r \

Technology

and

World Trade

PROCEEDINGS OF A SYMPOSIUM

U.S. DEPARTMENT OF COMMERCE / NATIONAL BUREAU OF STANDARDS

NBS MISC. PUB. 284

Technology

and

World Trade

PROCEEDINGS OF

A SYMPOSIUM

November 16-17, 19BB

Sponsored by the

Secretary of Commerce of the United States

on the Occasion of the Dedication of the

New Laboratories of the National Bureau of Standards

at Gaithersburg, Maryland

U.S. DEPARTMENT OF COMMERCE

John T. Connor1 , Secretary

NATIONAL BUREAU OF STANDARDS

A. V. Astin, Director

Edited by

Robert L. Stern

National Bureau of Standards Miscellaneous Publication 284 Issued 1967

For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402 - Price $1.25
Symposium on

TECHNOLOGY

AND WORLD TRADE

Sponsor: John T. Connor, Secretary of Commerce

Committee: J. Herbert Hollomon

Alexander B. Trowbridge

Irl C. Schoonover

Program Chairman: Robert L. Stern

The Symposium Committee is grateful to the NBS Statutory Visiting Committee

for their help and to the following firms and foundations which made possible

many of the activities of the Symposium and NBS Dedication.

Firms and Foundations: Boeing Company, Corning Glass Works, Dow Chemical

Company, Eastman Kodak Company, E. I. du Pont de Nemours & Company,

Firestone Tire and Rubber Company, Ford Motor Company, General Dynamics

Corporation, General Electric Company, General Mills, Inc., General Motors

Corporation, Gulf Oil Corporation, Hewlett-Packard Company, International

Business Machines Corporation, International Telephone and Telegraph Corporation, Litton Industries, Merck, Sharp & Dohme Company, Inc., Polaroid

Corporation, Radio Corporation of America, Alfred P. Sloan Foundation, Standard Oil Company of New Jersey, Texas Instruments, Inc., Union Carbide Corporation, United States Steel Corporation, Westinghouse Electric Corporation,

Worthington Corporation, Xerox Corporation.

NBS Visiting Committee: Dr. E. R. Piore (IBM) Chairman, Professor Norman

F. Ramsey, (Harvard), Dr. Elmer W. Engstrom (RCA), Dr. Paul C. Cross (Mellon

Inst.), and Dr. Robert L. Sproull (Cornell).

ii
Symposium Program

and

Table of Contents

November 16, 1966

INTRODUCTION: Dr. J. Herbert Hollomon 2

Assistant Secretary of Commerce for Science and Technology

OPENING STATEMENT: Mr. John T. Connor 5

Secretary of Commerce

Morning Session—Technology: Its Influence on the Character

Of World Trade and Investment

Chairman: Dr. Frederick Seitz, President 7

National Academy of Sciences and National Research

Council

Speakers: Professor Marshall McLuhan, Director 9

Center for Culture & Technology, University of Toronto,

Toronto, Canada . Professor Richard N. Cooper 15

Department of Economics, Yale University, New Haven,

Connecticut

Discussants: Dr. H. B. G. Casimir 22

Director of Research Laboratories, N. V. Philips Industries, Eindhoven, The Netherlands

Mr. John E. Reynolds 25

Board of Governors, Federal Reserve System, Washington, D. C. Questions from the Floor:

Dr. Melville Green 27

Prof. V. K. R. V. Rao 28

Mr. Charles Vetter 29

Comments:

Dr. Seitz, Professor McLuhan, Professor Cooper, Mr. Reynolds —Pages 27-30

Luncheon Program

Introduction: Mr. Herman Pollack 31

Director of International Scientific and Technological

Affairs, Department of State Speaker: Mr. Pierre Uri 34

Counselor for Studies, Atlantic Institute,

Paris, France

Address: INTERNATIONAL COMPETITION AND COOPERATION

IN TECHNOLOGY

iii
Afternoon Session—The Impact of International Measurement

Conventions, Norms and Standards on World

Trade

Chairman: Dr. A. V. Astin, Director 37

National Bureau of Standards

Speakers: Mr. Francis McCune 39

Vice President, General Electric Company, New York,

New York

Mr. A. H. A. Wynn 44

Head, Standards Division, Ministry of Technology,

London, U.K. Questions from the Floor:

Mr. Leon Podolsky 52

Comments:

Dr. Astin, Mr. Wynn, Mr. Sharpston—Page 52

Discussants: Mr. Fayvel Hadass 53

Director, Standards Institution of Israel, Tel Aviv, Israel

Mr. Francis L. LaQue 55

Vice President, International Nickel Co., Inc., New York,

New York

Mr. Samuel H. Watson 58

Manager, Corporate Standardizing, Radio Corporation

of America, Camden, New Jersey

Mr. C. H. Sharpston 61

Secretary-General, International Organization for Standardization, Geneva, Switzerland

Banquet Program

Chairman: Mr. John T. Connor 65

Secretary of Commerce

Speaker: The Vice President of The United States

Honorable Hubert H. Humphrey 67

Address: TECHNOLOGY AND HUMAN BETTERMENT

iv
November 17, 1966

Morning Session—The Impact of the Policies of Government on

the Creation and Use of Technology for

Economic Growth

Co-Chairmen: Dr. Donald F. Hornig 73

Special Assistant to the President for Science and

Technology

Dr. J. Herbert Hollomon 83

Assistant Secretary of Commerce for Science and

Technology

Speakers: Mr. Robert Major 76

Director, Royal Norwegian Council for Scientific and

Industrial Research, Oslo, Norway

Mr. Peter G. Peterson 83

President, Bell & Howell Company, Chicago, Illinois Discussants: Professor James Brian Quinn 98

Dartmouth College, Hanover, New Hampshire

Professor V.K.R.V. Rao 104

Member, Planning Commission, Government of India,

New Delhi, India

Questions from the Floor:

Dr. Hendrik Casimir 108

Mr. Rodney Meyer 109

Mr. M. Zvegintzov 109

Dr. Paolo Rogers 109

Comments:

Dr. Hollomon, Mr. Major, Professor Quinn—Pages 107-109

Luncheon Program

Introduction: Mr. Alexander B. Trowbridge 111

Assistant Secretary of Commerce for Domestic and

International Business

Speaker: Dr. Ibrahim Helmi Abdel-Rahman 113

Commissioner for Industrial Development,

United Nations, New York, New York

Address: TECHNOLOGY AND THE DEVELOPING COUNTRIES
Afternoon Session—The Transfer of Technology Through

Enterprise-To-Enterprise Arrangements

Chairman: Professor Hollis B. Chenery 119

Department of Economics, Harvard University,

Cambridge, Massachusetts

Speakers: Mr. Elmer S. Groo 121

Vice President, IBM World Trade Corporation,

New York, New York

Dr. Aurelio Peccei 126

Chief Executive, Ing. C. Olivetti & C, S.p.A., Ivrea, Italy

Questions from the Floor:

Mr. Miguel Wionczek 132

Prof. L Rey 134

Dr. M. Kersten 134

Comments:

Professor Chenery—Page 132

Discussants: Dr. John H. Dessauer 136

Vice President, Xerox Corporation, Rochester, New York

Dr. L. R. W. Soutendijk 138

Manager, Brown Bros. Harriman & Company, New York,

New York

Dr. Antonie Knoppers 141

President, Merck, Sharp & Dohme International,

New York, New York

CLOSING REMARKS:

Mr. John T. Connor 144

Secretary of Commerce

APPENDIX:

List of Participants in the Symposium 145

vi
A Symposium:

To examine and forecast the impact of technology upon the patterns and

conduct of international trade and investment

To consider the international environment needed for the wider generation

and utilization of technology

To explore prospects for evolving policies and institutions that promote

economic development through technology and trade
November 16, 1966

INTRODUCTION

Mr. Stern: Mr. Secretary, Honored Guests, Ladies

and Gentlemen: Good morning to you on this brisk

fall day.

ROBERT L. STERN

Program Chairman

Chief, Office of Industrial Services

National Bureau of Standards

The ship "Technology" is about to set off on a round-the-world cruise. Our adventure and exploration during the next two days takes the form of a symposium which, to recall the definition of the

Greeks, means: a feast, a gathering together with

free exchange of ideas, a drinking together. Each

aspect of this definition will have its place in these proceedings.

Now, to get under way, and to introduce the

Sponsor of the Symposium and later the Chairman

of this morning's session, I would like to present Dr.

J. Herbert Hollomon, Assistant Secretary of Commerce for Science and Technology.

Dr. Hollomon: Honored guests, friends from Washington, New York, Delhi, Madrid, Ottawa, Paris,

and Manila and a dozen other world capitals, weK

come! One of every six or seven of us is a visitor to the United States. At least 25 nations are represented here. No matter where you came from, technology

helped bring you here. Many of you used jet air- planes. All of us used automobiles or buses. Transportation technology contributed to bringing us

here, I hope quickly, comfortably and safely.

We are meeting in facilities built with a great deal

of technology and we are using the products of tech- nology to hear and see and record our findings. The

specific occasion which brings us together is the dedication of this magnificent new facility. We are also commemorating the sixty-fifth anniversary of this great scientific and technological institution—the National Bureau of Standards, an agency of the United States Department of Commerce.

We all owe a debt to technology. We can partially

repay that obligation by making our two-day discussion effective, pointed, stimulating, and helpful to one another.

We planned this symposium so that you will have

ample opportunity at each session for questions

from the floor. We are also providing two luncheon

sessions and a banquet and at that banquet the Vice-President of the United States will speak to us. We hope that will encourage you to recognize that

this is a symposium of people talking together, rather than a few of us talking to all of you. We believe that technology, appropriately understood, morally and ethically applied, is the best hope

for a peaceful, prosperous society. Technology does

not automatically flow to where it is needed. It is necessary that men spend their wills and their hearts

to bring technology to people in a way that will contribute to their progress, their health, and their well- being.

For the opening remarks on these subjects, we are privileged to hear the Sponsor of this conference,

the distinguished Secretary of Commerce of the United States, the Honorable John T. Connor.

2
J. HERBERT HOLLOMON became Assistant Secretary of Commerce for Science

and Technology in May 1962, having been nominated by President Kennedy and

confirmed by the Senate. In this position he supervises the Patent Office; the National Bureau of Standards; the Environmental Science Services Administration;

and the Office of State Technical Services.

He also is the principal advisor on scientific and technical matters to the Secretary of Commerce, and he is a member of the Federal Council for Science and

Technology, consultant to the President's Science Advisory Committee, and Chair- man of the Interdepartmental Committee for Atmospheric Sciences. Dr. Hollomon was with the General Electric Company for 18 years, as metallurgical researcher, Manager of Metallurgy and Ceramics Research, and General

Manager of the General Engineering Laboratory.

i
JOHN T. CONNOR was nominated Secretary of Commerce by President Johnson

on January 6, 1965, and confirmed by the U.S. Senate on January 15. He assumed

his cabinet post after a career of law, government and industry, which spanned a quarter of a century since his graduation from Harvard Law School in 1939.

He is a graduate of Holy Rosary High School in Syracuse, New York; of Syra- cuse University where he received his A.B. degree, magna cum laude; and Harvard

Law School where he received an LL.B. degree in 1939. Mr. Connor then was

associated for several years with the New York City law firm of Cravath, de

Gersdorff, Swaine and Wood.

In 1942, Secretary Connor was appointed General Counsel of the Office of

Scientific Research and Development, of which Dr. Vannevar Bush was Director. In 1944, he went on active duty with the U.S. Marine Corps, serving in the Pacific as an air combat intelligence officer. Returning from Japan in 1945, he became

Counsel to the new Office of Naval Research, and later, Special Assistant to Secretary of the Navy James Forrestal.

Mr. Connor joined Merck & Co., Inc., in 1947 as general attorney and held

several other key executive positions before being elected president of the company

on September 27, 1955. In February 1967, Mr. Connor returned to private in- dustry and became President of the Allied Chemical Corporation.
OPENING STATEMENT

Technology and Management As Instruments of World Progress

Secretary Connor: Thank you, Dr. Hollomon. Honored guests, ladies and gentlemen: I am pleased to welcome all of you to this symposium on technology

and world trade. Many of you have come a great

distance to participate in this dialogue. I am

confident that when we are finished our efforts will be repaid with a clearer view of the common problems we face in the global exchange of goods, services, commodities, knowledge, attitudes, and ideas. At the dedication of these magnificent facilities yesterday, President Johnson sent a special message

of greeting. He noted that the symposium would

open here today and expressed his confidence that

the ideas emerging from this symposium will provide

a fresh insight into the task of creating a life of

abundance for people everywhere. Technology and

world trade are vital elements in the economic life of all nations in the shrinking world and accelerating

times of today.

The National Bureau of Standards and

the Department of Commerce

This symposium is especially appropriate at this time, coinciding with a momentous event in the his- tory of the National Bureau of Standards. The Department of Commerce is charged with helping

create those conditions which will encourage and

stimulate the growth of the national economy. The

National Bureau of Standards is a charter member

of the Commerce Department, having joined us when the department was established more than half

a century ago. NBS is also the nation's measurement

laboratory, our spokesman in the international lan- guage of science, a center of research, technology,

and its application.

The dedication of these new laboratories occurs

as the Bureau is placing increased emphasis on several fruitful areas of cooperation with American

business and industry. International standardization

of industrial products, the development of performance criteria for technological goods and services,

methods for measuring the performance of entire systems, and the dissemination of scientific data and

technical information—these activities all have great

relevancy to international trade. From the earliest days of its planning, I have

sensed an air of excitement about this particular

symposium. For this reason, I don't want to delay

your exchange of ideas and opinions for one minute

longer than necessary. In this setting, sequestered

from the day-to-day considerations of immediate

problems, perhaps we can suspend the old dogmas

and construct an edifice of new ideas, beginning

from the ground up. I would like to take a few

minutes at the beginning to examine with you some

of the foundation stones on which your dialogue can

be based. These fundamental notions are axiomatic

to the specialist. To a nonspecialist, such as myself,

they sometimes provoke more questions than they

provide answers.

Purposes of the Symposium

This symposium has three purposes: First, to look at the impact of technology upon international trade and investment. Second, to outline a world en- vironment which will encourage more widespread

use of technology. And, third, to seek new ways for technology and trade to promote economic develop- ment. These objectives combine to create a formidable

challenge. Fortunately, you and your speakers are admirably qualified to come up with constructive answers.

Fortunately, our constitution created a union of

states and precluded any attempts to raise trade barriers between one state and another within the United States. As a result, this early common market

grew into a mass market with economies of scale which contributed immensely to our economic

growth and our technological development.

In spite of this favorable environment, however, we have not yet achieved a nationwide parity in standards of living or in the level of technological

development. The Appalachian region of America

stands in stark contrast to areas on the East and

West Coasts, both economically and technologically.

5
Through our system of agricultural colleges, re- search stations and farm specialists scattered throughout the nation, the dissemination of the lat- est agricultural technology has become a successful

reality in this country. We have not yet been so successful in the manufacturing and service sectors of our economy. Studies conducted by the Commerce

Department show that there is a wide area of

difference, a wide range of difference, between the most efficient and the least efficient plants in any

given industry. This pattern exists regardless of the

size of the plant, and this condition is true whether

it is a labor intensive industry or a high technology

industry. In some industries, the value added per employee in the most efficient plants is five hundred

percent above the amount for the least efficient plants.

Think of the competitive advantage this offers the top firms. Or on the other hand, think of the waste

in human and material resources among the lowest

firms. These efficiency gaps include many components—management skills, availability of capital,

marketing know-how, participation in world trade,

condition of plant and equipment, flexibility of labor

and management, ability to utilize the latest technology, and many, many others. Our economists estimate that if all companies in

all industries followed the most advanced practices

and techniques of the most efficient companies, the growth in national productivity would greatly exceed

the growth rate of recent years. Practically speaking,

this may be expecting too much, but it is clear that there exists a great potential for improvement.

Opportunities for Better World Use

for Technology

Looking at the broad problems of technology and

trade from a global point of view, what needs to be

done? More to the point, what can be done?

First, there are some institutional goals we could

work toward. These include such things as greater

participation by all countries in the development ol|

international standards for industrial products, an

accelerated and more broadly based movement to- ward some form of international patent cooperation, an unfettered flow of capital among nations with due

provision made for special circumstances and special

cases, the reduction and elimination of barriers td trade on a fair and reciprocal basis, wider availability and movement of technology among nations. Second, we need to change our approach to the

fact that there are differing levels of technology in. various fields among the nations of the world. Our

thoughts and actions should not be directed toward

compensating for these differences artificially

Rather we should try to assure that each nation has

access to the particular technology most appropriate

to its own goals as defined by that nation. In this way, trade and economic growth will both be en-l hanced.

Third, we need to know more about the processes

of technology, trade and economic growth, how they

interact, why a certain formula succeeds for one]

country and fails in another. Toward this end, the United States has joined with the member nations of

the OECD in a major study of the processes by

which nations are able to develop and exploit

science and technology for the attainment of eco- nomic and other national goals.

The results of this study should be useful to all nations and applicable to all levels of development.

Can these objectives be realized? I don't know of any substantive reason why they cannot, if we have

the will to succeed and a willingness to cooperate.

The United States stands ready to join with all other

countries in efforts to disseminate and use the knowledge of mankind for the benefit of mankind.

6
November 16, 1966

Morning Session—Technology:

World Trade

Its Influence on the Character of

and Investment

Dr. Hollomon: I should now like to introduce to you Dr. Frederick Seitz, the President of the National Academy of Sciences, who will be the chairman

for this morning's session. Dr. Seitz: Thank you, Dr. Hollomon. Our session

deals with technology in world trade, as has been

made clear. I would like to say a few words of intro- duction about both.

Technology in Human History

Man is innately a technologist—inherently inventive. This characteristic is part of his birthright

and is linked intimately with the constitution of his genes. The long road of evolution of our species

[over the past million years is in fact littered with

the products of our inventive technology. There is much direct evidence for the crude tools of stone our forebears have produced and much indirect evidence for those made of wood and bone.

When our species emerged about 50,000 years ago with its present genetic make-up, more sophisticated devices appeared, including arrows, spears,

axes, hooks, nets, and intricately woven objects.

The basic genetic equipment which made us technologists is well known. This includes manual dexterity, stereoscopic vision and the ability to reason. Armed with these attributes and the willingness to focus attention on issues of immediate practical

importance, our antecedents moved ahead, first as hunters and food-gatherers and then, about 10,000

years ago, as agronomists. Five thousand years ago we became masters of the great river valleys which

yielded such riches that it became possible to develop

professional specialization, including most of the

fields of modern engineering.

Between one thousand and fifteen hundred years ago those of our ancestors living in Northern Europe

learned to cultivate the soils of the temperate climate

and to develop the technology associated with that

climate. This advance in technology, in turn, made

the urban revolution possible in northern latitudes. Without such a revolution the settling of North

America would have been of little meaning to mankind, except for the access the discoverers might have

had to the natural raw materials of the new land.

Science Revolutionizes Classical Technology

About 500 years ago, the earnest, practical philosophers of Western Europe conceived of an entirely new basis for technology. Inspired by access to the manuscripts of Greek science, they conceived of

establishing a new form of technology which would

extend well beyond the scope of classical technology

and which would rest upon investigations of the

basic laws of nature. In brief, they recast ancient

science into a new form and evolved what we now

call modern science—a process designed to gain

knowledge of nature characterized by the careful interplay of observation and theory. It took time

for the dream of these philosophers to be realized. However, starting about 170 years ago with the dawn of the age of modern chemistry—a product

of the scientific method—a great scientific revolution in technology was set into motion. It is easy

to show that by the present time technology would

have been running out of momentum if it did not have the contributions of science. By the end of this century the methods of classical technology would

have proved to be stagnant.

The Impact of Trade on Technology

Historically, as Secretary Connor pointed out so

eloquently, the evolution of technology has been

very closely coupled with the development of trade. Once man became a trading animal, as he did very

early—at least 10,000 years ago—he began to trade

technology along with material objects. This not

only stimulated his own process of technical innovation, but also made him aware of the importance

to his own welfare of the acquisition of alien methods of technology. The interchange of technology

has in fact been as important a component of trade

as the interchange of material products. Trade not

only brought British tin to the Mediterranean, but

stimulated the entire technology of producing tin alloys. The trade with China, initiated by the Chi7
FREDERICK SEITZ is the first full time President of the National Academy of Sciences, a position to which he was elected in 1965 for a six-year term. He served

the previous three years on a non-resident basis while continuing his affiliation with

the University of Illinois. There he was most recently Dean of the Graduate College and Vice President for Research. Earlier he headed the Physics Department

for seven years, following an extended period as Research Professor of Physics. He

taught at the Universities of Rochester and Pennsylvania, and at Carnegie Institute of Technology. He also spent two years with the General Electric Company.

Dr. Seitz, a native of San Francisco (1911), California, received his A.B. in Mathematics from Stanford University (1932), earning his Ph.D. in Physics at Princeton two years later. Dr. Seitz is presently a member of the President's Science Advisory Committee

and of the Statutory Visiting Committee for the National Bureau of Standards. Dr. Seitz is Vice President of the International Union of Pure and Applied

Physics, and a member of the Committee on Science and Technology in Developing Countries of the International Council of Scientific Unions.
nese, not only brought Chinese textiles and ceramics

to the West, but stimulated a host of parallel devel- opments in the corresponding fields of technology

in the Mediterranean. Our own trade with Europe

and Asia accelerated our national development not

only through the import of materials, but also by

stimulating our own technology. Our own technological advances have, in turn, had a very deep

influence on the parts of the world with which we trade. Technology based upon science developed very

slowly in our country. It was, in fact, only in this century that we accepted broad responsibility for generating science-based technology. Earlier in our

history we were in the main acquirers of products

or of licenses stemming from science-based tech- nology generated elsewhere. Interestingly enough,

the stimulus for the reform came less from scientific scholars than from the leaders of industry who desired to make their products competitive throughout

the world. In fact, the establishment of the great

industrial laboratories, such as those of the General

Electric Company, the Bell Telephone Company,

and du Pont, near the turn of the century can be

regarded to represent the dawn of a genuinely new

era in our own technological history.

If one tries to characterize the various phases in our history of creative technology, one can perhaps

say that our period of innovation in the pattern of

classical technology reached its climax in the era of

Thomas Edison. The revolution associated with the computer is the first major product of our creative

association with science-based technology.

Dr. Seitz: With this background of historical observations on man's relationships with technology and

trade, I would like to introduce our next speaker on

the morning session, Dr. Marshall McLuhan. Dr. McLuhan is Director of the Center for Culture and

Technology of the University of Toronto, Canada.

Dr. McLuhan: Mr. Secretary and ladies and gentle- men: The environment you have provided for us makes an occasion to relate to you one of our Canadian cultural products—French-Canadian grievance

humor. Have you ever noticed that good jokes tend

to record grievances? The grievances of the FrenchCanadians have been much related to the electronic

age, in which they feel a new need for separation

and decentralism, and some of the stories that go

with that are of this grievance type.

A mouse is being pursued around the house by

the cat and finally discovers a hole in the wall where

it hides. And then all is silent until a kind of bowwow, arf, arf, sound is heard. The mouse figures the house dog has come along, scared the cat away, and

ventures out. The cat grabs it and as the cat chews

the mouse down, it says, "You know, it pays to be

bilingual."

Another Canadian contribution to this grievance

humor is the sign that hangs over a junkyard in Toronto which reads, "Help beautify junkyards. Throw

something lovely away today."

It is a very rich observation.

There are quite a lot of these grievance stories,

which are rather instructive, but I am going to venture a few themes here in relation to our very rich subject of technology and world trade.

The New Environment for Man

I suppose one could simply sum the whole thing

up and say that any economy is an information pool

and, under electronic conditions, the world is a sin- gle information pool; therefore, there can and must

be just one economy. As the world becomes a total information pool, and therefore simultaneous, the

natural tendency is for all the older patterns and

barriers and structures to be swept aside.

I think one might safely predict, for example, that with the coming of the satellite environment for our

planet, the planet is no longer the human habitat. The planet is now the content of a man-made en- vironment of electric information and satellite infor- mation. When the planet itself goes inside a man- made environment, the planet becomes as it were, an old nose cone, an art form. Every time a new

9
MARSHALL McLUHAN is Director of the Center for Culture and Technology at the University of Toronto. Prior to this, he was Professor of English at that University's St. Michaels College, and earlier held teaching assignments at Wisconsin

University, St. Louis University and Assumption College.

A native of Edmonton, Alberta, Canada, Dr. McLuhan obtained his Bachelor's

and Master's Degrees in Arts from Manitoba and Cambridge Universities, then

receiving his Doctor of Philosophy degree at Cambridge in 1943.

Dr. McLuhan is the author of several books, including "The Mechanical Bride:

Folklore of Industrial Man," "Understanding Media" and "The Gutenberg Galaxy." He has in addition contributed to numerous periodicals including "Daedalus," the "Kenyon Review" and other literary magazines.
environment of any sort goes around another one,

every time a new technology creates a new environment, that environment goes around the environment of the preceding technology, turning the old

technology into an art form.

Environments need to be understood as processes. They are not containers, they are processes. So

when the TV environment went around the old

movie environment, the movie industry became in- creasingly an art form. The process of the TV sur- round has turned increasingly the old movies into

art form, and this now is happening to TV itself with the satellite environment going around TV.

I suppose, too, it is natural to observe that in the age of the circuit, the electric circuit, with its feed- back and folding back into itself, we have come to

the end of the neolithic age, the age of the planter,

the strip culture, with each person mining his own

bit of knowledge. With the diffusion of knowledge

instantaneously, in all sorts of patterns simultaneously, a great diversity of patterns, we have come to

the end of the neolithic time.

But the strange thing is this, that we have flipped,

as it were, back into the age of the hunter. The

electronic age is once more the age of the hunter,

only it is now the hunt for information, for data. The image of Sherlock Holmes and of James Bond

offers (again) the age of the hunter.

Reversals and the World Information Pool

This aspect of our time merely points to a number of other reversals and flips that are upon us

technologically.

For example, with the coming of xerography and

electric circuitry to the book trade, a typical type of

reversal that is manifest in many other fields has set

in. Instead of the book being a repeatable commodity, a package—and it was the printed book that was

the first uniform, repeatable commodity, making

possible markets and prices as we know them—the book tends to be an information service. The book can be programmed for the individual

request—tailor-made, custom built. The tendency of

circuitry and electronic movement of information is to break up the old patterns of mass production and

uniformity into the custom-built service. As we create these new and revolutionary situations, it is typical that we go on talking about the

old situation as if it were still the dominant one. With xerography as a service, it is possible, for example, to form an electrical information center. Say I am working on Egyptian arithmetic and

I would like all the most recent material. I read such

and such, I know such and such languages, and in a few minutes or hours, a package is gathered from all the libraries in the world and can be delivered to my

door. The book is becoming, with the aid of the computer and the telephone and Xerox, a completely flexible service. This pattern, for example, as it enters the world

of education, means that instruction in the older

classroom sense will tend to yield, as it is already

yielding, to discovery as a technique of learning.

The older pattern of imposing knowledge or instruc- tion upon the young is steadily yielding to the pattern of discovery as a means of learning.

Our dropout situation is not unrelated to this. Many children have the feeling that by being sent to school, their education is being interrupted.

Because we—literally—live in a world in which

the outside environment is far richer in information

than the schoolroom.

Pattern Recognition and Information Overload

Jacques Ellul, the French philosopher of technol- ogy, observes that: "The Twentieth Century child is engaged from morning to night processing data, on a massive scale." You might ask yourself, what happens when we subject children to massive doses of

man-made environment, what happens to their outlook, their inlook and their outlook?

One thing that happens is that under conditions

of informational overload, which is normal, they develop patterns of mythic thinking, because it is only

by mythic thinking that you can cope with information overload. Pattern recognition is another name

for mythic thinking. Instead of just acquiring data,

you have to discover patterns in order to survive. There is a well-known story by Edgar Allen Poe.

It is called "THE MAELSTROM"—-about a sailor who goes fishing one afternoon and becomes so absorbed in his thought that he forgets to notice the turn of the tide and suddenly is caught in a great

whirlpool. He realizes he can't row his boat out of

the maelstrom and so he begins to study the action

of the maelstrom. He observes that certain kinds of materials are sucked down into it and never return while other kinds pop up again. He attaches himself to one of these recurring objects and survives. This is pattern recognition. My point is: to understand the process is an indispensable way of coping

with information overload.

But there are some other points I want to intro- duce, apropos of the creation of huge new environ256-707 0-67—

1 1
ments by technologies. One of the peculiarities we

discovered lately when we began working on this problem of pattern recognition, is that whenever a new environment forms, it is invisible and what you

perceive is the old environment.

1 think it was Bertrand Russell who asked, if bath water were to get hotter one degree per half hour,

would we ever be able to scream. Would we ever know to scream before we were completely boiled?

The answer is no, we wouldn't, and it is apparently

quite possible to boil fish alive by simply raising the temperature slowly almost imperceptibly.

Each of us forms a body percept, from moment

to moment, based upon his intake of sensations, perceptions, but we are completely unaware of this body percept which we form of ourselves from moment to moment. It takes considerable dexterity and

skill to observe one's own body percept, the image we form of ourselves. The immediate surrounding

the new environment, whatever it is—is always in- visible to the whole population.

Navigating with the Rear-View Mirror

What they see in the mirror is the old environ- ment. When the railways were new on this continent a century ago, the people of that time formed an image of their new industrial iron horse environment

that was the Jeffersonian ideal of agrarian pastoral

life.Modern suburban man lives in the rear view mirror of "Bonanza." He perceives not suburbia but

"Bonanza life." That is the old environment, the

preceding environment, a world of compassion, initiative, and resourcefulness, a comfortable form of

the frontier. Very picturesque!

The habit of always using the rear view mirror for navigation is now yielding because at jet speeds

the rear view mirror has proved to be a somewhat

unreliable device. But, also at very high speeds, it becomes possible to recognize environments that were previously not noticeable.

The Effects of the Electric Technology

And so the advantages of high speed change is in the recognition of forms that previously had been

imperceptible. If education is undergoing the flip from instruction to discovery or tending that way,

there are other extraordinary flips resulting from

technological advance. There is a general tendency

to use the audience as a work force instead of as a

target or consumer. One of the strange results of the

speed-up in information processing and speed-up oi access to information is that the total audience can become involved in decision-making.

The idea of having an audience as work force, in politics and in business, is perhaps foreshadowed in the advertising world, where for some time now a new environment has been forming.

As information processes improve, the advertising

world is steadily substituting itself for the products;

that is, people now derive their satisfactions not from the product but from the advertisement.

You see, the research of the advertisers has long

revealed to them that the people who read ads are people who own the things, not the people who

should or might buy them. People read ads as a source of satisfaction, consumer satisfaction. In an

electric information environment, the ad is steadily

replacing the product. And this isn't really paradoxical. It is what we have been working to achieve for a long time.

The programming of the human environment by

information, the total programming of the human

environment by information, is more and more within reach with satellite broadcasting. You can now

program the world environment as a single shared

experience. As information levels rise and improve, we share the experience of this planet as a single

thing with everybody.

These are huge flip-overs or reversals that naturally tend to be hidden simply because they are of

such vast environmental form, and you may wish to discuss them.

One of the flips that exists now in the age of the computer is that it becomes possible to enter a

cashless society. By use of the credit card, it is possible to effect all type of transactions without any

form of cash whatever. And when it becomes possible to do something, there is usually a kind of restless itch until something is done about it.

I am going to mention one further flip-over that is taking place in our own homes, under our own

noses, and with great disturbance in our lives, but

without any recognition of the pattern.

With the coming of the circuit, man folds back

into himself. With the coming of television, man be- comes, instead of camera going out into the world, man becomes screen. Our children for the last ten years have had the extraordinary experience of growing inside themselves with television. They are on the receiving end

of that electric charge. It carries them inside themselves through the looking glass into a world,

12
ip of through the vanishing point into a kind of inner

meditative world.

The effect of television has been to orientalize the Western world. This is so vast a program or repro- gramming of the sensory life as to be completely

unobserved. But, while we are busy westernizing the

East, we are hastily easternizing the West. Our children regard parents who belong to the old Western civilization as finks, as squares, simply

because they are put together on a different pattern

from the pattern that children take for granted, of inner depth and commitment.

A young friend from Harvard was saying the other

day, "We are not a goal-oriented generation." He is a young architect. He said, "Sure, we'll learn medicine, we'll learn architecture, but we wouldn't dream

of setting ourselves a goal in life and moving steadily toward it." He said, "What we want is to know what is going on in the total human environment. We're not a

goal-oriented generation."

The hunter isn't a man with a goal. He plays the

total field, and I think electronically we are compelled to develop our perception and our awareness

this way if we are going to exert any sort of control over the next changes in the world.

The Hot and the Cool

We might ask ourselves to what extent would it be possible to have trade without information coverage, and also to what extent would it be possible to have war without information?

If there were no coverage of any sort of any war, no reports, no information, how would this change

the nature of war? To what extent is war accelerated

and raised into a potent force just by good cover- age? To what extent is information coverage, itself, aggressive warfare?

In a world in which the whole environment is made of information, it is natural that war should be

conducted by the same means and that top weaponry is increasingly that of the image. We call it the "cool" war, and that means totally involving.

I have a friend in New York, Tony Schwartz, the famous tape recording man. He said: "You know,

when I came to this part of town, years ago, the

police told me: Tony, if you are ever in trouble, never shout HELP. Shout FIRE! They said, if you

shout help, you'll get nothing. But if you shout fire, every window will go up."

Now this is the mystery of the "hot and the cool." People don't want to get involved in "help" situations; it is too "cool." Fire is a more reassuring and

less involving medium.

There is also one very relevant thing to point out about the computer, which has had its share of at- tention already. Notice that in line with the school

of the rear view mirror, the computer is being set to do all the old jobs, not the new ones. It is like the buggy whip holders in the first motor car. Computers are being given the job of card filing and retrieval. But, the computer, by speeding up the total available human experience, has in effect put outside —as the new environment—the human subconscious or unconscious.

For years I've been noticing the extension of consciousness by various technological means. The

human unconscious is the total experience of mankind, stored without any story line, just jumbled

and assembled in the human unconscious. Now,

with instant dispersal and instant retrieval sys- tems, we have the all at once. We have put outside

us, as a new environment, the unconscious which is part of that return to the age of the hunter, the most

primitive form of human society.

The Environment as the Product of Consciousness The unconscious, just because it is an all at once world of everything that ever was, now becomes en- vironmental. We can now have outside ourselves

everything that men ever were, or knew, or experienced—simultaneously. This perhaps does relate to the satellite environment of our planet, turning the planet into an old nose cone, an old hunk of camp,

an old art form.

The availability of the unconscious also insures

the future in terms of investment. I'm pretty safe, I think, in saying that the future of investment on this planet is going to be overwhelmingly the restoration

of the planet through all the phases of its develop- ment. The countless billions of dollars that will be

spent in the next decades refurbishing this planet

just like doing a Williamsburg job on the old planet —will be an overwhelming theme and area, reconstructing the total planetary process as it has come down to us through countless ages. This is the most

elaborate form of data processing that is conceivable.The extension of the unconscious compels man in the electronic age to live, mythically, as a way of

pattern recognition, and a way of coping with this vast amount of knowledge. If you look around at the changes in the world of the arts—not to mention

13
science, which is a prolific source of new myths, new

mythic form and understanding of nature—you en- counter this strange reversal. Way back in the age of the hunter, paleolithic man was firmly convinced

that he made his environment. He did it by rituals,

dances, and various cosmic communing, and behavioral patterns. Primitive men always thought they

made the world; they wound it up and renewed its energies by their rituals. Instead of just sitting, instead of just being an occupant of the world, we make it. Prior to the

Greeks, men thought they made the world; then

came a few centuries of sitting and living in the world, man contained in his world.

Then with the age of the circuit, a return to the age of the hunter, man makes his world once more, makes his environment, is no longer just an incidental content item.

Are we not moving very much back into that

state?

Is not this conference really dedicated to the theme that man makes his environment, makes his world? Under electronic conditions, we return to that strange state of the most primitive society

making our cosmos!

14
Dr. Seitz: Our next speaker is Dr. Richard Cooper,

Professor of Economics at Yale University.

Professor Cooper: When our hosts asked me to speak, they suggested that I summarize the light

which the academic subject of economics might shed on the relationship between technology and international trade, and to quantify if I could the influence

of technology on foreign trade and investment. I dutifully read all that I could find by professional

economists on this subject, much of it not yet published. On the basis of the material I could find,

I must give the profession low marks.

Economic theory has largely skirted the issue,

both on the side of technology and on the side of

trade. The contribution of technology to economic

growth has, up to now, been derived simply as a

residual, after allowing for other things which we know about.

The difficulty in quantifying the effect of technology on trade is, however, I think intrinsic, as I will try to indicate.

Quantifying the Effect of Technology on Economic Growth

Robert Solow, ten years ago, estimated that technical change accounted for about two-thirds of the growth of the U.S. economy, after allowing for growth in the labor force and in the capital stock. Edward Denison in 1962 whittled the contribution of what he called "increased knowledge and

its application" down to twenty per cent, after allowing for more efficient use of existing resources and

better education of the labor force as well as growth

of the labor force and the capital stock. Lately a more positive approach has been taken

to measurement of the contribution of technology,

but we still must rely excessively on such imperfect

indicators as expenditures for research and development, the number of scientists and engineers en- gaged in research and development, patents applied

for, patents granted, and so on. We still do not know how to measure satisfactorily the productivity,

or output of these various inputs. We assume we are

getting our money's worth, but we can't measure the value well.

Trade Theory and Reality

The situation is not much more satisfactory on

the side of trade. Most theoretical discussions of in- ternational trade involve what may be called tradi- tional trade, the exchange of food for raw materials or for simple manufactures. David Ricardo, the

English inventor of our theory of comparative advantage to explain trade flows, drew his example in terms of wine and cloth. The United States imports coffee and exports

wheat, both as a result of climatic and soil differences. Europe is often characterized as an importer of food, fuels and other raw materials, and an

exporter of manufactures.

The composition and direction of trade depends,

in the theory, largely on natural endowment, al- though occasionally special skills are also involved.

It is difficult to reconcile this theoretical picture

of trade patterns to the patterns which have actually

developed.

Manufactured products now account for nearly

sixty per cent of the value of world trade, up from

twenty-five per cent in the 1920's, and the proportion is still growing. Trade among major industrial countries now accounts for nearly half of world

trade and the share of this trade which is manufactures has grown even more rapidly than is true for

the world as a whole.

The growth in trade of manufactures does not

reflect a need to pay more in manufactures for the

food and raw materials needed by the industrial countries. It represents increasingly an exchange of

manufactures for manufactures. The growth of this type of trade is due to a variety of factors, including

the reduction in trade barriers over the last fifteen years, and the rising importance of brand name

products in consumer purchases. But a key factor may also have been the rapid pace of technological

innovation which has taken place. An innovation

adds to the list of export products, at least temporarily, and trade is stimulated.

Quantifying the Effect of Technology on Trade

We have little quantitative information on the

influence of technical change on trade. Nearly ten years ago, the Danish economist, Erik Hoffmeyer,

studied the pattern of U.S. trade and found that the

15
RICHARD N. COOPER is Professor of Economics at Yale University. Earlier, he

served for two years as Senior Staff Economist for the Council of Economic Advisers, followed by two years as Assistant Professor of Economics at Yale. He then

returned to the U.S. Government on leave from Yale to become Deputy Assistant

Secretary of State for International Monetary Affairs prior to assuming his present

position.

A graduate of Oberlin College with his B.A. in 1956, Professor Cooper acquired

his degree of Master of Science in Economics in 1958 at the London School for Economics and four years later his Doctorate from Harvard University. Dr. Cooper's publications have treated the international aspects of technical

change and long term trends in trade and economic growth, as well as international

financial issues. He has addressed himself extensively to the competitive position of the United States and to problems of national economic policy in an integrated

world economy.
United States tended to specialize in what he called research-intensive goods. He found that U.S. exports

of these research-intensive goods increased twenty

times between the period just before World War I and the mid-fifties, while exports of traditional goods merely trebled. More recently, several studies have shown that

there is a striking relationship between U.S. export

performance and several measurements we might

think are related to technical change.

Donald Keesing has found, for example, a very

high correlation, industry by industry, between re- search and development expenditures in relation to

sales and the U.S. share of exports of manufactures

by all the OECD countries. The relationship between

U.S. export performance and share of industry employment occupied by scientists and engineers is similarly high. The weight of the evidence leaves little question that there is some relationship, at least for

the United States, between export performance and

industrial research and development.

This relationship deserves closer scrutiny. First, it should not blind us to the impact of technical

change on more traditional forms of trade and,

second, we should not take for granted the direction

of causality in the relationship just noted.

As to the first point, the impact of technology is clearly not limited to the generation of new products

which enter international trade. Our attention is usually focused on these—the visible products, the

jet aircraft, the new computer, synthetic fibers, the new drugs. But the influence of technology is far more pervasive than that. In addition to these product innovations, there

are also important process innovations, improvements which lower the cost of producing and moving a wide variety of goods, including goods of the

traditional type. Examples of such cost-reducing improvements come to mind in concentrating metal

ores, producing steel, weaving cloth, harvesting grain,

raising chickens.

Some innovations have a double role. They in- volve the new product and they lower costs in pro- ducing traditional products. The sewing machine and

the mechanical reaper are now classic examples;

the machinery industry is replete with current examples.

Sometimes the so-called traditional products are themselves improved through advances in technical

knowledge. Selective breeding has increased both

the yield and the quality of many agricultural products and has produced chickens and turkeys which

far surpass their scrawny ancestors in edibility.

Purity of refined metals has been increased. New

alloys have greatly increased the performance of

these metals, and so on through most products.

Furthermore, trade has been greatly encouraged

by the impact of technological change on the trans- portation industry. The big change came in the 19th

century with the railroad and the steamship, but

these changes have not ceased. Ocean freight rates continue to decline relative to the value of goods

shipped and large bulk carriers with specialized port

facilities will make profitable the movement of large

amounts of low value goods, many being the tradi- tional products.

Air transport will come into range of an increasing number of goods as air cargo methods improve.

International air freight rates have fallen twenty per

cent in the last decade while other prices were generally rising, and the trend will probably continue

downward.

It is worth recalling, however, that not all tech- nological advances stimulate trade. Some of the major developments have the opposite effect, as when

nylon largely replaced silk, or when the Haber

process permitted fixation of nitrogen from the air and reduced dependence on natural deposits.

Such developments reduce dependence on geography and substitute, as it were, technology for ge- ography and climate, tending to lower imports.

For all these reasons, it is not possible to identify the impact of technology on trade by focusing on a short list of technologically visible goods. The impact is much more general, operating on production

costs and- transport costs as well as producing new

products; and some improvements may inhibit rather than stimulate trade. In view of this it may be asked, however, why

on such measures as we have there is in fact such

a close relationship, at least for the United States, between exports of certain goods and technological

inputs into those industries. This close relationship

has already been noted. I would suggest, however,

that it requires an interpretation somewhat different from the one usually cited or implied. This latter interpretation treats R and D expenditures as largely

autonomous, determined primarily, say, by government concern for national defense. But much R and

D is itself responsive to commercial demands for new products as incomes grow and for new labor- saving techniques of production as wages increase

and labor becomes more expensive. Technical improvements tend to respond to the demands pri17
marily of the domestic market. Many of the resulting

improvements also stimulate exports, either by cre- ating new products or by lowering the cost of existing ones. There is some evidence, at least within the elec- tronics industry—I assume the same is true for other industries—that those firms whose research

and development programs are geared toward commercial application, rather than government contract work, do much better, both in the home market and in foreign markets, than is true of firms

whose research effort is oriented heavily toward special requirements of government contracts. These

often involve very exacting requirements which domnate cost considerations. For commercial applications, cost considerations are important.

A Few Countries Are the Primary Technical Innovators

Domestic demand attracts private research, and

research success satisfies new market demands, both

at home and abroad. It is not surprising in view of

the relationship between the domestic market and

directed research, that the great majority of the in- novations take place in half-a-dozen to a dozen

countries, and that among these the United States plays a leading role. Quite apart from the effect of size—the proportion of Nobel Laureates in the last 15 years who have

been American corresponds roughly to the U.S. share

in free world industrial production, for instance

there are two reasons for supposing that the United

States might generate a disproportionate share of commercial innovations. The U.S. economy is on the

frontier of experience, as it were, in two respects:

first, per capita incomes are higher in the U.S. than

elsewhere and have continued so for a number of

years; second, closely related to that, wage rates are substantially higher than elsewhere and are continuing to rise, so that American businessmen face

before others the need to find new labor-saving tech- niques of production.

The first of these effects can be seen in a wide

range of consumer products which were first pro- duced on a massive scale in the United States—automobiles, household appliances, telephones, hi-fi

sets, small boats, small aircraft. The potential demand for such products not only generates improvements in the products themselves, but also induces

improvements in productive techniques to service the volume of demand and to bring the product

within the reach of the mass consumer a bit sooner.

High Labor Cost as a Stimulus to Innovation The second effect can be seen in the long history o

U.S. innovations directed at the conservation o

labor, which has always been high cost relative tc other productive factors and which on some occa- sions has simply not been available in the quantit) or quality required to satisfy domestic demand witl old techniques of production.

The sewing machine, the linotype machine, th< typewriter, shoe machinery, and down to data sorting

machinery and the computer are only the best knowr

of these labor-saving innovations.

Labor-saving innovations were often U.S. inven

tions. The need drew creative attention to possible

solutions. Very often the inventions were mad<

elsewhere but first widely used in the United States where there was a wide receptivity to improvement!

in techniques.

A typical illustration of the importance of receptivity as distinguished from just the generation of nev

products is offered by the sewing machine, which ir a primitive but effective form was invented by * Frenchmen, Thimonnier, sixteen years before Elias Howe constructed his machine in the United States

It was actually used to mass produce uniforms foj the French Army (an earlier example of governmen

support for innovation), but the Parisian tailor: formed mobs, smashed the machines, and forcec Thimonnier to flee to Paris. The labor-short U.S

economy could not afford the luxury of foregoing an important labor-saving device.

Resistance to technological improvement is no

absent today on either side of the Atlantic, but pre- sumably it is not carried to the lengths of the Parisiar

tailors. So long as labor costs are highest in the United States, however, and are expected to rise further, the incentive to devise new labor saving

techniques will be strongest there. As wages rise ir Europe and elsewhere around the world, business- men there will be passing through a range of ex- perience already passed in the United States, anc

the possibility of borrowing labor-saving technique;

rather than having to generate them will be mucf

greater.

On both counts, high per capita incomes anc high and growing wage rates, innovation is there- fore likely to be somewhat stronger in the Unitec

States until incomes elsewhere and labor costs rise to the U.S. level, a day that, at least for Europe, if

still some distance off, but is at least within sight

The choice of technology available to less devel- oped countries will be even wider and it is at presenij
i matter of considerable debate whether they should

0fn general adopt techniques now obsolete in the maor industrial nations but which are appropriate to

tojthe availability and cost of labor in those countries,

)cc a.3r whether they should adopt the latest, most up-todate techniques even though they are labor laboraving.

The Stream of Innovations

Technological innovation can undoubtedly

strengthen the competitive position of a country in which the innovation takes place, whether it be one

which enlarges exports or displaces imports. However, technological advantage in any one product is

iade transitory. Once a break-through has been made, the new information is typically spread widely. Underlying cost considerations will ultimately govern where

it will be produced and where it will be used. For the impact on trade, we must look not to the

individual product (because of obsolescence it may

not even be marketable long enough for basic cost considerations to come into play) but to the stream

of new products and processes, each one often re- placing previous ones. The advantage which accrues to a country's trad- ing position depends both on the intensity of the stream of innovations and on the rate at which new

knowledge is put into use elsewhere, where the basic

cost advantages lie.

Intensity of the stream is partly accidental, the product of individual and uncoordinated inventive

effort, but it is increasingly the product of systematic

and coordinated application of talent and resources

to discovery.

What we may call the research and development

industry, programmed expenditures for the development of new techniques and new products, absorbed

in the United States only two-tenths of one percent

of GNP in the early 1920's, but has grown to 2.8 percent of GNP in 1960 and must be three percent

today. Even excluding government financed research

and development, the expenditure grew sharply from

the '20's to over 1 percent of GNP for commercially

financed R&D today.

Business incentive to develop new products is strong as the public with steadily increasing incomes

gets sated with the traditional necessities of fife. Other countries have experienced a similarly rapid

growth of programmed R&D expenditures over the same period.

Is Spill-Over a Significant Source of Innovation? Not all of these expenditures contribute to the stream of commercially relevant innovations. Much

R&D expenditure, especially in France, Britain, and

the United States, is financed by the central government in pursuit of national defense. There is a lively

debate about how important is the so-called spill- over from this military research. There are a few

examples where military R <fe D has had clear commercial application, such as the jet engine. In other

cases, military R&D has pioneered a field and led to further development work aimed at the civilian market. This was to some extent true of computers

which started on government contract. But students of these spill-overs in the United

States find them to be surprisingly small. They are

difficult to quantify but it is noteworthy that in the

mid-fifties only four percent of all patent applications arose from defense contracts, even though the Defense Department financed roughly half of the total U.S. R&D. Furthermore, commercial utilization of private patents arising from government-financed

R & D is only thirteen percent, compared with

around sixty percent for patents arising from private

development work. One aerospace firm reported that out of four hundred patent applications accumulated

by the end of the 1950's, only three had commercial

application.

Indeed, there is some concern in this country that very large government R <fc D programs may actually reduce the stream of commercial innovations by

drawing away critical scientific and engineering tal- ent into military and now space work to a greater

extent than the pool of such skills is augmented by

the attractions of these programs. Fewer men are

available for commercial research and development.

Finally, even when there are spill-overs, much

commercial R & D is often required to adapt them

to the commercial requirements. It has often been

firms other than those doing the military work which

have made the products commercially successful. As

noted above, export success, at least within some

industries, seems much more closely related to privately financed research and development expenditures than to total research and development expenditures.

International Diffusion of Technology

The intensity of the stream of innovation is only one factor governing the trade advantage a country

gains from technological change. The second impor19
tant factor is the rate at which new knowledge is diffused abroad. Unless the innovating country enjoys

a basic cost advantage in producing the new product,

its trade position is enhanced only to the extent that there is a lag in time between its production of the product and new production in other, lower cost

locations. While the evidence we have is only fragmentary,

it does not seem as though the international diffusion of new techniques of production or of new products

is much more rapid today than it has ever been in the past.

The point is illustrated by the quip of a few years ago which went, "In January, an American invents a new product; in February, Tass announces that a Russian had invented this product thirty years ago;

and by March, Japan is exporting the product to the United States." In times past, great efforts were taken to prevent

the diffusion of technological knowledge to preserve monopoly for those with the specialized knowledge.

The secret of Tyrian purple was so tightly kept by

the Phoenicians that it was lost in the course of

time. England, seat of the industrial revolution, was much aware of the advantage it gained by the new

machinery and took stringent measures in the 18th

and early 19th Century to prevent the export of machinery, especially of textile machinery. The export

prohibitions on capital goods were not finally re- moved until 1 843.

France had similar restrictions. Many Germans

were worried about the export of capital goods right

up to the eve of World War I out of fear that it would undercut their markets.

Knowledge can be transmitted through emigration

as well as through the export of capital goods. The

first spinning mill in the United States was set up by

an Englishman, William Slater, in 1790, who had to memorize the machine design before he emigrated.

Britain was very much aware of this possibility

and imposed heavy fines on skilled English workmen

who went abroad. Those who were abroad for more

than six months, despite notification from the British Embassy to return, lost their British citizenship and

all their property was confiscated.

This kind of impediment to the movement of

knowledge was largely swept away by the free trade sentiment of the 19th Century, and today such re- strictions are generally limited to goods of military

application. Even without such deliberate impediments to diffusion of technical improvements, diffu- sion has been slow, but it has been accelerating. The

evidence we have is largely anecdotal, but as ai illustration consider the typewriter, which was in vented in the United States in 1868 and by the mid'

eighties had quite a large market in this country. I

first appears as a separate entry in U.S. expon

statistics in 1897 with exports amounting to $1.4

million. A report of 1908, eleven years later, indi- cates that American typewriting machines had onh

German competitors in Europe. Actually by thaji time there were also two British firms with exports

of $90,000, a negligible amount compared with UM

exports of $6V2 million. Broadly speaking, it took! twenty years from the time of heavy marketing ini the U.S. to the time of modest exports by the few

leading competitors, Britain and Germany.

Compare this with more recent developments.

Within a year of the introduction of stainless steel razor blades by Wilkinson Sword, a British firm, several American firms had competing blades on the market. This was a defensive response and it was

rapid. The inauguration of new techniques has only

been slightly less spectacular in other areas. Float

glass was produced in the United States only four

years after the pioneering production began in England. Many computers have been produced in Europe within a relatively few years after they were

first marketed in the United States. Even where international trade is not directly in- volved, new technology moves quickly. For instance, U.S. firms introduced much more efficient methods

for generating electricity from coal in 1949. By

1956, seven years later, all new French generating

capacity incorporated the new technology and a substantial part of new British capacity did. We have other indications of the rapid diffusion of technical knowledge. One is the so-called international patent crisis, where the number of cross-filings

has increased to such an extent that most national

patent offices are in heavy arrears in their work. A

second is the great expansion of patent licensing across national frontiers. The United States alone

earned more than $1 billion from foreigners last year

in royalties, license fees, and management fees—exports of knowledge, disembodied from exports of goods and even, in many cases, from exports of capital.Finally, there has been a large and growing

amount of direct foreign investment abroad—the creation of the multi-national firm. Such investment

tends to diffuse technical knowledge and management skills as well as, or even perhaps more than,

capital.

20
S a Leads or Lags? ^

I will close by venturing some speculation on

these trends. In the first place, they offer some parj :ial explanation for the baffling conjunction of two

irguments, one on the eastern side of the Atlantic,

J that the so-called technological lead of the United ^

States is increasing, and the other on this side of the

^ Atlantic, and with some vigor only a few years ago,

1 that the U.S. competitive position in world markets

is being weakened because of a diminution in tech-

"' nological lead. In fact, both arguments probably

. represent unwarranted generalizations from particu- ^

lar examples and, of course, both tendencies can be

observed simultaneously by looking at different in- dustries.

its A more sophisticated reconciliation would refer to the two basic dimensions that I have just been dis- cussing. The intensity of the stream of innovations

from the United States may have increased—we still await evidence on whether that is actually so—but

at the same time, the rate of diffusion of this knowledge to other countries has also increased. From the

. viewpoint of competitiveness in international trade,

" it is the product of these two factors which is important, neither one alone.

rt

1

Speculating on the Future Basis of Trade

The very rapid diffusion of new technological

knowledge along with the great accumulation of

capital which is taking place in most countries suggests a deeper irony. It is that most large countries

will become more alike over the course of time in their structure of production and levels of income,

and they can become economically more self-suffi- cient. The basis for trade among them will be undercut. There is already some evidence that most Western countries do look more alike in the structure of

their production, particularly in manufacturing production, than they did in the past.

Trade has certainly not diminished among these

countries, even relative to output, but even while

technological change throws up new products for

trade, rapid diffusion of this knowledge reduces the underlying basis for trade. One can even speculate—idly, for most of us

that in the course of time there will be a swingback

in relative importance to the traditional trade with

which we started out—trade in food and raw materials, whose production costs are rooted in climate

and natural endowments—while advances in tech- nology and rapid dissemination of new knowledge

permit many countries or small groups of countries

to produce their own requirements of the other commodities or services. Perhaps this is one of those historical reversals to which Professor McLuhan has referred, like the complete cycle from a tailor-made service economy

through mass production and back again.

21
Dr. Seitz: Thank you very much, Professor Cooper.

Now, we will begin the discussion period and I would

first like to call on two formal discussants. The first

is Dr. Hendrik Casimir, Director of the Research

Laboratories of the Philips Industries of Holland.

Dr. Casimir: I am not certain that the remarks I am

going to make relate directly to what the two

speakers have said, but I should like to make a few

comments on the role of basic science in technology.

Fundamental science is and should be an aim in

itself. It is one of the most noble endeavors of mankind to discover curious facts, to relate the apparently unrelated, to build abstract edifices of theory,

to probe the universe as astronomers do, and to probe the smallest particles as the high-energy physicists do.

It creates a beauty, an understanding and harmony. One doesn't perhaps go so far as Heinrich

Hertz, who, when working on his thesis, said to his mother: "Poor mother. What a pity that this type of beauty will forever remain a closed book to you."

Had I said this to my mother while working on my

thesis, she would have said, "Oh, yes, you are a dear little boy, but don't talk such ridiculous nonsense." But then she was a very wise woman. It happens, however, that this basic science provides

increasingly the tools without which entrepreneurs

and inventors and innovators would be completely

helpless and without effect.

The Debt of Technology to Basic Science

I have heard statements that the role of academic

research in innovation is slight. It is about the most

blatant piece of nonsense it has been my fortune to stumble upon.

Certainly, one might speculate idly whether transistors might have been discovered by people who

had not been trained in and had not contributed to wave mechanics or the theory of electrons in solids.

It so happened that inventors of transistors were

versed in and contributed to the quantum theory of

solids.

One might ask whether basic circuits in com

puters might have been found by people who want,

ed to build computers. As it happens, they were dis-

covered in the thirties by physicists dealing with the|

counting of nuclear particles because they were in- terested in nuclear physics.

One might ask whether there would be nucleai

power because people wanted new power sources 01 whether the urge to have new power would have led to the discovery of the nucleus. Perhaps—only it didn't happen that way, and there were the Curies

and Rutherford and Fermi and a few others. One might ask whether an electronic industry

might exist without the previous discovery of elec- trons by people like Thomson and H. A. Lorentz. Again, it didn't happen.

One might ask even whether induction coils in motor cars might have been made by enterprises

which wanted to make motor transport and whether

then they would have stumbled on the laws of in- duction. But the laws of induction had been found

by Faraday many decades before that. Or whether, in an urge to provide better communication, one might have found electromagnetic waves. They weren't found that way. They were found by Hertz who emphasized the beauty of physics and who based his work on the theoretical consideration of Maxwell. I think there is hardly any

example of twentieth century innovation which is not indebted in this way to basic scientific thought.

Basic Science Awaits Use by the Entrepreneur

I am quite certain that sooner or later the work

that is now going on in high-energy physics, on

problems like parity conservation and the eight-fold

way and the theory of unitary groups and so on,

will in some way or other lead people of enterprising

mentality and of inventive skill to come forward

with entirely new branches of technology.

These basic aspects of science are common property. They are available to the whole world, for everyone who wants to study them, and by the time

they are being used they are usually condensed in excellent textbooks and manuals. You don't have to repeat these studies to be able to reap the harvest,

but one must have certain powers of absorption.

One may ask whether these can be obtained, can be

present to a sufficient degree without some involvement in the scientific field.

22
HENDRIK BRUGT GERHARD CASIMIR is Director of Research Laboratories

for the N. V. Philips Industries of Holland. Concurrently, he serves as a member

of the Advisory Council for Science Policy of the Dutch Ministry of Education and

Sciences, The Hague. He is currently in the United States as a member of the Team of Examiners of U.S. Science Policy for the Organization for Economic

Cooperation and Development.

He has been with the Phillips organization since 1942, assuming his present

position in 1946 after four years of research in physics. Preceding this, he was for ten years Professor of Natural Science at the University of Leyden.

Dr. Casimir, a native of The Hague (1909), studied theoretical physics at Leyden with Ehrenfest, at Copenhagen with Niels Bohr, and at Zurich with Pauli. He

was awarded his Doctoral Degrees in Mathematics and Natural Sciences by the

Universities of Leyden and Copenhagen. Dr. Casimir is the author of numerous

publications in the fields of theoretical physics, applied mathematics and low temperature physics.
The Tie Between Scientific Competence and

Economic Development

The case of Japan was mentioned. It is true they

went into transistors without very large investments

in solid state research, but in my view their proficiency in absorbing knowledge is not entirely unrelated to the fact that Japan, after all, produced two

Nobel Prize winners in physics and a number of other leaders in research.

It has something to do with the fact that Japan

before the World War pioneered in certain magnetic materials. It has to do with the fact that on the

roofs of our houses we find television antennas of

the Yagi type, invented by Professor Yagi in Japan.

He was a man who encouraged Yukawa not to study atoms but nuclei, and so Yukawa was led into the study of nuclear forces. This indirect route made

him not only the winner of a Nobel Prize, but also the originator and father of high energy physics.

And it has something to do with the fact that, at present, in the Japanese school of theoretical solid

state physics, a man like Kubo is dominating parts of the field. Is this mysticism? You will have a hard

time to convince me that this is a myth that, should

be broken. I might conclude with one or two ex- amples from my own country which show that proficiency in certain research may not lead to technological and commercial results, without the sup

port of sufficient enterprise, but that in another wa]

it still has certain influence in the whole picture. Let's take three cases of Dutch Nobel Prize winners: Kamerling Onnes, who liquefied helium anc discovered superconductivity. It did not lead to ar immediate development of cryogenic industries ir the Netherlands. It didn't give us—even though th< primary logical circuits were also made in Hollanr

in the thirties—it did not give us a great advance

toward launching a cryogenic computer. Technology

and industry weren't right for that. Yet when ir Holland one decided to tackle certain aspects oj cryogenic engineering, the existence of this traditior helped us quite considerably.

The fact that electrocardiography was discovered

in the Netherlands did not lead at once to a grea; business in electromedical equipment. Yet the fad

that there was a general level of medical research contributed to the fact that Holland now exports c lot of x-ray equipment to other countries.

The invention of the phase contrast electron-microscope by Zernike did not lead to a great manufacturing enterprise for such microscopes. Still, it is in my opinion related to the existence of a pros- perous optical industry in the Netherlands.

These are the few remarks I wanted to make anc which perhaps can be contributions to the discussions of today and tomorrow.

24
ip.

aj

iiiad

anIfr. Seitz: Our next formal discussant is Dr. John E.

heleynolds, who is advisor to the Division of Inter- national Finance for the Board of Governors of the

ce'ederal Reserve System in Washington, D. C.

in

ofJ|r. Reynolds: I think it is important that we give

he audience a chance; therefore, I will try to be

1(jfery brief indeed. Perhaps the most useful thing I

a(;an do is to note the one or two of the points at

c( vhich it seems to me the different remarks we have

.jieard this morning bear upon each other.

a Seeing Things as a Whole

I One of Professor McLuhan's themes is that the Hew technology, the electronic or the information

isechnology, enables us to see things whole; indeed, it s-:ompels us to see things whole. We have to take

efuge from information overload in something he

id:alls pattern recognition.

1S I think throughout all the major speeches of this norning has run the thread of "having to see things

vhole" in analyzing the role of technology in world

rade. I see this in at least three different aspects.

Learning to Use Technology

First, that we have to have a sense of history; that ve have to see a time continuum, and recognize that he past is linked with the present and that with the

'uture. Both Secretary Connor and Dr. Seitz reminded us that man has had technology as long as we

lave any record of his existence. Technology and

trade have been the essence, really, of our whole

rise from the cave up to our present state of life. And while, as Professor Cooper says, economists

will differ on whether it has contributed one-fifth or

three-fifths of our progress—depending on how they

allow for education—still that's where economic

growth comes from—technology. While we perhaps

can't measure it quantitatively, we know that it is so and we recognize the success in the adaptation to and the exploitation of technology to meet human

needs.

I think we haven't made a quantum jump into a brand new kind of world with our new technology,

but we have a long experience of making use of tech- nology. Our pace may be faster now than before, so

that we have to learn to adapt ourselves faster than

before or run greater risks of not adapting, but we

can still learn from the past. Economists who plot

growth rates find that they are faster now than they were—but it is four percent per year instead of

three, or perhaps four-and-a-half percent instead of

three, rather than some brand new order of rate of change that we are experiencing.

The Characteristics of Trade and Investment A second way in which it seems to me we need to see things whole—and this, too, was stressed by several of the speakers—is that international trade and

investment are really only aspects of or extensions

of trade and investment as a whole. Economists may

be partly to blame for having made the study of international trade such a very special thing as if an

export were quite a different thing from ordinary

shipments say from Buffalo, New York, to Atlanta,

Georgia. They are very similar things, and while national boundaries are there and matter—matter very much to lawyers, matter very much, too, for certain tax purposes and so on—still the essence of the way

in which technology contributes to the quality of life

is quite general and can't be viewed as different in

its international trade and investment aspects than in domestic trade and investment aspects.

Viewing Economics Globally

Finally, I think Mr. McLuhan has impressed

upon us that the world has become really a globalsized village and we can't so readily take partial and

private viewpoints of the needs of the world. We

have to think, really, of the thing as a whole, now. We are doing that more and more, and one reason we have moved ahead rather successfully in an eco- nomic and technologic way during the two decades

since World War II is that we have been taking an

over-all view. It is true in the field in which I work,

international economic policy; and, incidentally, I think that the extent to which we profit by tech- nological advance is importantly conditioned by

whether we follow sensible or foolish economic policies.People talk of competitiveness, but you can't talk of that in technological terms alone; it has to do

with prices and exchange rates as well as with physical characteristics of processes. The OECD has been

25
JOHN E. REYNOLDS is presently principal Advisor to the Division of International Finance of the Board of Governors of the Federal Reserve System. He was

for two years Staff Director of the Review Committee for Balance of Payments

Statistics, more familiarly known as the Bernstein Committee. He joined the Staff of the Federal Reserve Board in 1953 following three years with the Bank for International Settlements in Geneva, Switzerland where he served under Per Jacob- son in the Monetary and Economic Department.

Mr. Reynolds studied Economics at Harvard University, receiving his Bachelor's

degree in 1944 and his Master's in 1950.
mentioned. It is very encouraging that people go

regularly from all over the developed world to meetings in Paris of the OECD to consider together how

they may jointly improve their policies towards the development of technology and also their economic

policies which bear on the rate at which technology

can be usefully applied. The very days of this Symposium are also days for another round of meetings

for the OECD Science Policy and Economic Policy

Committees.

Professor Cooper mentioned two reasons for the very rapid expansion of world trade in recent years, two among several. One, that trade barriers have

been lowered, and, two that the pace of technological innovation has been rapid. These two in- teract very much. We have had to lower the trade

barriers in order to take advantage of the technology

and, conversely, by lowering the trade barriers, we

have broadened the scope of beneficiaries from tech- nology. I agree with the Secretary, most heartily, that the main task for all of us is to keep things free and remove obstacles, as much as possible.

Can We Learn to Transfer Technology Across

the Equator?

There is a tendency to focus on the problems of

flow of information and technological gaps mainly

across the Atlantic, whereas in my view, the problems are much less serious across the Atlantic

than they are across the Equator. I hope at some

point during this meeting that people will take a good hard look at the problem of how you transmit

technology from highly developed countries to less developed countries. The challenge is that this needs

to be done with none of the long experience we have

had and needed in building up stable governments

with some support from scholastic research experience. Looking back from fifty years from now, the

real test of our times will have been not whether we

have got along well across the Atlantic, but whether we were able to transmit to the much poorer countries of the Southern Hemisphere the means of making progress.

QUESTIONS FROM THE FLOOR

Dr. Seitz: The session is now open for questions or comments. Does anyone wish to start?

Dr. Melville Green (NBS): I was much stimulated

by Professor McLuhan's talk. He has ways of describing patterns by which we can try to understand

our current civilization and the one that is rapidly

bearing down on us. However, some of his patterns seem to be somewhat contradictory and I wanted to ask him to clarify. In particular, he was discussing our young people and he said that they are learning by discovering

rather than by sitting in a classroom and being

taught.

The image is of a more active pursuit of knowledge. This was reinforced by his image of the

hunter. However, toward the end of his talk he mentioned that we all seem to be turning into television screens and becoming more oriental and perhaps more passive.

I would like him to comment on what seems to me a contradiction, or perhaps one shouldn't at this

stage of the game look for consistency but rather as

in modern physics, find complementarity.

Professor McLuhan: Yes, I wished to indicate that the coming pattern in education is moving away

from instruction toward discovery, just as in busi- ness and other organizations generally, people want more involvement. It doesn't matter what the age group or the operation is. In the same way, children

today, in their new electric environment, have come

to expect much more involvement in the decisionmaking and in the learning process.

I don't say we have done anything about this. I didn't wish to indicate that anything has been done

about this. Nothing has been done. But the children

are sitting there waiting to be involved in the process of discovery by being sent out into the society in small teams to do research, to discover and thereby

learn. Professor Oppenheimer used to say, "There are

kids playing here on the sidewalk that can solve some of my toughest problems in physics because

256-707 0-67—

27
they have modes of perception that I lost forty years ago." The idea that you can use children in high

level research is not something we are doing anything about. No. It is just a coming possibility, that's

all.The other matter of TV screens refers, not to passivity, but to the exact opposite. TV is a profoundly

involving medium because it takes us inside ourselves actively and inquisitively on a kind of a trip, as it were. LSD and TV are closely related. LSD is merely a physiological analogue to TV, and the craze for LSD is nourished by the TV screen. The

TV screen is not the movie screen, it has nothing to do with the old movie camera technique. You see, the movie camera extends the eye and takes you out

into the environment. TV does the exact opposite. It takes you inside yourself.

Existentialism, which came along with electric cir- cuitry, began with this interior trip into the darkness

of our own being. Kierkegaard and Sartre and such

people are all part of the western movement in- wards, for the investigation of the new frontier. Paradoxically, the new interior trip is unique and

singular, is not mass produced; people go on talking

about mass production and mass education without

noticing that they each now have the exactly opposite character. For the young people in our world

today, movement is toward the unique and the sin- gular and away from the mass produced and the

general.

So the points that were raised by your question

are typical of just how difficult it is to discuss the matters that are part of our current environment. It

is much easier to discuss the old rear view mirror

image than it is to tackle what is right under your

nose. It is very difficult to discuss the present. I have

a friend who says the future of the future is the

present. True, but the difficulty is to see the present.

Very difficult.

Dr. Seitz: Another question?

Professor Rao: We have heard, at this meeting and

others, discussion of the effects of science and tech- nology on international dealing and investments. I would like to suggest that the effect of technology in the last twenty years has hardly been sensed in the developing countries as far as their international trade or even their national income is concerned.

What has been the effect of technology and

science on the exports of developing countries? How

far has it reduced their external dependence? How

far has it reduced the gap between their national n income and that of other nations? Japan has had a is remarkable experience, but other nations have not. lie think it would be very good if some research were tc ti be done on that subject and I hope that this sympo- n sium and others to follow will deal with that. Should] I we not deal also with the more effective utilization j \ of the resources already available in developing t countries rather than weakening those needs and de- I mands by displacing those resources by synthetics

and technological substitutes, for example? •

\ Dr. Seitz: The question, as I think all of you heard,

is about what the effect of the technological develop- ' ments, since World War II, upon the developing

countries, treating Japan as somewhat of an excep i tion. To what extent have these countries been ' helped or hindered? Moreover, to what extent has I the development of such things as synthetic textiles had a deleterious effect in the natural fiber industries I of the developing countries? ;

I wonder if one of the panelists would care to ' speak to this. Professor Cooper? I

i Professor Cooper: I agree very much with Dr. Rao

that we need careful study of this question. I would , not, as a preliminary hypothesis, start out with the

| view that the impact of science and technology has , been nil or close to nil.

It is true that the great growth in trade in prod-; ucts having a high technological content has pre-i

dominantly been among industrial countries, leaving

aside, as he did, the export of capital goods to the! less developed countries.

Most of this vast growth of trade has taken place

among the industrial countries and the less devel- oped countries have been in a kind of a backwater.

Still, one can point to numerous examples where ad- vances in technology have contributed to the foreign

exchange earnings, the additional receipts, of less developed countries. Things come to mind like the

greatly improved strains of rubber which are now

being produced and exported from Malaya, the development of new and lower grade sources of metal-!

lie ores which due to improvements in the concen-;

tration process and reduction in the cost of bulk! transport permit earnings from what only a few

years ago was regarded as worthless dirt. Develop-!

ments in transportation, refrigeration, have stimulated the whole banana industry.

What is striking about the examples that I have

given is that they all focus on primary products andl

28
not on manufactured products. What has happened

.is that the growth in exports by the less developed

^countries has been in products with quite a low

^technological content. It would be useful to have

vmuch more detailed scrutiny of why it is that these ^tremendous improvements in available technology

[have been left relatively to one side in the less deveitoped countries and have not affected their manufacI'

turing operations much.

Dr. Seitz: Any other comments? A question over

[here.

!.Mr. Charles Vetter (United States Information

i Agency): As prompted by Mr. Reynolds' discus-

[sion, I'd like to hear a comment on barriers to the

i movement of knowledge across the Equator. Are

these barriers attitudinal, motivational, conceptual?

We see the same barriers domestically in the ur- ban problems that we have. There seems also to be

a parallel between the problems between cultures within our own country, like Appalachia or the ur- ban slum area, and the problems of international

movement of trade and technology.

I would like very much to hear Mr. McLuhan's

comments on means for influencing the attitudes that are the barriers and perhaps on how technology can be more effective in our training systems for people who are promoting the movements of ideas.

Dr. McLuhan: Well, sir, that's a big order. It has

been the traditional function of the arts to train our

perception. The artist is the only person who can

look at the present, at new environments without

fear, and can report what he sees by new patterns

and new styles.

The artist has training in perception rather than a blood bank or store of values. Pop art today, for example, is attempting to tell us what our environment itself is—the environment itself has become an

art form.

But the training of perception in regard to new

technologies and their effects has never been undertaken, except indirectly by the artist. Someone said once, "We don't know who discovered water but we

are pretty sure it wasn't a fish!" We are all in this position, being surrounded by some environment or element that blinds us totally; the message of the

fish theme is a very important one, and just how to get through to people that way is quite a problem.

We have from the moment of birth a fear of the new environment. We always prefer the old one. We

learn by going from the familiar to the unfamiliar.

In practice, this means whenever we account for the

unfamiliar, we translate it instantly into something we already know. In other words, we refuse to look

at the unfamiliar. Our built-in mechanisms of cognition seem to make it impossible for us to recognize

the new until we have translated it into the old. Now there is a technique for discovering the new

in spite of our built-in pattern map, and that is by

inventory. If you make an inventory of all the effects of the telephone or radio on a society, you will dis- cover a pattern. You have seen the transistor radios

teaching children to make their own space bubbles

for privacy. Our kids don't listen to radios; they use them as space bubbles for privacy. This has never been studied, but the radio, the use of radio as space

in the space age is the type of thing that is having

tremendous effect on the lives of the young. You

can study these effects by inventory, what effect it has on clothing, on cars, on schooling and so on. It

is very difficult to study them by any single concept

or point of view.

These inventories yield awareness of new forms

that you couldn't get by any other means. This is also where the young can enter the field of research. The young are very good at making inventories of

their surroundings; they can become hunters by

roaming the evironment, and at the same time getting smart.

Dr. Seitz: I think we have another question here.

Dr. Melville Green (NBS): Professor McLuhan

brought before this conference the idea of myths

myths as a spring of action. Dr. Seitz and Dr. Casimir later on referred to myth in the relationship of classical technology to science. We heard about the myths of technology in developing countries. Myths seem more useful than we may wish to admit. Perhaps what is necessary is a truer understanding of the positive role of myths.

Dr. McLuhan: The word myth is the Greek word

for work. Mythos is a work, and is considered a breakthrough. Mythos has a way of explaining some

event. The myth is a way of explaining a complex

process in a few phrases. As a technique of explanation of cause and effect, it is coming back into much

use. Many of the things we call natural laws or ways

of describing events are in the old Greek sense of

the word, myths.

29
There is a phrase, "Every breakdown is a breakthrough." This is a mythic form of awareness. Every

breakdown is a breakthrough, whether it is in pri- vate life or in a corporate organization. Whenever

you break down, you have just encountered a very

rich untapped potential which creates a new form.

Dr. Seitz: Near the rear?

Comment: It seems to me the discussion this morning points up a fact which is overlooked in the application of technology in international trade. Because we are working in a computer age with things

happening at electronic speed, we expect everything

to happen both nationally and internationally at computer speed.

It is evident to many of us that in the applications

of science and technology in industry that, some

twenty years after the end of World War II, we are

just beginning to apply many of the outgrowths of

military research. Dr. Casimir has beautifully pointed out that the application of fundamental research has taken any- where from ten to seventy years before it found util- ity in engineering practice or application.

We are very impatient to expect that the rapidly

developing technology is going to be exported and

accepted to produce great forward strides in undeveloped countries immediately.

We have to recognize that in these affairs there is a time lag, that the precursor conditions of education, of acceptance of technical ideas and the ability to use them, have got to come first. When they do,

then the applications of technology based on fundamental research in the more technologically advanced countries will find a fertile ground. There

will be seeds that will be planted, will grow, and will

increase the potentials of the undeveloped countries

to have international trade in technological commodities.

Mr. Reynolds: I would like to add just one thing to

that. I think too that the international diffusion of technology depends very much on the ability of the relevant people in each country to be able to recognize breakthroughs when they occur, and to adapt

them to local requirements. This requires a substantial base of technologically alert people.

One can draw a distinction here, between those

who are actually generating new ideas, new products

or new processes and those who are very quick at recognizing the useful developments of others. The

second is very necessary. One of the developments which has taken place is the tremendous growth of study abroad, especially

in science and engineering and some of the social sciences. Students converge from all around the! world on American and Western European universities, and this will in the course of time create this body of people who can receive and identify, recognize and adapt innovations that take place else- where.

One of the disturbing results that we have recently observed is that the rate of return of many people

from less developed countries from Western Europe

and North America to their homeland, is in some

cases strikingly low. This process of education

abroad at least to some extent robs these countries

of some of their best talent. But there is some re- turn. It varies a lot from country to country and I think we should work toward getting it up.

Dr. Seitz: Thank you. This morning's session is now

ended and we shall adjourn for lunch.

30
Luncheon Program

Introduction: Mr. Herman Pollack

Director of International Scientific and Technological

Affairs, Department of State

Mr. Pollack: Mr. Secretary and distinguished guests.

The prospects and problems associated with the development of technological capability and the

movement of technology among nations are now the

object of serious attention in many countries

throughout the world. I am sure, therefore, that the discussion under way here at this great and venture- some symposium will be followed with great interest by an international audience of governmental, industrial and business leaders. The need for a better understanding of and more

factual data on these subjects is abundantly clear. This symposium and others that will undoubtedly

follow will do much to illuminate and clarify this most complicated topic. I think you will agree that we have witnessed a splendid beginning today to what I am convinced will be recalled in subsequent

years as a landmark meeting.

The locale for such a meeting could not be more

appropriate. From its beginnings at the turn of the century, the Bureau of Standards has recognized the

need for international understandings and agree- ments in the area of technology and standards. The

Bureau has been a pioneer in projecting the United

States into international scientific and technical cooperation, and I think these new laboratories are ample evidence that the Bureau does not intend to

rest on its laurels. Along the way, the Bureau has made many

friends in many lands, and those here today have come from many lands. Among them is our speaker

at this luncheon, Mr. Pierre Uri. He is both a philosopher and an economist, and I think perhaps the combination and the marriage of these two disci- plines provides insights very useful to the subject

that we are here to consider.

It is an honor and a great personal pleasure to introduce to you one of France's most brilliant citi- zens and a man who I am sure will be identified with the future development of European unity, Mr.

Pierre Uri, Counselor for Studies of the Atlantic Institute.

31
HERMAN POLLACK is Director of International Scientific and Technological

Affairs for the U.S. Department of State. During his 25 year career in the Federal

Government, he first served in a variety of assignments in the Office of Price

Administration. Following a period in the U.S. Army, he was with the War Shipping Administration and the Foreign Economic Administration. He began his service with the Department of State in 1946, holding positions as Deputy and Acting

Executive Director, Bureau of European Affairs; Executive Assistant, Office of the Assistant Secretary for Administration; Director of the Management Staff; and

Deputy Assistant Secretary of Personnel.

A native of New York City (1919), Mr. Pollack is a graduate of the City

College of New York, and holds a Master's Degree from George Washington University.
PIERRE URI has made many important contributions to French economic policy

and to the creation of the European Economic Community. As Economic and

Financial Adviser to the French Planning Commission under Jean Monnet, he set up the first French economic budget in 1947. He was active in the conception and

negotiation of the Schuman Plan and had an important role in launching the Coal

and Steel Community. He then made the plans for the Common Market by preparing and writing the Brussels or Spaak Report, which served as a basis for the Rome Treaties. He was a member of the committee which in 1948 produced the report on

National and International Measures for Full Employment, and in 1957 he was

consultant to ECLA on a Common Market for Latin America. He has, as well,

served as a member of two ad hoc committees of the A lliance for Progress.

He chaired the group which produced the 1958 Report on the Economic Situation of the European Community, and then was Chairman of the group of experts

which studied long term development prospects in the Common Market. Among

his books, one may cite Partnership for Progress (Dialogue des Continents), A

Monetary Policy for Latin America, and just published, That We May Govern

(Pour Gouverner).

At present he is Counselor for Studies of the Atlantic Institute in Paris.
Speaker: Mr. Pierre Uri

Counselor for Studies, Atlantic Institute, Paris, France

Address: International Competition and Cooperation in Technology

Mr. Uri: Thank you, Mr. Pollack.

We have been told this morning that we are in a world of accelerating technical progress, that we are witnessing some new patterns of trade. The question

to which we have to address ourselves now is how

far this change in environment should lead to certain changes in our traditional views of policies. We

might only be in need of some adjustments in tradi- tional economic theory, because the old pattern of

competitive advantage seems now to yield to the very fact that there are now people with advanced

production of something which the others can't produce, and that's the most absolute advantage

which you can think of. This doesn't necessarily make for one-way trade

because, as has been pointed out, this technology can be learned, and can lead to a reverse trade when

it has been learned by people who have lower

wages. In other words, the way trade is now working is by innovation, then imitation, and finally the reverse trade. Now, we know that this is not new. We have been

told of the technological advance of Phoenicia and

of China in the old days, but probably it is now a

bit broader than it use to be, and people begin to be a bit jealous of the ones who have an advance on

this. Let us be quite clear. It doesn't take technical

advance to balance one's accounts and the United

States is the witness to that. But it means simply

you can balance your external account with a higher

standard of living.

The Technological Gap and Its Influence on

Trade

If, as some people maintain, there is a tech- nological gap, let's not complain about it. If it did not exist, the worries of our host, Secretary of Commerce Connor, about the balance of payments might

be even worse. The real question now before us is whether this inequality, if any, is going to be in- creased or whether there are appropriate policies so

that the whole world may benefit.

Measures of Influence of Technology on Trade

One point is immediately clear. It is very often

maintained that the balance of sales and purchases

of licenses might be a good indicator. I submit tha

any country, except the largest one, is bound to have a deficit on this. What is the probability that a small country could invent by itself as much as the

rest of the world? And there is another way not to have a deficit, and that is not to buy any license. On

this basis, the fact that some of our countries have

deficits on licenses is just a sign that they are inter- ested in technical progress and this is all for the good.

But there is another feature which I think is inter- esting to mention. Usually when speaking about

conditions of international competition, it is mostly

relative magnitudes which matter. In other words, in relation to the cost of a product, how scarce is capital and how scarce is labor?

And maybe with the great knowledge resulting

from research, particularly applied research, the absolute magnitudes matter. In other words, if you

have to produce something which is completely new,

there is a threshold below which you won't be able

to achieve anything, and I think that this is the really new feature which the advance of technology

brings into the field of international trade.

Technological "Fallout" Now there is another idea which I think is current but of which we haven't yet drawn all the possible;

consequences. We all admit that there is so-called! technological fallout, meaning by that that the re- search conducted in one sector spreads to others be- cause a lot has to be learned, and orders have to be

placed, and so forth, thus there is a certain cumulative effect from research and development. To some

extent, and within reasonable limits, doing the job

oneself has more profound effect than purely im-; porting the recipes.

In other words, in a world of that kind, we can no more think purely of competitive advantage, and we have got to think ahead to potential capabilities of developing one day something for which one

hasn't yet the start, and to the cumulative effect, which may accrue. This is a rather important ele- ment which I think reflects even on present international negotiations. I have read somewhere, and I wouldn't disagree, that the famous eighty percent

34
clause of the Trade Expansion Act was a very clever American idea, because, mind you, the products on

which most of the world's exports are concentrated

in the North Atlantic area are really science-based

products.

But the question is whether there wouldn't be a

certain case at the beginning for the countries which

are less advanced to use the infant industry argu- ment and have some temporary protection, so that they can reap the benefits of things which they will do by themselves.

Foreign Investment Policy

But the reverse side of this possibility should be a completely open policy on their part on foreign in- vestment, because you are not going to have it both

ways. If you want to protect yourself for a certain

time against imported products because otherwise

you might never be able to develop them, then you

cannot protect yourself at the same time against the

firm which brings the technology with it, giving you

the possibility of fully using the new techniques and

filling the market.

And I am happy to say that the problem of inter- national investment, which seemed to be a rather

hot issue when the Atlantic Institute undertook a study of it, is now slowly cooling off. Even the gov- ernment of my country seems to have been convinced by the arguments presented by people who

don't belong to the majority. And the points which

are now being made are very reasonable ones, that the subsidiary of a foreign company must be free to export as is the interest of the host country; that there must be no discrimination in the high level jobs between the nationals of the country of origin

and nationals of the host country; and finally, and

this is probably the easiest thing to say but the most

difficult thing to conceive, that the host country

should be fully associated with research. I venture

to submit that if this symposium could try and devise some of the criteria according to which some of

the research could be done in the host country, that would serve a terribly useful purpose.

But, obviously, the real answer to our problem

lies in what the countries which feel that they are

less advanced do to restore the balance.

Advanced Technology and Economic Progress

On this, there is one remark which I haven't

heard often enough: there is no direct correlation

between the efforts on advanced technology and the

overall rate of economic progress. In other words, it

is not enough to do everything to make up for the

lag by concentrating on advanced technology. There

must be a balance. It depends, of course, on the orientation of the research, and it is a moot problem

how far military technology has civilian spillover.

There is also the risk that by investing in a certain

direction, you practically dis-invest in others. And I am afraid that there are some European

countries which have made very courageous efforts and have been frustrated, because what it takes is also the management to exploit research and the size of the market to develop it, which means practically that in the European countries that are complaining,

the remedy is in their hands.

Cooperative Efforts

It is the basis on which technological cooperation can be organized to be a match to the United States. Now, there are plenty of attempts at cooperation

and I have read that there are even now at inter- national or regional levels about three hundred in- ternational organizations; I'm sure you could not recite the list. But it is not enough to say that things are done

jointly. The important thing is how are they done. Is

it going to be done on a case-by-case basis, negotiated, revised, finally in some cases abandoned? This

doesn't create the new environment. Is it going to be

done by allocating to one industry this, and to another industry that, so that practically everybody

gets back the money which he just put in the pot?

This doesn't create either the conditions for real progress. If Europe is to do something and if the notion evoked by the British of the technological

community means anything, it should be the agreed

principle that any new development, any new in- dustry, any new product is not started on a national

but on a common basis. Of course, there is one difficulty which we can't overlook, which is that, according to products, not

necessarily the same countries are interested or can

contribute. In other words, what it might mean

and I venture it as a firm proposal—would be an

agreed option of a right of first refusal for those

interested countries to join in a product if they can

contribute something, and this should be done on as broad a basis as possible.

Up to now, let's be frank, most international co- operation in technological ventures has occurred in a spirit of competition. Two countries come together

to beat a third one. We could quote an infinite number of those attempts. I'm sure everybody rec35
ognizes that this is not the soundest possible eco- nomics.

Commonalities and Equalities

Let's begin to conceive of real international

projects. I'm sure there will come a day when we

will really wonder that a race to the moon or the exploration of the deep earth could be considered as something other than a project for the whole of

mankind because, after all, this is our common earth and this is our common universe. On this common

earth, there is one fact which we have got now to

face. It is the fact that whereas in our own society we are all trying to have more equality of a basic

sort and more equality of opportunity, we are on the contrary faced with the risk of growing inequality

between nations, in power, in standard of life, and

maybe even in the development of culture. Well, civilization might be defined as the refusal of natural inequality of the more brutal sort, and

what we have done in our society is to refuse brute

force so that other values may emerge. This is now

the challenge before us.

How have we been able to establish more equality? First, by the rule of law, secondly by the grouping of the weaker. And we are now coming to the idea of solidarity to assure at least a minimum tc the underprivileged.

We now have to go over from our own national

societies to the international one with the same principles and the same efforts.

Technology and Destruction One point has been omitted up to now, and 1 agree that it didn't belong in the title of this confer- ence or as part of the agenda. It is the terrifying

contribution that technology can also make to the power of destruction. Against that background, if we accept the philosophy which equates civilization to research for growing equality, an equality which

is no more a word but which we begin in fact to have the means to achieve, we may very well save

ourselves, to reiterate Secretary Connor's final words, by thinking in terms of mankind.

36
^November 16, 1966

Afternoon Session—The Impact of International Measurement Conventions, Norms,

and Standards on World Trade

Mr. Stern: Ladies and gentlemen. This afternoon's

session is one that is critical to the principal role of our National Bureau of Standards. It is equally criti- cal to other bureaus of standards around the world;

many of them are represented here. Our chairman,

this afternoon, is a man who not only speaks the language of standards, fluently and without accent,

but is also one who is continually contributing to the vocabulary of the standards world.

It is a great pleasure to introduce the fifth director of the National Bureau of Standards, also the person who planned and executed this project, the creation of these new laboratories which now stand

as the culmination of his efforts during 14 years as Director of NBS: Dr. Allen V. Astin.

Dr. Astin: Thank you very much, Mr. Stern. Distinguished guests, our topic this afternoon is The Impact of International Measurement Conventions,

Norms, and Standards upon World Trade. Our

speakers and other experts from several countries

will express their views on this subject.

Personally, I believe that standards underlie all types of communication and exchange. The common

dictionary type of definition for standards is "that which is accepted for current use through authority,

custom, or general consent." In this context lan- guage, of course, is the oldest standard we have, and

the most fundamental standard for all communication.More sophisticated types of communication also require standards. Telegraph systems, radio systems,

television systems, and even the automatic data

processing systems that were talked about earlier to- day, are all reaching the stage where adequate

standards are a critical factor in their more efficient and effective utilization.

Standards in Science Among scientists and engineers, communication

or exchange of quantitative information depends

upon the availability of generally accepted units to which the measurements can be referred: the standard is merely a physical embodiment of one of the

units of physical science or engineering. Fortunately, we have, through efforts beginning at the time of the French Revolution and culminating in the Treaty of

the Meter in 1875, an effective international system

of units in which we can express the quantitative

language of science on a compatible, understandable, coherent basis. Nearly all technologically sophisticated nations of the world belong to this convention of the Meter. The standards carried out under this Treaty support

the traditional types of commerce and trade, where

it is necessary to have units and standards to which

quantity can be referred.

Standards in Trade

The association of standards with trade is expressed, quite significantly, in the United States Constitution, which links together in one phrase both

halves of the normal commercial or exchange process. In our Constitution, the Congress is given authority "to coin money, regulate the value thereof,

and fix the standard for weights and measures." It

is in that context of the utilization of standards in trade that we will be concerned this afternoon.

Modern technology has brought into the market

place a wide variety of very sophisticated products

whose characteristics can only be specified through

extensive types of measurement systems. It is helpful

in the buying and selling and production of such

products to have standards for the performance or

the evaluation of such products. These types of

standards and their impact on international trade

will constitute the major part of our discussion.

37
ALLEN V. ASTIN was born in Salt Lake City, Utah, in 1904. He received his bachelor's degree in physics from the University of Utah in 1925 and his Ph.D.

from New York University in 1928. From 1928 to 1930 he was a National Research Council Fellow at Johns Hopkins University. Dr. A stin joined the staff of the National Bureau of Standards in 1932. His

principal fields of work included precision electrical measurements, the development of early radio telemetering techniques, and during World War II the development of proximity fuzes. He was .named Chief of the Bureau's Ordnance Development Division in 1948. The President appointed him as the fifth Director of the National Bureau of Standards May 31 , 1952.

He serves as the U.S. member on the International Committee of Weights and

Measures and as Chairman of the Standing Committee of the Federal Council for Science and Technology.
Dr. Astin: Our first speaker this afternoon is Mr.

Francis K. McCune, who is Vice President of the General Electric Company.

Mr. McCune: Dr. Astin and ladies and gentlemen.

Let me begin with a little philosophy. It is hard to

tell, of course, where standards started. It is fairly clear that monkeys and even the higher primates

don't need standards. Even at a still higher level, there was little need for standards when each family

produced its own food, its own clothing, its shelter and was self sufficient unto itself. But beyond these

stages, standards are absolutely necessary, and this has been recognized since prehistoric times. With

civilization comes exchange of goods and services, barter or trade—and standards.

Let me point out here that I am not really talking

only about standards like those of time, dimension,

weight, money, and so forth. Fundamental as these

are, standards go far beyond these essentials. Standards as we know them today usually cover the fol- lowing:

definitions, so that buyers and sellers speak a common

language; mechanical or electrical specifications, so that components may be freely interchanged;

safety requirements, so that society's interest may not

be compromised by transactions between individuals; composition, properties, and methods of test standards

for materials, for processes and for devices; minimum performance specifications, so that the user may know in simple terms what the product will do. Minimum because enlightened buyers are looking for increased values through performance above standard.

If you will permit me one more observation, while

standards usually involve compromise, as does the

art of politics, they are in toto, I believe, the best

index, the most coherent summary of technical

knowledge in existence today.

These, then—definition, interchangeability, safety,

properties, and methods of test, and performance

levels, are basic to trade—and without trade, civili- zation as we know it is impossible.

The World Trade Picture So let us look at some figures on trade itself. Total world trade has been rising steadily since the end

of World War II, and has doubled during the last 10

years to an estimated total of $200 billion in 1966.

Most of the growth in trade has been among the countries that are well developed industrially. The

total of world trade appears to be growing exponentially. There is substantial trade between developed and

undeveloped or under-developed countries, or among under-developed countries. I believe, and I believe all of you believe, that trade in these areas is going to increase greatly. Hence, I think we are going to see an acceleration of this rather exponential

advance in world trade. But I think that there are other things that we

must look at. I think that growth in technology will also stimulate more trade. The amount of the growth from this cause will depend to a great extent on a number of countries and people that are able

to make use of the products which the new technology provides; but I hope and believe that international trade will grow from this factor much faster than in the past.

There are many factors that affect international

trade, including tariffs and a variety of other barriers, as has been mentioned this morning, to the

free exchange of goods among nations. The main

purpose of the several common market schemes

around the world is to eliminate these trade barriers

where it is feasible to do so.

Importance of International Standards Lack of standards and differences in standards

have long been very troublesome barriers. Fortunately, most countries now recognize that the devel- opment and use of international standards will go a long way towards the removal of such barriers. This

growing interest in international standards is apparent in the expanding work of the ISO and the IEC.

There is no question but that international standards

will more and more become the commercial documents by which future international trade will be

conducted. We are already seeing evidence of this:

The OECD recommendations on development and

use of international standards in its 1964 progress

report. The EEC and EFTA arrangements to harmonize

their standards. CEE and its effort to have common electrical safety standards throughout most of Europe.

39
FRANCIS K. McCUNE is Vice President of General Electric Company. In this position, he is responsible for a program designed to assist operating management

in the making of major business decisions. Mr. McCune has been with the General

Electric Company since graduation, holding many and varied assignments in engineering and general management. He has been responsible for GE's participation

in atomic energy programs, including operation of major government-owned instal- lations, establishment of the Company's own nuclear facilities and development of

its business in that field. He was elected a company Vice President in 1954, and in I960 became Vice President-Engineering and a member of the Company's Executive Office. He assumed his present position in 1965.

A native of Santa Barbara, California (1906), Mr. McCune received his Bachelor of Science Degree (cum laude) in 1928 from the College of Electrical and

Mechanical Engineering of the University of California at Berkeley.

Mr. McCune was Chairman of tlie National Society of Professional Engineers'

President's Council of Industry Engineering Executives, is a member of the National Academy of Engineering and is the new President of the United States of America Standards Institute.
Use of international standards by NATO and other

treaty organizations. Use of international standards by the developing

countries. The slope of those curves we looked at a moment

ago shows that all our people must engage in world

trade or sink to the position of small and insulated

markets.

Standards and Developing Areas of Technology

But beyond trade in being, let us look at some

rapidly expanding areas of engineering development

which will have, or are beginning to have, a major

effect on trade. Man above all animals communicates, learns and

records. To communicate, he travels purposefully,

and in this century man has increased his speed of

travel at least tenfold on land and fortyfold on

water. Can you imagine automobiles in widespread

use without standards? Standards for materials, for dimensions, for performance measurement, for inter- changeability, for the tools used in their manufacture, even for the plants in which they are built. The

Society of Automotive Engineers alone has issued

well over 2,000 standards. Can you imagine airplanes without standards?

I am told that even a revolutionary new concept

in airplane design uses many thousands of standards. If it did not; the plane could hardly be pro- duced at all. The Aerospace Industry Association in

this country has issued over 2,000 standards, and

yet both automobile and aircraft freely use ASTM's

over 3,000 standards, as well as electrical standards,

mechanical standards, government standards and

many others. Let me remind you that a single standard covers a

multiplicity of things. For example, typical of the

Institute of Electrical and Electronic Engineers, 275

standards are—these are just at random:

A guide for operation and maintenance of turbine

generators, which covers 5 methods of temperature

measurement, 4 standards on loading, 24 requirements on machine operation, 25 inspection and

maintenance procedures on 7 different types of tur- bine generators.

Transmission performance of telephone sets, which contains 15 standards for test equipment, and

10 test procedures covering 30 different types of

tests. Industrial control apparatus, which covers 17

groups of products with 4 different types of control equipment, with 7 general standards on equipment,

with 5 types of interruption, with 1 1 types of capacitors, 5 classes of resistors, and 12 types of enclosures, for a total of more than 200 standards for

individual devices. In addition, there are individual standards on an- other 112 devices, so I could go on but I won't. Man's power to communicate brings us also to the telephone, the radio and television. These are media of mass communication and prime examples

of standardization; and again the materials used, the components, the major processes, the means of specifying and describing them all involve standards, as well as the standards truly pertinent to tele- vision as such. Man's ability to record has been primarily by

memory and by writing, and these involve language.

Language itself is not considered a standard, but is

it not really as close to a standard as one can come?

Certainly it involves definitions and rules for inter- changeability, and now we have machine languages

which may in the end have even greater impact.

Suffice it to say that machines which talk to each

other and to objects in outer space know no pride of

nationality, and their language must be standardized.

So we see that man's peculiar abilities have in the past century been enhanced manyfold by concepts,

systems and devices which involve standards and

which in many ways are dependent on standards. But let us shift a moment, however, and look at progress, past and maybe future, from a viewpoint

of science and engineering. The scientist examines

the processes and forces of nature with the hope

that he can understand them and hence can usefully

predict beyond the limited range of his ability to observe and record. Usually he resorts to measure- ment to gain his knowledge, and standards are the very essence of measurement. Without them the

scientist would be at a loss to conduct his experiments, and even more to communicate them to anyone.The engineer seeks to use knowledge of nature's behavior to produce things useful to society. Let us look here at the recent past and conjecture a little concerning the future in this field. Each one of us as an individual views progress through a different screen, and we classify it in different ways. So let me

talk about the exciting technical achievements of the past forty years as I personally have seen them.

Recent Technological Developments

As I left college, the exciting fields to me were

large machines, and in particular the problem of ac- curate theoretical prediction of performance, which

41
was necessary for a sound design basis as the sizes began to get big; telephone communication theory

and practice; tall buildings; high voltage, high fre- quency and high-current phenomena; deep well exploration of our oil fields. At the same time, as

1 can remember when I left college, farther out were

the development of radio, including high power tranmitters, sensitive receivers, high gain antennas, highfrequency techniques; direct-current power transmission; diesel engines, and in particular the problem

of smooth, specifically timed injection which was

critical to efficient performance.

These continued to cast their spell, I think, until

late in the '30's, when radio and electronics began to come into their own. Television was in its very embryonic stage. There were no common agreements on systems to be studied. Mechanical scanners were

still competing with crude cathode ray scanners and

image tubes. Control was moving from its primitive

state. Systems engineering was being recognized, and

with it the ability to engineer units too complex for the single human mind to comprehend.

To many of us then came war and with it concentration on such technical fields as aircraft, aircraft propulsion, control using the speed and versatility of

electronics for many purposes. Also, the development of feedback theory and its application to all sorts of automatic controls, such as fast acting generators, voltage regulators, steel and paper mill equipment, and gun-pointing; fully automatic track- ing radar; great advances in communication and the use of electronics for recognition and ranging; mi- crowave radio technology—in essence, the marriage

of radio and optical theories; infrared technology

applied to the problem of seeing in the dark; in- creased development of analog, and finally digital

computers, and so forth. And with these came nuclear energy devices.

Postwar we saw television for the general public,

which would have been totally impractical without

brilliant and painstaking standardization work; fantastic increases in speed, size, and range of aircraft; application of sophisticated controls to industry generally; rocket engines, not completely new but an

accepted engineering challenge of that time because

of wartime needs and new technology capabilities; the further development of electronic and analog

computers; a whole realm of semiconductors and

circuitry, including transistors; the work of making

nuclear energy useful to peaceful society; and, only a few short years ago, the beginning of our conquest

of space.

Of these, three great waves seem to me to stand li out—electronics, nuclear energy, and space. Today u we do not know what the next such wave will be but p many believe it is here already and it is the informa- it tion revolution.

g

ti The United States of America Standards f( Institute

f Let me pause to remark that for these reasons as

s

well as many others, the new United States of

s America Standards Institute has come into being. ' The American Standards Association had a long and 11

distinguished history in inspiring and certifying na2

tional standards. The new United States of America

Standards Institute will build on this foundation. It

''

retains the principles of voluntary standards, with c

participation of all the affected segments of society r and arrival at a consensus, but is planned to go

beyond the American Standards Association in its 1

1 membership. It is reaching into truly affected sectors of society in its ability to participate in international ( work. That ends my commercial for USASI.

i

Future Developments in Technology

Returning to my theme of engineering, what do | we see for the next 10 or 20 years or even sooner? j Well, this business of predicting is a bad one. I had i a boss once who told me what to do on a podium.

He said that if you ever have an experiment to per- form, first perform the experiment and then tell the audience what they saw. Any other course is disaster. Well, there is a lot of truth in this, and I can remember very well that some years ago utilities in our country asked my company and another to pre- pare a movie which would be of interest to high

school children and might give them some incentive

to consider science and engineering as a career. They asked for it to be not just held down to facts but quite far looking, and we put some rather absurd things into this after a lot of thought, far out; a

substantial part of this movie was man landing on

the moon in the year 2000. That's the fact. Well, returning to my theme of engineering, what

do we see for the next 10 or 20 years or even

sooner? Supersonic transports, of course; communi- j cation by satellite as the rule worldwide, not the exj ception; exploration of the moon and space by in- struments and by man; the use of space capability

for the betterment of mankind, including navigation,

air and sea traffic control, economics and dependable point-to-point communication; mass communica42
tion, especially for educational purposes, for use in under-developed countries; longer range weather

[{prediction by means of space data gathering capability and advanced electronic computer modeling of global circulation; assessment and control of agriculture, water resources, mineral resources, wildlife and

forests, through space observations over a wide

range of frequencies and using many kinds of sensors; unlimited resources of economical power; some

I say the electronic home, with the library, the paper,

the store, the business system, where the individual

needs in the way of information or communication

are at his fingertips in his home.

Some say that we are in a materials revolution, no

longer dependent largely on nature, to be able to create exactly what we need for our structures, our

machines, and our systems.

Some say the wave of solid state devices is in

itself a revolution.

We look to understanding and beneficial control

of climate in the less favored parts of the world, the

arid and arctic regions; understanding of the

influence of the sun on the earth as it affects weather, magnetic storms, communications, and so

forth; understanding of the earth's interior and crust, primarily for the prediction in time to give people

protection from disasters, such as volcanoes, earth- quakes, and tidal waves; cities without traffic jams

or bankrupt commuter railroads and subways; and

related to this are clean air, clean water, and no

unsightly dumps, no junk yards to beautify; hospitals and schools in which the nurses, doctors and

teachers would be freed of drudgery and have time

for the human aspects of their jobs; unlimited food

for the hungry people of the world from a better understanding and integration of marine biological resources, biological fermentation of cellulose or

similar processes; understanding, occupation and use

of the world that lies beneath our oceans. These are the things that fascinate our college stu- dents today. Yet through all these run two common

themes. They are wanted worldwide and they are wanted soon. Let me submit that if the fruits of the foregoing

are to be available as well as wanted worldwide,

much needs to be accelerated in our worldwide

standards work, for each major achievement re- quires standards, sometimes for the acceptable cost made possible by a worldwide market and often even to be useful at all. To come soon, they must be accomplished by the fewest people. Each must not be engineered from

the ground up. Each must build to the fullest extent on the compendium of knowledge and accomplishment embodied in worldwide standards. My conclusion is that we have lots of work to do.

256-707 0-67—

43
Dr. Astin: I think it might be better if we hear the second speaker and then ask for questions on both

papers. Following that, we will take a brief recess and then call for formal comments by four discussants who are prepared to do this. Our next speaker is Arthur Henry Ashford Wynn,

who is the head of the Standards Division in the Ministry of Technology of the United Kingdom.

Mr. Wynn will talk to us on the subject, "Technological Barriers to World Trade."

Mr.Wynn: Dr. Astin, ladies and gentlemen: The

decision to hold a symposium on technology and

world trade to mark the dedication of the new laboratories of NBS raises the expectations of all countries. This great enterprise, together with the estab- lishment of the U.S.A. Standards Institute mark, we

believe, a change to a higher energy level in American standards activity with which I and the other

people from abroad are honored to be associated.

Since last year we have also been awaiting overseas with much interest the implementation of the LaQue report, a document that has contributed to

all our thinking.

Standards as Help or Hindrance to International Trade

All standards record a consensus. Standards codify

the wisdom of many. There are now about a thousand standard recommendations of IEC and the International Standards Organization, ISO, recording a world consensus on a remarkable range of

detailed topics. These include standards for machines

and materials, methods of test and analysis, and means of communication, including glossaries, codes

and units. No other area, as Mr. McCune has said, of human affairs has produced such an extensive

and detailed record of consensus. There are, however, many thousands of national standards, often

enforced by legislation or national exclusive testing or approval arrangements. These national standards

quite frequently offer formidable barriers to trade

between countries.

It is a thesis of this paper that it is urgent for technologically advanced countries to exercise more

leadership in extending the world technological code

embodied in world standards, and that it is in the

interests, both of advanced and developing countries, that this should be done. This great occasion

offers us the hope that these new laboratories will contribute to this purpose. Information on standardization is manifestly more

important to smaller industrialized countries which

devote a higher proportion of GNP to exports. For

example, the United Kingdom exported 14 percent

of its GNP in 1 964, while the U.S.A. only exported

4 percent. In the same year, the Netherlands ex- ported 35 percent.

Of course, the flow of trade between the States of

the U.S.A. is not international trade and is subject

to few restrictions. In contrast, the flow of trade between the States of Europe is international and subject to many obstacles. Who can doubt that the impediments that there have been in Europe to the

free movement of people and goods provide at least a small part of the explanation for the lower stand- ard of living in Europe compared with the U.S.A.

Differing standards, both voluntary and compulsory,

are obstacles to trade that are often overlooked in the preoccupation with tariff barriers. International standardization is necessary for the removal of barriers which often impose more restric- tions on trade than do tariffs, but the profit to be

harvested from international standardization is al- most certainly greater in Europe than in the U.S.A.

Europe has the larger problem but the less saturated

markets. However, all countries, including the U.S.A., are becoming more dependent upon their foreign trade.

Harmonization of International Trade

Where is the driving force for increasing the pace

of international standardization activity? One great

force is that of the Common Market countries, anxious to harmonize their trade. These countries, with

a total population similar to that of the U.S.A., have

what may be described as an economic gravitational

field. The United Kingdom and other members of the European Free Trade Area are within that field, in orbits of apparently diminishing diameter.

The developing countries, anxious to benefit from

the best advice and to reduce the difficulties of multiple standards from which they already suffer, are another force. An increasing number of developing

countries, particularly the new African states, are

44
ARTHUR HENRY ASHFORD WYNN is Head of the Standards Division in the Ministry of Technology of the United Kingdom.

Born in 1910, Mr. Wynn received his education at Oundle School and Trinity

College, Cambridge, where he was an Entrance Scholar in Natural Science and

Mathematics. After granting of his M.A . Degree, he qualified as Barrister-at-Law.

He worked for A. C. Cossar Ltd. in the electronics field from 1939 to 1948, at which time he assumed the position of Director of Safety in the Mines Research Establishment of the Ministry of Fuel and Power. From 1955 to 1965 Mr.

Wynn was Scientific Member of the National Coal Board, serving at the same time

as a member of the Advisory Council on Research and Development of the Ministry of Power. He was also a member of the Safety in Mines Research Advisory

Board during the period 1950 to 1965.
within the gravitational field of the Common Market. These developing countries will generally adopt

international standards and not the standards of any

particular developed country.

The greater concern of Europe with international

standardization is to be seen in the location of the

secretariats of the ISO and IEC technical committees. Of the 242 ISO technical committee and subcommittee secretariats, the six countries (Belgium,

France, Germany, Holland, Italy, Luxemburg) of

the European Economic Community (EEC) to- gether hold 119, the United Kingdom 38 and the U.S.A. 60. Of the 133 IEC technical committee and

subcommittee secretariates, the European Economic

Community (EEC) holds 69, the United Kingdom

26 and the U.S.A. 13. The United Kingdom, repre- sented by the British Standards Institution, has been

among the first two or three nations in its contribution to international standardization at all times. There are also international "Standards" or- ganizations, for example, the International Organization for Legal Metrology (O.I.M.L.) to which the United States has not hitherto belonged.

I cannot claim to understand all the obviously se- vere restrictions on the full participation of the U.S.A. in world standardization in the past.

The elimination of the barriers between the six Common Market countries and the removal of obstacles to trade are express purposes of the Treaty

of Rome, which established the European Economic

Community or Common Market. This is part of the process now generally known as harmonization. The

acceleration of standardization has been interpreted

as an essential part of this policy of harmonization.

The Treaty of Rome is removing all barriers to trade within the Common Market due to differing

national standards, disparate legislation or purely

national testing or certification arrangements. The

initiative in international standardization comes,

however, mainly from the individual countries rather than from the organization of the Common Market.

We are reacting to this in the United Kingdom.

The confederation of British industry, which is a fed- eration of all trade associations, speaks for British industry as a whole and has urged the British Government to "support, and be seen to support every attempt to secure international alignment of standards in the appropriate international forum. It should, moreover, both in its own legislation and in

its procurement policies, give the strongest support

to acceptance of internationally agreed standards as

British standards without deviation."

The seven countries of the European Free Trade

Area have been much concerned that the deliber- ations within the Common Market should not lead

to new obstacles to trade between the two blocs, and

the seven governments who belong to the Council of Ministers agreed at Bergen in May 1966 that: "The

Ministers should give strong encouragement to in-; dustries, departments, and to standards bodies to; pursue the objective of early agreement on standards

in the European and, where appropriate, in the inter- national standards organizations.

The national standards bodies should be pressed

to make the strongest efforts to secure full acceptance

of these agreements in national standards without

deviation, and public purchasing departments should

be urged to take full account of such standards."

The standardization activity of the Common Market countries is not only of concern to Europe be- cause the results influence the deliberations of ISO

and IEC very quickly and are indeed often intended

to do so. European countries are strongly represented on every committee and therefore are in a good

position to influence ISO deliberations.

Technical Areas Affected by International Standardization The pace of international standardization is in- creasing. In the last 10 years ISO produced about

500 recommendations. It is hoped to produce over 100 in 1966 alone. ISO is being expanded, and it is planned to produce 200 in 1967 and more than 300

recommendations a year from 1969 onward.

On what subjects is this international standardization activity particularly concentrated? The greatest activity in most countries is concentrated on

compulsory national standards. It is widely believed;

that these national standards enforced by law are the greatest of all obstacles to international trade. These standards have received the special attention of working parties of the Commission of the Common Market under the general heading of "Obstacles to trade arising from provisions of a technical

order." These working parties have, for example,

produced 12 Council Directives concerned with motor vehicles and 5 with agricultural tractors.

Motor Vehicles Conformity with these standards is likely to be- come essential to any manufacturer wishing to sell a vehicle or tractor within the Common Market.!

Alignment of EFTA with Common Market stand- ards and extension to African associated States and

46
trade

Dvei

Greece and Turkey may increase the purview of

these directives eventually beyond the six members

of the Common Market.

These motor vehicle and tractor standards have

built into them operational experience, engineering

knowledge and research results. They also record a consensus about the price that is worth paying for increased safety. There seems to be no good reason why motor vehicle standards vary much from one

country to another. Certainly the greater the pool of

experience, knowledge, and research results underpinning the standards, the better they are likely to

be.There is everything to be said, therefore, for dis- cussing such standards in as wide a forum as possible

and for a constructive dialogue between Europe

and America, with a pooling of wisdom and experience. Indeed, the failure of this dialogue to proceed

fast enough in the past and the unilateral action on

both sides of the Atlantic already taken or about to be taken, seem certain to result in substantial further losses in trade to most manufacturers.

Twelve years ago it was only necessary to produce two versions of an automobile for sale to Europe. Today, in spite of excellent work of the Economic Commission for Europe, it is necessary to produce 9 or 10 versions. The barriers to trade are growing. Regulations governing motor vehicle design

are essential but it is not clear that anyone benefits from compelling manufacturers to produce a dozen

different designs for different markets. Nor is it clear that the cost of international negotiations could ever be at all comparable to the losses to countries, in- cluding the United Kingdom and the U.S.A., who

manufacture motor vehicles, caused by disparate

regulations, and motor vehicles are, of course, only one area where trade is impeded by disparate regulations.

Foodstuffs, Food Preservatives and Proprietary

Medicines

The Council of the Common Market has issued

directives concerned with coloring matter in foodstuffs, food preservatives, and proprietary medicines.

Directives concerning preservatives, for example, came into force in November 1965. The directive explains that it "is necessary with a view to the free circulation of commodities intended for human

food," but the primary concern, of course, is with

free circulation within the Common Market. More

than a quarter of the world's trade is in this area of

food and drugs. Every country has its food and

drugs legislation, and it can be sound only if based

upon research that is generally costly, indeed, so

costly that it can only be afforded by the most advanced nations. There is everything to be gained by

aiming at a world consensus about each individual

coloring matter, insecticide, herbicide, preservative or drug.

The advanced nations generally need world markets to help pay for the research and if expensive

duplication of research beyond the means of most

nations is to be avoided, then the smaller and poorer

nations must rely on the research undertaken by the few.

The international standards for food and drugs,

including insecticides and herbicides, are of primary

economic importance and must be a major object of future research.

Safety and Health

Insofar as the purpose of technological advance is improvement in the human condition, then the improvement of safety, health, and amenity are an es- sential part of that purpose. In the standardization

activities of governments, and these European governments in particular, there is nevertheless a double

motivation. There is the urge for harmonization in order to satisfy the need of modern industry for a

large market, a need that flows from the economies

of scale and from the falling real cost of transport,

due in part to the increased value of many manufactured goods per unit weight. Harmonization is a

profit-generating activity, more particularly for the

large, low cost producer. This is the first motive.

Harmonization has, however, to be consistent

with the public will for promotion of safety, health,

and amenity, which has been government's traditional concern with standards. This public will provides

the second motive.

The formidable barriers to trade have resulted from compulsory national standards and have not

generally been erected primarily to protect indige- nous producers but have resulted from the essentially national or even local character of legislation con- cerned with health, safety, and amenity. This

legislation will remain national and local. The barriers to trade can still be removed if legislation is increasingly based upon international standards. If there is adequate international cooperation to ensure

that these standards reflect the best possible world

opinion, then the quality of the local legislation may

often advance more rapidly than hitherto.

47
Many barriers to trade cannot be removed by in- ternational standardization alone. It is also essential to have international testing and inspection conventions. This is necessary because the screening out of equipment that is unsafe or dangerous to health

should not be left to market forces but should be

made the job of an expert organization backed by

national legislation.

The difficulties of exporting any kind of pressure

vessel to many countries of the world, including the U.S.A., are well known but are still daunting. This is a very old problem. The United Kingdom now has

reciprocal testing and inspection arrangements for pressure vessels with a number of European and

Commonwealth countries, without, however, having

yet harmonized the standards. The United Kingdom

would welcome such reciprocal arrangements with

the U.S.A.

Electrical Equipment

Some of the worst hidden barriers to trade concern electrical equipment. Almost all electrical equipment exported to some countries has to con- form in such matters as the adequacy of insulation or rise of temperature and has to be approved as conforming.

In the Scandinavian countries a safety mark is compulsory by law. In the official showrooms of

power authority suppliers, in France, only products

bearing the NF mark are allowed. There are many

main plugs and miniature plugs. A dozen or so

different models of radio receiver, vacuum cleaner, or electric iron are necessary for export to European

countries alone. There are Common Market directives in draft concerning low tension electrical equipment, household electrical equipment and portable electric tools. The Common Market Commission can rely on

the ground work that has been done by the International Commission on Rules for Approval of Electrical Equipment, usually known as CEE. All the 18 member countries are European, although the United States has sent observers to meetings for the

last 17 years. The CEE is a powerful code-making

organization, concerned not only with safety standards for electrical equipment but with compatibility,

and it is perhaps likely in the future to be increasingly concerned with standards of quality and reliability. We do not understand why the U.S.A. has felt for 17 years unable to give full support to this barrier-removing organization.

Conformity with performance requirements cannot be established by visual inspection, and a stand- s ard testing procedure is generally needed. The CEE t will issue a certificate of compliance with CEE

specifications for any equipment if advised to do so £ by the testing station of the country of manufacture i and of one other country. The certificate is then ac- \ cepted in all 18 countries. This is an outstanding i international agreement for reducing trade barriers. \

I A few other conventions exist, but very few. The i British Standards Institution, for example, is recog- \ nized by arrangement with the Canadian Standards

Association as a testing and inspection body for all I British electrical equipment exported to Canada. I There is no such reciprocal arrangement between i the British Standards Institution and any organiza- I tion in the U.S.A. What organizations in the U.S.A l can be parties to testing conventions with, say, CEE i or BSI? Is this one of the future roles of the United : States of America Standards Institute? It will be in-j i teresting to know whether the U.S.A. already has

any reciprocal testing or certification conventions 1

with other countries or whether there are any new

conventions in mind.

Quality Assurance and Performance Criteria The need for testing conventions is not confined

to electrical equipment or problems of health and

safety. There is a great interest in Europe for schemes in quality assurance. The distinguished re- port of the National Commission on Technology,

Automation, and Economic Progress, entitled "Technology and the American Economy," placed great

emphasis on the use of a performance criteria as a means of promoting technological innovation and

advance.

The same emphasis on performance specification

is evident in Europe and in the United Kingdom and

j is likely to be reflected in international standards.

The international implications of this great emphasis on performance criteria still need, however, to be

thought through.

The economic role of performance specifications

in our competitive market economies also merits

discussion. Performance specifications can be used

to reinforce market forces and strengthen the market \ economy, and can also be used restrictively. Test specifications may be used only to disclose performance facts to buyers, and so to increase their power of discrimination. Specifications used in this way strengthen and accelerate the action of market

forces in eliminating the inferior and promoting

technological advance. This is a role of performance

48
CEE

CEE

lo so

cture

The

specifications which we regard as wholly beneficial

to a free economy.

However, test reports that include opinion, even

expert opinion, can bias consumers' choice, and are

in a sense restrictive. Performance specifications can

also provide the basis of legislation. It is a tradition

in the United Kingdom only to use such legislation to promote safety, health, or public amenity, for example, under the Factories or Mines and Quarries

Acts. Some new schemes in the United Kingdom directly concerned with performance specifications and

testing already have international implications. For

example, there is in the United Kingdom an association of big purchasers of instruments, mostly of the type used in the processing industries, that "evaluates" instruments. This is an essentially permissive

scheme for reinforcing market forces. The instru- ments are tested in the laboratories of the Scientific Instrument Research Association for conformity

to performance specifications agreed between user and manufacturer. Factual reports are produced and

circulated to members. The costs of quite expensive

tests of new instruments are spread in this way over

the members. There is now a similar association in the Netherlands and the recent agreement between

the United Kingdom and the Netherlands Associations to accept each other's "evaluation" reports.

This is an interesting example of a quality assurance scheme that has been established on industrial rather than government initiative and on the initiative of

industrial consumers rather than manufacturers.

Not only British but American and continental in- struments are tested for conformity to specification,

including accuracy and reliability. The scheme illus- trates a growing concern with quality and reliability,

particularly of on-line process equipment, and also the growing cost and difficulty of choosing the right

equipment for the job. Both the industrial buyer and

domestic consumer are increasingly concerned with

this problem of choice over a range of equipment

much wider than industrial instruments.

There is another quite separate scheme in the

United Kingdom for the evaluation of new building

components and materials. This is quite similar to the French scheme for the testing and approval of

building components. Both schemes are concerned

essentially with promoting progress in building and

construction by using performance criteria for screening new developments.

The French scheme was motivated by insurance

requirements for new buildings; the British scheme

was initiated by Government for the purpose of accelerating acceptance of new building techniques

and reducing variety in favor of the better building

techniques. Reciprocal approval arrangements are in mind. There is an element of compulsion in this scheme, as each certificate is deemed to indicate compliance with building regulations.

There is a separate, well-established scheme for

the performance testing and evaluation of agricultural machinery in the United Kingdom by the National Institute of Agricultural Engineering.

These new schemes are part of a spectrum of activity that provide consumers, including industrial consumers, with quality assurance. Such schemes,

unless well conceived, have their dangers and can

introduce further barriers to trade. The national standards organizations are much

concerned with quality assurance and have associat- ed national marks, such as the BSI Kitemark in the United Kingdom, the NF mark in France and the JIS mark in Japan.

Generalizations about the economic role of these marks are liable to be wrong, as they have many

purposes. When applied to some products such as crash helmets or life belts they are often rightly

compulsory and restrictive, but when applied, for example, to metal finishes or the composition of al- loys they are permissive and informative and a valu- able help to the market. These well-known marks all indicate conformity with some national standard.

The use of the mark is generally based upon

approval of a manufacturer's quality-control pro- cedures or on procedures agreed on by a whole

association of manufacturers. For some products,

samples have to be submitted to independent test. Conventions between nations for the reciprocal

acceptance of the marks of their standards bodies

are conceivable and have indeed been discussed but

in general no conventions exist. There are, however,

models to be followed, including the testing proce- dures already mentioned of CEE, and the AngloDutch arrangements for the evaluation of instru- ments. An extension of these schemes concerned with

quality assurance is certain. There seems to be no

reason why evaluation techniques of the kind al- ready used for quite complicated industrial control

equipment should not be extended to cover computers and ancillary equipment and communication

equipment, including satellite equipment and even

civil aircraft.

49
Such schemes could be extended internationally.

The essential requirement is always an objective

specification defining the tests to be performed, preferably agreed between manufacturer and customer. There is much to be said for the manufacturer

having the right to veto the publication of a report if he wishes. This is in fact what we are generally doing. A satisfactory performance specification can

hardly ever be written except at the end of an experimental program.

Performance specifications for oil-hydraulic equipment, or bearings and lubricants, or electronic components, or almost all components or finished equipment of industrial importance can be written only at the end of an experimental program that may be expensive.

The production of sound performance standards

depends indeed upon an intimate knowledge of what

is possible as well as what is needed. Such knowledge is generally to be found only within the frontiers of the technologically advanced nations, and

notably within the U.S.A.

This is, therefore, a particular point where the world needs the leadership of advanced countries.

Barriers to Communication

All the barriers to trade that have so far been

discussed in this paper, including performance

standards, are concerned with end products of tech- nology and their suitability for use. Barriers to communication are probably of comparable economic

importance, and the long history of standards is primarily concerned with problems of communication.

No commercial transaction at a distance is possible

without standardization of word meanings and units of quantity. These problems include the provision of

basic and derived standards of measurement and

their transfer, the language of units and indeed the language of science and technology, the new lan- guages of data processing and transmission, institu- tional structures and procedures used by such or- ganizations as ISO and IEC, and much else besides.

The technology of the world advances by the diffu- sion of technology from discrete innovating centers. The rate of economic advance of all nations depends

very much upon this rate of diffusion of new tech- nology. The smaller and developing nations are heavily dependent upon diffusion of this knowledge

from outside their frontiers. International standardization makes a double contribution to this diffusion of knowledge. Standards are authoritative statements

about technology, but standards are also concerned

with processes of communication.

The U.S.A. has played a very leading part and

has a special responsibility to the ISO for nuclear

energy standards. Various organizations may be said

to be planning the diffusion of new knowledge about

nuclear engineering to the future owners of nuclear

power stations.

Traceability

The communication of standards of measurement

can also be planned. Traceability is a word that was

born in the U.S.A. in the 1950's. Standards of meas- urement are, of course, of no use unless they can be

communicated. Many measurements inevitably lose accuracy in the course of communication. The art of communicating measurement standards is, therefore,

itself a proper object of research, and in due course

of the standards code defining the method of transferring, say, a measurement of radio frequency

power from a central national institution to the manufacturer's standards laboratory.

The greater use of atomic definitions of units could reduce the problem of communication.

In the United Kingdom we have followed with

much interest the work of the National Conference of

Standards Laboratories in the U.S.A. We are creating

a British Calibration Service in the United Kingdom

with a somewhat similar purpose but also with the ambition of giving meaning to the word "traceability." I hope that we may before too long have a

series of standards as a foundation of traceable chains for many classes of measurement.

Technology is demanding ever higher levels of ac- curacy for a wide range of measurements. This ac- curacy is required on the job in many parts of the world. The communication of a measurement to the point of use, or the diffusion outwards from central laboratories of measurement capability, is a large

part of the problem and purpose of the British Calibration Service. The end of this development must

be a much extended matrix of laboratories in the world as a whole, with measurements traceable to a few central laboratories and ultimately to the laboratories of the BIPM.

The concept of traceability as applied to measure- ment derives not so much from the location of ulti- ! mate standards as from a greater capability in a

given location as a consequence, for example, of su- perior equipment.

The application of the concept of traceability can

therefore be extended notably to materials of high

50
purity or special composition. Traceable measure- ments are needed throughout industry, defense and

commerce. The Common Market has given priority to the needs of commerce and there are now a number of draft Council Directives to the Common

Market concerning weights and measures.

International System of Units

During recent years the world has gone far to- wards the adoption of an international system of

units, or SI units. Perhaps the most important thing

about units is to use them to help international trade and not to allow them to obstruct the adoption of

international engineering and commodity standards.

In the United Kingdom we know that we shall have

to continue to live with both the SI and the English or Imperial system for a period. We are, however,

adopting the metric units at points where it is believed that they will help and not injure the econ- omy. This requires much study and consultation and

the results are often surprising.

The concept of a module, for example, is particularly important in the building and construction in- dustry. In the U.K. it has been decided to adopt a 10-centimeter module. Thirty centimeters will also be a preferred dimension. No compulsory legislation

converting the whole economy to the metric system

is at present in mind, but rather the use of the metric system and SI units for increasing numbers of

limited purposes, like its present use in the motion

picture industry for film standards. Electric motors

are a particular example of an early change.

Units are just one contribution of standards to the

art of communication. Of even greater importance

in the future will be the standards for data processing and transmission. The ASA has made an out- standing contribution introducing American standard FORTRAN. The U.S.A. holds the secretariats for IEC Technical Committee TC-53, Computers

and Information Processing, and TC-53 (b), Digital

Data Transmission, and is therefore in a unique position to influence and accelerate production of world standards for data processing and transmission. Work is needed urgently to control the proliferation of new words and acronyms.

We may perhaps anticipate a great need for per- formance criteria for both computer equipment or hardware and for software, to give confidence and

facilitate trade across national boundaries. Design

standards are necessary for electrical connections,

data format, and speed of transmission in terms of

error rate and so on.

The most serious problems, however, may concern the man-machine relationship. The development of software sophistication may eventually re- quire more direct man-machine communication,

while details of the machine code and operating sys- tem will be looked after by the compiler and executive and will be of no interest to the user. These developments may bring to the fore the

great problems of national language differences, particularly if the maximum international use is to be

made of facilities. Information storage and retrieval will grow in importance with bigger storage banks in different countries able to interchange information. Standard

methods of indexing and recording will be essential. There is perhaps no bigger area of new problems.

There should be much scope for close collaboration

between the Ministry of Technology and Department of Commerce's new Center of Computer Sci- ence and Technology in data processing and trans- mission.

ISO and IEC

The central administrations of ISO and IEC are not commensurate with their great responsibility and

they are to be strengthened, for this reason. The

separation of ISO and IEC is perhaps also a weakness to be overcome in due course. The investment

in these organizations by advanced nations will still, however, amount to no more than a small fraction of one penny, or one cent, per annum per head of our populations. Is the possible contribution of these

organizations to reducing trade barriers really so marginal? Do all our other investments abroad in developed and developing countries really produce

a higher return? The main staff work can, however, never be centralized. The main contribution of individual nations

may probably come through the secretariats, like TC-53. Much can be done by technical committee

secretariats, by informal discussion and corre- spondence, to establish world consensus in advance

of formal meetings. It is increasingly necessary for each secretariat to be supported by a specialized in- formation center, and these information services should be available to the central offices of ISO and

IEC. Many programs will also require laboratory

support. Indeeu, the secretariats that we hold should

influence the staffing of our organizations in re- search and development projects. All of us who

hold technical committee secretariats have an exact51
ing task to win the confidence of other countries,

both in our technical ability and our intentions.

International Standardization Activities in Various Countries The Soviet Union and other countries of Eastern Europe do not hold many technical committee

secretariats, but they do make a great contribution

to international standards activity and are to be

numbered among the countries whose confidence

has to be won. The United Kingdom has frequently been in the lead in international standards activity. We believe it has been a good investment for us. In the United

Kingdom, insularity is in decline.

It is still a very difficult matter to decide upon the

right balance between activities aimed at achieving

national and international consensus. We appreciate

that it is more difficult to decide upon the right bal- ance for a country as large as the U.S.A. However, the world will lose much unless the variety of organizations concerned with removing technological

barriers to world trade receive the full support of! the U.S.A.

There is a great spectrum of activity, oversimplified in this paper, needing international

collaboration and your help. The United States of America Standards Institute and the National Bureau of Standards, supported by the finest standards

laboratories in the world, will, we know, bring great

benefit to the U.S.A.. and will, we hope, also make a contribution to world standards activity commensurate with the great contribution that the U.S.A.

makes to world technology.

QUESTIONS FROM THE FLOOR

Dr. Astin: Thank you very much, Mr. Wynn. Both

Mr. McCune's and Mr. Wynn's papers are now open

for discussion.

Mr. Podolsky: My name is Leon Podolsky from the Sprague Electric Company in Massachusetts. I address myself to Mr. Wynn. He has asked a number

of provocative questions. I am going to limit myself

to just one—his remarks with regard to CEE membership.

He commented that in 17 years the United States has been only an observer to CEE. It is our understanding that the charter and national legal basis for CEE has in all this time actually precluded membership by the United States in the CEE and nothing more than observer status is available to us. Would

you care to comment on that, sir? Mr. Wynn: I went into that myself and I got the answer that the USA was not precluded from joining;

I would comment further that all constitutions can be

changed.

Mr. Podolsky: For 17 years we were welcomed as observers but not as members with a vote. Mr. Wynn: We will give the USA every support in trying to change the constitution accordingly.

Dr. Astin: Are there further questions or comments?

Question: How much progress has been made in standardization and communication of standards

between Eastern Europe and Western Europe?

Mr. Wynn: As far as we know, the countries of Eastern Europe are very quick to adopt ISO and IEC

standards, but I believe there are people here from

Eastern Europe who can reply better than I can. I think of all the countries in the world they respond

extremely quickly in enforcing and adopting inter- national standards, once agreement has been reached,

and they fully cooperate in the standards committees

of ISO, IEC, and so on. Dr. Astin: Would you care, Mr. Sharpston, to comment further on that point?

Mr. Sharpston: Yes, Mr. Chairman, I would confirm the substance of that last remark. I have had

this directly from the ISO staff and the members,

that in their work they do very rapidly adopt the ISO recommendations where these are favorable,

this being particularly true in their own regional

grouping.

52
- 0

ivermat

Ik

Dr. Astin: We will now have our topic discussed by

"our experts on the subject of standardization. The

first of these is Mr. Fayvel Hadass, who is the Director of the Standards Institution of Israel.

Mr. Hadass: Dr. Astin, Ladies and Gentlemen: I am

not supposed to take more than five minutes of your

time. In five minutes or 300 seconds in the non-decimal system that are at my disposal, I wish to bring some fragmentary comments related to the aspect of

developing countries. Looking back at the past 50 years, two events are most conspicuous; the immense technological advancement so well described by Mr. McCune, and

the awakening of a very considerable part of humanity to their economic potential. No doubt, both

phenomena are interrelated. Looking ahead, we are facing two imminent

world trade factors: One—Through further technological advancement, the plenty of today may,

under peaceful world conditions, turn into a disturbing surplus. This is not unlike the surplus brought

about by industrial farming. Second—The awakened part of the globe can and is going to be turned

into the potential recipient for this surplus. A first family car in Africa will be a better choice for the

surplus automobile than the third family car in the producing country.

It is therefore the concern of the highly advanced

countries to promote the buying power of these potential markets. In order to become paying purchasers they must produce added values. Here, tech- nology can assist them in becoming a productive

and constructive world trade factor. What I have in mind is applied technology, since sophisticated

scientific technology is going to remain for a long

time the domain of the most advanced nations. In young countries, sophisticated technology often results in prestige ivory towers. A baby should be fed

milk, not steaks! An important tool of technological advancement is no doubt standardization. It is of utmost importance

particularly to developing countries as suppliers as well as purchasers in the world market. —It helps them to establish, right from the beginning, an adequate quality of production. —It helps them to become discriminating buyers,

thus intelligent spenders. —It offers them a kind of clearing house in the complex of world trade.

—It also offers to the beginners the benefits of knowledge and experience accumulated in the exist- ing standards. Developing countries are particularly interested in international standards. They can and will develop

their national standards, mostly those related to

their specific natural, social and technical conditions.

But in foreign trade, for all practical purposes, they

are dependent mostly on standards of the buying

and even selling advanced countries. The bitter taste of "colonial quality" is still fresh in the minds of

Africa, Asia and Latin America. Naturally enough,

they find international standards, based on world

consensus, more just and reliable. The more so in the role of suppliers of raw materials and

semi-finished products.

It is in the interests, also, of the industrialized nations to help the developing part of the world be- come standard-minded and assist them in setting up

standardization and testing facilities. From what I have been able to learn in the pilotplant-sized economy of Israel, differing standards,

the dualism of systems and the inadequate coverage

of international standards are

always a nuisance,

usually a waste of time, energy and money, often a

serious trade barrier. I will illustrate with two examples—62% of the Israeli plywood production is being exported. Our national standard provides for 47

size varieties. Because of the lack of an internationally agreed-upon standard, we have to deliver many

hundreds of sizes. —At the conference table of an

international committee, the Indian iron ore export

just increased its return by a full percent—, by

millions of dollars. May I address a few words to my hosts? From

observations collected around the globe, I sincerely

conclude that the most advanced and standardminded American technology is still detached, to a

regrettable extent, from international standardization

activities. I am convinced that you could give and

take much more in international trade through

closer cooperation in this area. If world trade is to be really free, smooth and decent, it is imperative to develop a global and uniform trade yardstick—to my mind, a meter-stick.

Those who are qualified for leadership have to place the horse before the cart—and act early and

decisively!

When Lindbergh crossed the Atlantic, the rabbi

admired his skill and courage, but failed to understand his hurry. Today, all of us are in a hurry

even the rabbi travels by plane.

53
FAYVEL HADASS is Director of the Standards Institution of Israel. His industrial experience began in Danzig in the automotive industry. Upon his emigration to Israel in 1932 he spent seven years on the mechanization of farming. During

World War II he spent four years on the development of the local industry for the War effort and served as Member of the Allied War Supply Board.

For the subsequent four years Mr. Hadass was active in international trade with an American firm. With the establishment of the State of Israel he became

Controller of Light Industry and a Member of the Board of the Investment Centre, as well as adviser on industry to the Ministers. He founded, and for four years managed, the Institute for Vocational Safety.

Mr. Hadass has been associated with Standards work for seven years and he is a Member of the Board of the Institute for Productivity.
Dr. Astin: Our next discussant is Mr. Francis L. LaQue, who is Special Assistant to the President of

the International Nickel Company of Canada, Limited, and a Vice President of the International Nickel

Company, Incorporated, assigned to executive support of major corporate activities. A short time ago he headed a distinguished panel

under the Commerce Department's Technical Advisory Board to study our national needs with respect

to standards. His report is well known and has been

widely read and discussed and I think was a major

factor in the recent organization of the United States

of America Standards Institute. It is my pleasure to present to you Dr. LaQue.

Dr. LaQue: Thank you, Dr. Astin. Distinguished

guests from abroad, ladies and gentlemen: I will take

the risk of telling a story that might be considered

to be funny to some people, and it has a moral. The

story is this. There were a lady and her husband walking down

the street. The lady noticed a weighing scale in a doorway. She went over, got weighed and came

back with smiles all over her face. Her husband asked her, "My dear, how much

overweight are you now?"

She said, "I am not overweight at all. There is a

chart in there on that scale, and according to that chart I am 6 inches too short." The moral is obvious, of course, that when rela- tionships are indicated between one measurement

and another we cannot safely assume the interpretation of this relationship is going to be the same by

everyone who endeavors to make it, and I would

think that the danger in this direction is likely to increase with the international use of any such sys- tems of relationships.

I assume that the ground rules will permit me to

deal, in my occupation as discussant, with matters

that were presented this morning as well as this afternoon. I was particularly interested in trying to prepare a discussion in advance of what I thought

Dr. McLuhan might say. That was an interesting

activity, so in preparing my comments an immediate

problem was presented in trying somehow to relate anything as "hot" as precise standards documents to the "cool" world which Dr. McLuhan visualizes as being imminent and perhaps desirable. The words

"hot" and "cool" are used in this context in the sense that the speaker has tried to understand Dr. McLuhan.

Precision and Uniformity in Standards

In the field of international trade, in which stand- ards are an essential component of the language of communication, it is likely that everyone will agree

that there must be maximum precision in describing

by reference to an appropriate standard what the buyer expects to receive and what the seller agrees

to furnish. There must also be precision in the description of how compliance with stipulated requirements is to be determined, so that the buyer can

confirm that he got what he expected and so that the

seller can be sure that what he furnished is likely to meet the tests that will be applied by the buyer.

The ability to describe what is wanted and what is offered very precisely become more and more important as the revolution in means of communication progresses. It is already possible to transmit

facsimiles of printed documents overseas in a matter

of minutes. When such means of communication

take the place of discussions at first hand, the need for precision in description of what is being

dealt with becomes greater and greater. Along with

this need for precision is an almost equal need for uniformity of standards on an international scale. Thus, advances in communication techniques in- crease the urgency of the development of international standards as a vital factor in world trade. The standards I have been discussing apply, of course, to things that are prescribed in terms that describe exactly what is to be furnished, keeping in mind the purpose for which it is to be used. These

precisely descriptive standards or specifications must

of necessity fall into what Dr. McLuhan would consider to be a "hot" category.

Performance Criteria On the other hand, we can see a trend toward

another type of standard or specification which prescribes what is wanted in terms of the performance

needed or expected, without stipulating how this performance is to be achieved. This begins to ap- proach Dr. McLuhan's realm of the "cool", since it implies a degree of freedom—if not exactly free55
FRANCIS L. LaQUE is Special Assistant to the President of The International

Nickel Company of Canada, Limited, and a Vice President of The International

Nickel Company, Inc., assigned to executive support of major corporate activities. He previously served eight years as Manager of the Development and Research

Division. He has been with International Nickel since 1927 and specialized in the

field of corrosion and corrosion-resisting materials. Inco's well-known corrosion

testing stations at Kure Beach and Harbor Island, North Carolina, were established

under his leadership.

A native of Ontario, Canada, Mr. LaQue received his Bachelor of Science Degree in Chemical and Metallurgical Engineering from Queen's University, Kingston, Ontario in 1927, and an Honorary LL. D. from that University in 1964.
wheeling—in which display of imagination and new

approaches are favored in the "cool" atmosphere of

cultivated vagueness, which the speaker guesses Dr. McLuhan would welcome and endorse.

It seems reasonable to recommend that our atti- tude towards the nature of standards and specifications should remain fluid, so that the advantages of any sensible approach can be examined and utilized on a rational basis, in what Dr. McLuhan might describe as being a "cool" way to do it. We must,

however, continue to use the "hot" line whenever it

is impossible or impractical to employ the "cool"

approach and when there are no reliable means

either to define adequately the circumstances of the intended use or to measure performance capabilities

closely enough to permit the use of a performance

standard in preference to a descriptive one. The tremendous capability of the National Bureau of Standards, as represented by its staff and its new facilities on display on this occasion, is being

applied more and more to the development of new

and better means of measuring performance as well

as properties of materials and things that enter world trade. This is bound to accelerate greater use

of performance as compared with descriptive standards and specifications, and thus we shall feel more

and more at home with our standards in the new

and "cooler" world in which we are going to be

living.

I have some additional comments pertinent to some of the questions raised this morning and comments made.

Technology flows in world trade through the substance of engineering and material standards and

methods of test, which include the distilled product

of the tremendous amount of research upon which

these standards are based. This will be a means by

which the developing nations can be given the advantage of the technology of the nations in which

the most sophisticated standards originate and appear in their most highly developed form, most useful to developing nations—that is, international

standards. This requires, of course, the existence or

cultivation of an ability to make use of knowledge

provided in this form to the developing nations.

Systems of Measurement

I have another comment dealing with occasional

presentation of statistics relating world trade to sys- tems of measurement. Statistics on possible effects of systems of physical measurement on international trade ought to be refined, to make a proper distinc- tion between items where the size module or system

of measurement is likely to be important—for example, a component of manufactured goods as distinct from a complete assembly such as an automobile or

a machine, and as distinct from those where no

significant effect is likely such as foods, fuels, and raw materials.

It is easy to understand that the problems pre- sented by a change in the system of measurement

will be least in the case of measurements of weight

and volume and greatest in the case of linear measurements as applied to machine components, and

here the problem is not so much one of the units used for measurement as it is the size that is measured. We speak of international cooperation in achieving uniformity in the realm of measurement

and I would hope that we could look forward to a

lot of give and take, in which the module sizes al- ready well established with the one system might be

accepted in other areas in return for the acceptance

of the unit of measurement on an internatioal scale.

I recall that in Mr. Wynn's paper he referred to the desirability of bringing to bear on safety standards the accumulated knowledge, wisdom and experience of every country, rather than to develop such

standards on an individual country basis. I think this

is merely an extension of what I believe is the most

important factor in the development of safety standards in any country, which is not to waste time debating where the dominance of development of such

standards should rest, but to try somehow to find the

best way to organize competence from every availa- ble source.

57
Dr. Astin: Our next discussant is Mr. Samuel H.

Watson, who is Manager of Corporate Standardizing

of the Radio Corporation of America.

Mr. Watson: Dr. Astin, distinguished guests, both

from our many friendly countries abroad and the United States: Standardization is recognized and firmly established as an essential function in government, in the

military and in industry. My identification is predominantly with industry, where the pursuit of standardization can be difficult, costly, and limited in effec- tiveness unless it is a team effort which includes

Government and the Department of Defense. The

areas of mutual interest are extensive. Teamwork is in effect in many committees at the national level and

because it is, more and more standards are appearing

with a stamp of universal approval and acceptance.

They are the product of hard-working, objective, and

highly dedicated people; they are truly United States of America standards. They clearly identify United

States of America positions on the subjects resolved,

and they equip U.S.A. delegations well with the documentation and the authority needed for effective participation in international standardization.

Coordination of Standards Thoroughly coordinated standards are needed in greatly increased numbers. To this end, the function

of the reconstituted American Standards Association

under the new and appropriate name, United States of America Standards Institute—if its function can

be briefly stated—is: "to provide the coordination,

the procedures, the administration and the central- ized services needed to accelerate the production

and maintenance of United States of America standards and to establish and maintain appropriate USA

participation and effectiveness in world standardization." The capacity of the Institute to carry on

this important task will be markedly increased with

the granting of the proposed Federal charter.

Standards as Aids to Communication

The standards in greatest need internationally are those that can make a contribution to improved

communications, a contribution in each case that is worth the effort and expense required to bring it about.

One of our great international standards, a boon

to communications and world trade, is the Gregori- an calendar. Occasionally a proposal to change it is] publicized. Perhaps the change is convincingly ex- plained as one offering some improvement in communications. However, since the existing calendar

is working so well and since it took almost 400 years

to get it into universal use, it is not likely to change in the near future. In any avenue of international communications,

where all those involved readily understand one

another, further purification of the basic standards of communication is not likely to affect world trade to any measurable degree. Conversely, changes in exist- ing standards or newly introduced standards which

can substantially speed-up and sharpen understanding among the representatives of different countries can have far-reaching effects upon world trade. Such standards are a most favorable influence to-: ward improved utilization of world manpower andi

material resources. Standards in this latter category

are the breakthroughs, the difficult standards to! come by. Included would be any standard, practice, or procedure that softened the greatest obstacle in the conduct of international transactions—the lan- guage barrier. Perhaps the near future will bring an ingenious

way of accelerating the already somewhat advanced

merging of languages. Probably few of us in the English-speaking countries realize how much French we know until we thumb through an English-French

dictionary. In the same vein, if others share my

experiences, it is disturbing when using an English

dictionary to note how much English we do not know.

I stated that standards that improve communications are most important. Through them, the peoples

of every nation will better understand and better evaluate the standards and offerings of other countries; each in terms of its own economic needs and

preferences. As a result, it is likely that a degree

of variety and not global sameness will continue to

prevail.

The trends in color television preferences in the

countries of Europe today provide an excellent ex- ample. Color television receivers will be powered by

a variety of voltages and frequencies, the pictures

will contain a varying number of lines per frame,

58
SAMUEL H. WATSON is Manager of Corporate Standardizing, Product Engineering, of the Radio Corporation of America, an activity with which he has been

intimately concerned since 1944. Beginning his engineering career with General

Electric Company, Mr. Watson joined RCA in 1929, engaging first in design and

field engineering. During the war, he served as Project Engineer on vital military

communications equipment , including radar. Mr. Watson, is a Senior Member of the Institute of Electrical and Electronic

Engineers, and charter member and Fellow of the Standards Engineers Society. In

recognition of his service to the voluntary standards movement through leadership

in the actual development of standards, that organization awarded Mr. Watson its ASA Standards Medal in 1962.

Mr. Watson was the U.S. Representative to the ISO Committee on Drawings in Geneva, Switzerland, that year, and was Chairman of the U.S. Delegation to the meeting in Budapest, Hungary, in 1965.
and the broadcast signal standards will conform to one of possibly three different systems.

Importantly, however, the basic standards of measurement are essentially identical. This enables

all the countries of Europe, regardless of power,

broadcasting, and receiving practices to use the same

standard materials and components in the manufacture of television equipment.

Although the European color television receiver owner may not have access to certain programs, he

can fully enjoy, in the programs he does receive, the

reliability and fitness-for-purpose developed in the United States over a number of years of high vol- ume color TV component production and field experience.

Critical Approach to Standardization

I stated that standardization is recognized and

firmly established. This means that it is here to stay, and more and more will be expected of it in government, in the military and in industry. Funds and

management support for standardization are being

made increasingly available. With them will come

demands for high performance levels; the maximum of effective standardization for each dollar ex- pended. The standards engineer of the future, like many today, must be a very competent fellow with

his feet firmly on the ground, a healthy and controlled enthusiasm for standardization and a capacity for effectiveness with people as well as with

technical problems and situations. The standardizer

who waves the banner and gets carried away will require increased restraint. In recent months, in my reading, a new stumbling

block has been added; the word "Hertz." I refer

to the adoption of Hertz for use instead of CPU

(cycles per second) and not to the well knowr

automobile rental agency. In the current issue ol Electronic Products, November 1966, Mel Mandel

Editorial Director, writes under this heading: "Readers favor CPS over Hertz two to one." The editoria

is interesting in its one page entirety, and I quote

this segment:

"When so many company presidents, vice presl

dents for engineering, general managers, chief en- gineers (and two physicists with the National Bureav

of Standards) vote (three to one) against Hertz, it

is obvious that our representatives to the International Electrotechnical Commission, where Hertz was se- lected, did not properly understand the people the)

represent. Should we use a little more democracy iv selecting our international technical negotiators?"

It is not my purpose in this reference to imply i personal position but rather to re-emphasize thai management is becoming more and more critical ol the standardization function and of the standardizers

The consensus principle is going to require more

surveillance. The consensus in the future must be consistently real and contain an "engineered component" of smaller size.

I consider it an exceptional honor to have beer

invited here today to participate in these historic dedication ceremonies and to mingle with so man)

fine people from so many great countries. As the)

have in the past, these great laboratories in theii new, enlarged, and modernized setting are destined

to continue as a tower of increasing strength in support of our United States of America standards

program, nationally and internationally.
I u°lf Dr. Astin: Our final speaker is Mr. C. H. Sharpston,

who is the Secretary-General of the International

iresi Organization for Standardization (ISO).

s se

)h i

of

zers.

npoMr. Sharpston: Thank you, Dr. Astin. I wish to touch rapidly on three matters in the time at my

disposal. The first is the general way in which the work of ISO is carried out; secondly, some Government legislation; thirdly, the interaction of standardization work at three levels—national, multinational

regional group, worldwide.

International Organization for Standardization The impact of ISO and IEC activities on world

trade is greater than would be indicated by a recital of the nearly 1,000 Recommendations which have

been published and almost as many Draft Recommendations now in the pipeline. This is a conse- quence of the way in which the work is organized.

In choosing its delegation to participate in our

Technical Committees and Subcommittees, each national standards institute calls on experts from pri- vate industry, (as consumers as well as manufacturers), by virtue of the relationship which links the

Institute to industrial companies and manufacturers'

associations. It can and does include, when appropriate, representatives of research laboratories, Government Departments, consumers' associations, and

so forth. The composition of a national delegation

is altered where necessary from meeting to meeting,

in the light of the agenda.

In the give-and-take of international negotiation

within the Technical Committees, delegates obtain

first-hand experience of the way world trade can be

hampered by the absence of international standards,

and likewise of the difficulties in achieving such

standards. They carry this experience back into their normal professional work as well as contributing

their practical wisdom to the international recommendations for standardization. In the last analysis, the scale of our activities in ISO and IEC, and our effectiveness, depends upon

the national Member Bodies. It was they who constituted our organizations originally, it is they who

finance our work, and exercise control of policy.

My colleague, Louis Ruppert, the General Secretary of IEC, is here with us, and he can speak more

particularly about his organization. As far as ISO

is concerned, national Member Bodies fully agree with Mr. Wynn that we have not grown recently as

fast as our responsibilities. They have recognized

this in the most practical fashion, by voting funds

for 1967 which are more than double those of 1966.

A greatly strengthened staff will not only enable

us to process more Recommendations, doubling and

then redoubling the output of recent years within

24 months; it will also make possible a more skillful coordination of the work of our many Technical

Committees and a more sensitive planning of our

forward program to match the needs of world trade. Some 20 years of experience bear witness to the fundamental soundness of our organizational structure, to its flexibility and its adaptability. If Mr. McCune is right, we might have to be 10 times

as active by the early 1970's as we are today, I don't

know. What I do know is that, provided industry

and governments agree and make the resources

available, ISO will measure up to that challenge.

Incidentally, Mr. Wynn mentioned that the Soviet

Union and other countries of Eastern Europe do not hold the secretariats of many of our Technical Committees. That is true, but whatever the historical reasons for this state of affairs, it does not represent

today a lack of confidence in the value of ISO's

work. It is no secret in fact, that these countries

desire to take on more such secretariats as the

opportunities present themselves.

There is a solid foundation of international rec- ommendations in the basic fields of terminology,

units, symbols, methods of measurement, documentation, classification, etc. This work is continuing. In

the field of applied standards, the record is admittedly more patchy. It does, however, include many Recommendations relating to physical, mechanical and

chemical methods of test; methods of sampling and

quality control; safety standards; product quality and

"fitness for purpose." My list is not exhaustive.

As one of the means whereby technology is diffused from industrially advanced countries to developing countries, the work of our Technical Committees and the resultant ISO Recommendations play an important role. The developing countries participate in this work to the extent of their capabilities —and as consumers where they may not be producers. We also have begun to hold seminars and con61
C. H. SHARPSTON is Secretary General of the International Organization for Standardization (ISO). During the war, he served as Assistant Director of Planning, Programmes and Statistics in the Ministry of Aircraft Production, and was

subsequently concerned with matters relating to the economic recovery of post-war

Europe.

Mr. Sharpston's industrial experience was with the English Electric Company

and more recently with a member company of the Joseph Lucas group. His work

has encompassed market research, sales forecasting, export projects and budgeting.

He has dealt extensively with overseas negotiations relating particularly to the European Economic Community. He has spent the past few years as Director and

General Manager of two subsidiary companies of Joseph Lucas (Industries) Ltd.

in Brazil. Mr. Sharpston received his education at St. Paul's School, London, and at Corpus Christi College, Cambridge, where he obtained a first in mathematics and

economics.
ferences to guide the newly developing countries in standardization matters.

Government Legislation

Next I want to take compulsory standards, where

safety, health, and public amenity are involved. At

the national level, government departments will generally draw heavily on outside advice about the

technical content of legislation in this field. Add the

extra dimension of a world community of trading

nations and you need to think a bit more carefully

how to organize the preparation of such legislation,

in order to achieve an organic international whole.

The commonest approach is to move on from

established national legislation to inter-Governmental negotiation aimed at reconciling the national

differences. The greater the technical content of such legislation, the more I would question the efficiency

of this procedure. It seems to me that an alternative approach should be adopted more frequently. This

is, to begin by ironing out the national differences in

the purely technical aspects, within the non-Governmental forum of ISO and IEC. The component of

expertise in public administration can be introduced

at this stage quite effectively by having government

officials as advisers to or members of national dele- gations in our Technical Committees.

When the draft Recommendation emerges from a Technical Committee, we have a period for the fullest consultation of all interested parties, prior to submitting it to our Council for approval. In the class

of standards which I am discussing, governments as such would be the most interested parties. By the time ISO published a Recommendation, Governments could nearly be ready with draft legislation to submit to individual legislatures. I am aware that

this kind of legislation is by no means non-political

and non-controversial. That is the case however,

whichever approach is adopted. I wonder how many

of you agree with my ideas.

Coordination of Standardization at Various Levels Thirdly, there is the issue of standardization at

national, regional, and international levels, and the

best way to coordinate them. There can often be a

basic dilemma. The smaller regional groups are more

cohesive, and likely to be more active and work

more quickly than a worldwide organization. On

the other hand, fully international standards benefit these groups most in the long run, and a set of dis- cordant regional standards may actually make it harder to agree subsequently on an international

standard.

In parallel with the work in Western Europe described by Mr. Wynn, the harmonization of standards in Eastern Europe is undertaken within

COMECON and in the Americas by COPANT—

the Commision Panamericana de Normas Tecnicas.

There is no simple solution, for we must recognize that the pressures for action at the regional

level are often stronger than at the international

level. In most cases at the regional and the inter- national level, we are seeking to iron out differences

between national standards which already exist. I can only suggest a complete flow of information

from the various regional groups to ISO. If we see

that the work is moving towards a consensus in a given sector, well and good; if it seems to be

moving on a collision course, we could discreetly

drop some words in the appropriate ears. The great challenge, however, lies in the newer

technologies and the new developments within older

technologies—the challenge, to write truly international standards from the start, instead of several national standards. I would contend that the best hope of success in these cases is to go clear-sightedly

and with firm purpose for negotiation at the inter- national level only. Dr. Astin: Thank you very much, Mr. Sharpston.

I am sure that there are a lot of questions remaining

but I will have to ask you to refer your questions

to these gentlemen at the reception this evening.

I would like to thank all of you for participating,

and most particularly to thank the speakers for their most interesting contributions.

63

Banquet Program

Chairman: Mr. John T. Connor, Secretary of Commerce

Secretary Connor: In this nation, beginning around 1950, a few people outside of those directly engaged in the work began to realize the significance and the implication of the progress being made in the field of science and technology. At about

the same time, a few others began to realize the great importance of international

trade, and began to talk about the importance of growth in international trade, and

the absolute necessity for broadening the area of free trade on a fair and reciprocal

basis.

Still fewer people in this country combined those interests and those understandings and articulated them in the context of the subject of this symposium: the

effects of technology on international trade. One such individual—and an exceptional one—is here with us this evening. He is Vice President of the United States. May I present him to you now: The Vice President.

65
HUBERT HORATIO HUMPHREY, Democrat, of Waverly, Minnesota, was born

in Wallace, South Dakota, on May 27, 1911. Mr. Humphrey received a degree

from the Denver College of Pharmacy in 1933, his B.A. degree from the University

of Minnesota in 1939, and his M.A. from Louisiana State University in 1940.

He was elected Mayor of Minneapolis in 1945 and 1947. In 1948 he was

elected to the U. S. Senate and re-elected in 1954 and 1960. His Democratic

colleagues in the U. S. Senate selected him as the Assistant Majority Leader in 1961 . In 1964 he was elected Vice President for the term beginning January 20,

1965.

He is President of the U. S. Senate, a member of the Cabinet and National

Security Council, Chairman of the National Aeronautics and Space Council, Chair- man of the Peace Corps Advisory Council, Chairman, National Council on Marine

Resources and Engineering Development, Honorary Chairman of the National

Advisory Council to the Office of Economic Opportunity, Chairman of the Special

Cabinet Task Force on Travel USA, member of the Board of Regents of the Smithsonian Institution, and Chairman of the Cabinet Task Force on Youth Opportunity. At the request of the President, the Vice President has helped coordinate

and implement the Federal government's responsibilities in the areas of civil rights

and poverty.
Speaker: The Vice President of The United States, Honorable Hubert H. Humphrey

Address: Technology and Human Betterment

Vice-President Humphrey: Thank you, Mr. Secretary, you have an imposing list of participants in this conference. By the time it is done, I am sure that just about

every conceivable aspect of technology and trade . . . technology and competition

. . . technology and investment . . . technology and growth will have been examined

and discussed.

I am also aware that the so-called "technological gap" between the United

States and other nations—particularly our Western European friends—can hardly

be escaped these days. Each day there seems to be a new proposal—and some of them have been good ones—toward closing that gap. If there is a technological gap, there is no gap in the information about it. Therefore, rather than enter into any technical discussion this evening, I would simply like to leave behind a few

general observations and ideas.

First, although some people deny it, I do not dispute the fact of a tech- nological gap. I know that all the statistics indicate that we in the United States have commanding leads over Western European nations in many fields—especially

in computer technology and utilization. But we have advanced technology in large part simply because our industry,

which exists in many cases on a far larger scale than European industry, has had

the need for it. Supply does follow demand.

Proposals for Closing Gaps

I think by far the most promising proposals for closing the American-European technological gap have been those such as Prime Minister Wilson's on Monday for a European Technological Community. "If Europe—which has already seen

the benefits of a European Economic Community, a Coal and Steel Community,

and an Atomic Energy Community—were to pool her technology in a similar way,

I have no doubt that the gap would already be a long way toward being closed. The very fact of entry into the European Communities by Britain and her

EFTA partners—and eventually perhaps by others—would help create an even

larger European market and larger industry able to finance and sustain advanced

technology, along with the necessary research and development. And from the general need for such technology, I feel sure it would follow.

The Rich-Poor Nation Gap

This leads me to my second observation: Namely, that economic integration

and the creation of larger, continental markets—all over the world—can be a powerful force for closing any technology gaps.

It seems obvious, but too often overlooked, that small and poor nations stand

little chance for economic sustenance if they do not seek economic integration—or

at least, close economic cooperation—with their neighbors. This is beginning to happen in Latin America, Asia and Africa, but not nearly rapidly enough.

I am pleased to see that "Technology and the Developing Countries" will be one of your subjects tomorrow.

Long after any North Atlantic technology gap is closed, it will be the business

of the Atlantic nations to try to close the far more dangerous rich-poor nation gap. We in the rich nations must begin taking more active steps now to help the poorer

nations build their economies, create broader markets, and develop their own technologies.

67
I do not mean that each developing nation, and its economic partners, will need the capacity to produce and market sophisticated IBM systems. I do mean

that, without trained manpower and the ability to enter the technological age, the developing nations will not only be unable to compete in world markets but that the resulting political and social unrest in these nations will be a threat both to their own security and ours.

The Proper Ways to Use Technology

And this leads me to my third general observation: That we all ought to do a

little more thinking about what technology is for. If technology is used just to construct more impressive pieces of hardware—without resulting human benefit

then it will be wasted.

I believe that today we have the technological capacity already at hand: To

rebuild the decaying central cores of large cities all over the world; to provide

decent and reasonable housing on a wide scale; to lift primitive agriculture into the

modern day; to compress the time scale for nations with catching up to do; to master our physical environment before it masters us; to end the coexistence of starvation and abundance on the same planet. In my view, the real "technological gap" is between our technological capacity and our application of it to social needs. These needs—such as education,

public health, recreation and transportation—exist in every part of the world.

Meeting these group needs, however, is quite different from meeting individual

needs such as for automobiles, clothing, or electrical appliances.

Old ways of doing things simply won't do the job. We need new mechanisms, new ways and means for bringing technology into the market place of public

needs.

Constructive New Partnerships

Here in our country the model may lie in the constructive partnership of government, industry, labor, and the university that has been so successful in our

space program. The talent and resources of all these elements in American society

brought to bear in an efficient and coordinated fashion, have moved us forward in space far more rapidly than we would have hoped even a few years ago. We have seen, too, what government research and development contracts

given to the university and to private corporations—have produced in overcoming

scientific and technological obstacles in a remarkably short time.

The same partnership concept . . . the same "systems approach" . . . the same

investment in research and development, applied to other public needs, may prove

to be the way in which our rich nation may finally be able to overcome economic

and social problems which have been generations in the making.

I believe, too, that private industry, acting on its own, can be a powerful force

in overcoming these problems. In the United States, a good deal of our tech- nological capacity lies in private industry. In other countries, this situation often

differs.

I know from personal experience that American business today is demonstrating a social conscience. This has been shown again and again in such areas as equal employment opportunity, retraining of workers, and hiring the handicapped.

Often as not, public service has also turned out to be profitable. I think that American private industry—operating in a competitive environment which pro- motes efficiency—can profitably enter other areas of public need, providing educational services, slum rehabilitation, and such things as information systems.

68
Where these things may not be profitable, I believe we in government should

do what we can to be of help until they become so. (But I have the feeling many

of these things can be profitable from the start.) Today we are putting to use in government many of the modern management

techniques already used in American industry. In formulating federal programs

and in organizing ourselves—such as in the new Department of Housing and Urban Development, and of Transportation—we are increasingly concerned today

with attacking our national problems with the highest degree of coordination and

cost-effectiveness. We have for example, with the creation of the new Department,

begun to consider transportation as the problem of how to move men and materials most effectively, rather than the particular problems of railways, airlines and

highways.

The new Demonstration Cities Act, passed in the last Congress, is our first legislation which attempts to pull together all programs for the city—programs for economic opportunity, for housing, for clean air and water, for social welfare, for highway construction, for neighborhood renewal, and so on—and bring them to bear together in the right mix, in the right place, at the right time to best improve

the urban environment. Up until now these programs have too often been administered without regard to their relation to each other, or to their order of priority.

And both the partnership concept and systems approach have been put to work in the war on poverty—part of which is managed under contract by private

American corporations. In California my friend Governor Pat Brown—working

with aerospace companies—has made a promising beginning at the state level in applying these approaches to problems of transportation, garbage disposal, crime,

and paperwork.

We are just beginning to utilize our technological capacity for human benefit here in the United States. We are learning. But, during the learning process, we

still—as the world's most technologically advanced society—have a responsibility to help create human benefits in other places by making our knowledge more

widely shared.

How to Transfer Technology

Technology moves in the form of products and services that nations ex- change. It moves through patent royalties and licensing arrangements. It also moves in textbooks.

I have noticed that while a breakthrough in science flashes quickly around the world, a breakthrough in technology may take years to find its way to a place of need. What we should seek, therefore, are rules and practices to help speed the

flow of technology, not slow it down or stop it.

I know the argument that technology carefully gained should not be easily

shared, lest hard-earned competitive advantage be lost. The argument against sharing of technology, it seems to me, is not unlike the argument against liberalized trade. But in technology, as in trade, the benefits of openness and free exchange

would seem to outweigh any loss of temporary, protective advantage.

I should think that an international patent system, for instance, would go a long way toward safeguarding ownership of valuable technological processes with- out burying each nation under paper. And it seems clear to me that the United States' own long-term economic

interest dictates that our trading partners should develop strong, tech- nologically based competitive economies.

69
Stemming the Brain Drain

Technology also moves in the minds of people who travel from one country

to another. Some travel to teach, and some travel to learn. When students have been trained in another country and then remain there to fashion their careers, we are faced with one element of what is the now-famous

"brain drain."

There are thousands of young scientists and engineers working in the United

States who came here to learn, but have stayed to earn.

If it is any comfort to those nations which have lost the services of their talented citizens, they should know that we have experienced a comparable situa- tion in the United States. Some of our states and regions graduate more Ph.D.s

each year than they employ. There is a "brain drain" from our Midwest to our

East and West Coasts. We deplore this. But from a broad, national point of view, we can at least take some comfort from the fact that the United States as a whole

is richer for this new talent. There is no comfort at all for the developing country desperate for trained

manpower when that manpower is swallowed up here. These are precious human

resources they cannot afford to lose. How do we reverse this flow?

First of all, I take it for granted that good, technically trained people do not

turn away from their homelands for money alone, or for better living conditions

alone. Any good man wants to be where the problems are and where he has a fair chance of solving them. He also wants to utilize the most modern equipment and

facilities. There are some things we can do. I believe a great part of the problem lies in the educational systems of the industrialized countries. Too often, we offer disci- pline-oriented—rather than problem-oriented—education and training. Quite properly we emphasize the "ics"—physics, optics, nucleonics. I believe we must emphasize, too, the "tions"—education, transportation, nutrition, communication,

irrigation—the things needed in developing countries—so that both our own citi- zens and those of developing nations can acquire the useful skills of nation-building.

I think, too, that we can help draw these valuable people homeward by making available to their own nations equipment and facilities that they have become

accustomed to here. Our government agencies, our universities, and private in- dustry are all topheavy with equipment which is perfectly satisfactory for skilled use, but which has been superseded by the next-generation model. As chairman of the Aeronautics and Space Council, I have made it my particular business, for

instance, to see that equipment which has served its purpose in our advance

research and application in space has been put to good use elsewhere.

We can help by working with the developing countries to insure that too high

a percentage of their students do not come to the United States to acquire skills which have no relation to the priorities at home. We can also, quite practically, do

what we can to help establish institutions in their home countries which will give these young people the skills they need without leaving home in the first place.

Flexible Approaches

There is the across-the-board need to help build the technologies of the havenot nations so that their talented people will have sufficient daily challenge. It is clear that unemployed or underemployed scientists, even if they do not leave their country, pose political and social problems. In all we do to raise technological

70
capabilities around the world, and to use those capabilities for human benefit, I am

convinced that we should not become bound by doctrine, dogma, or ideology. In the United States there were any number of people who argued that there was no way to undertake a major effort in space except under complete government auspices. Yet, as I have related, we have been successful with another ap- proach. I am equally sure that the approach we took would be a dismal failure in many other countries, because of the varying strengths and relationships in their

societies.

Opportunities for Business We need to find out what works, and use it. I can think of a number of

opportunities, not tried or barely tried. For the business executives here tonight: I believe private corporations should

think about establishment, with other corporations—regardless of their nationality —of joint training institutes in talent-short parts of the world.

I don't mean that you should establish your own private foreign aid programs

(although I'd be in favor of that too). What I see are cooperative arrangements

which meet the intellectual needs of the people being trained . . . which help meet

the national goals of the country in which the institute is located . . . and the

legitimate financial objectives of the private or public enterprise company which

sponsors it.

Opportunities for Universities To those of you from universities: I would like to see schools established by

you, on your own initiative, devoted to city-building, to agricultural development,

to modern management. Why can't we export the essence of the Harvard or Stan- ford Business Schools?

I believe that American and European universities—increasingly breaking out

of isolation from their own societies—should try to meet as well the human needs

of the people living in the forgotten two-thirds of the world.

Opportunities for Foundations

To those of you from private organizations and foundations: What opportunities do you see? Here in the United States we have a National Academy of Engineering. It took us a long while to get it, but now we have it.

I see no reason why the Academy could not serve as a clearinghouse in helping to set up similar engineering institutions in other countries, working on

public problems.

Opportunities for Government

To those of us in government: I think each of us, in our respective governments, must seek new ways to use technology constructively.

The United States government, in this past year, has embarked on new inter- national programs using technology in the fields of health, of education, and of

agriculture. We mean to expand those programs. We have taken steps to remove

barriers to the flow of scientific and technical information and instruments to and

from our country. We have increased our programs of international exchange. But

I have no doubt that we must do much more, as other governments must do much

more.

I believe that we should be particularly receptive to proposals from other

governments, from international organizations, from private companies or groups

of companies, from any source, in fact, which wants to put technology to wider and

better international use.

71
The least we can do is to reward initiative by others, and to remove unnecessary obstacles, when a good idea turns up. (And if the Americans in the audience

have any doubt about where to submit their good ideas, I would refer them to Vice

President Humphrey.)

The Need for Action

Finally, may I make this observation: We can perceive today the general need

for . . . and the genuine benefit from the building of technological strength in every country of the world.

We can also begin to perceive the ways in which this can be done—a number

of them have been discussed at this conference. What remains to be done is for all of us to act on our knowledge.

As Thomas Huxley once said: "The great end of life is not knowledge, but

action." It seems to me an abysmal waste of time, of resources, and of energy

whenever men build barriers between themselves or when they miss the opportunity to improve mankind's general lot on earth. Today we have the chance—through technology—to remove those barriers,

and to lift all our nations together by our action. / think we should get on with it!

72
November 17, 1966

Morning Session—The Impact of the Policies of Government on the Creation and

Use of Technology for Economic Growth

Mr. Stern: This morning's session will deal with the instruments of government and how they may be

used to encourage the creation and the utilization of technology. As co-chairman of the session and first to speak on the subject, we have with us the President's Special Assistant for Science and Technology,

Dr. Donald F. Hornig.

Dr. Hornig: Ladies and gentlemen: It seems to me this symposium is unique in recent times in that

; it has brought together such a wide spectrum of people of different persuasions to discuss these topics.

The title of this morning's session is "The Impact

of the Policies of Government on the Creation and

Use of Technology for Economic Growth." I hope

that our policies are more concise than that title. Government policies have at times been widely misrepresented, and discussed from many points of

view. It seems to me that it is important that we get

together for this kind of discussion.

We have with us this morning a distinguished

group of panelists and discussants; businessmen,

technologists and scientists. They are all a part of

this problem, which 1 do not think is well understood. Nor do I think we have yet found, in our own

government at least, all the proper mechanisms for

taking into account technology as part of economic

growth. I hope that many aspects of this problem

will be aired and discussed this morning.

I regret not having been able to be with you to hear yesterday's fascinating discussion, and I hope

you shall permit me to avail myself of the privileges

of a Chairman to say a few words on his own behalf

before getting discussion under way.

The Relation of Technology to Economic

Growth

This general matter of economic growth, and the

relation of technology to economic growth, has been

one with which my office has been very much concerned, both domestically and internationally.

According to our Council of Economic Advisors,

something over one half of total economic growth

can be ascribed to the introduction of new technology. Although economic growth may not in itself be

the end objective of a society, it is central to achieving most of the social goals and most of the material

goals. The technological input is central to the progress of any country.

Broad Areas Involved in the Relationship

In thinking of what might be discussed this morning, I hope the discussion will cover the full range of

the inputs that go into this problem, and not be nar- rowly focused. There are surely a number of ingre- dients of technological and industrial innovation

with which governments must be concerned.

First, they must be concerned with the availability of suitably trained people, not only scientists and

engineers but entrepreneurs, inventors and managers. Secondly, they must be concerned that re- sources for new technology are provided. This in- volves risk capital or business credit on proper

terms, the availability of economic and financial in- formation and the availability of scientific and tech- nological knowledge to those who innovate. Also in- volved are such matters as the development of markets for advanced products—and such markets

may be generated either by the existence of a taste for advanced products in the society as a whole, or more consciously by government procurement.

There is the matter, particularly in a free enterprise

economy like ours, of the creation of a climate for innovation in a variety of forms. And each of these

are matters to which government policies can and

should be addressed.

Further, the Federal Government has a central

role—together with the states and communities—in connection with education. It isn't just the question

of the mass education of people, but the kind of

73
:

DONALD F. HORNIG is Special Assistant to the President for Science and Technology. He concurrently serves as Chairman of the Federal Council for Science

and Technology and Director of the Office of Science and Technology in the Executive Office of the President. Dr. Hornig's early career included research at Woods Hole Oceanographic Insti- tution and leadership of a project group at Los Alamos Laboratory. In 1946, he

joined the faculty of Brown University, subsequently becoming Director of the Metcalf Research Laboratory. He later joined the faculty of Princeton University

where he became Chairman of the Department of Chemistry in 1958 and first incumbent of the Donner Chair of Science.

A native of Milwaukee, Wis. (1920), Dr. Hornig received his B.Sc. and Ph.D.

degrees in Chemistry from Harvard University. A Guggenheim grant and Fulbright

scholarship for research at St. John's College, Oxford University, England, fol- lowed. Dr. Hornig was the first Bourke Overseas lecturer appointed by the Fara- day Society. Some 80 of his papers in the field of physics and chemistry have

appeared in professional journals.
education which is provided at all levels. The gov- ernment is concerned with the problem of developing the basic knowledge and understanding which

provides the raw material for innovation. In my own

thinking I draw a rather sharp distinction between

R&D per se and the innovative process. The two are

closely related but aren't necessarily the same thing.

The Federal Government now provides about 75

percent of the support for research in universities which is primarily concerned with the development

of basic knowledge and the training of people. This

makes the whole higher education process a major

Federal responsibility. The Federal Government

must be concerned not only with the conduct of basic research but with the health of the basic research

establishment and, therefore, the health of the universities. There are many problems in carrying out

this responsibility.

The Interacting Roles of Government and

Private Enterprise

In our society, industrial innovation takes place

primarily in the private sector. The primary role of

the government, it seems to me, is to provide a cli- mate for private initiative, and it does this through a wide variety of processes. Innovation is affected by a wide variety of governmental actions which aren't themselves technical or scientific. For example, there

is no question but that in many industries the rate of innovation is very much affected by the nature of

regulatory policies. Regulatory policies in the past

have been thought of from the standpoint of their

legal and economic consequences. I don't think

there has been very much thinking about regulatory

policies in terms of innovation. Additionally, tax

policies may be critically important to industrial in- novation. Tax policies can be restraints and brakes

or can provide, as many countries have learned, in- centives to innovation. The nature of anti-trust laws

and regulations and the ways they are enforced are

clearly important to the innovation process. It is important that we maintain an atmosphere and condition of healthy competition. On the other hand, care must be taken in some cases that the anti-trust laws

not be used in such a way as to stifle innovation.

The purchasing policies of the U.S. Government,

which spends one seventh of the GNP, are important in a variety of ways. In particular, the Department of Defense and NASA together buy probably

$25 billion worth of highly technical products. Thus

their purchasing policies can have a very important

effect. I'm thinking, for instance, of such things as the nature of the contracts, how they are written, the use of incentive or fixed-price contracts, and so

on. These all affect the mode of conduct under the contracts and the inducement to innovate.

Finally, there is the matter of new technology.

This has been generated in great volume, primarily

through the Department of Defense, the Atomic Energy Commission, and the Space Administration. I won't discuss this point further since it was so thor- oughly covered last night. But it seems to me that U.S. Government support of new technologies has

been effective because it hasn't just been an across- the-board support of technology per se. It has coupled the support of new technologies to urgent goals

which had to be met. I think this has been an important feature of the governmental effort. An analysis of the mix of all of the things that enter into the process of innovation has yet to be

produced, or if it has been produced, I wish someone would call it to my attention. I hope that, during the course of the discussion this morning, some

light will be thrown on many facets of this complex

mix of factors, particularly in the context of a society in which the government and industry play

complementary roles.

I think you know that the Department of Commerce, as its name implies, has a key role in these problems. However, the problems cut across all parts of our Government, so many of them can only

be dealt with at the level of the White House.

The Need for Close Industry-Government Dia- logue

Before turning this session over to our co-chair- man and to the speakers, I want to say that progress

in this direction—the development of wise govern- mental policies—requires a good and close dialogue

between government and industry. One of my own

hopes is that we will improve this dialogue and I hope to take some additional steps myself in that

direction. This symposium is one of the most important steps I have seen recently in improving the dia- logue and the conversation among the various parties concerned with the creation and use of technology for economic growth in all of our countries.

256-707 0-67—

75
Dr. Hornig: It is now my privilege to introduce the

first of our speakers this morning, Mr. Robert Major,

who is the Director of the Royal Norwegian Council

for Scientific and Industrial Research.

Mr. Major: It is a pleasure and an honor to address

this distinguished group on the important theme of the impact of the policies of government on the creation and use of technology for economic growth.

I will discuss this theme by trying to answer the following questions: In the first place, what are the main factors in building up national technological

research potential? And second, what is the role of

government in building up these potentials? That is, how can government stimulate the creation and use

of technology for economic growth, and what do

governments do about it? Third, what should we ex- pect governments to do in this field in the future?

Building National Research Potential Let us briefly look at the factors which build up

the national research potential. There is a need for a system capable of educating in quantity and in quality all personnel needed for national research activities and for industry, and for other activities making

use of research results. There is a need for fundamental research institutes in the universities, or as separate organizations to pursue the search for new

knowledge, thereby also nurturing applied research

activities and giving inspiration to higher education.

There is a need for applied research institutes and

laboratories which can assist in solving the practical

problems which are faced by a government of our

time, and which can also help in the development of production methods and of new products throughout

industry. There is a need for a technical information

system which brings an ever increasing knowledge

from national or international research to the people

needing it in the form and at the time they need it. But all this is not enough. Knowledge acquired in educational systems is only useful for economic

growth when the educated personnel learn how to use it in industrial activities. And research itself has no economic value until it has been built into new

processes or new products. There is also need for dynamic industry which has the right structure and

management open to the exploration of research itself, sufficient risk capital, and a market big enough

for the product. Without such a dynamic industry, even first class research itself would have no bearing on the economic growth. It is further necessary to understand the interplay of all these factors and to create a natural climate for development of all these

factors. Government's role in this picture varies from

country to country, depending on the degree of in- dustrial development, on the national goals. I do,

however, think it right to say that in all countries

government's role is growing. This is partly due to the growth of research activities, but also due to the

fact that it was not until lately that most governments have discovered the roles government could

and should play. Let us look at the situation in regard to different factors I just mentioned.

Planning the Educational Program

The most striking example of government growth

in the fostering of education is perhaps the development of the educational system in Soviet Russia during the last decades, which was so well described in Nicholas de Witt's books. This is an example of how a government decision, under that particular

regime, followed by long-term action, can change

completely one of the conditions for economic

growth in a nation. In Western countries, education facilities have

traditionally been developed through an interplay of

initiative from private quarters, municipalities, states and the national government. We all remember what

happened in this country after the first Sputnik in

'57. A strong government policy mobilized the whole education system in a joint effort to expand

education in quality and quantity, an effort which

has had far reaching effects in this country.

The most striking recent work in this field in Western Europe has in my view taken place in the OECD. In cooperation with the Committee on

Scientific Personnel, the Directorate of Scientific Affairs of OECD has built up a milieu which has

made thorough studies of most of the relevant questions which have a bearing on the supply and de- mand and also use of scientific and technical personnel in many of the countries. The OECD's work has very strongly influenced

educational policies and planning in most European

76
ROBERT MAJOR is Director of the Royal Norwegian Council for Scientific and

Industrial Research, an organization which he has headed since its formation in 1946. Under his guidance, the Council has established a number of specialized

research institutes, including the Norwegian Institute for Atomic Research which

operated the Dutch-Norwegian Joint Establishment for Nuclear Energy Research

in cooperation with its Dutch counterpart.

As Norwegian representative to the OECD Science Committee, and earlier to the OEEC Committee for Productive and Applied Research, Mr. Major has repre- sented Norway at numerous international meetings concerned with scientific and

industrial research. In addition, he has served as a member of the Norwegian

delegation to the first and second United Nations "Atoms-for-Peace" Conferences

held in Geneva in 1955 and 1958.

A native of Oslo, Norway (1914) Mr. Major received his Master of Science

Degree from Oslo University in 1941 , then serving a period as Scientific Assistant

there. He saw war service with the Norwegian High Command during the period

1941-1945 , and was Secretary of the Committee for the Organization of Scientific and Industrial Research in 1945 and 1946.
countries, and I think also it has had something to say for work here. With the rapid growth and

change in the demand for various types of personnel, and in view of the long time it takes from the decision to build an educational institution to the time when new candidates have been educated, the need for a national analysis of the comprehensive

future requirement of personnel and the need for policy and planning by government, has now been

understood and, I think, accepted in practically all the Western countries.

The rapid advancement of knowledge also demands a constant change of curricula and new

teaching methods. This situation will demand, at a growing rate, a re-education of people working in all branches using science and technology. This will probably mean that very soon a considerable part of

the population will have to use at least 25 percent of

their time for re-training all through their working

years. There is also in many countries the view that more should be done in the educational system to encourage the development of creativity.

The current explosion in education and the rapidly

growing need for increased investment in education

have made the role of government all the more important in all countries. Governments in Western

countries discharge their responsibilities in the educational section by various means. Sometimes it is through the establishment and direct control of educational facilities; in other cases it may be by means

of financial contributions distributed through proper

channels or agencies to the educational establishment run by states, municipalities, or by private initiative. This growing demand and rapid change throughout the educational field puts a rapidly growing

strain on government resources and initiative. No

country has yet reached anything like maximum de- velopment and use of its talents. I believe that much

is yet to be achieved through an interplay of people

in government, in the educational system, in in- dustry and in other activities needing trained personnel.

Fundamental Research Fundamental research is, I think, now recognized

in most governmental circles as basic to the development of new technology, and as a factor of importance for economic growth. The results of fundamental research are on the whole common property,

and it has therefore been recognized that governments must carry the main part of the financial re- sponsibility for its pursuit. In spite of this economic

dependence, there has been a general understanding

for many years that decisions regarding how money

for fundamental research should be spent should bt

left to the academic community.

During the last decade the pursuit of knowledge,

particularly in the physics field, has as we know de- manded ever more expensive installations, such as accelerators, radio telescopes, et cetera. We've got, "big science," which now in most countries takes a growing part of the economic resources available foi fundamental research. In advanced countries, between ten and twenty

percent of the overall R&D expenditure is now

used for fundamental research. This corresponds to between .1 and .3 percent of the Gross National

Product. The development of "big science" has, particularly in small countries, but increasingly in the medium sized and big countries, strained the financial resources for fundamental research. For the

small country it is now impossible to take part in the forefront in all fields, and also for the medium sized

countries it is becoming more and more difficult. This has created strong pressures for establishing

criteria for the allocation of resources for fundamental research. And as governments are the main

source of money this will of necessity force governments to take part in priority decisions.

I think so far too little thought has been devoted

to the situation which becomes more and more criti- cal. Especially for the small countries, some re- thinking and adaptation to the new situation seems

to be required. The general tendency is to try to copy the big countries' research pattern and take an

active part in all fields. This will, to my mind, have

to be replaced by more modest and realistic goals.

There are still many fields of fundamental research

offering great scientific challenges which can be pur- sued within a modest financial frame. In more ex- pensive fields, there are possibilities for the estab- lishment of cooperation with other nations.

I believe the time is right for government,

specifically in smaller countries, in close cooperation

with the representatives of their academic institu- tions, to study how fundamental research in the fu- ture can best be pursued for the benefit of the country within the financial resources which can be

expected to be made available.

The Governmental Role in Applied Research and Development Work

Government's role in the field of applied research

and development work falls mainly into three categories. First, in certain fields where government

78
has its own activities such as defense, government

will itself be responsible for the creation and use of

the appropriate technology. Second, as government

is interested in the over-all national economy, it must

also feel a responsibility for stimulating the creation

and use of technology all through industry, particularly in those industries which are not in a position

to take the necessary steps themselves. Third, gov- ernment is also responsible for development of a general national climate conducive to the creation

and use of technology throughout society.

Fields of Government Influence The technological fields where government is re- sponsible for activities vary from country to country.

In all countries it includes defense. In many countries it includes telecommunication systems, power

supply, roads, railways, and also the search for and

conservation of natural resources, environmental

pollution, etc. In addition, of course, there are

the more recent programs such as those concerned

with space. Governments usually apply two different measures for the creation and use of technology in these

fields—the establishment of government research institutes, and the contracting of research and devel- opment programs to industry. The balance between

these two tools varies strongly from country to country.

The establishment of government research insti- tutes is the oldest method, and, particularly in countries without a heavy commitment in the defense

field, it still seems to be the more important one. Many of these institutes have performed excellently.

I think, however, it is a general experience in many

countries that research doesn't always prosper in a

rigid government system. In some countries there is a move to establish institutes of this type as semigovernmental institutions, thus giving them greater

flexibility in their operations.

The contract system has been developed mainly

in countries with heavy defense and space commitments. As you know, the United States now spends

approximately eighty percent of government R&D

funds for military and space purposes. About three quarters of this money is used for R & D contracts

to industry. This represents more than fifty percent

of all R & D activities performed by industry. This

is a volume which is many times higher than the

total of all European R&D contracts of this type.

The impact of this on industries working for defense

and space, mainly the aerospace industries, is im- mense and well known.

Influence of Military R & D on Civilian Economy

The spill-over effect for civilian industry is, as we

know, difficult to ascertain and much debated.

Everybody seems to agree that there is considerable

and valuable transfer to civilian technology. However, they also agree that the transfer is not big

enough, leaving to the responsible government cir- cles the problem of increasing this transfer through

the dissemination of reports, exchange of personnel,

etc.

I believe that a good many of the people in this auditorium know more about this subject than I, and I shall therefore not go into detail, but I would

like to mention that these types of R & D contracts

are very rare in many countries where the defense

activities are at a relatively low level and space activity hardly exists. As many industries in these countries have to compete in the world markets, it has become a problem for those nations to find ways

and means whereby they can stimulate their industrial technology to make up for this deficit. This leads me to the next point—how the government can stimulate creation and use of technology in

fields where government has no administrative responsibilities. The old established method for this stimulation is the creation of government research

institutes working in specific fields like agriculture,

fisheries, raw materials research, and also the creation of institutes to establish national competence in

fields of general interest to industry, such as weights

and measures, standards, etc. We all know that there is a great variety of examples of the high value

of activities in institutes of this character.

Research Associations and Sponsored Research

Institutes A more recent development, which has taken

place mainly in Europe, is the establishment of re- search associations. As is known, these work on mutual problems for specific branches throughout in- dustry. There are in Europe approximately four

hundred of them.

The volume of work in these institutes in the indi- vidual European countries varies from a few percent

up to ten percent of the R & D work performed by

the industry as a whole. Most of the institutes have

a government subsidy varying from zero up to sixty

percent of the total income of the institutes. A considerable portion of the activities of these organizations involve technical information activities. The main purpose of the Research program is

79
to increase the quality of existing processes and to improve the quality of existing products. The pro- grams are therefore usually unspectacular in nature and this type of laboratory has appeared to be useful mainly in old established industries. The over all usefulness of these institutions is debated. I think

that on the whole this is because many of them are too small or have been established in industries which they are unsuited to serve. Since the last war there have been established in many European countries sponsored research insti- tutes of the Battelle Memorial type. They work

mainly for research-based competitive industries. A

good many of them receive financial support from

governments to enable them to establish competence

in fields that are considered to have a general national interest.

Method for Governmental Stimulation of R & D in Industry

Particularly in countries with few R&D contracts from defense, space and atomic energy, a need has,

as mentioned, been felt to compensate for the ab- sence of spill-over effect such as benefits civilian in- dustries in the United States and some of the other

countries. We can here on the whole distinguish

among three different methods which have been

taken by the government. First, the development of a procedure whereby government agencies procuring

products of advanced technology are authorized to give R&D contracts to national companies to enable them to compete on a more favorable basis with the big international concerns. To administer

such programs effectively, the government agency

must build up a staff competent in long term planning, for the working out of specifications and

for handling of R & D contracts. The administration

of such programs also calls for the wise selection of

fields in which to encourage the development of national industries. Second, in many countries, companies which have

valuable ideas for innovation are unable to finance

innovation costs or to get loans through the usual

credit institutions. To meet this situation, several governments have established so-called development

funds, which function as a bank with risk capital,

giving loans to cover up to fifty percent of the devel- opment cost of a project. When successful, the company will repay the loan with interest. When the project is unsuccessful the loan will be waived. Some

organizations of this type also take an active part in the exploitation process, like the National Research

Development Corporation in Great Britain, which

can draw on a government credit of up to twenty-five million pounds. Others act like banks

and leave the exploitation to the manufacturing

company. Some of these new agencies seem to have

had success with several of their projects but it is yet too early to judge their importance as a whole.

Third, in certain countries research councils 01

similar agencies, which usually spend their money in research institutes, have lately been allowed to; spend money also in industries with the aim of; building up national competence in new subject

fields, such as systems engineering and the like. Because of the government financing, there is usually a requirement that the general results of these research projects be available to other firms in the country.

The above mentioned three procedures, R&D

contracts from government agencies to industry as part of the buying procedure, the establishment of development funds, and the use of government money to build up technological competence in industry, are on the whole relatively recent developments.

The ideal situation for a country is of course, that industry is so strong and viable that this type of stimulation is unnecessary. The stimulus is felt to be

needed partly because the financial resources of in- dustrial units in many countries are too small to develop competence in new technological fields, and

partly to compensate for the absence of the spill- over effect which prevails in other countries. There

is, however, the danger that these measures can be

used to conserve industries which would never be

competitive, and they should therefore be used with

great care and wisdom.

Judging from recent trends it is, however, likely that these activities will play an increasing role in government policies to create and use technology in the years to come.

The Need for Technical Information Centers With the growing flow of technical information,

it is a problem, specifically for smaller firms, to acquire all the information needed for their production. In most countries, governmental or semi-governmental organizations therefore have established

information centers and advisory services of various

kinds. There seems to be a general feeling in many

countries that compared to the money and effort spent on research projects, the investment to make

80
sure that existing knowledge is being effectively used

in industry is much too low.

The Climate for Research

In addition to all these activities of a more concrete character that I have mentioned, governments

can stimulate technology and its use through the creation of a general industrial climate conducive to research activities and the exploitation of research

results. Activities of this kind include the development of taxation systems with the right financial in- centives, suitable patent policies, and general en- deavors to remove obstacles such as customs

barriers, thereby creating bigger markets for the sale of industrial products. These indirect general measures can have a profound influence, but I understand that they will be covered later today and I will not go into detail. I will just mention them as a very important method in the hands of government to stimulate the creation and use of technology.

International Cooperation and Government

Policy

One aspect of government policies for the creation of technology which will no doubt grow in importance is international cooperation. I think it correct to say that the greater part of international

exchange and collaboration in the scientific and

technological field, both among scientists and companies, has grown up without any government initia- tive and will continue to do so. But with the growing

role of government in the national scene, government policy will also have a strong and growing

influence on international activities. I can mention:

government policy for declassification and dissemination of reports from government financed re- search; bi-lateral agreements between governments

for research cooperation in fields that require big

research investments, such as atomic energy, space,

et cetera; and multilateral cooperation in general in- ternational organizations like the United Nations

and OECD, and in international research organizations like the European Nuclear Physics Organization (CERN) in Geneva, or the European Space

Organizations, ESRO and ELDO.

I think that not all of these international activities sponsored by governments operate quite efficiently,

but they serve their useful purpose for exchange of information and make it possible for small and medium sized nations to take part in "big science" activity. I think, also, scientists usually find it easier to agree than politicians and I believe that the international atmosphere created by scientific cooperation can be an important factor for the stimulation of world trade.

The Technological Gap

I had intended here to discuss the so-called tech- nological gap between the United States and Europe.

After the Vice-President's speech last evening, I

will, however, just say very briefly that it seems to me we often think wrongly with regard to this gap. To my mind, it is not so much a question of tech- nology as of mentality and attitude. In your country

here you have quite an eye for the future; you have

a dynamic industry, and you have built up managerial skill and big markets. I think the difference

in all these factors is very much more important

to explain the gap than the difference in science and

technology. We need a better diagnosis of the tech- nological gap between Europe and America before we start to suggest remedies.

Overall Financial Resources for R&D

The growth of government activities in the re- search and development sector demands increasing

financial resources. As you all know the total R&D

effort in the industrialized OECD country varies

from approximately one percent up to some three percent of the GNP. Now these expenditures can be

divided into three categories : R & D expenditure for defense purposes, which varies in the different countries from 0.1% to 1.6% of the GNP; government R&D expenditure for civilian activities which

doesn't vary much at all—it is approximately 0.5%

or a little lower for all industrialized countries; and,

third, research and development expenditures in the private sector, which varies from 0.3% to a little over one percent of the GNP.

Now, taken altogether, government financial contribution to the R&D effort varies from 0.5% to approximately two per cent of the GNP. In percent- age of gross national R&D expenditure, government contribution makes up from thirty percent as

in the Netherlands, up to more than sixty percent,

as is the case in this country. All governments in the advanced countries now see the importance of these

activities for the culture, for the economy, welfare,

and security, and are spending an increasing share

of national financial resources in this sector. But we

may, of course, ask how wisely do they spend their money—what systems have they developed to evaluate the programs and what is their efficiency in all this work?

81
Efficiency of the Technological Effort On the whole, I believe a historian some years hence who will write about science in the presentday society will find that the efficiency of the overall system was then not too high, although it varies considerably from country to country. Most countries are still experimenting to find out how best to organize themselves to evaluate programs, to establish criteria and priorities. They also must choose

the fields in which they wish to concentrate. This is particularly true of the smaller nations.

Some countries have established a ministry for science which is responsible for the broad policy

decisions. Examples are France, Germany, and for a time, also, Great Britain. Others find that research activities will have to be an integral part of practically all the different

ministries' activities and find it difficult to concentrate the responsibilities in one ministry. Their solution is usually one or more national committees

for science policy close to the president or prime

minister, to give general advice. They leave administration of programs to the different ministries or established agencies. Examples here are in the United States, Belgium and the Scandinavian

countries. What seems essential in all systems is to develop

enough people with a thorough and broad knowledge of how science works and how the results can be exploited in industry, people who can serve in government departments on advisory committees at different levels, and in semi-governmental and industrial research organizations. It is only through the interplay of such people that good proposals for government action can be worked out and wise decisions reached.

If we see government's role in the creation and

use of technology in perspective, there has been a

rapid growth both in direct responsibilities, in the

allocation of money and in results obtained. It represents, all together, I think, an impressive impact. To my mind there is no reason to believe that

this trend will change in the immediate future. This

is a consequence of the growing complexity of life in society and also of the inherent nature of science

and technology.

The growing reservoir of knowledge to be passed

from one generation to another and the better education of a larger number of people needed for the type of occupation we can foresee in the future society, will increase the responsibilities in the education sector. The need for ever more comprehensive

technological knowledge in all branches of industrial

life, the growing complexity of each subject and the growing need for cooperation will increase the de- mand for government measures to stimulate tech- nological development.

Government's Future Role What sort of technology-based activities govern- ments will administer in the future is more difficult to foresee. With China in the picture, it is most likely that defense activities will continue. Space ret search is most likely to continue, at least at its present scale, unless joint programs should be es- tablished with the Soviet Union, in which case a good deal of the national prestige and competition

might disappear. Development of the fission process, for the production of energy seems on the whole to be passing over to industry, but it is not unlikely

that demand for increased government support for development of new sources of energy will be re- quired in the future. We have, I think, passed through an age of chemistry, we are in the age of physics, and I believe we

are on our way into a biological age. This will open

up new aspects and possibilities which may quite

drastically change our way of life. We must expect

that in the years to come we shall be thinking not

so much of our standards of living, but of our standard of life. Much more emphasis will no doubt also be given to environmental research and the urban

problems, transportation systems, et cetera, and

in all these fields it seems likely that government

will have to be heavily engaged.

I think that in most countries there is need for a much stronger harmonization of research activities with the over-all national goals. Too many small

countries tend, in their research efforts, to copy re- search activities of bigger countries, forgetting about

the high threshold value for realistic activities in a growing number of fields. Considering the immense

effort put into the actual research work it will, to my

mind—with these problems of size, priorities, selec- tion and choice that most countries have to face

be necessary to devote greater efforts to the development of well-conceived and realistic science policies. In many fields the best results will only be

achieved when countries are brought together in co- operation in a more meaningful and cohesive pattern. Those countries which will be the most able to master all these problems will to my mind have a

great advantage, both for economic growth and for

life in society as a whole in the years to come.

82
istria

Dr. Hollomon: To continue our discussion of the impact of policies of government, we bring to you a person who has long been engaged in industrial activity, and whose training is not in technology or

science. He is especially interested in marketing. Recently, however, he has made two excursions into the government realm. In one of these, he is serving on a special panel that is advising the Secretary of Commerce on the climate for invention and innovation in our society.

A member of that panel said at one of its later meetings, "I'm not sure that we should ever tell any- body about the real result of our work because, you

know, there's a great story and myth going around

that all we have to do is to do lots of R&D, then to give R&D away and to help people to trade, and

ultimately everything will work fine. Most of the world believes that. Our real secret in this country is the fact that a young fellow has a chance to go out and start a small new business on his own without

having to work through established organizations or

the conservative constituencies."

Some of the panel thought, good humoredly, that we ought to keep this report secret, because other- wise we might lose our competitive advantage. We

decided to make it public and take the risk!

I would like to introduce to you Mr. Peter G.

Peterson, the President of the Bell and Howell Company.

Mr. Peterson: I noticed that we had some French- men in the audience and if they won't mind I'll tell a

little story about the French acrobat, Blondeau, that

I hope helps me make a point about the lead of the United States in technology.

As the story goes, Mr. Blondeau, the French

acrobat, was crossing the Niagara and he was not

only crossing it on a tightrope but he was carrying a man on his back. There were a million-and-a-half

people watching this extraordinary feat of the

Frenchman, including the President of the United

States, the Prince of Wales and so forth. About a quarter of the way across, the man who was on the back of the Frenchman looked down at him and

said, "Don't you think that we should reconsider? Don't you think that we should perhaps go back?"

At which point—roughly translated to suit my pur- poses here today-—Blondeau was reported to have

said, "Just because you're on top doesn't mean you

know where you're going."

So we need to remind ourselves of that. Let me talk briefly about the panel that Dr. Hollomon talked about. We spent eighteen months

studying innovation.* The chairman of our committee was Dr. Robert Charpie of Union Carbide. The

panel membership consisted of prominent men in business, education and the professions.

R&D and Innovation One of our early conclusions was that there had

been so much emphasis and so much impressive data on how much this country spends on research and

development that we wondered if there hadn't been

too much emphasis placed on that. So, early in our

study, we decided to make the distinction between

invention and innovation.

I want to make the important distinction that we

did between invention, which is to conceive—it's the idea—and innovation, which is the using, the process by which the invention gets translated into a product and brought into the market place. And if we're really interested in growth and the things that

affect the quality of people's lives, we emphasize

over and over again in our report that we really had

to concern ourselves with innovation, not just re- search and development.

I'll make a perfectly obvious point now to those

of you who are sophisticated in business. We noticed in our study that many people in government,

and to a certain extent in universities, tend to think

that innovation and R&D are the same phenomena,

and if you just have more research and development,

in some simplistic way—almost automatically—you

get more innovation.

So in our report we presented some distribution of costs—as shown in Chart 1. We simply put together the experiences of our

panel members to make a point that we thought

needed making: that the businessman looks at the

: The full report of the Panel, Technological Innovation: lis Environ- ment and Management, is available from the Government Printing

Office, Washington, D. C. 20402

83
innovation process as a totality, as a total venture, not just as an R&D expenditure.

And that in many, many projects the research and

development, the idea stage, is really a small part of

the total investment. In the case studies we looked

at it was only about five to ten percent of the total process. We said to ourselves, therefore, if you're

seriously interested in innovation you really can't pretend that the only incentives you need to offer

the only counsel you need to offer—is on how to invent, how to conduct R&D.

Why Should the Government have an Interest

in Innovation? We then went into the area of why should the government be interested in innovation. I won't bore

you with the familiar statistics of how important in- novation is, that it accounts for half or more of the growth of our Gross National Product, eighty-five or

ninety percent of the increase in real output.

We decided that we ought to make this point a

little more vividly. We chose three technological in- dustries—television, jet travel, and digital computers —that virtually did not exist in 1945, and found that by 1965 they had contributed more than thirteen

billion dollars to our Gross National Product and

something approaching a million jobs (Chart 2). In

addition, these three innovations obviously affected our lives in a very important way.

Another thing we did, in order to make vivid the point of how important technology is in terms of our economy, was to take five companies in this country

that one could refer to as being technologically innovative companies, and see the thrust of these companies, which were by and large rather small companies or nonexistent in 1945. We can see in Chart

3 that these companies had an annual sales growth

of nearly seventeen percent, whereas during the same period of time the Gross National Product of

this country grew at a rate of two-and-a-half percent.Next, we asked, what is the impact of innovation on international trade? You all have seen the data on the balance of payments, and of course we in- cluded that in our study, but we also included some

specific examples to make the point that a gross number, like what happens to our total balance of payments, often obscures the fact that the real factor

that underlies this growth has been in high-technology products.

For example, in the textile industry we chose cotton, wool and synthetic fabrics. If you study the data over only a ten-year period from 1956 to 1965.

you will see that cotton and wool exports declined 1 roughly a third whereas the exports of our hightechnology synthetics went up from a hundred and

fifty-eight million to two hundred and forty-one million (Chart 4). Thus, had it not been for the high

technology product, I think it's pretty clear that our

textile exports would have actually decreased. Soj we had a section of our report that dealt with why

innovation is important in practical, meaningful dollar and cents growth terms.

Innovation and Competition

As you've sensed, our country is also enormously

interested in competition as well, and we wanted tos make the point that we didn't think was made as often as it should, with regard to what technology

has done to competition. This point concerns a comparison of the traditional forms of competition ver- sus what we call the "new" competition, represented

by the high-technology businesses. In the traditional forms involving largely non-technological businesses,

this is often largely price competition between fairly similar products. But when you look at the new

competition, the high-technology competition, you

usually see entirely new categories of products that perform old functions much better or entirely new

functions. Obvious examples in this country: xerography, synthetic wash-and-wear fabrics, instant photography. And these new competitors have—believe me, because we have "enjoyed" the "stimulation" in one or two of our businesses—enjoyed the

astringent effect of this kind of competition.

There is another aspect of the new competition

versus the old. Traditionally, in the nontechnological

businesses in this country, we've had familiar competitors long-established. There's a tendency to get

to know each other well, a tendency to have discussions, and there have even been a few occasions in which there has been a kind of collusion, whether

conscious or unconscious.

But when you look at the new competition you

often see competitors who are unfamiliar. They're

called "outsiders" usually. Let's look again at some

of them. We need only to remind ourselves that synthetic fabrics were not invented or developed by the

textile business but rather by the chemical industry.

Or, look at high-speed ground transportation. We

might have expected all of this to come from rail- roads or automobiles, yet aerospace and electrical manufacturers have played a major role here.

H4
PETER G. PETERSON began his business career in 1948 with Market Facts,

Inc., a Chicago firm specializing in marketing counsel and research on consumer

and industrial goods. He was elected executive vice president in 1952. In 1953 he

joined McCann-Erickson, Inc.. advertising agency, as director of marketing services. He became a vice president in 1954, general manager of the Chicago office in 1956, and a director in 1957.

He joined Bell & Howell Company in April, 1958. As executive vice president

he headed the company's Photo Products Division as well as Bell & Howell's

corporate market planning and product development programs. He also served as chairman of the corporate research board.

In April of 1961 , at the age of 34, he was elected president of Bell & Howell

Company. His responsibilities were further broadened in July, 1963, when the board of directors named him chief executive officer of the corporation.

Mr. Peterson is a graduate of Northwestern University and the University of Chicago Graduate School of Business.
Instant pictures were not developed by the photographic industry or a company that had been

thought of as being part of the photographic in- dustry. Xerography was created and developed by a company that was outside of what we called the business equipment business.

Some Characteristics of Innovation in America

Now rather than just look at the total gross dollars on R&D, we decided that it would be interesting

and perhaps fun to try and understand the variation

in the expenditures in research and development.

We looked at four kinds of variations.

First, public or social investment versus private sector investment. I wish we had the time to discuss

this subject at this meeting, but it's clear that certain very important problems facing this country are not

getting much R&D investment, and it's also very

clear that the private enterprise mechanism, because

of the great uncertainty and the great risk, is probably not the right kind of mechanism to get appropriate R&D investment in this area. But within the industrial complex we noticed

something else when we studied the output of innovation, from one region or city of America to the

other, in one industry versus another, and for small versus large companies. Let me briefly take you

through some of the findings, and I must say that

this is not highly statistical data but, rather, personal

experience of the panel members.

One of the things that becomes very clear in America is that you can take eight or ten cities in

this country and look at the data on R&D invest- ment, on numbers of scientists, on numbers of engineers, and then apply common sense tests on numbers of new businesses, numbers of tech- nologically based new enterprises that are being

formed, and you will often find a substantial

difference between one area and the next that does

not seem to have much to do with how much money

is spent on research and development.

In America, for example, there are several areas, Boston, Palo Alto, Washington, Pittsburgh, in which

you will see the spawning, the nurturing, the conception of many of these important small new businesses, some of which we might hope would be the Texas Instruments, Xeroxes, and the Polaroids of 1985.

But in other cities—my own city of Chicago, or Philadelphia—in spite of substantial R&D investments we do not see many of these new kinds o, technological businesses being spawned.

We were also impressed with the obvious fact tha. there are tremendous differences in R&D invest- ments by industry in this country, with steel, for ex- ample, spending about one-tenth of what the drug,

business spends in this country—shown in Chart 5.

, Now to be sure, part of this is inherent in whal

kind of business it is. Quite frankly, gentlemen, we, come to the conclusion that only part of it is due tc what kind of industry it is. When you get behind some of these numbers and look at some of these

industries, you're led to believe, at least, that the problem often is that the top managements of some

of these industries have not yet learned to manage

technology, and that in a curious sense this is per- haps an important reason why they are not spending

as much money on innovation. And this is also the reason, we suspect, that some of these same industries are not innovation industries. So, a lot of it has

to do with skill and managing technology and atti- tudes toward technology, not the inherent economics

of the business itself. We look at the variation in R&D by size of company in Chart 6, and the point here is that the small

businesses—those with less than a thousand employees, which account for a very large percentage

of the companies—account only for a very small

percentage of the R&D done in this country. It is estimated that some three hundred companies in America account for something over ninety percent

of the research and development.

We tied this particular finding in with something

else. We looked at several studies that we could find on innovation in the United States. There has been one rather classic study, by a group of men who

went back and studied the origin of the most important commercial innovations of the twentieth century. Now keep in mind that this is in the era, to a certain extent at least, that we have thought of as the era of the large company R&D laboratory.

When you look at these inventive contributions

as shown in Chart 7, you see outstanding examples

of enormously important commercial innovations in

this country—Xerography by inventor Chester Carlson, the vacuum tube by an individual, the cyclotron

by an individual, automatic transmissions by a small-company individual, the Polaroid camera, obviously by a small company individual. The point

being that there is some impressive evidence that the small inventor, the individual inventor, the small

businessman, contribute to the innovative flow in

86
id

ue to

perthe

°'this country, at least, to a substantially larger extent than the amount of money he is spending on re- search and development.

Then we look at five other studies of innovation

in the United States and they make the same point,

that small businesses are responsible for an important portion of the significant inventions and

significantly larger percentages than their small in- vestment in R&D would suggest.

At this point our study then went down two

tracks. I don't want to sound here as though I feel that large companies are dispensable in this process. They have a unique and a vital contribution to make.

On the other hand, we did decide that, given this kind of input on how important small companies

were, if we were really going to study the innovative

process in America we'd better break down the process into large companies and small companies.

The Innovative Process in the Large Company

Environment

First, let us consider the large company in America, and the kind of growth problem it faces. In America we have all sorts of clubs with varying degrees of exclusivity. One of the more important

clubs is the Billion Dollar Club. And we've decided

to look at the Billion Dollar Club's growth problem

the way it does (Chart 8). It has annual sales of a

billion dollars. It wants to grow at least ten percent

a year. Some of its old products decline about five percent a year. There is some price erosion due to competition and technological competition. If it wants to grow 10 percent a year, it must make up

the seventy million it loses from price erosion and

industry decay, plus another hundred million or so from new businesses and new products. So this company has to find a hundred and seventy million dollars a year of growth if it's to meet its objectives.

Now, what we've done in our report is to try to categorize the problems that this company has—as shown in Chart 9. They're really different problems —not just in degree, but in kind—from the small

company's.

We see here this whole early stage of business

planning very much concerned with words we're

using more and more in this country—venture analysis, directional planning, strategical planning, busi- ness objectives. In short, where do we want the business to go?

There are some problems here. Problems like, "It wasn't invented here." A friend of mine thought that N.I.H. stood only for the National Institutes of

Health. I told him that in this country a far larger

membership was the membership of the "not invented here" club. A big company has the problem of

understanding that important inventions in the company will not come always from the inside, as this study has demonstrated.

The new idea then goes through a second stage, the important stage of experimental appraisal. Here

big companies are often missing entrepreneurial

skills. I have talked to the heads of many large companies about this and when I asked them what their problems were they said quite often, "We are missing entrepreneurs; we are missing the men who can

create businesses that have never existed before."

Then, very often, innovation within the large

company moves into what we call the embryo stage,

where one sets up small businesses and tries them

out. A very delicate problem the big company has,

as we have discovered at least in this country, is that

if we take these embryo businesses and put them in existing operating groups or existing divisions they

often get crushed or ignored. One of the problems a large business faces is how to organize for these new

businesses. The big company has tremendous advantages in terms of skill and resources, production, engineering, money, plant facilities, market research,

et cetera, et cetera. However, when it gets into this stage, we in this country run into anti-trust difficulties from time to time.

The Innovative Process in the Small Company

Environment Let us look at the small company—as shown in Chart 10, because it has a really different problem.

This generally starts out with an idea, and the idea

is usually a technical idea and it's usually an idea by

a rugged individualist who has very little business

experience but who has a total commitment to the

fact that his idea is going to revolutionize the world.

Our economy is filled, incidentally, with examples

of men like this who created businesses where, had

they existed in the large company, their idea would

never have succeeded because our various planning

and analytical techniques might have crushed the vitality of their ideas. And I think we all recognize the enormous contribution they make.

When I say the words "total commitment," I'm reminded of a story. In America at least, it's a very

old one—perhaps our foreign visitors haven't heard

it—about the pig and the chicken who were walking

by the restaurant and they see ham and eggs advertised. The chicken suggests they go in, the pig says

87
no, no, no. He says for you it's a donation, but for me it's a total commitment. As we've interviewed

these small companies, there's no question but

there's total commitment in every sense of the word.

Now the kind of problems they run into when

they seek money are the problems of how they explain to a hard-headed businessman or a financial person an idea that is very vague at best, and usually highly technical. One of the problems, which we

will talk more about later, is that in the financial community there are very few men who are as comfortable with masers and lasers and quasers, and so

forth, as they are with convertible debentures.

Therefore, they have the important problem of

finding people who can understand what they are

talking about.

If they get this initial venture money—and it's very high risk money because many of these busi- nesses fail—they then can go into the garage operation. We are talking here about a small business,

less than five million, usually fifty to a hundred employees. They do not have a serious marketing problem because they often know most of their cus- tomers intimately. Often the government is supporting this kind of activity. It's usually custom

manufacturing, it's really not high volume manufacturing.

But as they move from this stage now into the second stage where it gets to be a good size business

and where there's more than five hundred people

and where you can no longer know your customers,

except in an impersonal sense, the problem starts shifting. And many of these small companies who

are dealing with innovation start having serious

problems in this particular stage. Why? They don't

have experience in control technique. They don't

know how to get a product from a custom manufacturing stage into a high-volume manufacture, and all that this requires in terms of processes and

drawings, et cetera. Financial controls, they haven't had to worry

about before. Marketing, they really haven't had to worry about. So in this stage a very critical stage is reached where management, or lack of management,

often becomes the decisive factor as to whether this business is going to become a Texas Instruments or whether it's going to remain a small business. If they can get out into this stage they have other problems.

In this country we, of course, get into all sorts of questions which we review in our report. These deal

with mergers and "escaping" and making your money, as well as anti-trust problems.

Some Findings and Some Proposals for Improv- ! ing the Environment 1 Our panel had many recommendations and I'm;

just going to review a few of them. I would like toi say that while we looked at tax incentives in this i country, we could not convince ourselves that major

tax incentives were really the way to foster innovation. The most frequently mentioned proposal of allj

is that instead of a fifty percent tax deduction oni

research and development we have a seventy-five

percent tax deduction or tax credit, depending on! how you look at it. To give you an idea of numbers, this would cost , the government, in terms of lost revenue, about a

billion and a half dollars a year. And because over

ninety percent of the research and development in

this country is performed by large companies, most

of this money would go to large companies. As we

looked at the enormous demands for federal reve- nues, we decided that from a cost-benefit standpoint,

to use a popular word, it was a little difficult for us

to justify this kind of tax loss. So we had a set of proposals that largely dealt with the small companies, because we felt the lever- age per dollar was higher there. For example, if you

equalize the tax treatment of profits and losses of

large and small technically oriented companies, the

life cycle of the small company is such that often they are losing money for at least five years. If you

happen to be a company like duPont or General

Motors or Union Carbide or Bell & Howell or Xer- ; ox or a company of this sort, you obviously take

your innovation losses and write them off immediately. These, i.e., the small technically oriented

companies, companies not only cannot write them

off immediately but because of the five-year-loss

carry-forward, they often lose the carry-forward. So we had a provision here that did something about

this by suggesting that for these categories of com- I panies the tax loss carry-forward, at the very least, be extended to ten years. We had other kinds of provisions. I emphasize to you that if these companies are going to become big

companies they need to attract management, which

often they don't have. How do they attract management that is skilled in high volume marketing and

manufacturing? Obviously, they attract it from the

large companies.

In 1964, in this country, there were major revi- sions of our stock-option arrangement, as some of you know (Chart 11). The purchase price of the stock went from eighty-five percent of market value

88
ke to

up to a hundred. The period of option exercise went

from ten years to five years. The life cycle of these companies, of course, makes this a difficult but very important problem, because the stock of these small

companies is normally not nearly as liquid or convertible as is that of the larger company. Also in 1964, the holding time was extended from six months to three years. We've convinced ourselves,

at least, that if we really want to help these small

companies, we should go back to a more liberal stock option plan for these categories of companies.

Another specific proposal had to do with capital

gains treatment to professional inventors. We have

laws in this country that say, in effect, unless the inventor sells all of his patent he will not get capitalgains treatment for it. But this presents a serious

problem. Many of you in this room are in business

and you know that if an inventor walks in with what

may be a promising idea, there are, at its early

stages many questions, many ambiguities, many uncertainties about whether the idea is worth pursuing.

From the standpoint of the inventor, if he has to sell

it all in order to get this capital gain treatment, obviously, many of these transactions don't get made;

many of the inventions do not get put into the flow

in the market place.

So we had some suggestions about that. But I think the real point of our findings had nothing to do really with specific tax proposals. Our over-all findings really had to do with the fact that in this country, at least, we have made great progress in certain segments of technology; but by and large

there's not sufficient understanding at government,

university, business and banking levels of this fundamentally new process. Many of our recommendations dealt with the education-attitude-communication side. For example, at the Federal Government level, we pointed

out that there's really no federal spokesman—no- body that's concerned with the generation of new

technological business. For example, we have the "Small Business Administration." By statute it can't possibly deal effectively with high-risk capital re- quirements of these technological firms. As we inter- viewed people in various departments of the government, we did not really find an understanding of the unique problems that these small technological busi- nesses had.

As another study of a governmental problem in our country, we decided it would be interesting to write down all the government agencies that are re- sponsible for policies that involve competition

(Chart 12). As the panel studied this, it became

very clear that there were a number of government

regulatory policies that, when one really analyzed

them, were anti-innovative, anti-competitive, in terms of their effect. What are some of the reasons for this? Well, one

of the reasons for this, quite bluntly and frankly, is that many of our regulatory and anti-trust agencies

in this country tend to be staffed by legally oriented

people, not by people who understand economic

forces and, particularly, technological forces. Among

a number of recommendations that we made in this area one was to seriously look at the possibility of putting men in our various bureaus and departments

and agencies who have a genuine feel, a genuine

appreciation, of technology and the innovative

thrust in this country.

The Environment for Innovation

In some ways our most important conclusion has

to do with how we get these ideas in small busi- nesses into the market place. Why is it that Boston,

for example, spawns so many of these businesses?

Let me now tell you of a little study that was made

of Philadelphia versus Boston, in which interviews were made of companies of this new type that had

been founded there recently. For example, thirteen company founders were interviewed—seven in Phil- adelphia and six in Boston. One of the questions asked was the role that local universities played in stimulating them to form a

business. Obviously this is not a large sample; but in Philadelphia, of seven such firms interviewed, seven

said the university played a small role. In Boston

where six were interviewed—and keep in mind that Boston has many more of this kind of firms than

Philadelphia—all six indicated that the university

played an important role. You know, of course, that M.I.T. is one of the important universities that plays

a role in Boston. What about banks? They were asked, "What role did the local banks have with regard to helping you

to get your business started?" Once again in Philadelphia (and, incidentally, I think the figures in Chicago would be very similar to these) seven out of seven people, i.e., the entrepreneurs, who founded

the business, said the attitude of the banks was poor

or bad. But in Boston, five out of five said it was good or excellent. We became so intrigued with this phenomenon

that I took about fifteen of our own executives in our company to Boston to try to understand this

89
environment that is apparently much more favorable

and stimulating to technological businesses. In the banking community in Boston you will find at least two major venture capital firms who specialize in getting technology businesses started. There are no

such firms in Chicago and many other cities. In Boston we interviewed leading banks who had set up

departments to deal with the unique problems of high technology business. You don't normally find these in other cities. So what we have tried to do is to define this environment that seems to spawn and nurture and create these businesses. One aspect of the environment that

is terribly important is banks or venture capital sources, who are at home with technically oriented

businesses, who make it their job to understand

what these fellows are talking about, who have busi- ness appraisal capabilities to diagnose the risks and

who know whom to call in a certain field if they

have uncertainty about it. Another is the presence of technically oriented

universities who are genuinely sympathetic and

firmly believe that helping these businesses get start- ed is an important contribution they have to make. I suspect that many of our universities feel that it is not an appropriate role for a university to really en- gage in an activity that's this closely related to commerce. I can only indicate to you that in Boston, at

least, it's a dynamic force that has helped Boston

recover from what could have been a disastrous loss following the removal of the textile and leather busi- nesses from the Boston area. A third aspect of the environment is the entrepre- neur and we said in our report that entrepreneurship

breeds entrepreneurship. Put yourself in this situation. You're a young man who has an idea, you're

committed to it and you're trying to find out whether to start a business with this idea. I submit

to you that if there are a few multi-millionaires in the community that have been successful in doing

this, you're not going to be discouraged by that fact. And it's important to have these successful men.

In the environment we see people whom we call marriage brokers, who know how to find people for these small companies. How to get them management. How to help them get money at the right time

if that's what they need. And, very important, communication. In the Boston area for example—this is also true of a few other areas—it is clear that there's a lot of talk back and forth between universities,

banks, marriage brokers, small companies et cetera. We don't find this in many other communities in the country.

What have we concluded about innovation in terms of the government's role? Perhaps its most important role is to assume the leadership in getting

this environment set up in the business community

and in the local communities where bankers, busi- nessmen, universities, technologists, et cetera, are working together to get these businesses formed.

One of our important recommendations is to have a

top conference in Washington, and then set up re- gional conferences in every major city of the United

States, to get this innovation mechanism going.

Some Thoughts About the Future Environment

for Innovation What does this mean to businessmen? In the first place, we've had the model in this country that there: are big companies and little companies, and the big

companies get at the technology of the little companies by swallowing them up or acquiring them. I'm not so sure that's the only model, and I would

guess—from my study of these small companies—

J

we're going to see some new creative relationships

emerge over the next five to ten years—creative re-; lationships which will maintain the enthusiasm andf

independence of these small companies and yet add

to them the skills and resources of the large companies.

I suspect our anti-trust people will have to do{ some serious rethinking about the conglomerate en-|

terprise concept that they have found offensive. It could be argued that combinations of these small companies might be one of the best things that could happen to this country if we're seriously con- cerned with innovation and getting it started. What I've really been talking about is a revolution that has been taking place in the world since

the time primitive man first invented that wheel. If have a little story here that I hope makes a point. II

is set in the primitive era, and features the sales; manager of several hundred thousand years ago. The sales manager says, "Oonka"—he's talking tc| his market researcher—"We've been getting complaints about our heavy goods transporter."

Oonka, who is the market research man, as usual

is very well prepared and has his statistics in fine! order. He says, "I can tell you exactly why. 48.3 %j

think that the runners are too bumpy and lumpy anc|

39.2% say that the tow-rope keeps breaking."

"Well, that's simple enough," says the sales man

ager. "We're going to put research and developmen

to work and what they're going to do is to develop

smoother runners and stronger tow ropes."

The market researcher reflects awhile and hi

90
, are

ive

initDt

C "1!

and

>ays, "Gee, that's all well and good, but what if, for nstance, R&D came up with something spectacular,

ike a wheel?"

The sales manager looks incredulous and says, 'What's a wheel?"

Oonka says, "I don't know, the word just came to ne."This apocryphal story is designed to make a

joint. In some circles in this country, at least, we

lave believed too seriously some of the literature ibout the marketing concept, in which, translated

iterally, somebody goes out and finds out what people want and the research people are instructed to

;arry out certain assignments. The real need these

lays is to have businessmen and men of affairs who

ire what I call bilingual; who speak the language of he market place on the one hand and the laboratory on the other. A study was done recently of the six hundred sen- or officers of America's largest corporations: nearly

brty percent had technical degrees. A study of the

)ool of executives from which the next generation's

;enior executives are going to come, men between

hirty-five and forty-five, over half have technical

legrees. One of the adjustments we must make in American management, and I suspect all over the

vorld, is to get managers who have this bilingual

quality. Because if we're illiterate as far as technology is concerned, we're going to be functional illiterites of a rather serious kind. I say this with real

eeling. Incidentally, Dr. Hollomon was quite kind

n not telling you that I spent about a year-and-alalf at M.I.T. One of the reasons it wasn't longer

vas that 1 have the unique distinction of having

nade the lowest mechanical perception score in the

listory of the school.

So, I say this with deep feeling, the need is for

Tien who can understand what is going on in the aboratory. In one of the businesses that we are in- volved in, photography, we see an example of this ype of person—that person is Dr. Edwin Land of

Polaroid. This is a man who combines imaginatively

what is technically possible with what is commercially feasible. He works at the frontier of science and yet he has a feeling of what people want. One

of his great successes recently is a little camera

called "The Swinger," and he's the kind of man who

can say, "What we now need is a $19.95 Polaroid camera with a name that swings." We can't build a concept around a man like Dr. Land, but this kind

of bilingual communication, if you will, has to take

place.

he

Many of you, 1 know, are technical people, and

one way of putting it is that we need an impedance

match between the laboratory and market place, be- cause too many of the signals, frankly, are getting

lost and I think that if you talk to many, many senior executives in America, they're not concerned so much with the amount they're spending on research

and development as they are with its productivity

and what they're getting out of it. And they're con- cerned with the lack of an impedance match, the

loss of signals.

It is my feeling that the creation of these new

businesses that we've been talking about is not only

essential to the problem of growth in a technological

society, but it's one of the most torturous, exciting,

difficult jobs that American industry faces and we

just can't settle for having less than the best men

devote themselves to what I've been talking about.

Many of us, I'm afraid, get to be prisoners of our

environment. Marshall McLuhan was here yesterday. You know he talks about how we don't see the environment we're in. The comment he made that I think best captures this notion is, "I don't know who

discovered water but I'm sure it wasn't a fish." The

point, of course, being that we can't have men that are isolated from the rest of the world.

We often talk about the ivory tower and it has

occurred to me that many of us in business and in government can become so isolated in our occupation and in our own technologies that we live in an

ivory tower that is far more remote than the ivory

tower of the academic person. And part of the shift that we're going to need if we're really going to make use of this R&D is to have businessmen, if I can use the phrase, who cross-pollinate. Business- men who cross-pollinate with the non-suburban

community, the academic community, the young

community but, increasingly, the scientific community. And here I suspect, gentlemen, time is our en- emy. Most of us—at least my day is like this

spend so much of our working day on monumental

trivialities which bear only the dimmest relationship

to what we're really paid to do, that by the time we

extricate ourselves and get down to the business at hand, we're commonly too tired to cross-pollinate

with anyone.

I will end where I began. We are on a tightrope

in this technological age, and we are walking on the tightrope across the exciting technological Niagara.

The real question before the house is, "Can we stay on top and know where we're going?" We must. We

can, and I think we will!

256-707 0-67—

91
TYPICAL DISTRIBUTION OF COSTS IN SUCCESSFUL

PRODUCT INNOVATIONS

Research —

Advanced Development - Basic Invention 5-10%

Engineering and

Designing The Product 10-20%

Tooling —

Manufacturing Engineering

(Getting Ready for Manufacture) 40-60%

Manufacturing

Start-up Expenses

5-15%

Marketing

Start-up Expenses

10-25%

Percent 0 10 20 30 40 50 60 70 80

CHART 2

ECONOMIC EFFECTS OF ONLY THREE

TECHNOLOGICAL INDUSTRIES OUT OF MANY

In 1945, the TELEVISION, JET TRAVEL, and DIGITAL COMPUTER

industries were commercially non-existent.

In 1965, these industries contributed more than $ 13 BILLION

to our GNP and an estimated 900,000 jobs . . . and

very important, affected the QUALITY of our lives.

92
A FEW EXAMPLES OF TECHNOLOGICALLY INNOVATIVE

COMPANIES THAT HAVE EXPERIENCED MUCH OF THEIR

GROWTH IN THE LAST 20 YEARS (1945-1965)

AVG. % ANNUAL GROWTH (Compounded)

Net Sales Jobs

Polaroid 13.4% 7.5%

3M 14.9% 7.8%

IBM 17.5% 12.1%

Xerox

(Haloid Co.) 22.5% 17.8%

Texas Instruments

(1947-1965) 28.9% 10.0%

Average % annual sales growth of above companies*: 16.8%

Average % annual growth of GNP: 2.5%

'Excluding Texas Instruments for which data are available only for the past 18 years

CHART 4

INNOVATION AND INTERNATIONAL TRADE

An Example: U.S. Exports of Yarns & Fabrics Synthetics (High Technology) Cotton & Wool (Low Technology)

EXPORTS 1956 EXPORTS 1965

$187 Million

$158 Million

COTTON -WOOL

SYNTHETICS

$125 Million

$241 Million

Source: U.S. Department of Commerce.

93
VARIATIONS IN COMPANY- FINANCED R&D

AS A PER CENT OF NET SALES, BY INDUSTRY

Net Sales

(Billions) R&D

(Billions) R&D

Net Sales

Steel (Primary ferrous products) 17.8 0.111 0.6%

Transportation Equipment

(Excluding aircraft) 34.3 0.865 2.5%

Chemicals 25.6 0.830 3.2%

Drugs 5.03 0.224 4.5%

Source: NSF (1966) — Figures are for 1964.

CHART 6 ^i^H^^mHHkMHHHHH

VARIATIONS IN R & D, BY SIZE OF COMPANY

Percent Distribution of R & D Percent Distribution of R & D

Performing Companies Expenditures

100 80 60 40 20 0 20 40 60 80 100

Source: Basic research, applied research, and development in industry, 1962, NSF 65-18, 1965.

94
CHART 7

SOME IMPORTANT INVENTIVE CONTRIBUTIONS OF

INDEPENDENT INVENTORS

AND SMALL ORGANIZATIONS IN THE TWENTIETH CENTURY

Xerography Shrink-proof Knitted Wear Mercury Dry Cell Chester Carlson Richard Walton Samuel Ruben DDT Dacron Polyester Fiber "Terylene" Power Steering

J. R. Geigy & Co. J. R. Whinfield/J. T. Dickson Francis Davis Insulin Catalytic Cracking of Petroleum Kodachrome

Frederick Banting Eugene Houdry L. Mannes & L. Godowsky Jr. Vacuum Tube Zipper Air Conditioning

Lee De Forest Whitcomb Judson/Gideon Sundback Willis Carrier Rockets Automatic Transmissions Polaroid Camera

Robert Goddard H. F. Hobbs Edwin Land Streptomycin Gyrocompass Heterodyne Radio

Selman Waksman A. Kaempfe/E. A. Sperry/S. G. Brown Reginald Fessenden

Penicillin Jet Engine Ball-Point Pen

Alexander Fleming Frank Whittle/ Hans Von Ohain Ladislao & Georg Biro Titanium Frequency Modulation Radio Cellophane

W. J. Kroll Edwin Armstrong Jacques Brandenberger Shell Molding Self-Winding Wristwatch Tungsten Carbide

Johannes Croning John Harwood Karl Schroeter Cyclotron Continuous Hot-Strip Rolling of Steel Bakelite

Ernest 0. Lawrence John B. Tytus Leo Baekeland Cotton Picker Helicopter Oxygen Steelmaking Process

John & Mack Rust Juan De La Cierva/Heinrich Focke/ C. V. Schwarz/J. Miles/

Igor Sikorsky R. Durrer

CHART 8

GROWTH PROBLEM IN A SUCCESSFUL LARGE COMPANY

(Hypothetical Case)

Annual Sales $1,000,000, 000

Sales Decline (Oldest Products) 5% Per Year nnn nnn

n - r wn u $70,000,000

Price Erosion 2% Per Year

Typical Market Penetration 25%

Growth Target 10% Per Year $100,000,000

$170,000,000

Such a company needs $170,000,000 of new sales from a combination of

(a) established products

(b) new products in established businesses

(c) new businesses

Ultimately this company must seek to enter completely new businesses or abandon its growth objective

95
CHART 9 CHART 10

MANAGING TECHNOLOGICAL INNOVATION

LARGE COMPANY ENVIRONMENT MANAGING TECHNOLOGICAL INNOVATION

SMALL COMPANY ENVIRONMENT

CHARACTERISTICS PROBLEMS CHARACTERISTICS PROBLEMS

Venture analysis

Directional planning Business objectives

control BUSINESS PLANNING

Complex enterprise Has R/D organization May lack certain technical skills EXPERIMENTAL

APPRAISAL

Outside inputs needed

Incentives available Continuing R&D effort

EMBRYO

BUSINESS

Growth

Jobs Products

SUCCESSFUL GROWTH

BUSINESS

Not invented here Time value of money

Inbreeding Lack of specific market

experience often kills good projects

Entrepreneurs missing g Know-it-alls g' Risk vs. Cost emphasized

Extend present businesses

Failure to meet return on

investment criteria in early years

Antitrust Key management

Assimilation

Antitrust

IDEA

Individualists Technical Uncertainty No business experience

Total commitment

Capital?

In business?

MONEY

High risk requires high potential return

Relatively small $ No technical experience

Appraisal o

Lack of understanding 5

• Banks §

• Industry <

• Government i/>

• Universities £o

z

"GARAGE" OPERATIONS

Losing money

Less than

• 100 employees

• $1 million capital

• 5 years old Technology oriented High ratio technical men

Government contracts

Fast reaction time One or few customers Custom manufacture

High return on investment

High value added

Key management

Incentives Fringe benefits Government procurement

Total commitment

2nd STAGE

BUSINESS

New kind of financing

Dilution of equity Many impersonal customers

Product oriented High volume manufacture More than

• 100 employees

• $1 million capital

• 5 years old

Key functional staff Control techniques Market analysis World wide marketing Costs

Competition

SUCCESSFUL GROWTH

BUSINESS

Growth

Jobs Products

Escape Merger

Sell out

Antitrust Timing

96

.JL.
CHART 11

SOME OF THE MAJOR 1964 REVISIONS OF STOCK OPTION

PLANS ENTITLED TO CAPITAL GAINS TREATMENT

Before 1964 After 1964

Minimum Purchase

Price of Stock

00 /o of Market Value

IV/V//0 of Market Value

Maximum Time

to Exercise

Option

10 Years 5 Years

Minimum Holding

Time Between Purchase

and Disposition of Stock

6 Months 3 Years

CHART 12

Board of Governors of the Federal Reserve

Dept. of^Agricultur

Dept. of Interior

System

Dept. of Justice

Dept. of Treasury

Atomic Energy

Commis

Civil Aeronaut* Board

Federal Maritime

/Commission

Comptroller

of the Currency y

SOME OF THE?"

FEDERAL AGENCIES"

^SPONSIBLE FOR POLICIES

NFLUENCING

^COMPETITION

United States

Tariff Commission

y

Small Business

Administration

Federal Communications

Commission

Federal Deposit Insurance Corp

Securities and

- -Exchange

Commission

Interstate Commerce

Commission

eneral Services

inistration

Federal Trade

Commission

Food and Drug

Administration

Federal Power Commission

97
Dr. Hollomon: I'd like to introduce next, Professor

James Brian Quinn of Dartmouth College for a dis- cussion on these presentations. He has written much

about the processes of research and development,

their use and their management.

Professor Quinn: After the excellent statements by

the Vice President last night, Dr. Hornig, and my

two colleagues this morning, what should one add? I shall only touch on a few issues which I consider

most important and highlight significant points al- ready made.

There are some basic philosophical points which

need emphasis in any discussion of government poli- cy for technology.

The Nature of Technology

The most important of these is the nature of tech- nology itself. Technology is knowledge . . . knowledge about physical relationships systematically applied to useful purposes. Its manifestation, hardware —which many consider technology—may or may

not be technology. A crude lathe in the hands of a

skilled man can represent a sophisticated tech- nological system. But the most advanced computer

in the hands of a savage jungle tribe is likely to simply be a rapidly rusting hunk of junk.

Thus when we talk of policies for technological

development, we must think in terms of policies for essentially intellectual processes. This is something of a new concept for national policy makers

and for all managers. The concept should include

policies to stimulate both:

( 1 ) The creation of knowledge for practical purposes, and

(2) The use and transfer of knowledge for practical purposes. Within this context national policies for technology should include guidelines for the development,

use, and dissemination of "management tech- nologies" which—like operating research techniques —deal with optimal relationships between physical

entities. Yet such technologies have rarely been dis- cussed as a significant component of national technological policies. I believe this is a serious oversight.

To date, the European focus—and often that of the lesser developed countries—has been largely on how to create new technologies, preferably those based on frontier discoveries in the physical

sciences. Mr. Major wisely did not limit his focus to

this point. He recognized that the far larger question

for Europe, the United States, and most of the world

is how to intelligently use and transfer technological

knowledge we already are capable of creating. In

fact, for most of the underdeveloped and even de- veloping countries, the foremost question should be

how to create and adapt those relatively low-level technologies which could most easily relieve their people from needless unproductive routines and

vastly multiply their real wealth, health, and capital

formation potentialities.

With these philosophical views in mind, let us look at some of the more significant questions of government policy as they affect technological devel- opment. While I shall use the United States govern- ment apparatus as a focal point for my comments,

the same general questions would exist for many nations. The Public Interest vs. Economic Growth

At the heart of our discussion should be the question: How can the Government stimulate the creation, use, and transfer of technological knowledge in the "public interest," not just toward economic

growth in the usual sense of an ever higher Gross

National Product? Clean air, purified water, or higher levels of health may very well not mean as much economic growth as the use of similar rm

sources in other ways. But such uses may be

infinitely more important to the society than the implied loss in "economic growth." When we avoid the

simplistic use of "economic growth" as the sole cri- terion for advance, this leads us to some most complex questions. What is the public interest? Who

defines it? Should we consider a single cohesive

"science policy" to support these goals, even if they can be defined? Or, should we really think only in terms of policies (plural) for science and technology?

Personally, I think, both. I feel that pluralism in approach offers great strengths for a technological

society. The vying of individual minds and ap- proaches—both within the government and in the private sector—to establish social goals and to solve

society's problems, is among the greatest of all stimuli to the creation and use of technology.
JAMES BRIAN QUINN is Professor at the Amos Tuck School of Business Administration at Dartmouth College, and a consultant in Long-Range Planning and

Research Management to major United States and foreign companies. Formerly

Assistant Dean at the Tuck School and Assistant Professor at the University of

Connecticut, Professor Quinn has been a consultant to the U.S. Department of

Defense and the U.S. Treasury Department. He was a staff Consultant on Science

Policy to the Select Committee on Scientific Research (Elliott Committee).

Professor Quinn received a Bachelor of Science Degree in Engineering from

Yale University, followed by a Master of Business Administration in Management

from Harvard University. His Ph.D. in Economics was conferred by Columbia

University.

Professor Quinn's writing have been extensive, with emphasis on the planning,

budgeting and control of research, and the transfer of the results of research to operations at both corporate and national levels.
But even pluralism can go too far. Some choices

must be made by any responsible government in the

interests of social efficiency and effectiveness. Government must avoid excess duplication of expensive

programs. It must avoid undue conflicts in the pur- poses of related programs. It should avoid overemphasis on one technology at the expense of others

which may be more important to the achievement of

total social goals. It must choose where to invest when private investment mechanisms are inadequate

for social purposes. Typically, as the primary supporter of a nation's R&D activities—and as purchaser of a large portion of a nation's Gross National Product—the government is a prime determinant

of the balance toward which the society will direct

its technological resources. Through its allocation

mechanisms it establishes to a large extent which

technologies will receive major emphasis, which will be stimulated to a lesser degree, which will be left to

thrive under individual initiative and support, and

which "big science" areas may be purposely ignored.

For no single nation—not even the United States

can solve all the technological problems of mankind

at once. This hard fact leaves the U.S.—and all other advanced nations—with many difficult choices in policy. How much should the government spend in total on the development amd dissemination of tech- nological knowledge as opposed to the private sector? How far can the government's decision making

structure allow redundancy or competition? In what

areas is it most important to set forth strict rules for action or general guidelines for choices? How can one hope to predict the ultimate impact of any given

policy as its effects diffuse through the society? How

can we even measure its effect after the fact in a complex social system?

Levels of Technology

Whether systematically or intuitively, governments must inevitably formulate policies for tech- nological development. Whether they are formulated

with a full sense of the complexity of a technological

culture is another matter. Too often government

policy for technology could better be called "policies

for science and the advanced technologies." The

effective "level of technology" in a society depends

not just on its capacity to participate in certain advanced scientific areas—or even to "reduce-to-practice" first. Quite to the contrary, its true level of

technology will depend to a much greater extent upon its ability to use relatively low degree technological knowledge in the routine production, dis- tribution, and service industries, which are necessary

to back up more advanced technological fields and

which typically provide the bulk of its Gross National Product.*

The effects of many simple technologies, when

multiplied through a whole society, may be

significantly larger than the impact of a few more

advanced technological capacities. For example, the

prevalence of basic "work simplification" andt

"efficiency" concepts and attitudes everywhere in the United States may well be more important to its in- ternational competitive posture than even its most

glamorous modern technologies. Thus, technological

policy must consider not just the interests of science

and the advanced technical areas, but the balance of technological knowledge which the whole society

needs.

How can government policy stimulate the contin- uous development of both high and low level tech- nological knowledge on a broad base in the society?.'

More important for many countries, what policies can help induce good people to go into the less; glamorous fields of technology—like highways, ur-j ban development, building trades, and so forth

where the ultimate payoff to the society may be! much higher than investing the same skilled re-; sources in advanced fields like nuclear power or computer technologies? These are problems which;

plague all the advanced western countries I have

contacted in my international studies.

The Policy Formulation Process How does a government exercise its role in national policy making for technological development?

Here we should recognize clearly an often over- looked aspect of the policy-making process itself. National policy is rarely created finally by a "Ser- mon on the Mount" by a policy making executive.

Even the excellent statements of the Vice President

last night will not become policy until the apparatus

of government acts on them in a consistent fashion.

Government policy—as industry policy—derives

from a complex interaction of many forces. These

include, certainly, the statements of general guidance

provided by top government officials. But they also include the recommendations and ego-involvements

of people proposing programs and approaches at lower levels in government agencies. The project se-

* As a case in point; Communistic China has advanced nuclear andj

missile weapons capacities, but the limited availability of consider-; ably lower levels of technology in her agriculture, transportation,

distribution, and construction fields apparently constrains her per

capita wealth to minimal levels.

100
more d

am

nthi

Is :n

most

eical

ience

ceo

icietj

. Iff

thlection and priority setting systems of each agency in essence formulate policy, as do the actions of inter- bureau budgetary and coordination groups (like the Bureau of the Budget or Office of Science and Technology in the United States) at the highest administrative levels of government. In many countries, the

fiscal and political decisions of their legislatures are

as important in policy formulation as the highly so- phisticated analytical and organizational apparatus

of their Administrative or Executive cadres. In fact, in the United States the Congress—through its fiscal controls and oversight activities—is perhaps the ulti- mate source of policy in many areas affecting

science and technology. Yet its fragmented committee organization and review procedures practically

insure non-cohesive policies in the government sec- tor and an uncoordinated impact of government activities on the private sector. The complexity of the decision making apparatus in free countries thus

militates against formulation of a truly integrated

policy.

But even if all of these forces did interact to for- mulate a cohesive policy, there would still be the question of getting the government's far flung ap- paratus to follow that policy.

For example: in the early stages of World War II, the central British Government bureaucracy may not have wished to emphasize radar research, but technical teams in the Government and the scientific community generally saw to it that the official policy was

not followed. There are many other examples of

similar failures in implementation. Some of these

failures are healthy, some not. Thus, as we talk of government policy formulation, we must think of the entire complex planning,

evaluation, and control structure of the government

and how it could conceive of and implement desired

policies. It is ultimately this structure which allows

decentralization in government, maintains pluralism

in the government sector, and through its interactions determines the government's share of the "public interest"—yet does not imply omniscience

or direction by any single group or individual.

Mechanisms to Exert Policy In addition policies for the creation and utiliza- tion of technology in a non-totalitarian society result from an even broader-scale interaction among gov- ernment activities and other social forces outside the

direct pale of government. The primary role of government is to balance the impact of these forces,

stimulating some and suppressing others in the public interest. It exerts its role as a balancer in a variety of ways, and policy questions are associated with

each of the mechanisms through which the government typically directs its influence. This morning Dr. Hornig touched upon several of

the most important ways in which the government

extends its role as a policy formulator into the pri- vate sphere. He mentioned the government's role as a buyer of technology. This role raises many important questions. How can the government insure a

favorably balanced impact on the society from its many decentralized buying functions? How can consistent and beneficial priorities be set within missionoriented departments, between mission-oriented departments, and for new social needs not presently or

exclusively within the defined missions of existing

government departments? How can government develop its functions as purchaser of items desired by

the public—yet too complex or costly to be bought

by individuals or localities—without infringing unduly upon the personal freedoms of its citizens? Other questions exist concerning the government's

role as an investor in technological knowledge. How

can the government balance its commitments for fu- ture needs against current necessities? How can its complex political and policy apparatus evaluate the

relative worth of investments in general education,

science, social sciences, or the humanities against

added technological development? No accepted cri- teria even exist for weighing such alternatives. Neither are there adequate data nor analytical tech- niques for evaluating such questions. Until such criteria, data, and techniques do exist there can be no

realistic alternative to pluralistic competition for re- sources.

Still other questions result from the government's

regulatory role. For example, how can government

adequately estimate the impact of its economic,

fiscal, and social policies on the development and

utilization of technology in the national interest? How could the U.S. government have weighed the impact on its technological communities of its recent

decisions on interest rates and the rescinding of depreciation credits against the other economic and

social goals these policies sought? What role should

government take in establishing physical standards

for products and processes to obtain desirable consistency among local, regional, state, and private users? How can the government analyze and predict

the impact of its rules, procedures, and practices

under contracts and in heavily regulated private sectors—on the technological capacities of those sectors? How can it obtain productive comparability

101
among regulations in competing or impinging sectors without imposing bureaucratic rigidities which inhibit or prevent flexibility and change?

Thus, the central question of government tech- nological policy is: How can a government achieve

cohesiveness in the effects of its various policies on

the total society without destroying the freedom and

pluralism upon which the dynamism of that society

often depends? But these are just the questions

which exist at the government level in national policy formulation.

The Private Sector and National Policy

Formulation In a free society the government does not deter- mine national policy alone. The decisions of private concerns and individuals are as important, if not more important, than government decisions in deter- mining the overall posture of the nation. Thus, major questions exist concerning the relationship in a

free society between public vs. private choice and

development and utilization of technology by the public vs. private sector. What role should the government play in the creation of new technology? Should it limit its support to education and the support of basic science?

Should it support development programs for items

to be sold in the private sector? Should it create cooperative laboratories for lagging sectors? To

what extent should the government participate in the

actual production of technological goods and services in the United States? What policies can be for- mulated to differentiate the roles of the public and

private sectors? If there is to be a "new partnership"

between industry, education, and government—as many have suggested—what should be the terms of

this partnership? These are basic policy questions,

and I submit that we have neither good data nor good theory on which to base conclusions. Consequently, perhaps our only approach can be experimental.

Further policy questions strongly affecting the pri- vate sector are these. What policies should government develop concerning the size of competing units within its borders? How can the economy benefit most from the production and marketing economies

of scale offered by large size and the flexibility and

freedom offered by smaller units? I feel that a country needs both giant and small companies for

its continued healthy development. The question is how to develop policies which encourage rational development of both—and discriminate seriously

against neither one form nor the other.

Another most significant policy question for the

private (business) sector is this. How can private

producers be stimulated to further develop markets

where group consumption is essential? How can tra- ditional business attitudes toward group consumption markets be changed? Can the benefits of private

production be maintained when group consumption

becomes essential? Since the problems of all societies indicate that group consumption for health, education, de-pollution, transportation, urban development, and so forth will be increasingly essential if man is to improve the quality of his life, how can

private and government attitudes towards these markets be changed to develop the most effective rela- tionship between private production and public con- sumption? A most important development (in the U.S. and many western European countries) over

recent years has been the constructive participation

by businessmen in government policy formulating

commissions, such as: our recent National Commission on Technology, Automation, and Economic

Progress; the Royal Commissions of Sweden; and

the various planning committees in France. In all these countries there appears to be a changing atti- tude among businessmen toward "group consumption" as something apart from the dreaded "social- ism" it was identified as in the past.

Labor's Role in National Policy

Another private institution—organized labor—al- so largely determines any free nation's technological

posture. Labor can encourage or virtually stop tech- nological change in specific sectors. To assist eco- nomic growth through technological advance, government policy must help develop flexibility of movement, job adaptability, and acceptance of tech- nological change in the labor sector. The problem is how to accomplish this without infringing upon the freedom of laborers to choose their own futures and

to work in favorable industrial relations environ- ments. There can be no question that technological development in the U.S. and Sweden (for example)

has been vastly stimulated by these nations' highwage levels and demand for excellent working conditions. How can such demands continue to be considered acceptable points for collective bargaining

while the restriction of new technologies is severely

limited? How can employment and unemployment

practices be restructured to obtain a higher utiliza- tion and motivation of the employable work force?

Along with others, I am deeply concerned that the

102
administration of U.S. unemployment and welfare

programs is often wasteful and can tend to impact

unemployment, create unfortunate work attitudes,

and increase social inertias—rather than relieving the problems they seek to solve. Yet the producing

sector must shoulder the added burden of unnecessary social overheads. What new forms of data and

incentives are needed to keep able people actively

and flexibly producing for the society while the truly

handicapped receive the care they need? Again

neither an adequate theory nor reliable data exist upon which to base firm conclusions.

National Policy and International Affairs A final set of policy questions exists particularly for the United States in relationship to international

affairs. As the dominant technological power of the Western World, the United States runs a risk of becoming emotionally and politically cut off from the

allies it needs throughout the world. Consequently,

there is still another series of policy questions which

our government must (almost uniquely) consider in relation to its international posture.

To what extent should the United States encourage or actually discourage the "brain drain" from

foreign nations? Our policies to date have generally

encouraged movements of key people from friendly

nations to the United States. But there is some question as to whether these people could not contribute more to long term United States' and world interests by being stimulated to stay in their native countries. Certainly the United States cannot isolate those per- sons who wish to come to its shores to share the excitement of working with the most advanced

thinkers in their fields and to use advanced equipment only available here. But to what extent should

U.S. national policy encourage the sharing, exportation, or use of technology abroad rather than

domestically? What kinds of technological transfers are most effective to underdeveloped, developing,

and relatively mature economies? If these differ, can

the nation have one set of policies for one group of nations and another for others?

Despite many statements that technology is a "world resource" just like scientific knowledge, there

is a real question whether sharing technology freely

would actually stimulate or retard world tech- nological development. Unlike scientific knowledge,

which is generally sought for its own sake, technology is developed for its practical worth in specific

applications. To distribute this value freely is to deprive risk takers of some of the presumed benefits of

their efforts. To what extent should a government

force individuals who have developed technological

knowledge through their private resources—or a

public which has invested heavily to obtain such

knowledge—to share benefits with others who have

been unwilling or unable to make similar expenditures? The fundamental question is whether all societies would tend to lose the important intellectual output of many private (or privately supported) in- ventors, if they were forced to share their tech- nological knowledge freely throughout the world?

Finally, there is an entirely new private force in world technological affairs, the giant international

technologically-based companies. Many of these now have greater technological and production capacities than nations long considered sovereign in world affairs. There are major questions as to how

the policies of parent and host countries should be

adapted to maximize the world-wide effectiveness of

these companies. To what extent can these companies be considered apolitical forces in the world

affairs? To what extent are they to be regarded as

logical extensions of their parent and/or host countries' national technological policies? What kinds of

policies are desirable at the parent country level? At

the host country level? At the special treaty level? International law level? How can all interested forces work together to obtain maximum international benefit from these new sophisticated entities which can contribute so much to or distort the cul- tures they operate within?

Conclusion

These are national policy questions which affect the development and use of U.S. and free world

technologies. They are the dominant issues of our

times and must be faced in the best way we can

while we develop better data and techniques to improve our decision processes. But a key step in moving forward would be to recognize the complexity of

the issues we face, the need for a thoroughly articu- lated science and technological policy apparatus

throughout all elements of government, the critical relationships of the private business and labor sectors, and the new issues raised for all societies by

the developing needs for group consumption and in- ternational exchange of technologies on a scale never before conceived. To solve these problems

will require ( 1 ) new mechanisms of communication

and cooperation among the three major sectors of

labor, business, and government in each country,

and (2) new concepts of how economic systems actually operate and the role of technology in world

affairs.

103
Dr. Hollomon: Thank you Professor Quinn. I would

like now to introduce to you Professor V. K. R. V.

Rao, member of the Planning Commission of the Government of India, a person who has participated

in United Nations affairs, and an economist who is deeply interested and responsible for finding ways of applying technology in an emerging economy.

Professor Rao: Mr. Chairman, I must begin by

saying how very much I have enjoyed the educated discussions that I have heard both yesterday

and today. I must also confess how deeply I have

been impressed by the articulation of people who

do not belong to the academic world. I find, for example, that the analysis presented by Mr. Peterson, who spoke a little bit earlier, is much more

articulate than even that of the academic or the

political world. I will take back with me these impressions, as an index of the skills that ate fostered by the economic system in this country.

Just two or three points I wanted to make. I am expected to express views on policies of gov- ernment toward the creation and use of technology.

My country, India, provides a star example of how

almost everything which has been suggested here

in the course of the statements of these two days, can be tried.

Prominent Place of Science in Government of

India

For example, I can recall that immediately after the country became independent, the Government

of India, under the stimulus of Mr. Nehru, issued a special government policy resolution on science. The policy resolution indicated the importance of science and technology in economic development,

gave the scientist a very important place in Indian

society, created a scientific policy committee in the Cabinet, and so forth. Then, definite steps were taken to foster scientific research in the public sector through the creation of

laboratories of various kinds and of research stations in government departments. Our government's

expenditures for research, I think, went up from 47

million in 1947 to something like 706 million rupees

today, and we are still increasing our expenditures on scientific research. In our country, of course,

these expenditures, unfortunately, are almost totally in and by the government; there is not any remotely

comparable expenditure by private industry in my

country.

Support for Education of Scientists and

Engineers

Another thing is the question of adequate quantity

and quality of scientific personnel. There again I think we started with about 90,000 persons entered

in science courses. Today, the figure is 440,000

persons who are engaged in science courses in my

country. By the time we come to 1970 and 1971 we will be under our Fourth Plan and we hope to reach a target of about 800,000 persons enrolled

in science courses. It is not a very large number,

because by that time the number of university stu- dents in my country will be between 2 and AVa

million persons. There is a great need for persons trained in engineering courses. We began with a national capacity

of about 6000 engineering graduates per year. The

number is now 50,000 and is expected to go up even

more.

Developing Private Enterprise

Then, we, too, have a national resource in the

private corporations that are trying to make salable and marketable inventions based on the findings in these scientific laboratories. We have something like 40 national science laboratories—some are basic

research laboratories, and some are commodity

laboratories. All my countrymen may not agree with me, but I think the latter kind is especially

productive as far as development of commercial

innovations are concerned.

Financial Encouragement

Because we have such a need to promote new

enterprises, we have special depreciation allowances, we have development banks and special loan sources

for making available funds to the private sector. As

far as foreign capital is concerned, we welcome

foreign capital. I think I can say with a sense of

pride, mine is the one country where any foreigner

is treated so that he may feel completely at home.

104
V. K. R. V. RAO is a Member of the Planning Commission of the Government of

India, with responsibilities for Agriculture, Education, International Trade, Social

and Economic Research and Program Evaluation. In this position, he holds the rank of Minister. He is also Professor of Economics at the University of New

Delhi, a post which he has occupied for twenty years. Professor Rao in addition

serves the University as Vice Chancellor.

Professor Rao founded the School of Economics at the University as well as the

Institute for Economic Growth. He has also been active in the U.N. as Chairman of

its Subcommittee on Economic Development from 1947 through 1950, and as a member of the U.N. Committee of Experts for Definition and Measurement of Standards of Living.

Professor Rao is a graduate of both the Universities of Bombay and Cambridge.
I don't think there is a single recorded example, in the last twenty years, of acts of hostility toward any

foreign enterprise within my country. There is no

discrimination and all tax incentives and fiscal in- centives are available to foreign enterprises as well

as our own. In spite of our being a democratic

socialist country, we have no foreign investment

controls. We are relaxed in our procedures; we are

trying to stimulate growth by creating a favorable

climate for foreign enterprises to come in. How Have All the Policies Worked Out? With all this attention, support and these re- sources, we have not succeeded in accelerating our economic development significantly. We have had some economic growth, and undoubtedly we are

infinitely better off than we were twelve years ago. Nevertheless, we are nowhere near where we would

like to be, nor has there been anything like a sig- nificant reduction of the gap between us and other

major countries of the world. And, there are a lot of countries who have not been able to achieve this either. The failure is not trivial when it occurs in my country, India, numbering five hundred million

people, and occupying a key position in the Asian

continent quite apart from being an old and not

entirely an uncivilized nation.

Now, what can we do? And this is a question

which, if I may say so, we should discuss at length

in a seminar such as this, but dealing specifically

with the developing countries. In trying to use technology and science for eco- nomic growth, I think it is important for us to realize that this cannot be treated as a matter of

individual national policy. It cannot be handled only

by each national government to meet its own problems, especially for those governments which find themselves occupying what is called a dominant

world position. In some ways such governments are creating more problems for the developing countries, simply by the speed with which they are advancing their technologies relatively to the rest of

the world.

NOTE: The remainder of Professor Rao's text is paraphrased from his remarks, which, unfortunately

,

were not recorded in toto.

I am not suggesting that they should stop advancing their technology, but every advance made in the developed countries does make it more difficult for

the developing countries to catch up or reduce the gap that exists between them. I would like to take

just a couple of minutes to propose some means for

creating the conditions under which the developing

countries can make use of technology for their own

economic growth and for modifying their basic

structure so that they may take their place among

the growing and dynamic nations of the world.

We recognize that this will require a highly imaginative, as well as organized effort. A country like mine which represents a significant portion of the world's population approaches this era with the problem of surplus labor. Nearly 70% of our working population is engaged in manual or agricultural

occupations. One cannot continue to have 70% of

the population so occupied for an indefinite period

if you want to establish the basis for economic growth

and an opportunity to use technology to our national

advantage.

Then' we also suffer from a scarcity of capital.

With the limited number of industrial operations, our capability to generate capital from earnings is severely limited. These two conditions reinforce one

another to create serious barriers. One of the fundamental requirements for utiliza- tion of science and technology in the underdeveloped

countries is for the population to have functional

literacy. Here again it is only a very small proportion of our population that is now able to read and

write, which again limits the opportunities for eco- nomic growth and the contribution of science and; technology.

What Remedies are Available: There are some proposals I would like to offer for consideration with this audience. These suggestions

may not all be able to be taken up concurrently, but!

I hope that, together, we can make some progress through applying ourselves to meeting the problems

described earlier. First, I would propose that we use the most]

up-to-date training methods to rapidly expand the proportion of our population that has functional

literacy. Is it not conceivable that a massive pro- gram conducted during a period of six months to a year could increase significantly the proportion of our population which can use written instructional! material? The increased capability of these trained

people would begin to make our large population

useful in the modern economic development process. Second, I would propose the establishment of an international agency that would be concerned,!

with the technological health of the developing

countries. We already have analogies in the field of public health. We now need institutions that could

106
provide the necessary technological constituents of a functioning economy. Such an agency would, on

the basis of its experience throughout the world,

be able to bring about conditions, throughout the developing world, that parallel conditions found

satisfactory elsewhere.

Third, we need to find new means to make

private foreign capital available to support the

growth of export industries in the developing countries. Unless these countries can develop significant

exports, it will be increasingly difficult for them to have the capital to purchase imports. It is, therefore,

to everyone's interest that such export industries be

built up and it may be wise to consider some proposals for sharing the export earnings between the countries furnishing the capital and the countries

receiving it. In this way, the opportunities that

exist for the developed countries in marketing to the underdeveloped world will have within them the seeds to make the developing world an active partner

in future trade. Fourth, The success of the U.S. Peace Corps

in the field of cultural and social development proQUESTIONS FROM THE FLOOR

Dr. Hollomon: As is usual with almost all affairs of men, schedules are difficult to keep; on the other

hand, we have delayed lunch a little bit so we could

have some more discussion between the audience

and the panel. Do we now have questions, comments, suggestions, or controversy from the floor?

Question: I have a question, primarily addressed to our foreign guests, either Dr. Major or Professor

Rao. We have heard a brilliant exposition by Mr.

Peterson on some of the components of our tech- nological environment. One is the tremendous influx of government money for contract research, and so

on. Second is the large amount of private research

and development wherein private companies support

people in doing R&D and then to translate and convert it for commercial purposes. Third, we have the pluralism that Dr. Quinn mentioned, which is a many-sided way of encouraging entrepreneurs and

enterprises to get started. My question really is this: There has been a lot of

pressure, because of the so-called technology gap

with Europe, to emulate our government's R&D

sponsorship. Do European countries really understand the other two components that have gone

vides a model that may be useful in the economic

development area. Would it not be possible to establish a "Peace Corps" which might contribute effort and talent for the scientific and technological devel- opment of the developing countries. If our countries can develop independent positions in science and

technology through such an injection of the wisdom

and experience gained elsewhere, our countries will be able to make a more constructive contribution to world economic development.

Our over-all objectives should be, through the combined hard work of developing and developed

countries, to create the conditions so that our large

populations can become more significant producers

and consumers of the world's goods and services. I trust that there will be additional consideration of

the special problems of the developing world in symposia such as these. I would also encourage ex- perimentation with some of these proposals in rela- tion to the Indian economy which offers such an out- standing opportunity to demonstrate the feasibility of international cooperation in economic develop- ment.

into our successful economy, namely the profitoriented R&D, and the entrepreneurship? If they

don't really understand that, then would not the adaptation of just one element, a large amount of

government R&D money, give them a distorted tech- nology that might accentuate the gap?

Dr. Hollomon: I think Mr. Major might want to

react to that.

Mr. Major: The question is very rightly put and I think it is quite true that in Europe they do not understand this completely. Perhaps I could add now what I had in my manuscript on the tech- nological gap that gives an answer in a way. It has

been suggested that there be closer research cooperation in certain fields between U.S. and Europe as a way to remedy the gap. That is the Italian suggestion. Such a cooperation may be a good thing, but I doubt whether it would have the expected effect. To my mind there is a gap, but I'm not certain

that the reason the gap is there is to be found in the technological field. I believe that the fundamental

reason for the gap is more a question of mentality

and attitude. On this side of the Atlantic you are

256-707 0-67—

107
more dynamic, you see more in the future. In Europe we are, on the whole, more complacent. I think

you have very often heard about the dollar incentive. Have you ever heard about a pound incentive?

A franc incentive? Or a mark incentive? I never heard of it. Your attitudes have helped to establish the management skills, the big market, free of cus- toms, and the big industrial units. In such a system

it is obviously appropriate to make use of science

and technology as important tools for the growth of

the whole system.

Science and technology are and have been present

in Europe for many years. What we'd like is the

attitude necessary for the creation of more big in- dustries with leaders who know how to make use of science and technology. We also need politicians, or

rather statesmen, who can create the bigger markets

which are needed for our companies to grow. I mention this because I think it is important for governments to consider the gap in full perspective.

Dr. Casimir: First of all, I am very strongly opposed

to speaking about "the" technology gap—using the

definite article. I think that is entirely wrong. I don't even like to speak about a technology gap or technology gaps. What we have is a distribution of technological

knowledge. In some cases the United States is ahead, and sometimes even far ahead, of Europe; in other cases they are .slightly ahead. In a few cases Europe is ahead. Not even all of American technology is on one level—it shows a widespread dis- tribution from the very advanced technology to primitive operations. To speak about all these dis- tributions as being part of "the technology gap" is to create an artificial notion. It is getting into newspapers and it is getting into political discussions. I would like to abolish the words "technology gap"

altogether, or if that can not be done, at least to abolish speaking about "the technology gap," be- cause it does not exist as such. Now, it is certainly true that there are symptoms

that are alarming. They show that in the distribution of abilities there is considerable advantage to the United States in certain fields. Europeans don't wel- come this trend. The question is whether people in Europe realize that this certainly is not due only to U.S. Government spending for R&D.

As you know, I have recently been around this country and interviewed people with a small OECD

group. They will write a report on science policy

practices in the United States. In our study, we tried

to get more information on the influence of the gov- ernment spending on research and development.

It is perhaps too early to formulate the conclusion, but still the general impression is that, al- though there is a positive influence there, it is much

more indirect than many people in Europe believe.

It is not so much the specific pieces of hardware and

specific procedures that are turning out to be useful

in the economic sphere, it is more a generally highlevel of technology and a general managerial competence. It was already suggested here to us that if you

want to speak about a gap, it is more of a managerial gap and an organization gap than actually a tech- nology gap. As a matter of fact, if we bring people

together in Europe in the right way, aimed at the

right purpose, we can do quite well technologically,

in many important cases. Take the CERN organization at Geneva, dealing

with high energy physics; it certainly can at this moment compete in results with high energy physics

work anywhere in the world. The technology of the

bubble chambers and their accelerator is quite as good as what you find here. It was all made in Europe by a combination of European firms. If the aims are clearly stated and the organization is well made, I don't think that technology is the difficult part.

Certainly there are fields where one has to rely on American help. One has to go to the United States for the big computers one needs. I don't consider

that so very tragic. But there is one thing that one must never forget, and that is, that even when we

train new managers and new entrepreneurs, the United States will remain a tough competitor.

What I should like to propose is this. If America

really wants to do something about the "gap," start introducing a different currency in each of the fifty states, and impose other serious boundaries among

all the states. You have enough Italians, Greeks

and Germans and Dutch people to create four, five or six official languages in the various regions. If you made a state with an official Italian language,

be sure to incorporate minorities with another

language or two. Otherwise it won't work or create the full effect. It would also help to have several of these states drive on the right side of the road

and others keep to the left. It would be a nice

project in operational research to work this out

in such a way that you would get the maximum

number of collisions. If this experiment were done

and we then, ten or fifteen years from now, com-
pared your America with Europe we may well have

bridged the gap, whatever it is!

Dr. Hollomon: Are there comments from the floor?

S YesMr. Rodney W. Meyer, of Hughes International

Corporation: I would like to comment please. If there's a more technological group in the world than our company, I'd like to know where it is. We

spent about 30% of the year, each year for ten

years, in Europe and I'm going to take advantage of Mr. Peterson's characterization. I'm one of those

fellows that divides people into two groups. Europeans divide themselves in two different classes. One,

those that apologize and, two, those that work. Now

let me be specific. In Mr. Major's country, Tandberg,

as far as I know, makes the best hi-fi tape recorder

in the world. I, among other people, have gone to the man who invented it trying to persuade him to use better components, and he says, "I'm not going

to change a thing, it's the best there is." And he's

right. I think the Norwegians are doing a great job.

I know this, I never heard a Norwegian apologize

for being a small country.

Phillips Radio has something like eighty percent

of the sonars designed to find fish, used in fishing

fleets of the world. Their competitors are Raytheon,

Siemens Electric and RCA. So there's no problem in being small, if you want to get to work.

Dr. Hollomon: We will let you reply to that Mr.

Major.

Mr. Major: I don't think it needs any reply. It is quite true that we have some few people that are exceptional. I think that you will find that every- where. But what we are talking about here is more

of a general situation in Europe.

Dr. Hollomon: One might make a general point that

in this country, too, small companies, starting new

technical enterprises, don't have large markets initially. They are not even competing for a large market. They start with small markets and then grow

those markets. That is true here as well as anywhere

else in the world.

Are there other comments from the floor?

Mr. Zvegintzov: I am from the National Research

and Development Corporation, United Kingdom, a government-supported effort to encourage the devel- opment of government-devised technology in the

private sector. I was extremely glad to hear what

Professor Quinn and Mr. Peterson said. It looks as though your problems of this country are almost the exact same as those we are identifying in Britain

today.

I heartily agree with Professor Casimir also that there isn't the technological gap; it is primarily the organizational environment, the management, the dissemination of knowledge through the training of executives that accept and adopt what already exists.We have based our organization on the principle that the best place to apply government R&D results

is in and through industry. The job of research and

development is to make money, not to give people

fun; that's a by-product. What we do is to invest just

enough money into our industrial partners to make

them give our R&D developments sufficient priority to convert them into commercial innovations. We

are providers of revolving funds of risk capital. In

the event of success we get the capital back through

royalties on the exploitation and commercialization.

In the event of failure, we have lost our money. We

can't say yet what the time cycle for full recovery is;

it may be twenty years; it may be twenty-five; I can't say. But the effect is one of adding the catalyst

to the business enterprise; the acumen which exists

in industry sometimes requires a bit of an extra boost when new technology is involved.

Dr. Paolo Rogers, Olivetti Co., Italy: Mr. Chairman, from what has been said in this discussion it will appear that this symposium is about to conclude

that there is no technological gap. If this is to be the consensus, I would like to register a dissenting vote. The gap may not be purely technological but there

is definitely a gap, with a capital "G"—Europe and

America are growing in different scales in different directions, and this is creating a very dangerous gap

indeed within the Atlantic world. It may be due to poor organization, to inadequate dissemination of

information, to lacks in management, to limited

R&D, and to insufficient applications or use of fundamental research. The semantics aside, Mr. Chairman, I think this meeting must recognize that a dangerous gap is developing and that we need to find ways—for both

sides—to deal with it.

Professor Quinn: I would just like to make a brief comment on that. I think that the gap that you refer

109
to is genuine in certain areas. To me, one of the very important aspects that has not been emphasized

in the discussions so far is the matter of the large

initial demand and opportunity for relatively lowlevel technological skills. I go into many European

bakeries, drug stores, groceries, et cetera, and see

that simple time and motion concepts would release people into the society for much greater additions to production. This is also true in the underdeveloped

nations where relatively simple technologies would

release large numbers of people to do more productive things. I hope that this will be recognized in our

conclusion here. The gap has many dimensions; it is not solely one involving complex technologies.

Dr. Hollomon: I would like to make one comment

myself; I don't think anyone here is saying that there are not differences. Dr. Casimir has said, too, that it is neither simple, nor a single difference. There are many complex differences. Comparable

differences exist right within the United States. We

have those who are in the space and military efforts, which are at the forefront of technology, because the problem there is not one of cost but of performance.

It is a difference which exists between the highly

sophisticated scientific and technical business that depends almost solely on technology and the rest of

the business world.

I don't think the world is moving apart. There are new and highly sophisticated technical businesses

which the world has never seen before and we happen to have a lot of it here. The same techniques

that apply to these highly sophisticated businesses

do not necessarily apply, as Mr. Quinn has said, to the economy of the less developed country. We must

learn and appreciate that there are different sciences

and technologies that apply to that situation. That's

the difference to which you refer.

I'll take the prerogative of having the microphone

and comment on Prof. Rao's arguments. I agree that the difference in technology between the less devel- oped countries, and the European, American, Russian economies is a much more substantial problem

than any small disparities between us and Europe,

or even between Mississippi and New York State

the latter, by the way, is a large disparity, too.

That difference is much more one in management

skills and entrepreneurship than the differences that have been stated to exist between us and Europeans

even though those are significant too. One of the great mistakes is that, as Prof. Rao

mentioned himself, India has tried all the techniques

that we suggested. It may be that those techniques

only work for a highly developed country. They may

not work at all for the kind of country that he is talking about. Entirely different means may be appropriate; we need to find them.

Let's look at our own case, that of the United

States. When we began to grow seventy-five to a hundred years ago, there wasn't much R&D. We]

didn't have scientific advantages; we didn't have al national policy on educating scientists and engineers.

We didn't have a national research and development

corporation. We didn't have government contracts

to industry. None of the things which these gentle- men have suggested were available during the great

take-off period of this country, which changed it from an agricultural economy to a manufacturing

economy. We used entirely different techniques during that period of our development. Perhaps you

don't teach to all those young people in India the same kinds of sciences we now teach. As the Vice

President said last night—the "ics", nucleonics and

physics and what have you, may not be the best approach. It wasn't what we used, for whatever

that's worth.

We made, in this country—the greatest political!

experiment that any country ever made—by estab-i

lishing the land-grant colleges, the state universities that taught the farmers and diffused the growing

body of knowledge in agricultural technology. That was done by a national program, and it was done by

a pluralistic decentralized institution, primarily by

man-to-man conversation and education.

All I'm suggesting is that for a country like India or Vietnam to believe that the methods which work

today for the United States or Britain or Norway

would work there is, in my opinion, a grave mistake.

The application of the most modern sciences may

not at all be appropriate. We don't really know the; soundest approach.

110
It

at

as

Luncheon Program

Introduction: Mr. Alexander B. Trowbridge

Assistant Secretary of Commerce for Domestic and

International Business

Mr. Trowbridge: The site for this conference, these magnificent facilities of the National Bureau of Standards, are clearly the products of a highly advanced economic structure. This new industrial rev- olution today is based upon the burgeoning technology, and the developed nations of the world lend new impetus to that revolution with each day of new

inquiry and innovation.

From all that has been said so far in this symposium, including Mr. Rao's remarks just before

luncheon, it is abundantly clear that we must focus on the position of the developing nations of the world who are not yet fully engaged in the development and utilization of technological progress. Mr. Reynolds raised this issue yesterday when he

said we would probably be judged 50 years from now more closely on how we have dealt across the Equator, rather than across the Atlantic. And the Vice President eloquently spotlighted this area of concern last night in his challenging talk at the banquet.

What has been done—and what more should we

be doing—to make technology available to nations

at all levels of economic development?

Secretary Connor said yesterday that our efforts should be aimed at removing barriers and obstacles,

and I can only re-emphasize that this is indeed the

policy of the United States Government. We support

and encourage the transfer of our technology to the developing countries. The achievements of American research, the products of our free enterprise sys- tem, are available under the patent process throughout the world. We have active programs in promoting U.S. private investments, licensing agree- ments and joint business ventures with all the peaceful developing countries of the world.

And these programs are bringing with them the

best of our technology and know-how. The coming

year will be very important for the less developed

countries, for it is then that the long-planned inter- national symposium on industrial development is scheduled to take place—probably toward the end

of 1967. We hope that this symposium will do much

to focus the attention of the developing countries on

what practical steps they can take to realize their industrial development potential. We, in the United

States, will give our full support and encouragement

to that symposium, to which our next speaker has

already given great leadership.

It is a great honor and privilege for me to be able

to introduce to you the United Nations Commissioner for Industrial Development, Dr. Ibrahim Helmi Abdel - Rahman.

Ill
ALEXANDER B. TROWBRIDGE is Assistant Secretary of Commerce for Domestic and International Business. Prior to assuming this post in early 1965, he was President and Division Manager of the Esso Standard Oil Company of Puerto

Rico. He was formerly engaged in the overseas operations of several petroleum

companies in Cuba, El Salvador, Panama and the Philippines.

A native of New Jersey, Mr. Trowbridge is a cum laude graduate of Princeton

University (1951 ) where he majored in the Woodrow Wilson School of Public and

International Affairs. Mr. Trowbridge has written of his overseas business experiences as a contributor

to Harlan Cleveland's "The Overseas Americans" and was a consultant in the preparation of "Spearheads of Democracy—Labor in the Developing Countries,"

by George C. Lodge.
Dr. Ibrahim Helmi Abdel-Rahman

Commissioner for Industrial Development,

United Nations, New York, New York

Technology and the Developing Countries

Speaker:

Address:

Dr. Abdel-Rahman: In my early days, I didn't hear

much about "science and technology." We used to hear about science only. Everybody spoke about

science. I think this combination, science and tech- nology, is relatively recent in literature. Even at UNESCO, which was established 20 years ago, they

i included science with a capital "S"; and even this

[' was introduced with some difficulty in those days.

Now nobody mentions technology without science,

or science without technology, and it seems that

they are very much related. Another word combination so often heard is "Research and Development." I think this is an invention of the American corporation. Of course, it may

not be a monopoly. R&D is now a recognized combined function: you don't speak about research

without development, or development without re- search. Then, "transfer of technology." Transfer of tech- nology has been mentioned, I think, about 3000

times in the last day or two, but how do you

transfer technology? In books? By moving people?

By what? What is technology itself?

The Process of Transferring Technology

The "transfer of technology" reminds me very much of a blood transfusion. You know that for a healthy body you must have blood. In certain situations the blood is not there, so you choose some

good blood and inject it by transfusion. Blood by

itself has little value; however, blood within the body is of paramount importance. Along the same

vein, it seems to me that even a whole room full of technology put in books or on "microfilm" won't do

anything. I want technology to be inside the body. I want it to be inside a production process. I don't

believe in technology by itself. Technology is generated within a system, and

similarly is transferred and transplanted within a system. You cannot speak about technology separate from the system in which it works. People study

blood, blood diseases, and blood circulation, but

they don't study them for their own sake. Blood is thought of as a constituent of a system.

What I mean by this anology is: In the advanced

countries you have a system which operates the processes of production, of consumption, of creation

of needs; you have research and development, and

within this system technology moves; there is a cycle; there is a living body.

Technology in the Economic Cycle

When you go to the developing countries, you

don't find this cycle. I think this is more or less what

Professor Rao has been saying this morning. In his country, and my country, we do not have such a

cycle, which goes this way: first you have production

of goods, and services; then you have the purchasing

power to buy this production; you have the incentive to increase production; finally, you have the technical capacity, the ingenuity for creating new

techniques and procedures—that is where technology goes into the circuit. You can have institutes studying blood and insti- tutes studying technology, but these by themselves

do not complete the cycle.

Here at the National Bureau of Standards—and

I'm so glad at last to be visiting this place—here

you do not concern yoursleves directly with eco- nomics, you don't think about national consumption

directly. You work on certain aspects of technology

and development, but there are existing connections

carrying whatever is going on here into the mainstream.

In the developing country this is not so. There is no cycle. They get industry from outside, they get

technology from outside, they get science from outside—but inside the country, there is not enough

circulation. The mechanism of the body there is not working

properly. This means that we need to activate this cycle of life in the developing countries and to inject into this cycle the life-blood which is technology, in a way that will produce a growing economy. To me,

this is more important than speaking about the "gap" and the "levels." Can we put dynamics inside societies so that they

grow and generate their own energy and exercise a

variety of functions? Can we get modern technology,

advanced technology, to be a help in that?

113
IBRAHIM HELMI ABDEL-RAHMAN is Commissioner for Industrial Development for the United Nations, an office he has held since appointment by SecretaryGeneral U Thant in 1963 * Following twelve years as a member of the faculty of Cairo University, Dr. Abdel-Rahman became the first Director of the Egyptian

Atomic Energy Commission, occupying this position from 1954 to 1959. Concurrently, he was Secretary-General of the Council of Ministers and the National

Science Council, and was Under Secretary and head of the technical staff of the National Planning Commission of the United Arab Republic. He also headed the U.A.R. delegation to the International Atomic Energy Agency in Vienna and was

a member of the UN Conference on the Peaceful Uses of A tomic Energy.

Dr. Abdel-Rahman, a native of Sharkia, United Arab Republic (1919), re- ceived his Bachelor of Science Degree from Cairo University, followed by postgraduate work leading to a Ph.D. degree from Edinburgh University. He also accomplished post-doctoral work at Cambridge University and later at Leyden.

*On December 6, 1966, Dr. Rahman was appointed the first Executive Director

of the United Nations Industrial Development Organization (UNIDO) by the UN

General Assembly. The functions of the Center for Industrial Development have now been transferred to UNIDO.
There are economic levels, there are social levels, there are philosophical levels. If you like, there are "technological" levels. This differentiation by levels,

as we have been told this morning, exists even in the United States—between industry and industry, and

between state and state. Can one conceive of a society where all levels in all directions are equal? I think it would be a very dull place, by the way!

How Can Technology Help Start the Economic

Cycle of Life? What is needed is to recognize that in the underdeveloped countries, the poor countries, the cycle of

life is not really working. We have to see how can

you transfuse the technology which is already avail- able—not as something in itself, but in order to

create this moving cycle.

Technology used in production, whether agricultural production or industrial production, is the

technology most necessary in the developing countries. Yet the developing countries, without having

this technology, can utilize outside technology. In my little village in Egypt, the farmer boys have transistor radios. We have television, motor cars, jet

planes; we are asking for and obtaining levels of life which are drawn from outside. Needs are created by

this. But we do not have the corresponding industry

that will produce these requirements at home or produce the wealth with which to buy these needs.

This disrupts the balance between technology of production and—for the lack of a better word—

call it "modernization." In the underdeveloped

countries, we aspire and do modernize our life by

utilization of the cinema, radio, television, and

health activities. But we are not so capable of in- creasing our industrialization. All the while, through the integrated system I re- ferred to earlier, these two functions (industrialization and modernization) are moving in parallel

paths in the advanced countries. You are producing

color television, you invented color television, you

are the consumer of color television. You have production, utilization of technology, consumption,

moving parallel to each other. So, economically,

this is a viable system.

We in the underdeveloped countries are exposed

to the results of technology, but there is a lag be- tween industrialization and modernization. What

should we do to correct that? Three Possible Strategies for the Developing

Nations

A very easy reaction would be to shut oneself off completely from the outside and stop this modernization. You could continue living in the underdeveloped countries in the life of the Middle Ages. So

the readiest solution is the solution of isolation. A second solution—just as an alternative—is to create a selective barrier that will allow the technology of production to pass through but keep out the technology of consumption. We could stress heavy

industrialization, we could stress modernization ol

agricultural production, but not have shoes or shoemakers, not have houses, not have television, until we build industry first. We could subject our politi- cal system to this requirement, forcing the whole en- ergy of the society into trying to make production

and consumption come closer to each other to create a balance. This is a second alternative. A third alternative is to see that you get from the outside not only the television and other modern in- novations but also some support to be able to pay

for television, and innovation. Today, we get support for industrialization. But Dr. Rao doesn't want

support. He is too proud. He wants our countries

and I agree with him—to be capable of producing

things by themselves. We want to share in the human development. We don't just want to be handed

down things. I think Professor Rao will agree with

me, that for a certain stage, outside help is needed,

both economic and technological, provided that this outside help is going to lead to increased vigor, and

fuller life and development of the developing countries. It doesn't matter if it takes long, provided we

can really get working.

The Disillusionment with Foreign Aid

This brings me to some of the disillusionment

which we are experiencing about foreign aid. Twenty years ago, as a result of the Second World

War, we in the underdeveloped countries passed in- to a stage of political maturity—a stage of de-col- onization, a stage of emergence of new nations

though some are very old peoples. We recognize

that political independence, though necessary, is not

sufficient. We also need economic availability and

social change. The same principles were recognized

fully by the advanced countries, including this country. This country created Lend-Lease during

the war—a concept of sharing responsibility for vic- tory—and this country developed, also, foreign aid as a concept for joint responsibility in peace. After 20 years, there is disillusionment. In my

opinion, this disillusionment comes from the fact that we underestimated the task and overestimated our tools and facilities for tackling it. We assumed

115
that a certain amount of aid was going to generate

miracles, and that provided one does this trick or

that, developing societies could change immediately.

What we are discovering on both sides—the advanced countries, and the underdeveloped countries —is disenchantment and disillusionment because the

results are not up to the level of expectation. The

difficulty is in the original expectation, not in the

actual result. The original expectation was too high,

and not based on real experience. Now we have 20

years of experience and we should reexamine this situation. If this were done, we would find that what

is needed is a better method of enabling the devel- oping countries to come and share in world activity for everyone's mutual benefit.

I would like to comment also on the several points which Dr. Rao mentioned this morning. I am

on the best terms with Dr. Rao. We know each

other, we admire each other, but I have some comments nevertheless. He speaks about an international technology

agency. Translated into my language, he wants a world blood-bank. I don't want that. I don't think

you can store technology and then press a button,

and technology will flow. What we need is something different; namely that when you come to a country to establish an industry, available knowledge and experience that will create the physical

productive entity must be examined first. In other

words, I want technology . to be embodied in an

operation and a system; I don't want blood in test- tubes, I want blood inside living people. I am happy

to see that Dr. Rao agrees with me.

In a second point, Dr. Rao wants almost a supersonic system of education. Within six months or a year he would like to educate people to be technically and functionally literate. I leave it to more ca- pable people than myself to see if this can be done.

I believe it should be done as part of a specific activity rather than just teaching technical literacy for

itself. If you have a factory—and this has happened

in many places:—and you take people who have

never had any technological experience, and you

give them training on the spot in a specific field, they acquire the necessary training to fit into the

activity. We have seen this in the army technical

services, we have seen this done in other fields. The

question is not the transition from the unskilled

worker to the skilled worker when you have provided the organization that will supply him with real work. I don't object to Dr. Rao's appeal for rapid

literacy if it can be done, but the essential point

here is to believe that given proper productive facili-l

ties, the human interest and the basic capabilities, it; is not difficult to build up the trained personnel re-i quired. Training and industrialization move to-t gether.

On a third point—about export promotion!

through joint enterprise—let us wait until the after-! noon session to hear more about it. Let us see, if the experts think it is feasible to establish modern in-; dustrial production facilities on an appreciable scale; in the developing countries—with the participation, not only of foreign capital, but also of management, , and export marketing—so as to utilize the labor and

the raw materials of the developing countries in an

increasing production based partially on the market

demands in the advanced countries. This is a very;

serious question before us and it ties in with the last of the alternatives I proposed before. If we do not want the underdeveloped countries to shut themselves off from the world, and if we don't want them

to move in the direction of heavy industrialization exclusively at any cost, the policy to follow is to

give them a chance to develop their resources jointly

with the developed countries in an activating process. The Corporation as a Catalyst in the Develop- ment Process This brings me to an observation about the role of the corporation. I am not referring to the private

corporation, or the public corporation, but the cor- poration as an institution. In the last 20 years or 30

years the corporation, as an institution, has faced

two very difficult battles successfully.

The corporation has succeeded in the battle of

labor. You now have the corporation working fairly well with labor. That was not the situation in 1900

or even in 1930. In those days, whenever you spoke

about social legislation for the improvement of the

lot of labor, it was taken to be against the corporation. But in the meantime, we found it is possible to have successful corporations with stronger labor

participation and higher standards of living for la- bor. That is a very important achievement; it is the

first of the two battles that the corporation as an

institution won—namely succeeding in making

peace, and collaborating with labor. The other battle, which I think the corporation

also won, is the one with the public authority. In this country and other countries we wanted to find out i whether the corporation could live in a society in which central public authority has to exercise certain functions. Less than a decade ago this was sup116
cili-i posed to pose a conflict. With the corporation havs, it ing interest on one side, and public authority having

re- i interest on the other, it was said that the two would

to- have to fight each other, but we have found out in- stead that the corporation as an institution could

lion live and cooperate with public authority, and peace

ter- between the two could be obtained. ^ A third and new battle is coming up for the corIn' poration. The corporation must recognize its intera' e national role and responsibilities. This is where the

tl0D question of export and joint enterprises comes. If

ent

> you have a corporation in America, even if it is 100 ^ percent private, it must be recognized that, inherently, while this corporation my be working in a

specific industry, it has also an international responer)' sibility. It does not just have responsibility toward

' asl the shareholder, which no one would deny, but it

not has a certain responsibility toward the public of the

:nl*i country in which it is domiciled. In addition, there m is also an international responsibility. This interna10D tional role and responsibility of the corporation is, I

t0 think, what we are trying to discover, and which

'''y may hopefully be very useful in solving some of the

oc' questions which Dr. Rao has put this morning,

namely, to establish effective machinery for the

op- transfer of technology.

3 | e What Future for the Developing World?

lte 1 don't want to be an alarmist. On the contrary, I

)r. am an optimist, but I feel that—from my limited

30 experience in the United Nations and in my own

e(j country and in the fields of science and administration in which I have worked—the developing counfl[ tries within the current system of relations don't

lj, seem to have much of a future. This is very serious.

)0 This will become more and more apparent. The bal-

,£ ance of payments, the difficulties of foreign ex-

]e change, the political instability, all of these are

a

. symptoms which are appearing in one form or the

, 0 other. They are symptoms of the underlying fact

lf that the present set of relations are not capable of

j. being endured by the developing countries for long.

e There must be some basic change in thinking if we

n want to bring the developing countries—which

j represent two-thirds of the human population—into an active participation in the affairs of the world

n and to guarantee them some hope for the future.

s As things are, I cannot give the developing count tries any picture of optimism for the future. After

i 20 years of effort, after all the aid they have taken,

after all the good wishes and the resolutions they

• have received from the UN—where are they now?

On what basis could you tell them that they have a future? In line with the title of this luncheon's discussion,

in my opinion, this calls for a very intensive examination of how to get technology, which is abundant

here, to work in these countries—the technology of

getting wealth, the technology of getting the progress which has been achieved here, to be realized there.

The Need for Better Ways to Industrialize The technology is available. But how is it to be

built into the systems of the developing countries? If we cannot do that, and do it quickly and with effec- tiveness, I don't see how the picture can change;

instead I can imagine a lot of deterioration.

How can it be done? I think this is a matter for examination. We in the UN have hardly started defining the problems. Referring back to the inter- national symposium that the UN Center for Industrial Development will sponsor within a year, we

find that there has never even been an international

meeting on industrialization before—never. Nobody

thought of it. People have spoken of specific industries or certain aspects of industrialization of the developing countries; but to make it the total subject matter of an international meeting is new. We hope this coming symposium will be useful. We hope it will be useful in the sense of discovering

the dimensions of the problem. We hope it will speak straight to the developing countries, because

they, too, have made mistakes. There are bad administrations; there is bribery; there is laxity in the determination of policy. There is confusion of politi- cal factors and economic factors. There may also be

prejudice against foreign participation, which may

or may not be justified. There have been mistakes,

and there are shortcomings.

From the side of the advanced countries, one also has to admit, with due respect, Mr. Secretary, that the advanced countries will have to learn also. They

should be shown—with all good intentions—that they have given aid for 20 years which has not suc- ceeded as much as it should have. Why is this so? Is

it that more of it is needed, or that other methods

are needed? How can we increase confidence between the two groups of countries. How can we get the activation process I spoke of earlier going?

The United Nations Symposium of 1967: Its Purposes

So, we hope that some of these questions will be

posed in the International Symposium. I am not say117
ing that they will be solved, but it will create a better understanding of the dimensions of the problem.

We also hope that the new Organization for Industrial Development (UNIDO), which the United

Nations is setting up now, with the full support of

all countries, will play an important part in building

this understanding.

In the marvelous little booklet which I was given

last night to read, on Science and Technology for Mankind's Progress, I noted that the United States

is spending 22 billion dollars on research—16 billion by government and 6 billion dollars by in]

dustry. I was wondering, could we take one percen

of this to examine the effectiveness of the availabl< methods of industrialization? We must define the problem. The advanced coun-i

tries are spending money. They are giving aid. The}

are giving loans. Would it be worthwhile using jusi one percent of this total—to see what is the problen

and where are we going?

I want to leave you with this idea to consider.

118
m

Ik

November 17, 1966

Afternoon Session—The Transfer of Technology Through

Enter prise-To-Enterprise Arrangements

Mr. Stern: In this afternoon's session, rather than

being concerned with the role of government, we

shall be concerned with the role of enterprises, primarily private, and examine their role and effective- ness in the transfer of technology throughout the

world.

The chairman of this afternoon's session is a scholar of this field, Dr. Hollis B. Chenery of Harvard University.

Dr. Chenery: I assume a professor has been invited

to be chairman because he looks at this problem

from the outside while the other speakers are directly

involved in the process. I have some observations on

the process from my vantage point but I shall wait

until the formal participants have spoken and then

comment on some of their themes later on in the

discussion. However, I would say that in my period

with the U.S. Agency for International Development we were always impressed with the fact that the res- ervoirs of expertise and the resources to transfer technology were largely in the private sector, and

that the government was essentially on the side

lines, trying to motivate or facilitate private activity.

To get anything really done on the technological

side seemed to require private actors. It was much

easier to get a dam or a steel mill built than to get the manager for it and particularly the system, as Dr Hollomon puts it, in which it was going to fit. Governments were really only observers in these

aspects.

119
HOLLIS B. CHENERY is Professor of Economics at harvard University. Currently his research at the Harvard Center for International Affairs is directed at developing quantitive analytical techniques for the study of economic development.

He formerly served as Director, Program Review and Coordination Staff, Agency for International Development (U.S. Department of State), and from

1962 to 1965 was Assistant Administrator for the Agency. Dr. Chenery's early career included engineering assignments with the Phillips Petroleum Company and

the Southern Natural Gas Company. Dr. Chenery has also been Economist with

the U.S. Economic Cooperation Administration and Chief of the Program Division of the U.S. Mission to Italy for the Mutual Security Agency.

A native of Richmond, Virginia, Dr. Chenery received his B.S. degree in Mathematics from the University of Arizona and in Engineering from the University of Oklahoma. He was awarded his Ph.D. in Economics from Harvard University in 1950.

Dr. Chenery has carried on many international economic consulting and advising assignments. Turkey, Italy, Pakistan, Japan and Israel are among the countries

he has thus served.
Dr. Chenery: I would like to proceed with the formal program. Our first speaker is Mr. Elmer S. Groo, Vice President of I.B.M. World Trade

Corporation.

Mr. Groo: Mr. Secretary, ladies and gentlemen, I'd

like to discuss this afternoon some of the issues that

affect the way a business corporation does business

overseas. In particular, I'd like to focus on the size

of markets compared with the size of technology as measured in terms of its cost.

Historical Experience in International Exploitation of Technology

The basic question in introducing technology

abroad, is always the market. Traditionally, international business has been effectively organized as a group of self-contained national markets. Cultures,

customs, language, laws and national tastes have

tended to define markets in terms of national

borders. •Two decades ago, technologies were simpler and

investments in development were, by today's standards, rather modest. Technologies like jet aircraft, color television, computers, with their development

costs running into hundreds of millions of dollars, were simply unheard of.

It was possible in those days to bring a product to market with expectation of a profit in the relatively limited scope of national markets.

The Need for International Markets

The burst of technological developments of the

last two decades, with their enormous costs, has demanded the expansion of markets. Almost the only

market that will justify some of today's advanced

technologies is America. And for a company based

in Europe or Asia, or for any company engaged in national trade, a single unified international market

may be required just to justify the cost of technological advancement.

There are all kinds of recognition of this fact around us. The growing emphasis on international

standards, the concept of a European Common

Market, and the emphasis by every industrialized nation on exports. All of these are really a recognition of the need for international markets.

The Conflict of National and International Markets

Yet, the fact is that national markets do continue

to exist. Each nation has its goals; each nation has

interests of its own which influence its laws and

which dictate common-sense rules for good corporate behavior there. So we find a conflict. On one hand the company

seeks an international market to support its invest- ment in technology. On the other hand it must satis- fy the national markets and the special needs and

interests of a national economy. So the problem is how to organize in such a fashion that we can meet

these conflicting needs.

IBM's Approach to the Conflict Problem

Without trying to speak for American business in general—I'm sure there are great differences between companies—I'd like to describe how we ap- proach this problem in our own company.

We start with the assumption that the need for our products and the function they perform are

pretty much the same around the world. There may

be differences in details but these are a matter of adaptation, not basic to the design of the machines.

So the technological side of our business is run es- sentially on a uniform, world wide basis. Our second assumption is that we must operate in a given country as a part of that country's industrial economy, responsive to national goals and interests,

and equipped to provide the same level of support

and service to the customer that we would in this country. This means that we need a strong autono- mous country operation. Let me illustrate, using France as an example.

I.B.M. France is not our largest operation, but it's one of the largest. It has eleven thousand employees,

thirty branch offices, two manufacturing plants and

a product development laboratory. The employees

are all French, including the general manager. We

learned long ago that we could not really satisfy a market as well on any other basis. With an American

running an operation in a strange language and a different culture without an emotional commitment

to the country, we could not learn as well the needs

of the market nor the interests of the government, nor could we find and hire the best people or manage them with the same appreciation and understanding.

121
ELMER S. GROO is Vice President of IBM World Trade Corporation. Joining

International Business Machines Corporation in 1941 as a Sales Trainee, he be- came a data processing sales representative in Philadelphia and was then sent to Washington, D.C., as a special representative. Following a four year naval career, he returned in 1946 to a sales assignment in Philadelphia.

After a period in sales and sales management, he was assigned special duties in the office of the Executive Vice President, subsequently being appointed Executive

Assistant to the President of IBM in 1956.

He was elected Vice-President in 1959, being responsible for European Operations for a two year period. His present responsibilities include Personnel, Communications, Executive Development, Government Relations and Administration.

Mr. Groo is a graduate of Drexel Institute of Technology. Mr. Groo is a Director of the Business Council for International Understanding.
The principal preoccupations of the general manager of I.B.M. France, are marketing, personnel and

finance. His responsibility for the laboratory is only

administrative. In manufacturing, his responsibility

is somewhat broader but it is still limited to executing a plan worked out with manufacturing management at our international headquarters. While his advice and counsel are valued and often asked for in regard to manufacturing, both as it applies to France and as it applies to the total I.B.M. interest, he alone does not make a decision as to what products will be produced in his plants nor does he determine production quantities. These are a matter

for international decision because his plant is producing for the international marketplace.

When it comes to personnel, he has complete responsibility to find and hire and train the people he

needs. In marketing, again his responsibility is complete. He gets help from the outside when he asks

for it, but basically he has to sell and service the market. Above all, he is responsible for our corporate

posture in his country. It is his job to know market

needs, the attitudes of his government, the require- ments of his laws, and to see to it that we conform

to them. He is the spokesman for what is best for I.B.M. in his country and, I assure you, we take his

advice. We bring together the interests of I.B.M. France

and the interests of the total corporation through an

annual planning process. All operating plans origi- nate within the country. They are worked up

through several levels of management and finally

consolidated on a worldwide basis in the United

States. During the process there is a good bit of

negotiation on sales targets, marketing programs, the investment of funds and a host of other considerations. When the final plan is reached, the country general manager has specific operating goals and responsibilities which he executes according to his own

judgment. In this way, although he may not decide

the final mission of his laboratory nor the products

to be produced in his plant nor the volume of his production, he has a clear understanding of his responsibilities which effectively enables him to manage the operation in his own country.

Management of Technology on an International Scale Now looking at the other side of the picture, with

all the variations in laws, customs, individual product needs and the need for responding to national

objectives, how do we manage technology on an in- ternational scale? Well, first, when we plan a product we do it on a worldwide basis. While final specifications are deter- mined at the headquarters of our development divi- sion in this country, they reflect inputs from at least twenty countries around the world. Our product

planners receive market requirements from all of our large countries, so that when we announce a

product, we know that it will meet the needs not

only of the United States market but virtually every

significant market abroad.

All of our computers, for example, handle not only decimal arithmetic but sterling as well. Our out- put printers can print not only Arabic characters,

but the Katakana alphabet used in Japan. Our typewriters can be supplied with type faces for any one

of 22 different languages. Our banking equipment

deals equally well with American or European

checks.

Incidentally, one of the beliefs that seems to persist is that the country less developed industrially

will be willing and satisfied to buy the products of yesterday's technology. This may be true in some

industries but it certainly is not so in ours. Developing nations are aware of today's technologies; they

are not willing to go through all the steps of devel- opment that we have in the West. Our African cus- tomers buy the latest, most sophisticated computers we have to offer and we have such machines in- stalled today in some inaccessible areas of that continent. We have learned not to look upon these areas as second markets for yesterday's products.

International Diffusion of Development

Responsibility

It is one thing to plan a product on an international basis and it's another thing to develop it that way. Yet the pool of technological talent is an inter- national one, and the ideas that contribute to the advancement of our particular industry have come

from many countries around the world. We have six research and development laboratories in Europe

and today we use those laboratories as part of a worldwide development organization.

This was not always so. For some time we used

our European laboratories primarily to support the

local market. Fifteen years ago, when technology was simpler, this worked pretty well. As time moved

on we found it harder and harder to make full use

of the talent we had in limiting their mission to the

123

256-707 0-67—
needs of a single country or even to a single conti- nent.When in 1961 we undertook the development of

a new line of compatible computers in a new tech- nology, later announced as System 360, we made

the decision to bring the European laboratories into the worldwide development program. The 360 line comprises six basic computers, compatible in concept and ranging in size from one designed to meet

the needs of small to medium business, up to a sys- tem of great speed and capacity for the most complex computing requirements.

The architecture for this system came from a variety of sources, with several basic concepts originating in our European laboratories. Once the several

units in the line were agreed upon, each laboratory,

whether U.S. or European, was given a specific mission. The smaller machine came from Germany.

The medium-sized machine was designed in England, the larger computers in our U.S. laboratories. The French, Dutch and Swedish laboratories, as well as laboratories in the U.S., produced a variety

of input/output equipment necessary to apply the computers to the wide variety of applications for which they were to be designed. In developing a single, compatible commercial

product line, we obviously had a special need to maintain constant liaison between laboratories in the U.S. and our laboratories in Europe. With the magic

of today's communications technologies, we were

able to set up a network between the U.S. and Europe, and by use of fascimile equipment to transmit not only messages but drawings as well. An engineer

in our laboratory in Poughkeepsie, New York, could

talk with and jointly design circuits with an engineer

in Hursley, England, transmitting designs back and

forth as they worked.

Although we do not take the credit for it, we

think the day-to-day relationships between our engineers, which were made possible by this network,

represented a great advance in bringing the tech- nological abilities of a lot of nations to bear on the solution of a single problem.

Manufacturing in Local Markets

We've talked about planning and we've talked

about product development. The final step in our

technical process, of course, is manufacturing. We

plan our production programs on an international

basis but we believe in manufacturing in a local market whenever the economics of the situation al- low it.

There are some technical advantages in terms o

closer support for products in the field. Certainh

transportation is simplified and, at least in the Com

mon Market, the duty picture is more favorable

The most significant reason, however, that we manu

facture abroad, is that it involves us in the loca economy in a positive, contributory way. We emploj

people, we buy parts and components from local in dustry, and we contribute directly to the export pro grams which are so important to a national econ omy.

Training of Work Forces With all its pluses, the manufacture of a compli

cated product in more than one location poses som(

real problems, especially when the manufacturing lo- cations may be thirty-five hundred or even eigh

thousand miles apart. There are, obviously, some

duplicate investments in production equipment

Much more important are the duplications in the training of a work force. Our particular products

involve a high skill-level, and we expend a greai

deal of time, money and effort in assuring that oui people have the same level of training in every loca

tion.One of the things we do to meet the training neec

is to transfer people for a temporary period of six oi twelve months to laboratories where products art developed and to plants where technical control wil remain. The people return as fully trained as theii counterparts in other plants and can act as a skilled cadre to set up a full work force when a product is released to production.

Standardization We make a special effort to maintain worldwide

engineering levels. We believe that this is fundamental for many reasons, not the least of which is pro- viding the same services to our customers, regardless

where they are. To start with, we have an active

effort in standards. An important segment of our en- gineering force is devoted entirely to the problem

and all of our specific product design is executec

against a predetermined set of standards. Desigr

drawings carry both the Anglo-American system oi feet and inches and the metric system used by the

rest of the world. This gives us a common base, andi as we make improvements in products—and we dc —we transmit from the point of engineering control! to all points of production, via computer, the latest) engineering changes on an overnight basis, so that:

Js.

[(

124
they can be reflected simultaneously in current pro

rta duction at all points where the machine is made.

Con t

>rab!

loc

IE

t pro

ecu

iLX 01

5 are

let

Function of Patents Another facet of our efforts in technology and

which has to be an influence in any fast-moving

field, is that of patent protection and access to the patents of others. We maintain patent departments

in the larger industrial countries of the world and we

file our patents on an international basis regardless

of their source. An active program of licensing provides the freedom of action that enables us and

others in our field to develop and bring to the marmpl> ket products of the latest technology, without fear of m ([accidental patent infringement,

ng 1( IBM Looks at the Future

son* , . . A Symposium such as this is concerned as much

with the future as it is with today, and I'd like to take just a minute to talk about the future. Recently we conducted an experiment with high

school students in New York City. Through tele- phone connections, they had access to a computer at our research laboratory in Yorktown Heights, New

York, which helped them do their mathematics

homework. Professor Quinn told me that Dartmouth

College is doing the same for students at Dart- mouth. On numerous different campuses of American colleges today, computers are assisting instructors in teaching a variety of academic subjects to undergraduates. And early this month the first timeshared system designed specifically for educational

purposes went into operation, assisting in teaching over a hundred first-grade students in Palo Alto,

California.

::octive

A number of hospitals are using computers today

to assist in analyzing electrocardiograms, blood

tests, and in a series of other diagnostic applications.

One airline uses computers to make it possible for an airline passenger in Rome to request a seat on a plane out of New York and to get confirmation

from his agent in a matter of seconds. So the timesharing system, the use of computers in education

and medical science are already a reality. In certain

fields the worldwide computer network is already in use. These are only the beginnings of what might come about just in our industry in the next ten

years. I'm sure that other industries have the same entrancing possibilities. The significant thing is that the

direction of technology continues to move toward

serving the individual, whether he be American,

European, Latin American or Asiatic. A meeting such as this, examining the practical

problems of bringing technology to the individual

wherever he is, is enormously significant. One thing

that it underlines is that our success in business or- ganizations will be very much measured by how well we carry our technology to international markets

and, perhaps equally significant, how aggressively we bring foreign technology to use in our own market.Improvements in communications and transportation will create a market demand which is more

international than national in character. Television

satellites and supersonic flights will certainly break

down national barriers. I suspect that there will continue to be nationalism, and national markets, in a certain sense, for a long time to come; but I believe

that the mobility of people and the mobility of ideas

will assure the fact that there will also be mobility of technology.

125
Dr. Chenery: Our second speaker, Dr. Aurelio Peccei, will give us a European view of some of the same issues. Dr. Peccei as far as I can tell wears

three hats. He is managing Director of the Olivetti Company; he is also head of Italconsult, an international consulting and engineering firm which deals with underdeveloped countries, and he is on the Executive Committee of the Fiat Company. He tells me he's going to draw on all of these backgrounds

in his presentation.

I might mention my own one experience with the

Olivetti Company, when I was working in Italy some years ago. I was much impressed in visiting a new Olivetti plant, outside of Naples, when I was

told, first, that almost none of the labor force had

had any previous experience with this technology

and that the employees had been selected on a psychological basis rather than on their experience, and

second, that in two years the Naples plant had

reached the productivity of the Turin plant through

proper training and proper management. Such

transfer of technology within Italy itself is a fasci- nating achievement because the south of Italy, particularly in the past, has had the same kinds of educational deficiencies as the underdeveloped countries

have now. I hope that Dr. Peccei may be able to tell us that such development can also take place else- where.

Dr. Peccei: Mr. Chairman, Mr. Secretary, ladies and

gentlemen. I am the last formal speaker before the discussion and I suppose that by now, after the bril- liant addresses of yesterday and today, you will be

well prepared for an anticlimax.

I enjoyed the symposium immensely. I learned very much from the previous speakers and from the

panelists, and from the scientists back in the labs as

well, but I would flatly refuse to submit to a proficiency test on what I learned. Before entering into my subject—which, as I understand it, should mainly refer to industrial tech- nology—I want to make a few general remarks.

First, I submit that the problem of spreading technological progress ranks at least equal in importance

to technological advance itself.

The Problems of Technology Transfer There is a continuous and increased acceleration

in the advance of science-based technologies. Under

proper conditions, progress has become practically

self-propelling. The dramatic technological revolution we are going through is indeed radically trans- forming our society: it generates "real mutations," a', change in kind, not merely in degree. The conse- quence is that the dialogue, even between two nations, friendly but having a different level of devel- opment, tends to become extremely difficult, as if it were between two different species of civilization. This is why I maintain that, in order to keep a

fairly homogeneous pattern of society for the

different human groups which should stand together —for instance, the nations we would like to seej

forming the Atlantic Community—we should devote an equal effort, as we go on producing technological

progress, at devising how it can be moved speedily

from one country to another in the Community

area. Otherwise, this technological bounty, not properly distributed, will become a dangerously divisive

factor. And, as we live in a time of history when

regional or continental integration and unity has be- come an imperative prerequisite for orderly

progress, if not final survival, this danger needs to be underscored.

When we say that the dimension of the nationstate is nowadays inadequate practically on all i counts; when this inadequacy applies equally to nation-groups of sub-continental size, such as EEC

and EFTA; when Europe itself is not enough, and

our objective has to be "a Europe-plus;" when the very Atlantic Community should be conceived not only as an irreversible partnership among West

European and North American nations, but also as the hard core of a wider cooperation area and the

rallying point for other important outside regions;

then, we must conclude that revolution-carrying

technologies should in fact move as freely as possi- ble within the inner Community area; and also in reasonable measure to and from the outer regions

flanking it. This has become one of the urgent and fundamental problems we have in front of us, perhaps notj

less important for our future than the quest for peace in a nuclear era and birth control in the face! of demographic explosion.

126
Effect of Development Level on Technology

Transfer

I have here a second general remark. There are, on the other side of the coin, a great many difficulties in the transfer of technology, however vital this

tl011| transfer might be. Among others, a condition to carry it out successfully is the existence of compatible levels of development and organization among

the countries concerned. This means that only in the general framework of compatible development levels can transfer of technology, enterprise-to-enterprise or otherwise, be effective. Experience has shown

that to absorb into its national fabric and socioeconomic setup the technology which is being trans- ferred to it, the "host country" must be prepared to receive it. The concept of a compatible level of development

does not refer only to the technological gap, which,

if too great, would not permit the transplant of tech- nology between two countries. It involves the capacity of the recipient country to live with the new

technology, adapting it to its own economic organization, basing on it a process of industrial

diversification, assimilating it into its own educational institutions, so that this alien input may be trans- formed into a national asset.

Effect of Nature of Development Interests There might be also sectorial incompatibility. For

instance, I would question the validity of the

transfer to my country, Italy—if it were the case

of some of the U.S. space technology. This type of

activity is and will remain for a long time alien to, and therefore its transplant would be incompatible

with, her kind of development.

For another example, we may take the Soviet

Union. Here we have a technologically and culturally advanced nation "par excellence." Yet her organization level is not compatible with that of the U.S.

or even Europe, in some broad and fundamental

areas of human endeavour and interest. This is the case of a whole range of mass production-mass dis- tribution activities which characterize our consumer

economy. The Soviet system simply is not rigged to take in, and profit by, Western technology in some

fields, such as motorization and automation. The

transfer from the West to the Soviets of, for example, our automotive technology—planning, designing, tooling up, manufacturing, marketing, selling,

financing, handling, servicing and finally destroying

motor cars—of course does not present insurmountable difficulties. But even this will require a basic

reshaping of the Soviet organization, and sometimes

the recourse to odd solutions, such as an extreme

verticalization of their manufacturing setup.

This transfer of technology will in any event re- quire rather a long time and, in my opinion, cannot

materialize through the effort of Europe alone. The

same can be said of another example concerning the manufacture and dissemination of modern office machines in the Soviet administration, which is embarking only now in a process of mechanization and

computerization similar to that existent in the U.S. and also in Europe, and which, although so advanced, is nevertheless still in the midst of a further profound evolution. On the other hand, the transfer of technology between countries and in fields having

compatible levels of technico-scientific development

and organization can be most fertile and effective, as many examples, including that of Olivetti-Underwood, will indicate.

Effect of Stage of National Development

On the other extreme, the less developed countries offer the most evident necessity and the highest

difficulty in transferring technology. Here companyto-company transfer of new technology can be effective, especially to countries whose system is so

different from ours as not to permit an easy transfu- sion of our technology. I am sure that we are not

yet able to assess in depth what might be the after- math, in third world countries, of the second industrial revolution now taking place in the most advanced countries. Two-thirds of the world population have not yet

adjusted themselves to the first industrial revolution

which started more than two hundred years ago. Technologies simpler than those we are now currently considering—for instance those necessary for making agricultural implements, conventional and

machine tools and pumps, for improving agricultural

yields or better harnessing and using surface water —have not yet been transferred to many of those

countries which nevertheless are euphemistically la- beled developing countries. The consequence of this maladjustment is unending wrath and turmoil.

Many of these less developed, generally small and

often isolated countries, are so attracted by our

breakthrough and achievements that they end in aiming at industrializing themselves chiefly along the wrong avenue of the glamour industries and technology. In this manner, efforts are displaced from more

useful fields and, if eventually these more sophisticated technologies are transferred, they will be ill

127
AURELIO PECCEI is Chief Executive of the Olivetti Company, to which position

he was appointed in 1964. Since 1957, he has also headed Italconsult, an international consulting and engineering firm headquartered in Italy and specializing in development projects in Africa, Asia and Latin America.

He has also been connected with the Fiat automotive company since 1930,

\vhere he has special responsibilities in the area of international affairs and is a member of the Executive Committee.

A native of Turin (1908), Dr. Peccei received his Doctors degree in economic

and commercial science from the Turin University.
absorbed, and cause more dislocation and delays

than good. In conclusion, my point is that, as it is

difficult to regulate the flow of technology to less developed countries, it is equally difficult to transfer

the appropriate technology to them.

Need for Emphasis on Social Facets

This is a major international task. To carry it out we have to concentrate not only on the scientific technologies, but, even more so, on social and political science studies and on social technologies. These

latter deserve a higher priority than we have heretofore granted to them. This does not apply only when

we deal with underdeveloped countries: it holds also when we look around at our highly developed nations. To illustrate these points, I will quote from the experience of the companies with which I am associated.

The Olivetti-Underwood Case The Olivetti experience in the United States

affords a case example of the possible transfer of

industrial technology, in the broadest sense, between

two private corporations, operating in a sector in which the two countries involved have compatible

levels of development. It is also a case example of

cross-fertilization, demonstrating that cooperation —not only in technology, at that—between Europe

and the United States can be a two-way affair,

if earnestly pursued.

Olivetti took over control and management of the then Underwood Corporation in the fall of 1959.

Initial investment for the purchase of approximately

one-third of the Underwood stock was in the order

of 8 million dollars. Throughout the years 1960-1963, the initial investment was considerably

increased, and today Olivetti has total ownership of

its U.S. subsidiary—whose name is now Olivetti Underwood—with an investment of almost 100 million

dollars. Yet, in our judgment, even more significant

than the size of the investment is the total involvement of managerial techniques in the various areas

of the Underwood venture: manufacturing, servicing, marketing, training and management in general.

Olivetti brought to the United States its managerial techniques and philosophy, its industrial design,

its salesmanship, its personnel training; but instead

of reshaping Underwood merely as a reflection of

Olivetti, a new experience was started. Olivetti,

in turn, tested and received from this country,

through Underwood, new methods and ideas. The

result was the emergence of a set of revised tech- nologies in all sectors concerned, which constitute an important asset not only for Olivetti Underwood

but for Olivetti as a whole.

Our estimate at first sight had been that the Underwood typewriter factory in Hartford obviously

needed substantial rejuvenation; but the vast sales organization of Underwood, spreading all over the United States, should have represented the positive

part of our purchase.

The Production Problem

The streamlining of the production facilities at the Hartford plant involved the challenging task of pro- ducing at an acceptable cost per unit. First of all, we

redesigned the products, pooling together the experi- ence of Hartford Engineers and designers and of our

experts in Italy. In this area a fruitful cooperation

immediately developed, without friction or delay.

Then, to produce a line of new typewriters, the fac- tory was re-tooled with modern equipment and machinery, and new production methods were intro- duced such as were used in other Olivetti factories around the world. This brought about a rapid trans- formation of the old factory which, even within its old brick walls, in a few months was put in a position to turn out new products under high standards.

The Marketing Problem

This, however, proved in reality less trying a job

than the reshaping of the sales organization, the

marketing services and the organization to maintain

and repair all models of our machines. Soon after takeover it was realized that to sell and service the range of our products, sales and services personnel

had to be trained in great number. This was done on

the basis of a crash program which started by bringing to the United States a group of Olivetti instructors from the Olivetti Training Center in Florence.

Olivetti's methods, both in recruiting and training, were already quite sophisticated, and we felt they

would provide a positive basis for the rebuilding of

Underwood. Yet, as we acquired a deeper knowledge of the U.S. market, we realized that a number

of adjustments were needed in our own techniques

and methods, to better respond to our new environ- ment. This is the case, for instance, of maintenance

and repair activities, where Olivetti's experience had

been both original and extensive. However, when we

transplanted to the United States our methods for the instruction of service personnel, we found that

129
new methods being explored in this country in the general field of education offered good possibilities

of use to us. Thus we were among the first to adopt

methods of programmed instruction based on the experience of the U.S. Armed Forces and the studies of various organizations and universities. Our interest in continuing this process of transfer- ring U.S. knowledge back to Italy is evidenced by

our program for retraining Olivetti middle management in various business schools in the United

States. Our aim is to expose our management to the

fresh influx of modern business teaching, as practiced in the U.S. Also, in R&D, we have developed a regular exchange of information and experience between our base in Italy and the Olivetti Underwood

research unit in Hartford.

Personnel Management

In the field of personnel management, we pro- ceeded on the basis of the Olivetti philosophy, which

considers the human element as the most valuable

asset. This basically humanistic concept, which rec- ognizes in our human potential the greatest element

of strength for the corporation, was enforced whenever possible. In this respect one should note that the Olivetti approach was probably a step ahead of

the standard U.S. business practices of the time, and we are gratified in seeing the evolution which has

occurred since. As the result of all these combined efforts, Underwood, which for nine years had been a nonprofitable

operation, is again in the black, as Olivetti Underwood, since early 1964. Fortune Magazine in its July 1966 issue, listing the major 500 U.S. corporations, singled out Olivetti Underwood for the most

spectacular proportional gain of 1965. In this case

of technological exchange between Olivetti and Olivetti Underwood, one should say that if it is not

unique, neither is it the rule of transfer of technology across the Atlantic. Furthermore, we must bear

in mind that its successful and extensive results took

place between two companies belonging to the same

group.

Other Instances of Technology Exchange

Speaking as an Italian and coming from what is generally considered in the U.S. a "host country," I must say that not always has the experience of

transferring technologies from your country to my

country been satisfactory, either at the receiver's end, or, I gather, at the giver's end. I will not quote names or point out instances. There is, however, I

am afraid, a growing belief in Italy and Europe tha

the negotiation of an agreement with a U.S. com1

f pany is extremely difficult when the transfer of im' f portant technology is involved; and that its imple-:

mentation eventually becomes even more difficult in1

the long run. This is probably due to the fact that i dynamic company, setting the pace in innovatior

and technological development (admittedly a U.S

company, as this is the most common case) hardl}1

sees its interest in farming out to another compam'

in Europe the most precious ingredient of its suc-i cess—its know-how or its painfully acquired achievements in R&D.

The U.S. company may be induced to adopt this course (instead of installing a subsidiary directly w

Europe, for instance) if it is temporarily too busy al home, or with the aim of gaining a foothold in thti European market by a combination with local partners. But generally, once the initial honeymoon

is over, the technologically senior U.S. partner., which by virtue of this fact is also the prime mover

of future developments, is bound by the logic of its! dominant position to escalate its requirements: from

a technical agreement to an equity participation, and

from a minority position to control of the European!

company. And this may spell difficulties. There are, of course, exceptions. Such is the case notably of new technologies developed by small companies which cannot exploit directly in Europe;

their know-how and patents, and prefer to do if through a license agreement. Another case is when

the patentability is doubtful or the patent rights are: difficult to enforce. The practice of cross licensing,

which is spreading on the spur of these difficulties, may prove very beneficial for a more generalized

transfer of technology. Nevertheless, serious limita- tions remain in the transfer of technology between

companies when they do not belong to the same

group. And this applies not only to the case of the U.S. versus Europe, but also to that of Europe ver- sus less advanced countries.

Wholly-Owned Subsidiaries vs. Licensees The example of Olivetti comes in handy again.

Whenever Olivetti considers transferring its technol- ogy to another country it never chooses to deal with

third parties, but rather tends to establish whollyowned subsidiaries for the manufacture of Olivetti products. This of course is a practice that may not be applied everywhere and therefore has a restrictive element imbedded in it. This approach was followed

by us in the United Kingdom, Brazil, Argentina,
Canada, South Africa and Mexico, with very good

jm

. results of technological transfer. One exception is Spain, where simple control of that subsidiary had

to be substituted for total ownership, as local regula-

- tions limit foreign participation in certain industries.

I know of many other corporations having a similar policy, which, inter alia, facilitates a rationalization of production among manufacturing estab- m, lishments located in different countries. The spread

uc]of the multi-national company responds, among

ve

. other things, to similar needs, and helps the interna-

;

; tional flow of technology, albeit within a restricted

J. circuit. In two cases Olivetti gave to third parties the

j. license for the exploitation of its designs and knowjl how. The first case was India, where Olivetti sup-

'(1,5 plied the necessary machinery, licenses and knowpca

|! how for the establishment of a teleprinter factory,

m totally owned and operated by a state company. The

ner second case is the agreement still under negotiation

m with the U.S.S.R. In both cases, this was the sole

[ jJ way to enter a market altogether closed and with a

rM view to furthering future opportunities.

i it

Automotive Industry Examples

Another interesting case of transfer of technology

to subsidiary companies tightly controlled by the parent company may be found in the automotive

industry. I remember, from my experience, the

rather chaotic creation of the automobile industry in Latin America. When the local governments gave a more or less indiscriminate green light, all the inter- ested parties jumped into a competitive struggle to enter those markets, with questionable benefit for

either the host countries, the companies, or finally the customers, because of the splinter industries which resulted from this free-for-all. Only in the case of the American and European

motor car manufacturers (General Motors, Ford,

Volkswagen and Fiat) which established wholly

owned or strictly controlled subsidiaries was the

transfer of technology satisfactory. In most of the other cases, if I am not wrong, the experience has

been on the whole extremely poor, which confirms

the limitations I mentioned above.

As for the recipient countries, they received no

doubt an injection of a good dose, perhaps an overdose, of modern technology, which could not be

readily absorbed and will require a rather long period of internal adjustments. In fact the intrusion of

this most complex industry has caused some severe

dislocations in the unprepared economic fabric of

those countries which in turn proves, once more,

that the transfer of technology is optimal among

countries with a compatible level of overall develop- ment. We may conclude that, although private enterprise is the central element of development in the market economies of the Western countries, it cannot be counted on as the exclusive factor for the

international transfer of technology. Our corporations must live up to the rules of competition. This

very fact limits their willingness to transfer tech- nologies to other companies.

As I mentioned before, the tremendous invest- ments required by modern R&D causes any company to be extremely reluctant to transfer to others

its advanced technology, prior to its full exploitation

by the company itself, either in the home market or through direct industrial operations abroad. Also,

there are other limiting factors.

I am therefore afraid that the open market for technologies, though representing an efficient and

fertile exchange medium, is not broad enough to cause the international technological flow to happen

at the speed and in the measure which is nowadays

required. In our rapidly changing world we should not feel bound by traditional and established yardsticks. As

in the case of domestic basic research programs,

funded and handled by public agencies and academic institutions, also for the international exchange of basic and applied technology, a new, imaginative ap- proach should be devised, whereby private ways and means may be supplemented by intra-government

arrangements. This point was abundantly and masterfully touched upon last night and this morning.

Highly provocative thoughts and questions were advanced.

We have come to a point where action and

answers and remedies are required, both at the national level and in Europe. Some agonizing reappraisals are needed in mentality, attitude, education,

environment and policies also, with the assistance of

the U.S. and at an international level as well.

A Plan for International Cooperation

The plan for technological cooperation recently

proposed by the Italian government is meant as a

contribution in this direction. This plan calls, in the

first phase, for the signature of a technological

agreement between the governments of the NATO

countries with the possibility for other governments

to join at a later date. To reach such an agreement,

the interested government should first of all sub131
scribe to a joint political declaration of intent in this vital area, and then call on a special conference to lay the basis for a unified European technological

organization which, in turn, may pave the way for a

true cooperation, as more or less equal partners,

with the United States. Prime Minister Wilson re- cently outlined a somewhat similar proposal.

The technological organization should promote

initiatives, agreements and infrastructures in Europe

necessary to foster European technological development for the next ten years. The plan also suggests

that European and U.S. cooperation may start with

a project-by-project approach, as indicated in Presi- dent Johnson's proposal in relation to the possible

common endeavor by Europe and the United States

in the Jupiter project. This proposal implies the ac- quisition by European countries of U.S. technology,

without charge in the case of Government-owned

technology, and through payment in the case of pri- vate patents.

The Italian plan is now under study and I understand it will be examined by the Council of Ministers of the NATO countries this December. I fer- vently hope that this and other means will be

devised and implemented so as to assure a two-way

flow of technology across the Atlantic, consistent

with the vital requirements of a homogeneous devel- opment and transformation of the U.S. and European societies.

QUESTIONS FROM THE FLOOR

Professor Chenery: Both of our speakers have re- ferred to the quality of "appropriateness" in the technology to be transferred. I would like to point out that the total capital investment in all underdeveloped countries, comprising nearly a billion and a

half people, is less than the total annual capital in- vestment in the United States. The need to econo- mize on investment embodying any new technology

is obviously enormous. The capital invested per

worker in underdeveloped countries is now one

tenth or one twentieth of what it is in the United

States. Of course, this does not mean that each industry

in an emerging country has to be designed so that it uses only a small proportion of capital, but it does mean that only a very small number of sectors in such economies can be equipped with the capitalintensive technology to which the U.S. and Europe

are accustomed. Let me suggest that we think about the relations among economic sectors. It is probably efficient to have a small number of sectors, even in quite primitive countries, that do have the latest technology,

provided they fit into the environment, as Dr. Rahman proposed. Fitting into the environment may

mean that the construction industry which builds the buildings might employ completely unautomated

means, because that can be done efficiently under

these circumstances, whereas the machines which

operate in the buildings might be of the latest design.

The advanced countries have to figure out, somehow, how to transfer technology to underdeveloped

countries, even though it is not always the same

technology which they are using themselves. This

problem is probably relatively easy to solve technically, if somebody were willing to finance even a\ half-billion dollars worth of R&D on designing appropriate technology for India or Pakistan or other

countries at that level of development. The principles are known; the trouble is there is no ready way, even though the technology would itself be profita- ble once it is established. There is not now a mechanism which brings together the resources in the prij vate sector with the users in the private sector. This

is the gap which has bothered governments and the economists for a long time. The profitable international transfers are going to take care of only a small part of the problem. Let me invite a few comments on this from the audience before we turn to| our formal discussants.

Mr. Wionczek: It may be of interest to this session

of the Symposium to know some preliminary results of a study prepared recently by me for the United I Nations Secretariat on the subject of the transfers of technology to the developing countries through'

enterprise-to-enterprise arrangements. This case; study dealt explicitly with issues arising in Mexico, I a country which, because of its very satisfactory;

economic performance in the past two decades, is I considered today semi-industrialized.

i
A cursory survey of the local scene discloses that,

at the present state of Mexico's industrialization involving implementation of heavy and intermediate

industries, technology imported from abroad is of

crucial importance. This foreign-originated technology flows not only from foreign private enterprises

to private enterprises in Mexico, but also to firms

fully owned by the State or with minority public

capital participation.

The massive transfer of foreign technology to Mexico and the growing size of payments for these

transfers led to the feeling, which is spreading

throughout the country, that because of the fact that Mexico cannot afford in the long run to finance the

cost of technology acquired abroad through tradi- tional enterprise-to-enterprise channels, some new

arrangements in this field will have to be devised.

The present debate in Mexico runs along the following general lines: The country cannot afford to abandon its objective of rapid absorption of new technology and to use "second-hand" know-how because of longer term

development considerations—especially the need to

diversify exports.

For political reasons, Mexico cannot permit the complete technological domination from abroad

through arrangements tying up new technology to private foreign investment exclusively.

Both for political and economic considerations,

foreign private capital should plan gradually to withdraw, in agreement with other countries, from industrial activities in which technology is relatively stable or where there is ready access to non-proprietary

know-how that may require no more than advisory

services to the local capital replacing the foreigncontrolled investment;

On the same grounds, foreign capital should contribute to the development of local applied scientific research in areas of dynamic technology;

Moreover, the cost of foreign technology to Mexico must be lowered through external financial assistance and general liberalization of conditions

under which technical services and licensing and

engineering agreements are negotiated between for- eign owners of technology and Mexican private and

public enterprises.

The position described above seems to imply many

legitimate grievances of a rapidly industrializing

society which faces technological power of the more

advanced countries and whose dependence upon

foreign technology continues to increase. During my interviews with state officials in charge

of industrialization, experts engaged in technological

research and executives from industrial enterprises,

opinions were heard that a relatively limited relation- ship exists between the nature of transferred tech- nology and modalities of the transfer itself. The

picture which emerges is rather that the problems

of transfer are more closely related to the intensity of technological change and the respective size of

local firms receiving technology from abroad.

Another important element is considered to be the existence or absence of corporate links between the foreign owner and domestic receiver of technology.

Large state-owned or controlled enterprises in Mexico do not seem to face any major problems in respect to acquiring adequate technology from

abroad. Larger domestic-owned private corporations

in Mexico seem also to show a growing ability to shop for available technology around the world and

especially to discern between patented know-how

available only through license agreements and nonproprietary technology. Unless the purchases of

technical know-how are tied to purchases of capital

equipment through medium or long-term export

credits, these larger enterprises follow the strategy

of diversifying their sources of know-how through

entering into separate agreements on designing and

construction of production facilities, on technical

services covering provision of technical information

and on licensing agreements covering patented

knowledge. Very often these large enterprises hire international consultants of great prestige for the purpose of feasibility studies and ask them later on

to act as advisors on choice of foreign technology

and its sources. The situation is very different and more difficult in the case of small and medium-sized industrial enterprises in Mexico. They face practically only two

alternatives: (a) buying packaged technology abroad

in the form of a plant which incorporates the design

and construction of facilities and patented knowhow and technical services; or (b) following the

strategy of larger enterprises by negotiating separate

agreements with foreign technology owners at differ- ent levels. Because in Mexico both the state and

private manufacturers of capital goods are unequivocally opposed to importation of packaged plans, a small or medium-sized industrial enterprise finds it very complicated and often very expensive to acquire new technology from abroad. Normally, it finds it necessary to make a single arrangement with a foreign firm having access to all phases of technology

required and not available from within the country.

133
This last choice inexorably leads to corporate links which many small and medium enterprises try to avoid in fear of the undue degree of control by the foreign partner.

These are some of the preliminary findings of my

survey. They point out a need to start much

broader research on this subject, possibly with participation of experts from both the developed and

the developing countries. The U.N. Fiscal and

Financial Branch will undertake such pioneering

studies in 1967. The issue itself has a high political content and may become within a short time a source

of considerable friction between the owners of new

technology and the developing countries.

Professor Rey: I am scientific advisor of NestleAlimentana Company of Switzerland. I wish to add

to what has been said this morning on the technological gap. I believe that there is not only a tech- nological gap between Europe and the States, but

also a technological gap between Europe, the States and the Far East. Nevertheless, in our own particular case, we have

gained a lot by establishing close connection with

Japanese companies and with American companies.

Besides, we have a subsidiary research establish- ment in the States, and for that reason have elimi- nated any technological gap between the European

operations and the American operations of the same

European company.

As far as Nestle is concerned, we are involved

in manufacturing and sales in more than 100 countries, and we have research establishments in several places in Europe as well as in the States. However,

when we are faced with a need for very specialized

types of technology, such as when we became inter- ested in radically new sources of food for the future,

we went out to find partners who could give us the

technology and the know-how in their specialized

fields. It was announced last July that Nestle entered

into a joint venture with a company in New Jersey —a typical case where two big companies with com- mon interests in a given field can complement each

other's know-how. This, in my opinion, is one of the best kinds of enterprise-to-enterprise agreement;

they are non-competitive and complementary.

Dr. M. Kersten: I am the President of the Physikikalisch-Technische Bundesanstalt of Braunschweig,

Germany, and I would like to make a remark

about the international transfer of technology by

national standards institutes. Perhaps my colleagues

at the National Bureau of Standards are too modest

to speak about it. All these national institutes are increasing their cooperation, especially with the developing countries. Some cooperation has been

in effect, as in our case, since the beginning of this century.

I would like also to remark about the role of fundamental measuring devices, as a means to transfer of technology. It is very important at the start of the industrialization of a developing country to provide a modern measurement system and standards, including the newest methods. Sound measure- ments lead to sound industrial and social life. The

national standards institutes must see that education

toward this point of view is their common duty. I will add only that collaboration among all the national institutes should be encouraged. The

United States, Canada, and the United Kingdom,

Germany, and so on are already doing so. This

is a vehicle for the transfer of technology which

extends way beyond fundamental units and measuring methods.

134
JOHN H. DESSAUER is Executive Vice President of the Research and Advanced

Engineering Division of Xerox Corporation, and Vice Chairman of the Board of

Directors. First joining the research department of Agfa Ansco Company when he came to the United States in 1929, he became associated with the Rectigraph

Company in 1935, shortly before it was purchased by the Haloid Company, fore- runner of Xerox. He established the research department there, engaged in a search for new products and, together with Joseph C. Wilson, explored the xero- graphic (electrophotographic) process when it was publicized in 1945. The re- search effort which Dr. Dessauer now directs for the Xerox Corporation is the outgrowth of the Haloid Company's research established by him in 1938.

A native of Aschaffenburg, Germany (1905), Dr. Dessauer, after receiving his early education there, went on to the Albertus Magnus University in Freiburg for Liberal Arts studies. He then received the equivalent of a B.S. degree in chemical

engineering from the Institute of Technology in Munich, followed by his Masters and Doctors Degrees in engineering sciences at the Institute of Technology in Aachen, Germany; both cum laude.
Professor Chenery: Thank you very much. I think we should now turn to the first of our formal dis- cussants, Dr. John Dessauer, who is Executive Vice

President of the Research and Advanced Engineering Division of the Xerox Corporation.

Dr. Dessauer: With your permission, I would like to

limit my comments to the experience of Xerox Corporation, since I feel that I must disqualify myself as an expert in this complex situation of technology

transfer.

Required Characteristic for Successful Transfer

of Technology

Now in our experience, the transfer of technology

must have one very important characteristic in order

for it to be successful. It must be mutually

beneficial. It cannot be like a blood transfusion,

where the donor does all of the giving and the re- ceiver gets all of the benefits. It is true that relation- ships like that can exist, and it is also true that most

lay people and, in fact, most taxpayers think of technology transfer in those terms. But, it has been the experience of those of us who

work in this field of industry that in order to be

viable a relationship must benefit both parties—the

transferor and the transferee. Perhaps I can illus- trate such a viable, mutually beneficial relationship

by telling you how Xerox approached the problem

of Technology Transfer through an enterprise-to-enterprise arrangement.

Formation of Rank Xerox Ltd.

In 1956 we formed an affiliated company, Rank

Xerox Ltd., with The Rank Organisation of England

as our partner. This company was formed to take

advantage of our technological development and

patent position and also to utilize the assets which

The Rank Organisation had to offer. These assets included not only money but also experience in in- ternational distribution and services. Xerox invested

technology in the form of know-how and patents.

The Rank Organisation invested money, international operating management and manufacturing and.

distribution capabilities. The profits are shared on a 50-50 basis up to a datum point. Beyond this, Xer- ox Corporation receives two-thirds of the profit. The

datum point can be changed according to the capital

invested by Rank. Based on this agreement, Xerox

Corporation does all research and development

work and transfers the results, subject to all U.S.

regulations, to the British-affiliated company.

The British Rank Xerox, in turn, followed this same pattern and set up a Japanese company jointly

owned with Fuji Photo Film under the name of Fuji

Xerox.

Mechanics of Technology Transfer During the ten years following 1956, Xerox trans- ferred the technology it applied to the development,

design and manufacture of such machines as the Copyflo, the 914 and 813 copiers and the 2400

copier/duplicator.

This transfer was accomplished in the form of engineering drawings of parts and assemblies, manufacturing fabrication and assembly process instructions, consumable material formulations and

specifications as well as product service procedures

to be used by the technical sales forces. We are for- tunate that, in our field, the same products identified for our national U.S. market have to date qualified for international usage, and we foresee that this will continue. In the past, a certain amount of adaptation (Anglicize and Nipponize) for English and Japanese requirements had to be accomplished. With new products on the drawing boards at the first stages of development now, we are trying to come

up with a design which will fit the world-wide re- quirements. This is accomplished by giving our British and Japanese associates a voice in the selection and specification-writing of new programs as well as having representatives of the affiliated companies

as part of the technical development and design

teams in Rochester when we get under way.

Our experience has been a most happy one. The

only serious problems have arisen from the need for more international standards, since Japanese System

is based on the "CGS" system, and we here use the inch and ounce approach.

Perhaps the best way to confirm my claim for a very successful experience of technology transfer would be to state a few figures.

136
Results of Technology Transfer Rank Xerox Limited has grown from 1956 to the

present, to a company with manufacturing plants in three locations in England, one in Holland and,

through the affiliated Fuji Xerox, with three plants in Tokyo. It has developed distribution and service facilities in 20 countries and territories, and the annual

growth for the fiscal year ending in June 1966 has

reached the 124 million dollar level. This made

Rank Xerox one of the hundred largest companies

in Europe in less than 10 years. By comparison, Xerox Corporation's sales have

grown during this same period from 24 million dollars to over 393 million dollars last year and to an

annual rate of over 500 million dollars this year. You may recall that I started out by saying that for a transfer-of-technology relationship to be successful, it must be mutually beneficial. The above

figures give evidence of the fact that this has been

just such a relationship.

137
Professor Chenery: Whether by accident or design

in the programming, all three of our formal dis- cussants have transferred technology from Europe

to the United States. Our last two are both Dutchborn U. S. residents. Dr. Soutendijk, who will comment now, is Manager of Brown Bros. Harriman

and Company.

Dr. Soutendijk: Not having a company with experi- ence in the field of technology to discuss, I hope

that you will permit me to make some general re- marks about the technological gap between Europe

and the United States. I want to limit these remarks

to some economic and financial points which might

contribute to a discussion later.

Nature of the U.S.—Europe Gap

I have been trying to find out for myself why

there is a gap and what kind of circumstances in the economic and financial field have contributed to this gap. Like Mr. Peterson this morning, I came to the conclusion that technology is done by the large companies. We have figures from the International

Chamber of Commerce, according to which 60 to 90 percent of all the research is done by large firms. For Holland some rather typical figures have been

developed—80 percent of the research is done by

companies with more than 1000 employees, and 65

percent of this 80—or 52 percent of the total—is even done by five large companies.

Concentration of R & D in Large Firms and

Large Countries This brings us immediately to the point of concentration. Concentration of businesses we see in Europe at the moment, on a large scale in many

countries. It is stimulated—in the first place—by the Common Market and—in the second place—by the governments of different countries. We all know the case of France, where it is government policy to stimulate concentration. We have

seen a report about it from the German Government. We have seen a similar "White Paper" from

the Dutch Government and another from the Common Market Commission.*

This concentration in Europe is in full swing and

will, after some time, show results as far as technology is concerned. I have to make the restriction that so far it is only done on a national basis. We don't

see concentration of businesses in different countries

as yet, and so there is still much to be desired. But

it is a step in the right direction, hopefully leading to a smaller "Imbalance of Technology" between the United States and Europe.

Need for Larger Markets

The next thing that is needed in Europe is larger

markets. Here, something is being done already. The

duties in the Common Market and the duties between the EFTA countries have been brought down

to a large extent, but there are still other barriers, as the negotiators in Geneva, for the Kennedy Round,

have experienced.

Although some measures have been taken, there

is still a long way to go before Europe will be as large a market as the United States is.

Need for Capital

Another point is that there is capital required. In order to acquire the technology which the United

States has, Europe can buy it or it can develop tech- nology itself. Developing it is ordinarily more expensive than buying. Also, you don't have the risk of mistakes when you buy it, and it is probably a simpler way, but it requires capital.

Here we come to the strange phenomenon that in Europe there is enough savings—we have seen before the Interest Equalization Tax that most of the European issues floated in New York were bought

by European capital. We have also seen, as reported

in a recent publication of the Atlantic Institute in Paris, that there is a remarkable balance in amounts

invested by Europe in the United States as compared to the amounts invested by the United States

in Europe. But there is a difference in composition;

European investments in the United States are most-

* References

Bericht ueber das Ergebnis einer Untersuchung der Konzentration

in der Wirtschaft. Sent by Chancellor Ludwig Erhard to the President of the German

Bundestag on June 5, 1966. Enige Gegevens over de Concentratietendens in het Bedrijfsleven. Sent by State Secretary J. H. Bakker to the President of the Netherlands Tweede Kamer der Staten-Generaal on January 7, 1966. Le Probleme de la Concentration dans le March^ Commun.

Prepared by the EEC Commission, Brussels, December 1, 1965.

138
L. R. W. SOUTENDIJK is Manager of Brown Brothers Harriman & Company,

commercial banking, investment counsel and brokerage firm of New York. From

1946 to 1959 he served as Financial Counselor to the Netherlands Embassy in Washington.

Dr. Soutendijk was educated at the Rotterdam School of Economics, from

which he received his Doctorate in Economics.

Dr. Soutendijk is currently President of the Netherlands Chamber of Commerce

in the United States and Vice President of the Netherland-America Foundation.

He has served as a member of the Netherlands Delegations to the Reparations

Conference in Paris in 1945 and to the inaugural meeting of the International

Bank for Reconstruction and Development and the International Monetary Fund

in Savannah, Georgia in 1946. In 1945 and 1946 he was Secretary, Economic and

Financial Division of the Netherlands Military Mission. He was alternate Executive

Director of the International Bank for Reconstruction and Development during the period 1952 to 1954.

256-707 0-67— 10
ly portfolio investments; American investments in Europe are mostly direct investments, bringing

ideas, techniques and processes to Europe. So even when there are sufficient savings in Europe these are not directed to improve technology.

Need for More Coordinated Capital Markets

This brings me to capital markets. The study of

the Atlantic Institute mentioned that there are a number of shortcomings as far as the capital markets

in Europe is concerned; of these the separation of

the different national capital markets is a most important one. We should have—there should be—a European

capital market, and to promote this there should be

a harmonization of law and taxes in general. The

Common Market Commission is moving in this di- rection but, also here, there still is a long way to go. There is a kind of transfer of know-how in connection with capital markets, and I might point out

that the World Bank has for years been trying to

assist in the development of capital markets in the developing countries. I might also point out in this respect that American banks have been going and

are still going to establish themselves in Europe, in one form or another; this definitely will contribute

to the foundation of capital markets over there. And

in the third place I want to mention that a large

American chemical company has taken an interest

in a Dutch bank, a couple of years ago, in order to participate in the European money market, and has

recently established a bank in Zurich to be active in the European capital market. So there is some

transfer of know-how in the field of capital markets.

Old Attitudes About Exports of Technology &

Capital

I would like to touch on the attitude which the

different countries can take with regard to international investments. We have not too long ago, and 1

think it was Mr. Cooper who mentioned it yester- I day, seen that there was a time that countries didn't want to export capital, they didn't want to export

!

technology. A very interesting article in the Federal Reserve Bulletin in 1950 quoted a German publication of 1907, under the title, "Is Export of Machin- ', ery Economic Suicide"?

When we look at the United States as the major

country that is supplying technology, we can state that here there is no concern in this respect whatsoever. The United States never has had any objection against these exports and the United States doesn't have to. The article in the Federal Reserve

publication gives as explanation the composition of

the United States exports, which are not endangered

by industrialization since U.S. export articles are geared to increase production or are required by an expanding consumption. And the same goes for the

industrial raw materials exported by the United

States. In this connection we should remember the well-known fact that industrial countries are usually

each others' best customers. This brings me to the attitude which the receiving

countries have towards foreign investments. We

have seen some remarkable changes. We have seen i for instance, the French government opening an

office in Paris in 1959 to attract American invest- ments and closing this office in 1964. France is now

more interested in exporting capital to the United

States than in attracting capital to France, except

when it is connected with technology, with the

transfer of technology, or with research in France

itself. In view of the late hour, I shall limit my remarks

to this. Maybe we will have an opportunity to come

back to these issues in the future.

140
ra

. Professor Chenery: The third discussant is both a

| scientist and a manager of a technology-based enteral prise. Dr. Knoppers is President of Merck, Sharp

and Dohme International.

Dr. Knoppers: As a closing speaker I am in a somewhat difficult position because everything that I wanted to say has been said, and—even worse—it has been said better than I could do it.

The Key Element: Superior Management

I am very grateful that I had three industrial speakers before me who stressed the point which

has been made to this conference since the opening

remarks of Secretary Connor until now. We see

clearly again that their three companies were successful because they had superior management

which created the technology they wanted, and this inter-action between management and technology,

with its feedback, is essential for technological

progress. The story of Merck in this field started in the

early 30's. The late Mr. George Merck, president of

the firm, was dissatisfied with the progress of pharmaceutical developments. The industry couldn't at- tract the right people of imagination and capability, so he made a management decision. He asked the advice of some of his friends outside the industry.

This was something which Mr. Petersen alluded to

this morning when he talked about cross-fertilization. A modern industrial manager must understand

other fields of life: government, economics and

science. Mr. Merck consulted several outstanding

scientists and he spoke to presidents of universities. And as a management decision, again, his company

created laboratories in which basic research was

combined with objective, directed research with a broad latitude of freedom. The tradition of Mr.

Merck has been followed up and expanded by his successors, and I think this approach is the real source of the success of innovation in drugs by an American company.

Indeed, I believe deeply that the broadening of

the attitude of management towards technological

development is essential. And I can possibly feel it a

little more acutely because I'm a product of two

worlds, one in which interplay between industry and

science is utilized fruitfully and an older world

where this is less often true. Yet I think we would

do well to ask ourselves where the basic differences

in attitudes lie.

Willingness to Exchange Experiences

The first difference is that American management

stimulates a freer exchange of experiences, and a

freer exchange of experiences means competition. If you hear how others do it and how well they do it, you want to do it as well, or better.

Looking for Uses for Scientific Findings

The second difference, I think, is that in the United States the drive of management to find applications for basic findings is fierce—I sometimes call it ferocious. It's the habit of thinking immediately and

eagerly: "What can I do with basic findings? What

basic needs can I fill with them?" In my own field, the pharmaceutical field, the British biologists and

pharmacologists had a complete lead in the physiology of nerve transmission, a very essential part of physiology, with great clinical implications. But it became such an obsession in many of their universities they forgot to develop a satisfactory number of application-minded pharmacologists

Providing Management Talent in Depth

The third difference in my opinion is that, except on the higher level, the level of Dr. Peccei and

others in Europe, there is a management gap. In the United States there are many more good research

directors, both in the giant companies and among

smaller competitors. And, I think, here is a chal- lenge for Europe to improve its performance. I think that from the management point-of-view,

Europeans generally should give more attention to application and they should really try to develop

better professional long-range planning, both in function and the development of people. One application of this attitude was referred to this morning

by Mr. Peterson, when he spoke about those small

companies, the entrepreneurs, that come up and

really are pioneers for the big companies. The

leaders must keep completely awake because they

could be overtaken at any time by competitors with new concepts.

141
ANTONIE T. KNOPPERS is President of Merck, Sharp & Dohme International, a world wide manufacturer of pharmaceuticals and chemicals. From 1950 to 1952

he was Professor of Pharmacology at the Free University of Amsterdam, following

which he was appointed Manager of Medical Services in the international operations of Merck and then Director of Medical Services for Merck, Sharp & Dohme

International. He became Director of Scientific Activities for that division in 1955

and the same year assumed the Vice Presidency and General Management. He

assumed his present position in 1957.

A native of the Netherlands and now a citizen of the United States, Dr. Knoppers received his Doctor of Medicine degree from the University of Amsterdam

and his Doctor of Pharmacology from the University of Leyden. Dr. Knoppers has authored some 60 scientific papers in the fields' of pharmacology and endocrinology.
Rewards for the Entrepreneurs

I think that Europe could improve its performance with better tax laws. We complain about the

tax laws for our entrepreneurs. But in some European countries, if an entrepreneur would put his

capital to risk and make a million dollars, he would

lose virtually all in taxes, then or later. For instance, Great Britain has not followed through with re- search and development although it has had the ini- tiative in many technological basic ideas—vertical

aircraft, to mention one example. A country that does not reward its entrepreneurs—entrepreneurs

that dare to take risks—is in trouble technologically.

Using a Technological Advantage on a WorldWide Basis And another possibility is the one that Dr. Peccei

mentioned. This is the role, the "world-wide" atti- tude, of firms such as IBM, Olivetti, Xerox, Merck —I mention only those who stand here on the platform. They establish themselves everywhere. Theirs

is an example of a management attitude that re- mains enormously important. I would venture a

suggestion: in the pharmaceutical field our main

competitors are three or four big firms based in Switzerland, a small country. So the question of home-country size doesn't play a crucial role, if the company specializes, invests and reinvests in re- search and above all has a world-wide approach.

The Positive Values of a Technological Gap

I feel that basically it is in the interest of the United States that we maintain a technological advantage: that we transfer more technology out than we take in. This protects the balance of payments

and contributes to the balance of trade. Through

payments made for licenses and royalties, and

through exports of technologically advanced products, a vital contribution is made.

Therefore, I feel that the technology-based

American companies should be good traders; they

should really use their technology to earn money for

this country.

Although I'm thoroughly prepared to be sympathetic with the general aims of the Italian (Fanfani)

plan, especially since it recognizes the need for better technology, I would be very much against weakening our attitude to the exploitation of technology

without sound payment. I'm simply surprised at the suggestion that United States government research

and government technology should be given freely

to Europe at the moment we are in some difficulties

with the balance of payments. To give away the tax- payers' money—as represented in the value of gov- ernment patents—to European countries which are

affluent, would, I think, be the opposite of wisdom.

While I consider it useful, on the one hand, that there is a gap, I am convinced that the gap must

remain manageable (and there I am very sympathetic to the ideas of Dr. Peccei). Should the gap be- come unmanageable, it could lead to a chain reaction of undesirable consequences. It could make

technology too expensive for Europe to buy; it could

create protectionism, and it could encourage curtail- ing of direct investment—all of which runs counter

to our nation's need, which is a Europe where we

can sell to an affluent, sophisticated society. And it would be against the interest of Western Europe itself, as it is a move backwards. But, as I said, I don't think we have reached this unmanageable

stage yet, and Europe has been alerted.

Technology for the Developing Countries: Can

We Help?

I see the problem of technology in less developed

countries in a different way. It is quite clear to me,

especially after what we heard from Professor Rao

and Dr. Rahman, that this problem is not solvable with the present means. Still, we have it in our

hands, I think, through technology, to solve problems of underdeveloped countries; the methods to apply this technology with maximum effectiveness are yet to be found. A very broad systems approach

could be the theoretical solution. But political and

emotional problems within less developed countries

hamper the implementation. It is a problem of major magnitude!

Dr. Seitz yesterday referred to man in terms of

his evolution as a user of tools: homo jaber. It seems that we face some difficulties in finding out how we can use our present tools—not only in the problems less developed countries have, such as population control, food supply, et cetera, but with our own problems as well (air pollution, slums

et cetera). We have to ask ourselves whether man is equipped in the evolutionary process to handle those

tools with wisdom. It means, negatively, can we control our emotions, can we harness our aggressions

and territorial compulsions? Positively, will we men

be wise?

In other words is this technical man a homo sapiens? That's possibly the question.

Professor Chenery: Thank you, we now conclude

this part of the Symposium.

143
CLOSING REMARKS

Secretary Connor: What has happened here in these two days indicates the complexity of the relation between technology and international trade, the complexity of the problems attendant upon the transfer of technology from one country to another, from

one industry to another, from one company to another, from one government institution to another.

Our friends on the platform and in the audience

have delineated some of these problems, particularly

as applied to the transfer of technology from devel- oped nations to underdeveloped nations. We now

have to break down the general problem into its various component parts. The problems attendant upon

the transfer of technology from an agency of the United States Government to a private firm in Mexico are obviously different from the problems that are associated with the transfer of technology from

Olivetti, in Italy, to Olivetti-Underwood in the United

States. The reverse follows. It is also different in a situation involving a private firm in the United

States with a competing firm in Great Britain. The problem of competition needs to be stressed somewhat more than it was during the formal program. In our system, after developing new technology using stockholder money, it just isn't feasible for a corporation to give that away without adequate consideration. The adequacy of the consideration can vary from case to case, but there must be some return on the technology that represents an

investment of stockholders' money. Then, the point

made about the transfer of technology developed

in the public domain, involves quite a few special

problems. Most of that technology gets into the

literature and is available to the public on a worldwide basis. However, the actual transfer of the

know-how involved requires additional expense for

travel of skilled people, for example; this additional

cost might have to be justified to the Appropriations

Committees, as one example.

This symposium, in many respects, has been an

eye-opener, certainly for me and perhaps for some

of you. For one thing, I have a completely broadened view of the question of the "technological

gap." The fact that so many people have talked

about the differences in the managerial competences,

attitudes and techniques is of considerable importance. We are left with the conclusion that an

important element in the so-called technological gap

consists of what could be called a managerial gap, and this is surely something that would have to be

given more attention in the future. In the discussion

this afternoon, we get on the question of the gap in capital resources; in any further -consideration of

this problem, this element has to be explored in greater detail than it has heretofore. In thinking about what has transpired, I come up

with an analogy. It seems to me that we can view

technology as a vehicle of progress, with managerial

skills in the driver's seat, incentives as the fuel, and

the road paved with capital resources. These are

certainly the important elements and make me come

back with renewed emphasis to the importance of

the management factor. If the management of tech- nology is as important as stated in this two-day ses- sion, then we should take definite steps in all the countries to do something about the lack of trained,

highly motivated people with managerial skills, who

are willing to try to make technology work for the

benefit of mankind. That is the final thought that I would like to leave with you, because that is really the objective of our endeavors—to improve the condition of mankind. Thank you all, very much.

144
IOlList of Participants in the Symposium

Ibrahim Helmi Abdel-Rahman

Commissioner for Industrial Development

United Nations New York, N.Y.

Colonel William M. Adams, President Sprague International Ltd. North Adams, Mass.

Harry C. Anderson, President

Business Equipment Manufacturers Assn. New York, N.Y.

Rolf Andreasson

Scientific Attache Embassy of Sweden

Washington, D.C.

an Azmi Ahmed Afifi, Chief

, me

! Industrial Institution Section

j i Center for Industrial Development

i United Nations

cal | New York, N.Y.

e M William H. Aiken

3r-r Vice President fcr Research & Development

an Union-Bag Camp Paper Corporation

,J New York, N.Y.

Samuel N. Alexander

National Bureau of Standards Washington, D.C.

D. Jaime MacVeigh Alfos, Vice President Tecnatom, S.A. Madrid, Spain

Dr. Harry Allen, Jr. Bureau of Mines, Dept. of Interior Washington, D.C.

Dr. Eranz L. Alt National Bureau of Standards Washington, D.C.

Dr. Ernest Ambler

National Bureau of Standards Washington, D.C.

William G. Amey

Leeds & Northrup Company

Philadelphia, Pa.

Dr. Costas E. Anagnostopoulos

Director of Research, Organic Chemicals Division Monsanto Chemical Company

St. Louis, Mo.

W. E. Andrus, Jr. Group Director of Standards IBM Corporation

Armonk, N.Y.

M. D. Archangeli

Director of Planning Eaton Yale and Towne Inc. Detroit, Mich.

Dr. George T. Armstrong

National Bureau of Standards Washington, D.C.

H. C. Armstrong

Embassy of Canada

Washington, D.C.

Dr. Allen V. Astin, Director National Bureau of Standards Washington. D.C.

L. A. Atwell National Aeronautics & Space Administration Washington, D.C.

George E. Auman

National Bureau of Standards Washington, D.C.

Dr. Walter Baer

Office of the Vice President The White House

Washington, D.C.

Henri Bader, Scientific Attache Department of State Washington, D.C.

Dr. W. O. Baker, Vice President

Bell Telephone Laboratories Murray Hill, N.J.

145
Dr. Lajos Banlaki Deputy Commercial Counselor Hungarian Legation

Washington, D.C.

Donald W. Banner

General Patent Counsel Borg-Warner Corporation

Chicago, 111.

Jenaro Baquero

Secretary of Commerce

Commonwealth of Puerto Rico

Santurce, P.R.

Henry Barbour

Congressional Hotel Washington, D.C.

Saul Baron

Bureau of International Commerce

Department of Commerce

Washington, D.C.

Alfred W. Barth

Executive Vice President The Chase Manhattan Bank

New York, N.Y.

Dr. A. Allan Bates National Bureau of Standards Washington, D.C.

Joseph W. Barr Under Secretary

Department of the Treasury

Washington, D.C.

Norman E. Bateson, Vice President Pullman-Standard Division Pullman Incorporated

Chicago, HI.

Dr. Charles W. Beckett National Bureau of Standards Washington, D.C.

David Z. Beckler Technical Assistant to the Director

Office of Science & Technology

Washington, D.C.

George E. Beggs, Jr., President Leeds & Northrup Company

Philadelphia, Pa.

Dr. S. J. Begun, Vice President

Clevite Corporation

Cleveland, Ohio

Harry H. Bell U. N. Conference on Trade & Development

Geneva, Switzerland

Reynold Bennett

Director of Science & Technology

National Association of Manufacturers Washington, D.C.

Milton A. Berger Bureau of International Commerce

Department of Commerce

Washington, D.C.

Dr. Joseph S. Berliner Department of Economics

Brandeis University

Waltham, Mass.

Samir K. Bhatia World Bank

Washington, D.C.

Dr. Bruce H. Billings Vice President Aerospace Corporation Los Angeles, California

Bascom W. Birmingham

National Bureau of Standards

Boulder, Colorado

Slator Blackiston, Jr. American Embassy

Cairo, U. A. R.

Dr. Edward Blum

Department of Chemical Engineering

Princeton University

Princeton, N.J.

Dr. Marcello Boldrini, President Ente Nazionale Idrocarburi Rome, Italy

Dr. C. F. Bona, Director

Central Research Laboratories FIAT

Torino, Italy

Rod Borum, Administrator. . Business & Defense Services Administration Department of Commerce

Washington, D.C.

R. M. Boudeman, Vice President The Upjohn Company

Kalamazoo, Michigan

146
Pierre Bourguignon

Special Advisor to the President Commission of the European Economic Community

Brussels, Belgium

Dean Bowman

Autonetics Division North American Aviation, Inc. Anaheim, Calif.

Eugene M. Braderman

Deputy Assistant Secretary

Commercial Affairs & Business Activities Department of State Washington, D.C.

Dr. Edward L. Brady

National Bureau of Standards Washington, D.C.

G. E. Branscomb, President Systems Development Division IBM Corporation

White Plains, N.Y.

Dr. Lewis E. Branscomb

National Bureau of Standards

Boulder, Colorado

Edward J. Brenner Commissioner of Patents

Patent Office Department of Commerce

Washington, D.C.

Dr. F. Cecil Brenner

National Bureau of Standards Washington, D.C.

Leonard M. Brenner Atomic Energy Commission

Germantown, Md.

Dr. Robert Brenner

Special Asst. to the Under Secretary for Transportation

Department of Commerce

Washington, D.C.

Dr. Andrew F. Brimmer

Federal Reserve System

Washington, D.C.

Dr. Alfred Brown, President Celanese Research Company

Summit, N.J.

Dr. S. H. Browne

Lockheed Aircraft Corporation

Washington, D.C.

Corwin Brumley, Vice President Bausch & Lomb, Inc. Rochester, N.Y.

Meade Brunet, Vice President Radio Corporation of America

Mendham, N.J.

Stanley Buckland

Control Data Corporation

Rockville, Md.

Robert F. Burnett 6322 Alberta Street

Springfield, Va.

Dr. Alis J. Buselli, Vice President Research and Technology

Mobil Oil Corporation

New York, N.Y.

Edward A. Butler Maritime Administration Department of Commerce

Washington, D.C.

J. A. Caffiaux, Manager

Engineering Department

Electronic Industries Association Washington, D.C.

Julius Cahn

Assistant to the Vice President The White House

Washington, D.C.

Philip A. Calabrese Environmental Science Services Administration Department of Commerce

Rockville, Md.

Dr. Edward W. Cannon

National Bureau of Standards Washington, D.C.

Dr. William M. Capron

Brookings Institution Washington, D.C.

E. Finley Carter

Consultant, Stanford Research Institute Portola Valley, Calif.

Professor H. B. G. Casimir

Director of Research Laboratories N. V. Philips Industries Eindhoven, The Netherlands

Leo Castaldi IBM World Trade Corporation

Washington, D.C.

Tomas Chavarri

First Secretary, Economic Affairs Spanish Embassy

Washington, D.C.

147
Professor Hollis B. Chenery

Department of Economics

Harvard University

Cambridge, Mass.

James F. Collins Deputy Assistant Secretary for Domestic Business Policy

Department of Commerce

Washington, D.C.

R. H. Cherry

Director of Research & Development

Research & Development Center North Wales, Pa.

Harry E. Chesebrough, President USA Standards Institute New York, N.Y.

Dr. Herman I. Chinn

American Embassy

Tehran, Iran

Gordon Christenson

Asst. General Counsel Department of Commerce

Washington, D.C.

Walter A. Chudsen

Center for Industrial Development

United Nations

New York, N.Y.

Llewellyn Clague

Business International New York, N.Y.

Dr. Amando Clemente

National Research Council of the Philippines

University of the Philippines

Quezon City, Philippines

V. Clermont

Director General

Association Francaise de Normalisation

Paris, France

Dayton H. Clewell, Senior Vice President Mobil Oil Corporation

New York, N.Y.

Dr. Norman D. Coggeshall Gulf Research & Development Company

Pittsburgh. Pa.

Dr. Gerhard Colm

National Planning Association Washington, D.C.

Dr. E. U. Condon

Department of Physics

University of Colorado

Boulder, Colorado

John T. Connor

Secretary of Commerce

Washington, D.C.

Dr. Richard K. Cook

Environmental Science Services Administration Department of Commerce

Rockville, Md.

Dr. Denis A. Cooper

Small Business Administration Washington, D.C.

Professor Richard N. Cooper

Department of Economics

Yale University

New Haven, Conn.

P. Willard Crane, Vice President The Cincinnati Milling Machine Co.

Cincinnati, Ohio

Dr. Paul C. Cross, President Mellon Institute Pittsburgh, Pa.

A. A. dimming

Chairman of the Board

Union Carbide Canada Ltd. Toronto, Canada

Robert F. Dale

509 Beaumont Road

Silver Spring, Md.

Earl C. Daum, General Manager

General Motors Overseas Operations Division New York, N.Y.

Nathan Cohn

Vice President for Technical Affairs Leeds & Northrup Company

Philadelphia, Pa.

Dr. Henry David, Head

Office of Science Research Planning National Science Foundation

Washington, D.C.

Thomas P. Collier Thomas Collier & Associates Los Angeles, Calif.

William R. Davies Worthington Corporation

Washington, D.C.

148
John V. Deaver, Vice President Economic Research The Chase Manhattan Bank

New York, N.Y.

Peter R. DeBruyn

National Bureau of Standards

Washington, D.C.

Wilfred F. Declercq

American Embassy

Belgrade, Yugoslavia

Dr. Paulo De Goes

Science Attache

Brazilian Embassy

Washington. D.C.

Dr. Peter T. Demos

Massachusetts Institute of Technology

Cambridge. Mass.

Charley M. Denton

Business & Defense Services Administration Department of Commerce

Washington. D.C.

Daniel V. DeSimone

National Bureau of Standards Washington, D.C.

Dr. John H. Dessauer, Vice President Xerox Corporation

Rochester, N.Y.

Edward W. Doherty

Policy Planning Council

Department of State Washington, D.C.

Robert B. Dollison Department of Commerce

Washington, D.C.

Myron G. Domsitz

National Bureau of Standards

Washington, D.C.

Hugh Donaghue

Assistant to the President Control Data Corporation

Rockville, Md.

Walter Dowling, Director General The Atlantic Institute Boulogne-sur-Seine. France

Carroll Downey

Business & Defense Services Administration Department of Commerce

Washington, D.C.

Alan Drew, President, International Marketing

Friden Inc. New York, N.Y.

Miss Maryanne Dulansey

Office of the Foreign Secretary National Academy of Sciences Washington, D.C.

John P. Eberhard, Director

Institute for Applied Technology

National Bureau of Standards Washington, D.C.

F. W. Edwards

Vice President, International Marketing

Standard Kollsman Industries Melrose Park, 111.

Dr. Churchill Eisenhart National Bureau of Standards Washington, D.C.

Julian Engel

Office of the Foreign Secretary National Academy of Sciences

National Research Council Washington, D.C.

Dr. Elmer Engstrom, President Radio Corporation of America

New York, N.Y.

Fred C. Ewert

Deere & Company

Moline. III.

B. Eyal-Josyk

Embassy of Israel Washington, D.C.

Allen J. Farrar

National Bureau of Standards Washington, D.C.

Mark C. Feer Deputy Assistant Secretary for Financial Policy

Department of State Washington, D.C.

Dr. Robert E. Ferguson

National Bureau of Standards Washington, D.C.

Georges Feme

O.E.C.D. Fellow

c/o National Science Foundation

Washington, D.C.

149
Irwin Fine Bureau of International Commerce

Department of Commerce

Washington, D.C.

Leslie S. Fletcher American Society of Tool & Mfg. Engineers

Dearborn, Mich.

Dr. Rene Foch

Director of External Relations EURATOM

Brussels, Belgium

G. A. Fowles

Vice President, Marketing

B. F. Goodrich Chemical Company

Cleveland, Ohio

Dr. Daniel Frerejacque

Scientific Attache Embassy of France

Washington, D.C.

Dr. Franz Froschmaier

European Economic Community

Washington, D.C.

Arnold W. Fruitkin

Asst. Administrator, International Affairs National Aeronautics & Space Administration Washington, D.C.

Bernard M. Fry

National Bureau of Standards Washington, D.C.

Dr. Donald L. Fuller American Embassy

New Delhi, India

Dr. Herbert Fusfeld Research Director Kennecott Copper Corporation

New York, N.Y.

Sydney R. Gaarder

Atomic Energy Commission

Germantown, Md.

Dr. Oswald H. Ganiey

International Scientific & Technical Affairs Department of State Washington, D.C.

Arthur Garel

Business & Defense Services Administration Department of Commerce

Washington, D.C.

Dr. Edwin A. Gee

Director of Development Department

E. I. du Pont de Nemours & Co., Inc. Wilmington, Delaware

Mrs. Frances M. Geiger

National Planning Association Washington, D.C.

J. Mishell George

Bureau of International Commerce

Department of Commerce

Washington, D.C.

Francis J. Gleason

Vice President, International Operations

Schering Corporation

Bloomfield, N.J.

Seymour S. Goodman

INR/RES

Department of State Washington, D.C.

Dr. George S. Gordon

National Bureau of Standards Washington, D.C.

G. S. Gouri

Center for Industrial Development

United Nations

New York, N.Y.

Harold Graham

Pan American World Airways, Inc. New York, N.Y.

Hylton Graham

National Bureau of Standards Washington, D.C.

R. E. Graham, Executive Vice President Owens-Illinois Toledo, Ohio

Nils L. Gram

Scientific Attache Embassy of Norway

Washington, D.C.

James A. Gray, Executive Vice President National Machine Tool Buildings Assn. Washington, D.C.

Dr. Melville E. Green

National Bureau of Standards Washington, D.C.

150
Martin Greenspan

National Bureau of Standards Washington, DC.

John C. Griffith

Office of International Economic & Social Affairs Department of State Washington, DC.

N. K. Grigoriev, Director

Technological Division, Centre for Industrial Development

United Nations New York, N.Y.

Ze'ev Grodecki, President Israel-America Chamber of Commerce and Industry Ltd. Tel-Aviv, Israel

Paul J. Grogan, Director

Office of State Technical Services Department of Commerce

Washington, D.C.

K. A. Anker Hansen

Scientific Counselor Embassy of Denmark

Washington, D.C.

Robert D. Harrington

122 Calvert Road

Rockville, Md.

Dr. Milton Harris 3300 Whitehaven Street Washington, D.C.

S. T. Harris, Vice President Texas Instruments, Inc. Dallas, Texas

Dr. William J. Harris

Assistant to the Vice President

Battelle Memorial Institute Washington, D.C.

G. M. Hartley, Managing Director Cooper Development Association New York, N.Y.

Elmer S. Groo, Vice President IBM World Trade Corporation

New York, N.Y.

A. C. Grove USA Standards Institute New York, N.Y.

William Hartley

Science Attache

Australian Embassy

Washington, D.C.

A. Hass

Schering Corporation

Bloomfield, N.J.

Louis Groven

Scientific Counselor Embassy of Belgium

Washington, D.C.

Sanjivi Guhan

First Secretary of Economics

Indian Embassy

Washington, D.C.

Fayvel Hadass, Director The Standards Institution of Israel Tel-Aviv, Israel

Jerrier A. Haddad, Director

of Technology of Engineering Systems

International Business Machines Corp.

Armonk, N.Y.

Walter Hahn

Environmental Science Services Admin.

Department of Commerce

Rockville, Md.

George T. Hayes

Assistant Manager-Development

Bechtel Corporation San Francisco, Calif.

H. E. Heilman

Vice President-International

B. F. Goodrich

Akron, Ohio

J. M. Heldack

North American Aviation, Inc. El Segundo, Calif.

George Herbert, President Research Triangle Institute Research Triangle Park, N.C.

M. P. Hershey, Technical Director

Firestone Tire & Rubber Company

Akron, Ohio

R. D. Higgins

Bell & Howell Company

Chicago, Illinois

151
John Hight, Executive Director Committee for a National Trade Policy

Washington, D.C.

John Hill

Office of Atlantic Political Affairs Department of State Washington, D.C.

Dr. James Hillier, Vice President RCA Laboratories David Sarnoff Research Center

Princeton, N.J.

Walter R. Hinchman

Office of Telecommunications Management

Executive Office of the President Washington, D.C.

W. C. Hittinger

Bell Communications, Inc. Washington, D.C.

Dr. Robert B. Hobbs

National Bureau of Standards Washington, D.C.

Dr. C. A. J. Hoeve

National Bureau of Standards Washington, D.C.

Frank N. Hoffman

United Steelworkers of America

Washington, D.C.

Dr. John D. Hoffman

National Bureau of Standards Washington, D.C.

E. S. Hogland, Chairman

National Foreign Trade Council, Inc. New York, N.Y.

Dr. J. Herbert Hollomon

Assistant Secretary for Science & Technology

Department of Commerce

Washington, D.C.

Albert Louis Horley

1845 Harvard Street N.W.

Washington, D.C.

Dr. Donald F. Hornig

Special Assistant to the President for Science and Technology

The White House

Washington, D.C.

Dr. Emanuel Horowitz

National Bureau of Standards Washington, D.C.

Miss Vada Horsch

Program & Policy Executive, International Affairs Department

National Association of Manufacturers New York, N.Y.

Dr. L. E. Howlett

Director, Division of Applied Physics National Research Council

Ottawa, Ontario, Canada

Dr. Ralph P. Hudson

National Bureau of Standards Washington, D.C.

Commander Wesley V. Hull Environmental Science Services Administration Department of Commerce

Rockville, Md.

James K. Huntoon

Environmental Science Services Administration Department of Commerce

Rockville, Md.

Dr. Robert D. Huntoon, Director

Institute for Basic Standards

National Bureau of Standards Washington, D.C.

Morton Hyman

International Business Machines Corp.

Gaithersburg, Md.

Dr. Horace S. Isbell National Bureau of Standards Washington, D.C.

F. H. Jabos

International Economic Policy Association Washington. D.C.

Dr. Christian Jacobaeus

Executive Vice President for Technique

L. M. Ericsson Stockholm, Sweden

S. C. Jem, Vice President Chinese Petroleum Corporation

New York, N.Y.

Malcolm W. Jensen

National Bureau of Standards Washington, D.C.

Dr. Everett R. Johnson

National Bureau of Standards Washington, D.C.

152
Harry W. Jones

Vice President and Assistant to the President Westinghouse Electric International Co. New York, N.Y.

Robert T. Jones

Vice President, Autonetics Division North American Aviation, Inc. Anaheim, Caiif.

Dr. Deane B. Judd

National Bureau of Standards Washington, D.C.

Leonard Kamsky, Head

Business Economics Department W. R. Grace & Co. New York, N.Y.

Morris Kaplan, Technical Director Consumers Union Mount Vernon, N.Y.

Atilia Karaosmanoglu, Economist

World Bank

Washington, D.C.

Walter Katchnig

Deputy Assistant Secretary for International Organizations

Department of State Washington, D.C.

Jacob E. Katz

Business & Defense Services Administration Department of Commerce

Washington, D.C.

Michael G. Kelakos American Embassy

Tel-Aviv, Israel

Dr. M. Kersten, President Physikalisch-Technische Bundesanstalt Braunschweig, Germany

Dr. Karl G. Kessler National Bureau of Standards Washington, D.C.

I S. Khranston

Soviet Embassy

Washington, D.C.

Edward R. Killam

Business & Defense Services Administration Department of Commerce

Washington, D.C.

Dr. Gordon Kline 331 So. Palmway

Lake Worth, Florida

Dr. Antonie Knoppers, President Merck Sharp & Dohme International New York, N.Y.

William T. Knox

Office of Science & Technology

Washington, D.C.

Dr. H. William Koch

National Bureau of Standards Washington, D.C.

K. L. Kollar

Business & Defense Services Administration Department of Commerce

Washington, D.C.

Paul H. Kratz

National Bureau of Standtrds Washington, D.C.

Louis C. Krauthoff

Office of the Special Representative for Trade Negotiations

Washington, D.C.

Richard T. Kropf, President Belding Hemingway Company, Inc. New York, N.Y.

Dr. Juergen Kuczynski

German Academy of Science West Berlin, Germany

Miss Barbara M. Kugel, Adviser Economic & Social Affairs U. S. Mission to the United Nations

New York, N.Y.

Dr. Lawrence M. Kushner

National Bureau of Standards Washington, D.C.

Ralph A. Lamm

Bendix Corporation

North Hollywood, Calif.

Francis L. LaQue, Vice President

International Nickel Company

New York, N.Y.

William S. Lawson

Patent Office Department of Commerce

Washington, D.C.

153
Dr. Cristino Lazatin, Science Attache Embassy of the Philippines

Washington, D.C.

Richard S. Leghorn, President DASA Corporation

Andover, Mass.

P. H. Leman, Executive Vice President Aluminum Company of Canada Ltd. Montreal, Quebec, Canada

James Leonard

Bureau of Public Roads

Department of Commerce

Washington, D.C.

Bernard M. Levin

National Bureau of Standards Washington, D.C.

Charles A. Lewis

Business & Defense Services Administration Department of Commerce

Washington, D.C.

Dr. Halvard Liander

Executive Vice President ASEA

Stockholm, Sweden

Dr. David R. Lide, Jr. National Bureau of Standards Washington, D.C.

Robert Liimatainen, Science Attache Department of State Washington, D.C.

Walter L. Lingle, Jr. Executive Vice President The Procter & Gamble Company

Cincinnati, Ohio

Arnold Lissance, Interpreter Division of Language Services Department of State Washington. D.C.

Varnum D. Ludington

Vice President of Research

General Foods Corporation

White Plains, N.Y.

W. Stuart Lyman, Managing Director Cooper Development Association New York, N.Y.

Willis S. MacLeod

Federal Supply Service Washington, D.C.

Sam L. G. Maggio

Division of Language Services Department of State Washington, D.C.

Dr. Robert Major, Director Royal Norwegian Council for Scientific &

Industrial Research

Oslo, Norway

Dr. Canuto G. Manuel, Commissioner

National Institute of Science & Technology

Manila, Philippines

The Rt. Hon. Ernest Marples

Member of Parliament London, England

Dr. Ladislaus L. Marton

National Bureau of Standards Washington, D.C.

Dr. Oscar Marzke, Vice President United States Steel Corporation

Pittsburgh, Pa.

Dr. George J. Maslach, Dean

College of Engineering

University of California

Berkeley, Calif.

E. O. Mattocks, Director Division of Science & Technology

American Petroleum Institute New York, N.Y.

Mrs. Elizabeth S. May

Export-Import Bank of Washington

Washington, D.C.

Dr. Clyde L. McClelland

American Embassy

Stockholm, Sweden

Dr. R. J. McCubbin

Director of Special Staff Projects, International Minnesota Mining & Manufacturing Co.

St. Paul, Minn.

Francis K. McCune, Vice President General Electric Company

New York, N.Y.

William Mclnerney

Senate Small Business Committee

Washington, D.C.

154
Harris Mcintosh, President Toledo Scale Company

Toledo, Ohio

H. McKinley

State Government

Atlanta, Georgia

Miss Joyce McKloskey

Gulf South Research Institute Washington, D.C.

Professor Marshall McLuhan, Director

Center for Culture & Technology

University of Toronto

Toronto, Canada

Thomas R. McMullen

Business & Defense Services Administration Department of Commerce

Washington, D.C.

Alvin G. McNish

National Bureau of Standards Washington, D.C.

Lawrence C. McQuade

Assistant to the Secretary

Department of Commerce

Washington, D.C.

C. J. McQuillan

International Telephone & Telegraph Co. New York, N.Y.

Thomas W. Mears

National Bureau of Standards Washington, D.C.

D. A. Meeker, Chairman of the Board

Hobart Manufacturing Company

Troy, Ohio

Dr. W. Wayne Meinke

National Bureau of Standards Washington, D.C.

Alejandro Melchor, Deputy Director General

Presidential Economic Staff

Office of the President of the Philippines

Manila, Philippines

Edward Melton, Director of D.C. Affairs

Clevite Corporation

Washington, D.C.

Dr. Alan Mencher

American Embassy

London, England

Dr. Oscar Menis

National Bureau of Standards Washington, D.C.

Dr. M. Eugene Merchant

Director of Scientific Research The Cincinnati Milling Machine Co.

Cincinnati, Ohio

Frank Meya

The Taft-Pierce Mfg. Co. Woonsocket, R.I.

Rauer H. Meyer

Bureau of International Commerce

Department of Commerce

Washington, D.C.

Rodney W. Meyer, Manager

Components & Products Marketing

Hughes International Culver City, Calif.

Michael Michaelis, Manager

Arthur D. Little, Inc. Washington, D.C.

Gene Mikols

Electric Machinery Mfg. Co. Washington, D.C.

I. J. Minett, Group Vice President

International Operations

Chrysler Corporation

Detroit, Mich.

G. Franklin Montgomery

National Bureau of Standards Washington, D.C.

Ugo Morabito

Commercial Minister

Italian Embassy

Washington, D. C.

Dr. Richard S. Morse

Alfred P. Sloan School of Management

Massachusetts Institute of Technology

Cambridge, Mass.

Dr. J. A. Morton, Vice President

Bell Telephone Laboratories, Inc. Murray Hill, N.J.

George B. Mosely, Director Corporate Marketing

Champion Papers, Inc. Chicago, 111.

256-707 0-67— 11 155
Miss Mary Moss

Center for Industrial Development

United Nations

New York, N.Y.

Dr. Carl O. Muehlhause

National Bureau of Standards Washington, D.C.

Howard C. Multer

Stanley Tool Division

Stanley Works

New Britain, Conn.

Costin Murgescu, President The Academy of the Romanian People's Republic

Bucharest, Romania

Henry Myers, Office of Atlantic Political Affairs Department of State Washington, D.C.

Mr. Sumner Myers

National Planning Association Washington, D.C.

Stanley Nehmer,

Deputy Assistant Secretary for Resources Department of Commerce

Washington, D.C.

N. D. Neureiter American Embassy

Bonn, Germany

Dr. Morris Newman

National Bureau of Standards Washington, D.C.

Nicolae Nicolae Deputy Minister of Foreign Trade

Bucharest, Romania

Robert M. Norn's, President National Foreign Trade Council. Inc. New York, N.Y.

Gerald O'Brien

Assistant Commissioner of Patents Patent Office Department of Commerce

Washington, D.C.

Dr. Edward R. O'Connor

Office of Under Secretary of Commerce for Transportation

Department of Commerce

Washington, D.C.

P. T. O'Day

National Bureau of Standards Washington, D.C.

Carl Oechsle Macon Smith & Company

Springfield, Mass.

B. H. Oehlert The Coca Cola Export Corp.

New York, N.Y.

Kenneth Olsen, President

Digital Equipment Corp.

Maynard, Mass.

Joseph Oppenheim, Director Raytheon International Raytheon Company

Lexington, Mass.

Donald Orr, Vice President, Operations—International

Division, UNIVAC

Sperry Rand Corporation

Philadelphia, Pa.

Dr. Hansjorg Oser

National Bureau of Standards Washington, D.C.

Nathan Ostroff Chairman, Appeals Board

Department of Commerce

Washington, D.C.

Dr. Jose M. Otero, President Junta de Energia Nuclear

Madrid, Spain

James M. Owens

Business & Defense Services Administration Department of Commerce

Washington, D.C.

Dr. Chester H. Page

National Bureau of Standards Washington. D.C.

L. Palacios Centro Nacional de Energia Nuclear

Madrid, Spain

Max Palevsky, President

Scientific Data Systems

Santa Monica, Calif.

A. R. Parsons Honeywell, Inc. Minneapolis, Minn.

Dr. Elio Passaglia National Bureau of Standards Washington, D.C.

156
Thomas H. Pearce, President National Standard Company

Niles, Mich.

Robert W. Pearson, Chairman

P-W Industries, Inc. Philadelphia, Pa.

Dr. Aurelio Peccei, Chief Executive

Ing. C. Olivetti & C, S.p.A.

Ivrea, Italy

Dean Courtland D. Perkins, Chairman

I Aeronautical Engineering Dept.

Princeton University

j Princeton, N.J.

R. L. Perry, Economics Department

The Rand Corporation

Santa Monica, Calif.

C. M. Peterson

Vice President, Overseas Marketing

John Deere & Company

Moline, Illinois

Peter G. Peterson, President

Bell & Howell Company

Chicago, Illinois

Donald L. Peyton

Managing Director & Secretary

USA Standards Institute New York, N.Y.

Christopher Phillips, President U. S. Council of the International Chamber of Commerce

New York, N.Y.

Professor F. Picard

Director for Research

Regie Nationale Renault

Billancourt/Seine, France

Dr. Emanuel R. Piore, Vice President

International Business Machines Corp.

Armonk, N.Y.

Dr. Edgar L. Piret American Embassy

Paris, France

Dr. Sergio Pizzoni-Ardemani

Special Assistant to the President Olivetti-Underwood Corporation

New York, N.Y.

Leon Podolsky

Sprague Electric Company

North Adams, Mass.

Herman Pollack

Director of International Scientific & Technological Affairs Department of State Washington, D.C.

Reuben Pomerantz

Special Assistant to the Assistant Secretary for Science & Technology

Department of Commerce

Washington. D.C.

Gaston Ponsart Delegue du Comite Franc

Dollar en Amerique du Nord

Washington, D.C.

Edward Pope, Special Projects Manager

General Foods Corporation

White Plains, N.Y.

Robert C. Powell

National Bureau of Standards Washington, D.C.

Dr. S. L. Pundsak, Director for Basic Research

Johns-Manville Research & Engineering Center

Manville, N.J.

Dr. Stephen T. Quigley

American Chemical Society

Washington, D.C.

Professor James Bryan Quinn

Dartmouth College

Hanover, N.H.

Jacob Rabinow, President Rabinow Electronics, Inc. Rockville, Md.

Valeri A. Racheyev, Scientific Counselor

Soviet Embassy

Washington, D.C.

Remus Radulet, Vice President National Council for Scientific Research

Bucharest, Romania

K. S. Sundara Rajan

Minister of Economics

Indian Embassy

Washington, D.C.

M. G. Raja Ram

Minister, Education and Culture

Indian Embassy

Washington, D.C.

Dr. Walter Ramberg

American Embassy

Rome, Italy

157
Professor V. K. R. V. Rao

Member, Planning Commission

Government of India New Delhi, India

James B. Rather, Jr. Research Department

Mobil Oil Corporation

New York, N.Y.

Hugh L. Ray

Sears Development Laboratories Chicago, Illinois

Murray Rennert Bureau of International Commerce

Department of Commerce

Washington, D.C.

Prof. L. Rey, Scientific Adviser

Nestle Alimentana S. A.

Vevey, Switzerland

John E. Reynolds

Board of Governors

Federal Reserve System

Washington, D.C.

J. W. Richards, Director Technical Analysis Office Ford Motor Company

Dearborn, Mich.

Philip Ridley

British Embassy

Washington, D.C.

R. W. Ritzmann

Atomic Energy Commission

Germantown, Md.

Paul H. Robbins, Executive Director National Society of Professional Engineers

Washington, D.C.

Dr. R. O. Roblin, Vice President American Cyanamid Company

Wayne, N.J.

Dr. Arthur Roe, Head

Office of International Science Activities National Science Foundation

Washington, D.C.

Dr. Paolo Rogers

Director for International Affairs

Olivetti Company

Rome, Italy

Stephen H. Rogers

European Community & Atlantic Political-Economic Affairs Department of State Washington, D.C.

Jean-Jacques Rolland

Secretary, Scientific Affairs Embassy of Switzerland Washington, D.C.

i Dr. Ludwig Rosenstein

Consultant, Tech. & Engineering Chemistry San Francisco, Calif.

Dr. Henry M. Rosenstock

National Bureau of Standards Washington, D.C.

Geoffrey Rowe

Standardization Officer

Electrical & Electronic Branch

Department of Industry

Ottawa, Ontario, Canada

M. L. Ruppert, General Secretary

International Electrotechnical Commission

Geneva, Switzerland

James V. Ryan

National Bureau of Standards Washington, D.C.

L. V. Sabelnikor

Soviet Embassy

Washington, D.C.

Dr. Juan Salcedo, Jr., Chairman

Philippine National Science Development Board

Manila, Philippines

Soedjana M. Sapie National Bureau of Standards Washington, D.C.

Dr. Mario Scalera American Cyanamid Company

Wayne, N.J.

Dr. Reinaldo Scarpetta

Dean, Division of Social & Economic Sciences Universidad del Valle

Cali, Columbia

R. A. Schatzel 1406 N. George Street Rome, New York

E. E. Schnellbacher, Assistant Director Bureau of International Commerce

Department of Commerce

Washington, D.C.

158
Dr. I. C. Schoonover

Deputy Director National Bureau of Standards Washington, DC.

Dr. Galen B. Schubauer

National Bureau of Sttndards Washington, D.C.

Professor Andrew Schultz, Jr. Dean of Engineering

Cornell University

Ithaca, New York

W. L. K. Schwarz, Industrial Economist

Stanford Research Institute Washington, D.C.

[ C. S. Seabring, Vice President for Research & Development

Worthington Corporation

Harrison, N.J.

Francis J. Sehn, President

Press Automation Systems

Detroit, Michigan

Dr. Frederick Seitz, President National Academy of Sciences—National Research Council

Washington, D.C.

Dr. Giuseppe Sfligiotti Assistant to the President Ente Nazionale Idrocarburi Rome, Italy

C. H. Sharpston, Secretary-General

International Organization for Standardization Geneva, Switzerland

John F. Shaw

Office of the Special Representative for Trade Negotiations

Washington, D.C.

Dr. Reza Shayegan, Director

Institute of Standards & Industrial Research of Iran-Isiri Tehran, Iran

Dr. Leonard S. Sheingold, Vice President Sylvania Electronics Systems

Waltham, Mass.

Dr. Chalmers W. Sherwin, Deputy Assistant Secretary

for Science & Technology

Department of Commerce

Washington, D.C.

John H. Shoaf, Director U. S. Department of Commerce Field Office Santurce, Puerto Rico

H. W. Shoemaker

Manager, Technical Information General Electric Company

Washington, D.C.

Dr. Ronald Gordon Shuttleworth

Scientific Attache Embassy of South Africa Washington, D.C.

Clarence S. Siegel, Deputy Director

Office of International Regional Economics

Department of Commerce

Washington, D.C.

Alessandro Silj Harvard University

Cambridge, Mass.

Dr. Shirleigh Silverman

National Bureau of Standards Washington, D.C.

Richard W. Simon, Vice President United States Steel Pittsburgh, Pa.

Robert E. Simpson, Director

Office of International Regional Economics

Department of Commerce

Washington, D.C.

Dr. O. Simpson, Deputy Director National Physical Laboratory

Teddington, Middlesex, England

Dr. Andre C. Simonpietri U. S. Scientific Attache American Embassy

Rio de Janiero, Brazil

James Simsarian

Office of International Economic and Social Affairs Department of State Washington, D.C.

Paul Sithi-Amnuay, Vice President Bangkok Bank Ltd. New York, N.Y.

Dr. Charlotte M. Sitterly National Bureau of Standards Washington, D.C.

George Sivac Embassy of France

Washington, D.C.

159
L. E. Smart, Jr., Vice President

International Operations

Bendix Corporation

Detroit, Michigan

Dean Smith, Director

Office of Publications & Information Bureau of Domestic & International Business Department of Commerce

Washington, D.C.

Edward D. Smith, Director

Business Services and Head, Foreign Trade Division Department of Commerce

Harrisburg, Pa.

Edward G. Smith

Business & Defense Services Admin.

Department of Commerce

Washington, D.C.

General Edmundo Mecedo Soares Counsel for Latin America, Inc. Rio de Janiero, Brazil

Anthony M. Solomon

Assistant Secretary for Economic Affairs Department of State Washington, D.C.

Dr. Howard E. Sorrows

National Bureau of Standards Washington, D.C.

Dr. L. R. W. Soutendijk

Brown Brothers Harriman & Company

New York, N.Y.

Dr. George Sponsler Director for Exploratory Studies

International Business Machines Corp.

Gaithersburg, Md.

Dr. C. E. Starr, Vice President Esso Research & Engineering Co.

Linden, N.J.

Hoyt Steele, Vice President

International General Electric Exports

New York, N.Y.

Joshua Stern National Bureau of Standards Washington, D.C.

Robert L. Stern Chief, Office of Industrial Services National Bureau of Standards Washington, D.C.

William Stibravy, Director

Office of International Economic & Social Affairs Department of State Washington, D.C.

Dr. Daniel R. Stull, Director Thermal Research Laboratory

The Dow Chemical Company

Midland, Michigan

Christopher A. Squire

American Embassy

Moscow, U. S. S. R.

Professor Ronald A. Sterkle University of Illinois Champaign, Illinois

Charles W. Stewart, President Machinery & Allied Products Institute Washington, D.C.

Rene Stinglhamber, Head, Technical Department

Fabrimetal

Brussels, Belgium

Dr. Herbert Stussig, President Arbeitsgemeinschaft Industrieller Forschungsvereinigungen

Cologne, West Germany

Faruk A. Sunter

President, Turkish Standards Institution Ankara, Turkey

R. H. Swanson

U. S. Rubber Company

New York, N.Y.

I. B. Tauter Romanian Embassy

Washington, D.C.

Dr. Gordon K. Teal, Director

Institute for Materials Research

National Bureau of Standards Washington, D.C.

Walter D. Thomas

FMC Corporation San Jose, Calif.

Alexander B. Trowbridge

Assistant Secretary for Domestic and International Business Department of Commerce

Washington, D.C.

Roy P. Trowbridge, Vice President General Motors Technical Center Warren, Mich.

160
Dr. A. C. Tugado

Senate Committee on Scientific Advancement

Philippine Congress

Manila, Philippines

Dr. Howard Turner, President Turner Construction Company

New York, N.Y.

Alexandru Ungur

Romanian Embassy

Washington, D.C.

Dr. Pierre Uri, Director of Studies

Atlantic Institute

Paris, France

Dr. Harold Vagtborg, Executive Chairman

Board of Trustees Southwest Research Center

San Antonio, Texas

Heimon van Blankenstein Economic Minister Embassy of The Netherlands Washington, D.C.

Dr. H. M. H. A. Van der Valk

Executive Director

International Monetary Fund

Washington, D.C.

Leiton Van Nort

Office of International Economic & Social Affairs Department of State Washington, D.C.

A. B. VanRennes, Technical Director Bendix International New York, N.Y.

Donald van Tuyl

Secretary of the Committee on Technology

U. S. Chamber of Commerce

Washington, D.C.

Herman C. Van Vierssen, Scientific Attache Embassy of The Netherlands Washington, D.C.

Tibor Vasko, First Secretary

Embassy of the Czechoslovak Socialist Republic

Washington, D.C.

Russell Venn, Vice President Humble Oil & Refinery Company

Houston. Texas

Daniele Verduani

Directorate General for International Market Affairs European Economic Community

Brussels, Belgium

Charles T. Vetter U. S. Information Agency

Washington, D.C.

Nikola Videnov, Deputy Chairman

State Committee for Science & Technical Progress

Bulgarian Legation

Washington, D.C.

Irvin V. Voltin National Bureau of Standards Washington. D.C.

R. G. Voysey, Counselor

British Embassy

Washington, D.C.

Robert S. Walleigh

National Bureau of Standards Washington, D.C.

Dr. Merrill B. Wallenstein National Bureau of Standards Washington, D.C.

Samuel H. Watson

Manager, Corporate Standardizing

Radio Corporation of America

Camden, N.J.

Norwood W. Watts Manager, International Marketing

Philco-Ford Corporation

Washington, D.C.

Samuel C. Waugh, Director The Atlantic Council, and

Consultant, Blaw-Knox Company

Washington, D.C.

Charles E. Webber

Sun Oil Company

Philadelphia, Pa.

Dr. Robert T. Webber

American Embassy

Tokyo, Japan

Ernest M. Weber

Vice President for Scientific Affairs Charles Pfizer & Co., Inc. New York, N.Y.

161
Irving H. Weil

Weil Brothers, Inc. Frederick, Md.

Bruno Weinschel, President Weinschel Engineering Co., Inc. Gaithersburg, Md.

Dr. S. G. Weissberg

National Bureau of Standards Washington, D.C.

Donald S. Welshon

International Division

Illinois Tool Works, Inc. Chicago. Illinois

George C. Wells, Vice President Union Carbide Corp.

New York, N.Y.

Dr. Edward Wenk, Executive Secretary National Council on Marine Resources and

Engineering Development

Washington, D.C.

Dr. F. Joachim Weyl, Chief Scientist Office of Naval Research Department of the Navy

Washington, D.C.

Professor Ralph H. Wherry

Dept. of Commerce & Management

Pennsylvania State University

University Park, Pa.

William A. Wildhack

National Bureau of Standards Washington, D.C.

John D. Wilkes

Agency for International Development

Department of State Washington, D.C.

Dr. William W. Williams American Embassy

Bonn, Germany

W. J. Wills, President The American Trade Association of New Zealand

Wellington, New Zealand

Bruce Wilson

National Bureau of Standards Washington, D.C.

Prof. Miguel S. Wionczek

Center for International Affairs Harvard University

Cambridge, Mass.

John G. Wirt, Program Evaluation Staff Bureau of the Budget

Washington, D.C.

Dr. Gregory B. Wolfe, Director

Office of Research & Analysis for the American Republics

Department of State Washington, D.C.

Dr. Nathan H. Woodruff

Scientific Attache American Embassy

Buenos Aires, Argentina

Harold K. Work, Secretary National Academy of Engineering

Washington, D.C.

A. H. A. Wynn

Head, Standards Division

Ministry of Technology

London, England

Dr. Mohamed Yeganeh

Deputy Minister of Economy

Tehran, Iran

Eiji Yokoyama, Executive Vice President

Mitsubishi International Corporation

New York, N.Y.

Charles I. York

Seismology Division Coast & Geodetic Survey

Rockville, Md.

Dennis R. Young

National Bureau of Standards Washington, D.C.

Bernard Zavos

National Bureau of Standards Washington, D.C.

M. Zvegintzov, Chief Planning Advisor

Dept. of Planning & Policy Coordination

National Research Development Corp.

London, England

162

U.S. GOVERNMENT PRINTING OFFICE : 1967 0 —256-707