How to Sharpen the Cutting Edge : Franklin should attack the R&D; problem

Barbara H. Franklin, President Bush's nominee to become the next secretary of commerce, brings to the job splendid credentials as head of her own corporate consulting company.

With the U.S. economy still trying to crawl out of the hole it dug with its massive accumulation of debt in the 1980s, her apparent talent for making business tick is just what the White House needs.

It is also a plus that she is not scheduled to replace Robert A. Mosbacher until sometime next month, when he leaves to head Bush's reelection campaign.

That should give Franklin, one of the first women to graduate from the Harvard Business School, time to bone up on a crucial challenge to America's hope of regaining its global competitiveness--dwindling budgets for research and development. It will give her time to argue at the White House that there is nothing inherently wrong with the government's helping to pay for commercial research and development and that, in fact, it is inherently right if America is to hold its own in world trade.

The federal role in research is increasingly crucial because hard times are forcing too many companies to cut research budgets for any program that cannot promise reasonably quick profits.

This emphasis on immediate return has even invaded AT&T;'s Bell Laboratories, perhaps the best industrial think tank in the world, now being pressed to think less of basic research and more of gadgets to sell.

Research budgets are further threatened by impending raids on Defense Department funds that have been used on projects such as high-definition television, a technology with important defense and commercial applications.

As of the late 1980s, California had a larger stake in maintaining healthy levels of research spending than any other state. Nearly 20% of all money spent on R&D; in the United States was spent on work in California laboratories and shops.

That also makes the Batelle Research Institute's forecast of R&D; spending for next year bad news generally and worse news for California. As Times writer Jonathan Weber reported this week, Batelle thinks private and government research spending will barely keep up with inflation in 1992.

The Bush White House too often worries about excessive government intervention in the economic process when it hears the words "more R&D.;" So venturing into tight budgets to find money for research on future American products will not be easy for Franklin--just rewarding for the nation if she prevails.

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