Committee have just completed a very revealing study of technological innova-
tion and the creation of innovation-produced companies. One important point
they demonstrated was that technical approaches often lay dormant for many
years waiting for someone to identify a need. There should be regional people
studying such situations.

Let me give a couple of examples. A few years ago it became apparent that
optical registry and evaporation equipment would become important in the tran-
sistor business, as integrated circuits and micro-apparatus were certain to be-
come more prevalent. A small, light-hearted and light-footed company might
have been able to move fast enough to get a large share of the market. A regional
expert studying industry's needs might have identified this one in time.

Another example is more current: Everyone is scrabbling for contracts to develop highly sophisticated materials for aircraft turbine blades and leading edges of re-entry vehicles and the like at hundreds of dollars per pound. What many areas of the world need is quite different: very cheap materials, cheaper than concrete, stronger in tension than concrete, necessarily produced from indigenous raw materials. Perhaps such materials could be local fibers, preserved from rot by sea salt, reinforcing a Portland cement matrix. Perhaps they could consist of fibers similar in size and shape to Fiberglas but of unrefined local rock, like rock wool. Teams of chemists, geologists, physicists, and metallurgists might well find their services in demand by ATD, OECD, and foreign governments. In many ways, this development of cheap materials is a harder job than designing sophisticated materials; it also is less "scientific" and therefore probably frightens scientists. But it represents an urgent need, and if a region can supply it, the region can prosper.

A region must also be studying realistically its regional resources. Two years ago the Greek Government was host to a conference in Athens on the creation of a university at Patras to aid the development of the Peleponesus. The Greek experts were thinking in terms of nuclear reactors and desalination, developments that might help Greece's Mediterranean competitors with abundant flat land far more than they would help mountainous Greece. Many Greek experts deprecated tourism as unscientific and undignified. Yet Greece has absolutely unequaled resources for tourism. Just think of the things going for her: The rise in the standard of living everywhere with more travel money available; the move toward warmer climates, especially by older people; the decreased cost of air transportation; and finally, and most important, Greece's monuments of the classical tradition becoming more attractive every year as more of the world's youth goes to college. A realistic appraisal of Greece's actual opportunities was sadly missing, presumably because of justifiable (but in this case harmful) local pride.

Another prime requirement for a regional development is an outstanding educational system. Of course junior colleges, colleges and universities are necessary, but I won't dwell on these since everyone agrees on them. They're vital, and that is that. One note of caution is necessary at this point, however: The Ph.D.'s turned out by a university are especially mobile. If a region does not have challenging opportunities for them, its resources might better be applied at other educational levels. This remark applies especially if the Ph.D. is in "pure science." One corollary is that Ph.D. programs might well be designed to give the student (to use Dr. Harvey Brooks' words) "respect for applied problems."

The junior-high and high schools seem to be the most important single piece of this system (although my psychologist friends argue that it is the first part of education that is even more important in many ways). Despite the enormous recent advances-almost all in science and mathematics-there is room for great strides in innovative science and especially technology in the high schools. By this I do not mean just making the courses more advanced, which any college teacher could do. But I mean creation of new teaching programs leading students into technology at all levels.

A region would be much more attractive to science-based industry if its high schools featured technology. In many ways we as a nation have gone down hill since the times when almost any high school boy could repair a Model T. I should like to see in addition to science fairs, competitions for designing and making ingenious things that work-not from kits or from the Scientific American advertisements. Call them "Edison Fairs" or call them anything else, but provide some status for imagination and tinkering ability, whether or not it is coupled with the analytical depth of science or the specialized ability to do well on Scholastic Aptitude Tests. A region can well afford to encourage and keep its tinkerers. The skilled electronics technician who graduates from a local high 84-526-67-pt. 2-4

school is more likely to stay in the region than is the Ph.D. at the local university, and he is almost as vital to growing local industry. This circumstance suggests that regional resources be concentrated more on technical training up to the two-year college level than on more advanced training.

Incidentally, a number of the scientists and engineers in the universities who are disenchanted with the Federal Government might find the development of high school programs a promising outlet for their extra energy. Their rewards would be real, though not likely to be financial.

Before going to the last items on this list, let me remind you that I do not make any claim that this is an exhaustive list, but only a few personal additions to the conventional list.

The final item is money. One of the points noted by a recent Department of Commerce Committee was the comparison between the attitudes of banks in the Boston and Philadelphia regions. Small, growing industries near Boston reported a cordial, flexible, risk-taking attitude by banks. Similar Philadelphia industries reported more of a cool, firm, play-safe attitude. This attitude can make an enormous difference, since new industries always need money. At a recent regional development conference at Barranquitas, the question arose as to what the minimum size of one of the British "new towns" should be. A firm answer came from the owner of a consulting firm: "Large enough to have at least three banks!" He might have added "cordially interested in regional development." A region ought to study realistically whether its commercial lending institutions have a healthy, imaginative attitude toward fledgling business.

One final, unconventional need stems from the splendid aphorism that "Nothing succeeds like success." A spirit of success pervading a region, or a whole country, can be immensely important to its development. This is true whether or not the success is in industry or commerce. Nobel prizes buoyed the San Francisco Bay region for years. The general spirit of optimism that ran throughout the Route 128 region may have been the most exportable idea. People work harder, take more important risks, probably even have better ideas in such an atmosphere. Clearly one cannot legislate or buy optimism, but there are things a region can do. For example a famous symphony orchestra or art museum can be the element that gives the additional local push necessary to get a region moving.

THE REGION AND THE FEDERAL GOVERNMENT WORKING TOGETHER

How can Federal funds be brought to bear for regional development? Clearly any illumination of the process of creation of new industries and new technology will help regional development. I have already alluded to Department of Defense and Department of Commerce experimental programs to help such understanding. Many more experiments of this kind are needed.

I have emphasized above the regional advantages of concentration on engineering (rather than science) and on high school and two-year technical colleges (rather than more advanced training). Federally sponsored experimentation on creating new ways of training engineers would be very useful; new principles or approaches produced by these studies could then be adopted by ambitious regions.

Federally sponsored experimentation on technology training in the high schools and two-year colleges would be similarly helpful. This is the area formerly called "vocational training" that deserves far more imaginative treatment (and more status) than it usually gets.

Another similar program that should be developed is the teaching of business management for technological industry. Federal funds might well be used to experiment on curricula and teaching approaches, probably mostly for application in four-year colleges.

I made a point of a "few outstanding scientific establishments" in the preceding section. If a region establishes one of these and sets its sights high enough, surely Federal funds will be attracted even in the active nationwide competition for such funds. If a region, on the other hand, divides its expendable resources and attempts to create and nourish too many good but not exceptional institutions, it may have a much harder time.

I do not know whether the Federal Government could generate additional programs in which it shared the risks of new industrial developments by providing risk capital. If it could, it might wish to share the gains as well, since the provider of risk capital generally deserves some equity. It is possible that such sharing not only would stretch Federal funds but also might take some

of the harshness out of the invidious comparisons between the promise of inventions by inventor A in region X and inventor B in region Y.

Finally I should like to suggest a modest program similar to one created by the Sloan Foundation. This Foundation makes grants to promising young scientists that enable them to equip their laboratories and pay for travel, books, and even salaries for a couple of years. These grants have been exceptionally effective. Unfortunately they usually are not made until the young men have gone to existing universities. Suppose a Federal program selected the grantees while they were still in Ph.D. or post-doctoral fellowship training, before they took permanent jobs. A young man could then afford to go even to an institution just beginning its development of excellence, since his laboratory support would be assured for an introductory period. In the competition with established universities for such promising young people, the new university would then fare much better than it now can. Such a program might be even more important to regional development if it were directed to engineers, as well as or instead of to scientists.

Senator HARRIS. Not only are your comments especially relevant, but very excellently done. As a matter of fact, I do not have any questions because you have hit on exactly what our interests are here, and I think you have made some very discerning comments, some that you did not go into in detail orally, but about which you did in the statement itself, in particular about what things cause economic growth in a region.

I think you have made some very good comments on that in your prepared statement, and also in the additional suggestions you made. I think some of the things I said earlier, just before you testified, are touched on here. You talk about a few really outstanding institutions in a region. Then I think your emphasis on the high schools and junior college level is very interesting and worthwhile.

So I really do not have anything to add or to ask about. I just made a note of some people I want to send your statement to, because I think it is a very useful one.

Do you have any further comments that you would like to make? Dr. SPROULL. No, no; thank you very much.

Senator HARRIS. Dr. Sproull, thank you very much.

We will stand in recess until 10 a.m. tomorrow.

(Whereupon, at 12:10 p.m., the committee recessed to reconvene at 10 a.m., Thursday, May 11, 1967.)

EQUITABLE DISTRIBUTION OF R. & D. FUNDS BY

GOVERNMENT AGENCIES

THURSDAY, MAY 11, 1967

U.S. SENATE,

SUBCOMMITTEE ON GOVERNMENT RESEARCH,

COMMITTEE ON GOVERNMENT OPERATIONS,

Washington, D.C.

The subcommittee met, pursuant to recess, at 10:05 a.m., in room 3302, New Senate Office Building, Senator Fred R. Harris (chairman of the subcommittee) presiding.

Present: Senators Harris and Hansen.

Also present: Dr. Steven Ebbin, staff director; and Fred Mansbridge, minority staff member.

Senator HARRIS. The subcommittee will be in order.

The Senate Subcommittee on Government Research continues today its hearings on equitable distribution of Federal research and development funds and the impact of science and technology on regional economic development.

Our first witness this morning is Dr. Benjamin Chinitz.

Dr. Chinitz is professor of economics at Brown University, and without objection, we will place in the record at this point a biographical sketch concerning him which has been prepared by the staff.

Biographical Sketch: Dr. Benjamin Chinitz

Professor of Economics, Brown University, Providence, Rhode Island; Ph. D. Harvard University, Economics.

Background data: Deputy Assistant Secretary of Commerce for Economic Development; Chairman, Department of Economics and Associate Director, Center for Regional Economic Studies at the University of Pittsburgh; Staff Economist, New York Metropolitan Regional Study, Regional Planning Association of New York; Instructor at Brown University; Instructor at Dartmouth College; United States Air Force.

Participant in many related professional activities.

Author of many publications.

Senator HARRIS. We are very pleased you are here. I believe you have a prepared statement, Dr. Chinitz; you may proceed with it or however you please.

TESTIMONY OF DR. BENJAMIN CHINITZ, PROFESSOR OF ECONOMICS, BROWN UNIVERSITY, PROVIDENCE, R.I.

Dr. CHINITZ. Senator, with your permission, I would like to summarize briefly the main points of my statement.