By Robert S. Boyd Knight-Ridder Newspapers

WASHINGTON -- For most of this century, it was the engine that made the United States the science and technology champion of the world. But now the great American research machine is sputtering.

Private industry, the federal government and the universities -- the three pillars supporting the nation's $180 billion scientific and engineering establishment -- are pinching pennies, downsizing and concentrating more on practical, short-term research projects than on discovering the underlying mysteries of nature.

A source of special concern is the stagnation of corporate research. The legendary laboratories of companies like AT&T, IBM, DuPont, General Electric and General Motors have either shrunk in size or narrowed their research and development (R&D) work to areas likely to improve sales and profits.

Facing intense competition and rapid product turnover, companies are ``cutting costs to the bone and using available research money on projects with near-term payoffs,'' said John Gibbons, the White House science adviser.

``Their headlights are lowered; they can't look ahead so far,'' Gibbons said.

Leading scientists, academicians and government officials worry that this focus on a quick return on investment threatens the long-term health of the U.S. economy.

They point out that it was basic research in physics, chemistry and biology that led, over time, to inventions like telephones, television, computers, spaceships and wonder drugs.

For example, AT&T's Bell Laboratories -- home of seven Nobel Prize winners, birthplace of the transistor, laser, solar cell, communications satellite, stereo recording and cellular phone -- has not decreased the size of its research budget, but has changed its direction.

``Bell Labs has been reorganized to support product development for AT&T's operating divisions,'' said Rep. George Brown, D-Calif., former chairman of the House Science Committee. ``It now performs a fraction of the long-term, path-breaking R&D it once conducted.''

William Brinkman, a Bell Labs vice president, defended the change.

``What's important today is different than 25 years ago,'' he said. ``There is no divine right to support a field of science forever.''

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BellCore, the high-tech communications laboratory created by the seven regional Bell telephone companies after the breakup of AT&T, is up for sale because its owners are no longer interested in sharing a common research facility.

In the aerospace and defense industry, ``the trend is clearly to do less fundamental science and engineering and focus more than usual on applied research for perceived mission needs,'' said Noel Hinners, a vice president of Lockheed Martin Astronautics in Denver.

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More than half the companies with research budgets over $10 million expect to trim staffs and cut spending in 1995, R&D Magazine reported after a survey of 1,500 firms.

IBM's research budget shrank by 27 percent after adjustment for inflation between 1989 and 1993, according to an analysis of 2,800 companies last year by Schonfeld & Associates, a market research firm in Lincolnshire, Ill.

DuPont, the huge chemical conglomerate, spent 30 percent less in real dollars over the same five years; McDonnell Douglas Corp., the aircraft maker, 52 percent less; Texaco, the oil giant, 26 percent less.

Some companies, to be sure, are expanding their R&D budgets: Merck & Co., a big pharmaceutical firm, increased its research spending by 34 percent from 1989 to 1993; Boeing, the aircraft maker, spent 89 percent more; Microsoft, the computer software leader, added a whopping 134 percent.

But as a whole, corporate research is not keeping up with inflation, according to Charles Larson, executive director of the Industrial Research Institute, which follows trends in the field. Private investment is flat, he said, and government research contracts are shrinking.

Larson expects industry investment to perk up a bit this year, thanks to improving corporate profits. But he cautioned: ``We may be hurting ourselves 10 to 15 years down the road.''

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Albert Rubenstein, a professor of industrial engineering at Northwestern University in Chicago, deplored the fading emphasis on long-term research and development.

``When sales go down, management cuts R&D,'' he said. ``It's a vicious cycle.

Rubenstein blamed Wall Street's focus on quarterly earnings for part of the problem.

``The security analysts poison the atmosphere,'' he said. ``A chief executive officer may have a vision, but he is chopped down by security analysts and pension fund portfolio managers.''

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Working scientists are also disturbed.

``In the go-go 1980s, profit was everything, so R&D had to go,'' said Mike Jones, a computer scientist at Los Alamos National Laboratory. Richard LeSar, a Los Alamos specialist in advanced materials, added, ``It's one of the biggest crimes in science.''

Industrial R&D is a vast and complex enterprise, served by three quarters of a million scientists, engineers and technicians in over 13,000 laboratories in the United States.

Corporate laboratories employ three out of every four U.S. scientists and engineers; universities employ 18 percent and the federal laboratories only 6 percent, according to the National Science Foundation.

Industry will spend an estimated $130 billion -- $107 billion from its own funds, most of the rest from government contracts -- on R&D in 1995. Only 8 percent of this sum will go for basic research, Larson said. The bulk of the funds are for product design, testing and research closely tied to the company's business lines.

Meanwhile, federal and university outlays for science and technology are flat or declining. President Clinton's $1.6 trillion budget for the next fiscal year earmarks $72.1 billion for R&D. This is a reduction of 0.2 percent in current dollars -- 3.1 percent after inflation is taken into account -- according to an analysis by the American Association for the Advancement of Science.

``This would appear to be the first time in recent memory that a president's proposed budget has not contained at least a current-dollar increase in total R&D,'' Rita Colwell, president of the science association, told the House subcommittee on basic research last month.

Even deeper cuts are promised by the new Republican majority in Congress.

Republicans have already trimmed $1 billion from this year's research budget. Rep. John Kasich, R-Ohio, chairman of the House Budget Committee, has projected additional cuts of $2.5 billion from science and technology next year, and $13 billion over the next five years.

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Gibbons, the White House adviser, called the proposed cuts ``a ruthless attack on this nation's future.''

The United States ranks 28th in the world in the percentage of its national wealth it spends on non-military research, he said. ``We're pretty low on the totem poll. How much lower are we willing to go?''

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Republican leaders defend their research policy. They contend that reducing taxes and ending unnecessary regulations will do more for science and technology than federal spending.

Ned Heindel, president of the American Chemical Society, said a permanent R&D tax credit would be one way to get industry to stop ``downsizing, eliminating or disbanding its own fundamental research laboratories.''

Mary Good, 63, has spent her life in all three branches of the research world -- 20 years as a university professor, 13 years with AlliedSignal, an engine manufacturer, and 11 years as a government official, most recently as chairman of the National Science Board.

Good, now undersecretary of commerce for technology in the Clinton administration, worries about the future of science and technology.

Ever since General Electric founded the first centralized industrial research laboratory in 1900, she said, corporate R&D has produced ``a parade of progress ... The technology bucket was relatively full.''

But now, Good told a congressional committee, corporations are ``dipping out of the technology bucket, and they're no longer putting anything in. That's new.''

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(EDITORS: Graphic (04-17 RESEARCH) available from KRT Graphics Network; for information on graphic, call 202-383-6064.)

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