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Research and development - where is it?

The National Science Foundation economists recently released a survey that demonstrates what many of us have been "yelling" about for years now. In 1989, spending on corporate research and development in the U.S. has not even kept pace with inflation. Less research is being done in large laboratories where resources can be pooled, limiting the opportunities for significant advances. The report shows that more than $68 billion was spent in 1989 but there is still great concern that the U.S. is lagging in its efforts to hold a competitive edge in high technology.

Money for corporate R&D continues to decrease from its historic position of some 10% for most industries. Product development is apparently getting a significant portion of that money. Industry executives say that factors contributing to this change include higher interest rates, forcing management to focus on short term profitability, cost cutting internally and mergers and leveraged buyouts. They say a company with a large R&D expenditure is an attractive acquisition since it can show a good cash flow when it is taken over and that spending dramatically reduced.

Caring For The Fatted Cow

It appears that too many companies in the U.S. are milking the cow" and not feeding it very well. We are not breeding stock to grow and build a new herd to work for us in the future where they could give birth to new generations. The U.S. has produced many revolutionary new products and concepts in the past fifty years. Some of these have been used as the base to build thousands of additional products.

R&D is being saddled with projects like "improve" the existing product or "correct" problems in production or converting. They are being restricted by cuts in budgets, personnel being moved into manufacturing, sales or other areas where the company believes it can get a faster return on its investment. in some companies, the executives and managers are dramatically influenced by short term profits since their salary, bonus, perk or even their job may depend on it.

Most other countries are more patient and believe in the long term regarding marketing position and profits. Recent figures show that during the past few years, the Japanese with all their cash available are spending more than three times that of the U.S. on R&D. Some so called experts in the U.S. claim we are now more efficient and productive in our R&D. Therefore we don't require the large expenditures of several years ago to accomplish the breakthroughs. I believe that about as much as I believe the U.S. education systems and academic learning is the best in the world or that it has improved in recent years.

There are many signs for the investors, the stockholders, the board of directors and the company owners to see and compare. They can look at innovations in fibers/binders/raw materials, the advances in nonwoven manufacturing equipment, the number of products and processes licensed from foreign countries, the fact that nearly one half of the U.S. patents are granted to foreign companies and, last but not least, stories in the newspapers noting the number of cuts, layoff s or excuses regarding lower company profits.

I do not want to imply that there is no R&D in the U.S. or that there are not creative new products and processes invented here. Indeed there are many. However, the question is, how many do we produce in comparison to our capability or our potential and how will our creativity/productivity effect our market positions?

Where Has The Think Tank Gone?

We see intelligent, educated and inventive people in our industry that are either burdened with "company priorities," "political situations" or paper work (that is now performed on their own personal computer terminals) that consumes their energies and curbs or drains their creativity. It has been said that "imagination is the key to invention." One must have the time, the environment and sometimes, a little push, to imagine.

The old terms used in the fifties and sixties such as "brain storming," "think tank" or "creative sessions" have evidently lost their position. They have been replaced with courses like assertiveness training for corporate tigers, bioastronautics or how to have fun while filling out purchase requisition forms. Just a little bit of humor there, folks, to try to make my point.

Fortunately, there are those individuals that will not take no for an answer. They will continue to pursue an idea or concept for merit even after they have been instructed to drop it and after the funds or budget have been stopped. The parent of a good idea is often the most qualified to recognize its true value and will go to extremes to protect it and see it mature.

Individual inventors and small companies that specialize in research continue to grow in number. Will they account for the major portion of the inventions? Will large corporations plan to acquire their new products (their future) from outside? Will the education level in the U.S. continue to decline as compared to many other countries and will that reduce our research and development capabilities?

Let's begin at home and raise the awareness of research, invention and productivity in our industry. It has proven to be a good investment through the years when it is planned, directed and funded properly, so put your time and money on a winner.
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Copyright 1990 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Holliday Talk; nonwoven fabrics industry
Author:Holliday, Tom
Publication:Nonwovens Industry
Article Type:column
Date:Mar 1, 1990
Previous Article:Another landmark along the way.
Next Article:Failing to plan is planning to fail.

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