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Growth threatened by federal and industrial cuts, Vest warns

A strong partnership between government, academia and industry has provided "dramatic benefits" to the society and the economy-as in the case of biotechnology-but is in danger of being undermined by reduced federal support for research and the downgrading of industrial research and development, President Charles M. Vest said Monday.

"Investments in science are going by the wayside," Dr. Vest told a breakfast meeting of the Greater Boston Chamber of Commerce. "The US cannot afford to lose its (technological) edge and our region most of all cannot afford to have this happen.

"At least 50 percent of all economic growth in this country since World War II has been due to technological innovation," he said, the "lion's share" of it coming from research universities.

The two great threats to this innovation system, he said, are "the downward direction of federal research budgets, and the disappearance of 'mid-range' research" carried out by industry.

The federal government plans to reduce its support of civilian research and development by 30-35 percent over the next six years-a "dramatic contrast" to the policy under which the federal government joined forces with universities to invest in research and education.

"What worries me especially," Dr. Vest said, "is that today, just as the US is on a course to disinvest in civilian R&D, Japan is increasing its investment and is on a path to nearly double it by the end of the century."

Every rapidly developing nation in the world is banking on technology to move it into competitiveness on the world stage, he said. "The support of research has traditionally been bipartisan," he noted. "We now need continued bipartisan political action. We also need concerted effort by our colleagues in business and industry, to shore up our national investment in these areas."

The second threat, he said, stems from the economic pressures that industries have been facing over the last several years.

"In response to intense global competition," Dr. Vest said, "our large corporations have completely transformed their research and development activities to concentrate on short-range matters-incremental improvements of products, reducing product development cycles, improving quality and productivity."

"These actions have been essential and effective in the near term," he added. "But they are resulting in the disappearance of the mid-range research that builds a common knowledge base of developing technologies, and which is the source of much of America's innovation."

To counteract the loss of industrial R&D, "We need to establish a strong new innovation system for these times, as we did in the past," Dr. Vest said. "One way is for universities to establish new partnerships with industry." An example which is just beginning to pay dividends, he said, is MIT's Leaders for Manufacturing Program. He added:

"This is a program in which a group of American industries has joined with MIT to build research and educational programs that are providing new approaches to the practice of manufacturing while preparing students who have both the technical and managerial expertise to lead tomorrow's manufacturing industries. Inventing more such partnerships will allow us to capture the benefits of new ideas on the horizon. Many emerging areas of research hold real promise for significant economic and social benefit. Examples are brain and cognitive sciences, information technology, environmental technology and biotechnology.

"In the brain and cognitive sciences, for example, we can look forward to the day when advances in these fields will offer respite and even cures for mental illnesses, in much the same way that research in molecular biology has led to dramatic progress in the fight against a host of physical diseases. Such advances will provide the real path to reducing the social and economic costs of health care.

"Fulfilling these promises requires support of the research that takes place in our universities, to be sure, but it also requires the participation of industry in transferring the research results from the laboratory to the economy. Long-term success also requires active involvement and appropriate support for industry and academia from our state government. In sum, new partnerships in new fields hold the key to our economic vitality."

Dr. Vest said that MIT's biotechnology study (see related story) is a good example of an "extraordinary" economic return on the nation's investment in education and research.

A version of this article appeared in MIT Tech Talk on January 24, 1996.

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