Md. lost high-tech jobs in late '80s Foreign countries gained ground on U.S. leadership

November 18, 1992|By Gilbert A. Lewthwaite | Gilbert A. Lewthwaite,Washington Bureau

WASHINGTON -- The United States lost ground to foreign competitors in 10 out of 11 high-technology industries in the 1980s, according to a government study released yesterday.

The General Accounting Office found that Japan gained on the United States in many high-tech areas, including research and development, trade, and patent applications.

The report, commissioned by Sen. Lloyd Bentsen, the Texas Democrat who chairs the Senate Finance Committee and sits on the international trade subcommittee, was the latest evidence of a disturbing trend over recent years that threatens U.S. dominance in the world's high-tech market.

The report from the GAO found that only the U.S. pharmaceutical industry maintained its strong international position over the decade.

U.S. leadership declined in the 1980s in most of the other industries studied -- telecommunications equipment, fiber optics, semiconductors, semiconductor equipment and materials, robotics, flexible manufacturing systems, supercomputers, advanced materials, consumer electronics and civilian aircraft.

"While these selected industries and technologies do not necessarily constitute a bellwether for the U.S. economy, they do represent important sectors with likely impacts on overall economic performance," the GAO report said. It noted: "Current concern over the U.S. trade position extends beyond growing trade deficits to the question of technological leadership."

The GAO cautioned that, while there was "some evidence" of a decline in U.S. leadership in high technology, the case was not "clear cut for all measures of high-technology activity, and some measures show continued U.S. strength."

Senator Bentsen noted President-elect Bill Clinton's campaign emphasis on high technology, and said: "This GAO report dramatizes one of the toughest challenges confronting our nation. We must restore our competitiveness in this area if our economy is to provide good-paying jobs for future generations of Americans."

Mr. Clinton promised during the election campaign to develop the world's best communication, transportation and environmental systems, to create a high-speed rail network, develop "smart" highway technology and to support a high-tech short-haul aircraft.

His economic blueprint, "Rebuild America," called for switching military research funds to civilian use, and for the development of a national information network linking every home, business, lab, classroom and library by the year 2015.

Lending strength to that assertion yesterday, the GAO report found that:

* U.S. research and development expenditures were five times the Japanese level in 1970 but less than three times that level in 1988.

* The U.S. trade surplus in high-technology products increased between 1978 and 1982, then declined sharply to post its first deficit in 1986, before starting to improve again on the weakness of the dollar, which made American-made goods cheaper for foreigners to buy.

* Japan's share of U.S. patents increased to 21 percent in 1989, from 4 percent in 1970.

* The last of the large-volume U.S. robot producers was sold to a foreign company in 1990.

* U.S.-based companies' share of the semiconductor materials and equipment markets fell steadily in the 1980s.

* U.S. setbacks have extended from the low end of the telecommunications industry to the high end of the supercomputer sector.

"The extent to which gaps have been narrowed in technology development and supply of goods varies widely," said the report, noting that the United States kept its dominance in civil aircraft supply despite the increasing market share of the European Airbus. It also maintained its world leadership position in supercomputing technology despite increased competition from the Japanese.

The United States also remained the biggest outright spender ++ on high-tech research, although Japan now devotes roughly the same percentage of its gross national product as the United States to research and development. And the United States was the most prolific producer of scientific papers, publishing six times as many as Japan in the 1980s.

But the report found signs of weakness even among evidence of strength. It reported that Japan paid the United States $2.6 billion in high-tech royalty and license fees in 1989 and received $490 million from the United States in royalties and fees.

"While the U.S. position as a strong exporter of technology, measured by royalty and license fee receipts, is evidence of U.S. technological strength," the report said, "that position can also be viewed as an indicator of the failure of U.S. industry to fully exploit its technological assets."

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