are not high by U.S. standards. Aircraft is an example of a "high-tech" industry. Wages tend to be higher in the aircraft industry and other high-tech industries than in lumber and other low-tech industries. Much of our country's future economic well-being, then, depends on our ability to establish and maintain competitive positions in industries in which the value added by our labor is high.

The extent of the problem of competitiveness for U.S. industry can be indicated by the following statistics [3].

In 1989 the service sector generated a $20 billion trade surplus while manufacturing trade produced a $115 billion trade deficit. Petroleum imports produced a $50 billion trade deficit, while agriculture produced a moderate surplus. Current accounts were settled in part through the $72 billion worth of companies and real estate that were purchased by foreign investors in the same year. To paraphrase the discussion of Made in America [4], it will not be possible to close the trade gap through growth in the service sector. On the other hand, Quinn [5] argues that in the service sector high-technology capital investment has been rising rapidly since the mid-1960s. In fact, the service sector depends on manufacturing for its vitality, and cannot be expected to remain healthy while manufacturing continues to lose ground. Figures 2.12.4 show a consistent loss of U.S. market share for U.S. manufacturing across many industries over the last decade.

Several conclusions can be drawn from the analysis in this chapter. The historic record of economic success for the United States cannot be taken for granted in the future. Technology is an important aspect of economic success. The mathematical sciences are nearly always an integral part of that technology, both on the basis of computational simulation1 and on the basis of quantitative reasoning and modeling. Technology applies to all phases of the product cycle and is not simply a research and development activity. It is most effective when the interrelations among these phases are considered, such as the relations among


Simulation includes mathematical modeling and heuristic principles in order to represent on a computer real-world processes and systems (e.g., rush-hour traffic in a metropolitan area, the real-time operations of a large telephone network, or the flow of air around an aircraft). Computational and numerical analysis play a role in simulation. The distinction between simulation and computation, as defined here, is illustrated by the fact that a correct simulation must agree with the real-world process being simulated, whereas a correct computation must agree only with the mathematical model or equation being solved.

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