WASHINGTON—A large black bust of Thomas Edison greets visitors to the Naval Research Laboratory (NRL) here. Established in 1923 at the famous inventor’s urging, the lab was for more than 20 years the federal govemment’s sole facility for fundamental research in the physical sciences.

NRL remains the Pentagon’s flagship research facility, conducting work in such fields as space, new materials, microelectronics and artificial intelligence. Some 700 of its 1,600 scientists and engineers hold doctoral degrees—triple the number of Ph.D.s employed at any other of the 100-odd laboratories and R&D centers directly run by the Department of Defense. But despite a tradition of fundamental research that includes a recent Nobel Prize in chemistry to Jerome Karle, the laboratory is “not an ivory tower,” said Fred Saalfeld, who took over last month as director of its parent organization, the Office of Naval Research (ONR). “What’s important is what the Navy can use,”...

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