SECTION II 

 2. RESEARCH— A RESOURCE TO SMALL COMPANIES 



By Fairfield E. Raymond 

 Administrative Assistant, National Industrial Conference Board, Inc., New York, N. Y. Special Contributor, Cambridge, Mass. 



ABSTRACT 



This report on research in I lie small coiiijiaiiy is 

 based on a statistical study of 50 companies located in 

 industrial centers of New England. They range in 

 size from 33 wage earners to 1,500, and in total assets 

 from $150,000 to $2,500,000. In addition to this 

 statistical survey a considerable number of other small 

 companies was studied to give a broader basis for the 

 generalizations of the report. 



The outstanding feature of the small company is 

 its technical uniqueness — in respect to a process, a 

 product, a service to industry, or a selected market. 



Research, which for the small company is "organized 

 fact-finding," is carried on by the company itself in 

 varying degrees of complexity of organization, and is 

 besides the product of collaboration with research 

 agencies, technical institutions, suppliers, equipment 

 manufacturers, customers, and even competitors. In 

 the small company it is usually very individualistic, 

 relying on the inspiration of one or a few executives. 



There is no apparent relation between the size of the 

 company and the amount of research carried on as 

 evidenced bj' the number of research workers, kind of 

 research organization, or number of fields of research. 

 The determining factor seems rather to be the kind of 

 process or product. 



The small company can be self-sufficient in the matter 

 of immediate product or process developments, but 

 for research which is concerned with the long-range type 

 of development it needs the help of outside agencies. 

 This includes the use of private research laboratories, 

 technical institutions, and the buying or licensing of 

 new developments from individuals or other companies. 

 Such use, however, is markedly intermittent. 



Additional resources in research for the small com- 

 pany are in the participations by their [)ersonnel in the 

 activities of professional societies, the informal exchange 

 of information among staff and clients and suppliers, 

 and especially current technical literature. 



Place of Research in Small Enterprises 



A striking feature that marks the place of many a 

 small company and explains its existence as a vital 

 factor in our industrial economy is its technical unique- 

 ness. Through the initiative of an individual or through 

 the force of circumstances these small companies create 

 a unique position for themselves by providing services 

 or products that are too specialized for larger corpora- 

 tions to supply profitably. As an extreme example, we 

 have the very small concerns operated by tradesmen or 

 craftsmen whose claim to uniqueness is largely a per- 

 sonal service to a particular clientele in the comnnmity. 

 There are also those innumerable proprietors of small 

 businesses who cater to the needs of a locality and who 

 manufacture with a certain amount of ingenuity 

 products which for the most part are in common use. 

 Again, we have the inventor type who has succeeded in 

 building a small business around some technical 

 specialty for which there is but a limited demand. 

 78 



The more consequential small company for which 

 research begins to be a factor falls largely into the 

 following categories. It may be foumled upon some 

 specialized branch of technology, for example the 

 development and manufacture of a special type of gas 

 engine for use in outboard motors. It may cater in a 

 technical way to a selected market, as does the manu- 

 facturer of sporting goods, such as fishing rods and flies. 

 It may offer a unique technical product to industrj', 

 as for instance some small suppliers to the automotive 

 industry, such as the makers of windshield wipers. Or 

 it may offer a unicjue engineering service to industry, 

 as, for example, do production die makers. 



To obtain a measure of the extent to which research 

 proves to be a resource to the small compjvny, a lim- 

 ited though representative sample of 50 such companies 

 has been examined. In addition to these 50, on which 

 the statistical study in this report is based, a consider- 

 able number of others has been studied to give greater 



