fLhemicai —Engineering WALTER J. M U R P H Y , Editor
Mews
The Role of Research A F E W days ago, a close personal friend of long standing, a m a n trained as a lawyer, told us h e was about to become a member of the board of directors of a fairly large chemical company. I n the course of conversation, he posed this question—"Tell m e briefly w h a t I should know about the economic aspects of the chemical industry so I will understand better the role of research?" W e told him essentially: Chemical products and processes are typically short-lived because rapid technological changes effect rapid changes in the picture of who uses what, w h e n , and where . _ . and how it is best made. A change i n one chemical product, because of a new laboratory development, may make another obsolete. No wonder the old-fashioned banker shuddered at chemical stocks and suggested railroad bonds to widows. Large capital investment, although often necessary, does not ensure against short life of a process. Obsolescence usually is of a n entirely different order of magnitude in the chemical field from what i t is in other industries. For a chemical company to remain healthy, it must stay on the research merry-go-round a n d periodically pick off t h e brass ring. Even the manufacturer of fundamentally basic chemicals must support research or suffer the consequences. Another distinguishing feature is the need for very competent employees in both t h e professional and skilled labor categories. The average investment per chemical worker is very high because of the b i g investment in plants. Therefore, it makes good sense t o try and obtain the most intelligent and the best-trained employees available. A fourth characteristic is the fact t h a t the chemical industry is less affected b y business cycles and seasonal changes than other major industries. In a word, this is due t o a wide diversification which has come about as a result of research. A fifth characteristic is that the chemical industry enjoys relative price stability. However, over t h e long pull, chemical prices usually tend to go lower. The chemical industry has been built upon two fundamental concepts: (1) a belief in the value of research; (2) belief in the economic wisdom of reducing prices in order to increase consumption, thereby increasing production, thereby reducing manufacturing costs. A sixth point to b e remembered is some simple high school chemistry, namely, that -when two chemicals are mixed, there are by-products to think about as well as a main or major product. One of the reasons for the success of the chemical industry has been the ability of chemists to find useful markets for waste products. A sizable part of t h e 3 or 4% of sales volume that is spent over-all on research and development is devoted to finding markets for by-products.
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Next it is well t o keep in mind that chemical products are sold on the basis of function. Marketing chemicals is quite different from selling milady a hat. Most of t h e usually understood sales appeals are entirely out of place in the chemical industry. Research frequently plays a direct role in selling chemicals. Finally, it s h o u l d be pointed out that the chemical industry is its own b e s t customer; that manufacturers today sell most of their o u t p o t directly to the major consumers in contrast to the marketing procedures in force u p to and including World War I. Just because the chemical industry is its own best customer does not mean that less research is needed than in industries which sell mainly to other industries or directly to t h e consumer. And now t o speak even more directly on the subject of research, it is essemtial t h a t it b e properly financed; it must be continuously sustained in bad as well as good times. You cannot turn r e s e a r c h on and off like the spigot of a barrel and expect satisfactory results—ones that will pay dividends. You must «have clear-cut objectives in whatever research program you authorise. It is particularly important that directors, management, and y o u r research organization agree on what part, if any, of the total research budget is t o b e devoted to basic or nondamental research. It is also very necessary that all concerned liave the same understanding of the meaning of fundamental research. It is also imperative to know how much of the total is to be allocated for true applied research a n d what is to be charged to development. Research c a n only he a s good as is t h e competency of those who direct it and those w h o work at the laboratory bench. Kigh morale is essential in every segment of a company including the technical personnel. O n e final warning-research is not a panacea for all the ills that beset indostry. T h e most fruitful research program in t h e world will n o t offset indecision and incompetency elsewhere in a company. A. fairly sizable proportion of the failures of companies., big a n d small, can be traced to the fact that they neglectedi to guard against the kind of obsolescence that only research can prevent. Research directors and researchers are not miracle makers in t h e sense t h a t advertising copywriters use the term. Given proper support, something tangible to work with, and a reasonable period of time, the research team can and usually will malce the IdndL of contribution that will indicate the desirability of eorHmued support. Perhaps the.« axe other important angles which have been omitted, hut our lawyer friend insisted we be brief.
1953
1071
