Group Unsure if High Tech Ensures U.S. Industrial Edge
The belief that America’s economic standing in the world will be rescued by emerging high-technology industries was questioned Wednesday by a prestigious study group that said the country is fast losing its dominance in many of these fields.
The Council on Competitiveness, contending that the country has been far too complacent in the face of growing foreign competition, recommended a major effort on the part of government, industry and schools to reverse the trend.
“We cannot afford any further erosion in our once-commanding technological lead,” said the report of the council, which comprises 151 top officers of industry, labor and higher education. “Because technology is a driving force behind productivity improvements, export strength and a high standard of living, the stakes are enormous,” it said.
In releasing the report, John Young, chairman of the council and president of Hewlett-Packard Co., said he wanted to challenge the belief that high-technology industries would provide the “economic panacea we all need” to offset job losses in traditional smokestack industries.
“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 U.S. companies’ market share had shrunk so dramatically over the past two decades that the country suffered a trade deficit in high-technology goods for the first time ever in 1986.
Citing government statistics, the report said that between 1970 and 1987, American manufacturing companies saw their proportion of the U.S. market for record players fall from 90% to 1%; for color televisions from 90% to 10%; for machine tools from 100% to 35%, and for telephones from 99% to 25%.
“In field after field . . . foreign competitors have moved into markets pioneered and once dominated by American firms,” the council said. “Often their success was built on exploiting inventions made in American laboratories by American scientists.”