TEXT E
There is widespread belief that the emergence of giant industries has been accomplished by an equivalent surge in industrial research. A recent study of important inventions made since the turn of the century reveals that more than half were the product of individual inventors working alone, independent of organized industrial research. While industrial laboratories contributed such important products as nylon and transistors, independent inventors developed air conditioning, the automatic transmission, the jet engine, the helicopter, insulin, and streptomycin. Still other inventions, such as stainless steel, television, silicons, and plexiglass were developed through the combined efforts of individuals and laboratory teams.
Despite these findings, we are urged to support monopoly power on the grounds that such power creates an environment supportive of innovation. We are told that the independent inventor, along with the small firm, cannot afford to undertake the important research needed to improve our standard of living while protecting our diminishing resources; that only the prodigious assets of the giant corporation or conglomerate can afford the kind of expenditures that can produce the technological advances vital to economic progress. But when we examine expenditures for research, we find that of the more than $ 35 billion spent each year in
this country, almost two- thirds is spent by the federal government. More than half of this government expenditure is funneled into military research and product development, accounting for the enormous increase in spending in such industries as nuclear energy, aircraft, missiles, and electronics. There are those who consider it questionable that these defense - linked research projects will account for an improvement in the standard of living or, alternately, do much to protect our diminishing resources.
Recent history has demonstrated that we may have to alter our longstanding conception of the process actuated by competition. The price variable, once perceived as the dominant aspect of the competitive process is now subordinate to the competition of the new product, the new business structure, and the new technology. While it can be assumed that in a highly competitive industry not dominated by a single corporation ,investment in innovation - a risky and expensive budget item - might meet resistance from management and stockholders who might be more concerned with cost -cutting, efficient organization, and large advertising budgets, it would be an egregious error to assume that the monopolistic producer should be equated with bountiful expenditures for research. Large - scale enterprises tend to operate more comfortably in stable and secure circumstances, and their managerial bureaucracies tend to promote the status quo and resist the threat implicit in change. Furthermore, the firm with a small share of the market will aggressively pursue new techniques and different products, since with little vested interest in capital equipment or plant it is not deterred from investment in innovation. In some cases, where inter -industry competition is reduced or even entirely eliminated, the industrial giants may seek to avoid capital loss resulting from obsolescence by deliberately obstructing technological progress.
The conglomerates are not, however, completely exempt from strong competitive pressures; there are in- stances in which they, too, must compete, as against another industrial Goliath, and then their weapons may include large expenditures for innovation.
It is the author’s belief, as expressed or implied in the passage, that ______.