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US research cuts by 2002 may slash 30,000 Mass. jobs

The heavy dependence on federal research funding of Massachusetts's "unparalleled concentration of the world's best known and respected research institutions--universities, medical centers, non-profit technical organizations and technology-intensive firms" makes the state "particularly vulnerable to reductions in federal research support that are likely to occur over the next several years," according to an economic study released recently at a news conference at MIT.

The most optimistic scenario--level funding at about $3.6 billion in federal R&D funds to Massachusetts organizations--is likely to result in 7,000 fewer jobs by 1997 and a total of 26,000 fewer jobs by 2002, according to the Massachusetts Technology Collaborative study presented by Dr. Adam Jaffe of The Economic Resources Group, Inc. Extending the level funding to the year 2010 would mean a total of 33,000 fewer jobs in 2010 compared to 1995, said Dr. Jaffe (MIT '76), an associate professor of economics at Brandeis University.

Massachusetts jobs losses would be worse under the scenario of the Congressional budget plan that would reduce federal R&D funding up to 34 percent in real terms over the years 1995-2002 (assuming inflation of about three percent a year). Under that scenario, Massachusetts jobs losses compared to 1995 would be 17,000 in 1997, 37,000 in 2002 and 50,000 in 2010, according to the study, entitled "Planning for Change/Preparing for Growth: Implications of Reduced Federal Research Spending for Massachusetts."

MIT President Charles M. Vest, who hosted the February 29 news conference in Boynton Hall, said, "If our federal funding to universities is cut dramatically, increases in other funding sources are unlikely to make up the difference, despite the growing partnerships between universities and industry. The problem of diminished support for research does not rest solely with the government, however. I must tell you that if we are to keep our economic engine going, corporations must stop their retreat from research and development, particularly mid-range research. Corporations must carry their weight as well.

"Unless government, universities and industry pull together on this, our national innovation system is going to wind down.

"And while Massachusetts has a strong story to tell in terms of the climate and infrastructure that have played such a key role in the economic vigor of this region, we need to do more. In this regard, we can take a lesson from business leaders in California-especially in Silicon Valley-where there is a much greater cooperative spirit in many activities.

"We need to strengthen this spirit in Massachusetts. The public, rightly concerned about corporate downsizing, needs to understand the other side of the coin: R&D investments, especially in Massachusetts' entrepreneurial universities, create small companies, and small companies create jobs.

"Such investment provides strong economic returns to the state, the region, and the nation as a whole," Dr. Vest said.

Joseph Alviani, executive director of the Massachusetts Technology Collaborative based in Westborough, noted that Massachusetts is the most research-intensive state of the nation's industrial states, with nearly six percent of its gross state product related to R&D activities.

The study said that in 1993, total R&D spending in Massachusetts was almost $9.6 billion, of which nearly $4.1 billion came from the federal government. Industrial R&D was $6.95 billion of the total, with $1.88 billion contributed by the government. R&D in universities, hospitals, medical institutes, research institutes like MIT's Lincoln Laboratory, the Draper Laboratory and MITRE, and federal agencies totalled $2.64 billion, of which $2.21 billion came from government.

A version of this article appeared in MIT Tech Talk on March 13, 1996.

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