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Chapter III Characteristics of R&Dâ Incorporation of Science and Technology into the Economy The Overlapping Nature of R&D ActivitiesâSome Definitions and Concepts In the context of an evaluation of national policies in support of these activi- ties, it is essential to recognize and to clarify the differences between science and technology or between research and development, and the manner in which they relate to each other and to economic development. For most human history, science and technology were separate enterprises with differing objectives and conducted by different individuals and even dif- ferent classes of people. The relation between science and technology was tra- ditionally quite loose, and applications of science to technology in many areas historically were quite casual. Only in the course of the twentieth century and, in particular, since World War II has there been a deliberate effort to apply science to technology on a broad scale. In view of this relatively recent devel- opment in human affairs, it is not surprising that many problems existânot only in the management of science and technology but in broadening the public understanding of these activities and of their relationships to each other and to society. Science, in this context, is more than the classification of facts and ob- served phenomena; it is the rational correlated knowledge of natural phenom- ena. Technology consists of codified and reproducible ways of doing things; much of this is based on systematic theoretical knowledge, i.e., science, but some is based on codified experience, i.e., technological "know-how." Thus, technology includes any tool or technique, any product or process, or 31
32 method of doing or making, by which human capability is extended. While the terms "science" and "technology" are sometimes used to include the acts of seeking new knowledge or of developing new methods for doing things, these efforts are more aptly designated by the terms "research" and "development." A principal difficulty in characterizing research and/or development is that these embrace a set of overlapping activities that do not have sharply defined boundaries and in which sharp distinctions often are counter-productive with- in an organization dedicated to relating one set of activities to the other. Even widely used designations such as "basic research" and "applied research" are not without ambiguity. Basic research is often defined as being aimed at ex- tending knowledge without conscious regard to application; research under- taken with a particular application in mind at some not-too-distant time is classified as applied research. Among the difficulties in such a division is agree- ment on what constitutes the not-too-distant future and what constitutes the motivation for doing the work. Frequently, the motivations of researchers are more mixed than such a separation would suggest. Furthermore, a given re- search activity may be properly thought of as basic research by the performer and, at the same time, as applied research by the sponsor, or vice versa, de- pending on the subjective assessment of its relation to potential applications. Under these circumstances, it makes sense to recognize a wide set of related activities and, at the same time, to admit to important distinctions between research and development. At one limit of the spectrum of activities lies basic or scientific research, an activity in which the principal motivation is to strengthen the conceptual structure and expand the scope of man's knowledge. This in no way implies that it will not find application, sooner or later, in various devices, processes, or systems; rather, such research does not have ap- plication as a principal goal in its pursuit. At the other limit of these activities, development is used to designate activities directed toward the application of existing knowledge, toward the design of devices or processes useful to man. Applied science occupies an intermediate position between pure science and engineering development. In applied science, we may have a definite prac- tical aim in mind; however, we are uncertain as to whether this aim can be ac- complished. To find new, fruitful applications of pure science is in itself a creative process. In some cases, the immediate objective of applied science may not be a specific device or process but, rather, better understanding of a field very closely related to technology; it would probably not be worth under- taking purely for the sake of intellectual curiosity. Alternatively, new develop- ments frequently require new details of knowledge or conceptual structure that can be produced by scientific research techniques. The applied research aimed at such insight is not the stimulus to innovation but supplies vitally needed information in support of it. In characterizing the two distinct limits in this continuous range of activi-
33 ties, we observe that basic research is aimed toward a philosophical or analyti- cal description of natural phenomena, whereas development is focused on a need or a problem posed by society. Basic research is considered as worth- while if it contributes to our understanding, whereas development must be judged in terms of the need for its product. Characteristics of the Scientific Communityâthe Relationship of Basic Research to Institutions and to Society In this discussion, we include not only basic research in the natural sciences but also in the life sciences, in which it is now making profound changes, and the behavioral and social sciences, in which basic research is beginning to have a significant impact on related professional and applied fields. Basic research begins with the selection by an individual investigator of a problem or problem area from among the vast variety of natural or social phenomena. The ultimate validity of such a selection depends not only on the significance of the problem but also on its tractability; clearly, both the choice of problem and the approach to its solution are based on subjective evaluations by the individual researcher. Ultimately, however, the evaluation of both the validity of the solution and its significance are the responsibility of the larger community of specialists in the field. Since the findings in any one investigation may be fragmentary and eluci- date only one small aspect of the problem area, the challenge in validating and confirming the significance of the individual scientist's contribution is increas- ingly complex. It is a triumph of the value and reward system in scientific re- search that it has drawn upon the efforts of a remarkably individualistic set of practitioners and molded them into nationwide or worldwide communities that have succeeded in many areas in relating a large reservoir of isolated con- tributions into a fabric of viable understanding. The dynamics of the "system" of scientific advance have relied very heavily on an elaborate system of public documentation, with strong sanctions operating on the individual scientist to make full use of and give proper credit for previous work relevant to his own. Discovery and innovation within science have extremely rapid diffusion times, and the rate of diffusion is influenced to only a minor degree by political and organizational boundaries. Thus, the scientific research community, func- tionally organized by separate disciplines, is worldwide in scope, and well- established communications exist. With the increasing complexity both in the structure of science and in the experimental instrumentation needed to gather further data, the nature of the individual's relationship to his discipline has depended heavily on the nature of the local community in which he works. In view of the rapid advances in his own and related fields, it is increasingly necessary that a researcher be in
34 contact with a group of his peers on a day-to-day basis. Thus the character of his local community is crucial to success; the critical mass for a given research group depends on the complexity and rate of development of the field. The worldwide community is made up of a relatively small number of outstanding centers, which set the standards of performance and provide the foci for com- munication. The interactive relationships within the truly outstanding research centers help to explain the quality of individual performances. A corollary of this is that brilliant individual researchers are seldom found in a community of second-raters. The search for individuals possessing unusual scientific or technological talent is also a nationwide or a worldwide activity. Unusual talent occurs at random, is hard to detect, and must be carefully nurtured and developed. After an outstanding individual has been discovered and his talents recognized, he has very great mobility; it is easy for a gifted scientist to move from one research center to another almost anywhere in the world. Because modern technology depends increasingly on the scientific knowl- edge that has been accumulated, it is understandable that society places con- siderable value on the products of scientific research. However, it is very important to differentiate between the product values associated with the col- lective efforts of the national or international community of science and the product values of given scientific investigations. Although incremental insights and data are added to the reservoir of knowledge by individual investigators on a continuing basis, it is most problematical as to when a given contribution to knowledge may find application. Frequently, a result may lie unused for dec- ades before certain additional insights or techniques incorporate the result into a useful product. Because ideas fit into a structure of knowledge in a complex and interrelated way, it is often extremely difficult to trace back the particular fundamental ideas that contributed to a practical application. In any case, it is virtually impossible to attach a value to the incremental scientific contribution at the time it is delivered, and even more so when it is merely proposed as an idea.* Furthermore, it is hard to predict whether a given incre- ment of new knowledge will be useful to the institution or agency that spon- sored it; it may, indeed, be of greater value to another, perhaps competing, institution. For these reasons, although basic scientific research can be viewed as having collective product values for the nation as a whole or for a program with national scope, it is unrealistic to think in terms of supporting a given scientist on the basis of the practical value of his "research product." It is for these reasons that institutions that support science typically recognize as *As pointed out by Harvey Brooks (private communication), these statements apply not only to application to technology but also to application to science. Not only is it hard to determine when a given contribution may find practical application, but it is also often difficult to evaluate the significance of a basic discovery or advance until after other parallel advances or discoveries have been made.
35 a principal justification the process values associated with the research activi- ty, i.e., the values associated with the research activity viewed as a social, cul- tural, or educational process. The principal process value of research in the university is its value in the educational mission itself. Not only does the research activity relate in a direct way to the education of graduate students but also to the continuing educa- tion of professors and, less directly, to undergraduate education. Similar process values provide an economic justification for basic research in industry; for example, an ongoing research program constitutes an excellent way of re- cruiting and developing technical talent for future leadership roles. In addition, the basic scientist in a profit-making institution may aid in establishing a de- sired intellectual environment. He is able to bring into a proprietary situation the standards of performance and technical achievement that are characteris- tic of the scientific community as a whole. Finally, a basic science effort can provide for applied programs a window on the world's research effort. Basic scientists often spend a fraction of their time consulting in their areas of ex- pertise with problem-solving groups. Thus, the typical scientific researcher in- cludes, along with his basic commitment to research, professional activities like teaching, consulting, or advising, which have values to his institution other than the direct products of his research. The Nature and Organization of Applied Research and Development 1. Objectives and Organization It is largely through development and applied research that new and improved products, better processes and more effective systems are made available to society. Thus the activities in these categories are identified immediately with their product values; however, they fall into a very wide variety of professional pursuits and technological objectives. Intertwined in all these is a need for in- vention to bring new technology into being. The diversity of objectives and activities can perhaps be illustrated by listing a series of hypothetical applied technological activities as follows. Because of the availability of approximate data, the examples are taken from the field of air transportation; for each program a rough estimate of the possible cost is given. a. Develop a prototype supersonic jet transport planeâ$1,000,000,000. b. Develop a prototype jet engine for the aboveâ$100,000,000. c. Analyze and solve a problem involving metal fracture on a specified airplane componentâ$1,000,000. d. Carry out analytical study of shock waves as a function of distance from supersonic sourcesâ$100,000.
36 e. Carry out a market analysis of supersonic jet transportation for an airline companyâ$100,000. f. Make a systems analysis for the location of an SST jet airport for the State of Illinoisâ$100,000. The above list is intended to demonstrate the wide variety of activities that fall into the categories of applied research and development. It includes a large-scale hardware development procurement that might involve 20,000 or more man-years of effort, a systems-engineering analysis involving techno- logical problems, and a systems analysis including socioeconomic inputs. All the above activities illustrate the fact that applied research or develop- ment must be focused. In many applications such work may have a regional or localized implication. Unlike basic research, the objectives are typically clearly defined and the criteria for success predetermined. Very frequently, the time schedule for delivery of the final product is crucial, particularly when the over-all system is dependent on the successful development of various sub-systems. To reduce the uncertainties inherent in new processes or tech- niques, the prime contractor frequently takes several technological approaches in parallel. As contrasted with research, applied programs draw upon a variety of dis- ciplines, the particular requirements being imposed by the nature of the problem. A given application is typically motivated by a single need and draws from a large body of knowledge. The characteristic mode of interaction of people engaged in an applied program is that of a team. The nature of the team is a function of the complexity of the problem and the urgency of the imposed completion date. If the system involves hundreds or thousands of interrelated technological developments, it is clear that a team of large size and sophisticated relationships is called for. Recent military and space sys- tems have utilized new managerial techniques and laboratories of very large critical size. On the other hand, systems analyses of some complex problems can and have been carried out with small numbers of broadly educated individuals. Development typically calls for knowledge from many subject areas. It is the specific problem to be solved that determines the varied talents and back- grounds needed to make up a given team, and its success depends critically on the quality of team leadership and the relationships built up between the in- dividuals within it. A team assembled to carry out a given development is sel- dom uniquely suited to carry out a task in another area. Hence, the success of a development organization depends on its capability for restructuring new teams for attacks on new problems. Whereas discovery and new insights within science are communicated readily across political or organizational boundaries, in the case of develop-
37 ment and applications research the communications pattern tends to be more confined to organizational channels and to be more localized in character. One reason for this is that much technological insight is based on intuitive in- vention or "know-how"âit is more difficult to verbalize and to document. Another reason is the requirement in some cases to retain proprietary infor- mation as a company or national asset. Thus, typically, the technologist in an industrial or mission-oriented government laboratory tends to be oriented toward internal communications and (unlike the scientist in such institutions) to seek recognition and reward within the organization. Increasingly, how- ever, there is a trend in the direction of greater conceptualization of techno- logical knowledge and documentation of specific advances. (It is important to note significant differences in the degree of conceptualization of technological knowledge in different fields. In general, the more closely a field of technology is related to recent or contemporary science, the more likely it is to acquire the documentation habits of science.) The administrator, either at the institutional or project level, plays a more important role in development (or applied research) than is the case in basic research. He must be concerned not only with the technical substance of the work but also with the scheduling and assignment of responsibilities in what is typically a time-limited and cost-limited enterprise. Whereas the good mana- ger seldom directs in the sense of telling people how to solve each problem, he must take a far more active role than his counterpart in basic research; he must see to it that each development team is adequately staffed and sufficiently motivated to carry through to projected solutions, even in cases in which the approach to the solution was "not invented here." 2. The Role of Invention Invention is the process of bringing new technology into being, or the new technology created in the process. Historically, invention has not always come from R&D; in earlier centuries, it was more often based on intuitive in- sight or knowledge of the "tricks of the trade." Indeed, such terms as "well versed in the art" or "state of the art" are still a part of patent law. However, since the turn of the century and, particularly, in the past few decades, the more distinctive the new product or process, the more likely it is to have orig- inated in the applied research or development laboratory. Scientific under- standing as well as a knowledge of the cutting edge of technological advance is increasingly essential to the inventor, particularly in the sophisticated areas of modern technology. Thus, while laboratories for basic research were well established much earlier, organized invention is relatively recent. What Whitehead32 has referred to as "the invention of the method of invention" took place in the form of the establishment of central "research" laboratories
38 in a number of major industrial corporations in the early 1930's. Science is a resource from which new technology derives. Not infrequently, inventions emerge directly from science or result from scientific discoveries or from instrumentation originally developed to improve scientific measure- ments. However, the application of science to technology and the utilization of science, particularly for economic purposes, increasingly depend upon in- stitutions and attitudes that are different from those necessary for the crea- tion of science. In particular, such application calls for institutions and individuals who look to the marketplace, to the production facilities, and to the problems posed by society for inspiration and reward. In recent years, the problems posed by society have tended to be set forth in increasingly broad terms. Thus the pressing problems in transportation may be appropriately addressed in the general terms of "design a transportation system" or "design an air-traffic-control system" rather than in the specific terms of the design of hardware components. In addressing such problems, the social or political constraints are often as difficult to meet as the techno- logical or economic constraints. Inventions that permit "designing around" or accommodating social obstacles call for as much social ingenuity as techni- cal ingenuity; typically the two have to be combined in a single individual. In some cases, a solution is possible only if the innovator can bring about a change in such social barriers, e.g., changes in building codes or zoning restrictions. In one sense, the idea of social barriers or constraints on technical inven- tion is not new: virtually any new product or way of doing things must over- come traditional attitudes to meet the requirements of the market. However, with the growing awareness of the social costs of various technological devel- opmentsâe.g., automobiles and their impact on air pollution or traffic conges- tionâthere are social needs that are not taken into account in the market- place. There is an increasing requirement for the articulation of such social needs in a way that encourages invention. In some cases, a technological in- vention may be the "key" that provides the solution to a problem with com- plex social or political constraints. In other cases social inventionsâincluding new institutional or political frameworksâare required before technological solutions are feasible. In either case, the changing environment calls for inven- tors with both technological and social insight. The Incorporation of Science and Technology into the Economyâ Technological Innovation and Technology Transfer The primary way in which research and development affect the economy is by increasing the productivity with which the nation's resources are used, notably through the development of new and improved products, processes,
39 and systems. Even if technical feasibility should be proved, however, it is by no means clear whether a new idea or invention will lead to rewarding results in an economic or practical sense. The term innovation has been used to describe the process by which new products, processes, or ways of doing things are introduced to widespread use in the economy, the society, or into the process of government. It may be applied to many areas of human en- deavorâto industry or agriculture, to medicine or educationâand to a variety of social, economic, or political activities. In many instances of innovation, one finds a dedicated proponent, a single-minded individual with a clear and unswerving vision of the goal that he sees as possible and desirable. Such an individual may or may not be the inventor of the new idea; he is the person who seeks and obtains financial support in the development phase, attracts creative people to the various ac- tivities required, and sees it throughâif necessaryâup to the production and utilization of a new product or process. In short, he is a technological entrepreneur. Although the risk of failure of a new idea is less of a liability to a large company or federally supported laboratory than to a small enterprise that can not spread its risk over several such ventures, the process of innovation has many similarities, independent of institutional size or objectives. The in- dividual innovator or entrepreneur must seek and obtain financial backing; he must be persuasive in changing traditional viewpoints and in overcoming inertiaâfrequently in the form of bureaucratic concerns about making "mistakes." Thus, the term innovation involves activities that are often dif- ferent from invention, but in which creative ingenuity in dealing with a wide variety of issues is called for; the technological entrepreneur must understand not only the technology with which he is dealing but also the society into which he must introduce the new idea. The term technology transfer has been used to describe processes by which a successful development of technological know-how built up in one institu- tion is embodied in a way of doing things by other institutions or groups. It refers to the processes by which science and technology are diffused through- out human activity. For historical reasons, we tend to view technology primarily in terms of machines and physical instrumentation, that is, hardware. However, today technology consists increasingly of "software," that is, the organization and systematization of ways of doing things, and not merely the ways of making things or the specifications for things themselves. Unless we take this wider view of technology, our policies and goals are likely to be based on an obso- lete concept of the transfer process. In this view, we should include managerial technology or management systems. Harvey Brooks has emphasized the in- creasing importance of software:
40 It is necessary to take this broader view of technology because the process of technology transfer is similar, whether we are talking about hardware or soft- ware, and because non-material technology is the fastest growing, and is likely to increase in relative significance in the future.33 "Vertical" transfer occurs when new products or processes are carried through successive stages of research, development, manufacturing, and marketing in a given setting. It includes the process by which new scientific knowledge is incorporated into new technology. Many major advances, such as nuclear reactors, television, and transistors, have resulted from vertical transfer of technology and have called for highly structured and highly inte- grated research and development organizations. Even if the original idea were generated elsewhere, the nature of the product often calls for a large R&D organization. This characterizes the central laboratories of many large corpo- rations, as well as the national laboratories of the AEC and NASA. "Horizontal" transfer describes processes in which technological develop- ments are transferred from one application to another, one corporation to another, one industry to another, or even from one region or country to another. Increasingly, the vertical transfer of new technology has been ac- companied by horizontal technological transfer, even involving major new technologies such as the computer. Frequently, vertical technological transfer is aided by the contributions of small companies, often sub-contractors, which specialize either in hardware components or sub-assemblies or in technological software. The growth of an R&D industry, particularly the scientific- instrumentation industry, typifies the build-up of horizontal technological transfer. Historically, one of the most important mechanisms for technology trans- fer has taken place in the marketing and purchase of capital goods. Thus, technology imbedded in machine tools was sold by that industry to the manu- facturers of metal products; similarly, innovation in printing technology was sold in the form of capital goods to the publishing industry. This also typified the transfer of technology from one region to another, or from one country to another. Increasingly in recent years, capital goods must be considered to include not only hardware but software: it has been suggested that the equiva- lent of machine tools in this context might be called information tools. Soft- ware technology includes not only computer programs but also various techniques for controlling, testing, evaluating, or managing complex proce- dures and organizations; it also includes material and aids for the training of personnel in the use of new approaches. Another important mechanism for horizontal transfer lies in the utilization of new materials. Such materials as synthetic fibers, plastics, metal alloys, com- posites and ceramics often are introduced into products far different from those for which they were originally developed by organizations other than the users.
41 The transfer of technologies developed by mission-oriented agencies of the federal government to other applications or agencies has been widely recog- nized. Thus, civilian industries have benefited greatly from such examples of transfer as turbine engines for aircraft, transistors and integrated electronic circuitry for computers, and many examples of electronic instrumentation. It should be noted that the rate of technology transfer can be greatly af- fected by the manner in which the developed product is "packaged." The development as well as the transfer to other uses can be greatly accelerated if the device or process is recognized as a potential product of broader use rather than one that meets only a specific need within the sponsoring government agency; indeed, both the government use and the industrial application can be greatly benefited by stimulating private demand for the potential product. Conscious attention to the transfer of such technology from one agency to another would also enhance the payoff and potential for the originating agency. Technological know-how and newly developed processes or techniques are often transferred via the physical flow of personnel from one institution to another, or by the movement of people between fields of science and tech- nology, and from science into technology. Many aspects of new technology are not incorporated in written reports. Hence, the movement of knowledge- able engineers or scientists is often mandatory in transferring technological know-how from one corporation to another, or from a government laboratory to industry. People are often transferred to carry such know-how from the research to the development laboratory or to take a new product from devel- opment to pilot production in a given corporation. Consulting and advisory activities represent additional ways in which technology transfer is encouraged via personnel interactions. These mechanisms for technology transfer are sum- marized in the statement, "The technological pipeline is people." Technology transfer is frequently activated by and associated with the marketing function, particularly in the process of finding entirely new appli- cations for a product developed to meet a given requirement. The "applica- tions engineer" is a relatively recent addition to the field of marketing; his activities are devoted to finding new applications for recently developed products. Certain high-technology industries, particularly those engaged in scientific instrumentation or high-speed computers, represent a relatively small fraction of the total gross national product in annual sales. However, they contribute in a major way to technology transfer since their rate of growth depends directly on the discovery of new applications for their prod- ucts. A given product or process that is small in relation to the gross national product may nevertheless affect a wide area of productivity and may therefore have a major effect on the gross national product; e.g., a new method of prospecting for oil. Technology transfer also is generated through entrepreneurial activities, in
42 particular, the spin-off of new enterprise from existing organizations. Entrepreneurship is also closely related to the movement of people. Universi- ties and research institutions often provide the training grounds as well as a form of interim personal security for would-be technical entrepreneurs while they are developing know-how and faith in a new idea. Finally, technology transfer takes place through the various mechanisms for the exchange of technical information through the scientific and technical literature, through licensing of patents, exchange or sale of know-how, and through personal interactions. Opportunities for person-to-person exchange are provided by technical meetings and trade exhibitions, programs of training and education, and accidental personal contacts. The literature for technology transfer includes not only the archival technical journals but also trade jour- nals, patents issued, and even advertisements. This wide array of mechanisms for technological transfer emphasizes the diversity of activities and institutions that translate R&D into the national economy. This diversity will have its counterpart in the numerous facets of national or regional science policy when reviewed in the context of economic development. It is not possible to form a precise judgment as to the relative importance of these various mechanisms for the transfer of technology. The dominant mechanisms in a given instance vary with the nature of the tech- nology, the industry, the resources involved, and other related factors. Ob- viously the various transfer processes do not operate independently of each other; an effective program or strategy for increasing the rate of transfer would need to combine a number of mutually supportive elements. With respect to technologically backward regions, it would appear that there are deficiencies in horizontal transfer, particularly as implemented by the movement of persons skilled in advanced technology. This difficulty is heightened if there are differences in industrial structure among regions so that a desired movement of highly skilled persons into a given region would call for a transfer of their employment from high-technology to low-technology industries as well. Since it is difficult to provide incentives in the latter situa- tion adequate to motivate outstanding technological personnel, it follows that technologically backward regions are usually called upon to attract new types of industry to facilitate technology transfer.