Industrial Research 



11 



dependence and that the very considerable increases 

 in numbers of technical students and in courses in 

 applied science were due to the demand being created 

 by the laboratories. In turn, technical graduates 

 initiated research in companies where it was previously 

 unknown. Naturally, research prospered best in the 

 newer companies, dependent upon technical men, and 

 it has made least progress generally in the old, estab- 

 lished industries where the art had been higlily devel- 

 oped, as in the tanning industry, to cite an extreme 

 example. 



As a distinguishing characteristic of modern research 

 is its organization, it is to be expected that it would be 

 most higlily developed in the larger companies. It is 

 probable that in some instances an aggressive research 

 policy has contributed to the rapid expansion of some 

 of these larger companies. In the course of the survey, 

 question was raised as to the abUity of the small com- 

 pany to use research and as tliis problem had important 

 bearing on public welfare, it was given special con- 

 sideration. 



Briefly, it would appear that although the small 

 company has many handicaps, in the use of advertising, 

 accounting, legal assistance, and other staff functions, 

 when it comes to research it is often found that a small 

 flexible group can accomplish rather remarkable results. 

 One companj- reported that when a large portion of the 

 industry merged and offered unusually strong competi- 

 tion, the company fell back upon research as a defense. 

 As a result, specialties were developed that have kept 

 the company in a strong position with increasing, rather 

 than decreasing, pay roll. In many other instances, 

 especially in industries built upon new discoveries, 

 small companies lean upon research and technical 

 development as a principal competitive support. 



Research and the Small Compary 



There is a lower limit for the average size of company 

 that maintains a large organized research staff. Assum- 

 mg 3 percent of gross income as proper for research, 

 then $30,000 is a reasonable budget figure for a company 

 whose annual gross income is $1,000,000. This would 

 mean a research staff of six or seven people at an 

 annual carrying cost approaching $5,000 per person. 

 Obviously large research staffs are not to be expecteti 

 in the smaller companies. 



It does not follow that small companies are not using 

 industrial research. Unfortunately, the National Re- 

 search Council's Dii-ectories of Industrial Research 

 Laboratories are not a satisfactory source of small- 

 corn [any research statistics, since small companies were 

 not canvassed systematically even for the latest direc- 

 tory. For this report a sampUng investigation was 

 necessary and its findmgs have been used. For con- 

 clusive statistical data on the extent of small-company 



r'jsearch, for comparison with large companies, or with 

 estimates of totals sjjeiit for otlier purposes, a much 

 more extensive census would be necessary. Relatively 

 little use was cited of university, consulting, association 

 or governmental laboratories. Small com])anies appear 

 rather as highly individualistic and self-sufUcient. 



A variety of successful research practices is found in 

 small companies as are numerous methods of providing 

 for advertising, legal, and accounting procedure, and 

 other staff functions without separate departments or 

 organized staffs. Increasingly common and construc- 

 tive is the use of help from the technical sales-service 

 man who relays to his customer technical and even 

 original research assistance in the application of his 

 materials. An electrical company carries on research 

 in electronic circuits, doing pioneer work in the field, 

 and its findings are available to customers, small and 

 large. Paint, lacquer, and resin manufacturers have 

 aided small companies in the improvement of their prod- 

 ucts by special finishes, frequently involving special 

 original research. The small shoe manufacturer obtains 

 his research from suppliers of machinery or materials, 

 some of whom have large laboratories. The flow of 

 technical knowledge from the research laboratory of 

 the large company to the smaU company and through 

 its sales engineers to the ultimate user or consumer 

 takes the place of highly organized research in many 

 small companies. 



Figure 4. — General Motors Research Laboratories Building. 

 Detroit, Michigan 



