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Series on PROSPERING IN A GLOBAL ECONOMY
Mastering a New Role
Shaping Technology Policy for National Economic Performance
Committee on Technology Policy Options in a Global Economy
NATIONAL ACADEMY OF ENGINEERING
NATIONAL ACADEMY PRESS
WASHINGTON, D.C.
1993
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NATIONAL ACADEMY PRESS
2101 Constitution Avenue, NW Washington, DC 20418
NOTICE: The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. Robert M. White is president of the National Academy of Engineering.
This publication has been reviewed by a group other than the authors according to procedures approved by a National Academy of Engineering report review process.
Partial funding for this effort was provided by the Alfred P. Sloan Foundation and the National Academy of Engineering Technology Agenda Program.
Library of Congress Cataloging-in-Publication Data
National Academy of Engineering. Committee on Technology Policy Options in a Global Economy.
Mastering a new role : shaping technology policy for national economic performance/Committee on Technology Policy Options in a Global Economy, National Academy of Engineering.
p. cm. — (Series on prospering in a global economy)
Includes bibliographical references and index.
ISBN 0-309-04646-7
1. Industry and state—United States. 2. High technology industries—Government policy—United States. I. Title. II. Series.
HD3616.U47N24 1993
338.973—dc20 93-3912
CIP
Copyright 1993 by the National Academy of Sciences. All rights reserved.
Printed in the United States of America
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Committee on Technology Policy Options in a Global Economy
HARVEY BROOKS, Cochairman, Professor of Technology and Public Policy,
Emeritus, Harvard University
JOHN S. FOSTER, JR., Cochairman, Chairman,
Defense Science Board
H. NORMAN ABRAMSON, Retired Executive Vice President,
Southwest Research Institute
JOHN A. ARMSTRONG, Vice President for Science and Technology,
IBM Corporation
ERICH BLOCH, Distinguished Fellow,
Council on Competitiveness
MICHAEL L. DERTOUZOS, Director,
Laboratory for Computer Science, Massachusetts Institute of Technology
BOB O. EVANS, Executive Vice President and Managing Partner,
Technology Strategies & Alliances
HAROLD K. FORSEN, Senior Vice President and Manager,
Bechtel Technology Group, Bechtel Group, Inc.
WILLIAM G. HOWARD, JR., Independent Consultant,
Scottsdale, Arizona
STEPHEN J. KLINE, Professor of Mechanical Engineering,
Stanford University
JAMES F. MATHIS, Chairman,
New Jersey Commission on Science and Technology
JOHN S. MAYO, President,
AT&T Bell Laboratories
M. EUGENE MERCHANT, Senior Consultant,
Institute of Advanced Manufacturing Sciences
JOSEPH E. ROWE, Associate Vice President for Research and Director,
University of Dayton Research Institute
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ERNEST T. SMERDON, Dean of Engineering and Mines,
University of Arizona
ALBERTUS D. WELLIVER, Corporate Senior Vice President,
Engineering and Technology, The Boeing Company
NAE Staff
PROCTOR P. REID, Study Director, Senior Program Officer
PENELOPE J. GIBBS, Administrative Assistant
MARGERY HARRIS, Administrative Secretary
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Preface
In recent years the national debate about technology policy has revolved around the relative roles of government, industry, and universities; of science and technology; and of defense and nondefense agencies. Governmental, academic, and industrial institutions, at the heart of our nation's technological enterprise, are midstream in a profound and sometimes wrenching reexamination of their missions and responsibilities as they seek changed roles in a new and unfamiliar world—a world without a Cold War but with new levels of global economic integration and and technological interdependence. There is a widespread recognition that U.S. economic performance and national security are intimately tied to the nation's ability to adjust its government policies and private-sector practices to a world economy rapidly being changed by transborder flows of goods, services, technology, and capital.
This report of a committee of members of the National Academy of Engineering addresses both goals for national technology policy and promising paths along which to pursue those goals. The report reaches back in time to World War II and examines the genesis of our nation's current policies. With that background, and bringing to bear some of the most recent experience and scholarship about how technology is used by successful companies to drive economic growth, the report argues that it is time for the U.S. government to master a new and unfamiliar role in helping the private economy develop and diffuse technology explicitly for purposes of enhanced economic performance.
On behalf of the National Academy of Engineering, I would like to thank the cochairmen—John Foster and Harvey Brooks—and the other members of the committee (named on p. iii) for their considerable efforts on this
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project. In particular, I would also like to thank Proctor Reid, the study director, who managed the project and helped elicit consensus among the committee members. Alexander Flax, NAE senior fellow, and Bruce Guile, director of the NAE Program Office, provided their valuable insights to the committee and the study director over the course of the project. Kathryn Jackson, former NAE fellow, contributed to the committee's work during the early stages of project, and several members of the NAE Program Office, past and present, deserve thanks for their help, including Barbara Becker, Penelope Gibbs, Margery Harris, H. Dale Langford, and Annemarie Terraciano. Funding for this effort was provided by the Alfred P. Sloan Foundation and the National Academy of Engineering Technology Agenda Program.
ROBERT M. WHITE
President
National Academy of Engineering
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Contents
EXECUTIVE SUMMARY
1
Trends and challenges
1
Goals and policy actions
2
1
BACKGROUND: THE POSTWAR U.S. TECHNOLOGY ENTERPRISE
7
Four distinguishing characteristics of the U.S. technology enterprise
8
The postwar performance of the U.S. technology enterprise in perspective
20
2
THE CHANGING DEMANDS ON NATIONAL TECHNOLOGY POLICY AND STRATEGY
28
Rising technical intensity and the revolution in production systems
29
Toward a technologically multipolar and interdependent world
40
The geopolitical premium on economic strength
52
Conclusion: Weaknesses exposed
55
3
STRENGTHS AND WEAKNESSES OF THE U.S. TECHNOLOGY ENTERPRISE
61
Strengths of the U.S. technology enterprise
61
Weaknesses of the U.S. technology enterprise
67
Conclusion: The need for change
84
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4
A NEW MISSION FOR U.S. TECHNOLOGY
91
Underlying trends and resulting challenges
92
Four goals of a new national technology strategy
93
Recommended policy actions
94
REFERENCES
110
BIOGRAPHICAL INFORMATION ABOUT THE COMMITTEE
122
INDEX
129
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Figures and Tables
Figures
1.1
Scientists and engineers engaged in R&D per 10,000 labor force, by country: 1965 and 1989
12
1.2
National shares of world high-tech production and trade, by country: 1970
21
2.1
Rate of issuance of design changes, patterns of U.S. and Japanese auto manufacturers
38
2.2
National R&D expenditures, by country: 1964–1990
41
2.3
Nondefense R&D expenditures as a percentage of gross national product, by country: 1971–1990
42
2.4
Trends in employment of scientists and engineers in R&D, by country: 1965–1989
43
2.5
Shares of global market for high-tech manufactures: 1980, 1987, 1990
45
2.6
Growth in world trade, output, domestic investment, and foreign direct investment: 1975–1991
46
2.7
Ratio of imported to domestic sourcing of inputs, average of manufacturing goods, by country
51
2.8
Number of new transnational corporate technology alliances, by industry: 1980–1989
52
3.1
Basic research expenditures, by country: 1988
62
3.2
Home market share of world consumption of high-tech products: 1988
64
3.3
Distribution of U.S. private-sector expenditure on formal training
73
3.4
Private industry expenditure on plant and equipment as a percentage of gross domestic product: 1972–1990
75
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Tables
1.1
Federal Government Role in the U.S. R&D Enterprise, Shares in Percent
10
1.2
Support for U.S. Academic R&D, Percent Shares by Sector: 1960–1991
11
1.3
National Security's Contribution to the U.S. R&D Portfolio, Shares in Percent
13
2.1
Changing Organizational Patterns in U.S. Industry
33
2.2
Use of New Technology in Manufacturing, Japan and the United States: 1988
39
2.3
Import Share of Domestic Market for High-Tech Manufactures, by Country: 1980, 1986, 1990
46
2.4
Foreign-Controlled Firms' Share of Total Business Enterprise R&D Expenditure, Employment, and Product Shipments in Manufacturing Enterprises in Six Countries
47
2.5
Measures of the Proportion of Foreign Direct Investment in the U.S. Economy
48
3.1
U.S. Competitive Position in Critical Technologies
79
3.2
Government R&D Support by Socioeconomic Objective, by Country: 1989
81
3.3
International Patent and License Transactions, Selected Countries: 1990
83
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Mastering a New Role
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