October 9, 1984 EXTENSIONS OF REMARKS 31089 EXTENSIONS OF REMARKS THE STATE ROUTE TO HIGH research consortium called Microelectronics tiona! concern as public schools and better TECHNOLOGY: NO EASY ROAD and Computers Corporation <MCC>. The roads. Typically, however, state programs consortium hired a former deputy head of recognize that economic development is the Central Intelligence Agency, Admiral linked to technology and that technology in HON. MARILYN LLOYD Bobby Inman, to run MCC, and the admiral turn builds upon scientific research, public OF TENNESSEE set out to find a permanent home for his education, and the investment of capital. IN THE HOUSE OF REPRESENTATIVES new company. Why should states be involved in all this? Admiral Inman and his associates toured In part because they have unique capabili­ Tuesday, October 9, 1984 the country like an imperial court as mayors ties that flow from a longstanding relation­ e Mrs. LLOYD. Mr. Speaker, the dis­ and governors extolled the virtues of their ship with education. Elementary and sec­ tinguished Governor of Arizona, the respective sites and offered up such tangible ondary education is a state and local respon­ Honorable Bruce Babbitt, has au­ inducements as real estate, research facili­ sibility. State universities have long been thored a thoughtful article, "The ties, and endowed professorships. When the the center of agricultural research, and in bidding finally peaked with an unbeatable recent years they have expanded into medi­ States and the Reindustrialization of offer from Texas, Inman had secured a mul­ cine, computers, electronics, bioengineering, America," which appeared in the fall timillion dollar package, including thirty materials science, and other fields. State 1984 "Issues in Science and Technolo­ million dollars in faculty endowments at the economic development planning, the in­ gy." Governor Babbitt has served as University of Texas in Austin, thirty-seven volvement of states in budgeting university the chairman of the Western Gover­ million dollars in equipment and operating research, and the demand of the private nors' Policy Office and the Nuclear expenses, twenty acres of land a nominal sector for university excellence have made it Safety Oversight Committee. He is an rent in the Balcomes Research Park, twenty possible to build close connections between author of several books and has writ­ million dollars worth of office space, subsi­ university research and economic develop­ ten a most valuable article which out­ dized home mortgages for MCC employees, ment and job creation. a petty cash fund of a half-million dollars Recent changes in the American economy lines the problems and opportunities for country club initiation fees and other have enhanced the role of state and local for the Federal Government and the services, and a Lear jet with two pilots avail­ governments in formulating industrial States in the massive effort to achieve able at all times. Some sixty mayors and policy. In past decades, technology had a "the reindustrialization of America." twenty-seven governors complained about centralizing impact. Only massive multina­ Governor Babbitt notes the critical the unfair advantage of Texas oil money tional corporations joined with big labor need to nurture technology from the and promised their constituents a better and big government to dominate our eco­ laboratory bench through the applied showing next time. nomic life. Washington and Wall Street research stage on the way to product The great MCC bidding war marks a spe­ made economic policy, and governors and development by noting, "[tlhe fruits cial chapter in American industrial history. state legislators contented themselves with State and local governments across the placing ads in the Wall Street Journal offer­ of university research and develop­ country have discovered scientific research ing tax breaks and discount real estate to ment activity has little economic value and technological innovation as the prime any company willing to locate a branch fa­ unless they are systematically harvest­ force for economic growth and job creation. cility. ed in the marketplace." And local officials have also uncovered a The microelectronics revolution is now ex­ While realizing the necessity for broad base of public interest that can be erting an opposite, decentralizing force in growing industry /university ties in re­ translated into support for aggressive action the American economy. Big growth in the search, he notes that it is not without programs. With the exception, perhaps, of technology sector is coming from hundreds problems: "[tlhe emerging university­ the post!Sputnik era, such grassroots enthu­ of new companies that did not even exist a siasm for science and technology had not few years ago. From Massachusetts to Cali­ business ties raise subtle issues of aca­ been seen since the Gilded Age of the nine­ fornia, software companies in backyard ga­ demic freedom, proprietary restric­ teenth century, when communities vied to rages are taking root and moving into the tions on the dissemination of informa­ finance the transcontinental railroads. national market overnight. The near mythi­ tion, and patent and royalty rights." This renewed public interest in industrial cal story of Steven Jobs and Apple Comput­ He also comments on the rapidly innovation and technological progress is er inspires dissatisfied and restless corpo­ achieved national consensus on up­ rooted, in some measure, in the sharp eco­ rate engineers to think about starting their grading the quality of our schools and nomic recession and increase in unemploy­ own businesses. our teachers: "[tlougher academic ment that began in 1980. It is a product of The process of decentralization has also Japanese competition and of a growing been accelerated by the liberation of indus­ standards and objective performance awareness that helping new, small business­ try from the constraints of geography. A requirements, with greater emphasis es creates more jobs than trying to lure circuit manufacturer or software company, on math and science, are now the rule giant smokestack industries. There is a real­ with a high value added product and insig­ across the Nation." ization that technology-the application of nificant transportation costs, no longer Governor Babbitt also recognizes the scientific knowledge-is the basis for eco­ needs a deep-water port or proximity to coal fact that the lure of high technology nomic expansion and diversification, the fields and steel mills. The new technology may be somewhat illusory and sug­ key to the formation of new business, and enterprise is free to locate anywhere its gests an alternative: "[tlhere should the competitive survival of old ones. This is founders wish to go. very much a grassroots phenomenon, devel­ The technology-driven decentralization of be more attention to using electronic oping and taking shape through independ­ the American economy and the dominant technology to upgrade and revive tra­ ent efforts in thousands of communities, role of small business in job crreation were ditional regional industries." hundreds of universities, and fifty state leg­ confirmed in 1979 by a landmark study un­ I hope that this article will catalyze islatures. dertaken by David Birch of the Massachu­ more thoughtful debate on the ques­ Across the country, governors have ap­ setts Institute of Technology. Based on a tion of this country's high technology pointed public commissions to examine the computerized analysis of six million busi­ future and help to dispel the prevail­ role of state and local government in eco­ nesses in the United States, Birch concluded ing misperception that the path of nomic revitalization and to make recommen­ that small businesses (those with fewer dations for stimulating economic growth. In than twenty employees) generated two­ many States to such a future is easy or some states, the recommendations of these thirds of all new jobs. Here were shared even necessarily desirable: commissions amount to a state industrial data reaffirming the diversity and decen­ Two years ago ten American high technol­ policy, a comprehensive plan addressing all tralization of the American economy. The ogy companies, including Control Data, aspects of governmental performance in­ Birch study conveyed a strong message that Honeywell, Lockheed, Motorola, Sperry, and cluding taxation, expenditures, regulatory state and local policies could be the crucial NCR, stepped forward to meet the Japanese policy, infrastructure development, and edu­ factor in the use of science and technology challenge for supremacy in supercomputer cation. Other states have proceeded more to create and sustain new companies and development by pooling resources to form a cautiously, emphasizing such areas of tradi- new jobs. e This "bullet" symbol identifies statements or insertions which are not spoken by the Member on the floor. 31-059 o-87-26 (Pt. 22) 31090 EXTENSIONS OF REMARKS October 9, 1984 Nearly every state has increased its sup­ ship, and a supportive university adminis­ Egyptian cotton led to the Pima cotton that port for university-based research and de­ tration. The availability of venture capital became Arizona's major farm crop. velopment. In the West, state legislatures, and professional management skills is also The Morrill Act also provided a unique lobbied by both businessmen and academics, important. Most universities have little American model for transferring university have come to understand