U.S. Losing Its Edge in 10 of 11 High-Tech Fields : Competitiveness: A report by the General Accounting Office cites erosion of market share in aircraft, supercomputers, robotics--all but pharmaceuticals.
All but one of 11 key high-technology industries in the United States lost ground in the 1980s to foreign competitors, especially Japan, a new government report said Tuesday.
Of the industries studied, only the U.S. pharmaceutical industry held its dominant global position over the last decade, according to a report compiled by the General Accounting Office for Sen. Lloyd M. Bentsen (D-Tex.), chairman of the Senate Finance Committee.
Other American companies producing goods ranging from aircraft to supercomputers saw their world market shares decline during the decade, while Japan virtually took over manufacture of factory robots and consumer electronics.
“This GAO report dramatizes one of the toughest challenges confronting our country,” Bentsen said in a statement. “We must restore our competitiveness in this area if our economy is to provide good-paying jobs for future generations of Americans.”
The Texas lawmaker charged that the Reagan and Bush administrations failed to provide adequate government support for U.S. high-technology firms to enhance their chances for success in the global marketplace.
“While these selected industries and technologies do not necessarily constitute a bellwether for the U.S. economy, they do represent important sectors with likely impacts on overall economic performance,” the GAO said.
The GAO analysis, however, noted that it was difficult to identify clear trends because of company-by-company variations within an industry and the increasing importance of multinational firms that complicated an assessment of U.S. competitive ranking.
Other factors, such as the value of the dollar, affected the ability of American firms to retain their share of global markets, the GAO said, adding: “Evaluating emerging performance trends in specific areas is most difficult for rapidly evolving goods and emerging technologies, where trade and market-share data may be poor indicators of future position.”
But the report was issued amid increasing concern over the steady erosion of the preeminent economic position the United States enjoyed 20 years ago as American firms came under pressure from foreign competition.
By one measure, the GAO said, the U.S. share of the world’s high-technology exports declined from 1966 to 1986 while the Japanese share increased.
Among the 11 industries examined in the study, however, the GAO said that U.S. performance varied widely.
American aircraft makers, for example, saw their share of the world market drop from 73% in 1978 to 58% in 1989 as a European government consortium developed the Airbus. Similarly, U.S. firms supplied almost all of the world’s supercomputers through 1984, but their market share fell to 68% by 1990.
In fiber optics, however, Japan reportedly has edged ahead of the United States in an industry where production figures are limited.
Several major U.S. robot makers halted their output in the 1980s, but a Japanese-American joint venture is now one of the world’s biggest suppliers of robots for manufacturing.
American-owned firms, however, kept their leading position in the pharmaceutical industry, with 35% of the world market in 1988, the latest year for which figures are available. Japan was second with 20% of global sales in this sector.
The GAO study also reported a relative gain for Japan in the 1980s in the advanced material, consumer electronics, flexible (automated) manufacturing systems, semiconductors, semiconductor equipment and materials, and telecommunications equipment industries.
America vs. the World
How U.S. companies are faring against foreign competition in 11 key technologies:
Advanced materials: Varies. U.S. lags Japan in some leading-edge electronics and photonics; leads in structural ceramics for aerospace.
Civilian aircraft: U.S. share of world market declined from 73% in 1978 to 58% in 1989 as other nations nurtured their own industries.
Consumer electronics: U.S. share of global production has declined over several decades; by mid-1980s, imports exceeded domestic production.
Fiber optics: Several foreign companies have set up production facilities here; U.S. and Japan are competitive, but some indications suggest that Japan has edged ahead.
Flexible manufacturing systems: Japanese firms achieved dominance during the 1980s in production of machine tools key to flexible manufacturing.
Pharmaceuticals: U.S. firms maintained their global leadership in share of world market and introduction of new drugs.
Robotics: Several major U.S. robotics firms ceased production in the 1980s; domestic industry is now limited to firms that import components.
Semiconductors: U.S. firms dominated global markets through the 1970s but were displaced by Japan during the 1980s; domestic manufacturers is still strong in some categories.
Semiconductor equipment and materials: U.S. firms lost world market share to Japanese competitors in every segment during the 1980s.
Supercomputers: U.S. companies supplied almost all supercomputers through 1984, but market share dropped to 68% by 1990.
Telecommunications equipment: U.S. share of both domestic and overseas markets declined over the 1980s.
Source: General Accounting Office.
