By Steven R. Rivkin
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S. Secretary of Labor to launch a similar program of regional studies on a nationwide basis of similar problems and of welfare, education, unemployment, and housing. Nonetheless, however novel the approach of the California studies, some reservations must be noted about the capabilities of the experiment to serve as a model for the salvation of either the aerospace compan- 42 TECHNOLOGY UNBOUND ies or of society. From the point of view of the companies, research and analysis in public domestic problems is not profitable and apparently not capable of usefully employing large numbers of scientists and engineers now engaged in defense work; one contractor reports that 47 per cent of its professional personnel committed to the project were neither scientists nor engineers.
In tracing out the consequences of a defense cut on the reabsorption of scientists and engineers elsewhere in the economy, Nelson was guardedly optimistic. Assuming a temporary surplus of R&D personnel and a commercial scramble for new markets, he forecast an intensification of research and development by industry (with salaries holding fairly 26 TECHNOLOGY UNBOUND firm but economies perhaps m a d e in the relatively m o r e expensive support costs for R&D) so as to boost sales via the development of new products.
Battelle's summary comments interpreting the table are as follows: The implications are clear for Assumption 3 (reduced procurement). Less than 1000 companies will face any signifi- PROBLEMS OF ADJUSTMENT 49 cant problems. A few hundred may have a few years of losses or no profits, and those with a single product line dependent on a single weapons systems would have more difficulties than a diversified company. The implications of Assumption 2 (Stage I, GCD) are also rather clear. Between 1500 and 2000 firms will have extremely serious profit or survival problems.