U.S. Economic Woes Expected To Limit Job Opportunities For Scientists In Industry

Slowdowns in corporate R&D are foreseen, which, experts reason, will cut employment potential for researchers in 1993 The 1993 employment outlook for scientists in industry is marginally optimistic, at best, according to various economic indicators and industry experts. With the exception of a few sectors that, as a result of sustained consumer demand, appear relatively recession-proof, such as the pharmaceutical and biotechnology industries, hiring will be tied to the sluggish recovery of the economy as a whole, they say. But it is more than fallible macroeconomic forecasts that cloud the picture of industrial R&D in the near future, analysts say. Other factors include: a new, untested Democratic administration; the world's changing political map; and a shifting perception of just how much basic research, independent of market demands, corporations can afford to finance. All of these ingredients contribute to a puzzle that many analysts and industry insiders are finding difficult to put together. And though the cyclical swings in the economy and resultant ebb and flow in the demand for new employees are to be expected, some industry insiders are predicting that, with this recession, the nature of corporate R&D may have changed forever. Although the specifics of President Clinton's first budget will not become known until late winter or early spring, Albert H. Teich, the American Association for the Advancement of Science's director of science and policy programs, says that there are a number of specific tools Clinton could use to help brighten the outlook for corporate R&D: An R&D tax credit. This would provide financial incentive for a corporation to invest in research and development. Technology extension services, modeled after the current United States Department of Agriculture program. These would send government-employed technical experts out into the field to provide assistance and advice to small businesses that don't have their own R&D capabilities. Consortia, formed by industrial firms in a given sector and with government support (modeled on the Sematech consortium of semiconductor manufacturers). These would help corporations advance their common interests by sharing work at the precompetitive level of underlying technologies. A revision of antitrust legislation. Joint research is already allowed under current antitrust law, but Teich suggests that Clinton might expand this practice to manufacturing. Government programs to facilitate the redeployment of highly trained scientists displaced from the aerospace and defense industries. Finally, Teich points out that "all of the things that would improve the climate for industrial research would improve the employment possibilities for scientists." "I am not optimistic that corporate basic R&D is going to make a big comeback," says Trueman Parish, director of special projects development at Eastman Chemical Co. of Kingsport, Tenn. "Even if we have a very robust economic turnaround, the overall expenditures for a corporation might go back to the same level, but they will have a very different character. There has been a real shift toward emphasis on business organizations and market- driven re- sponses to market needs, vs. just developing new technology in a vacuum and hoping there is a market out there." To be sure, outside of the aerospace and defense industries, companies are doing some hiring. And certain technical specialties, such as hydrology and other environmental-related disciplines, and industry sectors, such as biotechnology, should see significant expansion throughout 1993, industry observers predict. But Tom Parent, manager of professional recruiting for General Electric Co.'s corporate R&D division in Schenectady, N.Y., is one of many recruiting managers who are being inundated by applications from an increasing number of frustrated scientists. "These are good people who would like to contribute," he says, "but the jobs are just not there." Indeed, a July 1992 survey of 141 of the 257 R&D company members of the Washington, D.C.-based Industrial Research Institute (IRI) resulted in the institute's prediction that "1993 will see the recession continuing for industrial R&D in the United States." The survey found that 28 percent of responding companies expected to decrease their total R&D expenditures from 1992 levels (vs. 19 percent in 1991 and 16 percent in 1990); only 10 percent expected to increase hiring of new graduates, while 40 percent expected a decrease; and 84 percent expected their R&D professional staffing level to remain unchanged or to drop from 1992 levels. And Columbus, Ohio-based Battelle Memorial Institute, an organization that develops, commercializes, and manages technologies, forecasts--based on information compiled from the National Science Foundation federal budget documents, and other sources--that 1993 industrial support of R&D will be $83 billion. This represents an increase of just 2.4 percent from 1992, a rise that shrinks significantly when juxtaposed with the expected 1993 inflation rate in excess of 2 per-cent. Eastman's Parish, one of the authors of the IRI report, says he wasn't surprised by the institute's results. "R&D is about the last place companies are willing to go back and expand after a recession," he says. But the appearance of a downswing is exacerbated, Parish says, when compared with the boom years of the 1980s, at which time most R&D companies saw an annual growth rate in the 5 percent to 6 percent range. "Compared to that, the current 1 percent growth in budgets is depressing, and doesn't create the demand for many people." Through an examination of surveys and an informal sampling of some R&D leaders in a variety of industry areas, The Scientist has attempted to gain a better picture of the employment outlook for scientists in industry over the coming year. Chemical and Engineering News (Oct. 19, 1992, page 24) has called 1992 "perhaps the worst year in a decade to be looking for a job in chemistry or chemical engineering." Indeed, an annual survey conducted by the American Chemical Society has found that the unemployment rate has risen dramatically since 1990, that the length of average unemployment increased during 1992, and that more Ph.D. chemistry graduates are taking postdoctoral appointments, rather than finding jobs. The ACS prediction for its members in 1993 is that the outlook for Ph.D. chemists is "bleak." Industry is hiring some chemists, albeit at a reduced level (Edward R. Silverman, The Scientist, Jan. 25, 1993, page 21). And, because the fortunes of chemical companies are tied so closely to the economy as a whole, ACS predicts that employment of chemists overall will improve, but slowly, throughout 1993. At Dow Chemical Co. in Midland, Mich., a hiring freeze has been in place for all of Dow North America since late last year. And Dennis Guthrie, manager of Ph.D. recruiting for Dow, reports that he expects to hire fewer than 30 scientists for corporate R&D in 1993--less than half of the number of positions filled during an average year. E.I. Du Pont de Nemours & Co. Inc. of Wilmington, Del., has been downsizing over the past couple of years, too. According to Parry M. Norling, planning director for corporate R&D at Du Pont, most of this has happened through the use of incentives for early retirement. And while Norling projects that hiring there will be up 20 percent to 30 percent over the coming year, he also says that Du Pont's research budget is tightening (normally $1.3 billion, it is set at little over $1.2 billion for 1993, he says). Norling reports that strategic approaches to R&D at Du Pont are changing as a result. "We're looking for more efficient and effective ways to get the job done," he says. Whereas in the past, for instance, Du Pont might have had three people working on the safety of and regulations regarding the use of lasers, now the firm is trying to spread the talents of one employee more effectively. "We're doing a better job of leveraging our support work across the company," he says. Aerospace, defense, and, to some extent, electronics firms have had to institute aggressive layoff and voluntary separation policies in response to the dramatic decline in the defense industry, and that trend will not change in the foreseeable future, industry experts predict. Even large corporations like General Electric, whose operations comprise 13 different businesses, are facing some rough times. Parent reports that, while to date GE has not had to actually lay anyone off, it has been downsizing through attrition: "We've been in a nonexpansion mode for the last four to five years." Parent adds that in 1993 he expects to hire only 50 scientists within corporate R&D, all of whom will be replacement hires. The situation for earth scientists employed in the petroleum and gas industries is expected to continue to decline, as well. Nick Claudy, manager of human resources for the American Geological Institute of Alexandria, Va., reports that these firms have been forced to lay off technical staff members as existing sources dry up and competition has increased from abroad over the past couple of years (Edward R. Silverman, The Scientist, Dec. 7, 1992, page 23). The American Association of Petroleum Geologists (AAPG) in Tulsa, Okla., reports that employment prospects in the mining and minerals industry are also pretty flat. But there is some good news on the horizon for earth scientists. With the current trend toward environmental awareness, both associations report a bright outlook for hydrologists, hydrogeologists, and scientists experienced in the areas of toxic waste and waste management. Oil companies need people to help them develop "cleaner" methods of drilling and are looking for more efficient ways to extract oil from existing wells, Claudy says. And Larry Nation, spokesman for AAPG, anticipates that many petroleum geologists will return to school for retraining in geology and hydrology, as the demand for environmental consultants skyrockets. Another industry sector that appears to be weathering the economic downturn intact is the pharmaceutical business. The Washington, D.C.-based Pharmaceutical Manufac- turers Association reports that R&D spending by its approximately 105 member companies increased in 1992 to $8.8 billion in the U.S. and $10.9 billion worldwide (up from $7.7 billion and $9.6 billion, respectively, in 1991). But while research budgets and hiring needs are expected to continue to increase moderately throughout the pharmaceutical industry, some external factors could negatively impact this market sector in the near future. One, says Ann Price, a scientific recruiter who works in the San Francisco Bay area, is potential drug price capping legislation that has been under discussion in Congress. "If drug companies are worried about how drug prices will be regulated and are not confident regarding their lobbyists' impact on a new administration, they will tighten their belts," she predicts. And Erwin Posner, president of the Professional Advancement and Placement Institute, a science recruiting firm in Southfield, Mich., says that the large number of prescription drugs slated to come off patent--and therefore become open to competition from generic equivalents--in the next few years also poses a problem for the large pharmaceutical firms. "They are tightening up on their research budgets now because they are concerned about how their income is going to support the continuing research," he says. Posner has been surprised over the past year to have some of his traditional corporate pharmaceutical clients tell him that they have a hiring freeze--even though, judging by their current sales, they appear to be doing well. The one area of optimism for corporate R&D appears to be biotechnology. Though Price stresses that, owing to the nature of science, fortunes and the demand for staff can change literally overnight, she has not witnessed any kind of slowdown in demand or opportunities for scientists in biotech; nor does she expect to over the coming year. The biotechnology industry has experienced some major setbacks in the past year and a half, but most of them have been attributable to regulatory agency complications, rather than to the troubled U.S. economy. The most recent example has been Malvern, Pa.-based Centocor Inc.'s January 18 announcement that it was stopping clinical trials of its antisepsis drug Centoxin because of problems. Last year, the U.S. Food and Drug Administration rejected Cen-tocor's request for approval of the drug, citing deficiencies in the company's data. A subsequent trial was halted after an unexpectedly high number of patient deaths. The news caused the company's stock to plunge 62 percent and raised questions about the health of the entire industry. But analysts disagree about the consequences of these setbacks, and many companies are moving ahead with research and clinical trials of their products. At Amgen Inc. of Thousand Oaks, Calif., for example, Chris Giffin, associate manager of research affairs, anticipates a 25 percent to 30 percent growth of employees for his company in 1993. (Amgen currently employs 600 to 700 scientists.) "We're in the human therapeutic business, developing treatments for diseases which currently have no adequate therapy; these kinds of things are not really influenced by swings in the economy," he says. Indeed, the success of Amgen's therapeutics Epogen and Neupogen is funding the company's current expansion. And the unprecedented number of biotech products expected to hit the market from several different companies over the next few years should help the outlook of this industry as a whole. Both Price and Giffin report that, as the biotech industry has matured, there has been a broadening in the types of scientists whom firms have been seeking. Whereas 10 or 15 years ago, companies were primarily hiring just molecular biologists, now they also are recruiting various types of cellular biologists, physiologists, neurobiologists, and organic and synthetic chemists, they say. But whatever the demand for scientists in any specific area, recruiting managers across virtually all industry sectors are reporting increasing competition for the jobs that are available. Norling at Du Pont reports that currently, for about 200 openings in corporate R&D, his company has roughly 2,000 active candidates. "Our pipeline is full right now," he says, "and the quality of candidates is excellent." Meanwhile, Dow's Guthrie reports an increase in students who want on-campus interviews with the company, as well as older applicants who already have industry experience. At GE, Parent is happy to reflect on the positive side of such a tight job market: It allows him to "cherry pick" the best people for his company. Suzanne Simala at Eli Lilly & Co. in Indianapolis also reports that the steady increase in the ratio of applicants to openings means that her company can be more choosy in whom they hire: In 1992, 40 percent of all scientists hired by Lilly had prior work experience in their fields. The recession also has caused industry executives to reassess the goals of their research. At Du Pont, Norling says, management is "spending more time looking at how long-range research ties into the long-term business outlook, and we are focusing research more on fundamental technologies that cut across a number of areas that will be in market demand." At GE, too, "the charge increasingly is to get R&D projects out into a business division," says Parent. He points out that this objective has real ramifications for the type of scientists GE is seeking to hire. "We are more interested in looking for a person who is interested in taking what has been done in the lab and putting it into business to become more competitive, vs. the person we would have hired a few years ago, who is interested in developing basic new technology." What other traits on a scientist's resume might strike the right cord with corporate recruiters? Du Pont's Norling says that, however tough the times, his company is specifically concerned with recruiting "new blood" into the organization, to ensure that Du Pont keeps abreast of newer technologies and techniques, such as innovative methods for making polymers. With this in mind, he says that Du Pont "still desperately needs to bring polymer chemists, chemical engineers, and biologists on board." Betty Devinney, employment manager for Eastman Chemical Co., reports that changing political and economic geography is having a direct impact on whom she hires. "Our market is no longer a domestic one, it's global: Fifty percent of our sales are international, and we are in the process of moving our manufacturing sites closer to our customers." As a result, while technical fit is still the first thing she looks for in a job applicant, she is increasingly concerned with finding scientists who can help Eastman's multinational effort succeed. Willingness to relocate overseas, international residency, having worked or traveled abroad, and bi- or multi- lingual skills--"anything that signifies appreciation or understanding of other cultures"--all raise her interest in a scientific candidate. John Oxton, manager of corporate Ph.D. recruitment for Armonk, N.Y.-based IBM Corp., cites the litany of characteristics he looks for in a candidate: "technical expertise, a track record of proven accomplishments, motivation, leadership and interpersonal skills, initiative, independence, the ability to generate ideas and communicate abilities, and raw intellectual power." Susan L-J Dickinson is a freelance writer based in Philadelphia.

U.S. Economic Woes Expected To Limit Job Opportunities For Scientists In Industry

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