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KEY POLICY ISSUES 147 years of effort, serious international competition is now emerging in large transports and has become a major market factor for commuters, helicopters, and executive aircraft. In this changed environment, an overt policy to restrain technology transfer provides little leverage and may serve to freeze U.S. companies out of markets and to stimulate the development of even more powerful technological competitors. Even with respect to national security, technology has value only in a limited time frame. Cooperative programs between the United States and its allies for licensing and coproduction of aircraft are also an important factor in technology transfer. This subject also is complex. It is in the national security interest of the United States for its allies to have an indigenous aircraft industry, which inevitably represents a potential threat in civil markets. Memoranda of Understanding (MOU) have represented the legal vehicle for large-scale transfer of technology for military aircraft. Industrial representatives believe these MOUs should be written with more consideration of the international competitive impact they may have on domestic manufacturers of civil aircraft. The key to effective policy formulation in this area is to insure that all parties with an important interest in the outcome have the opportunity for inputs. The mechanisms for marshaling the argument for national security and diplomacy are all within the government. The relevant inputs from the private sector are both more diffuse and more diverse, and the institutional arrangements for assembling and assessing these inputs are not now well articulated. MAINTAINING MOMENTUM IN R&D Although technological leadership is not of itself sufficient for success in the marketplace, the emergence of effective international competition increases its importance. The competitive assessment of the current promise of new technology in this study concluded that there were indeed important, attractive opportunities for further advances in aerodynamic design, controls, structure, and propulsion that would lead to greater fuel efficiency, lower noise, greater utility, and lower operating costs. In most of these technologies the United States still enjoys a lead. However, that lead is shrinking and competitors possess the skills and commitment to challenge its leadership in virtually every field. The likely increase, noted in this report, of cooperative international arrangements for the design and production of aircraft in order to spread risks, gain market access, and obtain capital will expand the potential for more rapid diffusion of technology. This ap
