Western Europe: The Research Gap

WESTERN EUROPE

With its classic respect for pure science and its fondness for academic titles, Europe was long the greatest repository of research for the world’s industries. But its crown has slipped since World War II. Of 40,000 patents granted in France last year, only 16,000 went to Frenchmen and the rest to foreigners, notably Americans. The West Germans, by latest count, spend $111 million a year more in fees to use foreign licenses than they collect from their own licenses abroad. Italy’s University of Pavia found that less than one-third of 965 companies it surveyed engaged in any research at all.

Some top managers take a defeatist stance. Said John Loudon, chief of the Royal Dutch-Shell Group (TIME cover, May 9, 1960): “In the case of research, we may have already reached a state of diminishing returns for our investment.”

Basic Loss. For research and development, both public and private, the U.S. last year spent $14.7 billion, or 2.8% of its gross national product. Among Europe’s big nations, only Britain invested about as much of its G.N.P.—2.7%. Germany spent only 1.4%, France 1.3%, and Italy a meager .4%. One reason for Europe’s low spending is that European governments have done little to spur research and development. Germany’s former Chancellor Konrad Adenauer was accused of pfennig-pinching, and his prospering government diverted only $700 million into R. & D. last year. By contrast, the U.S. Government’s bill mounted to almost $10 billion, and produced an industrial fallout of inestimable value to U.S. business. The push in aerospace alone has created an estimated 2,500 processes that can be used commercially.

The French, who now have “le plan” for everything, last year set up a government agency to regulate and stimulate research. It carefully selects public and private projects, issues orders as to what directions they should take, and subsidizes them—but on a budget of only $20 million. Sweden, with limited funds and a much smaller industrial base than the U.S., preplans and sets limited goals. Largely ignored, as a result, is the daring and unapplied “basic” research on which such teams as A.T.&T.’s Bell Laboratories thrive.

Exporting Men. Some European governments seem almost to discourage research. In Italy, until recently, private industry’s R. & D. budgets were taxed as hidden profits; in Germany R. & D. spending is hampered by low depreciation allowances. Germans also complain that the havoc of World War II slowed them grievously, and that higher-paying U.S. corporations continue to siphon off German scientists. General Electric recruiters recently interviewed 170 scientists in Germany, signed up 40 of them.

In most European nations, secrecy or carelessness makes for some misdirection in both state-subsidized and private research. Britain suffers particularly from a lack of priorities: its aircraft industry, which accounts for 4% of exports, reaps 38% of all research and development funds; but the machinery industry, which rings up 24% of all export sales, gets only 17% of the funds. “The present international research situation,” remarks London’s Financial Times, “is woefully inefficient and even bewildering.”