In other fields like semiconductors, the United States has lost significant market share, just as she has in computers. This loss of market share, and loss of industry sectors, is reflected in a negative trade balance. This negative trade balance has persisted even though the value of the dollar fluctuated from high to low. Not even increasing exports of paper, wood, agricultural products, or scrap iron can offset our failure to maintain world market share in high-value products and growth sectors.
Content in trade does matter. Technology standing does matter. In fact, trade and our technology leadership—or lack of it—are leading indicators of what is in store for us. It does not take much intelligence to predict that the future competitiveness of the United States is seriously jeopardized if we do not fundamentally change our ad hoc technology policy.
These changes cannot be explained in their totality by simply stating that other nations are catching up with U.S. leadership, as some people assert. Neither can this change in status be explained by observing a shift in the technology paradigm, although both of these changes have an influence on the position of the country relative to its trading partners.
There are more fundamental forces at work. There is a certain amount of complacency in the business community, which has been hanging on to the past for too long. The Taylor approach to mass production is superseded today by new techniques that stress flexibility and variability. This change is supported by new tools and devices like robots, computers and programmable manufacturing cells. Economy of scope, rather than scale, is the organizing principle in this global economy, with information technology and knowledge-based industries playing an increasingly important role.
But other reasons contribute equally. For most of the postwar period, we created a vast array of new industrial sectors. Good times, and a growing economy, created waste and bureaucracy simultaneously, which left us with overbloated organizational structures that had too many levels, in a tall and narrow organizational pyramid.
Business decisions came to be based on criteria that were more curtailing and narrow in scope. The time horizons of business decisions narrowed considerably. Tomorrow's short-term profit-and-loss statements became more important and sacrosanct than the decisions required to ensure the long-term survival of the enterprise. Financial manipulations too often took priority over technical or product strategies.
These attitudes and shortsightedness can be laid at the door of industry and its managers. However, the federal government is not blame free.
The comfortable and self-righteous position of the last and present administration to ''let the market decide" can only work if one's major trading