Welcome to the Reagan Era: RTI in the Early 1980s

"A new generation of leadership was given the chance to perform"

The 1980s mostly overlapped with the administration of President Ronald Reagan–and Reagan's administration was predicated, at least in part, on reducing the size of the federal government. As a result, many federally sponsored projects were curtailed, especially in the social sciences, which had a negative impact on RTI's bottom line. 1981 and 1982 were especially difficult years for the Institute. Research revenues dipped to $40 million after cresting at a record $47 million in 1980, prompting corresponding reductions in staff, from 1,100 employees in 1980 to fewer than 850 the following year.

These government cutbacks, combined with societal changes in developing countries, prompted social scientists at RTI to look closely at opportunities in international development–an area that previously had not been a major focus. Many developing countries were decentralizing, moving an increasing number of government services from capitals to regional cities. "Local government planning and management was a pretty wide-open field at the time," says Jim McCullough, an urban planning and public financing specialist. "We offered our specialized expertise in how water systems could be financed, tax systems set up, and local governments budgeted and trained."

In 1983, president George R. Herbert restructured RTI to focus its resources on specific projects and programs. Dan Horvitz was appointed executive vice president, a new position with operating responsibility for all research activities at the Institute. Ten vice presidents reported to Horvitz, each responsible for a given unit's program and staff. "A new generation of leadership was given a chance to perform," says Alvin Cruze, who was named vice president of economics and social systems and later succeeded Horvitz as executive vice president.

But the 1980s weren’t only about retrenchment and reorganization. One month before Ronald Reagan assumed office, a piece of legislation with profound implications for RTI was signed into law. Known as the Bayh-Dole Act, it gave nonprofit research institutes and universities intellectual property control of inventions derived from federally funded research. Virtually overnight, a new revenue source had materialized for RTI.

"We'd never thought of commercializing the fruits of our research–our purpose was getting it out and letting people benefit from it," says Cruze, who joined RTI in 1965. "It took a while for us to realize we could now license the results of our government-sponsored research–not that this drove us in a different direction. We were still focused solely on improving the human condition."