A Slowdown in Growth in the Early 1970s

RTI struggles in a difficult economic climate–but not as much as other research institutions

In the early 1970s, it became clear to RTI president George R. Herbert that the Institute's revenues were lopsided, the lion's share deriving from government contracts. Seeking to expand the base of industrial and commercial clients to at least 25 percent of research volume, Herbert directed two researchers to put aside their usual work and undertake a detailed study of the subject.

In January 1972, after discussions and visits with numerous trade associations and more than 80 corporations, the study was completed. However, its recommendations, including patent development and the recruitment of experienced researchers from industry, did not gain much traction. "The long-term development of relationships with potential industrial clients just wasn't among RTI researchers' priorities," wrote Charles X. Larrabee in Many Missions, his book covering the Institute's first 31 years. "Their professional preferences all favored governmental or academic research over the problem-oriented, new-product [and] applied research needs of industry."

Adding to the problem, Larrabee says, the early 1970s were by and large a "gloomy" period for not-for-profit research institutes. During the summer of 1971, for example, the industry journal Chemical & Engineering News reported a combined growth rate of a mere 1.9 percent for nine research institutions, excluding RTI. Even in this difficult economic climate, though, RTI managed to increase its revenues by 43 percent over these same three years, which Herbert attributed to the talent of RTI's staff and their ability to foresee changes in the research climate.

The subject of diversification was put on the back burner for the time being, since RTI certainly was growing, if not quite at the pace it had set during the 1960s. More than $9.9 million in contract revenue was recorded in 1972, up from $4.7 million in 1967, and much of it deriving from RTI's broad range of quality-of-life research projects. Conversely, though, contract income in hard sciences and engineering, such as the Dreyfus Laboratory's polymers research, were stagnant, particularly after laboratory head Anton Peterlin retired in 1973. This decline occurred even though RTI had shifted its research focus toward applications-oriented projects–among them the development of biodegradable polymer capsules for the sustained release of hormonal substances, like contraceptive drugs.