National Interests in an Age of Global Technology (1991) / Chapter Skim
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4. CAPTURING BENEFITS OF GLOBAL TECHNICAL ADVANCE: POLICY IMPLICATIONS
4. CAPTURING BENEFITS OF GLOBAL TECHNICAL ADVANCE: POLICY IMPLICATIONS
Pages 71-88
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From page 71... ...
International policy recommendations have tended to focus on issues regarding trade, intellectual property rights, and international standards while devoting little attention to issues raised by transnational technology flows or foreign direct investment. During the past decade, however, the rapid advance of international technological convergence and interdependence have recast the "competitiveness" challenge to U.S.
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From page 72... ...
The nature of each industry's technology, its product and production processes, the structure of its value-added chain, and the scale and scope of its market all play important roles in explaining interindustry variations. Likewise, the extent to which firms within a given industry have globalized their technical activities often varies significantly according to each firm's tenure in international markets, the size and openness of its home market, and the peculiarities of its historical development within a given national economy (see Appendix A)
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From page 73... ...
For example, local content requirements and other nontariff barriers to trade make it virtually impossible for a firm to penetrate certain foreign markets except through foreign direct investment, joint ventures, or other technology-transfer or production-sharing arrangements. THE CHANGING CHARACTER OF COMPETITION AMONG NATIONS The competition for economic and technological advantage among nations has intensified, not lessened, with the globalization of industry and corresponding growth of international economic interdependence.
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From page 74... ...
The changing corporate strategies of multinational corporations and the rapid growth of international economic and technical interdependence underline the fact that the neat dichotomy of domestic and foreign policies the distinction between policy areas that are "legislated" domestically and those that are "negotiated" internationally is breaking down. Domestic regulations regarding competition, health, safety, and the environment, fiscal and monetary policy, and a broad spectrum of science and technology policies, all are forcing their way onto the international negotiating table despite the protestations of national governments.
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From page 75... ...
domestic market through foreign direct investment and trade, the growing globalization of the advanced technical activities of U.S. multinational corporations, and the concurrent loss of world market share and relative technical capability by numerous U.S.-based industries have underscored the limitations and vulnerabilities of the U.S.
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From page 76... ...
The lack of international consensus or rules with regard to high-tech trade, foreign direct investment, antitrust policy, or the host of increasingly international-formerly "domestic" policy issues makes it increasingly difficult for U.S. and foreign legislators to resist the protectionist backlash that accompanies most structural adjustment and economic change.
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From page 77... ...
technical enterprise and inherent challenges and opportunities of the emerging global technical enterprise, the following domestic and international policy directions represent, in the judgment of the committee, essential elements of a broad national technology strategy for the United States. Domestic Policy Directions It is imperative that the United States continue to build on the comparative strengths of the nation's technical enterprise its research capabilities; its system of advanced technical education; its large pool of elite technical talent; and its extensive, sophisticated information technology infrastructure.
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From page 78... ...
While building on the comparative strengths of the nation's technical enterprise, this policy orientation neglects pressing national vulnerabilities that have less to do with an inability to create new technology than with a failure to adopt and adapt existing technology effectively for commercial benefit. Therefore, the committee recommends that policymakers expand support for diverse initiatives at the federal, regional, and state levels to
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From page 79... ...
. A New Approach to Generic Technology Development The intensification of international technological competition and interdependence underlines the need for the United States to develop a broader approach to the development and diffusion of commercially significant generic technologies.
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From page 80... ...
Potential by-products of collaborative public-private generic technology programs include the cultivation of local or regional technical networks; the resulting diffusion of "best practice" technical, managerial, and organizational capabilities; and the enhanced intercorporate organizational learning that enables participating firms to translate related technologies into commercial products rapidly and effectively. In this context, public policies in support of generic technology should be more attentive to the broader economic and regulatory factors that might amplify or diminish the direct and indirect benefits of generic technology programs.
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From page 81... ...
public policy should acknowledge the need for a stronger public role in support of generic technological capabilities for the benefit of the nation, and establish credible mechanisms for translating this commitment in principle into specific actions. The Issue of National Treatment The rapid increase in foreign direct investment in U.S.
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From page 82... ...
Nonetheless, recent growth in foreign technical capabilities and international technological interdependence suggest that as U.S. lawmakers assess the relative costs and benefits of discriminatory policies, they should attach greater weight to the many benefits U.S.
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From page 83... ...
There has been even less communication and cooperation among those responsible for formulating and implementing domestic and foreign policies that bear on the health of the nation's commercial technology base. This situation argues for expanding agencies' recruitment of technically competent personnel to formulate and implement domestic and international economic policy; it also points up the need for greater organizational focus at the national level on the policies affecting commercial development and application of technology.
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From page 84... ...
International Policy Directions The increasingly global character of corporate technical activities has made it essential that policies aimed at developing and better managing the nation's technical endowments be outward looking-consistent with an international policy framework that fosters and structures technological competition, cooperation, and exchange among nations and firms. Ultimately, the nation's ability to capture a fair share of the benefits of the global technical enterprise will depend primarily on the extent to which private corporations operating within its borders seize the opportunities presented by the emerging global technology base.
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From page 85... ...
Nevertheless, in the context of the current surge of world foreign direct investment and the proliferation of transnational corporate alliances and mergers, often in already highly concentrated industries unilateral approaches to antitrust regulation and enforcement pose two major hazards. On the one hand, the relaxation of antitrust requirements by the world's leading economies may increase opportunities for monopoly abuse in certain industries and actually impede technical advance.
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From page 86... ...
Both the danger of anticompetitive abuse by global companies and the costs of protectionist antitrust regulation underline a growing need for greater international cooperation in antitrust policy. Discussions currently under way within the multilateral forums of the GATE and the Organization for Economic Cooperation and Development on this issue warrant greater attention and resolve from all industrialized nations, including the United States.
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From page 87... ...
Board of the Ben Franklin Partnership Fund. Harrisburg, Pa.: Pennsylvania Department of Commerce President's Commission on Industrial Competitiveness.
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