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Summary of Findings Chapter I. Major Objectives of Federal Policies for Research, Development, and Regional Economic Growth We have found it important to distinguish between two major categories of national goals: Central National Goals for R&Dâsuch as leadership in the important fields of science, nuclear power, space exploration, and national defenseâin which the program is national in focus, sponsorship, funding, and over-all direction. Distributed National Goals for R&Dâsuch as the development of human re- sources, the rebuilding of our cities, water resources, and regional environment for livingâin which the programs are characterized by local determinants in the nature of the problems, in the approach to the solutions, and in their anticipated consequences. These goals, while related in many areas, require distinctly different criteria for establishing priorities and means for implementation. The Committee gave much attention to important social and economic con- straints that increasingly complicate problems for which technological solutions have been traditionally sought; it also gave attention to the variety of ways in which technological advances may create as well as solve social problems. Hence, 81
82 in its conception of R&D, the Committee found it necessary to include not only the natural sciences and engineering but also the social sciences and organizational and managerial technology. The nation's federally supported research and development activities, while largely committed to central national missions, have played a significant role, together with industrially sponsored research and development, in raising many sectors of the national economy to positions of world leadership. In the process, some geographic regions have made greater progress than others, and have greatly benefited from the technological changes that have transformed our society. In the valid development of other programs to enable lagging areas to accelerate their progress, it is important to recognize the continued need for maintaining and improving a strong program of central national goals in R&D. In broad terms, national policies for regional development should have two primary objectives: To improve incomes and levels of living in regions by making it possible for the people in each region to increase their contributions to the national econ- omy through development of the region's comparative advantages and full utilization of its manpower and other resources. To assist in correcting major imbalances in the availability of social and economic opportunities among some parts of the nation and between some regions and the country as a whole. However, each region of the country can not possibly become a duplicate in microcosm of the national economy. Diversity, migration, and change are all elements of growth and development. The Committeee has not sought to recommend geographic boundaries or political organizations; however, it views the organization of multiple state and local governments into politically and economically viable units as useful to planning for economic development. For many problems, the precise loca- tion of the boundaries is not as important as that the jurisdictional boundaries of regionally oriented organizations or activities coincide. However, since most regional problems have different geographic patterns, it should not be expected that a given interstate, multi-purpose organization will be able to cope with all regional problems in its area.
83 Chapter II. Characteristics of Regional GrowthâRegional Economic Implications Associated with the Location of R&D Institutions If a region has appropriate cultural, political, governmental, and economic attributes, then R&D activities and institutions can contribute to human development within the region, to the region's comparative economic advan- tages, and to the quality of the total regional environment for living and growth. Indeed, R&D activities typically reinforce these attributes. Hence, it is not surprising that there is an association between the economic vitality of a region and the nature and magnitude of the R&D institutions located in it. However, a simple one-way causality does not describe this relationship: one could argue either that the R&D located within it has created a strong regional economy or that an economically vigorous region attracts and supports R&D institutions, or both. That is, there are strong mutually supportive relation- ships between a region's full development and the success of R&D activities within it. The intensive incorporation of technology into manufacturing, agricultural, and extractive industries has brought significant changes in the nature of job opportunities and, hence, the experience and skills called for. Shifts of employ- ment have taken place from one industry to another, from one geographic region to another and from one sector of the economy to another. Increasingly, access to economic opportunities is dependent in a crucial way on the develop- ment of human capabilities. Education and re-education for the future is man- datory for the good life of the individual, the community, and the region. In broad programs aimed at the development of human capabilities, this Com- mittee feels that new efforts in research and development are called for. Edu- cation has come to be recognized as a continuing essential of life, not merely preparation for life. The development of new R&D institutions or the improvement of existing ones typically requires long periods of time. Moreover, the important contribu- tions of a given R&D institution either in terms of technological innovation, the development of human skills, or the improvement of the intellectual and cultural environment are achieved only after years of effort. Thus, it is impor- tant to consider resources devoted to the build-up of research and development institutions as an investment that may have long-term benefits to regio'nal development. Although the immediate economic effects of the location of an R&D institu- tion on its surrounding community are often very important to the community,
84 the indirect and long-range benefits in terms of the improvement of the social, political, and cultural environment are usually far more significant. The poten- tial contribution of such an institution to the generation of new local industry is highly unpredictable; it is dependent on a number of factors, an important one of which is likely to be a community of other "high-technology" institu- tions in the immediate vicinity. Chapter III. Characteristics of R&Dâ Incorporation of Science and Technology into the Economy In the context of this report, it is very important to recognize the essential differences between research and development. While these terms embrace a broad set of overlapping activities, they are, generally speaking, committed to differing objectives, organized in different structures, and make different kinds of contributions to society. They entail differing emphases on the values of their end-products and the values of the processes through which end-products are achieved. Because modern technology depends increasingly on the accumulated reservoir and conceptual structure of scientific knowledge, the collective efforts and products of the national community of science are of great value to the nation. However, it is hard to predict when a given contribution will be incorporated into useful products or whether a given increment of new knowledge will be useful to the particular institution that sponsored it. In addition to product values, research activities have important process values which contribute in a direct way to the mission of the sponsoring institution. The performance of research contributes directly to the educational mission of a university; in industrial or government laboratories, it helps to establish a desired intellectual environment and to provide access to the world's research effort. Science and technology are incorporated into the economy through invention, innovation, and technology transfer. Technology transfer takes place in a variety of ways: among the most important mechanisms are (a) the marketing of capital equipment (including software), instruments, and new materials in which new technology is imbedded, (b) the movement of skilled personnel from one institution to another, from science into technology, or from one field of activity to another, and (c) the dissemination of information through personal contacts. The technology transfer process is critically dependent on people, their attitudes and motivation; it is social and economic in form and purpose. To solve problems posed by society, invention and innovation are called for
85 which meet increasingly complex social or political conditions as well as tech- nological or economic constraints. Such innovations demand both social and technical ingenuity, typically combined in a single individual. To introduce new inventions into the economy, three types of innovators are needed: technical, financial, and civic entrepreneurs. Chapter IV. R&D Activities Relevant to Regional Economic Developmentâ Institutional Relationships Major contributions associated with R&D activities may be categorized as follows: Direct contributions to the economy through the development of new and improved products, processes, and techniques which can be manufactured, sold, or utilized by institutions in the region. Contributions to the development of human capabilities and skills; basic and applied research play an important role in education and training. Provision of new approaches to the extraction or improved utilization of natural resources located within the region. This includes enhancing the attractiveness of the regional environment. The delineation of regional problems and the development of plans for their solution. While the principal contribution to the invention of new products and pro- cesses that can be manufactured and sold in a region comes from industry, important contributions are made by each of the other categories of R&D institutions. Regional economic development can be aided by federal policies aimed at fostering innovation and the transfer of existing technology to new applications in both the public and the private sector. Many of the regional problems of rural and urban America are associated with the failure of local and regional educational institutions to keep pace with the demands of a technologically based economy. National policies regarding R&D can affect this situation in two ways: By providing effective support for graduate education and research, upon which adequate institutions and qualified personnel for higher education critically depend.
86 By supporting new programs of R&D leading to innovation and change in the educational processâformal and continuingâat all levels. Technological developments have had increasing effects on the economic resources, on the physical environment, and on the amenities of life of com- munities formerly dominated by their geographic location and the availability of natural resources. The development of sophisticated approaches in economic forecasting and systems analysis offers new opportunities for the delineation of regional prob- lems and the development of plans for their solution. Chapter V. Dimensions and Distribution of R&D Total federal obligations for R&D in 1968 were approximately 17 billion dol- lars, or about two percent of the gross national product. The total number of R&D scientists and engineers represented less than one percent of the total labor force, but about sixteen percent of the professional and technical labor force. About 70 percent of the total expenditure for R&D in the United States is in industry, approximately 15 percent in federal laboratories, and the remainder divided between universities and other non-profit institutions; the federal government presently supports somewhat more than half of all industrial R&D. Eighty-five percent of the federally sponsored R&D is carried on in three in- dustry groups that receive a major fraction of R&D funding from federal sources: aircraft and missiles, electrical equipment and communications, and scientific instrumentation. While they provide direct employment to only a relatively small fraction of the industrial population (about 16 percent) they contribute in important ways to new job opportunities and enhanced produc- tivity in other industries. They play a significant role in innovation and tech- nology transfer through the marketing of products and services. The geographic distribution of company-sponsored R&D has a pattern dis- tinctly different from that which is federally sponsored. The New England, Middle Atlantic, and East North Central regions, which together account for 29 percent of federal obligations for R&D, performed 72 percent of company- sponsored industrial R&D. In contrast, western regions received 55 percent of the federal R&D contracts going to industry and accounted for only 16 percent of company-sponsored R&D.
87 The greater part of research and development activity is carried out in institu- tions that employ 1,000 or more R&D scientists or engineers. About 50 per- cent of industrial R&D is performed by the nine largest organizations, a similar percentage of academic research is carried out by the 25 largest universities. An important feature of the geographic distribution of scientists and engineers is that research and development tend generally to be located in metropolitan areas; this is particularly true for small R&D firms. Chapter VI. Mechanisms for the Implementation of Regional or Distributed National Goals in R&D In recent years, there has been a growing recognition that there are national objectives which can not be reached through R&D tailored solely to central national missions. As a result, the nation has assumed additional objectives, for example, institutional development grants for colleges and universities or programs for the encouragement of technology transfer. The increasing support and utilization of R&D by the federal government has not been matched by a corresponding trend in state and local governments. Mechanisms are needed for encouraging both centrally directed research and locally oriented research on such problems as law enforcement, urban develop- ment, and waste disposal. There should be national recognition of a need in higher graduate education to participate in technical activities which involve the processes of invention and innovation, i.e., how science is put to use. The universities should contribute both to science and to the art of using it. There is a major need in virtually all regions of the country to enlarge and improve every sector of education from elementary and secondary schools through to higher education and continuing adult education. The need for support of graduate research in newly developing institutions might be met in conjunction with meeting the need for research on problems of a regional nature and supported in part by block grants committed to such studies. While competent, technologically sophisticated organizations are necessary to provide analyses and designs for the future, it is equally essential to elicit knowledgeable client-sponsors 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 conditions
88 that in turn specify which programs leading to solutions may plausibly be set forth. Fragmentation of political responsibility frequently limits the effective incor- poration of technological or social invention. Since state boundaries are not the proper regional delineations for the solution of many problems, serious consideration should be given to the formation of new regional compacts or federal-interstate commissions to act as client-sponsors for systems analyses, regional planning, and the implementation of plans. R&D programs aimed at regional economic development viewed as a distributed national objective may best be carried out in two broad categories of R&D institutionsâone oriented toward problems that many regions share in com- mon, the other directed to the problems of separate regions. R&D institutions committed to the development of given regions as central institutional missions are needed to assure innovation in the form of valid long-range plans, better utilization of available resources, and the diffusion into widespread use in the regions of new technologies, organizational structures, and ways of doing things.