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Senator STAFFORD. Thank you very much indeed, Dr. Willoughby.

The Chair is beginning to feel a little bit frustrated by the fact that another rollcall is in progress, which I did not anticipate. Dr. Leeson, I guess it would be best if, with deep regret, I recess here once again long enough to again go over and vote, rather than have you testifying with no member of the committee here to hear you.

So, we will again, with reluctance, have to recess the committee long enough for its chairman to go and vote.

Whereupon, a brief recess was taken.]

Senator STAFFORD. The committee will please come to order. At the time the second rollcall caught up with us, we were about to hear Dr. Leeson. Without further ado, Doctor, we would be delighted to receive your testimony.

Dr. LEESON. Thank you very much, Mr. Chairman, Senator Pell. I sit before you a product of the NSF fellowships of two decades ago, and I commend that path as one that would be interesting.

I would like, with reference to the parable of the blind man and the elephant, to provide you with an industry viewpoint of certain portions of the problem under discussion. I represent the American Electronics Association, an association of 2,000 electronics manufacturers with over a million employees.

As I am sure you are aware, electronics and information technologies are major contributors by creating jobs and by creating productivity in other sectors. By the end of the century, it is expected that electronic and information technology will be the second largest industry in the United States.

The area I would like to focus on today is the upper level of the academic spectrum. Industry requires, in order to carry out its mandate in international competition, both military and economic, a reliable supply of brain power. I am wanting to focus today on the leveraged individuals—those individuals such as faculty and creative technologists who themselves create many additional jobs, sometimes in many cases 20 to 50 other jobs, through their own efforts.

In absolute terms, as I am sure you are aware—and there is written testimony with data-by comparison both to our trading partners and our military competitors, the United States is not doing well in the generation of technology creators.

The view of our members is that there is a bottleneck at the very top of the educational chain which is impacting the entire chain. We have data which suggests that, today, two out of every three qualified and acceptable applicants to colleges of engineering are turned away and lost to society as a result of the lack of facilities and faculty at those colleges.

I believe very strongly that if we can resolve some of those problems, that will create a vacuum on the rest of the system which will benefit the entire society. This is due to a shortage of two elements; one is faculty and the other instructional equipment.

The faculty shortage is, I believe, in large part due to the low salaries relative to industry and to inadequate teaching laboratories. Many faculty who would otherwise stay in school to teach do not find the equipment adequate to perform the job.

[Whereupon, Senator Pell resumed the Chair.)

Dr. LEESON. I think that it is important to ask two questions, then. What should the public response be and what should the private sector response be?

AEA has responded by creating from among its members the Electronic Engineering Foundation. EEF is committed to creating 500 faculty grants for salary assistance and graduate fellowships. These are all incentivized toward preserving the individuals who receive these in teaching. They are returnable to AEA if the individuals leave teaching within a specific period.

A number of companies have banded together in various efforts and industry has contributed a major element to advanced education. We can identify some 200 to 300 million of industry contributions that specifically aid the creation of technology creators, and I am speaking today specifically with reference to the education of those folks who will create the technology that the rest of us will use, as opposed to the also very important issue of educating the general public in technical literacy and the equally important issue of retraining those folks who have been displaced by the advances in technology in the economy.

I know of no way to slow the advance of technology; if we do not do it, our trading partners will. I think that it remains then to ask what is an appropriate Federal response. From the industry viewpoint, we would benefit greatly from additional Federal incentives by way of tax incentives, permitting industries to contribute even further.

believe that we also feel very strongly that the problems at the very top of the academic chain, if resolved, can provide a tremendous incentive, raising the level of the entire rest of the academic area.

We would like to see leveraged action, particularly by way of tax issues. Companies are currently incentivized by way of the 1981 Tax Act to contribute equipment to universities for research purposes but not for teaching purposes.

Furthermore, many universities cannot accept even the equipment which is offered because there is no tax incentive for the accompanying service contracts, and the universities are not themselves able to provide the maintenance of equipment which is offered to them.

We would like to see the R&D tax credit extended beyond 1985, specifically with reference to educational impact. We would like to see the expansion to incentivize the donation of equipment, particularly instructional equipment, to community colleges, which are currently excluded, as well as 4-year institutions.

We certainly would suggest a resumption of support of faculty fellowships, with an incentive provided to those individuals who will stay with teaching.

The industry appreciates the opportunity to address you, and as you develop legislation, we would certainly hope to participate.

Thank you.

[The prepared statement of Dr. Leeson follows:]

Statement of David B. Leeson

for the American Electronics Association

Before the Subcommittee on Education, Arts, and Humanities
Committee on Labor and Human Resources

United States Senate

March 8, 1983

Summary

· The U.S. electronics industry is experiencing a growing

shortage of the specific skills needed to maintain and expand our position in the world economy.

The magnitude of the problem continues to increase.
• The most serious current problem restricting the

increase in electrical and computer science engineering
graduates - those specialties of highest need to
electronics - is the shortage of faculty and
instructional equipment in undergraduate programs.
AEA has established the Electronics Education
Foundation to encourage and aid contributions by member
companies to engineering universities.

The federal government can help significantly by
enacting tax policies which encourage additional
private sector action.

ACA American Electronics Association

1612 K Street, N.W., Washington, D.C. 20006

Statement of David B. Leeson

for the American Electronics Association Before the Subcommittee on Education, Arts, and Humanities Committee on Labor and Human Resources United States Senate

March 8, 1983

[blocks in formation]

I was educated at Caltech, M.I.T. and Stanford, and a substantial

portion of my graduate education was supported by federal and

industry fellowships.

I received my Ph.D. degree in 1962.

I am

a member of the Board of Directors of the American

Electronics Association (AEA) and am appearing before you today

on behalf of that organization.

The American Electronics

Association represents over 2,000 growing high technology

companies throughout the U.S.

The Association's membership

includes all segments of the u.s. electronics industry, including

computers, telecommunications, defense, instruments, semi

conductors, software, research, and office systems.

While the

Association numbers among its members many of the largest

electronic manufacturers, a majority of AEA's member companies are relatively young innovative organizations employing fewer

than 500 employees.

In aggregate, AEA companies employ over

1,000,000 Americans.

The electronics and information technology companies are major

contributors to the industrial development of the United States,

both through the creation of jobs within the industry and through

the improvement of the productivity of all other sectors of the economy These same technology companies are also key resources in the national defense. The industry has had a phenomenal

growth rate of 17% over the last decade, and currently ranks

ninth among U.S. industry categories.

By the end of the century

electronics and information technology industries are expected to

rank second.

Sales of the top 100 electronics companies increased 46% between

1979 and 1981; this is reflected in the creation of a substantial

number of u.s. jobs within the industry.

Additionally, the

electronics and information technology sector is a bright spot in

the continuing creation of innovative and entrepreneurial new

companies which have proven the ongoing source of economic growth

in the U.S. economy.

In addition to ongoing need for capital and a favorable

regulatory climate, the electronics industry requires a reliable and growing pool of brainpower and know-how. In many portions of

the industry, each innovative engineer can create 25 to 50 additional jobs. It is on this leverage potential of the

technology-creators--the electronic/electrical and computer

engineers--that I would like to focus today.

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