needs of society. The pursuit of science or research alone is not enough; knowledge must be applied, put to use, if the society is to get tangible benefit.

Not enough scientists and engineers are employed in and working toward the economic advance of such basic industries as food processing, transportation, textiles, construction, machine tools and production engineering, foundries and castings, lumber and wood products. A little more than 1 percent of the total number employed in these industries are scientists and engineers. Contrast that with chemicals or electronics, where it is almost 10 times higher. In 1962, there were only 7 Ph. D.'s in the United States with a specialty in textiles. In 1963, 200 engineers were graduated with petroleum specialties; the industry estimated its needs for that year were three times as great.

Not enough technical people are engaged in the process of invention, inovation, adaptation, and diffusion. The result is that we have a vast reservoir of untapped knowledge that is not being fully used to give us the new products, processes, and techniques that are the sinews of a robust and growing economy. Not enough technicians are available to free engineers from the routine tasks the technicians could perform if they were trained to, say, the second year college level.

(2) A second broad problem I think we have to face up to is that the technologically rich are becoming richer, and the technologically poor are becoming more so. This is a trend that must be halted in the national interest.

The cost of technical activity has been rising steadily. The pinch of higher costs affects companies with limited resources more than it does those with large financial bases. Thus, technical activity in companies with fewer than 5,000 employees has stagnated at a fairly constant level in recent years, whereas that of the large companies has greatly increased.

Research and development, indeed all technical activity, has steadily increased in complexity and sophistication. As we go up the scale, the increase in costs accelerates; workers need more technical training, for example, we need technicians instead of skilled mechanics; the relative number of professionally trained personnel increases, thereby spurring the escalation in costs. Development of new products and processes becomes riskier, and therefore is more and more undertaken by the larger firms who can ride out the inevitable delays, disappointments, and failures, waiting to recoup when the successful project materializes.

Let us consider the cost of technical manpower for a moment.

In the 1940's the incomes of all workers rose more rapidly than those of engineers. In the 1950's this lagging trend of professional salaries was reversed, and the rate of all skills just about kept pace with each other.

In the last decade, the youngest workers (20 to 25 years) with the highest incomes saw their salaries rise at a faster rate than their contemporaries with low incomes. The situation was the reverse for those in the 35 to 45 age bracket. This pattern was significantly accentuated for workers in technical fields. In other words, youngsters fresh out of school and trained in the latest techniques were in higher demand and enjoyed faster rising incomes-and the higher the income level, the steeper the rate of increase.

The increase in the income of scientists and engineers is reflected in the increased costs of research and development. Thus, the costs of professional manpower engaged in research and development rose 69 percent from 1952 to 1962, whereas the Consumer Price Index for that period increased by only 14 percent. The existing competence and expanding research grants and contracts in large universities tend to attract talent from all parts of the country-and more grants. The result is that the large ones are getting larger; the smaller ones are having a tough time. For example, 95 percent of federally sponsored research and development is done in only 100 out of 2,000 universities. The University of California had an operating budget last year of the order of a half billion dollars, and employed 40,000 people. Its operations are worldwide, and its customers other than students-range from the Federal Government to State and local governments, foreign nations, and industry, both local and national.

The regions of our country, and that means the workers in those regions, are also feeling the effects of technological change. Those with existing and growing technical competence are experiencing burgeoning prosperity, admittedly much of it due to huge Federal research grants and contracts, and their already existing technical competence makes them attractive magnets for additional talent from all parts of the country. On the other hand, other

regions not fully utilizing their educational resources, and depending on traditional industries that for one reason or another do not carry on the technical activity needed for viability and growth-these regions are economically sluggish and having growing problems of unemployment.

The importance of technical leadership to a firm, an industry, or a region is well illustrated by its importance to us as a nation. The United States today competes in world markets increasingly on the basis of technical excellence, on the basis of a large fraction of value added in manufacture due to advanced technology. Our exports are chiefly in sophisticated machinery, newly developed chemicals, and in modern aircraft. Two-thirds of our exports are the products of industries paying its workers over $2.50 an hour. On the other hand, our exports of textiles and apparel are declining.

(3) A third problem of importance is the role of the university in advancing the economy of the Nation. Whereas the need for greater university participation in the economic development of the regions in which they are located is growing, the gap between the needs of industry and the activity of the university, with some exceptions, is widening. Most of the Nation's universities carry on programs that are unconnected with local industrial problems, and too many industries fail to draw upon the intellectual resources of nearby academic institutions.

(4) The transformation and adaptation of knowledge to meet a practical need of society requires a particular skill that is not science nor research but yet which has to be developed to the professional levels we have come to expect only of top scientists.

This point can be illustrated by a comparison with the medical profession. Suppose we put all of our emphasis on the training of research doctors, to work in laboratories, and not on the training of practicing physicians, to work on the real ills of live patients. The health of our people would suffer, for while we need researchers to develop new medical and pharmaceutical knowledge, we also need the practitioner to apply that knowledge in the cure of the sick. The same problem applies to the kind of training given our engineers. We need engineering practitioners trained to the highest professional level in order to qualify them to conceive, design, and execute the new products, processes, techniques, and complex systems that modern society needs and at a price society can afford.

This is not to depreciate the value of the scientist and researcher. The point is a good scientist deserves to have his discoveries put to the use of mankind. No matter how good a job the researcher does it is wasted unless it is applied.

(5) There is no present mechanism for supporting the education and training of the kind of technical people that are needed to work out the problems of industry or the social problems of an urban society-no mechanism, that is, except research grants, and that is not the way to train the people we need. There is no equivalent, in short, of the kind of support recently provided for doctors and dentists education.

It used to be that a graduated engineer would customarily enter industry, rub elbows with production and marketing problems, get the feel of the needs of society, and apply his technical training to the conception and design of something to meet those needs. The scarcer engineering graduate today is increasingly embarking on a career in research and development, where he is comparatively insulated from the interplay of the marketplace and activity directly related to economic growth, and gets little or no training in the art and practice of engineering.

If modern engineers are not getting their training in the practice of engineering on the job, they will have to get it in the universities, and their training must be more general and broader in scope than at present.

All these conditions and problems exist in our country today. In large measure they account for the fact that our economy is not growing at the rate necessary to assure a high standard of living, full employment, healthy economies in all regions of the country, and a stronger competitive position in world markets.

We have reached the point, I am convinced, where we must all be concerned about these problems-and by we I mean the Federal Government, the State

and local governments, industry and industry associations, and the universities and technical institutions. Action must be taken to

(1) Enlarge the available pool of scientific and technical manpower. (2) Make more effective use of existing personnel.

Some of the steps that might be taken to achieve these goals are

On the one hand, support education at the graduate level and beyond, and on the other, further education to the second-year college level, probably-of technicians. This support should be a joint affair-stepped-up campaigns for voluntary endowments, stronger support from the States and from the Federal Government. Certainly the National Government has a stake and a responsibility here. Even the land-grant colleges, which get extensive Federal support, still depend for most of their income from the States and other sources. When we see that many of these and other locally supported universities educate scientists and engineers primarily at local expense only to find that a significant proportion of them move and fertilize the economies of other States and regions, we must consider this highly mobile resource-brainpower-a national as well as a local resource that needs and deserves national as well as local support.

Moreover, we must find ways to strengthen educational capability in the smaller colleges and universities dispersed throughout our land.

Support retraining programs: The unemployed are a serious economic drain. An investment to make them employable is a wise and prudent one. In this connection, I think that more should be done to anticipate dislocations due to technological change. I am sure that in many industries and many regions it is possible to assess the effect of technology now on the drawing boards or in the offing and to prepare for the blow well in advance. Regional economies can be kept viable in this situation by developing growth industries suited to the regions and expanding them so that they are ready to take over when the older industries become obsolete. Thought might be given to retrain the workers in the earlier industries so as to phase them into the payrolls of the newer industries with a minimum of dislocation. Now, this will not always be possible, nor is it a panacea for all ills, but it will work in many situations and will pay off in a stronger economy in regions otherwise destined for depression or stagnation.

Stimulate and encourage industry-oriented and industry-supported research through industrial research associations and other mechanisms: This too should be a joint activity, with the role of the Federal Government that of a catalyst. The effect of such activity would be to build a reservoir of applicable technical knowledge and of people especially educated and trained to use it for the economy.

Streamline and expedite information dissemination: There is a distressing amount of valuable information already in existence that goes to waste or lies fallow for longer-than-necessary periods of time because it does not reach the potential user at the right time in the right form. This wastes the time of scarce technical people on re-research or inefficient literature searches. Information dissemination can be significantly and profitably improved through the adoption of various devices, such as

A university-industry extension service that would bring into closer contact the people with problems and the people with answers. Such a service should be primarily a local or State operation with industry and university participation, but again strengthened and encouraged by Federal participation. The fabulous success of a similar service in agriculture certainly constitutes a useful precedent.

A national document center that will facilitate and expand the distribution of domestic and foreign technical documents, especially those resulting from Government-sponsored research. A nucleus of such a center already exists in the Office of Technical Services in the Department of Commerce. Its level of effort should be substantially raised.

Research results in a pile are of marginal use. They need to be sorted, evaluated, and reworked to make them assimilable by firms unable to do so by themselves. This is an area in which the universities and the professional societies can play an important part, with appropriate encouragement and support.

These, then, are some of the courses of action I consider worthy of implementation or exploration. Effectively carried out they should bring about a more efficient use and an expansion of the Nation's technical resources, its scientific and technical manpower, to the end that our people will be more gainfully and more fully employed.

I shall be happy to answer any questions you may care to ask, and to supply for the record any supporting data you consider of value to the committee's deliberations.

Senator CLARK. Would you first give us a little background about your own career?

STATEMENT OF J. HERBERT HOLLOMON, ASSISTANT SECRETARY OF COMMERCE FOR SCIENCE AND TECHNOLOGY

Mr. HOLLOMON. I was educated at MIT in both science and engineering; spent 4 or 5 years in the war, where I was responsible for metallurgical development for guns and armor for the Ordnance Department. Then I went to General Electric where I spent 14

years

Senator CLARK. What degrees do you have?

Mr. HOLLOMON. I have a bachelor's degree in physics and a doctor's degree in metallurgical engineering.

I spent about 14 years at General Electric, both in its basic research activities and also in its central engineering organization, being responsible for a substantial part of its basic research and subsequently its activities leading to the development of new businesses based on engineering.

I have had some contact with educational institutions and a year and a half or so ago came to the post which I now hold.

Senator CLARK. Thank you, sir. You refer to the total research and development programs of the Nation as almost $17 billion a year of which you say $12 billion is spent for such things as defense, space, atomic energy, and health, and less than $5 billion for the development of new products, et cetera.

What part of that $17 billion is paid for by the Federal Government and what part by private industry?

Mr. HOLLOMON. The private industry support for research and development as calculated by the National Science Foundation is somewhat over $4 billion and less than $412 billion; however, a part of those funds flow indirectly from the Federal Government through the application of overhead charges to Government contract work.

In addition, some of the products that industry normally sells directly at fixed prices on the open market are also related to the military or to the space effort, and they, of course, include part of the indirect development expense which the industry would have incurred prior to their sale.

So, my guess is that the private industry support for research and development for new products processes, by the private sector, is less than $4 billion but more than $312 billion a year.

Senator CLARK. In the vicinity of between 20 and 25 percent of the total?

Mr. HOLLOMAN. Of that order, yes, sir.

Senator CLARK. And is it your opinion that if we are trying to develop a civilized nation, in the broadest of humanistic terms, this is an imbalance?

Mr. HOLLOMON. I do not know whether it is an imbalance or not. An imbalance would assume that I have a limited pot, as it were, of total resources and I had more on one side than the other.

I would rather say there is an inadequate support, in my view, of those things that have to do with the relationship of science and technology to cultural and social and economic development.

I certainly would maintain that there is an inadequate support both publicly and privately for such activities.

Senator CLARK. In other words, you think a larger percentage of the gross national product ought to be devoted to research and development?

Mr. HOLLOMON. I think that a larger percentage of our gross national product ought to be related to the technical activities that have to do with our civilization and our culture, as you put it, as contrasted with, let us say, the major national programs of military and related activities.

Senator CLARK. Of course, the military and related activities play the major part in the expenditure of the research and development dollar, do they not?

Mr. HOLLOMON. Agreed; yes, sir. There is the matter of defining technical activities to include those other than research and development, such as inventions.

Senator CLARK. Although much research does lead to invention, does it not?

Mr. HOLLOMON. That is one of the mechanisms by which invention

occurs.

Senator CLARK. What others are there?

Mr. HOLLOMON. For instance, there are entrepreneural kinds— piggybacking, ballpoint pens are examples.

Senator CLARK. This is where somebody thinks up a bright idea, it is analyzed and decided that to be a mechanically good idea and you can make money out of it, so they go into production. Is that about the process?

Mr. HOLLOMON. That is the process. This comes indirectly from research, that is, research contributes to the pool of knowledge which these people indirectly use, but much industrial development still occurs by this rather indirect process of ingenuity applied to technical problems at the marketplace.

Senator CLARK. You can get into a semantic problem very easily. Mr. HOLLOMON. It is very difficult to avoid.

Senator CLARK. You say there is a need today not only for more technical people but for better and more advanced training. I guess we all agree with that. The real problem is how are we going to get it. Skills of all kinds and dollars are both in short supply in terms of the needs of our civilization; accordingly, we are always going to be dealing with priorities, there is not enough of anything to really go around, so somebody has to make a valued judgment as to what we are going to stress and where we are going to spend the money and what kinds of people we are going to train. In a free economy such as ours those valued judgments are a series of somewhat unrelated judgments by a wide variety of individuals and corporations and governmental units, but nonetheless in the end the mission of this subcommittee is to try to find how to better utilize

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