Industrial Research 



79 



validity to the generalizations drawn. Outstanding 

 concerns were selected for stiuly in 6 industrial centers 

 in New England. This is not, then, a typical sample 

 of the small company, for the purpose is not to present 

 a cross section of the industry hut rather to present 

 the clearest examples of the extent to which research 

 has proved of benefit to the small company. For this 

 purpose, obviously, companies of little technical accom- 

 plishment would add little to our Icnowledge and so 

 they have been neglected in order to concentrate at- 

 tention on more successful research methods. But in 

 the latter category as much diversity as possible was 

 achieved in location, type, and size. 



The 50 companies of the sample range in size from 

 33 wage earners to 1,500. Their total assets, as repre- 

 sentative of capital employed in the business, range 

 for the majority from slightly over $150,000 up to 

 $2,500,000, wliile 7 companies having somewhat larger 

 total assets were included in order to provide a connect- 

 ing link between the typical sample of small company 

 and those of larger proportion. To provide sufficient 

 diversification, the companies investigated include 

 those that were manufacturers of machine tools, process 

 equipment, control instruments, prime movers, mechan- 

 ical appliances, metal products, rubber, leather, tex- 

 tiles, foods, drugs, pharmaceutical supplies, and a lim- 

 ited number of consumer goods. 



Extent of Research in Small Enterprises 



Research for the small company must be viewed on 

 the basis of the defuiition of Dr. C. F. Hirshfeld, the 

 late director of research for the Detroit Edison Company, 

 "research consists of organized fact-finding."' It then 

 becomes a question of the extent to which organized 

 fact finding has been carried by companies witliin this 

 category. The markedly different circumstances of 

 the field of business, the character of the market, the 

 complexity of technology, and the severity of competi- 

 tion make it difficult to draw specific conclusions. The 

 outstanding fact is that, whatever be the extent of or- 

 ganized fact-finding among small businesses, research 

 in the broadest sense gives to such concerns a resource 

 for rendering a imique technical service to industry or 

 the community whereby they hold tlieir place in com- 

 petition. These companies draw in turn upon teclmi- 

 cal institutions, suppliers, equipment manufacturers, 

 customers, and at times competitors, for technical de- 

 velopments to supplement their own activities. 



The small enterprise has the option of carrying on 

 whatever sort of research it can afford, of developing its 

 own technique, of training its own technicians and 

 experts, of acquiring new knowledge by hiring trained 

 engineers or by participating in professional-society 



■ Davis, H. N.* and Davies, C. E. Industrial research by mecbaoical engineers. 

 This volume, p. 329. 



activities, by paying for the services of consultants or 

 scientists, by financing s|)ocific research projects through 

 technical institutions, or by buying outright new tech- 

 nical developments or inventions from individuals or 

 other coinpaiiics. These o[)tions are not, of course, 

 mutuallj' exclusive; a company may use first one and 

 then another as the need arises, or more than one may 

 be utilized simultaneously. In fact, the intermittent 

 and irregular use of such kinds of research is the most 

 striking characteristic of its use by the small company. 

 Research is thus ])oth a dire(;t and indirect resource to 

 the small enterprise; it benefits not only from its findings 

 but also from the contributions it is able to make to 

 others. 



The importance of research to the small enterprise is 

 brought out by the fact that 12 of the companies 

 interviewed admit that should they immediately cease 

 all forms of organized fact finding in which they are 

 now engaged, they would be forced out of business 

 within a year, while 17 would be seriously affected by 

 the loss of competitive position that would immediately 

 ensue. Six others acknowledge that after a period of 

 approximately 3 years they would forego all technical 

 uniqueness. On the other hand, 13 companies whose 

 distinctive position rests more in serving a selected or 

 regional market or in acknowledged consumer goodwill 

 recognize that the cessation of research would only 

 inhibit the long-term growth of the company. Only 2 

 companies went so far as to assert that the technology 

 of their field had become so well developed that any 

 effect would be merely incidental. 



Of the competitive forces that impel small companies 

 to undertake research, two are of primary importance. 

 The first is the need to satisfy the specific teclmical 

 requirements of industrial customers; an example would 

 be the manufacture of machine tools for specialized 

 operations. The second is the necessity the small 

 company faces of meeting technical competition wath 

 unique developments of its own, as, for example, in the 

 development of impregnated fabrics in such articles as 

 shoe laces. Of almost equal significance is the expressed 

 desire of small entrepreneurs to excel in a specialized 

 field of technology or to establish themselves in a sector 

 of a market which they are peculiarly qualified to serve. 

 An example of this last would be the manufacture of 

 vitamins and hormones. In a few instances the small 

 company holds the position of pioneer on the frontier 

 of nn evolving art, as in the use of cast beryllium copper 

 for molds and dies. In the area of consumer goods, 

 factors of market competition take precedence over 

 technical considerations in determining the character of 

 research activities. In many retail products, for ex- 

 ample, the package is likely to be at least as important 

 as the product and the elements of appearance and 

 style are given much attention. 



