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V. CONCENTRATION OF RESEARCH; ASSOCIATIONS

AND COMPANIES

In 1958, approximately one-half of the almost 2,000 national trade associations were featuring discussions on technical research at their conventions, sponsoring research conferences or using other means to encourage their member and their industries to be "research-minded" as to new and improved products and production techniques. Several hundred associations were cooperating with universities, Government agencies and research institutions in laboratory investigations-yet it is likely that more than one-half of all research expenditures were by some 30 national associations. The situation was probably somewhat similar to that summarized in the National Science Foundation's previously mentioned "Research by Cooperative Organizations, 1953." A similar high degree of concentration in a comparatively few companies of the technical research done by individual concerns, is revealed in two Federal Government reports. In 1952, a survey was made for the Department of Defense by the U.S. Department of Labor resulting in a report entitled, "Scientific Research and Development in American Industry" (1953, 120 pp., 50 cents). As stated on page 1:

Nearly 2,000 concerns, including almost all companies with large research programs, sent in usable questionnaires. These companies employed about 61⁄2 million persons. *** The study covered most of the industrial research and development work in the United States-probably about 85 percent of the total ***"

It is stated elsewhere in the report that,

***

research employees totaled almost 240,000, of which 96,000
were research engineers and scientists. *** Approximately
half of these were working on federally financed projects
The largest 34 companies had 48 percent of all research
employees, and 54 percent of all research expenditures. The
largest 129 companies had 72 percent of the employees, and
78 percent of all expenditures on research.

There are at least 50 giant companies with 1,000 or more researchers, each. These are named in appendix A, compiled for this report from the latest (1956) edition of "Industrial Research Laboratories of the United States." This top group in research (and patents) activities have some 3,500,000 employees, including 150,000 technical research specialists.

In 1956, an even more extensive survey was made by the U.S. Department of Labor for the National Science Foundation, resulting in the 1956 NSF report, "Science and Engineering in American Industry" (120 pp., 70 cents). Approximately 20,000 firms were studied. They had some 400,000 employees in research and develop

ment, of which 157,000 were scientists and engineers. As stated on page 4:

Research and development activities are centered in large companies. The 400 companies with 5,000 or more employees did over 70 percent of the research and development work. The average ratio of research and development cost to value of sales was 1.7 percent for large- and medium-size companies.

About nine-tenths of the total cost of industrial research development was accounted for by these nine industries: Aircraft, electrical equipment, motor vehicles, chemical, machinery, professional and scientific instruments, petroleum, telecommunications, and fabricated metal products. The first two had two-fifths of the grand total for all industries.

From the above two studies it is seen that an overwhelmingly large proportion of research conducted by American business, with its 4,300,000 enterprises in 1958, is done by a few hundred firms of comparatively giant size. Only through cooperative effort, such as through the medium of trade associations, can most smaller firms financially arrange for direct participation in technical research.

Of all business enterprises, about 95 percent have 20 employees or less and 4 percent have from 20 to 100 employees. Thus, only 1 percent of all American business have more than 100 full-time workers. Of the more than 300,000 manufacturing firms, only 6 percent have more than 100 employees and 12 percent have more than 50 full-time workers. The great majority of members of the Nation's trade associations are firms of "smaller business" size.

VI. LARGEST FIELDS OF U.S. EMPLOYMENT IN 1957-58

The population of the United States reached 175 million in 1958. This is a 23 million increase since 1950. Decades ago, agriculture was the foremost employer. Now, business fields (marked with asterisks in the table below) are the largest job providers, and include about two-thirds of the 1957 total of 69 million employees, employers, and self-employed. Manufacturing is the leading single field, with about 25 percent; retailing is second; agriculture is third.

Most of the 3 million business employers, and many of the over 1 million no-employee business units, are members of the 2,000 national mutual aid organizations of businessmen. Well-managed associations constantly encourage research and business promotion to insure high levels of employment. Some 30,000 persons serve as staff employees of the 2,000 national associations and their 10,000 local area affiliates.

Sources: U.S. Department of Commerce. "Survey of Current Business," February 1958, and "National Associations of the United States" (and supplements).

34347-30.

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VII. THIRTY TYPES OF MUTUAL AID SERVICES OF TRADE ASSOCIATIONS IN THE UNITED STATES

What is the relationship of technical or industrial research by associations to the 30 typical activities of representative nonprofit organizations of businessmen?

Almost one-half of the nearly 2,000 national trade associations of businessmen in the United States are limited in size of staff, having five persons or less, so that a full program of activities cannot be carried on. Most of the some 10,000 local area associations are affiliated with these national groups, according to a U.S. Department of Commerce (Office of Technical Services) publication, "Directory of National Trade Associations: 1956." The number of such organizations has doubled since 1930.

Listed below are the 15 major activities of the average national associations of manufacturers; also, the 15 areas of activity which, in most industries, are of lesser importance. With staff assistance, committees of association members are appointed to study over, and held find solutions to, these specialized problems of the industry. It will be seen that the encouragement of industrial research is usually a continuing service of a majority of the national organizations.

A. FIFTEEN MAJOR OR PRIMARY SERVICES OF TRADE ASSOCIATIONS

(1) Serving as the industry's center of information on business facts and problems affecting the industry's employers, employees, and

customers.

(2) Issuing frequent (weekly, etc.) bulletins.

(3) Sponsoring frequent conferences and annual conventions.

(4) Keeping in touch with trade and professional associations in all related industries.

Engaging in:

(5) Government relations and legislative research: Federal and local.

(6) Industrial research: Encouraging members to realize the vital importance of technical research, to find new or improved products or manufacturing techniques. Only a small percent of associations provide financial support to a considerable extent, such as is required to establish an association laboratory.

(7) Commercial research: To find wider and more profitable markets.

(8) Public relations activities: The increase of consumer goodwill. (9) Sales promotion of the industry's products.

(10) Labor relations in general. (Few regular trade associations, however, go so far in employer-employee services as to act as the industry's collective bargaining agency for employers.)

(11) Statistics: Chiefly, republication of useful data from Government agencies and all other sources on current production, sales, etc., so that each member will have latest information on industry trends. Also economic planning surveys, that is, long-range studies of possible future years' trends as to competition from other industries, raw material supplies, production and distribution improvements, etc. (12) Uniform cost accounting and industry surveys of costs of production and distribution.

(13) Standardization, simplification, inspection, grading and certification.

(14) Studies of trade practices, unfair competition, and business ethics (false advertising, defamation of competitors, etc.).

(15) Commercial arbitration, between members, or between members and customers, both in domestic and in foreign trade.

B. FIFTEEN MINOR OR SECONDARY SERVICES OF TRADE ASSOCIATIONS

As a general rule, these services are of lesser importance in the program of a trade association of national scope than those listed above. (1) Foreign trade promotion: This would include surveys of foreign markets, tariffs, regulations, export and import statistics, and so on. (2) Legal advice on broad industry problems, but not acting as general legal adviser for individual members.

(3) Credit problems: This would also include studies of the industry's financing, credit, collection, cash discount, etc., practices. A small percent of associations operate an industry credit bureau.

(4) Insurance aid; also fire and accident prevention studies.
(5) Traffic problems; also some prepare freight rate books.
(6) Warehousing, packaging, and related problems.

(7) Patents, copyrights, trademarks and designs services.
(8) Field services, and branch office assistance.

(9) Exhibitions of the industry's products at trade shows. Most of the Nation's some 3,000 exhibitions each year are held by, or in cooperation with, trade associations.

(10) Aid in the exchange or resale of excess machinery and equip

ment.

(11) Operation of an employment placement bureau.

(12) Cooperation with trade associations in Canada, England, etc. (13) Engineering and inspection assistance.

(14) Specialized services: library, visual aids, management research,

conservation.

(15) Cooperative buying and selling. Only a small percent of businessmen's associations are active in cooperative buying or selling (however, these are major services of farmers associations).

A recent textbook on the activities of association management is a 1956 publication of 310 pages, "Trade Association Law and Management" by G. P. Lamb and S. S. Kittelle. (See bibliography.) The part which associations play in the research and other problems of smaller firms is thus summarized (p. 19):

Trade associations contribute to the preservation of small business by making it possible for the small firms to pool