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-over-shadowed or decreased this private support? In this time of crisis in academic science funding can or will industry come to the rescue? Is there, in fact, any alternative to the Federal budget for the large sums necessary?

Answer 2. The recent great increase of Federal support of universities has not brought about a decrease in support of grants, fellowships and facilities to universities. On the contrary, the chemical industry has increased support of higher education, but the increase has been far short of meeting the national need. In this time of shortage of academic science funding, industry is making a modest effort to accommodate the short-term position, but there is clearly no alternative to a Federal budget with the very large sums necessary to support adequately the advance of science in this country.

Question 3. What is the relative amount of research done in operating divisions (corresponding to mission agencies) vs Central Research Lab (corresponding to NSF) in Du Pont?

Answer 3. The amount of research and development work done in the operating departments of the Du Pont Company, corresponding to mission agencies in the Federal government, is 80% versus 20% of basic or exploratory research, corresponding to the role of NSF.

Question 4. Flexibility in the use of certain National Laboratories could be construed as competition with industry. (e.g. if Oak Ridge National Laboratory was assigned the task of developing a phosphate-free detergent or a lead-free gasoline). What problems do you foresee and what mechanisms might be necessary to avoid interference with market place economics while getting the social overheadproblems solved?

Answer 4. If certain National Laboratories are assigned missions which are directed to development of products or processes which are carried into commerce by industry in a competitive economy, there must be proper incentives for private industry to develop and commercialize government-supported research findings. Incentives must be provided for industry to invest capital and to make a commercial effort to make government-sponsored research findings available to the public.

A re-examination of government patent policy, which is now written to eliminate profit incentives, should be undertaken.

Exploitation of government-sponsored research which is of clear social benefit should be made possible through profitable commercialization with limits which are acceptable to the Federal government.

Mr. DADDARIO. Our next witness is Dr. William J. Harris, Jr. He is assistant director of technology of Columbus Laboratories, of Battelle Memorial Institute.

Come forward Dr. Harris.

He is a man who has a long period of involvement in Government prior to his service with Battelle, who we believe can give this committee a great deal of help.

We are happy to have you here, Dr. Harris. I understand too, that you have some charts, and I wonder if we might place those so that the people who are here can also see it as well as the committee.

STATEMENT OF DR. WILLIAM J. HARRIS, JR., ASSISTANT DIREC

TOR OF TECHNOLOGY, COLUMBUS LABORATORIES, BATTELLE
MEMORIAL INSTITUTE, ACCOMPANIED BY MR. LEDERMAN
Dr. HARRIS. Yes, Mr. Chairman.

Mr. Chairman and members of the subcommittee and ladies and gentlemen, I was pleased to receive your invitation to appear before you today and have read the report on “Centralization of Federal Science Activities” with a great deal of interest. After several decades of very rapid growth in Federal support of research and development, R. & B., and current efforts to reexamine national goals, it is appro

priate to discuss the contributions of R. & D. and to seek organizational improvement.

It is my view that the most important general issue regarding Government R. & D. policy and organization involves the relationships between Federal R. &. Ď. activities and national goals. Of course, this subcommittee and the Congress as a whole has been stressing with increasing vigor the need for research to be relevant to goals.

On this general question, the report to the subcommittee indicates that the proponents of both the diffuse and the centralized organization have suggested that their organizational philosophy will better serve national goals. Under the section in the report entitled “Pro and Con Arguments for a diffuse and a Centralized Organization Grouped Around Major Functions,” is stated: “* * * a diffuse organization links science and technology to basic national goals * * *"-page 10 and "A centralized organization would relate R. & D. activities to national goals * * *»-page 11.

We have had an opportunity in the course of the last few years and particularly in the course of a recent study 1 to analyze the allocation of Federal R. &. D. fiscal resources in terms of the functional end use to which they are related. I would like to note, Mr. Chairman, that we have given your staff copies of this report, in two volumes and I will leave another copy with you for such use as you wish to make of it.

Mr. DADDARIO. We will appreciate that, Dr. Harris.

Dr. HARRIS. I would like to present a few of the results of this study and then discuss their implications for some of the questions that you have raised.

Although we are keenly aware of and sensitive to the many ways that a Government may express goal orientations, the allocation of Federal budget resources appears to be the best reflection of their importance and their relative priorities. This was well expressed by Melvin Anshen when he said:

The unique function of a public budget is to implement the conclusions of a political philosophy 'through the assignment of resources to their accomplishment."

A simplified expression of this idea comes through in the old American adage, “Put your money where you mouth is."

With the concept of basing goal orientation on budgetary allocations in mind, the fiscal year 1961-69 budgets : were examined. The budget presents Federal outlays by agency and also by function. The arrangement by agency—or other administrative body-is largely a reflection of the historical growth and development of the administrative apparatus of the executive branch.

Although this arrangement indicates lines of responsibility and authority in carrying out Government programs and is the basis on which congressional appropriations are made, the functional classifi

1 "An Analysis of the Allocation of Federal Budget

Resources as an Indicator of National Goals and Priorities," by L. Lederman and M. Windus, Battelle Memorial Institute, Columbus Laboratories to the National Aeronautics and Space Administration. Federal Clearinghouse for Scientific and Technical Information, vol. 1 (summary), is N69-20989, vol. II (details), is N69–29088. A copy of this report was provided this subcommittee and the Science Policy Research Division of the Library of Congress several months ago.

* Anshen, Melvin, “The Federal Budget as an Instrument for Analysis and Management," The Rand Corp., Santa Monica, Calif., April 1965.

8 "The Budget of the U.S. Government,” Fiscal Year 1969, U.S. Government Printing Office, Washington, D.C., 1968. Referred to throughout this paper as the budget.

cation appears more useful when discussing goals and objectives of the Federal Government. Thus, in our report, when programs of several agencies fall within a single broad function-such as educationthe programs are aggregated under the functional heading. Since the headings designate functional fields for which goals and objectives have been expressed, these aggregations of programs serve to make possible a study of relative priorities. This general approach was endorsed by the President's Commission on Budget Concepts.

The term "function” has been used in many senses and, therefore, I would like to clarify our use of it. For example, the AÉC civilian nuclear reactor program is related to energy production and natural resource utilization and is, therefore, assigned to the functional field of natural resources and environmental. NASA's space sciences program is related to the functional field of education and knowledge; NASA's aircraft technology program is related to transportation, and appears within the functional field of commerce, transportation, and communications. The basic research programs of NSF are not considered in this study to be a end in themselves but are identified with the functional field of education and knowledge.

We have used the functional fields listed in the budget with some minor modifications that seemed helpful for our purposes. The budget provides historical data on total outlay expenditures by function, but to our knowledge we are the first to make a similar study on R. & D. expenditures and their comparison with total budget allocations for the various fields. While many Government programs can easily be assigned to one of the 13 functional fields used, honest differences of opinion can exist with respect to others. We were explicit in the way we did it, and anyone who differs can easily regroup the programs utilizing the data we provided.

There are, of course, other ways of discussing Federal R. & D. activities. Some of these have been presented to you in previous studies or testimony-organization by agency, by nature of work-for example basic research, applied research, and development-organization by discipline-for example physics, chemistry, aeronautical engineering, and so forth. Classification of Federal R & D, activities in these other ways frequently serves a useful purpose. However, I believe that much of the current organizational problem and many of the policy issues connected with Federal R. & D. programs are concerned with their relationship to national goals and priorities, and for this purpose the functional end use concept seems more appropriate. Now, I would like to speak briefly from the figures.

(The figures referred to are as follows:)

* President's Commission on Budget Concepts, "Report of the President's Commission on Budget Concepts,". U.S. Government Printing Office, Washington, D.C., October 1967. The major recommendations of this Commission were incorporated in the fiscal year 1969 budget used as a basic source of data for the study. The Commission Chairman, David M. Kennedy, is now etary of the Treasury, the Sts Director, Robert P. Mayo, is now Director of the Bureau of the Budget.

FIGURE I

RELATIVE PRIORITIES % OF TOTAL OUTLAVS -FV 1969

449 % 20.0 7.0 4.7

7

U NATIONAL SECURITY 2 WELFARE 3 HEALTH 4 COMMERCE, TRANSPORTATION

AND COMMUNICATIONS 5 EDUCATION AND KNOWLEDGE 6 AGRICULTURE

INTERNATIONAL RELATIONS 8 LABOR AND MANPOWER 9 VETERANS 10 SPACE IP HOUSING AND COMMUNITY

DEVELOPMENT 12 NATURAL RESOURCES AND

ENVIRONMENTAL 13 GENERAL GOVERNMENT

3,3 3.2 2.9 29 2.8 2.3 2.3

2.1

FIGURE II

RELATIVE R&D PRIORITIES

% OF TOTAL RED-FV 1969

53.1% 23.4 7.3 6,8

I NATIONAL SECURITY
2 SPACE
3 HEALTH
& EDUCATION AND KNOWLEDGE
5 NATURAL RESOURCES AND

ENVIRONMENTAL
I COMMERCE, TRANSPORTATION

AND COMMUNICATIONS
7 AGRICULTURE
* WELFARE
9 HOUSING AND COMMUNITY

DEVELOPMENT 10 LABOR AND MANPOWER bGENERAL GOVERNMENT 12 INTERNATIONAL RELATIONS I'S VETERANS

1.4

0.3

0.1 0.1

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