1. There is growing belief that there exists some correlation between the economic vitality of a region and the nature and magnitude of the fundamental research effort at the focal universities of that region. The examples cited to prove this case are well known to the Committee. Demonstration of true causality in this relationship is extremely difficult, and one can readily argue the converse, i.e., that it is the economically vigorous region which supports the scientific endeavor of the university. I shall make no attempt to argue either case but only indicate that this must be a mutually supporting relationship with the two aspects escalating together. We shall return to this subject below.

2. There is now general acceptance among our people that every American student should have access to the maximum level of education which he can achieve. And, each year, an increasing fraction of high school graduates go on to college while an increasing fraction of college graduates go on to graduate and professional schools.

3. The very conduct of academic research contributes significantly to the tone and quality of life not only at the university but in a wide area which surrounds it.

These benefits should not be denied to any region of our country.

D. It is difficult to credit the thought that the national purpose will be served by redistribution of existing resources. The educational and research endeavors as well as the industrial and economic activity of regions such as metropolitan Boston and metropolitan San Francisco should continue to be strengthened, rather than eroded by transfer therefrom of students, faculty, or industry. Strengthening of existing universities and build up of economic vitality in less developed regions of the country need not, however, occur at the expense of the better developed centers. The burgeoning of our population, and the growth of the undergraduate and graduate populations combine to offer a superb opportunity to the United States.

Available estimates indicate that between now and 1975 the graduate student population of the United States will approximately double in all areas of graduate studies and continue to grow rapidly thereafter. Growth on this unprecedented scale is opportunity knocking. With today's facilities and faculty, the totality of present universities could accept an increment of no more than perhaps 25 percent in graduate enrollment. And most of this must occur at existing but less developed universities since the major graduate centers, in terms of both numbers of students and numbers of research dollars, are well nigh saturated. To be sure, a greater number of students could be accepted if a significant decline in the quality of graduate education were tolerable. But, in my view, this thought should be rejected out of hand.

If therefore, a number of graduate students equal to those in residence today is to be added to the total system within the next seven or eight years, this will constitute both a great challenge and the driving force of opportunity to build many good graduate schools across the land. Perhaps the magnitude of this opportunity will be evident from the fact that if these projections are borne out, the universities and colleges will have to add 35,000 natural and social scientists, mathematicians. psychologists, and engineers to their faculties before 1975! To achieve this, however, we must prepare sufficiently in advance. There will be required a commensurate increase in the physical plant, defined plans for upgrading existing universities, and imaginative creation of new universities. Some states are already engaged in extensive planning of this kind. And this can come none too soon. It will be a tragic error to continue along the course wherein teachers colleges are transformed to state colleges which are permitted to expand in undergraduate enrollment until the latter exceeds that of many universities, whereupon they then seek status by asking to become universities. By that time, if already staffed to meet their undergraduate responsibilities, e.g., for an undergraduate enrollment of 15,000 in some cases, the faculty is simply not commensurate with the requirements for graduate education. Each state must engage in planning activities which will definitively determine which of the state's institutions are to be the important graduate universities so that they may be of the requisite quality ten years hence.

The same circumstances will permit development of new graduate universities in many metropolitan areas which currently lack the invigorating and cultural stimulus of the university. Across much of our land, many state universities,

particularly the land grant colleges, were located in rural settings, remote from centers of population. And they served us nobly as the chief instruments which made possible the agricultural revolution. Much of the next generation of universities, however, should be located near metropolitan centers where they can serve society during the scientific and social revolution of our times.

In any case, it will be evident that the pressing need to accommodate the legitimate aspirations of hundreds of thousands of graduate students, requiring appointment of many thousands of additional faculty, ipso facto, avoids the problem of strengthening weak universities at the expense of the strong. By wisely building the developing universities, we can strengthen the latter while also improving those which are already developed.

E. It is imperative that the Federal government provide to the developing universities the resources which they will need to get on with the task. Funds will be required for physical plant construction, for acquisition of major scientific instruments, for recruitment of new faculty as these are provided by the training programs of the existing first rate universities, and for fellowship funds for the rapidly growing graduate student population. And, unless unforeseen circumstances reverse present trends. I see no way to avoid the need for direct Federal subvention of the Universities by some formula basis.

As I view the situation, therefore, we are not in a time of crisis, if by the latter is meant the evident disparities in the distribution of federal funds for research. We are, howover, in a time of crisis with respect to our understanding of the immensity of the problem before us in the development of universities across the land in time to meet the arrival of this wave of graduate students. We are in a time of crisis in the sense that our universities, public and private, do not have the resources to undertake the tasks ahead and, indeed, even now, many are faltering. But if funds are provided in sufficient time to the developing universities, these crises should be averted.

But we must understand that building universities is slow and difficult. Adequate funds are a necessary but not a sufficient condition. There is required also careful planning, vigorous recruiting, good taste, and a national pool of available, trained talent. The dimensions of the task become apparent as one observes the genuine but slow progress of those universities which have received University Science Development Awards from the National Science Foundation. Withal, by 1975 it could be possible to double the number of universities with standards comparable to the first 25 while dramatically upgrading at least 50 additional universities.

G. Finally, may I comment more directly upon regional economic development and federally sponsored research in the universities. Although, as indicated earlier, I consider these two activities as mutually supporting with neither more cause than the other, I do believe that by vigorous and determined efforts, communities can capitalize on the presence of a strong university to attract new industry, and in so doing upgrade the economy of the region. I believe this to be possible because, in North Carolina, we have made it happen. The proximity of North Carolina, North Carolina State, and Duke Universities, "middle universities" all, prompted the development called the Research Triangle. This attracted substantial industrial and federal laboratories; in turn, these attracted others and the community benefits by the second and third harmonics of this activity, ultimately including better shops, better bookstores, more theatre, etc. All increased the local tax base, giving rise to better community services and and better schools, while attracting yet more industry and industrial research, and the sum of these, in turn, strengthens the universities. Such a growth cycle was not the automatic consequence of the presence of the university: it was fostered by vigorous community effort, an effort which included two Governors, leading industrialists and bankers and the administration and faculty of all three universities. There is no doubt that it has been the intellectual and physical resources of the universities, the opportunity for scientist-to-scientist contact. and the cultural programs of the universities which attracted the personnel of the attracted organizations. But this example does demonstrate that such a scheme is feasible, provided that the focal universities have genuine strength. How many such developments the country can successfully undertake in the next five or ten years remains to be determined.

The last witness before our noon recess will be Dr. John G. Welles, who is head of the Industrial Economics Division of the University of Denver Research Institute.

Without objection we will place in the record the biographical sketch which has been prepared concerning Dr. Welles.

Biographical Sketch: John G. Welles

Head, Industrial Economics Division, The University of Denver Research Institute.

Background data: Staff Member, Mountain States Employers Council, Inc.; Labor Relations Staff, New Departure Division, General Motors Corporation; Instructor in Finance, University of Pennsylvania; Test Engineer, General Electric Company.

Research specialization in economics of science and technology and in regional economics.

Member of regional and national committees working in these areas.

Senator HARRIS. Mr. Welles, we are glad you are here. We appreciate your patience in waiting to testify. We will be pleased to hear from you at this time.

Mr. WELLES. Thank you, Mr. Chairman.

TESTIMONY OF JOHN G. WELLES, HEAD, INDUSTRIAL ECONOMICS DIVISION, DENVER RESEARCH INSTITUTE, UNIVERSITY OF DENVER, COLO.

Mr. Chairman and members of the subcommittee, I greatly appreciate the opportunity to present some of my views on the impact of Federal support for science and technology on regional economic development. I shall speak as a private citizen, not as a representative of the University of Denver.

In the hope that it might be of the greatest value to you, I shall concentrate my remarks on the development of regional scientific complexes. I shall describe first the situation in Colorado, then make some observations which seem to have applicability to other States and regions, and finally offer a few suggestions regarding the role of the Federal Government. My remarks are based on 14 years of participation in economic development activities in Colorado, and on research into the development of scientific complexes in other parts of the country.

COLORADO'S SCIENTIFIC COMPLEX

By way of background, Colorado is a relatively small State in terms of population. It has about 2 million people, or roughly 1 percent of the Nation's population. Almost three-fourths of these people are concentrated along the front range, a narrow strip of land which lies at the western extremity of the Great Plains, just at the foot of the Rocky Mountains.

Most of the scientific and technological activities in the State are located in the front range area between Fort Collins, Denver, and Colorado Springs-the core of Colorado's scientific complex. All four of the State's universities are located within the scientific complex core area, as are most of the scientifically and technically based industries and the Federal Government's research facilities. I shall leave for the subcommittee's files a report entitled "Analysis of Colorado as a Location for Research and Development Laboratories," which details the nature and types of research and development activities currently carried out in Colorado.

Colorado's scientific complex is broadly based, having university, industrial, and government components. It may be called an emerging scientific complex, since it does not compare in size to such major scientific complexes as Boston and Palo Alto. But for the size of the State, it is relatively large and it has a significant impact on Colorado's economy. The complex is conservatively estimated to provide direct employment for 34,000 people, or about 5.7 percent of Colorado's nonagricultural employment.

Based on a variety of rough indicators, it appears that Colorado ranks about third among the States in amount of scientific and technical activity on a per capita basis. Metropolitan Denver ranks only behind the Washington, D.C.-Baltimore area among metropolitan areas with the most scientists per capita.

GROWTH OF COLORADO'S SCIENTIFIC COMPLEX

How has Colorado's scientific complex developed? I shall briefly mention some high points.

The year 1951 marks the turning point in the development of Colorado's scientific complex. Groundwork previously had been laid by the State's four universities in establishing graduate teaching and research programs in science and engineering, in the establishment and growth of a few small technically oriented industries, and in the presence of two well-established Federal facilities: the Geological Survey laboratories and the Bureau of Reclamation Laboratories in the Den

ver area.

Rapid growth of the scientific complex began in 1951 with the location by the Atomic Energy Commission of the Rocky Flats plant near Denver, operated by the Dow Chemical Co. Also in 1951, the Central Radio Propagation Laboratory of the National Bureau of Standards began to transfer its operations to Boulder from Washington, D.C. Three years later, the National Bureau of Standards Laboratories in Boulder were dedicated and the Sundstrand Corp., established its Denver plant. In 1955, the Martin Co., began construction of its integrated Titan missile plant near Denver. Since 1953 a number of national firms have established facilities in Colorado or have acquired existing firms and greatly expanded their operations. These include Honeywell, Stanley Aviation, Beech Aircraft, Ball Bros., HewlittPackard, Kaman Nuclear, Ampex, IBM, Litton Industries, Amphenol, and Bendix. Two federally supported facilities were added: the National Center for Atmospheric Research in 1960 and the Environmental Science Services Administration Institutes in 1965.

During this period the universities were developing sizable research programs of their own, mostly independent of the activities in the region, but in part supported and certainly spurred on by the evolving scientific and technical environment along the front range. The universities began to offer additional courses in response to the needs of the new industrial and Government facilities. Adjunct professorships and other arrangements were made with scientists and engineers from the new facilities to teach graduate courses in the universities. Joint research and development programs were undertaken between certain of the Government and industry facilities and the universities. Faculty members were encouraged to consult with the new facilities, and the new facilities contracted with the universities for research services. The total annual volume of scientific and engineering research at the four universities (including medical and agricultural R. & D.) currently exceeds $30 million, nearly double the level 4 years ago.

FACTORS BEHIND THE GROWTH OF COLORADO'S SCIENTIFIC COMPLEX

Turning now to the specific interests of this subcommittee, I would estimate that about three-fourths of the scientific complex in Colorado is supported by Federal funds and the remainder by the private market economy and other non-Federal sources. It is obvious that Federal support of science and technology has had a very significant direct impact on Colorado's economy. This impact has not been confined to universities; it has been keenly felt by the industrial segment and by the Federal facilities located in the State. And, of course, there have been many indirect impacts, not only on the State's economy, but also on other aspects of life in the State; such as, State and local

ment, secondary education, and the cultural and intellectual environ

ments.