U.S. Has Lost Lead in High Technology, Study Warns

A study released today challenges the notion that America will be able to replace millions of jobs lost in fading smokestack industries with new jobs in high-technology fields.

The Council on Competitiveness said the United States has lost its once commanding lead in many high-tech industries. It said that only a concerted effort by government, industry and the nation’s schools can reverse the trend.

“In field after field, from combustion engineering to consumer electronics, from machine tools to the integrated circuit, foreign competitors have moved into markets pioneered and once dominated by American firms,” the report said. “Often, their success was built on exploiting inventions made in American laboratories by American scientists.”

Faster Process

The report said other countries, such as Japan, have done a much better job of bringing new technology to the marketplace quickly.

Unless this trend is reversed, the study warned, the United States will suffer further deterioration in its trade deficits and a declining standard of living.

“Technology is essential to America’s competitiveness, the driving force behind increased productivity, export growth and a rising standard of living,” said John Young, chairman of the council and president of Hewlett-Packard Co.

Considered an Illusion

In releasing the report, Young said he wanted to challenge the comforting illusion that “the sunrise industries of high technology are the wave of the future--the economic panacea we all need.”

“In 1987, our trade deficit with Japan in electronics was almost as large as it was for automobiles. So Silicon Valley is not so far removed from Detroit,” he said.

The report said foreign inventors captured 47% of U.S. patents in 1987, up from 35% in 1975, with Japanese inventors holding key patents in an increasing number of fields.

And it warned that America could face a shortage of 500,000 scientists and engineers by the year 2010, due to retirements and a declining number of students choosing careers in science and engineering.

The report called on the next President to give his national science adviser Cabinet rank, with the power to coordinate all government policies relating to research and development. It said investment in education, equipment and facilities should be made a top federal priority.