Technology and Global Industry Companies and Nations in the World Economy (1987) / Chapter Skim
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Coping with Technological Change: U.S. Problems and Prospects
Coping with Technological Change: U.S. Problems and Prospects
Pages 160-190
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From page 160... ...
industrial competitiveness in world markets. The idea of a decline In He '~compebtiveness" of any given sector in a national economy is not easy to define and document.
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From page 161... ...
The same technological changes in communication and transportation have contributed to the spread of U.S.-based multinational enterprises over He past four decades. Technological advances have reduced the cost of search for new locations on die part of multinational enterpnses.
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From page 162... ...
With a relative decline in the costs of communication, We costs of transfem~g technology between independent parities can be presumed to have gone doum, whereas We speed of such transfer has probably increased substantially. That development has been particularly important because of a concurrent development during these same decades namely, an increase in tile number of sources from which the technology required in any given product line could be drawn.
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From page 163... ...
hn many cases, the ability of the national champions to compete in technolog~cally sophisticated lines of manufacture has also been helped by the Import protection Weir governments provided in weir home markets, as well as by Me selective provision of venous means of support.5 Many observers in the United States attribute the relative decline of U.S. industry during the past few decades to the unwillingness or inability of Me United States to engage In policies of a similar kind (Diebold, 1983, pp.
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From page 164... ...
Moreover, He global position of U.S.-based multinational enterpnses, including their foreign affiliates, offers a different impression of U.S. managerial performance than does tile output data for the United States alone; if He global exports of U.S.-based enterprises are taken as a guide, no competitive slippage occurred between 1966 and 1977 (Lipsey and Kravis, 1985~.
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From page 165... ...
Win multinational enterprises in the United States accounting for two-thirds or more of U.S. industrial output, most U.S.
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From page 166... ...
This demonstration, however, typically sets off a reaction of the deepest truss on on the pan of politicians, newspapermen, and over ordinary mortals, and a reaction of Me deepest annoyance on the part of other members of Me economics fraternity, because of venous cnt~ca1 and unanswered questions: Are the economic costs associated with the consequent adjustments being distributed to venous groups in Me economy on a pattern Mat is politically tolerable? · Is Me new production mix conducive to the continued future grown of Me economy?
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From page 167... ...
industries have been especially vulnerable to foreign competition because Hey have been paying wages in Me United States wed above He levels that seemed indicated on the basis of Weir productivity relative to over U.S. industries; In Hat category notably were automobiles and steel.~° A second group of affected ~ndus~ies were those Hat had been insulated from ~nternabonal competition by the frictional costs of distance, costs that had previously restrained producers from acquiring the necessary technical capabilities and from learning about foreign market opportunities; illustrative of such products were venous consumer soft goods and electronic items.
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From page 168... ...
welfare as a whole as to justify Me inequality in the burdens of adjustment. For instance, workers in industries in which relative wage levels have not reflected relative productivity, such as those in automobiles and steel, have In effect been extracting a rent from the rest of the U.S.
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From page 169... ...
Of We various hypothetical possibilities, the assumption Hat the next war will be much like the last, however implausible that may be, still ranks very high. Hence He idea that a county will need, for example, a national steel industry, a national aluminum industry, and a national petroleum industry for defense purposes is bound to be an unshakeable element in national defense planning.
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From page 170... ...
There is noting new in Hat generalization. Historians usually explain the spectacular rise Of Germany and Japan as well as He relative decline of the United Kingdom in pen by reference to their respective systems of education (Lances, 1969, pp.
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From page 171... ...
The problem is not limited to the fact Cat the U.S. labor force may be unable to provide the productivity that is consistent win high living standards for the country.
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From page 172... ...
Moreover, public initiatives such as military procurement sometimes generate costs that inhibit commercial research and development rather than support it. The principal means by which military programs encourage commercial research and development is Trough the spillover effects to nonmilitary applications.
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From page 173... ...
If the fruits of our technological efforts must inevitably be shared, however, there is a case for encouraging joint national programs in the stimulation of technology rather than unilateral national efforts, wherever that can be arranged. True, joint national efforts usually generate formidable organizational problems that national efforts can sometimes avoid; but confronting those problems may be seen as
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From page 174... ...
landscape is littered win anachronistic regulations and outmoded precedents that tend to put a damper on managerial initiatives. Among the most obvious are those relating to allh~USt and restrictive business practices.
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From page 175... ...
might use Heir vastly increased capability for movement by establishing a production plant In the United States. As He statistics of foreign direct ~nvesunent In He United States dramatically illustrate, that possibility is now veer real.~4 This profound change In inten~abonal markets suggests the need for a radical overhauling of He standards and precedents of which He U.S.
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From page 176... ...
Numerous agreements among governments limiting the international movement of various types of steed now cover so large a part of the worId's steel output as to take on many of Be characteristics of a world steel cartel. The slow growth in the world demand for steel, when coupled with the curbs on international competition, could easily have the effect of attesting the steel indus~Ty's investments in new steel products and processes.
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From page 177... ...
One approach to this issue is to review and revise national policies that now influence managements to respond to foreign competition by creating new offshore facilities, rawer than by attempting to increase their productivity and lower their costs in the United States. Of course, the possibility of increasing productivity in the United States in response to increased foreign competition is not always realistic; some old U.S.
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From page 178... ...
politics, however, the problems of managing technological change are likely to be framed as problems in international trade policy, and the instrumental responses are likely to be measures for res~ict~ng trade. Managing technological change, therefore, embraces all the familiar issues associated with trade policy.
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From page 179... ...
In the eyes of disadvantaged groups, those consequences might appear no worse than a set of policies whose costs have to be borne by them. Still a third strand in the current wave of demands for unilateral action is a mounting impatience among the American public and the Congress with the behavior of other governments in international trade.
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From page 180... ...
Practically all multilateral agreements are also bedevilled by the problem of the free nder. With more than 160 sovereign states of various sizes and interests engaged in international trade, countries that will hope to profit from open markets without opening their own are bound to appear in considerable number.
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From page 181... ...
markets. And it makes a mockery of the rules on international trade agreements.
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From page 182... ...
Although the VEAs and the OMAs have been des~uc~ve to ~ntemabonal trade, it should not be assumed that aB trade agreements Hat are less Han universal in scope are necessarily destructive. Economists have long recogn~zed Hat In some circumstances, trade agreements Hat are discriminato~y in their application may actually foster trade and may contribute to He welfare of nonparticipating countries as weD as of those that parncipate (Lipsey, 1960~.
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From page 183... ...
policymakers are far from considering any such ambitious possibilides. Instead, weir next efforts are being directed at extending the GArr to the liberalization of services and of foreign direct investment, programs Mat seem even less appropriate to the GAIT structure Han dealing win Be new wave of made restrictions.
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From page 184... ...
One key reason for Be striking protectionist sentiment in Congress and the public press is that a coalition of protectionist interests In the United States has succeeded in a strategy Hat Hey have pursued persistently over the past 35 years. The strategy has been fund~nentally to ensure Ache problems associated with increased international trade are always addressed on a case-by-case basis rawer Can systemically.
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From page 185... ...
In each of these instances, costs and benefits of the trade regime were framed and presented as a single package. Those same acts, however, camed We seeds of the eventual undermining of the trade policy they supported, as a series of technical amendments made it increasingly easy for special Interests to raise their trade problems on a case-by-case basis.
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From page 186... ...
3. From 1980 to 1984, foreign direct investment as reported by U.S.-based firms has been virtually unchanged.
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From page 187... ...
14. Between 1970 and 1984, the book value of all foreign direct investment in the United States rose from $13.3 billion to $159.6 billion.
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From page 188... ...
328-356 in U.S. Competitiveness in the World Economy, G
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From page 189... ...
1982b. National Industrial Strategies and the World Economy.
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From page 190... ...
1979. Foreign Production of Technology-Intensive Products by U.S.-Based Multinational Enterprises.
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