U.S. Needs Self-Sufficiency of Its Technological Fabric : Economy: America is fast becoming a second-rate power, importing industrial goods and selling its resources and assets.
The great changes sweeping the East Bloc augur major cuts in U.S. defense spending. But before we rush to spend the peace dividend, we should rename the defense budget the “strategic security budget.” This would help us think of it as the pot of money we use to defend ourselves against any external force that, left unchecked, would lead to the subjugation of the United States.
The forces likely to undermine our independence and security today are different from those of the past. The military danger is diminished, but the technological and economic threat has never been greater. How ironic it would be if the United States goes down in history as the country that succeeded in casting a protective military net over the Free World, only to lose its own economic freedom to the very nations it shielded.
For those of us who earn our living fighting foreign competitors, it is painfully evident that the United States is losing its leadership in one industry after another. American companies must contend with an unusual trinity of forces. Our most ferocious foreign competitors are frequently subsidized and steered toward markets in which the U.S. edge is slipping. We face trade barriers that limit our penetration of foreign markets. Finally, we work with an Administration whose laissez-faire view of the world makes it ill-suited to cope effectively with the new realities of international trade.
It is instructive to re-examine some of the changes that occurred in the 1980s. In the electronics industry, for example, there is trouble up and down the industry’s food chain. In 1980, there were several American suppliers of the silicon wafers used to make chips. Today, there are none. Ten years ago, U.S. semiconductor manufacturers controlled 57% of the world semiconductor market. Today, their market share is 35%.
Even more alarming is what’s happening to our customers. In 1980, U.S.-based electronics companies consumed 42% of the world’s semiconductors. The number today is 32%. There is practically no consumer electronics industry in this country. The computer industry, I’m afraid, is next to go.
Projecting these and other trends onto the ‘90s, the United States emerges as a second-rate economic power importing most of its industrial goods and paying for them by selling its natural resources and dwindling corporate assets. That sounds a lot like the definition of a colony. It is difficult to imagine a military action by the Soviet Union, short of a nuclear strike, that could achieve a more damaging blow to the well-being of the United States.
To reverse these trends, we should aim to make America technologically self-sufficient by the end of the decade. A first step would be for the President to acknowledge that the deterioration of our industrial fabric is a threat to our strategic security. This may seem trivial, but for the current Administration it would be a major step.
We must also conceive of solutions that have measurable effects before the targeted problem becomes unmanageable. If we experience another decade like the ‘80s, it will be all over. So we can’t rely on solutions that take longer than 10 years to work. For example, one of the most frequently mentioned--and certainly worthwhile--cures for what ails industrial America is to improve our education system. The benefits, however, would not begin to be evident until the next century.
Long before then, we need to inject funds into our industrial infrastructure to keep it alive and well. We need to make sure that companies like Intel, its U.S.-based suppliers and its customers will be around to employ the graduates of the improved education system.
So let’s declare technological self-sufficiency the top priority of our strategic security spending. Then let’s redeploy our current “defense” spending to achieve it. And let’s hope we’re not too late.
