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tate, however, we were able to recognize the market potential when laboratory experiments produced a fiberlike, long-chain polymer.

Continuing research by our textile fibers department later enabled us to introduce to commercial markets acrylic fibers and polyester fibers. In recent years, we have gone on to spandex and other fibers. We not produce seven families of synthetic fibers, each in a number of variations. Nylon, for instance, is being produced in more than 600 varieties, in a product line with more than 1,400 items. Our production of rayon, the original base for our entry into the fibers business, was phased out in the 1950's as rayon became less and less profitable.

Frequently, more than one of our departments becomes involved in this process of continuously applying technology to market needs. This has been the case with "Teflon" fluorocarbon, a polymer which is almost impervious to heat and conventional solvents. Discovered by a scientist in one of our industrial department laboratories in 1938, it was first used during World War II as a resin for gaskets and seals for military purposes, including the Manhattan Project. Today, materials of

Teflon” are being produced by four Du Pont departments--as resins, finishes, and fibers. They are used for industrial packing, heat exchangers, wires and cable coating, artificial heart valves and arteries, coatings for nonstick cookware and hand tools, and in the laminated structure that makes up the protective "moon suits” worn by the astronauts.

Our experience with polymeric fibers research is similar. The chemistry that led us to nylon and “Dacron" also led other Du Pont departments to new plastics, films, and finishes.

Our industrial departments submit no research and development budget to our Executive Committee, our top corporate management. They do submit, for information purposes, forecasts of their research and development expenditures for the ensuing year. Only that part representing new venture development requires the approval of the executive committee.

An industrial department is not tightly restricted to its current business area in initiating research, but it primary responsibility it to see to it that it is thoroughly exploiting its technology and vigorously seeking additional business opportunities in its commercial field.

These fields are defined mainly by product functions, not by products themselves. If more than one department has an interest in commercializing a new product line, the first consideration in determining responsibility is the intended uses of such products. In some cases, of course, the technological base of the departments also may be a consideration.

The central technical groups also have a great deal of freedom in determining the scope of their research and development programs, but they are required to submit budgets to the executive committee for review and approval.

One reason for this is that the exploratory research they conduct has corporate implications. Another reason is that the Executive Committee has a strong interest in all new venture development. It wants to be sure that the company has an adequate variety of new ventures in the mill, and is not spending too much or too little on its own future. It wants to weigh and compare projects coming from various sectors of the organization.

Frequent and detailed reporting on the progress of each venture is required. The department heads determine when a project has reached the point where this development work should begin, but the approval of the Executive Committee and the corporate Finance Committee is necessary for the major investments that are required to construct manufacturing facilities and create a marketing staff.

We maintain a number of these ventures in various stages of development. We have about two dozen underway at the present time. Some represent investments of $50 million or more before we can expect any return on them.

In any technical activity as diffuse as ours, there obviously are problems of coordination. İt is important for the left hand to know what the right hand is doing. If there is duplication and overlap, we want it to be intentional rather than accidental, so we encourage full sharing of technical information.

The company wide technical groups are kept informed of the research and development programs of the industrial departments. If one of the central laboratories has suggestions to offer, it is expected to come forward with them. The central research department sends its reports to all of the manufacturing departments. Any research finding that appears particularly pertinent to one of these departments is flagged for special attention.

All departments exchange, on a regular basis, detailed reports on their research activities. Managers with research and development responsibilities are expected to maintain close working relationships with one another, and to provide mutual assistance through advice, consultation, and exchanges of personnel and equipment. The departmental research directors meet periodically, and there are frequent seminars for them and their staffs. We have devised an information storage and retrieval system, encompassing technical reports and patent literature.

Where overlaps or possible conflicts arise, the departments get together at the earliest possible moment to agree upon a course of action. We resolve problems of this kind before we reach the point where products are ready for commercialization. Proposals for commercialization are presented not only to the Executive Committee but to all other interested departments in the company.

If one of these departments believes it has a better technical position than the originator of the project, or has some other reason to be interested itself, then this department is expected to make a case for itself. In some cases, the development department is asked to act as arbitrator or to prepare for the Executive Committee an analysis of conflicting claims. This creates some pulling and tugging from time to time, but more often than not such cases are settled by mutual agreement.

The great advantage of this decentralized system, as we see it, is the pluralism it provides. A good many different points of view come into play in the initiation, conduct and evaluation of programs. Since none of us can make very accurate predictions about the future, we feel that the more people we have making decisions, and the broader our base of reference, the better it is for the company.

For us as for most people in science, the key problems lie in the selection of ideas to pursue. In research and development, there are always many more projects conceivable than anyone has the skilled manpower

and money to pursue. There is always the problem of objectives and priorities.

In one respect, this is less a problem for industry than for Government. The competitive marketplace provides a clear criterion. Our research and development must produce results that are economically and socially useful, and that can be converted into profits.

When we evaluate a research proposal, we ask ourselves whether the end result would be something really new, or whether it would be similar to existing technology. We ask whether our scientists and engineers can bring a truly novel approach to the problem. We ask whether success in this line of research and development would give us a strong business position, and whether the product can be made at an acceptable cost.

Let me stress here that it is not enough, from our point of view, for a project to be technically intriguing. Technical novelty is a necessary but not a sufficient condition. It is possible for a research question to be original and fascinating, but not worth the cost of answering. Unless we have some reason to believe that the answer would take us in a direction we want to go, we do not undertake such a quest.

At each step along the way, from laboratory to marketplace, we appraise and reappraise. If prospects turn sour, or we find that we have not been clearheaded enough about our assumptions, we are prepared to kill a project. We try to keep in mind not only the possibility of failure but also the probable value of the results if we are successful. This is salutary, I think, because it helps keep us from wandering off on tangents.

We think our approach to the management of research and development, while it may or may not be appropriate for others, has worked well for us. It works as well as it does, I think, because its multiple inputs maximize opportunities to identify economic and technical needs, because the missions of our departments are clear, because our research and development purposes are susceptible to definition, and because the overall corporate viewpoint is kept paramount.

Occasionally, narrow interest may be put ahead of the corporate interest, but this is rare. The rivalries within the company are open and aboveboard, more productive than destructive in their effect. There is duplication, but we think that we know where it is, and that kept under control it is healthy.

How much if any of this is applicable to the science programs and activities of the Federal Government, I will leave to your judgment. Certainly in size, range, and sheer numbers of programs the Government's involvement in research and development is on a plane far beyond that of any single industrial firm. Nevertheless, I think we face some of the same management problems, and certain points are probably as valid for one as for the other.

One question before you is the degree of centralization desirable in administering the myriad federally funded science programs. At present in-house programs are scattered through dozens of departments and special agencies, and everyone seems to agree that there is overlap, duplication, and drift.

Given current budget limitations and the costly stop-and-start record of some programs, it may be tempting to ponder a thoroughly cen

tralized system. I doubt, however, that this is either feasible or advisable. The diversity of Government-supported programs is simply too great; even with a more manageable technical base, the Du Pont Co. finds it unwise to try to administer all research and development from a single office. Furthermore, as I observed earlier, science has certainly flourished best in a pluralistic system providing many different vantage points.

The experience of the Soviet Union is instructive on both counts. Its state committee for science and technology is the result of several attempts to place all applied research and development activities under a central coordinating agency. Outside investigators report that the committee has been able to deal with only a relatively small number of major projects. At the same time, we are told, the Russians are experimenting with ways to introduce more competition into their research and development. They are doing this in an effort to stimulate more innovation.

In this country, a number of organizational changes short of sweeping centralization have been proposed. I am not prepared to comment on specific proposals but would like to offer some general comments on centralizing Federal science activities.

I think some consolidation is in order, and that now is a good time to consider it. This could provide better coordinating and planning mechanisms for at least a significant portion of the Government's farranging science activities.

In my opinion, the best candidates for consolidation and realinement are those agencies that have research and development as their primary function, and those agencies that grew up in the older departments but are really tangential to their missions. I would exempt research undertaken by departments and agencies to aid in accomplishing or improving a broader mission. I think the heads of these organizations should be free to sponsor technical work they regard as necessary to their missions, with Congress and the White House providing general oversight and authorization.

It is my belief, based on research experience in profit-motivated enterprise, that Federal research with short-range objectives and research with an engineering or technological content have little to gain, and probably as much to lose, from centralized control.

On the other hand, federally funded research which is truly long range, exploratory, and scientific in its orientation might possibly be made more effective by economies resulting from centralized administration. Here I think centralization should be considered. A central agency could determine whether planned research should be conducted by in-house agencies, by academic institutions on a contract or grant basis, or by a combination of the two.

For long-range investigations not directly tied to an agency mission, I believe the Government should rely as niuch as possible on the universities. For one thing, they have a built-in motivation in this direction, and enough people to provide the critical mass that is necessary. For another, this approach offers the Government maximum flexibility. It can place contracts and grants discretely, and when projects are completed, it can channel funds to other purposes without going through the agonies of reorganizing an in-house agency or laboratory.

I think all university research contracts and grants for basic scientific research should be cleared through a single agency such as the National Science Foundation rather than being awarded independently by many different governmental organizations. I would favor enlarging the authority of such an agency to permit it to coordinate these basic research activities and to determine which projects shall be pursued.

This would provide a locus for congressional oversight. It could provide the framework for future U.S. participation in scientific projects with other countries. It would give us a balance wheel for federally funded basic research, but would not destroy the pluralism we cherish.

I would also hope that more can be done by government to increase the stability of its research commitments to the universities. With Federal support of academic science on a plateau, it is particularly important that we not jeopardize the research programs necessary to attract and train tomorrow's scientists and engineers. Basic research is comparatively inexpensive. We should assure that reasonable sums go to new basic studies and to the younger faculty members, who occupy a pivotal role in higher education. Dr. Philip Handler, the new President of the National Academy of Sciences, has made this point, and I am wholly in accord with it.

I think that Federeal support of academic science, where provided, should be on a realistic, full-cost basis, adequate to cover overhead as well as the direct costs of research. Otherwise, universities have no choice but to divert funds from other projects, and the academic programs we should be protecting are hurt.

Whatever mechanisms may be developed for administering federally sponsored research and development, there is need for a common set of terms and criteria--consistent and specific guidelines for describing the purpose of diverse projects, comparing alternatives, and appraising potential results. To merely assert that a research project will expand basic knowledge is not enough. No one should indulge himself in a development project—and this can be as much a problem in industry as government-merely because it is technically fascinating and he sees a way to attack it. Project proposals should not only explain technical content but also should contain a justification related to potential uses of the findings.

In summary, I believe there is a need to develop better mechanisms for the establishment of priorities in Federal science, for the clarification of program objectives, and for the review and coordination of the Nation's scientific efforts. In part this may be accomplished by some centralization of administration, and in part through development of improved guidelines and criteria.

Your subcommittee's efforts in this direction are to be commended, and I would like to express once again my thanks for the opportunity to participate in these hearings.

Thank you.
Mr. DADDARIO. Thank you, Dr. Lenher.

One sentence of yours sticks in my mind and that is the overall corporate viewpoint is kept paramount. I would expect that your

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