major competitors has increased dramatically over the past two decades. U.S. firms can improve their performance in moving technology into the now global commercial marketplace (technology commercialization), where they face this challenge, and speed the transfer and adoption of new technologies throughout the economy. Federal government policy can affect industrial performance in these areas.

In addition, problems associated with design for manufacturability, incremental improvements in product and process technology, relations between suppliers and customers, and quality control require attention. These problems have little to do with the commercialization of new, innovative technologies, but progress in raising U.S. performance in these areas is critical to long-term economic advance. The time required to go from product design to commercialization in some important U.S. industries significantly exceeds that of foreign competitors, for example. The new competitive environment for technology development means that continuous improvements by U.S. firms in manufacturing process technology will be necessary. Progress here remains primarily a private sector responsibility.

The panel believes, however, that modifications in federal technology policies can also strengthen national performance in civilian technology and enhance long-term economic growth. The U.S. performance (relative to its past) in technology is being challenged more strongly than ever before in the postwar period. The United States can strengthen technology commercialization, at a stage prior to that at which private firms invest in commercialization activities, through federal action to facilitate pre-commercial R&D. There is a legitimate federal role in this area. The science and technology enterprise is not characterized by a linear model of development, as we have seen. It is an intense, interactive process whereby investment in pre-commercial activities can help promote commercialization and thereby support productivity growth. The United States can construct a technology policy (and design a program) that avoids direct subsidies for firms and industries, while at the same time supporting and leveraging U.S. comparative advantages in technological innovation.

NOTES

1.  

For an overview of productivity and investment see, John Wilson, ''The Contribution of Infrastructure, Human and Physical Capital, and R&D Investments to Productivity Growth'' (Paper prepared for the Science, Technology, and Economic Policy Board, National Research Council, Washington, D.C., March 1991).

2.  

Eugene Kroch, "Recent Real Income and Wage Trends in the United States," Federal Reserve Bank of New York Quarterly Review 16 (Summer 1991):36-39.

3.  

Steven Englander and Axel Mittelstadt, Total Factor Productivity (Paris: Organization for Economic Cooperation and Development, 1988), 8.

4.  

The administration has requested $26 million in fiscal year 1992 for a new program to improve the collection and analysis of economic statistics/data by the federal government.



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