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Applied research also turns up rich and diversified rewards. Chrysler Corp.'s research in hydraulic pumps for cars resulted in a hospital pump that delivers liquefied natural food directly to a post-operative patient's stomach, eliminating the need for intravenous feeding in many cases. General Motors' development of a sensitive device to test automotive parts yielded an electronic "stethoscope" for doctors.
Applied research can often turn migraines into moneymakers. In the manufacture of chlorinated biphenyl, widely used for insecticides, Monsanto's Anniston, Ala., plant was swamped by a useless fluid residue. But when researchers found a new product, HB-40, that uses the waste fluid to give greater flexibility to plastics, Monsanto salvaged twelve million pounds of stored-up residue, started making the onetime waste product.
Despite the task force approach, research is not a monopoly of the big companies. Many small companies that cannot afford full-scale research programs of their own can hire top outside brains to solve their scientific problems. Companies such as B. F. Goodrich and General Dynamics specialize in product development to fit other companies' requirements. Even corporations with their own big laboratories often hand over research projects to scientific contractors such as Boston's famed Arthur D. Little Inc. (1955 gross: $11 million), whose 800-man research staff has developed products ranging from rubber cement to a better instant coffee. Research is also farmed out to nonprofit institutions and universities, which, before World War II, had a virtual monopoly on basic research.
Some companies still contend that fundamental research should all be done on the campus, where it is free from sales-department pressure. Others work closely with universities. Du Pont helps keep in academic touch by retaining 70 university professors as consultants. Many company research centers, e.g., G.E.'s Schenectady laboratories, cultivate a "congenial" atmosphere of academic leisure. Industrial jobs frequently give top scientists greater freedom than university posts.
How does management decide whether research will pay off? Says one executive: "You're always on a tightrope. Either you spend too little for research and your product is years out of date, or you spend too much and it's years from production." To cut the average ten-year time lag from test tube to cash register, most companies rigorously analyze even the most promising leads in terms of cost, marketability, timeliness and practicality, reappraise the potential new product at every stage of development. At Bell Labs, systems engineers spend years checking research developments against rival theories and the existing mechanisms they will outdate. They argue: "If it works, it's already obsolete."
Some companies allot to research a fixed proportion of sales (from less than 1% for transportation companies to more than 6% for big electrical and chemical manufacturers), give research directors a free rein in pursuing likely leads. Esso Research measures each venture by its "probability ratio," i.e., the value of the potential product, multiplied by the probability of successful research, divided by the cost of the work.