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Index Abernathy, William J., 160 Abr~movitz, Moses, 4, 21 Accounting practices, research treatment in, 112 Accrediting Board for Engineenag and Technol- ogy, 256 Adjustment mechanisms In market forces, 19, 20, 21 Agent Orange, and damage awards, 193, 209 Agncultural Research Institute, 337, 339, 352 Agricultural Research Service, 119 Agriculture adoption of new technologies in, 8, 319, 334 entrepreneurship in, 352 labor force in, 354 productivity of, 359 land available for, 345, 348 productivity in various countnes, 346 and growth in U.S., 353-354 research and development in, 333-354 in biological and chemical technology, 344 345 expenditures by public and private sectors, 337-343, 353 funding of, 154, 352-353 for mech~ni7~*on, 34~341, 344 for plant vaneties, 341-343 and productivity growth, 33~336 rate of return from, 308, 310, 33~335 by state experiment stations, 339 technical changes in U.S. and Japan, 345-352 technological strength in U.S., 395 Ailbus Industries, 299, 490 AirczaR industry 623 competitiveness of, 489~91 and Concorde as commercial failure, 147, 277, 299 economic benefits of jet engines in, 25 financing by banks, 461 innovations in 28~281, 299 in Japan, 557, 559-560 new technology affectung, 495 ong~ns of turbojet engine, 285 shortage of trained personnel in, 494 495 Altshuler, Alan, 134 Amdahl, Japanese investment in, 426 Amender Association for the Advancement of Sci- coce, 128 American Electronics Association, 468 American National Standards Institute, 160 American Society for Testing Materials, 160 Ames test for mutagenic chemicals, 198 Antirust policies modifications On, 132, 161, 188, 524, 53~532 res~icove effects of, 259 Aoki, Masahiko, 3, 7, 11, 12, 14, 15, 16, 569- 581, 593, 595, 607 Apollo, performance in stock market, 470 Apparel industry competitiveness of, 486 487 innovations in, 280 productivity grown in, 331 Arab oil embargo, 19, 72-73 Adler, Wemer, 220 Argentina, agricultural producu~nty of, 346 Arrow, Kenneth J. 312, 384 Arthur, Bnan, 364 376, 385

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624 Asbestos use, litigation concerned with, 181, 193 Aspin, Les, 134 AST Research, 474 Atkinson, A., 396 Atomic Energy Commission, 125, 130 Australia agricultural productivity of, 346 exploitation of gas resources in, 462 Austria, agricultural productivity of, 346 Automobile industry competitiveness of, 481-482 decline in, 542 development costs in, 300 and unproved c~uretion-induction system, 291, 292 indirect subsidies for, 120 investments in research and development, 134 in Japan, 85-87, 328, 395, 482, 542 management problems in, 495 new technology affecting, 495 patents affecting mnovanons in, 316 productivity in, 328, 331 in Japan and U.S., 85-87 regulations for, and technological innovations, 159-160 supplier industries for, 281 Avon, stock issues in, 468 Ayres, Robert U., 146 Baker, James, 507 Baker, William O., 9, 227-254, 607 Baldwin, Robert H. B., 14, 467-471, 608 Bangladesh, agnculn~ral productivity of, 346 Banks aid to emerging companies, 459 460 costs affected by technology, 367 financing of innovations, 11, 453 465, 476- 477 in large established companies, 4~62 as global ~nee~medianes, 463 464 lending to start-up companies, 457-459 regulations in U.S., 459, 464 role in financial system, 4S6-457 technological innovations in, 454 456 Barrow, Robert, 45, 46 Baruch, Jordan J., 132 Baller, Raymond A., 130 Baxter, William F., 132, 188 Bechtel, Stephen D., Jr., 4, 14, 115-118, 608 Belgimn agncultum1 productivity of, 346 defense expenditures in, 108 government expenditures in, 111 Bell Laboratones, 230, 250, 254 Berg, Paul, 220-221 Bergstrom, Sune, 264 Bhopal tragedy in India, 208, 400, 419, 421 Biotechnology, 429-435 development costs in, 299 and development of plant vaneties, 341-343 export policy for, 431 435 funding for research in, 154, 353, 43~431 govemment-sponsored programs for, 122 opportunities and risks in, 43~433 patent protection in, 433 INDEX products produced by, 429, 432 regulations in, 433-435 for recombinant DNA, 223-224 and time needed to big products to market, 429, 432 Gaining of personnel in, 431 venture capital in, 431 Birch, David L., 519 Biros, G., 309 Black box of technology, viii, 4, 5-6, 278-279, 280 Blackwelder Company, 341 Boeing, 87, 277, 299, 461 as parmer win Mitsubishi, 86 Bohr's complementarily principle, 246 Bok, Derek, 270 Boskin, Michael J., 2, 3, 5, 6, 7, 8, 15, 33-55, S85, 586, 587, 608-609 Boston Consulting Group, 414 Bower, Joseph L., 156, 532-533 Bowers, Albert, 9, 11, 13, 14, 16, 511-515, 609 Boyer, Herbert, 358, 429 Bracero program, ending of, and mechanization un agriculture, 341 Bragg, Lawrence, 215 Brandt, John P., 341 Brazil, agricultum1 productivity of, 346 Brenner, Sidney, 213 Bnush Petroleum, 105, 112 Brookhaven National Laboratory, 139 Brooks, Harvey, 2, 4, 6, 109, 119-162, 227, 229, 394, 418, 527, 530, 609-610 Brooks, S., 595, 602, 603 Bruce, Sharon Schur, 329 Budget projections to 1989, 48 Bureaucracies, compared to legal system, 13, 15, 187 Bush, Vannev~r, 123, 120126 Businessland, Sac., 437, 438, 439 Byer, Robert L., 560 Caltech University, 215, 216, 220 canal agriculture productivity of, 346 economic grown in, 62 energy price increases in, 73 Cancer deaths from, causes of, 418~19 research in, support for, 12~127, 130, 219, 267 Capital allocation schemes by gov=ent, 43 costs of, S05-506 and competition in foreign markets, 493 in Japan and U.S., 597-605 deficit affecting fonnation of, 48-52 exports from Japan, 463, 580 fom~on in U.S. and Japan, 583-606 in global markets, 463 464 incentives for fonnation of, 537 input of. See Investment internationalization of flow, 4708 ratio to labor, 585, 591 and grounds rate, 36 in information sector, 98-99

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INDEX in mech~ed agncultum1 system, 344 and productivity change, 100 resources in U.S., 11 Capitalism, and views of Karl Marx, 20 Carnot, Sadi, 84 Carothers, [W. H.1, 230, 359, 399 Carter administration, 43, 132 Cash flow techniques, discounted, effects of, 112 Center for Integrated Systems, at Stanford, 265, 273 Chayes, Abram, 204 Chemical industry, 417-421 basic research in, 418 case study of Eastman Kodak's Chemical Di- vision, 402-413 changes in, 40~401 expenditures for research and development, 400, 417-418 in agriculture, 339 rate of return from, 308 patents in affecting unitation costs, 314 affecting innovation, 316 and public's fear of toxic chemicals, 418-420 safety record of, 421 technological strength in Europe, 395 Chemical Industry Institute of Toxicology, 419- 420 Chemical Manufacturers Association, 419~21 Chevron v. Ferebee, 205 Chiang, Wang, 329 Chile, agricultural productivity of, 346 Christensen, Launts R., 57 Chrysler, 107 Citibank Corporation, 454 455 Class action suits, 193-194 Clean Sites, Inc., 420 Clean Water Act of 1977, 159 Clinch River Breeder Reactor, 133 Clothing industry. See Apparel industry Cohen, David, 384 Cohen, Stanley, 429 Colombia, agncultura1 productivity of, 346 Commercial applications of technology, and role of government intervention, 146 162 Commercial incentives in basic research, 271-273 Communication, and diffusion of i~ovanons, 319 Communications industry. See Telecomrnunica- . . tons Industry Competition and availability of substitutes, 83 challenges in, 13- 16 domestic, increase in, 84 economic results of, 5-6 and risk taking, 78-81 Competitiveness in foreign trade, 77-88, 479-498 in aircraft industry, 489-491 in automobile industry, 481-482 and challenge to industry, 7 decline in U.S., 131, 132-135, 502-503, 511, 521 background of, 528-530 indices of, 145-146 likely responses to, 53~533 In electronics industry, 482~84 625 government policies affecting, 113, 132-135, 491-498, 513, 515, 521-525 and impact of developing countries, 494 and increase in foreign competition, 85, 90 and innovative activity, 518-519 Japanese strategies in, 2, 146, 512 and job creation, 519-520 in machine tool industry, 487-488 management problems affecting, 495 and need for improved manufactunug technol- ogy, 112 and need for national resolve, 511-515, 522 in pharmaceutical industry, 488-489 President's Commission on Industrial Compet- it~veness, 9, 115, 117, 3?3, 377-378, 501-509, 521, 539, 542 productivity affecting, 583-584 and role of private sector, 133 and shortage of trained personnel, 494-495,506 and spending for research and development, 133, 135 in steel industry, 480485 steps for improvement in, 514-515, 523-525 targeting in, 12 technology affecting, 495, 504 505 and technology gap in U.S., 131 In textile industry, 486 487 and trade policies, 507-508 Comrce-Dripps study, in evaluation of basic re- search, 27~271 Computer industry and CAD/CAM, 29, 94, 293 in Japan, 559 competitiveness of, 483 development costs in, 299 improvements in price and performance, 114 445 personal computers in, 437-439, 450 software availability affecting, 383 Computer use applications of, 30 and changes in industries, 280, 281 in telecomrnunicanons industry, 282 Computervision, performance in stock meet, 470 Concorde, as commercial failure, 147, 277, 299 Congressional Budget Office projections to year 1989, 48 views on economic grown, 57, 74 Conoco, 400 Constant, Edward W., 285 Consumer Products Safety Act, 205 Consumer spending as economic policy, 524 Keynesian analysis of, 14 45 and low savings rates, 15 Contact, related to market, 170 Convergent Technologies, Inc., 476 Coover, H. W., 9, 12, 14, 105, 113, 289, 295, 399 416,587,610 Corn varieties, development of, 342 Corporate partnering, 14, 45~451, 475, 579-580 Corporate planning for innovation, 399-416 Carson, Dale R., 161 Costs of capital, 505-506

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626 and competition in foreign markets, 493 in Japan and U.S., 597-605 of development, affecting innovation, 298-300, 304 of diffusion of technology, 382-383 external, 170-171 of imitation of innovations, 312-315 of labor. See Labor, costs of of marling, and problems in financing, 109- 110 and pnces. See Prices of production, need for control of, 90 and productivity gains, 79 of research in universities, 264 Council for Chemical Research, 418 Cnck, Francis, 213-214, 215 Crystals and glasses, studies of, 231-234 Cucumber harvester, development of, 341 Cultural factors in entrepreneurship, 445 Daddano, Emilio, 172 Data General, performance in stock market, 470 Data Resources, Inc., 468 Dataquest, 437 David, Paul A., 14, 15? 322, 357, 373-389, 393, 396, 528, 529, 533, 585, 610-611 Davies, Stephen, 379, 380 Davis, Neil W., 558 Deadweight drag, problems with, 83, 85 Dean, John, 254 Debt ratio to equity, affecting companies, 11 ratio to GNP, 48, 50, 51 Defense Advanced Research Projects Agency, 125 Defense spending for high technology products, 557 impact on civilian economy, 134-135 reduction of, 15, 16 for research and development, 128, 131, 270 in venous countnes, 108 Deficits and capital fo~.~ation, 48-54 dangers in, S38 and decline in net exports, 47, 52 financing by foreign capital, 52 increase in, 90 inflationary effects of, 50 and interest rates, 47-48, 49, 85 and saving and investment figures, 53 Delbmck, Max, 215 Demand elasticity of affecting pnces, 79 and availability of substitutes, 83 policies for stimulation of, 45 and technology diffusion, 38~382 Denison, Edward, 4 Denmark agricultural productivity of, 346 defense expenditures in, 108 Department of Agnculture, 338, 339, 352, 387 Cooperative Extension Service, 381 Department of Defense, 557. See also Defense spending Department of Energy, 128, 130, 132, 133, 153 INDEX Department of Science and Technology, 504 Department of Trade, 507 Developing countnes, competitiveness of, 494 Development costs, affecting innovation, 298-300, 304 Diffusion of technology, 14, 318-320,373-389, 529 and concem with innovation, 37~378 costs of, 382-383 related to output, 381 research and development affecting, 383 demand factors in, 38 0 382 federal funding of, 387 and feedback information from users, 15, 277, 286-287, 289, 293, 384 and heterogeneity of adopters, 380 and implications for public policies, 386-389 rnicroeconomics of, 378-386 and nature of accumulated skills and markets, 396 performance improvements affecting, 384 and personnel turnover as information~issem- ination mechanism, 384 policy interventions affecting, 373-376 and protection of property, 14 and replacement of existing facilities, 381 and states of equilibrium, 380 supply factors in, 382-386 and survival of durable facilities, 381 time factors in, 381-382, 38~387 Digital Equipment, 450 DiLorenzo, J., 254 Dingle, R., 249, 254 Discipline, related to technology, 259 Discontinuines, technological, as key to grown, A~ 4_~ ,,, Tree Distribution of products, changes in, 437039 DNA research, 213-225 central dogma in, 215-216 double helix in, 214-215 Finding for, 225 and genetic code, 21~217 recombinant procedures in, 22~222, 429 regulation of, 223-224 replication in, 217-218 restriction enzymes in, 219-220 and rules for gene expression, 218 in Tudor Muses, 219 Doko, Toshio, 572 Doll, Richard, 419 Dollar valuation economic effects of, 8 increase in 1984, 90 and international made, 506 Donahue, Jew, 214 Drucker, Peter, 458 Dwomer, G. W., 444, 445 Du Pont Company, 400, 414, 430 Dupree, A. Hunter, 120, 122, 123 Eads, George C., 13, 15, 16, 322, 527-533, 611 Eastman Kodak's Chemical Division, approach to research in, 402~13 Ecicstein, Otto L., 134, 160 Economic policies

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INDEX in Japan, 569-573 recent trends in, vi-ix, 48-54 schools of thought on, 44 48 second-tier policies in, 54 Economic Recovery Tax Act of 1981, 52, 593 Economists 627 international fusion energy program, 157-158 nuclear power in. See Nuclear power public subsidies for, 154 and tax credits for household investments, 158- 159 technology in, 22 analysis of technological change, viii-rx, 18- Engineenag Research Centers, 13 23 Engineers classical, 19-20, 21 ~ ~ -~~ ~~~ neoclassical, 20, 21, 4506 views on production function, 327-328 Edison, Thomas, 2~25, 30, 116, 278, 287, 359 Education in foreign languages and cultures, 492,497, 513 in Japan, 544, 545, 555-556, 564, 574 and quality of labor force, 36 for technical manpower, 134, 138, 255-262, 537 in biotechnology, 431 federal support for, 13, 129 future directions for, 26~262 in Japan, 258-259 in U.S., 25~258 Efficiency and growth at aggregate level, 63 and growth at sectoral level, 64 in information economy, 100-101 Egypt, agricultural productivity of, 346 Emstein, Albert, 228 Eisenhower administration, 59 Electric power generation, improvements in, 282- 283. See also Energy programs Electron capture, 246 Electronics industry, 423-427 in Asian countnes, 566 competitiveness of, 482-484 development costs in, 299 in Japan, 547-552 new technology affecting, 495 patents in affecting imitation costs 314 affecting innovations, 3i6 product distribution in, 437~39 shortage of trained personnel in, 494 standardization in, 438~39 and technological Wills in venous countries, 395 Made deficit in, 426, 503 Eli Lilly, 430, 432, 468 Eta, Yehudla, 135 ElIsworth, Richard R., 605 Embodiment hypothesis, and rate of technical change, 40 Employment, and factors in job creation, 519-520 Energy prices and inflation, 42 and oil crisis. See Oil prices and productivity growth, 69, 72-73 and reallocation of output, 6~65 Energy programs development costs in, 299 for solar energy, 277 federal investments in, 132 financing by banks, 462 and improvements in electric power generation 282-283 education for7 255-262 as manufaculli31g technologists, 113, 134 number in U.S. and other countries, 137-138 publications by, 139- 141 specialists In high-tech industries, 260, 262 views of production function, 328 England, J. Merton, 124, 129 Enos, John, 283 Entrepreneurs in agnculture, 352 in biotechnology, 429-435 cultural factors affecting, 445 development and application of, 359-360 economic climate for, 9-10 and economic effects of innovations, 360-364. See also Innovations in electronics industry, 423-427 federal encouragement of, 132-133 financing of. See Financing innovations of. See Innovations market served by, 14 motivation of, 358-359 needs for, 7 probability of success, 363 tansinon to large company, 441-442 Environmental damage allocation of costs of, 171 and tort doctrine of nuisance, 175-178 Environmental Protection Agency, 130, 149, 195 224, 419, 420 Equilibnum diffusion models, and decision mak- ing about innovations, 380 Equipment and facilities, in university and re- search laboratories, 138- 139 ESL Company, 446 Estridge, Philip D., 476 Euratom at Ispra, 158 Eurobond borrowing, 463 Eu~e~it market, 463 Europe. See also under individual countries economic growth in, 62 gov~ent policies affiecang innovation in, 397 technological position of, 105-113, 394~395 European Airbus, 299, 490 Evenson, R., 308 Expectations affecting economy, 46 for problem solving by science, 130 for return on capital, 111 Export of capital Mom Japan, 463, 580 deficit affecting, 47, 52 of high technology products, U.S. share of, 144 regulations on biotechnology products, 431 435 Export-Import Bank, 11, 488, 491, 492, 493, 498 Fairchild, Sherman, 424

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628 Fairchild Industnes, 450 Farm machinery industry, expenditures for re- search in agriculture, 338, 339 Federal Reserve Board, 43, 89, 597 Feedback process in innovations, 15, 277, 286- 287, 289, 293, 384 Feigenbaum, Edward A., 560 Feldstein, Martin, 42, 46 Fertilizer industry, expenditures for research, 339 Fertilizer use in Japan and U.S., prices affecting, 350 Fiber optics, applications of, 28 Films and surfaces, technology of, 211 248 Financial climate and innovation, 10-12 Financial institutions. See Banks; Stock markets a. . tmancmg by banks, 453-465, 47~477 by business units of corporations, 476 corporate parmer~ng in, 14, 450-451, 475, 579- 580 and costs of marketing, 109-110 initial public offering market, 468, 469, 471, 473-475, 478, 593 mezzanine funds in, 470, 475 private funding in, 446 problems in small companies, 442 public market in, 445 446 R&D partnerships in, 10, 111, 161, 432-433, 446, 476 for research in universities, 264 risks in, 299, 300 301 sources of risk capital in, 445 trends in, 473-478 venture funds in. See Venture capital Finland, agricultural productivity of, 346 Fischer, Stanley, 42 Fletcher v. Bealey, 194, 196 Flexibility, dynamic, and productivity, 85-86 Fluctuations in economy control of, 34, 36-37 and tax policies, 38 Food and Drug Adrninis~on, 148-149, 199, 432 drug approval, process of, 489 regulations for biotechnology, 433-434 Food industry, expenditures for research in agn- culture, 338, 339 Ford, Henry, 29 Ford administration, 266 Ford Motor Company, expenditures for research and development, 300 Foreign capital and financing of deficit, 52 and information economy, 101 from Japan, 463, 580 and acquisition of U.S. semiconductor com- panies, 426 Foreign trade, 77-88, 479-498. See also Com- petitiveness in foreign trade Foster Associates, 310 France agricultural productivity of, 346 defense expenditures in, 108 economic grown in, 62 slowdown in, 63 INDEX expenditures for research and development in, 136, 557 government expenditures in, 111 labor costs in, 588 productivity related to investment rate, 144 Frankel, M., 381 Freeman, Christopher, 376 French, Ben C., 341 Fnedlaender, Ann F., 5, 6, 327-332, 611 Friedman, Milton, 44, 45 Fujitsu, investment in Amdahl, 426 Fusion energy program, international, 157-158 Gas utilizes, productivity growth in, 331 Gene expression, rules for, 218 Genentech, Inc., 35S, 429, 430, 432, 441 General Electric, 24 General Motors corporate partnenag by, 45~451 expenditures for research and development, 300 performance in stock market, 468 Generic applied research, 15~157 Genetic code, solving of, 21~217 Genetic engineering, 222. See also Biotechnology Geological Survey, 119 Geraldine Rockefeller Dodge Foundation, 469 Germany agricultural productivity of, 346 economic growth in, 62 slowdown in, 63 energy price increases in, 73 government expenditures in, 111 for biotechnology, 431 for defense, 108 for research and development, 136, 137 labor costs in, 588 number of scientists and engineers in, 137-138 patents granted in U.S., 142 productivity related to investment rate, 144 role of banks in, 45~457, 465 textile machinery from, 486 Glasses and crystals, studies of, 231-234 Global capital markets, 463 464 Global competition. See Competitiveness in for- eign trade Godwin, William, 32 Gola, Bela, 379 Goldberg, L., 317 Goodson, R. Eugene, 160 Gossard, A. C., 249, 254 Govern expenditures in venous countnes, 111 Government policies in U.S. anteing competitiveness, 113, 132-135, 491- 498, 513, 515, 521-525 affecting grown rate, 4 antitrust measures in, 132, 161, 188, 259, 524, 53~532 for basic science, 122-123, 148 capital allocation schemes in, 43 components of spending in, 38 changes in, 42 contracting of research to private org~ni7~iions, 124- 126 controversies in, 12, 152-158

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INDEX 629 expenditures as percentage of GDP, 111 Hannay, N. BIuce, S. 8, 11, 12, 14, 16, 357, 393, expenditures for R&D. See Research and de- 394, 395, 396, 479-498, 528, 529, 595, velopment,government expenditures for 604, 611-612 expenditures for technology transfer, 387 for fragmented industries, 154 for generic applied research, 156- 157 for innovation and technology, 6-9, 110, 121- 122, 132-133, 146-162, 39~397, 535- 539 inappropriateness of, 151- 152 social returns in, 153-154 and intellectual property rights, 16~161 in international programs, 157-158 and intervention in markets, 15, 147 in narrow markets, 154-155 and political processes, 161-162 risks in, 152-153 investment in instrumentation in university and research laboratones, 138-139 for key industries, 155-156 national industrial policy, 44 national science policy, 119-162 for public goods, 147-148, 155 regulatory issues in. See Regulatory actions for research on externalities, 148-151 subsidies for industries in, 119-120 taxation in. See Taxes wage and price controls in, 43 Grabowski, Henry G., 122 Great Society programs, 130, 184 Greece, agncultum1 productivity of, 346 Gregory, Gene, 143 Gregory, William H., 133, 155 Griliches, Z., 135, 152, 308, 310, 322, 345, 378 Growth at aggregate level, analysis of, 59-63 capital input affecting, 3, 59, 63, 64 divergent views on prospects for, 57-58, 74 energy prices affecting, 72-73 factors affecting, 35-36 government policies for, 4, 535-539 "d interest on national debt, 51 labor input affecting, 59, 63, 64 limits to, 4, 19 long-term prospects for, 3, 19, 21, 35-36 obstacles to, 12-13 and per capita income, 35, 36 and productivity, 59-65 quality of labor force a~feciung, 3 rates in U.S., 2, 62 rates in venous countnes, 62 reallocations affemug, 63, 64 at sectom1 level, analysis of, 63-65 and short-tenn concems, 3, 21 slowdown in, 41, 62, 73 in various countries, 63 and supply-side economics, 47, 58, 74 technical changes ffecting, vi-ix, 3, 4-5 and unexplained residual, 63, 73 Hagstrom, Homer, 252-253 Haul, R. E., 46, 602 Hambrecht & Quist Incorporated, 447, 563, 618 Handler, Philip, 122 Hanson, Ward A., 383 Harger, Alan E., 129 Harvey Aluminum, 177 Hatsopoulos, George N., 2, 5, 6, 11, 12, 13, 14 583-606 612 Hayanii, Yujiro 340 Health care basic research in, 270-271 and development of "orphan drugs," 154-155, 202 and investments in technologies, 155 research issues in, 265-267 support for research in, 154 technology affecting, 369-371 Health Research Facilities Act of 1968, 264 Hewlett, William R., 10, 11, 441-442, 594, 612 Hewlett-Packard Company, 446, 594 Hicks, John, 3 High Penn Oil Company, 176 Himsworth, Harold, 215 Histoncal aspects of econoIriic events in 1970s, 41 44 of impact of technological changes, 17-32 Hodder, James L., 595 Hollomon, J. Herbert, 129 Holmer, Edwin C., 4, 13, 14, 15, 417-421, 613 Honda, Soichiro, 359 Honda Coloration, 359 motorcycle plant in Columbus, 86, 87 Hoover, Heft, 123 Housing, SUppOft for research in, 154 Huber, Peter W., 4, 13, 191-210, 613 Hufbauer, G., 320 Husen, Torsten, 138 Hydrocarbons, 242-244 Icahn, Carl, 599 Imai, K., 134, 146, 563 Imitations of innovations, costs of, 312-315, 375 and industry concentration, 315 and market entry, 314 patents affecting, 313-314 ratio to innovation cost, 313 research and development affecting, 383 Impact of technological change, 17-32 Imports of high-tech equipment, 101, 102 increase in 1984, 90 Income, per capita, and growth rate, 35, 36 India, agricultural productivity of, 346 Indiana University, 215, 220 Indonesia, government expenditures in, 111 Industrial firms analysis of price performance in, 81-84 attitudes on waste disposal management, 149- 150 classification by biases of productivity growth, regulation of, end technological innovanons,159- 160 relationship with universities, 26~265, 445, 555

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630 research laboratories in, 27, 28 spending on research and development, 133- 134 rates of return from, 310 ratio to GNP, 137 subsidized by government, 119-120 voluntary standard setting in, 160 Industrial policy, national, 44 Inflation decrease in 1984, 90 and effects of deficits, 50 energy prices affecting, 42 and natum1 rate of unemployment, 45 and slowdown in economic growth, 41-42 and unemployment, 42, 45 and wage and price controls, 43 Information sector, 93-103 capital:labor ratio in, 98-99 corporate profits in, 9095 foreign capital in, 101 growth of, 8 high-tech equipment in, 98 introduction of efficiencies in, 100 101 investment in, 96-97 as key industry, 156 labor force in, 96 and law of intellectual property, 188 output compared to goods sector, 94, 95 productivity of, 100 and technology use by financial institutions, 455 Initial public offering market, 468, 469, 471, 473- 475, 478, 593 Inman, Bobby it, 511 Innovation, 9, 275-304 in agriculture, 333-354 and available alternatives, 284 as black box system, v=, 4, S-6, 278-279, 280 characterization of, 279-285 corporate planning for, 399~16 coupling of activities in, 301-302 cultivation of, 443~51 design process in, 286, 292-293, 302 determinants of, 393-397 development costs in, 298-300, 304 and differing views of production function, 327- 328 diffusion of, 14, 318-320, 373-389, 529 economics of, 277, 298-302 employment-expanding, 30 and enlargement of resource base, 21-22 and entrepreneurial climate, 9-10 factors affecting, 36 feedback signals in, IS, 277, 286-287, 289, 293 financial climate affecting, 1012 financing of. See Financing and gap between private enterprise and govem- ment policy, 109 and global competition, 518-519 government policies affecting, 132-133, 146 162, 39~397, 535-539 imitations of, 312-315 impact of, 17-32 and potential significance, 25-26, 3~31 and transitions in industry, 23-25 INDEX underestimation of, 25 inconspicuous changes in, 282 and interaction of entrepreneurship and econom- ics, 360 364 interaction win science,28~288,29~291,302- 303 international differences in, 395-396 labor-sa~ring, 29 and lack of predictive science, 296 297, 304 in large companies, 449-451 lead tunes affecting, 296, 301 limits to achievement of, 23-28, 276 and macroeconomic climate, 6-9, 89-91 market forces in, 275, 276, 278, 289-290 niicroeconomics of, 307-323 models of, 285-294 chain-linked, 289-294, 303 linear, 285-288, 303 patent system affecting, 315-316 and persistence of old technologies, 284 285 planning for, 297 - 298 and productivity grown, 21, 69 rates of return on, 280, 309-311 resistance to, 278, 292, 300 and risk taking, 78-79. See also Risk taking and service employment, 31 and stages of product cycle, 295 state of knowledge affecting, 295-296, 304 technical needs in, 27S, 276 technological environment affecting, 327-332 and technological levels of venous countries 390395 tinting of, 277, 301 uncertainty in, 275-276, 294-298, 303 and unemployment, 4, 20, 28-31 Instruments industry patents affecting innovation in, 316 productivity growth in, 331 Instrunnentation, in university and research labm ratories, investment in, 138-139 Insurance industry, productivity grown in, 331 Intel Corporation, 424, 425, 441, 463, 477 Intellectual property and expansion of information industry, 188 and flow of research information, 16~161 international trade in, 142-143 protection of, 151 Intelligence, artificial, development in Japan, 560 Interest rates and cost of capital, 506 and deficit financing, 47, 48, 49, 85 and initial public offering maricet, 468 and investment activity, 14 in Japan, 599 levels in 1984, 90 and ratio of national debt to GNP, 51 International Badness Machines Corporation (El M) business units of, 476 expenditures for research and development, 299 outlook in 1950s, 30 personal computers of, 439, 450 stock offering in 1951, 467 work on Josephson junction, 552 International capital markets, 463-464

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IIVDEX International cooperative programs, 157-158, 299 International differences In technological activity, 395-396 International Harvester, 84 International technology transfer, 320-321 International trade, 77-88, 479-498 International Trade Con~mission' 505 Interstate Highway System, 120 Investment available funds in Britain, 108 and costs of marketing, 109-110 decline in rates of, 42 federal deficit affecting, 53 and financing of innovations. See Financing and growth patterns, 3, 59, 63, 64 in information sector, 96-97 in instrumentation in university and research laboratories, 138- 139 interest rates affecting, 14 outlays in, 1984, 90 price of, affecting productivity growth, 68-69 and productivity rates, 5, 143-144 return on, expectations for, 111 tax policies affecting, 13, 14, 38, 52-53, 70 Ireland, agricultural productivity of, 346 Ireland, Norman, 375, 380 Iron ore supplies, expansion by technology, 22 Isotopes, radioactive, 248-249 Israel, agricultural productivity of, 346 Italy agricultural productivity of, 346 defense expenditures in, 108 economic grown in, 62 energy puce increases in, 73 goverurnent expenditures in, 111 labor costs in, 589 productivity related to investment rate, 144 Jacoby, Hank, 112 Japan, 541-567 acquisition of U.S. semiconductor companies, 426 agricultural productivity of, 334, 335, 346 technical changes affecting, 345-352 a~rc~ft industry in, 490, 557, 559-560 auto industry in, 85-87, 328, 395, 482, 542 bond issues in, 572 capabilities in artificial intelligence, 560 capital exports of, 463, 580 capital formation in, 583-606 cost of, 11 changing market structures in, 465 charactenstics of technological achievements in, 553-554 competitive strategies of, 1-2, 146, 512 cooperation among firms in, 161 deficit problem ill, 572 economic grown in, 62 slowdown in, 63 economic policies in, 12, 569-573 new goals for, 573-574 educational system in, 258-259, 544, 545, 555- 556, 564, 574 electronics industry in, 483, 484, 547-552 631 energy price increases in, 73 exchange rate system in, 570-571 exports of high technology products, 144 ratio to imports, 546 generic research in, 157 government expenditures in, 111 for biotechnology, 431 for defense, 108 for research end development, 136, 137,544, 545-546, 548, 550, 557 government policies affecting innovation in, 397 imports of foreign technology, 543-544 ratio to exports, 546 interest rates in, 599 investment in manufactunng, 548 labor costs in, 530, 571, 572, 589 labor force in, 544, 545, 548 productivity of, 366 land reform policy in, 570, 571 manufactunag technology in, 112 marketing development in, 548 materials technology in, 146 Ministry of Intemanonal Trade and Industry, 536, 542, 544, 571 monemy policies in 571 national goals in, 16 national research projects in, 561-562 numberof scientists and engineers in, 113, 137- 138 patents granted in U.S., 142 produce design in, and market penetration, 146 productivity in, 502, 529 related to investment rate, 143, 144 protectionism in, 107, 300 domestic, 553 role of banks in, 456 savings in, 576-578, 591-592 semiconductor industry in, 133-134, 549-552 space industry in, 557, 558-559 strengths and w~esses is, 547-563 structural changes in, 564 567 successful industries in, 547-554 targeted technologies in, 554-564, 570576 tax policies in, 572, 592-593 technological position of, 394-395 as follower, 511 546 as leader, 546 textile ~ndusty in, 384, 486087 venture capital in, 544, 545, 562-563, 578- 580, 594 very large scale in~amd Circuit project in, 549, 550, 561, 575 welfare system in, 570, 572 Job creation, factors in, 519-520 John Deere & Company, 84, 87 Johns-Manville Products Corporation, 181 Johnson adminis~on, 43, 59, 126, 184 Johnson & Jolson, stock issues in, 468 Jones, Jim, 468 Jorgenson, Dale W., 2, 4, 5, 46,57-74,322,330 331, 584, 602, 613-614 Josephson juncuan, work on, 552 Kamien, M., 324

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632 Karlesky, Joseph J., 138 Katz, Michael L., 383 Katz, Milton, 2, 9, 13, 14, 169-189, 227, 527, 528, 530, 532 Keeton, Robert E., 179 Kemai Koho Center, 143 Kendrew, John, 215 Kenduck, John, 4 Kennedy administration, 43, 59, 130, 132 Kennedy, Donald, 13, 263-273, 420, 506, 614 Kennedy, Ted, 266 Key industnes, support for, 155-156 Keynes, J. M., 3, 4~41,41 45 Kindleberger, Charles P., 385 Kislev, Yoav, 340 Klein, Burton H., 5, 6, 77-87, 322, 614-615 Kline, Stephen J., 9, 15, 275-304 Korea acquisition of U.S. semiconductor companies, 426 economic grown in, 62 electronics industry in, 566 government expenditures in, 111 Kornberg, Arthur, 217 Kresge, stock issues in, 468 Kuhn, Thomas, 286 Labor force in agriculture, 8, 354 costs of, 350 productivity of, 348,359 challenges to, 497, 507 costs of in Japan, 350, 530 and productivity grown, 69 in venous countnes, 588-589 for wages. See Wages education for tec~icalmanpower, 13,129,134 in biotechnology field, 431 employment ~ small businesses, 432 engineenug manpower in U.S., 258, 260, 261 increase in, 43 in information sector, 96 input of, and grown patterns, 59, 63, 64 in Japan, 544, 545,548 in manufactunug, 8, 354 productivity of, 359 number of scientists and engineers in U.S. and other counmes, 137-138 personnel turnover as information~issemin~- non mechanism, 384 quality of and growth rate, 3,36 and productivity, 143 ratio to capital, 585, 591 in infonnation sector, 98-99 in mechanic agricultural system, 344 and productivity change, 100 reallocation of, 64 shortage of Owned personnel in, 494 495, 506, 537 Labor-saving innovations, effects of, 29 Landau, Ralph, v-x, 1-16, 117, 583-606, 615 Landes, D., 397 INDEX Large companies entrepreneurial spirit in, 518-519 financing by banks, 4~462 innovations introduced by, 318, 449-451 interaction with small companies, 14, 361, 519, 520 risk taking in investments, 113 transition from entrepreneurs, 441-442 Laser technology applications of, 28 discovery of, 250 in Japan, 556 manpower and resources in, 560 pulsed beans on crystal surfaces, 246 Lawrence, Robert Z., 143 Layton, Edwin T., 123 Leaming-by-doing hypothesis, and rate of tech- nical change, 40 Leather industry, productivity growth in, 331 Legal Services Corporation, 187 Legal system, 169-189 compared to bureaucracies, 13, 15, 187 constraining aspects of, 17~183 as facilitator of enterprise and innovation, 17 171 federal structure of, 187 and judicial fact finding, 182-183 and liability issues, 13 and litigation increase in U.S., 187 and right to counsel, 187 shift in emphasis of, 527, 528, 530, 532 shifting judicial trends in, 18 - 186 technological development affecting, 172- 1?4 tort law in, 170182 and availability of information about hazards, 197-198 bipolar disputes in, 192-193, 201 compensation in, 181-182, 200 201, 20 209 and competence of courts and agencies, 203- 204 doctrine of negligence in, 17=175 doctrine of nlii~ce in, 175- 178, 192- 193 doctrine of strict products liability in, 178- 182, 186 expansion in reach of, 197 expert opinions in, 204 206 and focus on public risk, 191-210 imps ties and liability remits in, 201-203 multiparty disputes in, 193-194 and political legitimacy, 209-210 regressive incentives in, 199-200 and rule of proportional causation, 194 as social engineering, 201 timing of actions in, 190197 Levin, Richard, 322 Lewis, Jordan D., 132 Liability of manufacturers affecting grown, 13 and limits on tort recovenes, 202-203 market share of, 193-194 tort doctrine of, 178-182, 186 Libya, agricultural productivity of, 346 Life sciences research, support for, 126, 154

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INDEX Linden, Peter D., 381 Litigation, excessive, affecting growth, 13 Long, Russell, 468 Lucas, Robert, 45, 46 Luck, and productivity gains, 78, 79, 81 633 and role of property and contract, 170 and service by entrepreneurs, 14 targeting of, 12 analysis of business areas in, 405 Market pull and technology push, 142, 147, 289- Lull Engineenng Co., 179 290 Lumber industry, productivity growth in, 331 Marschak, Thomas, 297 Luna, Salva, 215, 220 Marshall. Alfred. 170 MacArthur Foundation, 511 Machine tool industry competitiveness of, 487-488 decline In U.S., 145 innovations in, 280 management problems in, 495 new technology affecting, 495 shortage of trained personnel in, 494 Machinery production, patents affecting, 314, 316 Macroeconomics in Japan, 569-573 in United States, 6-9, 33-35, 89-91, 93-103 and components in government spending, 38. See also Government policies in U.S. and composition of aggregate output, 38-40 and fluculaiions in economy, 34, 37 issues related to technology, 3040 and long-n~n grown performance, 35-36 tax policies in, 38. See also Traces Malaysia, government expenditures in, 111 Malpas, Robert, 5, 7, 9, 10, 11, 14, 15, 16, 105- 113, 615-616 Malstead, Illona, 337 Malthus, Thomas Robert, 18, 19, 21, 22 Management challenges to, 497, 507, 518 problems with, and compen~aveness of U.S. in- dusmes, 495 Mansfield, Edwin, 4, 6, 14, 152, 153, 159, 307- 323, 332, 376, 378, 381, 616 Manufacturing investments in in Japan, 548 in U.S., 503 labor force in, 354 productivity of, 359 lack of interest in, 505 productivity in in Japan, 59~591 in U.S., 365, 59~591 rate of return from research and development spending, 308 shortage of trained personnel in, 494 Marconi, [Guglielmol, 25, 26 Market adjustment mechanisms in, 19, 20, 21 development costs for narrow markets, 15~155 distribution channels in, 437039 entry affected by imitation costs, 314 government intervention in, 15, 147 identification of needs in, 409 and innovations, 275, 276, 278, 289-290 penetration strategies of Japanese, 146 policies affecting participation in, 537 and political decision making, 161-162 ~ _ ~ 7 _ ~ 7 _ _ Martin, B., 395 Marker, James D., 10, 11,14, 470,473-478,593, 594, 616 Marx, Karl, 4, 20, 28 Materials price of, and productivity grown, 69 technology in Japan, 146 Mauritius, agnculnm1 productivity of, 346 Mechanical technology in Japan and U.S., prices affecting, 350 Mechanization research in agriculture, 340341, 344 Medical care. See Health care Medicare system, 49-50 Mernfield, D. Bruce, 161 Metals industry and imlovanons in metallurgy, 280, 281 patents affecting innovations in, 316 productivity grown in, 331 Metcalf, J. S., 380 Mettler,RubenF.,7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 441, 517-525, 610617 Mexico, agricultural productivity of, 346 Mine funds, 470, 475 Microecono$nics of innovations, 307-323 and productivity, 57-76, 330-331 Military activities and defense spending. See Defense spending and research contacts with scientists, 123-124 as source of technological innovation, 12~121 Miller Willia~n, 451 Minasian, 1., 308 Minnesota Crop Improvement Association, 342 Mission~nented research, 156-157 Mitsubishi, as power with Boeing, 87 Modiglia~i, Franco, 42, 44 MonetaIy policies in Japan, 571 in U.S., 45, 506 Monsanto, 400, 430 Moore, Gordon E., 7, 8, 9, 10, 14, 358, 360, 423~27, 441, 596, 6I7 Moore, William, 295 Moreno, Glen R., 8, 11, 12, 453 465, 473, 476, 594, 597, 617 Morgan Stanley & Company, Inc., 93, 94, 467, 469, 470 Monson, Elting, 120 Manta, Akio, 359 Montani, Masanon, 543 Moms, lane, 475 Mosgavero, Louis N., 387 Motor vehicle industry. See Automobile industry Mowery, David C., 120, 130, 157, 383, 559 Multinational fines, technology transfer in, 320, 321

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634 Musgrave, Richard A., 154 Muth, John, 45 Nadiri, M., 309 Naisbitt, John, 402 Narnura School of Advanced Management, 536 Nasbeth, L., 379 Nathan Associates, 310 National Academy of Engineenug, 5, 117-118, 157, 172, 375, 480, 528 National Academy of Sciences, 117, 118, 150, 161, 172, 429 National Advisory Committee for Aeronautics, 119, 125, 157 National Aeronautics and Space Administration 125, 133, 157, 557 National Bureau of Standards, 119, 131-132 National Cancer Institute, 219, 419 National Cooperative Research Act of 1984, 188 National Institutes of Health, 125, 126, 216, 225 National Radioastronomy Observatory, 139 National Research Council, 132, 162, 480 National Research Foundation, 125 National Science Board, 131, 135, 137, 138, 139, 140, 141, 142, 143, 144, 394 National Science Foundation, 125, 126, 131, 134, 135, 139, 148, 216, 307, 310, 311, 317, 395, 563 National science policy, 119-162 historic aspects of, 119-124 in postwar era, 124-128 in cold war period, 129 in period of industrial competitiveness, 132- 135 In social priorities period, 129-132 National security and aircraft mdust~y, 490 and flow of research information, 161 and maintenance of lcey industnes, 155-156 and steel industry, 484 Natural resources depletion of, 18- 19 and diminishing returns, 21 and limits to growth, 4 optimal allocation of, 21 technological changes affecting, 21-22 Negligence, tort law relating to, 174-175 Nelson,Richard R., 120, 129, 130, 147, 157,284, 322, 352, 376 Netherlands, the agricultural productivity of, 346 defense expenditures in, 108 Network technologies compatibility or standardization in, 3&~385 in telecommunications industry, 329, 383 New Zealand agricultural productivity of, 346 synfuel project in, 462 Nippon Telegraph and Telephone, 557, 574, 576 Nixon administration, 42, 127, 131, 132 Nobel prize awards, 140, 264, 544 NorTnan, Colin, 139 Norman, David A., 437-439, 617 Norway INDEX agricultural productivity of, 346 defense expenditures in, 108 Nuclear power development costs for, 299 lag in standardizing designs for, 160 and Rasmussen report on reactor safety, 196, 198 shared liability of plant operators, 194 and tort immunity of organizations, 202 and waste disposal management, 150 Nuclear Regulatory Commission, 149, 198, 206 Nuclear science and radioisotopes, 248-249 Nuisance, tort law relating to, 175-178, 192-193 Occupational Safety and Health Administration, 195-196 Oettinger, Anthony, 188 Off-budget spending, 48 Office equipment, patents affecting innovations in, 316 Office of Management and Budget Regulatory Review group in, 132 views on economic grown, 58, 74 Office of Science end technology Policy, 132,133 Office of Scientific Research and Development, 123, 124 Office of Technology Assessment, 150, 340, 419, 455 Oil pnces. See also Energy prices and creation of Department of Energy, 153 effects in Japan, 571, 572 impact on economic growth, 63 increase in, 19 Okimoto, Daniel I., 7, 11, 12, 14, 15, 107, 357, 384, 393, 394, 395, 396, 397, 528, 529, 541-567, 575, 585, 617 Olsen, Trond E., 375, 380 Organisation for Economic Cooperation and De- velopment, 63, 73 Organization of Petroleum Exporting Countnes, 19 O`rer-the-counter market, 447 Ozawa, Terutomo, 543 Packard, David, 504 Pakistan, agricultural productivity of, 346 Panish, M., 250, 251 Paraguay, agricultural productivity of, 346 Parsons, C., 146 Particles and waves, dualism of, 246 Parmering, corporate, 14, 450 451, 475, 579- 580 Partnerships, R&D, 10, 111, 161, 432-433, 446, 476 Patents affecting application of technology, 376 antitrust implications of, 188 in biotechnology, 433 commercial basis for, 276 granted tO IS. and foreign inventors, 141-142 and imitation COStS, 313-314 and incentives for risk taking, 537 and innovation rate, 315-316 and intellectual property nghts, 151

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INDEX Plant Patent Act of 1930, 342 policy modifications for, 132 and prices for access to technology, 383 rights for university faculty members, 271-272 in semiconductor industry, 426 Pauling, Linus, 214 Pavitt, Keith L. R. 9, 15, 141, 322, 393-397, 617 Pear, Robert, 134 Peer review to evaluate research, 269 Penner, Rudolph, 58 Penny stock market, 445 Pension funds, and job formation, 520 Perry, William I., 9, 10, 11, 14, 443-451, 473 475, 593, 594, 618 Peru, agricultural productivity of, 346 Perutz. Max, 215 Pesticide industry, expenditures for research, 339 348-350 Peterson, Willis, 308, 310, 340 Peto, Richard, 419 Petrole''~n industry expansion of, 281 innovations in, 283 patents affecting, 316 as key industry, 156 oil prices in. See Oil prices rate of renun from research and development spending, 308 Pemt, Joseph M., 13, 14, 255-262, 537, 618 Pf~, W. G., 231 Pharmaceutical industry competitiveness of, 488-489 development of"orphan drugs," 154-155,202 expenditures for research, 489 for animal drugs, 339 international technology transfer in, 319-320 and legal problems of vaccine industry, 197, 199, 202 market share liability of, 193 new technology affecting, 495 patents in affecting imitation costs, 314 affecimg innovation, 31S, 316 problems of, 11 regtllation by FDA, 148-149, 433 434 Phelps, Edmund, 45 Philippines, agriculn~1 productivity of, 346 Phillips, Julia, 254 Phillips Curve, 40, 42, 45 Photonics, 231, 251 Physical science studies, 227-254 chronology of, 228-230 in crystals and glasses, 231-234 in hymns, 242-244 and innovations in electronics and photonics, 249-254 in nuclear science and radioisotopes, 248-249 and phase rule applications, 234 242 in surface technology, 241 248 Pickens, Boone, 599 Pigou, A. C., 170 PiLkington, Alasmr, 358 Piper AS Corporation, 180 Planar Corporation, 475 635 Planning for innovation, in co~poranons, 399016 Plant vaneties' research in development of, 341- 343 Poate, J. M., 250 Policy analysis, schools of thought in, 14 48 Portugal, agricultural productivity of, 346 Postal services, technology in, 367-368 Postwar science policy, 128-135 Prager, Denis, 511 Prandtl, L., 287 President's Commission on Industrial Competi- tiveness 9, l Is, 117, 373, 377-378, 501- SO9, 52i, 539, 542 Price, Derelc de Solla, 293 Price-Anderson Act, 194, 207, 208, 209 Prices and a~nculn~ral technology in U.S. and Japan, and availability of substitutes, 83, 84 and cost differences, 69. See also Costs and indexes for research and development in- puts, 31~318 of inputs and outputs, affecting productivity growth, 65-69 performance analysis in ~ndustnes, 81-84 schemes for control of, 43 Printing and publishing, productivity grounds in, 331 Private sector and development of American science, 123 government contracts for research in, 124-126 role In research and development, 123, 133, 401 trends in, 126-128 as source of risk capital, 446 Product distribution, changes in, 437 439 Production function, differing views of, 327-328 Productivity, 57-74 . . . In agncuiture research affecting, 330336 in U.S. and Japan, 348 and analysis of growth, 59-65 at aggregate level, 59-63 at sectoral level, 63-65 and basic research, 311-312 and capital:labor ratios, 100 aIld competitiveness, 71-88, 583-584 and dynamic flexibility, 85-86 endogenous growth of, 65-69 of information workers, 100 investment rate affecting, 143-144 luck as factor in, 78, 79, 81 macroeconomic policies affecting, 89-91 in manufacturing, 365 and microeconomics, 33~331 and prices of inputs and outputs, 65-69 prospects for grown in, 69-73 relation to research and development 308-309, 322 in service industry, 365-367 tax rates affecting, 5 technology affecting, 9, 21 and utilization of capacity, 8 Profitability, and diffusion of innovations, 318, 379

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636 Property, related to market, 170 Protectionism 107-108 of automobile market in Japan, 300 domestic, in Japan, 553 Public Agenda Foundation, 513 Public goods, universal access to, 147-148, 155 Public market, role in risk capital, 445046 Public opinion on technology, 4, 116 and expectations for scientific achievements, 13 131 and fears of toxic chemicals, 418-420 and sensitivity to potential hazards, 13, 15 Publications, by scientists and engineers, 139- 141 and citation counts, 140 Publishing, productivity growth in, 331 Quantum mechanics, 229-230 Quinn, James Bnan, 4, 8, 9, 10, 14, 15, 16, 357- 371, 618-619 Radioisotopes, 248-249 Rarno, Simon, 150-151 Ramo-Wooldridge, 517 Rasmussen Report on nuclear reactor safety, 196, 198 Rates of return pnvate, 309 from research and development, 308-311 in agnculture, 308, 310, 334-335 social, 309 Ray, G. F., 379 Reagan administration, 89, 115, 118, 128, 132- 133, 387, 509, 578 Real estate industry, productivity growth in, 331 Reallocations, and productivity growth, 63, 64 Reed, John S., 8, 11, 12, 476, 594, 597, 619 Reeder, Charles El., 8, 12, 14, 89-91, 619-620 Regulatory actions affecting grown, 12-13, 15, 41, 43 for b~nkirlg in U.S., 4S9, 464 in biotechnology, 433-435 and comparative risk assessment, 204, 206 and government responsibility for research pro- grams, 148-151 and incentives for risk 'eking, 537 modifications in, 132 and stimulation of technology, 159-160 Research, basic and accounting practices, 112 in chemical industry, 418 commitment to, 536-537 government support for, 122-123, 148 in industrial laboratones, 27, 28 rrussion-oriented, 27 and productivity, 311-312 in universities, 13, 27-28, 263-273, 418. See also Universities, basic research in Research and development (~&D) in agriculture, 333-354. See also Agriculture, research and development in in automobile industry, 134 in biotechnology, 430 in chemical industry, 400, 417-418 INDEX comparative expenditures in venous countries 135-137 corporate planning for, 402 416 assessment of, 411-412 base program in, 406-407 business area analysis in, 405 business aspects of, 412-413 commercialization target date in, 410 company goal in, 407 defining of responsibilities in, 402-403 identification of needs in, 409 innovation project stage in, 410 integration of information in, 413-416 levels of planning in, 403-408 marketing in, 410 project managers in, 411 projections in, 404 stretch position in, 407 and costs of marketing, 109- 110 expenditures in France, 557 expenditures in Japan, 544, 545-546, 548' 550, expenditures in United Kingdom, 544 and government contracts with private organi- zations, 124-126 government expenditures in U.S., 4, 6, 38, 116, 263, 401, 504, 544, 557 affecting growth rate, 3, - 5 in agriculture, 337-344, 353 in biotechnology, 430 controversial areas in, 152-158 distribution of, 128, 131 estimation with GNP deflator, 317 in postwar era, 128-135 and rate of technical change, 36 risk taking in, 152-153 and role of private sector, 133 trends in, 126-128 and incitation costs, 383 impact on competitiveness in interrlat~onal trade, 133, 135 industrial spending for' 13~ 134, 299-300 ratio to GNP, 137 and international technology transfer, 320 military' and contracts with scientists, 123-124 partnerships in, 10, 111, 161, 432-433, 446, 476 in pharmaceutical industr,, 339, 489 price indexes for mputs in, 310318 private funding of, 123, 133, 401 trends in, 12~128 rate of retum from, 308-311 in agnculture, 308, 310, 330335 relation to productivity grown, 308-309, 332 subsidies for, and diffusion of technology, 375 tax credits for, 159, 537 and technology transfer costs, 383 for waste disposal management, 149-150 Resources allocation to less productive uses, 64 oprimi7~iion of, 3 Retraining of labor force, need for, 13 Rhode, Paul, 387 Ricardian equivalence theorem, 46, 47

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INDEX llicardo, David, 18, 19, 20, 28 Risk capital, sources of, 445. See also Financing Risk Eking aversion to, 16 and costs of marketing, 109-110 and federal support of research and develop- ment,l52-153 incentives for, 537 in innovations, 299, 300-301, 310 by large companies, 113 and motivated competition, 78-81 propensity to engage in (PERK), 78, 8~81 RNA research, 215-216, 217 Roach, Stephen S., 7, 8, 93-103, 587, 620 Roberts, Paul Craig, 58 Robotics application of, 505 in Japan, 542 technological strength in Europe, 395 use in manufactunag, 146 Rockefeller Foundation, 215, 216 Rogers, Everett M., 319, 387 Romeo, Anthony A., 378 Roosevelt, Franklin D., 124 Rose, Mark H., 120 Rosenberg, David, 204 Rosenberg, Nathan, v-x, i_16, 17-31, 120, 121, 130, 157, 275-304, 375, 380, 384, 459, 460, 461, 462, 559, 620 Rubber industry and development of synthetic rubber, 284 patents affecting innovation in, 316 productivity growth in, 331 Rurtan, Vernon, 8, 13, 322, 333-354, 387, 395, 584, 620-621 Sahal, Devendra, 380 Sarcoma, A., 134, 146 Salter, W. E. G., 381 Samuelson, Paul, 3 Sargent, Thomas, 45 Satellite industry fmanc~ng by banks, 462 in Japan, 558 for monitoring of environment, 155 Savings rate and consumer spending, 15 decline in, 42 federal deficit affecting, 52, 53 increase in 1984, 90 in Japan, 16, 576-578, 591-592 taxes affecting, 605 Saxonhouse, Gary R., 384, 561-562 Schankerman, M., 317 Scherer, F. M., 322 Schlesinger, AIthur M., Jr., 130 Schmitz, Andrew, 310, 341 Schmookler, Jacob, 345 Schurnpeter, Joseph, 307, 352 Schwartz, M., 320 Science affecting innovation, 287-288, 29~291, 302- 303 637 policy of U.S. government 119-162. See also National science policy Seckler, David, 310, 341 Sectoral productivity grown, 72-73 econometric model of, 66 Securities industry. See also Stock market technology affecting, 369 Securities Industry Association, 468 Seed companies, development of plant varieties in, 341-343 Semiconductor industry competitiveness of, 483 entrepreneurship in, 423-424 foreign acquisition of U.S. companies, 426 improvements in price and performance, 444 445 in Japan, 133-134, 549-552 market penetration by, 122 patent protection in, 426 and study of crystal composition, 231 and surface technology, 246 Service industnes, 357-371 expansion of, 31 investment in, 8 medical care in, 369-371 productivity in, 365-367 support services in, 367-369 for users of specialized equipment, 383 Shane, Robert S., 387 Shapiro, Carl, 381 Sherva, Dennis, 470 Shipbuilding, as key industry, 155-156 Shockley, William, 27' 364, 423 Shockley Semiconductor, 450 Shoven, John, 592-593, 595' 601 Showalter, M. R., 291, 292 Silbertson, Z., 314 SiLkwood, Karen, 205 Singapore electronics industry in, 566 government expendinlres in, 111 Skinner, Wickham, 138 Small companies economic impact of, 360 361 entrepreneurial spirit in, 519 financial problems in, 442 importance of, 8, 9 jobs created by, 432 management weakness in, 442 problems with international sales, 493, 498 product line expansion in, 442 relations with large companies, 14, 361, 519, 520 transition to large composes, 441 442 Smith, Adam, 1, 3, 23, 87 Smith, Bruce L. R., 138 Smith, Hamilton, 219, 220 Smith, John, 220 Smithsonian Institution, 122 Social benefits from innovations, 309-311 Social programs, and expectations for scientific achievements, 13~131 Social Security system, 49-50 Socony Vacuum Corporation, 175-176

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638 Solar energy, costs of, 277 Solid-state physics, 27-28 Solow, Robert, 4, 21 Sony Corporation, 358, 359 television plant in San Diego, 86 South Africa, agncultural productivity of, 346 Soviet Union, technological rivalry with U.S., 124, 129 Soybean varieties, development of, 342, 353 Space industry in Japan, 557, 558-559 and spending for research and development, 128, 131 technological strength in U.S., 395 Spain agricultural productivity of, 346 defense expenditures in, 108 te}ecommu~cations company in, 464 Specialization effects of, 87 and limitations of expertise, 23-28 Spectroscopy, optical, 249 Sperry Corporation, 463 SRI Intemational, 451 Sri Lanka, agncultura1 productivity in, 346 Standardization in electronic industry, 438-439 in network technologies, 384-386 Standards setting in industry imposition of, 375-376 voluntary, 160 Stanford Center for Integrated Systems, 265, 273 Start-up companies advantages of, 425 critical size for, 11 excess of, 425-426 financing of. See Financing innovation in, 9 Steam engine, applications of, 26-27 Steel industry competitiveness of, 484 485, 530 decline in, 542 indirect subsidies for, 120 in Japan, 542 production in 1960, 541 protection of, 83 Steiger, Bill, 468 Stiglitz, J., 396 Stock market initial public offends market, 468, 469, 471, 473-475, 478, 593 in Japan, 563 over-the-counter, 447 penny stocks in, 445 performance of investment managers in, 469 Unlisted Securities Market in United Kingdom, 11, 111 and view from Wall Street, 467-471 volatility of high-tech stocks in, 471 Stockman, David, 58, 133 Stoneman, Paul, 375, 376, 380, 384, 387 Storage Tech Computer, 446 Stout, D. K., 387 Sturmer, H., 254 INDB Superfund law, 420 Super-Phenix reactor program, 158 Supersonic aircraft transport and British-French Concorde project, 147, 277, 299 cancelled by U.S. Senate, 130, 131, 147 Supply factors, in diffusion of technology, 382- 386 Supply-side economics, 47, 58, 74 Surface technology, 240248 Sunnam, agricultural productivity in, 346 Swanson, Robert A., 10 11, 13, 14, 15, 110, 358, 429-435, 44i, 511, 621 Sweden agricultural productivity in, 346 government expenditures in, 111 Switzerland agricultural productivity in, 346 government expenditures in, 111 textile machinery Tom, 486 Sylvania Electric Products, 449050 Syntex Corporation, 11, 430 Syria, agricultural productivity in, 346 System Industries, 538 Tachibanaki, Toschiaki, 592-593, 595, 601 Taiwan agricultural productivity in, 346 electronics industry in, 566 Tandem Computer Corporation, 478 Targeting policies, 12 and analysis of business areas, 405 in Japan, 554-564, 570576 Tax Equity and Fiscal Responsibility Act of 1982, 52 Taxes on capital gains proposal for increase in, 471 reduction in, 468 469 and competitiveness in foreign trade, 506 credit for household alternative investments, 159 credit for investments, 52-53, 70 ratio to statutory rate, 70 credit for research and development spendung, 159, 537 high marginal rates in, 42 and incentives for innovations, 14, 537 and investment projects, 13, 38 policies in Japan, 572, 592-593 and producti~riy growdl, 5, 69-12 and savings rate, 605 and slowdown in economic grown, 41 on Social Security benefits, 50 and spending decisions, 44 45, 46 and supply-side economics, 47 value-added tax, 492 and venture capital availability, 431, 447, 448 Taylor, C., 314 Technological change. See-Innovation Technology black box of, 4, 5-6, 278-279, 280 creation and application of, 504 505 diffusion of, 373-389. See also Diffusion of technology

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INDEX and economic growth, 358 issues in corn~nercialization of, 110-113 levels in various countries, 394-395 as positive sum game. 9 and production function as black box, 327 and productivity growth, 9 public attitudes on. See Public opinions on tech- nology transfer of export policy affecting, 434 by foreign acquisition of U.S. companies, 426 international, 320-321 by multinational firms, 320, 321 from research universities, 265 and variation in industry concentration levels, 315 Teece, David. 382, 383. 384 Teknowledge, 450 Tektronix, 475 Telecornrnunications industry applications in financial institutions, 45S competitiveness of. 483-484 computers in, 282 development costs in, 299 network technologies in, 329, 383 Telefonica, 464 Telephones, voice transducers in, 246 Television set production decline in U.S., 542 in Japan, 542 Terleckyj, N., 308 Texas Instruments. 467 Textile industry competitiveness of, 480487 in Japan, 384 management problems in, 495 new technology affecting, 495 patents affecting innovation in, 316 productivity growth in, 331 shortage of trained personnel in, 494 Thailand, government expenditures in, 111 Thermodynamics, Second Law of, 84, 229-230 Thomassen, K. I., 158 Thompson Products, 517 Three Mile Island, 209 Tilton, J., 320 Time factors affecting economy. 46 in biotechnology. and bringing products to mar- ket, 429. 432 in diffusion of innovations, 318 in expenditures by imitators of innovations. 313 and success of innovations, 277, 301 and transition to new technologies, 381-382, 386-387 Tobacco industry, productivity growth in, 331 Tomato harvesting, mechanization of. 340-341 Tort law. See Legal system Toxic chemicals. feared by public, 13, 15, 418- 420 Toyota, 601 Trace, Keith. 381 Trade deficit in U. S503 639 in electronics, 426 internationalization of, 47, 479-498 competition in. See Competitiveness in for- eign trade and technology transfer. 320-321 Trade law in U.S.. development in, 531-532 Trade secrets protection affecting application of technology, 376 compared to patent protection, 316 Transitions in industry, and applications of tech- nical skills, 23-28 Transistors, discovery of, 27. 250, 252 Transportation industry production processes in, 329 productivity growth in, 331 Traynor, Roger, 178-179 Treasury Department, 468-469, 471, 537, 597 Trilogy. 446 Trucking industry, productivity growth in, 329- 330 Tsang, W., 252 Turkey, agricultural productivity in, 346 Tushman, Michael, 295 Unemployment and inflation, 42 natural rate of, 45 technological change as cause of, 4. 20, 28-31 United Kingdom adoption of innovations in, 379 agricultural productivity of, 346 centralized finance system in, 111-113 dialogue between economists and technologists in, 108-109 economic growth in, 62 energy price increases in, 73 engineers in, 113 government expenditures in, 111 for biotechnology, 431 for defense, 108 for research and development, 136,544 labor costs in, 589 patents granted in U.S., 142 productivity related to investment rate in, 144 role of banks in, 457, 465 Unlisted Securities Market in, 11, 111 United States agricultural productivity in. 346. See also Ag- riculture capital formation in, 583-606 defense expenditures in, 108. See also Defense spending government policies of. See Govemment poli- cies in U.S. investments for research and development com- pared to other countnes, 13~131 labor costs in, 589. See also Labor force Naval Observatory, creation of, 120 productivity related to investment rate in, 144 technological education in, 25~258 See also Education for technical manpower technological position of, 39~395 technological rivalry with Soviet Union, 124, 129

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640 United Technologies, 463 Universities basic research in, 13, 27-28 263-273, 418 commercial incentives in, i71-273 formulation of policies in, 267-273 growth rate of, 268 and patent rights for faculty members, 271- 272 peer review in, 269 quality-utility issue in, 265-267 social utility of, 269-271 and technology transfer, 265 ties to industry, 26~265, 445, 555 Unlisted Securities Market, in United Kingdom, 11, 111 Upjohn, 467-468 Vaccine use, legal problems with, 197, 199, 202 Variations among sectors and companies, com- petition as factor in, 5-6 Venezuela, agricultural productivity of, 346 Venture capital, 10- 11, 447-449, 593-594, 596- 59? in biotechnology, 431 bank financing for, 457-4S9 corporate-managed, 450 and economic growth, 360-361 excess of, 425-426 importance of, 111, 414-415 in Japan, 544, 545, 562-563, 578-580, 594 and returns on investments, 360 taxes affecting, 431, 441, 448 third-round financing by, 449, 470 Vemon, John M., 122 Vernon, Raymond, 142, 143, 145 Victim compenc~hon, in industrial accidents, 181- 182, 200-201, 20~209 Vietnam War, 126, 129, 130, 218 Vincenti, Walter G., 281 Vogel, Ezra, 573 Wages. See also Labor, costs of ~ INDEX and competition in world market, 502 increased rates in Japan, 571 and productivity grown, 69 schemes for control of, 43 Waldrop, M. Mitchell, 133, 155 Wallerstein, Mitchel 13., 161 Wang Laboratories, 463, 470 Waste management and hazardous dump sites,.419, 420 and health effects of dump sites, 421 and investments in research and development, 149- 150 and multiparty legal disputes, 193 and tort immunity of companies, 202 Water pollution regulations, and technological in- novations, 159 Water power, use of, 285 Watson, James D., 6, 9, 13, 15, 213-225, 227, 362, 621 Watson, Thomas J., 30, 364 Waves and particles, dualism of, 246 Weather services, as public goods, 155 Weaver, Warren, 215 Weigle, Jean, 220 Westem Union, 24 White, Kerr, 266 Wiegma=, W., 249 Winter, S., 322 Wood industry, productivity growth in, 331 Worker's compensation systems, 201 World War II, and development of American sci- ence policy, 121, 123-124 Wright brothers, 25 Wyse Technology, 474 Yellin, Joel, 204 Young, John A., 7, 9, 11, 12, 13, 501-509, 521, 533, 539, 604, 621-622 Yuba Power Products, 178 Yugoslavia, agricultural productivity of, 346 Zschau, Ed, 6, 7, 15, 110, 468, 535-539, 622