tial revenue and expenditure growth. The value of our work is heightened, I feel, because we know the territory. Our final recommendations or alternatives for tax reform will not only reflect our own aggregate "house wisdom," but it will be pragmatic as a result of it.

Now, this is the commonsense element, which Mr. Rowan of Rand has suggested is so badly needed, if the results of systems analysis work are to be successfully applied. How much more effective would efforts on such problems be if the working relationship could be maintained over years instead of weeks or months. How much better if we could find a way to maintain and support continuing dialog between the experts and the analysts, and those people in State and local governments who are burdened with the operational problems.

I have one example for your consideration to illustrate this point. There is a new group in Mississippi known as the Mississippi Research and Development Center which, although barely underway, has been conceived by the State government as a means to provide State agencies and the rest of Mississippi's leadership with just such continuing help and analysis. While some of its operations are supported on a project-by-project basis, either under State or Federal funding, the important point is that sustaining funds have come from special appropriations from the Mississippi Legislature.

It seems likely to me that the type of funding to States which you have proposed could greatly magnify the achievements of similar

groups.

A short time ago, in a different approach, the Carnegie Corp.'s acting president, Allen Pifer, suggested that support grants be made to independent research institutes by the Federal Government, just as DOD and NIH now provide sustaining and general support grants to universities.

I could see many benefits of this. A further extension of this approach might be sustaining grants to groups like our own, to couple one or more of the activities I have mentioned earlier, such as training grants, to permit us to bring in people from various levels of government and universities and expose them to various techniques in the working research environment.

As a final point on this, let me cite one or two numbers. Our staff at Kansas City now numbers 400 people. It does an average annual research volume of $6 million. Over the past 20 years we have accumulated research experience working for some 900 private clients and 200 public clients, and the volume is in excess of $50 million. I believe it is vital to the progress of the region, the States and the cities in it, that we find a way to transfer and build on the value of this accumulated experience.

I will close with this comment, sir. In spite of their small number and their relatively small proportion of the total national R. & D. budget, 1 percent, these not-for-profit institutes are what I call highleverage organizations. They get things done, they are almost uniquely equipped to have a major impact on the regions they serve. They offer a singular resource in terms of multidiscipline expertese which is relevant to these public problems of our time.

In terms of broad familiarity and understanding of the most advanced techniques, they also understand the consumer or clients' need,

and they have over a long period of years established relationships, in the sense of what I term trusted sources, for scores of Government units at all levels, and they are eager to extend this contribution to respond more forcefully to the needs of this region.

sir.

That is the end of my prepared or rather, paraphrased statement,

Senator NELSON. The points you were addressing yourself to for the last 10 minutes have been precisely the kind of contribution that the committee is interested in.

Two years ago when I conducted the hearings on the allocation of scientific manpower, at which time you appeared, it was out of those hearings that we developed the idea, the proposal that is now before us. But I am not particularly satisfied with the way my bill is drafted. There seem to be some gaps also in the other bills pending before us. One of them creates a national commission to evaluate the problem and propose an approach while my proposal authorizes the Government to make allocations of funds for the application of the concept of systems engineering to State governments, to local governments, to groups of one kind or another. But how to implement the program really is the question. Who is prepared at the Federal Government level to give it a broad spectrum look and say, here is the way we ought to proceed and here is the approach we ought to take? I do not think we have anybody prepared to make that decision. I think it would be very valuable to have the consulting advice of research groups such as yours who have years of experience in dealing in both the private and the public sector, and my question is this: I am wondering if you could examine carefully the two bills that are before us and then prepare some suggestions on the best method of approach. We are probably going to merge the two concepts one way or another and, obviously, make a number of changes in them, and we expect to offer a bipartisan bill.

But no one I have talked to on the legislative side is really prepared to say that he has the best answer for how we ought to proceed. It would be helpful to the committee if you would only analyze these bills carefully and then write your suggestions upon how it ought to be done, who ought to allocate the money, what kind of advice should they have in allocating the money, what objectives should we seek to accomplish and how should we accomplish these objectives?

I think based upon the experience of your organization, the people you have there, that you probably could give us the best testimony that we can get on making this approach.

Dr. KIMBALL. We will give it a good effort, Senator.

Senator NELSON. Your testimony has been very valuable.

We will give the reporter 5 minutes.

(Whereupon, a brief recess was taken.)

Senator NELSON. Our next witness is Dr. Donald Schon, president, Organization for Social and Technical Innovation, Cambridge, Mass. Dr. Schon.

Dr. SCHON. Good morning, Senator.

Senator NELSON. We appreciate having you appear here this morning.

You have a prepared text. Your text will be printed in full in the record and you may proceed to read it or extemporize or however you wish to present it.

STATEMENT OF DR. DONALD A. SCHON, PRESIDENT, ORGANIZATION FOR SOCIAL AND TECHNICAL INNOVATION, CAMBRIDGE, MASS.

Dr. SCHON. I think I will begin by reading and then cover the high points of the remainder.

I wanted to begin with a definition of this term "systems approach" since it has come to be used with such frequency and sometimes in so many conflicting ways.

I would like to define the term "systems approach" around a specific model which I think has some independent interest for this committee. This is the schools construction system development project in California, led by Ezra Ehrenkrantz. The rationale of that project, supported in its early stages by the Educational Facilities Laboratory of the Ford Foundation, has been described as follows:

The why of SCSD is apparent in the gap between the increasingly complex, constantly changing demands being made on our schools, and the ability of traditional building practices and products to meet them. New teaching mehods and equipment call for new ways of arranging new types of instructional space. Changes in curricula, teaching techniques, organization and grouping of students and staff, require corresponding changes in buildings. And change is beginning to be recognized by educators as a continuing part of the educational scene. Upgraded educational standards point to an upgraded environment-good lighting, effective sound control, air conditioning, even carpeting. At the same time, the student population grows and shifts; budgets remain tight. In short, we are asking for more variety, greater flexibility, higher quality, and lower costs a combination the schoolhouse can seldom provide.

Collectively, schools form a building market second only to housing; but because they are built one at a time, schoolhouses do not offer the manufacturer enough volume to spur product development to meet new educational requirements. As a result, school architects must select from products which are developed independently, often for other building types, and therefore do not fit perfectly either the school's physical needs, its budget or one another. Too much of the architect's time is spent fitting together bits and pieces of material, instead of grappling with vital problems of program and design.

In 1961, when SCSD was established, it was abundantly clear that such procedures—inefficient educationally as well as economically-were not the best answer to the demands of a decade in which taxpayers would buy $27.3 billion worth of primary and secondary public schools, and in which change would be the only constant. And it was becoming evident that current attempts at reformstock plans, prefabs, portables, and so on-offered only limited solutions and were winning only limited acceptance. Certainly, no latter-day Henry Ford was in the offing, ready to start rolling identical schoolhouses off an assembly line.

What he did was to adopt a British model which focused on the problem of assembling a market large enough to attract industrial contributions to the development of new technology. He succeeded in doing this by inducing groups which formed a consortium which could guarantee markets big enough to support the development work and tooling. He then proceeded along the following lines:

1. The developing of new products designed specifically for schools.

2. Encouraging manufacturers to work together so that their products would constitute a system.

3. Guaranteeing a sufficiently large market for the products. 4. Finding a satisfactory way to bring products, producers, and purchasers together.

When he had assembled his market, he then began with a study of user requirements for a school. He began with the people who were

going to use them, teach in them, interact in them, and he focused on three basic sets of requirements:

1. Freedom in overall planning, from the single, large loft building to the multiunit, campus-style school.

2. The simple and economical arrangement of a variety of spaces in a variety of ways for a variety of purposes. For many of the districts the self-contained classroom for 30 students was no longer the basic teaching space.

3. Altering and rearranging these spaces as the need arises. In fact, one of the assumptions underlying the design criterial was that an average of 10 percent of the interior partitions would be changed yearly.

He then divided the basic design of a school into a set of component systems. These were the structural system, the ceiling lighting system, the air-conditioning system and the movable and operable portions. He did not select either the exterior brickwork or the plumbing because of special union problems.

For each of these it then became the objective of SCSD to develop performance criteria, that is to say, statements which indicated what the systems must do rather than materials or design specifications. SCSD was then in a position to go out for bid to industry and to attract large firms with major technical capability who would not have been attracted to the market offered by individual schools-for example, Inland Steel, Johns Manville, Hauserman Partitions and others. A bidding process was designed which involved perliminary qualifying bidding and the refinement of performance criteria on the basis of the capabilities of bidding companies.

That is to say, he engaged in the dialog with the companies testing performance criteria, testing what they could conceivably do.

While work was going on, efforts were also being made to bring school superintendents, local political leaders and, perhaps most important, union leaders into the building process.

Neil Haggerty of the building trades department of the AFL-CIO was selected to sit on his advisory committee. What he was attempting to do here was design the social process of getting buildings built as well as the system of schools themselves.

When bids came back and schools were built, they demonstrated improvements such as these:

First, long-span structures are usually too expensive for schools built within California State aid formulas. SCSD schools will get long spans, and the interior flexibility accompanying large, columnfree space, for $1.81 per square foot. Structure for the typical school with a roof span of only 30 feet costs an average of $3.24 per square foot.

SCSD will provide air conditioning for all academic areas (but not such spaces as gymnasiums, kitchens and storerooms), with local temperature control for all spaces of 450 square feet or more, plus a 5-year maintenance contract, for only 34 cents more per square foot than California schools now pay for heating and ventilating alone. The lighting-ceiling system, which not only meets stringent lighting requirements but also provides for air distribution, fireproofing, and sound absorption, will cost $1.31 per square foot, as against $1.67 ordinarily spent for ceiling plus lighting.

Although the specifications called for fixed as well as demountable and operable partitions, the demountable partitions turned out to be no more expensive than the fixed if educational work surfaces are included. The operable partitions, panel and accordian type, include builtin supporting framese that make them movable, too-a feature previously unavailable at any price. Yet this near-total partition flexibility will be provided for slightly less than the cost of conventional partitions.

Approximately five of these schools are under construction in California and others are under construction in this country, according to the plans Ehrenkrantz laid out in his problem.

I have gone at such length into this example because it illustrates some of the key features of a systems approach to public sector problems:

1. The object of inquiry was the whole system-the school and all its functions-not just a part or component of that system. 2. In the course of inquiry, the system was divided into interconnected subsystems.

3. For these subsystems performance criteria were developed. 4. A process was set in motion which led to the making of a variety of alternative inventions meeting these performance criteria.

5. Through the consortium of school systems, markets were created which served to attract technological innovation.

6. The whole building process, including its social and political problems, was taken as a subject of study and an attempt was made to design that process.

The term "systems approach" is sometimes used as though it contained a kind of magic which is new to our time. I do not believe this is the case. Nevertheless, it has been one major consequence of our efforts in the defense and aerospace fields over the last 20 or 30 years—perhaps in the Manhattan project and the recent major projects of NASA more than in any other area that we have begun to believe in the possibility of taking whole and analytical approaches to complex civilian problems. In my opinion, the key contributions of the "systems approach" in the civilian areas we are talking about, are as follows:

1. We now believe that we can attack certain complex problems as whole and analytically.

2. We have raised the level of aggregation at which they are tackled. We no longer talk only about filters or electrostatic precipitators, for example, brought about the whole problem of urban and environmental control.

3. We have learned the difference between materials and design specifications and performance criteria, which open up possibilities of technological innovation at the same time as they provide guidelines for performance.

4. We have begun to explore the mobilization of private industry to work on public systems problems-thus meeting Galbraith's excellent argument in "The Affluent Society" to the effect that private industry and the market mechanism had been effective in the development of the consumer products, but not in the