sponsibility. And the effect of this continuing aggravation will worsen unless we are able to achieve a balance which will encourage academic excellence to flourish outside the hubs of present activity.

Let us dwell for a moment on the matter of upgrading institutions of higher education so that they will have the capacity to perform important Federal research. Dr. Haworth alluded to this need in his testimony last year. At the risk of seeming parochial is it possible to estimate the capacity of institutions in the West North Central States and relate their experience in this Federal R. & D. program? Is it possible to measure this capacity and then equate the flow of research to determine whether these institutions are up to a maximum performance or whether they have an unused capacity? Is it possible to determine how they might better utilize their facilities or where added strength here or there might better position them? I ask this because of my conviction that our natures permit us to follow the easiest course because it is a familiar course.

And, while my immediate concern must be given to my area, I know we must address these inquiries and these evaluations to all parts of the country.

We know that we cannot transform every college and every university into a center for scientific research. But we want all of them to be capable in their pursuits so that we produce graduates schooled in the arts, the humanities, business, and other profession so that they can give balance to the structure of our society. We must make every effort to have in all areas of the Nation graduate schools of excellence so that those undergraduates who want higher education in the sciences can achieve these goals. And, if this can be accomplished, the basis will exist for a more equitable distribution of research funds, both public and private.

Last year Dr. Haworth said, "We believe that lack of institutional capability is the principal factor limiting greater spread of Federal research funds." I know that Dr. Haworth and his colleagues will make every effort to tell this committee, and institutions that want elevation, how institutional capability might be achieved. Is it improper to suggest a program wherein the capable institutions now numbering a might become 2 in 5 years, given the attention and innovation this problem deserves? To do this will activate Dr. Haworth's conviction to help the institutions get some good people, and then give them the research funds.

I agree with Dr. Hornig's statement last year that the pattern of research concentration does not reflect a geographical bias. The bias has been, and properly so, in favor of excellence wherever it existed. Let us now review the total excellence to be sure we have a maximum distribution. Let us be assured that the sixth or seventh research grant to a particular institution might just as well become the first for a capable institution not previously favored.

In summary, I deeply appreciate the magnitude of the problem before this committee. I am gratified that this magnitude will not deter the chairman and this committee from aiding the evolvement of a system, a plan, or a formula-call it what you will-to improve the disbursement of Federal research and development grants. We have the President's memorandum which directs this shall be done. We have the beginnings, as testified to last year, of intragovernmental

committees dedicated to this end. We are all keenly aware of our mission.

Our need is to spread and stretch out our areas of academic excellence. It will not limit excellence today--it will add excellence to more institutions in all areas of the Nation. Then the pattern of development activities of the Federal Government and of private industry will follow this rise of academic capacity.

I have asked that the burden of achievement be primarily in the National Science Foundation. If the Foundation, the Executive Office and the interagency committees believe the prime responsibility should attach elsewhere, let that be their good judgment. But this committee will surely share in this total effort and it will lead in providing whatever impetus is required from the Congress.

Senator HARRIS. Also, without objection, we will place in the record a letter to me from Senator John Sparkman, of Alabama, and attached to this letter is a statement for the record from H. L. Philpott. Auburn University.

(The letter referred to above follows:)

HON. FRED R. HARRIS,

U.S. SENATE,
COMMITTEE ON BANKING AND CURRENCY,

May 8, 1967.

Chairman, Subcommittee on Government Research, Senate Government Operations Committee, Washington, D.C.

DEAR FRED: Enclosed is a brief statement by the President of Auburn University, Dr. Harry M. Philpott. I would appreciate your including this in the record of your hearings on the geographic distribution of Federal research and development funds.

With best wishes, I am,

Sincerely,

JOHN SPARKMAN.

STATEMENT OF HARRY M. PHILPOTT, PRESIDENT, AUBURN UNIVERSITY, AUBURN, ALA.

To: Members of the Subcommittee on Government Research, Government Operations Committee, U.S. Senate.

GENTLEMENT: Auburn University shares the concern of President Johnson, expressed in his directive of September 13, 1965, in calling on government agencies to take steps to effect a more equitable distribution of federal funds for research and development. Staff and faculty members have participated in a number of discussions during the last year and a half as to the best means by which this objective could be achieved. We recognize the importance of safeguarding the vitality of existing research programs as well as enabling emerging institutions in research endeavors, such an Auburn University, to make a large contribution in both research activities and the training of research scientists.

It is our conviction, in which we are joined by many other institutions, that H.R. 13786 introduced in the House of Representatives by Representative Miller of California offers the best method of providing greater equity geographically and among institutions in the distribution of federal funds for research and development. The details of this proposal have been effectively presented to the Committee by others and I feel that it is necessary only to endorse fully this proposed solution. The institutional grant provided under H.R. 13786 would enable Auburn University to expand and properly develop its program of research and education in the physical, biological and social sciences, engineering and mathematics.

The courtesy of the Committee in permitting a presentation of this statement is deeply appreciated.

Respectfully submitted.

HARRY M. PHILPOTT, President, Auburn University.

Senator HARRIS. We are very pleased to have as our opening witness this morning Dr. Robert H. Ryan, president of the Regional Industrial Development Corp., Pittsburgh, Pa.

Without objection, we will place in the record a biographical sketch concerning Dr. Ryan.

Biographical Sketch: Dr. Robert H. Ryan

President, Regional Industrial Development Corporation, Pittsburgh, Pa. Background data: Executive Director, Greater Lawrence Industrial Development Committee. Executive Vice President, Massachusetts Business Development Corporation, Vice President, Cabot, Cabot & Forbes Company.

Adjunct Professor at the Graduate School of Business of the University of Pittsburgh since 1963.

Senator HARRIS. Dr. Ryan, we appreciate your presence here this morning, and your patience in waiting until we were prepared to begin. I believe you have a prepared statement.

You may proceed with it, or however you may desire.

TESTIMONY OF DR. ROBERT H. RYAN, PRESIDENT, REGIONAL INDUSTRIAL DEVELOPMENT CORP., PITTSBURGH, PA.

Dr. RYAN. Thank you, Senator Harris. What I would like to do, if I may, is sort of use the prepared statement as I go and sort of highlight some of the points I would like to make.

First, this Regional Industrial Development Corp., with which I happen to be associated, by way of explanation, is a nonprofit corporation which is concerned with the economic growth and development of a very important region in this country. As such, we have naturally come to be quite aware of the effect of research and development upon economic growth.

Now, as sort of an introductory statement, I would like to say this: first, that I am not sure the Federal Government is putting all of the R. & D. effort that it should be putting into some of our large problems in this country.

Secondly, I think that there is a very large role that the Federal Government can play with respect to using Federal R. & D. dollars to stimulate regional economic growth.

Third, that as we shift Federal R. & D. emphasis to some of the other problems that we should be concentrating upon, I would argue that there is going to be an automatic better distribution of the Federal R. & D. dollars. In other words, as I see the need for Federal R. & D. funds shifting to other problems, I can see the R. & D. dollars spreading more evenly over this Nation.

Fourthly, I think that we can learn something from the DOD in the NASA efforts in terms of using R. & D. to stimulate regional economic growth.

Now, this business of measuring the effectiveness of Federal R. & D. money upon regional economic development is a process which is far from precise. While the National Science Foundation does publish data each year on Federal research and development efforts, the results of that research in terms of regional economic development effects. really cannot be accurately measured.

Since this committee is concerned with Government R. & D. programs as they relate to regional economic growth, I would like to men

tion at the outset that I differentiate between R. & D. effectiveness as R. & D. and R. & D. results in terms of regional economic benefits. Now, it could well be that some of the most effective R. & D. is being done by lone scientists working in remote or isolated and unidentified places, and that the area in which they are located, not only does not know of their existence, but that area will never benefit economically from the R. & D. work which is going on by such quiet and lone types.

Now, even though this kind of work may be very effective as R. & D., it is not what I am talking about when I concern myself with R. & D. results in terms of regional economic benefits.

You have already mentioned the size of the Federal R. & D. effort. I had a figure of $18 billion, but I think that includes capital facilities as well. But the point is that R. & D. dollars of that magnitude, whether the figure be $16 billion or $18 billion, have results which reach deeply into the Nation's economy and the R. & D. dollar reaches in many ways, and it reaches over many areas.

Now, it is quite clear that three agencies-the Department of Defense, the National Aeronautics and Space Administration, and the Atomic Energy Commission-account for about 85 percent of Federal funding for research and development 44 percent for DOD, 32 percent for NASA, and 10 percent for AEC, which leaves 14 percent for all other agencies.

The major thrust of Federal R. & D. efforts is not for regional economic growth. It is, rather, for other purposes which presumably are more important in terms of national objectives. So on a percentage basis, we now have a situation in which the nonspace, nondefense R. & D. efforts of the Federal Government remain relatively small.

Another point I would like to mention with respect to the concentration in Defense and NASA is that specific projects in DOD and NASA account for large amounts of the Federal R. & D. dollar.

Such specific projects I could mention include the Army's NikeZeus-the Navy's Poseidon missile, the Air Force's Minuteman III missile, the Air Force's C-5A military transport, NASA's Saturn launch vehicle for the Apollo program, and various models of the Apollo spacecraft.

So in considering the effects of Government R. & D. on regional economic growth, I would like to spend just a minute reviewing how regional economic development has come about in this country to date, and to point out how now I think we can use Federal R. & D. to stimulate regional economic development.

The three phases of regional economic development in the United States which I see are these: First, we went through that period when regional economic growth manifested itself through the investment and the exploitation of natural resources. This pattern followed very clear lines.

One can develop the case of the whole coal-steel-railroad industry complex was one which was clearly built around situations where waterways, plus the availability of iron ore and high quality bituminous coal, caused the location of the steel industry in the last century in places like Pittsburgh. This exploitation of natural resources causing regional economic growth still does take place.

I would mention, for example, the exploitation of taconite in the Duluth area.

But the emphasis has really shifted, and we went into a second period of regional economic development, which I call that period when regional economic growth took the form of investment in plants and equipment. The devlopment of electric power, the emergence of the automobile industry, the use of mass production processes, et cetera, gave regional economic development an entirely new characteristic which, up until World War II at least, evidenced itself in the socalled Connecticut-Chicago industrial axis, which up until about 1940 was the industrial manufacturing backbone of the United States.

But the third phase, and I think the phase we are really talking about in these hearings, is the most recent phase of economic growth. That is this period in which economic growth is coming as the result of new science and technology, and investment in human resources really being a great stimulant to regional economic growth.

This new phase involves investments in getting people to think about problems, and this leads to heavy emphasis upon research and development through science and technology.

Now, the really important question emerges, and that is, how can science and technology, or more specifically, how can Governmentsponsored R. & D. programs, foster regional economic development? This, I think, is the really vital question. Now, because of the magnitude of the dollars involved, most of the people who think about Government research and development now think about defense, space, and atomic energy. And because these three programs have represented such a major portion of Federal R. & D. funds, it is understandable that when somebody mentioned Government R. & D., the usual connotation is one that is linked to weapons systems, space vehicles, nuclear accelerators, and so on.

As a matter of fact, the benefits accruing to regions are now so obvious that community and regional groups have been competing with one another to have Government R. & D. facilities or Government R. & D. contracts placed in their areas.

Perhaps the most striking example of this recently has been what I call the contest which centered around the plan of the Atomic Energy Commission to build a 200-Bev accelerator somewhere in the United States. Over 125 proposals were submitted to the AEC in connection with this activity, and the flurry of excitement which was created all over the Nation by the AEC request for proposals was not merely the result of the direct employment which was involved at the 200-Bev accelerator, which was estimated to be around 3,000 jobs, but the excitement was caused by the secondary or tertiary benefits, which some believed would be even greater than the direct pay involved, and would come in the form of additional research activity and additional facilities which might eventually cluster around the accelerator. It was presumed, for example, that the AEC 200-Bev accelerator would, when located, identify that area throughout the Nation as an area where good research could be undertaken because that area possessed the necessary ingredients for good research.

In reviewing the criteria which the AEC published in connection with its solicitation of proposals, it is rather interesting that at least as far as the AEC was concerned, these criteria identified those environmental and logistic factors which were considered to be important in connection with this major R. & D. investment.