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



The National Academies | 500 Fifth St. N.W. | Washington, D.C. 20001
Copyright © National Academy of Sciences. All rights reserved.
Terms of Use and Privacy Statement



Below are the first 10 and last 10 pages of uncorrected machine-read text (when available) of this chapter, followed by the top 30 algorithmically extracted key phrases from the chapter as a whole.
Intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text on the opening pages of each chapter. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

Do not use for reproduction, copying, pasting, or reading; exclusively for search engines.

OCR for page R1
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

OCR for page R1
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

OCR for page R1
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

OCR for page R1
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

OCR for page R1
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

OCR for page R1
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

OCR for page R1
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

OCR for page R1
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

OCR for page R1
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

OCR for page R1
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

OCR for page R1
Mastering a New Role

OCR for page R1
This page in the original is blank.