Americans don't know much about genetic engineering, and in their ignorance they tend to exaggerate both the risks and the benefits of biotechnology. So wrote the authors of The Novo Report, an opinion survey sponsored by the Danish company Novo Industri A/S, one of the world's largest manufacturers of insulin.

Nearly 40 percent of the initial 1,000 adults telephoned at random to participate in the study were immediately disqualified because they had never heard of genetic engineering. Of the 613 who finally took part, 70 percent said genetic engineering should be regulated -- but the vast majority were unable to say precisely how.

When they were asked, "Would you say you personally understand the moral and ethical issues of genetic engineering well enough to take a firm position on how it should be regulated?", 66 percent of those polled answered "No."

"This means that roughly four in five Americans either don't know what genetic engineering is or don't know enough about the science to understand the ethical issues involved," the report's authors concluded. "If the public is to play any role at all in helping to determine how much regulation there should be and which agencies should be involved, they will need a greater understanding of what genetic engineering is and what its potentials are."

These findings confirm those of earlier surveys, most notably the so-called Cambridge Report, that asked people to describe genetic engineering in their own words. About half the population in that 1982 study couldn't even hazard a guess, and many who did obviously were confusing genetic engineering with other items in the medical news, such as test-tube babies or generic drugs.

The Novo Report respondents, despite their lack of information, were gung-ho about using genetic therapy in the treatment of human diseases, the sort of treatment that the so-called human genome project would facilitate. A majority of respondents (67 percent) approved of inserting artificially altered genes into a human to cure a genetic illness, and a smaller proportion, but still a majority (53 percent), approved of similar manipulations in fetuses. Surprisingly, those surveyed also overwhelmingly approved of manipulating the genes in a woman's egg cells or a man's sperm cells; 75 percent of them favored using such techniques.

Other scientists are using genetic techniques to make plants resistant to frost and disease.

The high rates of approval for human gene therapy might be explained in part by the way the questions were worded. The emphasis in these questions was on the benefit, as in: "If scientists could prevent hereditary diseases by changing some genes in a woman's egg cells or a man's sperm cells, so the disease can no longer be passed on to the next generation, should this be allowed?" Using buzz words like "prevent" and "cure," pointed out a panel of 29 experts that Novo contacted to react to the results, might have helped bias the responses.

Or the favorable responses could have been, as one of the experts put it, proof of the old axiom that a little knowledge is a dangerous thing.

In general, those who understood genetic engineering the best tended to find it the least threatening. Respondents most supportive of genetic engineering tended to be male, under age 45, college educated and urban. Those least supportive tended to be female, over age 45, with only a high-school education and from small towns.

The Novo Report authors urged policy makers to restrain the public's optimism about genetic engineering -- and to restrain the public's fears about its risks. Both goals would be served by a major public education campaign, they wrote, because "exaggerated expectations in both areas stem from a common source: an overestimation of the geneticists' precision and control over the changes they can make in living organisms."

The authors said their survey sample did not seem to understand that scientists are limited in what they can do, and in the havoc they can wreak, because they "must work with the raw materials that nature provides."

The authors concluded that the current level of general understanding about genetic engineering would hamper the development of any social or political consensus on the issue. "It would be foolish to postpone this debate until the day a geneticist announces the ability to remove the genes for sickle-cell anemia or improve the strength of our cardiovascular system by borrowing DNA from other primates," they wrote. "The sooner we begin, the better."