most industrial progress up lo 1920 resulted frnm the
work of individual inventors. The telephone was developed
by a teacher of the deaf. Bell; the telegraph, by a professor,
Morse; radio, by another professor, Marconi. Edison and
Steinmetz were regarded as freak geniuses, of whom we
could expect to have only one or two in a generation.
However, the great success of the pioneer industrial research laboratories, anil also ihe success nf the Chemical
Wen fan- Service in World War I. finally awakened industry
lo lhe facl lhat it could hire people- In invent, ami could
make money hv doing so. Thai wei- really an important
discovery. \nil \merican competitive capitalism has made
far better use of this new tool than heis any other system.
Since- the end of World \\ en I I or roughly the period I've
been in industry I lhe number nf men engaged in applied
or industrial research in the United States has increased
fiftyfold! Both governmenl and industry an- now spending
more each Men than tin- total spenl in all the years prior
to World War II! Applied research is |M many ways the
mosl remarkable developmenl of mir generation. It has had
profound effects upon our life and time-. It has made many
companies and industries go ahead, and conversely lack
of it has retarded tin- progress of others.
HOW APPLIED RESEARCH BENEFITS INDUSTRY
In order lo help yon visualize jusl how research grew
into importance and to appreciate it- wide and often unexpected ramifications, I should like- to review briefly the
results of applied research on a single petroleum process.
Tin' pioneer who initiated thai research wee- Dr. William
\I. Burton, who died only ei few months ago.
\leoiit 1909 Dr. Burton decided that the country's rapidly
growing number nf automobiles would soon require more
gasoline than could he distilled onl e.f crude nil. Ih- therefore put lhe entire research slaff of the S1 ein11;ir< 1 Oil Company (Indiana) on lhe problem of converting heavy nils
into lighter, more' volatile materials. While that research
staff wa- probably the- besl and largesl in our industry,
il eictnallv consisted «>f onlv two chemists!
lb-re- we- see several Factors iheil favor research. First,
there was ei need; second, there was intelligent analysis of
the problem; and third, Dr. Burton was fin- in put the research slaff mi wmk of Iii- choice. I might add lhal Dr.
Burton enjoyed this freedom despite lhe fact thai the top
management was skeptical.
Fortunately, lhe research was successful, lln- resulting
Burton process of cracking doubled iln- amount of gasoline
obtainable from a heirrcl of crude nil and eilsn resulted in
gasoline of unusually high antiknock quality.
Cracking brought aboul many incidental benefits loo
numerous lor me in discuss fully here. I will onlv poinl
out thai the by-producl geises from cracking are lhe raw
material for our vast petrochemical industry and fm- plei--
ti.-. synthetic ml.her. synthetic fibers, ami hundreds nf
other new products.
Remember, I have been talking aboul onlv a single line
of research in a single industry. These advances represent
onlv a tiny fraction nf tin- benefits tin- country has derived
frnm applied research. Almosl every industry could offer
outstanding examples of more recenl date.
PROBLEMS FACED BY INDUSTRY
In view of the acceleration nf research and of technical
progress during the pasl few decades, many people begin
unconsciously to assume lhal progress i- certain and more
or less automatic. I nfortunately, lhal i- nol lln- cum-, 'flu-re
an- today serious threats in ihe- Inline ol applied research,
and therefore to ihe continued rapid increase in our stand-
.n.l nf living. Even a moderate slowing down nf research
wonlil have tragic effects on mir domestic economy. In
addition, il might well cosl us our freedom, since our enemy
has discovered, eiml pressed into bis own service, this great
contributor to our success.
In view of the many public benefits, il seems surprising
lhat there should be clouds mi lhe horizon nf applied research. Si.mi' nf these threats an- indeed amazing, because
ihey ein- so unnecessary. Other problems are inherent: we
can hardly expeel ei permanent rapid acceleration. As the
Chinese say. "frees iln mil grow into heaven." I think il
would be helpful lo educators lo know some of tin- (»i.«!*-
lems industry faces.
1. INCREASES IN RESEARCH COSTS
Tbe firsl threat is the rapid increase in cnsis. Research
today is expensive business. In lhe pasl ten years mir research cnsis al Standard Oil have increased 300 per cent.
Practically no olher numerical index connected wilh the
company has increased thai much. To dale we believe the
high iiesis have been more than justified by results. Bul
some time lhe- law of diminishing returns will begin lo
operate, and industry after industry is likely In he forced to
flatten nil ils rate of research spending. Prospective profits
will mil always justify the increased expense and risk.
2. HIGH TAXES
A second very serious threat to applied research has
been high taxes, especially on industry. If. like a corporation, ymi had in pay 52 per cenl lax on your earnings, how
would you feel eihoiii spending monev on anything see ri-^v
a- research? Especially if you face lhe prospect that success would require major new investments ami thai the
profits, if emv. would again In- taxed eel the- rale nf 52 per
cenl. The necessity to conserve cash has had In dominate
much corporate thinking. Last year's lax bill gave some' relief, bul some of ihe provisions il'-si'jiH'il l.e encourage business expansion ami research em- slill under political lire.
3. GOVERNMENT RESEARCH
As a third threat, wc arc beginning to Bee iln- adverse
effects nf government competition in applied research. 1
am by no means opposed in eill governmenl activity of licit
sorl. In a number nf fields the governmenl is tin- logical
agency tn foster research. The- me.si conspicuous of these
is aimiiic energy though even here it would he unhealthy
fm- the governmenl to nave a monopoly.
Il is practically necessary thai tin- governmenl lake lln'
lead in fields like- agriculture ami forestry, where the overall public interesl i~ large, and when- nn private concerns
exisl thai could <)<> eill the- needed research. Also deserving
of increased governmenl support i- tin- field '.f public
health, lln- governmenl i- -i i 11 spending far more nn fundamental Studies nf animal and planl diseases than il i- on
There an' many fields, however, in which governmenl
competition is mil desirable. Thev are the area- in which
private industr) i- able emd willing in carry mil adequate
research eil it- own expense. I< it mil significant lhal. mil
nf a li-t compiled hv th.- Patent Office of tin- eighteen ni.e-t
importanl American inventions, not a single one was mmi'
ill any nl inn government laboratories?
I believe the National Science Foundation is a construe
five influence, through ils efforts lo minimize duplication
and to concentrate governmenl efforts on basic science.
4. SOCIALISTIC TENDENCIES
Another threat in research, ami i.> mn- wln.li- system o"
free enterprise, i- tin- growth nf socialism in iln- form ol
more ami more governmenl control of business. >e.e i.ili-ii1
controls ami projects an- nibbling away mn- heritage o'
Freedom i- the one thing we must have in ihis nation i'
our progress is to continue, Freedom to undertake ne*
FACTS FORI M NEWS, November, I"'''