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Time Horizons and Technology Investments (1992) / Chapter Skim
Currently Skimming:

1 The Issue and the Approach
Pages 6-11

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From page 6...
... technology-intensive corporations have shorter time horizons for planning and investment than do their principal Japanese and German competitors. As such, the near-term orientation of U.S.
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From page 7...
... Is there an identifiable link between lengthened planning and investment time horizons and improvement in corporate performance? Many very successful companies constantly seek to shorten their operating time horizons by focusing research efforts more sharply on potentially profitable projects, by getting new products to market more quickly, by generating revenues from investments in plant and equipment as soon as possible, and by quickly and successfully instituting quality programs that increase profits.
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From page 8...
... Focusing on government investments and regulatory procedures, the chapter recommends actions and approaches through which government policymakers can productively lengthen the time horizons of private investment decisions in the United States. The committee is grateful to the participants in the workshops for their numerous insights and contributions, and to Professors Morone and Paulson for their work, but the findings and recommendations in this report are based on the experience and consensus judgment of the committee.
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From page 9...
... An earlier series of studies by committees of the National Academy of Engineering and the National Research Council found similar evidence of short-term behavior in several of the seven industries they studied (Steel and Hannay, 1985~. In the summary of the findings of those studies, particular attention was drawn to the problems of steel and semiconductors because of the cyclic nature of their markets, abetted in the case of semiconductors by rapid obsolescence of product generations and of production equipment.
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From page 10...
... Between 1973 and 1985, manufacturing gross fixed capital formation as a share of manufacturing gross domestic product averaged 12.4 percent in the United States and 19.1 percent in Japan, a ratio of 1.5 in Japan's favor. From 1976 to 1988, investment in machinery and equipment in Japan varied from 14.9 percent to 20.6 percent of gross national product (GNP)
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From page 11...
... When defenserelated R&D is removed, however, the results are quite different; the United States lags a full percentage point behind Japan and Germany in R&D spending as a percentage of GNP (in absolute terms, in 1987, the United States spent about $68 billion to Japan's $39 billion and Germany's $18 billion)
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Key Terms

  • investment time
  • capital formation
  • capital costs
  • investment decisions
  • gross capital

  • corporate investment
  • gross domestic
  • relative levels
  • technology investments
  • marginal capital

  • manufacturing gross
  • low relative
  • market share
  • corporate executives
  • private investment

  • government investments
  • noncompetitive time
  • domestic product
  • corporate performance
  • states actually

  • chose instead
  • perform exceedingly
  • absolute expenditures
  • remove internal
  • regulatory procedures

  • effective international
  • quality programs
  • lose market
  • risky investments
  • chapter reflects


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