Better support of small company RD will help us lead the world in innovative products as well as basic research.
On page 114 there's a chart of which every American can be proud. It shows that no fewer than 99 Nobel award winners in physics, chemistry, and the medical sciences over the past 30 years were Americans. That is more than half of all the winners in these fields, and two-thirds of the five nations' winners shown in the chart.
Japanese won two Nobel prizes during this same period. Yet Japan is the country that is presently our toughest competitor in industrial applications of science and technology. How can the United States, with such a long, probably unassailable lead in the basic sciences, find itself so hard pressed by another nation which has trailed so far behind?
Part of the answer is that the United States is in effect the basic science laboratory for the whole world. It takes only 30 days for the learned journals with basic science results to girdle the globe. And there are countries now that move much more effectively from basic science through applied science to production lines than we do. One of them is Japan, which has done a brilliant job of targeting research to market applications.
A second chart on the same page gives another part of the answer. It shows that in research and development we are still the defense shield for the free world. Almost two-thirds of our government R&D dollars are devoted to defense and space. Japan spends 7%. The rest of the free world has obviously been able to spend more government money strengthening its civilian research and development than we have -- because we have assumed the defense burden.
A third part of the answer to the question is to ask another: Who would win a Nobel Prize for foresight in national science and technology policies that best met the needs of a country's citizens? For relevance to innovation and productivity of investment in research and development? For the application of science to industry? Ask our unemployed steel workers. Ask our unemployed auto workers. Ask any American businessman who, in the largest energy market in the world, finds himself paying higher and higher prices for petroleum.
Our leaders of government and industry might not finish last in this prize competition. But not even the most devout American chauvinist can really believe that we would come in first, given recent history.
Since World War II, an efficient opinion-making machinery based in the universities, in large government laboratories, and in big companies has fought hard and well to keep federal expenditures in support of basic science at a high and stable level.
We have done far less well, however, in our support of small-scale industrial creativity in nationally needed areas. Small high-technology firms are notably more cost effective in developing new products and new processes than are the capital-heavy bureaucracies of government, large business, and even large universities.
As a result, our national support structure for science and technology has been badly out of balance for years. It has been, to say the least, unresponsive to national needs. Now we're paying for it.
Small high-technology firms are a critical bridge between basic science and applied technology; between big-ticket research and development and smaller, less costly ways of getting the same things done. The premium for them is always the biggest bang for the smallest buck. Their goal is always the greatest technological leap at the lowest cost. They are not hog-tied to massive financial and psychological commitments to existing technologies. Inertial bureaucratic pressures against change do not afflict them. They are the leanest, meanest way to technological progress. A dollar invested at this level of applied science and technology is likely to produce a greater and more direct return than the same investment at any other point in the science and technology structure. Yet these firms are the recipients of only three to four cents of every federal dollar spent on R&D.
Fortunately, some of our national leaders are alert to the urgency of the needed correction. A bill currently pending in Congress, introduced by Sen. Warren Rudman (R-N.H.), one of the Senate's more promising new members, would go a long way toward addressing the problem. Twenty-four other senators have joined Senator Rudman in sponsoring the bill, including Sen. Edward Kennedy (D-Mass.), who had a bill of his own on this same subject in the last Congress. They are Senators Hatch (R-Utah), Baucus (D-Mo.), Hart (D-Colo.), Weicker (R-Conn.), Huddleston (D-Ky.), Hayakawa (R-Calif.), Bentsen (D-Tex.), Glenn (D-Ohio), Garn (R-Utah), Riegle (D-Mich.), Tower (R-Tex.), Hatfield (R-Oreg.), Heinz (R-Pa.), Moynihan (D-N.Y.), Danforth (R-Mo.), Tsongas (D-Mass.), Dole (R-Kans.), Bradley (D-N.J.), Warner (R-Va.), Chafee (R-R.I.), D'Amato (R-N.Y.), Abdnor (R-S.Dak.), and Metzenbaum (D-Ohio).
It's a modest measure which will not add one new dollar to the federal budget. What it will do is redirect a tiny part of the federal dollars now being spent on research and development. Over a three-year period it will increase small business's share of such expenditures to at least 1% of what is now spent by every federal agency that spends more than $100 million annually for research and development. What's equally important is that it models this gradual expansion on the highly regarded National Science Foundation's Small Business Innovation Research Program. With a minimum of bureaucratic fuss, that program has proved itself to be a good taxpayer investment: In less than five years it has resulted in innovative research that is already supported by more private business dollars than the federal dollars spent to seed it.
In our next issue we will devote a special section to some of the work going on in companies participating in the program. The section will be called "From the Small Business Grass Roots: The Renaissance of American Innovation and Productivity."
Passage of the Rudman bill is a must for small business in the 97th Congress. This is the kind of step, we are confident, that would earn its supporters a Nobel Prize for foresight, if one were given.