CONTEXT

The passing of a world order dominated by two military superpowers naturally focuses attention on the character that international relations will assume in the years to come. A central question is how the three economic and technological superpowers (the United States, Japan and a united Europe) will interact in a world where bipolar military confrontation is diminished and where all major nations have elected the market as the preferred organizing principle for economic activity.

As C. Fred Bergsten noted in his opening remarks for the conference, two opposing tendencies are already apparent. First, opportunities for fruitful cross-border technological exchange and collaboration, particularly between private sector actors, are expanding at a rapid pace. These opportunities are driven by the globalization of markets. They are also strongly affected by another trend: the passing of U.S. technological preeminence and growing evidence that the United States lags Japan in terms of capabilities to commercialize civilian technology.

The globalization trend is already well developed among the industrial democracies and promises to broaden as more countries move toward open, market economies. In the foreseeable future, firms from the United States, Japan, and to some extent Europe are likely to remain in the forefront of international collaboration in research and technology development. Therefore, a deepening and acceleration of U.S.-Japan interdependence in technology is a particularly conspicuous aspect of the globalization of markets.

Yet while globalization would seem to suggest an inexorable movement toward a more integrated world economy and U.S.-Japan relationship, the growing divergence in the innovative and commercialization capabilities of countries may point in the opposite direction. Technology-related issues are increasingly prominent among U.S.-Japan economic frictions. The weakening or elimination of bipolar tensions has ushered in a period in which economic issues will rise on the agendas of the advanced, industrial countries. In the absence of the Cold War threat that held these countries together, conflicts arising from competition for technological and economic leadership will almost surely be more difficult to resolve under the rubric of common security concerns.

In short, we appear to be entering a world in which there is more potential for beneficial technological interaction among the advanced industrial nations but where the stakes and potential for conflict are also higher. Needless to say, the United States and Japan will play major roles in shaping the global cooperative and competitive context.



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