An Alarm Is Ringing, but Few Are Listening : Technology: Industry knows that a strategy is needed for the global competition, but the Administration stays tuned out.
A great divide has opened in the last year between two camps of government and industry leaders. In one camp are supporters of an active U.S. high-tech strategy; in the other are opponents of such policies, who continue to believe that government should take a “hands-off” approach to our commercial industries.
Two striking incidents illustrate the division and the consequences it will have on our high-technology base:
The first involved Andy Grove, president of Intel Corp., and Budget Director Richard G. Darman. A few months ago, in response to Bush Administration proposals to cut a range of key high-tech programs, Grove sent Darman a violin. Enclosed was a curt note suggesting that Darman might like to pass the time fiddling while U.S. high technology burned.
The second was the release of two major but unpublicized Commerce Department studies last month, , both warning that the nation was in serious danger of ceding its technological cutting edge.
The first report stated simply that “if current growth rates continue, the Japanese will be the world’s No. 1 electronics producer and trader by the early 1990s,” noting that electronics was our nation’s most important industry.
The second study concluded that “before the year 2000, the United States could lag behind Japan in most emerging technologies.” Focusing on key emerging technologies with a global market value of $1 trillion, the report found that the United States was “losing and losing badly” in 10 strategic technologies, “holding” position in three and gaining in none.
Both reports were received in deafening silence by the Bush Administration.
There is even a disclaimer in the foreword to the electronics report. It reads: “This report represents the views of the Department of Commerce. It does not necessarily reflect the views of the Administration nor has it received interagency clearance.” If Commerce doesn’t represent the views of the Administration on competitiveness, who does?
The Bush Administration maintains that there is nothing wrong with the economy, pointing to a record peacetime economic expansion, low unemployment, progress in cutting the budget deficit and small improvements in the trade deficit.
More important, the Administration and its backers insist that the federal government has no business picking commercial “winners and losers” and thus have no plans for any sort of long-term economic policy that might include government funding to develop important industries or technologies.
This failure to develop a coherent strategy is fast becoming an economic Achilles heel. In addition to attempting to bury the two reports, the Administration has:
* Threatened to cut military and quasi-public programs supporting X-ray lithography, semiconductors and manufacturing;
* Fired the capable, outspoken director of the Defense Advance Research Projects Agency (DARPA), Craig Fields, in an effort to eliminate Pentagon funding of dual-use technologies;
* Blocked all efforts by DARPA and others to encourage U.S. development of high-definition television;
* Refused to support the key findings of the National Advisory Committee on Semiconductors, run by such industry giants as the heads of Motorola, Texas Instruments, IBM and Martin Marietta.
Certainly Congress, the Administration and private executives must share responsibility for revitalizing our strategic industries. But the climate that the Administration has created leaves little room for serious discussion of long-term solutions.
To recapture the technological cutting edge, we’ll need a new plan of action structured on three key principles:
* Face the truth. We must shift the debate from whether or not our industrial base is eroding to the search for positive solutions. There is room for disagreement over which are the best proposals, but not until we pull our heads out of the sand;
* Check our ideologies at the door. Let’s admit that we’ve relied on a strategic policy for defense, the S&L; bailout and aerospace, to mention a few. We need to pursue policies that work, not policies that validate outdated economic theories;
* Work with industry to implement solutions. Our nation’s destiny will now be forged from economic, not military, might and we need new institutional structures that can better incorporate the wisdom of industry leaders.
America can regain the industrial cutting edge; we have the skills, the resources and the talent. Industry and government must be partners, not enemies.
