|
|
 THE STAT 26Percentage of wireless customers who use their cell phones to take picturesMore Vitals
| |
MARCH 16, 2004
Gunning for the U.S. in Technology Once the undisputed leader, America is now under assault from countries worldwide. How did this happen, and will the U.S. be able to fight back? In the history of the U.S. technology industry, 2004 will be remembered as the year that outsourcing hit home. Consultancy Gartner Group figures that U.S. tech companies will send 500,000 jobs overseas this year -- and indeed, hardly a week goes by without a major U.S. tech outfit announcing a new R&D center in Asia. As outsourcing has begun to hit high-salary jobs in programming and tech services, the trend is giving rise to a wider fear -- that U.S. dominance in high tech is starting to wane. For half a century, America has reigned supreme in technology. U.S. research institutions have been the best on the planet, and the U.S. capital-formation machine has turned their discoveries into one breakthrough after another in transistors, communications gear, computers, and just about every other key high-tech field. Players such as IBM (IBM ), Intel (INTC ), Hewlett-Packard (HPQ ), Texas Instruments (TXN ), Microsoft (MSFT ), and General Electric (GE ) have risen from this culture to dominate world markets in their businesses. Now, life at the top suddenly seems a lot less lonely. In fact, although the U.S. is still the undisputed champ in technology overall, in a handful of key areas it already appears to be falling significantly behind foreign competitors. "ON THE VERGE." The Nordic countries lead the world in designing and making cell phones. Israel easily competes with the U.S. for the top spot in information-security technology. Japan is beating America in a number of crucial fields, including optical electronics, robotics, and semiconductor-making equipment. And European aircraft consortium Airbus Industrie's market share should pass Boeing's (BA ) sometime this year. "We're on the verge of losing the commercial airline market," says Duane Shelton, president of the International Technology Research Institute in Baltimore. "At one point that was our largest foreign-exchange market." Some of this competition comes courtesy of the industrial development policies of foreign governments. Unlike the U.S., such countries as China, Singapore, and Taiwan are happy to co-fund tech startups and offer them 5- or 10-year tax holidays. The government of Singapore will pay 35% of the cost of new ventures -- as much as several hundred million dollars, says Curt Carlson, the CEO of SRI International, a Menlo Park (Calif.) nonprofit research and development organization. "With the government supplying significant funding, it's a different world," Carlson adds. "They're doing it to bring high-value innovation into the country. [The U.S. isn't] as aggressive about that kind of co-funding. We should make it easier for small companies on a lot of fronts, including that one." TOO TIGHT A FOCUS? Washington's priorities may be another factor making it hard for the U.S. to stay on top. Under the Bush Administration, federal spending for science and technology research and development have soared, rising to their highest level in 37 years as a percentage of domestic discretionary spending. But Shelton points out that the U.S. is falling behind other countries in per capita spending on R&D. And in any case, the Defense Dept. has been the primary beneficiary of U.S. budget increases, and it has spent most of its funds on weapons development, not research, according to the American Association for the Advancement of Science (AAAS). Outside of Defense, research funding has largely been concentrated on the life sciences and info-tech research. While those are worthy fields, such a tight focus has left out key disciplines such as chemistry, materials science, and physics, which may play a vital role in future economic and technology growth. Materials-science breakthroughs helped spur the development of the semiconductor and the computer revolution that followed. "It's true that we're spending more money than ever on research," says Kai Koizumi, director of the AAAS's R&D Budget Policy Program. "But for most disciplines, the picture isn't rosy."
BW MALL
SPONSORED LINKS
Buy a link now! | | |
 Copyright 2004, Bloomberg L.P.Terms of Use | Privacy Notice |
Printer-Friendly Version