testimony before Congressional hearings. As indicated by their affilia- tions and titles, the members of this Committee hold professional positions in industry, in government, in educational institutions, and in other non-profit institutions; a number have had substantial experience in two or more cate- gories of institutions. The findings and recommendations presented here rep- resent the opinions and insights of this Committee arrived at and assembled after many conferences and discussions. The content of the report is viewed not as a research report but as a presentation of the combined judgment and the general agreement reached by the Committee. It does not necessarily rep- resent individual endorsement of the details of each recommendation. It is important to recognize that the findings and recommendations herein presented have emerged from the adoption of certain perspectives which are based in part on the original charge to the Committee and in part on the in- sights which have been gained in the course of the study. The initiating "Scope of Work" statement requested the Committee "to conduct a study of the im- pact of science and engineering on regional development, and of the effect of Federal scientific and technical policies [on regional development]...." The Committee immediately recognized that many activities other than research and development have an important impact on the economy of various re- gions. Furthermore, there are policies at both the Federal and state level which affect regional economy but are not addressed specifically to R&D. We have been repeatedly reminded that in many instances, the economy of a depressed region might be more immediately strengthened by the establishment of a new labor-intensive industry with little or no R&D component than by a high- technology installation. Thus, the emphasis of this report on the potential iii

iv contributions of R&D to regional economy is attributable to the charge to the Committee and not to the parochial view that research and development con- stitute the only avenues to solutions of regional problems. Similarly, the ra- tionale for the emphasis on the role of the Federal government originates in the work statement posed by the Department of Commerce. Although this report is concerned largely with Federal policies or programs, we have con- cluded that many of the solutions to regional problems are to be sought in the encouragement of entrepreneurial activities in the private as well as the public sectors and at local, state, and regional levels. Following is a brief listing of some of the highlights of our report: 1. In the consideration of national policies for R&D, it is important to dis- tinguish between two major categories of national goals for R&D, in the context of which further recommendations are made: Central National Goals for R&D—such as leadership in the important fields of science, nuclear power, space exploration, and national defense— in which the program is national in focus, sponsorship, funding, and over- all direction. Distributed National Goals for R&D—such as the development of human resources, the rebuilding of our cities, water resources, and regional en- vironment for living—in which the programs are characterized by local de- terminants in the nature of the problems, in the approach to solutions, and in their anticipated consequences. These goals, while related in many areas, require distinctly different cri- teria for establishing priorities and means for implementation. 2. In attempts to develop or to initiate new programs, plans, or approaches to the solution of regional problems, it does not suffice to generate a carefully considered plan or to solicit the advice of a qualified group of experts. While competent, technologically sophisticated organizations or individuals are required to provide analyses and designs for the future, it is essential to elicit a knowledgeable client-sponsor capable of implementing such plans. In most cases, the client-sponsor must be clearly identified at the planning stage in order to stipulate the various social, political, and technological constraints within which solutions may plausibly be set forth. It is our considered view that the establishment of a client-sponsor is an essential step in the design of a program to solve regional or local problems. Such a client-sponsor might be a Federal or state agency, or a compact between such agencies; but it might include or be constituted by

a group of private individuals or a combination of public and private cor- porations. One aspect of our changing national environment is that so many economic and social problems extend beyond the political and geo- graphic boundaries of the municipalities and states in which they are lo- cated. Repeatedly, it has been necessary to designate or to establish a client-sponsor to act on behalf of the larger community or region in dealing with such problems. 3. A key requirement in the attainment of social and economic objectives for a given region lies in the development of human capabilities and talents, and the attraction or retention of the most gifted and innovative segment of the population. To provide for the maximum development of human resources, access to quality institutions of education should be available to citizens in all regions of the country. Since graduate research helps to provide superior educational opportunities at the university level as well as innovation at all levels of education, there should be a national commitment to the development and further improvement of centers of scientific and academic excellence in all major regions, particularly in those now deficient in such facilities. Our recommendations reflect a con- tinuing commitment to the project form of support for graduate research in universities; in addition, we have recognized the need for an enlarged program of institutional and block grants. The latter programs are needed to strengthen graduate research institutions in all regions of the nation, as well as to support applied academic research on problems of a regional or distributed nature. The Committee has also recognized the need for in- novation in our educational institutions, both in their orientation to a wide set of educational objectives and in new approaches to educational facilities and processes. Institutional grants for modern computer and library facilities should be made widely available so as to provide access to knowledge for students at colleges and universities in all parts of the nation. 4. R&D programs aimed at distributed national goals should be carried out in two categories of R&D institutions—one oriented toward problems which many regions share in common, the other directed to the problems of a given region. The Committee found a need for a new type of R&D institution, whose principal institutional mission would be to encourage the technological and economic development of the region in which it is located. As a pilot experiment, a small number of such institutions, re- ferred to as Exploratory Centers for Regional Development, should be es- tablished in regions in which needs exist and which are reasonably delineated in terms of geographic and political compatibility. In view of

vi the increasingly urban, mobile, industrial, and service-oriented society which such Exploratory Centers would be called upon to serve, they would have to be broad-based institutions equipped to deal with complex systems problems and to carry out entrepreneurial functions. The Com- mittee found it easier to describe the functions of such Centers than to specify their organizational structure. The functions, which are described in Chapter VI, include (1) a continuing survey of regional problems and resources, (2) social and technological invention—the matching of poten- tial solutions to possible needs, and (3) innovation and public service— the transfer of new ideas, commercial products, organizational processes, and ways of doing things into widespread use in the region. A key role would be the identification of public and private client-sponsors to im- plement new ventures aimed at the improvement of the economy and way of life in the region. 5. We have noted throughout the report a special need for entrepreneurs and the entrepreneurial spirit—a need to relate and involve the private sector in programs set forth in the public interest. The role of the indi- vidual entrepreneur—whether engaged in industrial, technological, finan- cial, or civic affairs—is a key factor in developing new opportunities and in solving the problems of depressed or underprivileged segments of our society. It remains a continuing challenge for leaders in private industry as well as in government or in the various categories of R&D institutions to evolve an increased and mutually supportive relationship between the public and the private sector to address social and economic problems. We submit our findings and recommendations with a full recognition of the need for further studies and for the adoption of new perspectives in the ap- proach to the regional problems of our times. Daniel Alpert, Chairman Stephen Quigley Guy Black George S. Schairer Raymond Bowers Albert Shapero Joseph Feldmeier George Simpson, Jr. Clifford Furnas Dort Tikker William L. Garrison Murray L. Weidenbaum William K. Linvill Ralph Widner

Committee on Science, Technology, and Regional Economic Development National Academy of Sciences-National Academy of Engineering GUY BLACK, Senior Research Scientist Program of Policy Studies The George Washington University Washington, D. C. RAYMOND BOWERS, Professor of Physics Cornell University Ithaca, New York JOSEPH FELDMEIER, Vice President and Director The Franklin Institute Research Laboratories Philadelphia, Pennsylvania CLIFFORD FURNAS, President Western New York Nuclear Research Center, Inc. Buffalo, New York WILLIAM L. GARRISON, Director Center for Urban Studies University of Illinois at Chicago Circle Chicago, Illinois WILLIAM K. LINVILL, Executive Head Department of Engineering-Economic Systems Stanford University Stanford, California STEPHEN QUIGLEY, Director Office of Chemistry and Public Affairs American Chemical Society Washington, D.C. GEORGE S. SCHAIRER, Vice President, Research and Development The Boeing Company Seattle, Washington ALBERT SHAPERO, Professor of Management and Coordinator of Systems Analysis The University of Texas Austin, Texas GEORGE SIMPSON, JR., Chancellor University System of Georgia Atlanta, Georgia DORT TIKKER, Vice President, Corporate Development Nationwide Industries, Inc. Chicago, Illinois MURRAY L. WEIDENBAUM, Professor of Economics and Chairman of Department Washington University St. Louis, Missouri RALPH WIDNER, Executive Director The Appalachian Regional Commission Washington, D.C. DANIEL ALPERT, Chairman Dean of the Graduate College and Professor of Physics University of Illinois at Urbana-Champaign Urbana, Illinois Staff LAWSON M. McKENZIE, Special Assistant National Academy of Sciences Washington, D.C. ANTON JACHIM, Research Assistant University of Illinois at Urbana-Champaign Urbana, Illinois vii

Preface Twentieth century man will not be remembered for inventing the atomic bomb but for daring to think he can use science to achieve the good life. —Arnold Toynbee To assist in its work, the Office of Regional Economic Development of the Department of Commerce has requested the National Academy of Sciences and the National Academy of Engineering to undertake a study of the impact of science and technology on regional economic development, to assess "the effects of Federal scientific and technical policies upon regional development, and to make appropriate recommendations of actions or changes in policies.. .." This study was initiated with a series of conferences sponsored by the Na- tional Academy of Sciences early in 1967. In November of that year, the mem- bers of this Committee, most of whom had taken part in the earlier conferences, were asked to carry out the formal task of formulating an assessment and issuing this report. The Committee wishes to express its sincere appreciation to the many indi- viduals who have made important contributions to this report in the form of presentations, contributed papers, and constructive criticisms on the various aspects of this work. These include participants in the conferences on regional economic development (as listed in Appendix C) and members of the Com- mittee on Science and Public Policy of the National Academy of Sciences. The Chairman wishes to acknowledge the cooperative spirit and the many individual contributions of the members of the Committee who have given profusely of their time, have helped in the several revisions of the report, and have worked together to develop new insights and perspectives. The Chairman also wishes to acknowledge the contributions of the staff and, in particular, the effective and conscientious editorial assembly of this report by Mrs. Peggy Harris and Mrs. Donna Avolt of the Graduate College of the University of Illinois. Daniel Alpert, Chairman Committee on Science, Urbana, Illinois Technology, and Regional January, 1969 Economic Development ix

Contents INTRODUCTION 1 The Changing Perspectives of This Study 1 Some Basic Premises 4 The Implications of R&D Activities and of R&D Location for Regional Economic Development 8 CHAPTER I. Major Objectives of Federal Policies for Research, Development, and Regional Economic Growth 11 Major Objectives of Federal Programs in R&D 12 Objectives of Federal Programs for Regional Development 15 Delineation of Regions—Place Prosperity versus People Prosperity 17 CHAPTER II. Characteristics of Regional Growth—Regional Economic Implications Associated with the Location of R&D Institutions 20 Some Characteristics of Regional Growth and Industrial Location 20 Factors Affecting the Introduction of High-Technology Enterprise 22 XI

Xll Regional Economic Implications Associated with the Location of R&D Institutions 25 CHAPTER III. Characteristics of R&D—Incorporation of Science and Technology into the Economy 31 The Overlapping Nature of R&D Activities—Some Definitions and Concepts 31 Characteristics of the Scientific Community—the Relationship of Basic Research to Institutions and to Society 33 The Nature and Organization of Applied Research and Development 35 The Incorporation of Science and Technology into the Economy—Technological Innovation and Technology Transfer 38 CHAPTER IV. R&D Activities Relevant to Regional Economic Development—Institutional Relationships 43 Direct Contributions to the Regional Economy through Development of New and Improved Products, Processes, and Ways of Doing Things 43 The Development of Human Capabilities and Skills 45 The Improved Utilization of Natural Resources—Enhancement of the Quality of the Physical Environment 47 The Delineation of Regional Problems and the Development of Plans for Their Solution 48 CHAPTER V. Dimensions and Distribution of R&D 50 Total Magnitude of Effort 50 Distribution by Function and Performer 51 Distribution of R&D by Industry 52 Geographic Distribution of R&D 55 CHAPTER VI. Mechanisms for the Implementation of Regional or Distributed National Goals in R&D 59 The Nature and Support of Distributed Goals in R&D 59 The Role of Government Policies in Encouraging Innovation and Technology Diffusion 61

Xlll The Buildup of Regional Strength in Research and Educational Institutions 65 The Statement of Regional Problems and the Formulation of Regional Plans—State and Federal Efforts 68 Client-Sponsors for the Implementation of Regional Plans— Organization of Regions for the Improved Use of R&D 70 Exploratory Centers for Regional Economic Development 75 SUMMARY OF FINDINGS 81 RECOMMENDATIONS 89 Recommendations Concerning National Policies for R&D 89 Recommendations Regarding the Implementation of National Policies for R&D 93 APPENDIX A. Bibliography 99 APPENDIX B. Con tract Statement: Scope of Work 107 APPENDIX C. Attendees at Conferences 109

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