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E. Finley Carter, director, Stanford Research Institute

n t r o d u c t io n

Physical and social progress today depend upon the systematic
process of research and development. Research, whether sponsored
by government or private agencies, can leaven our economy and so­
ciety. I t can have effects spreading far beyond the research act or
finding, just as one neutron can trigger a great explosion—but a way
must first be found to start the reaction. I t is therefore fitting that
the Joint Economic Committee of the Congress should devote part
of its study of Federal expenditure policy to the topic of research
and development. On behalf of my colleagues at Stanford Research
Institute, I am happy to take this opportunity to present our views
on this subject under the title of “Federal Research—Stimulator of
I t is our view that we cannot live indefinitely in a world where
social progress advances arithmetically and technical progress ad­
vances geometrically. Because of our belief, this paper presents three
main points of view:
1. Research and development have long since proved their
unique value in advancing our technical prowess in the realms
of defense, industry, and business.
2. Research, under the leavening sponsorship of the Federal
Government, can be equally effective in the realms of human rela­
tions, social affairs, and other public problems.
3. Research in this Nation must be coordinated and analyzed
and its meaning and capabilities profoundly understood if we
are to derive from our research and development efforts the full
benefits intrinsic to the scientific approach.
F irst, however, let us define “research” as the term is used in this
paper. Most research in industry and government is of an applied
character, and it is this applied type of research that is under discus­
sion here. Applied research has a number of distinct facets. In
the field of health, for example, applied research may create an anti­
biotic having specific properties—a tangible material. I t may evolve
a course of treatment for a particular disability—a method or process.
Research may also, however, provide information on the probable
consequences of following any of several courses of preventive action—
a management aid.
The terms “research” and “development’’ have become stylish in
both private and government circles. The securities analyst, for
example, tends to put a premium on the stock of companies that report
large research and development budgets. Because of the glamour of
the term “research,” however, an unfortunate tendency has emerged
to label some activities as research which really do not deserve the




name. Some of the criteria th at distinguish true research from the
activities that masquerade as research are therefore worth men­
Inherent in true research is the use of the scientific method. A t
the heart of the scientific approach is the analyst’s interest not only
in what happens, but in how and why it happens. He seeks an under­
standing of phenomena through certain basic steps:
1. He states the objective of his study as best he can and asks
himself the pertinent questions.
2. He makes observations and measurements and records data.
3. He develops trial ideas or “hypotheses” which relate his vari­
ous observations. In research dealing with policymaking and
decision-making, this step requires making a “model” of the oper­
ations. The model is an analog, often mathematical, of the real
system under study.
4. He devises experiments or other tests to determine relation­
ships among the measured elements of the problem, gathers in­
formation to round out the picture, modifies his original hypothe­
sis as necessary, and selects the hypothesis th at best expresses
the relationships involved.
5. Finally, he applies his refined hypothesis to the problem.
This approach can be used to achieve either of the two principal
aims of science or management: (1) To control the phenomenon or
operation or (2) to predict future events.
Unless an investigative activity utilizes the scientific approach it
cannot fully express the potential of research and it therefore does
not properly earn the designation “research.”
This paper deals with applied research in the sense just defined.
Its domain is applied research, supported or conducted by the United
States Federal Government and, more particularly, that segment
of the Federal program devoted to nondefense research. The impor­
tant areas of industrially supported research and governmental de­
fense research are well recognized and are treated herein only for
comparison. I t is one thesis of this paper that nondefense applied
research, under government leadership, can produce a great variety
of basic national benefits that can never be attained without conscious
and concentrated effort.
To develop our viewpoints we first discuss the place of research and
development in the Federal Government today. Of particular interest
are current trends and the nature of the research process—what to
hope for from research, how research influences the economy, and the
significance of attitudes toward research.
That general discussion is followed by a number of illustrations of
directions which Federal effort could take to utilize the full potential
of research in nondefense areas. I t is our purpose to show that many
vexing problems of national concern can be made to yield to the
research attack, if only the proper approach is selected.
The paper concludes by proposing a plan which gives promise of
improving research and development efficiency throughout the Nation.
A t the same time this plan could give rise to major advances in our
understanding of the fundamental capabilities of research as a tool
able to help bring about a world more at peace with itself.











However measured, research and development work supported by
the Federal Government is big business—and is growing bigger.
About $3 billion a year, or 4.6 percent of the total Federal budget of
some $65 billion, is currently spent on research and development. I t
is perhaps more meaningful that the two activities consume roughly
6.4 percent of the amounts spent for the purchase of goods and serv­
ices—mainly, equipment and payrolls.
Trends in research and development

The national defense program absorbs a very large fraction of total
research and development expenditures. Of the $3 billion, about $2.7
billion is used by the Department of Defense, the Atomic Energy
Commission, and the National Advisory Committee for Aeronautics.
Expenditures for defense and for nondefense purposes are increas­
ing at about the same rate. In both fields obligations in 1957 were 2.5
times the figure for 1947, measured in constant dollars. In absolute
terms funds obligated for defense research rose from $712 million
in 1947 to $1,806 million in 1957, again stated in 1947 dollars. On
the same basis, nondefense obligations during the decade increased
from $112 million to $281 million. Appendix I contains details on
Federal research and development obligations and expenditures, ana­
lyzed in several ways.
I t is pertinent to examine the ratio of research expenditure to the
value of the product and activity it supports. The goods and services
that national defense research affects will, of course, actually be pur­
chased at different times in the future. Nevertheless, the current ratio
is revealing. In recent years this ratio has hovered around 5 percent,
the 1956 figure being 5.2 percent.
An exactly analogous comparison cannot be made for nondefense
research expenditures because much of the research and its products
relate to activities outside the governmental sphere. To provide an
indication of the relation between defense research activities costs
and nondefense research activities costs, nondefense data on Federal
research and purchases have been combined with research and products
in the private-business field. The research cost to activities value
ratio for all nondefense purposes has climbed from about 1.3 percent
in 1947 to 1.7 percent in 1956.
The difference between these two ratios for defense and nondefense
states that more than three times as much is spent on defense research
per unit of product or activity as is spent in the nondefense realm.
Trends within national defense research expenditures are interesting
in th at the concept of methods research, especially that of research
on matters affecting decisions and policies, is taking hold rapidly.
Although research on physical problems is still overwhelmingly pre­
dominant, the whole field of operations research is receiving much
special attention. Many branches of the armed services, together with
special groups such as the Rand Corp., Operations Research Office,
and Operations Evaluations Group (acting for the A ir Force, the
Army, and the Navy, respectively), are pressing this aspect of research
effort with particular vigor.
Because the Government’s present expenditures for nondefense
research and development are comparatively so small, trends are more



difficult to isolate. I t nevertheless seems reasonable to suppose, in
view of the characteristic spreading habit of research methods, that
similar trends are active within nondefense research. Certainly they
are pronounced in industrial research, and give every indication of
becoming more so.
Research , economics, and society
I t always has been and always will be pertinent to ask what we
want for our research dollars.
One classic answer is profit. That answer has motivated and still
motivates almost all industrial research. Another answer is national
security. That, of course, is why this country spends some 90 percent
of its research and development funds on defense research. But
there are other answers, too, and they are the answers th at constitute
the reason for this paper.
Research can be a stimulator of progress, with all th a t th a t con­
notes. Innovation—generated largely through research—is one of
the great dynamic forces in an economy. Innovation is not only a
m atter of providing th at human needs are more fully and better ful­
filled. I t is also a matter that vitally affects the economic health of
the complex civilization in which we live. Our whole economic and
social structure is such th at if we do not continually press forward,
we are in serious danger of falling back.
In their impact upon society, innovations are like waves. Once a
series of discoveries has been initiated, it finds response in many
fields, first those closely associated and then those more remote, until,
like ripples in a still pond> everything within reach is touched. A
kind of spirit of adventure pervades all endeavors, not alone those
of the innovators, but those of business leaders, social leaders, and all
other members of the community. In some respects and in some de­
gree, exactly this has been happening in the past few years. In this
case, m ilitary research and development has provided one of the
important originating forces.
We need examine only 1 or 2 of the technical developments started
during W orld W ar I I to see the multiplying effect th at research and
development can have upon the Nation’s technology and economy.
Progress in developing fire direction systems for air and naval weapons
later led to the electronic computer and to factory automation and
control equipment—major businesses today. Improvements in mili­
tary aircraft and their powerplants led to rapid expansion of the air
transportation industry, with its inherent ability to knit the Nation
and the countries of the world in to closer and more harmonious
I f innovation is a key to economic and social progress, we must
ask how innovation is fostered. Any such consideration must take
into account the impact of the technological, methodological, or policy­
making breakthrough.
Barriers to further progress in a particular field crop up from time
to time and advances are slowed until the barriers are penetrated.
Once the barrier is penetrated, repercussions often fan out in all direc­
tions, leading to gains in a host of allied and distant fields.
The past has seen many such breakthroughs. As a rule they have
come about rather gradually and their effects have spread slowly. In
recent years we have learned, however, that under pressure of war or



other great need, a breakthrough can be forced much more rapidly
than would occur in the natural course of events. The spectacular
example- of course, is the creation and control of the chain reaction of
atomic fission. Other examples can be found in the field of elec­
tronics, high-temperature metallurgy, computers, polio vaccines, and
mathematical models for decision making in m ilitary strategy and
We must realize that each type of investigation—if appreciable
progress is to be made—requires its own appropriate threshold level
of activity below which little contribution can be expected. The prin­
ciple involved is not entirely understood. Nevertheless, comparisons
between research activities th at yielded spectacular success and those
of only mediocre fruitfulness seem to suggest that disappointing re­
sults may stem from the project that fails to mount a sufficiently high
overall level of effort, no matter how ably staffed and administered.
I t is conceivable, for instance, that the effort of keeping abreast of
current literature in a given field may require the full attention of the
project team. Under such circumstances no new contributions can be
expected. Such an explanation is certainly no full answer to the prob­
lem of evaluating the appropriate level of effort on a project. Until
the phenomenon is better understood we can say only that problems
differ greatly in the threshold level of effort they require for resolution.
I f we identify a critical roadblock, and if we conclude that it must
be removed, and if we mount a concerted effort to or greater than
the threshold effort required to break through, we usually accomplish
valuable results. We always take the calculated risk that the results
will not be worth the effort. Nevertheless, whenever means exist for
attacking a problem, we may anticipate eventual reward if enough
directed effort is put forth. Some attempts will fa il; some will be
only partly successful; others will achieve triumph.
The significance of the breakthrough principle to the Federal Gov­
ernment is that the Government often is the only agency that can
mount an attack that holds promise of success.
By its nature, then, research thrives only in an atmosphere that
believes in its widest potentials—in an atmosphere conducive to prog­
ress. Through research the group or nation believing in progress will
achieve its ends. We must remember, too, that pathfinding research
does not operate in a vacuum, but has an infinitude of beneficial side
effects. Progress spearheaded by the Federal Government will in­
evitably lead to far faster progress by State and local agencies, by
private enterprise, and even by the initiator, the Federal Government.




evelopm ent




o t e n t ia l







u n c t io n s

overnm ent

We have already seen that nine times as much is spent on defense
research as is spent in the nondefense realm. Perhaps nondefense
activities, then, represent undeveloped opportunities for usful re­
search, because in them there is more virgin territory untouched by
the effect of either an appropriate threshold level of research, or, in
some cases, of any research at all. I t is the purpose of this section to
examine a few or the key nondefense activities in which the Federal
Government has an interest, as a means of suggesting research oppor­
tunities of unusual promise.



Most of the research supported in the past by Government and
private agencies emphasized products and physical phenomena. In
the future, however, research on social phenomena can lead to an era
of social invention perhaps comparable to the great era of technical
innovation we are now witnessing. The results of undertaking re­
search on the large and pressing problems of public policy will be
manifested mainly in social adjustments, policy determination, and
aids to administrative decision-making. I t is likely, however, that
some solutions will suggest combinations of equipments and humans
into new systems that are more productive or beneficial than any we
now know about.
The public problems th at illustrate research opportunities in non­
defense activities fall under three major groupings of Federal Gov­
ernment interests: (1) National human resources, (2) national mate­
rial resources and public facilities, and (3) international relations.
No attempt is made to group these problems according to responsi­
bilities of departments of the executive branch of the Federal Gov­
ernment. Indeed, in nearly every case the scope of the problem cuts
across functional departmental lines. While most of the problems
listed in these three groupings are directly related to Federal Gov­
ernment responsibilities, others are only indirectly related. Even in
the latter situation a case can be made for Federal expenditures for
research to take leadership in promoting the general welfare of the
Nation and in sponsoring exploratory and pathfinding efforts which
can stimulate activities in the private sector of our economy.
National human resources

No area is more im portant to our national welfare than th a t of
human resources—people. Their happiness and their effectiveness
are involved. Education is one im portant domain of human re­
sources. Health, crime, management-labor relations, and racial prob­
lems are others, to name a few. All of these are prime subjects for
innovative research.
The preservation of our democratic heritage and the development
of our human and natural resources are attributable in no small degree
to our system of universal education.
Informed citizens agree th at education today is confronted with
many varied and complex problems resulting from our phenomenal
increase in school population, our changing technology, and our new
role of leadership in world affairs. The problems center around
teaching staffs, curriculum and guidance, organization, and financing.
Solutions are not likely to be found without major research studies.
I t is not easy to say to what extent the Federal Government should
finance research on education. I t may be sufficient to note that many
problems of nationwide importance lack solutions as well as sponsors
to r adequate research on them.
We need answers to questions about teacher supply; about how we
can staff schools and colleges for doubled enrollments when the supply
of new teachers is actually declining; about how we can increase or
stretch the effectiveness of capable teachers; about how we can finance
a scale of teacher compensation that is competitive enough with other
professional rewards to reverse the trend away from the teaching



One particular aspect of education and training of paramount con­
cern to the Federal Government directly is the need to determine what
competencies will be required of the men and women in the Armed
Forces of the future. This problem is a major one in view of the
growing technical complexities of military weapons and equipment,
much serious and imaginative study should be directed toward pro­
viding competent technical manpower through farsighted education
and training.
The Federal Government is the largest single sponsor of medical
and health research. In this case the total amount spent for research
is less open to criticism than the way expenditures are allocated. For
example, despite an annual operating expense of $900 million for
Federal hospitals, little research has been done on ways of making
hospitals more efficient.
Crime as a public problem takes a multibillion dollar economic toll.
I t represents an immeasurable blight in human anguish. Despite
heavy spending by all levels of government to prevent and control
crime, scarcely any pathfinding research is underway to seek new ap­
proaches to corrective and preventive measures. Organized applied
research by qualified social scientists and physical scientists could
well give rise to social inventions helpful in this national problem.
Another barrier to economic and social progress is the continuing
problem of industrial management-labor union relations. The public
interest in achieving a greater degree of harmony and equity in these
relations is so important that this topic deserves attention in an or­
ganized research effort.
In these troubled times of racial integration of schools, our public
officials must make decisions and policies without an adequate under­
standing of the consequences of alternative programs and without a
sufficient knowledge of attitudes and how to change them construc­
tively. Despite our past failure to undertake adequate research on
this problem, it is still not too late to launch an inquiry into problems
of race' relations and to gather experimental data from the diverse
methods that are being used to comply with the Supreme Court ruling
on desegregation of schools.
National material resources and public facilities

Many problems in managing the Nation’s natural resources and the
Nation’s public facilities are potentially researchable. Research on
these topics can guide planning and the allocation of future expendi­
The field of agriculture illustrates how research activities in in­
dustry and Government have cooperated to push productivity to everhigher levels, in recent years advancing even faster than in manu­
facturing as a whole. The farm-equipment manufacturers are bring­
ing out better and better machines; the chemical companies are intro­
ducing improved fertilizers and insecticides; the Department of A gri­
culture is developing new strains of animals and plants, new methods
of cultivation, new marketing procedures, and new means of helping
farmers decide on what to grow and how to utilize the natural re­
sources of the land to the best advantage. As a nation we can be
proud of our success in increasing productivity in agriculture, but at
the same time we should strive for a better balance that will distribute
the remarkably high agricultural output. Research efforts now



should be directed at determining policies which will enable the
Nation to reap fully the advantages of increased productivity.
Opportunities for research exist in discovering greater industrial
uses of farm products. Here, as in other problems, the Federal Gov­
ernment should try to sponsor research th at will stimulate private
industry to carry on its own studies of industrial uses of agricultural
W ater has assumed new importance as a national resource because
of rapid regional developments in population, industry, and agricul­
ture. Actual or threatened shortages may endanger the means of
many people to make a good living and the growth and economic
health of whole regions. A special reason for Federal interest in
water and initiative on water research is that the economic units for
water supply and use are not coextensive with State boundaries or
sometimes even with national boundaries.
There is need to formulate unified policies for entire water basins
flexible enough to meet local conditions but clear enough to guide the
Congress in such things as judging between competing functional and
regional demands for water, means of financing water development,
and the proper degree of Federal participation in development and
Research is needed especially on means of securing adequate sup­
plies of water of the proper quality for domestic, municipal, indus­
trial, and agricultural uses. Such research must be undertaken in co­
ordination with study of problems in pollution, flood control, hydro­
electric generation, navigation, and recreation, including the propaga­
tion of fish and wildlife. The research should deal extensively with
projections of population and industry growth and with areas yet to
be developed. Much more attention is needed on getting the highest
economic use out of scarce supplies, better correlation of benefits
and costs, and on more equitable financing of improvements by
The Paley Commission has made a number of constructive sugges­
tions for research and development on materials and energy resources.
They need not be repeated here. However, one field for research de­
serves a high priority, namely, the use of western coals and of certain
low -grade mineral deposits. Western coal is an abundant energy re­
source which seems much nearer to utilization than most others. Even
so, its potential is not being realized because of unsolved technical
and economic problems centering around getting the coal to market
or converting it at the mine or elsewhere into electrical, gas, or liquid
energy. The fact th at the Army is supporting a modest research
effort on these problems indicated the Federal interest in it. The
growing dependency of the United States on imported petroleum and
the increasing petroleum deficiency of the Western States accent the
need for a stepped-up effort. This effort should be coordinated with
the research and development on the chemical and industrial uses of
coal for other than energy purposes. Since there are many wellfinanced private enterprises with an interest in research on coal, and
which have done major work on it, the Federal Government should
focus on leadership and coordination rather than replacing private
responsibility, initiative, or financial support.
Technological advances and improved organization of mining and
processing industries, accompanied by the ever-growing needs for



minerals of many types, has increased the incentive to discover and
improve ways of using mineral deposits which may have been classed
as uneconomic in the past. Many deposits were discovered when the
circumstances for utilizing them were fa r less conducive to success
than they are today or as they seem to be in the future. Production
of copper from low-grade ores, iron from taconite, aluminum and
uranium from deposits considered worthless only a few years ago, are
dramatic examples of the process. As the higher-grade deposits
become worked out, the need and economic opportunity for success­
fully working with low-grade ores are increased.
As the principal owner of the undeveloped mineral domain, as a
major buyer and user of mineral products, as the guardian of the na­
tional security, and as the principal regulator of economic policy in
the mineral field, the Federal Government has a preeminent interest
in better utilization of low-grade mineral resources. Here, too, the
Federal Government should sponsor research designed to catalyze
private study of mineral deposits.
In its report, the President’s Materials Policy Commission pointed
out that development of effective means of highway transportation,
coordinated with land and resources use planning, is essential to the
utilization of resources. Highway planning is also connected with
urban development and housing in that there should be coordination
of plans for moving people into, within, and out of city centers. More­
over, highway construction that is compatible with master metropol­
itan planning can be used to clear slum areas. The Federal Govern­
ment is actively interested in redevelopment of urban centers, in
housing, and in its $50 billion Federal highway program. Research
to guide planning and decisionmaking in these interconnected topics
is a vital national need.
International relations

Any consideration of Federal expenditure policy for economic
growth and stability must respect the impact of the outside world.
The strength of our economy not only influences the condition of
other nations and our relations with them but has a material effect on
a significant portion of our own economy. W ith the stakes in inter­
national relations so high in terms of national survival and with
ever-changing conditions, our relations with other countries require
a greater degree of creative study than ever before.
Although research on problems of international affairs is now a
major occupation in government and elsewhere, Federal expenditures
in this crucial field are minute in comparison with those on m ilitary
research and development. F or example, the Department of State
spent about $351,000 on research in fiscal 1957. I t is time to ask
whether a much more intensive effort on behalf of peace through re­
search on political, social, and economic measures to reduce interna­
tional tension is not now in order.
No less an expert than the United States Ambassador to Egypt, Ray­
mond A. Hare, stated recently:
I would venture to suggest to you that no small amount of
the grief and frustration encountered in both the framing and
understanding of foreign policy could be avoided if foreign
policy were approached more as a science and less as a politi­



cal rough-and-tumble with esoteric overtones. For, as a
result of some reading on foreign affairs and some slight per­
sonal experience in th at field, I have been increasingly im­
pressed by the recurrence, in greatly changing circumstances,
of identifiable phenomena which lend themselves to analysis,
classification, and the drawing of basic and subsidiary con­
clusions. W hether these conclusions can yet be classed as
laws in the scientific sense is debatable and it is not my purpose
to press that particular point to conclusion with you today.
There is no question in my mind, however, th at such deduc­
tions do prove that the study of foreign policy can be pursued
beyond mere action and reaction and also beyond the evoking
of historical precedents, immensely valuable as th at may be.
How, then, can research aid the official who makes decisions in inter­
national affairs ? As a general guide, foreign policy should be antici­
patory rather than reactive, wherever possible. This implies the pos­
session of adequate facts and analyses in advance of probable events,
at the least, and of some important possible events in addition. From
this information consistent policies should be distilled in advance of
emergencies, and courses of action formulated in event of need.
In the light of tensions between our country and the Soviet Union
we know that it is prudent to spend large sums for research on new
weapons systems. This same motivation suggests th at it might also
be wise to conduct more research on means of changing the spirit and
attitudes of Soviet leaders. This would be p art of finding a really
feasible way of dealing with the Soviet bloc without the continuous
succession of crises and palliatives.
As we succeed in finding means of easing tension we need to under­
take research th at can guide negotiations for limitations of armaments.
Political, military, technical, psychological, and economic factors are
intricately interwoven in this problem. The interdisciplinary team
approach of applied research may succeed in penetrating this barrier
and hence ease international tensions. I t is difficult but nonetheless
esesntial for our representatives in arms-limitation discussions to assess
the implications of arms-limiting proposals. These proposals may be
symmetrical or asymmetrical, but before they are advanced or accepted
by us the clearest understanding possible of their probable conse­
quences is necessary. Even if the likelihood of a research break­
through in this area is slim, the risks of not understanding are so great
that research should be given a chance to illuminate this problem area.
Should international tensions lessen, our policymakers need to be
better prepared with facts and analyses than they are today to deal
with the adjustments that would be required. I t is likely th at national-defense expenditures could be cut drastically in such a con­
tingency. We need research to discover all the major impacts of
such a situation and to devise means by which the transition can be
accomplished without undue hardship to any sector of our people.
Another potential change to which our economic system may be
called upon to respond is the possible widespread reduction in tariff
barriers among many countries. Europe’s common market is just
getting into operation, resulting in regional adjustments in import
duties that will modify the character of economic enterprises there
and in other countries with whom European firms trade. I t is con­



ceivable that an effective means of achieving the foreign-policy ob­
jectives of our country may require sharp reduction in parts of our
own tariff structure. A t present our knowledge of economic dynamics
allows us neither to anticipate with any certainty the consequences of
changes nor to establish the corrective measures th at would make for
a successful transition. Research can illuminate this contingency.
In spending vast sums on foreign economic aid, the United States
has been rewarded with both successes and disappointments. Some
of the disappointments are attributable to failure to establish criteria
of economic development for each country where an attempt is made
to create something which has never before existed. Better results
could be obtained by a more searching analysis and comparison of
patterns of economic and social development.
Not only are the resources of the United States finite, but any pro­
gram of foreign aid will operate, like all other governmental activities,
within the budget limitations imposed by domestic political and eco­
nomic considerations. Research is needed here, too, to establish priori­
ties among foreign-aid goals and to determine the effects that different
levels of American foreign aid might produce.
Fully recognizing that foreign aid and economic development are
complicated by the broader aspects of political relations among na­
tions, we nevertheless believe that relatively small increases in ex­
penditures on research will yield an appreciably greater payoff in
the success of the foreign-aid program and in its benefits to the
United States than most other comparable expenditures of funds.
Some say that work today is progressing satisfactorily on most of
these important problems and that solutions will appear in the course
of time. We agree with such a viewpoint, but we also contend in
the strongest terms that progress is so slow as to make it unlikely
that the solutions will emerge before the most serious damage has
been done to our society and our economy.
Others say th at research on these important topics is not a function
of the Federal Government and would be too expensive. To these we
reply that if the Federal Government does not take the initiative,
no action is likely, and th at the cost would be so small relative to the
cost of not solving the problems that the comparison is not even
W hat is proposed is research th at will come up with feasible answers
to questions of vital public, social, and national concern. Each an­
swer would have a number of alternatives with respect to procedures
and approaches. W hat answers are considered best, what alternative
procedures are deemed most favorable—indeed whether any action
should be taken at all—is, of course, a matter for the Congress and
the American people.


C o o r d in a t io n

In view of the large and increasing volume of research now being
undertaken by and for the Federal Government, and the large ana
increasing volume being undertaken by private business and other
agencies, the need is evident for coordination in these efforts. This
need will grow more rapidly than research volume grows, because



the pattern of interdependent and overlapping investigations will be­
come more complex.
Because the capabilities of research are most widely recognized in
the Department of Defense, research coordination is more advanced
in that Department than in other parts of the executive branch.
There, an Assistant Secretary of Defense for Research and Engineer­
ing performs valuable coordinative functions on a staff basis for all
the m ilitary services. The effectiveness of this office is being further
enhanced by the creation of positions of Assistant Secretary for Re­
search, or Directors of Research, in each of the three services. This
pattern of research coordination is in keeping with the best practices
m corporate research management. Most research-minded companies
do have a vice president of research who has advisory and coordina­
tion powers over several decentralized research groups in the cor­
I t is our recommendation that a sound immediate step for achiev­
ing better research coordination and for stimulating the research ap­
proach in nondefense activities would be to extend this aspect of the
Defense Department’s organizational structure to the other executive
departments. In short, there should be created Assistant Secretaries
for Research in the Departments of A griculture; S tate; Commerce ;
Interior; Health, Education, and W elfare; Justice; Post Office;
Labor; and Treasury. These officers would give appropriate stature
to research in each Department. Together they would form a group
through whom interdepartmental research coordination could begin,
just as interservice coordination is now occurring within the D epart­
ment of Defense.
A t the present time, some of the functions of overall coordination
and evaluation of the Government’s research programs are assigned
to the National Science Foundation, the National Research Council,
Interdepartm ental Committee on Scientific Research and Develop­
ment, and the Bureau of the Budget. The Nation’s total research
effort could be more effective if, as a second step, one of these agencies
were authorized to extend its coordinative role and to take an active
as well as a passive approach in research matters th at cut across depart­
mental boundaries.
F or neither the departmental nor the central research coordinating
groups does this paper advocate setting up a whole new agency.
Neither do we suggest the creation of entirely new powers of control
in any group. We do urge strongly th at the Congress encourage the
executive branch to organize itself to do what will be described in suc­
ceeding paragraphs, and then make sure th at necessary funds are
provided, that qualified specialists are employed, and th a t they get
about the job.
Before describing the central, interdepartmental coordinating func­
tions that are needed, this paper can possibly put to rest some mis­
apprehensions that arise inevitably when this subject is brought up
for consideration. I t is not proposed th a t any agency, board- com­
mission, or committee be established to decide what research shall
and what research shall not be undertaken by the Federal Govern­
ment. I t is not proposed th at the central body do any research of
its own, except a special kind of research on research th at will be
outlined at a later point. I t is not proposed th at every new Federal



research project necessarily be submitted to this body for review before
adoption. I t is not proposed th at this body delve into every detail
of every Federal research program.
W hat is proposed is a body that will provide a management-aid
service to the Congress and to the executive department as a whole
to help them in making decisions on authorizations, appropriations,
and programs. In addition, it is proposed th at this same body be a
representative of the Federal Government in contact with research
activities outside the Government to bring about more effective cooper­
ation in the whole research community. In this latter respect it would
supplement, not supplant, the contacts now in existence at many levels
of research. Finally, it is proposed that this agency constantly seek
to stimulate and catalyze private organizations to sponsor and per­
form research th at is inspired by or derived from the initiative of
federally sponsored research.
The first task of such a body would be to make an inventory of
Federal research programs, their objectives, their plans of approach,
their staffing, and their schedules. This would be a perpetual inven­
tory kept just as current as it may turn out to be feasible to maintain,
but certainly brought up to date more frequently than once a year.
The second task of such a body would be to examine the inventory
to determine what duplications and inconsistencies may exist, so that
a full report can be made periodically to affected agencies on the
nature and extent of these aspects. I t is not suggested that all dupli­
cations and inconsistencies be eliminated, for progress in research can
often be accomplished expeditiously only by exploration of several
approaches simultaneously. We nevertheless think it important that
all persons involved know what is going on, so that no more of this
kind of thing exist than is consistent with a vigorous and compre­
hensive attack on the problems which are being examined. The re­
ports should contain comments on those features which are considered
to be clearly of questionable value in this sense.
The third task of such a body, and the most important, would be
a function that will be called evaluation—for want of a fully descrip­
tive term. I t is here that research on research comes into the picture.
W hat is required is an examination of each research program to dis­
cover how well its plan of attack matches the objectives set forth for
it and, more basically, to discover how well its objectives fit into the
dynamic nature of the economy and society it is expected to affect.
This examination in turn is dependent upon a well-worked-out con­
cept of what the set of programs as a whole is expected to accomplish
for the Nation.
From the foregoing evaluation it should be possible for the coordi­
nating agency to make the following kinds of contribution to the effec­
tiveness of Federal research efforts: (1) advise higher levels of effort
for programs that are below the required threshold or moving too
slowly to meet projected needs of a dynamic technology and economy;
(2) recommend removal of support for projects involving unneces­
sary duplication or for which changing conditions will eliminate the
need; (3) identify gaps that justify new projects; (4) interconnect
projects that can benefit from interaction of methodology or obser­
Some progress in research evaluation of this type is being made in
connection with certain m ilitary research programs. I t has been



found that the unifying principle in many cases is time. In any
consideration of our m ilitary offensive and defensive posture and the
weapons systems, strategy and tactics required, we must look at these
matters in a time frame. I t may be of little importance to us to
develop a manned atomic bomber of indefinite cruising range if, by
the time we can expect to have such an aircraft operational, it would
be likely that a potential enemy would have defense weapons easily
capable of knocking such a bomber out of the air a long way from its
target. I f we look at our probable offensive and defensive posture in
the future as a moving picture—actually as in the case of the moving
picture a series of stills at intervals of time—we will be able to see
more clearly where efforts are being made that can’t possibly be of
much help, when gaps are likely to show up that are not now being
worked upon, and, in general, how best to match the research con­
ducted to the m ilitary requirements.
Needless to say, the nonmilitary problems are not necessarily the
same as the military. The time-frame idea may not be appropriate in
some cases. But many of these nonmilitary problems do have a time
reference; for example, the waves of persons expecting to enter the
labor force in the future or the exhaustion of supplies of fossil fuels.
Others cannot be pinned down so precisely, but are still in some way
time phased, so that p art of the degree of urgency can be established
by reference to the period of time which will elapse before the problem
becomes serious and by reference to the period of time (called lead t ime
in m ilitary parlance) in which it m ight be expected that a solution
could possibly be achieved and implemented.
Another fairly significant task for the research coordinating body
would be the making and maintaining of an inventory of research
efforts outside the Federal Government which bear upon problems
of national interest. This inventory would be useful not only as
information available to all research workers, but it would lead to
efforts by the Federal Government and by the outside organizations
to bring about cooperation in some fields of mutual concern. There is
a place for an organization within government which could encourage
cooperative research activities among governmental agencies, the
private foundations, and private industry.
The research coordinating body described in this paper would have
no direct power to control research. I t can be effective only to the
extent th at its findings and recommendations are so well worked out
and supported by evidence that its work received recognition in the
deliberations of the Congress and the executive departments. Funda­
mentally, the outcome of its efforts will depend on the prestige it
generates by the quality and independence of its work.
B ut good work would depend rather signficantly at the outset upon
the standing and support it is given. Not much good can be accom­
plished by assigning duties and providing a small budget and then
throwing the group onto its own. I f it is concluded th at the objectives
outlined here are desirable, then the sponsor, the Federal Government,
would have to do what is required in all effective research programs—
have the confidence to back the efforts strongly from the beginning
both with funds and recognition.
Such action would have its risks, as in all research; not every
investigation would pay out. But the need is so very great that, in the



view of this paper, it must come eventually if not immediately. I f
delayed, there will be corresponding loss to the welfare of the country.
In this connection, there is every reason to believe that the coordinat­
ing body would save its cost and, indeed, lead to research results or
current programs at less expense than now contemplated. A t the same
time, we do not take the position that research expenditures after the
establishment of the coordinating group would be likely to be lower
than at present. The work of the group would inevitably bring to
light fields in which more research would bring about advances of very
great worth to the operating of the Federal Government and to the
public at large.
Through the creation of Assistant Secretaries for Research in each
of the nondefense departments and through interdepartmental re­
search coordination as described above, an acceleration of research on
pressing public problems would be bound to occur. This would help
to correct the serious disparity between social and technical progress,
bringing the former’s straight-line progression more nearly mto con­
formity with the geometrical rate of technical advance.

p p e n d ix



rends in








evelopm ent

b l ig a t io n s

For an appreciation of the increase of research and development
activity supported by Federal funds, it is necsssary to look at obliga­
tions for the conduct of current work and for the provision of addi­
tional research and development plant, without consideration of the
pay and allowances of military personnel or certain expenditures
financed through m ilitary procurement contracts. The latter two
items are included in the current rate of expenditure for research and
development of $3 billion, but no estimates are available for them
except for the last few years. The obligations for which data are
available more than tripled in the years since 1947, growing from $793
million in that year to an estimated $2,880 million in fiscal 1957, as
shown in table I. Even if account is taken of probable underreport­
ing in earlier years and of the decline in the purchasing power of the
dollar, obligations in real terms have in all likelihood more than
Most of the statistical information given here is based on data from
the annual issues of Federal Funds for Science compiled by the Na­
tional Science Foundation and from the annual Federal budgets.
These data, however, have been supplemented by estimates of unre­
ported data, have been reworked, and have been presented in different
ways to highlight some of the issues which are emphasized in this
paper. No attempt is made to separate applied from basic research
in these analyses, as the latter is relatively small in amount.
While the source figures are indicative of the general position of
Federal research and development and some of its aspects, it must be
admitted that the accuracy is something less than might be desired.
As the Foundation remarks in its reports, the data were obtained from
the agencies concerned and in many cases were estimates based on
judgment determinations of what should or should not be included.
Many difficulties of definition exist, and accounts are not kept in such
form that even approximations can be obtained without considerable
effort. I f the view taken by this paper is correct—th a t much of the

 97735— 57------ 75



effectiveness of decisions relating to the selection of equipment, meth­
ods, and policies depends upon the adequacy of the research th at pre­
cedes such decisions—it would appear that even more effort should be
made to find out what research is going on. The difficulties, and in­
deed they are formidable, should not be allowed to deter the making
of a major effort. I t is conceivable that what is needed is not more
funds but a better allocation of the amount currently being expended.
The following set of comparisons deals with defense research
(termed “national security” research and development by the Bureau
of the B udget). The data refer to obligations by fiscal years for the
conduct of current work and for increase in plant. M ilitary pay and
activities financed by procurement contracts are not included.
Table I shows Federal research and development obligations for
each year from 1947 through 1957. Table I I shows obligations for
research and development related to national security and compares
them with national defense expenditures for goods and services. In ­
formation on nondefense agencies is summarized in table I I I . Table
IV provides data on Federal and private nondefense research expendi­
tures and compares them with the value of the activities they support.
T able

I .— Federal research and development obligations,1 fiscal years
[In millions of dollars]

1947............. ............................................................. ............................
1948................................................... ....................................................
1949............. . . . ................ — ...........................................................
1950_______________ ___________________________ _________ _____
. . .
1951____________ ______________________
1952......................... ...................................................... .....................
1953. . . ________________________________________________ _
1956. ............... .................. ................................................................
1957________________________ _______________________________

Conduct of





Total in 1947
1 625
1, 845

i Included in these figures are the amounts obligated for general-purpose statistics which have been
excluded by the National Science Foundation in its last 2 reports. They have been restored for purposes
of this paper because (1) they provide im portant data for the making of management decisions both by
Government and industry; (2) they have a t least as much research content as m any of the programs still
included; and (3) while there is some variation from year to year, other programs still included vary much
more. The National Science Foundation appears to have Included no obligations for the M anhattan
Engineer District in 1947. This was the transition period to the Atomic Energy Commission. No doubt
this treatm ent is strictly accurate from the point of view of obligations, but it makes the AEC figure in
1947 appear very small. Half the reported expenditures for M E D are added to AEC obligations. Defla­
tion is by the implicit deflator for Federal Government purchases of goods and services as published by
the National Income Division, Oflice of Business Economics, Department of Commerce.


T a ble

II. — 'National security (defense) obligations for research and development,
fiscal years
[In billions of dollars]

of work


1947.......................................— 1948___________________ ____
1951______________ ____ ____
1952__________________ _____
1953_____ __________________
1955............................- ................
1956______ ____ ______ ____
1957................... ....................... -


P lant1



Combined Combined
plant and
in 1947


- 179



1. 520


Ratio, re­
search and
ment to



i Obligations to increase plant have been amortized over a period of years. The adjustment was very
rough because little is known of the appropriate depreciation rate and, in any event, only a few years’ data
are available. The plant obligations were spread on a straight-line basis over the 8 years following the
year of obligation. Nothing was known of the accumulation in 1947 and it was assumed that, a t that time,
plant bore the same relationship to obligations for conduct of work as in 1955. The figure so obtained was
reduced by
in 1948, % in 1949, etc., until elimination in 1955. The real objective of this process was to
spread the plant obligations so they would not be bunched, and the only justification of the process is that
it gave what appeared to be reasonable results.
T able

III. — Federal obligations for research and development agencies other
than national security agencies, fiscal years
[In millions of dollars]


Conduct of
work 1

P la n t2

1947__________ __________________________
1948_____________ ____ ______ _________ _
1949___________________________ _________
1951 _ ..............................................................
1953 ..............
1954_____________________ _____ _________
1957....... ..................................................................

plant and

in 1947

* Obligations for periodic census programs do not show any time trend and have been evened out over the
years by attributing to each year the average for the years 1945 to 1957.
2 Amortized by the same process employed for national security research plant.



IV.— Federal and private business expenditures for nonsecurity research
compared with selected Federal and private production activities, fiscal years

T able

[In millions of dollars]


1947................................... ................ .............
1948_____ _____________________ _____
1949______ __________________________
1950_________ ______ ___________ _____
1951.................... ........ .....................................
1952....................... ..........................................
1953................................... ....................... .
1954.............................................. - ...............
1956_____ ______ _____ ______ _______







Ratio, re­
search and
P ro d u ct1 develop­
m ent to


1 Gross product in agriculture, mining, manufacturing, transportation, communications, public utilities,
and medical health plus Federal nondefense purchases of goods and services.