Would you comment on that?

Mr. HOLLOMON. I think your criticism is well taken. My own view is that in the absence of the Soviet threat or the absence of any military or what have you confrontation, economic or otherwise, that the problem is deeply a human problem, it has to do with the effective use of human resources and how well we are able to manage our own human affairs.

Senator CLARK. I too could sing "Onward Christian Soldiers" but I do not think it gets us well toward a solution.

Mr. HOLLOMON. I agree.

Senator CLARK. Turning to your quite interesting approach you say not enough of our bright young people are learning the practice of engineering and that the pursuit of science and research is not enough but that you have to have applied knowledge.

How do you know that we do not have enough? And what is your philosophical approach in dealing with the competing requirements of a civilized economy because there is not enough to go around?

Mr. HOLLOMON. Well, I have answered this in part. This is from a practical contact with many of major, both small and large, technical programs leading to practical utility and my observation is that the primary limitation comes from the people skilled in the art of the use of science and the use of technology, for practical ends.

Senator CLARK. Actually you could document that; could you not? Mr. HOLLOMON. I think you could document it. I think you could also document the high cost of large projects. I think you could document from various industrial sources the fact that many major large industries are becoming more sanguine concerning their investments in basic research as contrasted to the way product and process development occurs. I think you could compare, for example, the improvements in the shipbuilding of Japan compared to our own country. You could compare the advances in textile machinery coming out of Japan and Germany. These have to do with the utility of science.

Senator CLARK. Let me interrupt you there.

Could you put your finger on a series of causes as to why Japan builds better and cheaper ships than we do, and Germany makes better and cheaper textile machines than we do? It is not a simple answer. They have a lower wage rate.

Mr. HOLLOMON. Right.

Senator CLARK. Is that primarily the reason?

Mr. HOLLOMON. No; I do not think so. I think that in many of the industrialized countries a commitment has been made to apply technology to economic needs.

In Japan, for example, a commitment was made after the war on the part of the Government and shipbuilding industry, to become first class, that is to do it as well as anybody knew how to do it.

Senator CLARK. This was a result of some pretty intensive national planning.

Mr. HOLLOMON. Certainly an analysis. What were the resources Japan could offer? What kind of businesses could they entertain? What sort of technical training could they stimulate? You see the laboratories and technical activities came after the decision.

Senator CLARK. Is this true also of West Germany?

Mr. HOLLOMON. I think particularly in the chemical industry in West Germany, for example, and certainly it is true in Switzerland. Here is a small nation, with only limited resources, which makes enormous commitments to certain kinds of machinery development, and I think that if you examine each of these problems or each of these national efforts, you do not find that the lack of availability of science as the stumbling block; the critical thing, the key that would unlock the door. It was (a) the commitment, you decided to do something, and (b) it was the skilled people who were able to make the translation between the science that is available, the technology, the resources, and the products that would sell at the market. Senator CLARK. Somebody must have made a decision on priorities in economies which are far less strong than our own, to take watches in Switzerland, and shipbuilding in Japan, and chemicals in Germany.

Do you think this was a conscious decision or was it just luck?

Mr. HOLLOMON. No, I think it was a conscious decision but a complex decision of a large number of people, not unlike some kind of process that goes on in our own country.

Senator CLARK. Is there any such process in our own country? Could we just leave this to the decisions of the marketplace or must there be a more conscious effort in our own country to do the things necessary to come to a series of decisions?

Mr. HOLLOMON. There are many things that can be left to the market, where the cost of that commitment can be justified in terms of the benefit to the single firm. There are major commitments in technology and education and national policy that have to be made in concert between industry and Government. I rather think it is intelligent discussion of the issues.

Senator CLARK. We are again in semantics.

Mr. HOLLOMON. We are again in semantics.

Senator CLARK. Planning was a naughty word when I came down here in 1957; it is becoming mildly respectable as time goes on.

Mr. HOLLOMON. Let me say this, as to the particular question as to the relative role of industry and Government in the support of technology and the commitment of technical resources there is an important role which the Government must play and the industry must play and best we must do this together.

Senator CLARK. I would like you to turn your attention again to where you said:

Our scientists and engineers are employed in and working toward the economic advance of these basic industries of food processing, transportation, textiles, construction, machine tools

et cetera, et cetera—

And hardly more than 1 percent of the total number employed in these industries are scientists and engineers.

Now, my first question there is in terms of an ideal civilized society we have been talking about. This is a leading question, you might well disagree is it not pretty clear we are putting too much of our national effort into space and defense? I do not deny that we have to be pretty strong in defense. Without asking you to make a valued judgment as to whether we are putting too much, too little, or just

enough in defense, it seems to me you could make a valued judgment in terms of space and also in terms of whether you think that there is a real need to shift this scientific manpower into these areas where you indicate there is a short supply. I would raise the question as to whether we really do need an awful lot of additional scientific and engineering brains going to work. I would certainly pull transportation out of there and construction, and maybe some of the others.

Mr. HOLLOMON. Machine tools?

Senator CLARK. I would like you to expand on your concept of the needs for more scientific personnel in those industries which you

name.

Mr. HOLLOMON. You have asked two questions.

One concerns the relative allocation of resources between space and the civil side of the economy.

As you know, the President and the administration support the space activity. I think the most pertinent and useful comment I could make is that I am convinced that there is an inadequate support for the technology and the science that relate to the economy and to the civil efforts of the society, such as urbanization, urban planning,

et cetera.

Senator CLARK. And, of course, the best and easiest way to adjust that inadequate supply would be some kind of international arrangements, whether disarmament or otherwise, which would enable us with safety to divert a substantial part of our effort away from war and toward peace.

Mr. HOLLOMON. And it requires a second commitment, that you are, in fact, going to do something about stimulating the private effort and the public effort with respect to these problems, and this is not going to be automatic. One of the questions I would ask, perhaps in public, is whether or not these things are not going to have to be, of necessity, simultaneous. That is, if we are going to have a detente, let's say, with the Soviet Union, this would release manpower, but that manpower must be able to work on major technical activities of importance to the society.

Senator CLARK. Or else in the famous words of George Humphrey, we would have a depression that would curl your hair.

Mr. HOLLOMON. These must be looked at simultaneously. My conviction is the following:

If you eliminate from the Federal support of research and development-other than space, military, and health-if you eliminate agriculture, aeronautics, and AEC, those three, I figure that it may be as much as $50 million spent on the support of those things that have to do with our civilizaton and our culture and our society.

Senator CLARK. $50 billion?

Mr. HOLLOMAN. $50 million. I have eliminated health, space, and military, I have eliminated aeronautics, agriculture, and AECeliminating those, then the remainder that has to do with the economic and social health of the society is about $50 million.

Senator CLARK. You are referring to Government?
Mr. HOLLOMON. Yes, sir.

Senator CLARK. Not what goes into private industry?

Mr. HOLLOMON. I have already commented this is in the order of $311⁄2 billion.

Senator CLARK. Now will you address your attention to the second question which is implicit in your statement of the need for more scientific and engineering manpower in these industries which you have listed in your paper?

Mr. HOLLOMON. Right. There are several comments I would have to make. One is that the degree of need must be looked at in terms of whether or not the commitment of additional technical activity would produce a benefit in excess of the cost.

Senator CLARK. This is basically the same concept of the Army Engineers in connection with a public works project, the cost benefits ratio.

Mr. HOLLOMON. Yes, sir. Now the benefit that a given technology would give to an industry has very little to do with whether it is a growing or declining industry. If you have an old industry that is based on craft, even though it is becoming less important nationally, a given commitment of technical resource may have a great multiplying effect in terms of its benefit on the economy in that particular industry.

Senator CLARK. Your judgment, of course, would be empirical but do you think this is a real possibility in, let us say, transportation and construction?

Mr. HOLLOMON. Yes, sir. Just to give an example, let us take a look at the total research and development performed in the United States having to do with railroads, by everybody; it is $7 million. Senator CLARK. Which may account for their plight.

Mr. HOLLOMON. It has some effect. There are many complexities as in any other problem, regulations, labor relations, et cetera, but the total technological effort of the railroad industry has recently been surveyed by a group of people for the Commerce Department and is $7 million.

Now, this is about the cost of launching a single Tiros weather vehicle.

Senator CLARK. In other words, you would suggest that our sense of values is a bit out of balance?

Mr. HOLLOMON. In certain aspects of transportation and clearly in building and construction, where the average size of the firm in that industry as I remember it is about 50 to 70 people. It is inconceivable to me that the individual firm can perform the technological work that would provide building and constructions which would benefit the whole society in the most effective way.

Senator CLARK. What do you think we ought to be doing about it? Mr. HOLLOMON. I have been trying personally for the last year to get the support for a program of civilian industrial technology. A major part of that program involved the building and construction industry, but there has been the most violent opposition from a group of people in that industry, particularly in Washington.

Senator CLARK. Actually, we have thought in the subcommittee for some time that if you could transpose the very ingenious methods devised by scientists in the space and military fields to attack problems in transportation and construction, you might come up with some pretty startling results. Would you agree?

Mr. HOLLOMON. I would agree with one slight qualification, these techniques have been devised in fields other than in the space and military effort in the electronics and electrical industry, for example.

Senator CLARK. Yes, of course.

Mr. HOLLOMON. I want to make that proviso.

Senator CLARK. I will accept that qualification

Mr. HOLLOMON. In addition we could support building and construction research education at the universities. This we do not do. We cannot interest bright kids in revolutionizing that industry because they do not see the problems when they are young enough to choose a

career.

Senator CLARK. They do not see the financial career in the rewards of other areas, of kudos, et cetera.

Mr. HOLLOMON. Otherwise the young bright people who want to change the world are not going into those industries.

Senator CLARK. I would like to turn to your second broad problem under point 2: "The technologically rich are becoming richer, the technologically poor are becoming more so."

Then you speak of the technical companies with fewer than 5,000 employees stagnating. What do you think we ought to do about

that?

Mr. HOLLOMON. There are two approaches to the problem, it seems to me. One of these is to attempt for certain kinds of industries to get them to associate together for technical activities that would benefit them in the large, that an individual firm would not do.

Although the experience in other countries is not always good, I think in general associative research and development of benefit to a broad industry like building and construction, for example, would be of great help in our country.

Senator CLARK. The mechanics of organizing that puzzles me a bit. Do you think this could be done through trade associations or through some kind of a sponsored foundation which would hire the brains and then rent them out?

Mr. HOLLOMON. I think you need an organization separate from the trade association because the trade association has other objectives and limitations.

I think that what is needed are associations for the purpose of working on the technology that is important to the industry as a whole and which takes into account the public view as well.

We have suggested that these associations be brought together and that at the beginning matching grants be provided from the Federal Government to get them started, and to see whether or not they would not continue on their own hook.

Senator CLARK. Actually they have every self-interest in doing it themselves, and one would think with the traditional American ingenuity and the fact that they are all in business to make a profitwhy are they not doing it?

Mr. HOLLOMON. One reason is that the research would benefit the whole of the industry, and from the viewpoint of an individual in the industry, particularly in a locally oriented industry, like building, for example, if he is in competition with the fellow right next door, he does not see how he can benefit. Thus, a relatively smaller fraction of the Nation's dollar goes into building or housing research than heretofore, and there are a large number of people who cannot afford the kind of housing that is necessary.

Let me put it this way. I think it is one of these programs that if once started and once the benefits were evident to the people who would