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Research and development - U.S. legacy to unemployment?
Industrial Marketing Management, 2 (19 72) 93- 95 Elsevier Publishing
Company,
LtERS -
AND OPINIONS
RESEARCH
AND
Amsterdam
- Printed
DEVELOPMENT
in the Netherlands
-
U.S.
LEGACY TO UNEMPLOYMENT?
Sir, Structural unemployment is prevalent today because of the shortage of capital which makes it unfeasible to employ the present labor force of scientists and engineers. The number of scientists and engineers is continuing to rise as a result of population growth and the need for them espoused by private business, private agencies, and the Federal Government in the Sixties. A solution to the unemployed research and development personnel is extremely rapid growth. This should aid at eliminating involuntary unemployment. However, extremely rapid growth is normally induced by investment. Investment risk is better borne during periods of low interest rates. In order to attain a low level of interest rates, the consuming public must save more and repress consumption. Even if there was success in that direction, investment might fail to provide employment of scientists and engineers. Extremely rapid growth can also be induced by high aggregate demand. If high aggregate demand becomes a reality, the unskilled and untrained may be put on production lines while research and development may continue to lag. In addition, should the economy develop extremely rapid growth based on high aggregate demand, inflation might accelerate rapidly. The growth of science over the last 25 years produced the longest period of discovery of new innovations and new industries in United States history (Lessing, 1971). This insatiable desire for research and development demanded the services of scientists and engineers. Government-sponsored research and
development totaled better than $14 billion in 1964 - see Maw, (1964) - not counting the research of private agencies and foundations nor private industry. Scientists and engineers were led to believe that research money was available in practically limitless quantities. Very few of them realized the implications that inflation, unemployment, the general business cycle, and politicians could have on basic and applied research. As the cost of living increased and taxes rose, tax-payers prodded their representatives to do something about rising prices and rising taxes. Congressmen were forced to inquire about government research and expenditures, and the necessity for spending. These pressures brought on a new awareness to government spending for research and development. money” further Rising costs and “tight accelerated the need to foster a value analysis program by many firms in private industry. There was concern, by both government and private industry, over the quality of the research effort and the direction in which research was moving. The need was to retrench by private industry in order to remain solvent, liquid or both. The need to cut back on research and development was espoused by legislators and their constituents. The demand to cut back on science and technology has become more vocal and more organized by the citizenry. The feeling has . arisen that social miscarriages of science and technology have developed to the point where scientists and engineers are creating a dehumanized, mechanistic world with a power system that will be devoid of human feelings and sensitivities to moral and religious values. They are blamed for the decisions made by governments and industries and are called upon to be clairvoyant in order to forecast 93
the consetluenct5 of their findings. Naturalists. ecologists, and special interest groups art’ sii@ing out for blame the scientists and engineers who will impoverish the earth and recreate the Stow Age mew, if not actually thrcatcn man‘s continuance on earth (Lessing! 1971). The ot’tcn-used phrase “power to the peopl+2” is exemplified by the high unemployment ol‘ rcserlrcll and development personnel. Thr voice> of the people arc being heard in diverse ways. They influence legislators, industry. arid each other, through the press, by meetings, and through the courts. Rcscarch has been cut back both at the fPrfera1 gowrnmcnt Icvel and by private institutions. This cut-back has created a structural unemployimnt situation for reswrch and developnicnt personnel that may take many years to TCCtify. In spite of rhc need for constant innovations by rcscarch and de\;rlopment. many people in the United States are blaming scicncc for corrupting them. ‘The natural sciences xc dcnwnced for being only concerned with materialism which has debased the country. It appears that advances in knowlrdgc do not dctcr or diminish ignorance (Ways, 1971). Thcrc have been reports in various rncdia that uncmploytnent has taken its toll in the wrospacc industry. Industry reports indicatt, that employment may bc off by 1 I.89 beforc a levelling-off takes place -see Wall Street Journal (May I 1th 197 1). What effect can this have on the continued nwd for scientists and cnginccrs, especially if graduate engineers cannot find rn~ploymri~t’? Employmenl and anti-technology sentiment arc the two factors that have already caused a dcclinc in collcpe applications for 1973 admissions. The relative slowness of the recovery frown the recent recession calls for poiicy altcrnatives to alleviate or vitiate the Important problc‘ni of structural uncmploq-ment of scientists and engineers. It may be that present high unemployment levels do not wholly rctlcct the recent general recession. A shift in the composition of the labor force; the 94
young, married women, and Vietnam veterans all play a role. There itre four altcrnativcs open to the government. I. To maintain the status quo which in time the disease of unemployment will “curt” of scientists and cnpinecrs. ’ The use of nioral suasion on industry in _. order to rc-hire scientists and engineers. 3. Utilize various mcasurcs for the stiniulation of the cconorny by direct govcrnnlent interwntion. 4. Itnprow cont;ols to regulate educarion and research.
Status Quo
As mentioned carlicr. thcrc is anti-business rising throughout the Unjtcd sent inlent Statch. This sentiment is being cxprcssod b> the unemployed enginet3rs and scientists, b) sociology and political scicncc majors in univcrsitics and by inany people in various disciplines such as environmen talisls and ecologists. Thr demon is business, so down with business. the saying goes. This frcling, of course. wilt induct young rncn and women to shy away from 3 biisincsn rehcarch orientation :I.\ an avocation. A drop in college enrollnxnts and general disencllanttnrnt will reduce the existing oversupply of engineers and s&ntists. This permanent reduction will help eliminate structural uncniployment of engincc’rs and scientists.
Moral Suasion The second alternative is to have tht: icdcral government persuade industry to step up R Br D. ‘This incrcasc in cxpcrtditurc for R & D by industry would ncccssitate the imnwdiatc need for additional scientists and cnginccrs to continue old programs or to instigatr new ones. However. the government would have to make it “worthwhile” for industry to spend more at a time when costs are up ;lnd profits are down. Some special dispensation will be required for industry to accept
the responsibility for increasing the R & D budget. This dispensation can be in the form of tax credit, tax deferment, or direct dollar subsidies whereby the government might underwrite part of the expenditure.
Direct Government
Intervention
More forceful methods whereby direct results may be forthcoming at a quickened pace would be by direct government intervention. If economic growth must be vigorously stimulated in order to increase employment of scientists and engineers, then a shift to a more significant expansionary monetary and fiscal policy is indicated. This would not create new job opportunities unless government contracts are exercised in those areas that can utilize the ingenuity and brain power of the scientists and engineers. Coinciding with an expanded monetary and fiscal policy would be an increased spending program by the government. These policies would reinvigorate an inflation that has crept along without abatement.
are involved. The constitutionality of selective controls might also be challenged. A final alternative might borrow the best from the above alternatives. What is considered optimal for the country today concerning structural unemployment, may be suboptimum or inconsequential five years from now or even a decade later. An important point to underscore is the need for some grand plan or objective in order to alleviate or prevent structural unemployment and utilize human resources more fully. The conservation of human resources and their utilization should be high on the agenda of the government, corporate boards of directors and boards of higher education. If the U.S.A. is to survive, research in the area of human resources should be increased and long-run objectives in all disciplines hammered out so as to formulate a grand plan. A.E. Spitz, Eastern Michigan
University,
U. S. A.
REFERENCES Selective Controls
The fourth alternative would be to step up socialization of higher education in engineering and the pure sciences. That is, the government might set up quotas at the university level in order to control the number of applicants that will complete the formal degree requirements to enable the successful applicants to work in R & D. The universities would be compensated for loss of student enrollment by the government. However, this would ensure full employment and eliminate structural unemployment. This method may appear to outrage many people because basic freedoms
Lessing,
Lawrence
(197 I), “The
Senseless
War on Science,”
Formne, Vol LXXXIII, No. 3, 89. Klaw, Spencer (1964) ‘The Nationalization of Science,” Fortune, Vol. LXX, No. 3, 159. Ways, Max (1971) “Don’t We know Enough to Make Better Public Policies,” Fortune, Vol. LXXXIII, No. 4. The Wall Street Journal, May I 1, 197 1, p. 1 “Tech
Schools
Suffer
As
Students
Turn
Off’,
Business
Week, Vol. 2171, (April IO, 1971). p.91.
(Professor Spitz sent this communication for lndustrial Marketing Management Vol. 1 No. 3 but the tditonial Board held it back so that publication would coincide with the commencement of the second volume and the start of a new Academic year. Ed.)
Company,
LtERS -
AND OPINIONS
RESEARCH
AND
Amsterdam
- Printed
DEVELOPMENT
in the Netherlands
-
U.S.
LEGACY TO UNEMPLOYMENT?
Sir, Structural unemployment is prevalent today because of the shortage of capital which makes it unfeasible to employ the present labor force of scientists and engineers. The number of scientists and engineers is continuing to rise as a result of population growth and the need for them espoused by private business, private agencies, and the Federal Government in the Sixties. A solution to the unemployed research and development personnel is extremely rapid growth. This should aid at eliminating involuntary unemployment. However, extremely rapid growth is normally induced by investment. Investment risk is better borne during periods of low interest rates. In order to attain a low level of interest rates, the consuming public must save more and repress consumption. Even if there was success in that direction, investment might fail to provide employment of scientists and engineers. Extremely rapid growth can also be induced by high aggregate demand. If high aggregate demand becomes a reality, the unskilled and untrained may be put on production lines while research and development may continue to lag. In addition, should the economy develop extremely rapid growth based on high aggregate demand, inflation might accelerate rapidly. The growth of science over the last 25 years produced the longest period of discovery of new innovations and new industries in United States history (Lessing, 1971). This insatiable desire for research and development demanded the services of scientists and engineers. Government-sponsored research and
development totaled better than $14 billion in 1964 - see Maw, (1964) - not counting the research of private agencies and foundations nor private industry. Scientists and engineers were led to believe that research money was available in practically limitless quantities. Very few of them realized the implications that inflation, unemployment, the general business cycle, and politicians could have on basic and applied research. As the cost of living increased and taxes rose, tax-payers prodded their representatives to do something about rising prices and rising taxes. Congressmen were forced to inquire about government research and expenditures, and the necessity for spending. These pressures brought on a new awareness to government spending for research and development. money” further Rising costs and “tight accelerated the need to foster a value analysis program by many firms in private industry. There was concern, by both government and private industry, over the quality of the research effort and the direction in which research was moving. The need was to retrench by private industry in order to remain solvent, liquid or both. The need to cut back on research and development was espoused by legislators and their constituents. The demand to cut back on science and technology has become more vocal and more organized by the citizenry. The feeling has . arisen that social miscarriages of science and technology have developed to the point where scientists and engineers are creating a dehumanized, mechanistic world with a power system that will be devoid of human feelings and sensitivities to moral and religious values. They are blamed for the decisions made by governments and industries and are called upon to be clairvoyant in order to forecast 93
the consetluenct5 of their findings. Naturalists. ecologists, and special interest groups art’ sii@ing out for blame the scientists and engineers who will impoverish the earth and recreate the Stow Age mew, if not actually thrcatcn man‘s continuance on earth (Lessing! 1971). The ot’tcn-used phrase “power to the peopl+2” is exemplified by the high unemployment ol‘ rcserlrcll and development personnel. Thr voice> of the people arc being heard in diverse ways. They influence legislators, industry. arid each other, through the press, by meetings, and through the courts. Rcscarch has been cut back both at the fPrfera1 gowrnmcnt Icvel and by private institutions. This cut-back has created a structural unemployimnt situation for reswrch and developnicnt personnel that may take many years to TCCtify. In spite of rhc need for constant innovations by rcscarch and de\;rlopment. many people in the United States are blaming scicncc for corrupting them. ‘The natural sciences xc dcnwnced for being only concerned with materialism which has debased the country. It appears that advances in knowlrdgc do not dctcr or diminish ignorance (Ways, 1971). Thcrc have been reports in various rncdia that uncmploytnent has taken its toll in the wrospacc industry. Industry reports indicatt, that employment may bc off by 1 I.89 beforc a levelling-off takes place -see Wall Street Journal (May I 1th 197 1). What effect can this have on the continued nwd for scientists and cnginccrs, especially if graduate engineers cannot find rn~ploymri~t’? Employmenl and anti-technology sentiment arc the two factors that have already caused a dcclinc in collcpe applications for 1973 admissions. The relative slowness of the recovery frown the recent recession calls for poiicy altcrnatives to alleviate or vitiate the Important problc‘ni of structural uncmploq-ment of scientists and engineers. It may be that present high unemployment levels do not wholly rctlcct the recent general recession. A shift in the composition of the labor force; the 94
young, married women, and Vietnam veterans all play a role. There itre four altcrnativcs open to the government. I. To maintain the status quo which in time the disease of unemployment will “curt” of scientists and cnpinecrs. ’ The use of nioral suasion on industry in _. order to rc-hire scientists and engineers. 3. Utilize various mcasurcs for the stiniulation of the cconorny by direct govcrnnlent interwntion. 4. Itnprow cont;ols to regulate educarion and research.
Status Quo
As mentioned carlicr. thcrc is anti-business rising throughout the Unjtcd sent inlent Statch. This sentiment is being cxprcssod b> the unemployed enginet3rs and scientists, b) sociology and political scicncc majors in univcrsitics and by inany people in various disciplines such as environmen talisls and ecologists. Thr demon is business, so down with business. the saying goes. This frcling, of course. wilt induct young rncn and women to shy away from 3 biisincsn rehcarch orientation :I.\ an avocation. A drop in college enrollnxnts and general disencllanttnrnt will reduce the existing oversupply of engineers and s&ntists. This permanent reduction will help eliminate structural uncniployment of engincc’rs and scientists.
Moral Suasion The second alternative is to have tht: icdcral government persuade industry to step up R Br D. ‘This incrcasc in cxpcrtditurc for R & D by industry would ncccssitate the imnwdiatc need for additional scientists and cnginccrs to continue old programs or to instigatr new ones. However. the government would have to make it “worthwhile” for industry to spend more at a time when costs are up ;lnd profits are down. Some special dispensation will be required for industry to accept
the responsibility for increasing the R & D budget. This dispensation can be in the form of tax credit, tax deferment, or direct dollar subsidies whereby the government might underwrite part of the expenditure.
Direct Government
Intervention
More forceful methods whereby direct results may be forthcoming at a quickened pace would be by direct government intervention. If economic growth must be vigorously stimulated in order to increase employment of scientists and engineers, then a shift to a more significant expansionary monetary and fiscal policy is indicated. This would not create new job opportunities unless government contracts are exercised in those areas that can utilize the ingenuity and brain power of the scientists and engineers. Coinciding with an expanded monetary and fiscal policy would be an increased spending program by the government. These policies would reinvigorate an inflation that has crept along without abatement.
are involved. The constitutionality of selective controls might also be challenged. A final alternative might borrow the best from the above alternatives. What is considered optimal for the country today concerning structural unemployment, may be suboptimum or inconsequential five years from now or even a decade later. An important point to underscore is the need for some grand plan or objective in order to alleviate or prevent structural unemployment and utilize human resources more fully. The conservation of human resources and their utilization should be high on the agenda of the government, corporate boards of directors and boards of higher education. If the U.S.A. is to survive, research in the area of human resources should be increased and long-run objectives in all disciplines hammered out so as to formulate a grand plan. A.E. Spitz, Eastern Michigan
University,
U. S. A.
REFERENCES Selective Controls
The fourth alternative would be to step up socialization of higher education in engineering and the pure sciences. That is, the government might set up quotas at the university level in order to control the number of applicants that will complete the formal degree requirements to enable the successful applicants to work in R & D. The universities would be compensated for loss of student enrollment by the government. However, this would ensure full employment and eliminate structural unemployment. This method may appear to outrage many people because basic freedoms
Lessing,
Lawrence
(197 I), “The
Senseless
War on Science,”
Formne, Vol LXXXIII, No. 3, 89. Klaw, Spencer (1964) ‘The Nationalization of Science,” Fortune, Vol. LXX, No. 3, 159. Ways, Max (1971) “Don’t We know Enough to Make Better Public Policies,” Fortune, Vol. LXXXIII, No. 4. The Wall Street Journal, May I 1, 197 1, p. 1 “Tech
Schools
Suffer
As
Students
Turn
Off’,
Business
Week, Vol. 2171, (April IO, 1971). p.91.
(Professor Spitz sent this communication for lndustrial Marketing Management Vol. 1 No. 3 but the tditonial Board held it back so that publication would coincide with the commencement of the second volume and the start of a new Academic year. Ed.)