Converting to non-defense. Hi-tech Los Alamos seeks new peacetime industries

On the campaign trail, George Bush promised to maintain current levels of spending for high-technology military systems. That was welcome news to defense workers who are accustomed to talk of disarmament and are often concerned about their jobs. Employment worries are widespread in an industry where foreign policy shifts can end careers.

One place where the economics of arms reduction can have an almost immediate impact is the small city of Los Alamos, N.M., where the nuclear age was born. The Rev. Dale Arnink has served there for 12 years as a minister of the Unitarian Church. He is used to hearing concerns about employment. Every election, Mr. Arnink notes, people wonder, ``What if d'etente breaks out?''

Almost every wage-earner in Los Alamos works for the National Laboratory: a facility built secretly during World War II on the grounds of a private school. Isolated on a high mesa in the Jemez Mountains, the location is ideal for classified research.

But the isolation of Los Alamos has often brought uncertainty as well. After World War II, the laboratory was almost shut down. Several enterprising chief administrators saved the facility, then expanded it by extending the scope of its research. From nuclear weapons, the laboratory took on peacetime nuclear technology, then other energy-related projects, biotechnology, and computer science.

James Williams, deputy director of industrial applications, has worked at Los Alamos for 30 years. He has seen dramatic changes in the nation's research agenda. ``During the oil crisis of the 1970s, 50 percent of our work was devoted to energy research,'' he recalls. Some of that work continues. The Hot Dry Rock Geothermal Program is developing methods to extract natural heat from the upper layers of the earth's crust. Another group of laboratory scientists has published a handbook on passive solar heating that has sold 30,000 copies.

Today, half the research at Los Alamos is devoted to nuclear weapons. A quarter of it is unrelated to defense. The rest is devoted to the politically vulnerable Strategic Defense Initiative, or ``star wars.''

That is cause for concern in Los Alamos. Two years ago, Mr. Williams noted, 550 new people were hired for SDI research. But since then, a zero-growth policy has been in effect. With no increase in staff and high interest rates locally, the real estate market has bloated. Today, a record 300 homes stand unsold, says Sarah Fulbright, president of the local board of Realtors.

That's why some residents believe it's time to look for other sources of income, such as tourism. The city is at the center of eight Indian pueblos. But others see prospects for new industry based on high-tech spinoffs from the laboratory. Since the Stevenson-Wydler Act of 1980, a series of laws has opened federal labs to private entrepreneurs. Other legislation has increased federal scientists' proprietary rights to their discoveries.

Since 1985, a dozen new businesses have been formed from Los Alamos Laboratory research. Amtech Inc. commercialized a device for remote identification of livestock. Hot Hole Instruments marketed new well-logging instrumentation for the energy industry.

The bureaucratic term for commercializing research is ``technology transfer.'' Under the Stevenson-Wydler Act, each federal laboratory with more than 200 employees must assign someone that responsibility.

Los Alamos has hired a specialist directly from industry. Ronald Barks is a physicist and MBA who spent 16 years with high-tech firms in New England. Mr. Barks brings a broad Down East accent to his job in New Mexico, and a realistic view of its challenges. Many legal issues affecting ownership of intellectual property, conflict of interest, and confidentiality have yet to be resolved, he says.

But Mr. Barks is impressed by the potential of Los Alamos. He compares the laboratory with university-based research facilities across the country. Stanford earns $7 million a year in royalties from research. The University of California and the Massachusetts Institute of Technology each average $4 million a year.

Ninety percent of MIT's contracts come from federally sponsored research. Yet, as a non-federal facility, the institute has accumulated $50 million in royalty fees. Los Alamos, on the other hand, is currently negotiating its first royalty-bearing licensure agreement.

Other laboratories are on the technology transfer trail. Robert Stromberg, technology transfer officer at Sandia Labs in Albuquerque, N.M., reports that an average of 20 business owners visit the lab every day. ``Nine hundred companies have drawn technology from our labs during the past five years,'' he says.

Many observers believe that conversion to more non-defense work is coming, whatever its cost and dislocations. Hugh DeWitt, a staff physicist at the Livermore Laboratory in California, senses a growing expectation among defense scientists that the United States and the Soviet Union will sign a nuclear test ban treaty sometime early in the 1990s.

Others believe that defense is an inefficient source of jobs. Richard Williams, a Colorado economist, cites the Bureau of Labor Statistics: ``Only 34 cents of each dollar spent on the military go to jobs,'' he says. ``By contrast, 85 cents of each dollar spent on education or health go to jobs, 51 cents in trade, 40 cents in government, and 39 cents in heavy industry.''

That kind of argument may buttress efforts to find alternatives to defense research. Peace groups such as California's Center for Economic Conversion and Boston's Jobs With Peace oppose military spending as much on economic grounds as on moral principles. ``We have to get at the economic underpinnings of the arms race,'' says CEC director Michael Closson.

As for alternatives, Mr. DeWitt sees strong potential for energy research at Livermore: laser fusion, isotope separation for new forms of nuclear energy, and surface physics for solar energy.

There may be other prospects as well. Los Alamos has strong programs in medical technologies such as laser spectroscopy and radioisotopes. ``Research is unpredictable,'' Barks comments. ``You can't tell what will lead to a breakthrough in sensors or ceramics. But research is cost-effective. For every $100 spent marketing a product, only $10 is required to produce it, and only $1 to discover it in the first place. These national laboratories are an undiscovered investment.''