U.S. Urged to Spend More for High-Tech R&D; : Competition: Government must focus on commercial applications that benefit industry if nation wants to stay ahead, panel says.

The United States risks losing its world leadership in high technology if it does not develop industrial technologies as a national priority and shift government research spending away from defense and basic science and toward commercial projects, according to a blue-ribbon panel of industry and academic leaders.

The Washington-based Council on Competitiveness, in a report released Wednesday, identified a series of “critical generic technologies” that are important to a broad range of industries, and called on President Bush to declare the development of these technologies a key national priority.

The study said that although the United States retains its lead in areas such as information systems and biotechnology, it is rapidly losing ground to Japan in advanced materials, electronic components and manufacturing technologies. Failure to reverse this trend will have a severe long-term impact on America’s ability to compete in world markets and maintain its standard of living, the report said.

In all, the report identified 94 key technologies and said that in one-third of them, U.S. companies are no longer competitive even though they led in virtually all of them a decade ago.

Many of the recommendations in the report were very general and appeared designed not to alienate the Bush Administration, which has generally been unsympathetic to calls for government support of industry. And others, such as the call for faster depreciation schedules on capital equipment, restoration of research and development tax credits, and relaxation of antitrust laws to allow more cooperative research ventures, are measures that have long been advocated by the technology community.

But though it stopped short of detailing exactly how government resources should be reallocated, the study called for a major shift in the way government R&D; funds are spent. Far too big a piece of the government research pie is devoted to defense-related work and basic science, the report said, rather than to technologies that will help American industry compete.

George M. C. Fisher, chief executive of Motorola and chairman of the group, said much of the $16 billion to $18 billion spent annually in more than 700 federal research laboratories does little to help industry. He said several billion dollars could be shifted to commercially oriented projects without damaging basic scientific research.

In addition, he suggested, spending on “Big Science” projects, such as the multibillion-dollar super-collider now under construction, should be slowed because such projects do not have direct commercial applications.

Fisher also pointed out that while defense-related research once drove the development of cutting-edge technology that later trickled down to the commercial sector, the reverse is now true. In areas such as electronic components and optical systems, for example, industry is at the forefront of innovation.

And the strong performance of American weapons in the Gulf War says little about the current state of the country’s technological capabilities, because many of those weapons were designed 10 to 20 years ago, he added.

Therefore, defense technology spending--which accounts for 61% of all federal government R&D; funding--should be re-focused on dual-use technologies that have both military and commercial applications, Fisher said.

Japan, the country that poses the most serious challenge to American technological pre-eminence, spends only $4.8 billion annually on defense-oriented R&D;, while the United States spends $65.6 billion. The United States is alone among industrial powers in failing to provide government support for technology that is important to international industrial competitiveness, the study said.

U.S. DEFENSE-ORIENTED TECHNOLOGY SPENDING The United States spends a lot more of its federal

research and development budget on defense uses than Japan

and Germany . . .

Percent of total federal government research and development budget, by mission, for 1988.

West U.S. Japan Germany Industrial development 0.2 4.8 14.5 Defense 65.6 4.8 12.5 Health 12.8 2.6 3.6 Energy 3.9 22.3 7.8 Advancement of research 3.8 7.6 13.3 General university funds (a) 43.7 30.8 Infrastructure (b) 1.8 1.8 1.8 Agriculture 2.0 3.9 2.1 Civil space 7.4 6.1 5.4 Environmental protection 0.5 0.5 3.4 Other (c) 1.8 2.0 4.8

(a) The United States has no equivalent to Europe’s and Japan’s general university funds.

(b) Includes transport, telecommunications and rural and urban planning.

(c) Includes social development and services, earth and atmosphere, and R&D; that is not elsewhere classified.

Numbers may not add to 100% because of rounding

Sources: Organization for Economic Cooperation and Development; National Science Foundation; national sources for Japan.

. . . and U.S. spending on R&D; is growing the fastest for defense.

U.S. federal spending for R&D; by agency, in constant 1982 dollars, in billions.

Net 1980 1985 1990 change Commerce 0.4 0.4 0.3 (0.1) Defense 16.5 26.6 27.9 11.4 Energy 5.7 4.5 5.1 (0.6) Health and human services National Institutes of Health 4.5 4.8 5.6 1.1 NASA 3.8 3.0 5.7 1.9 Nat. Science Foundation 1.1 1.2 1.5 0.4

Sources: National Science Foundation, National Science Board