US Industrial Competitiveness Research Articles

The delicate task of linking industrial R&D to national competitiveness

The question posed in this research is whether US R&D-oriented competitiveness policies are likely to be effective in light of a number of concerns about the deterministic role R&D is presumed to play in competitiveness. Three relationships are explored: (1) R&D intensity and comparative advantage; (2) R&D intensity and competitive performance; and (3) US and Japanese relative R&D efforts and competitive performance. Although R&D was found to have a direct association with comparative advantage, it was not a systematic predictor of US industrial competitiveness. Relative to Japan, R&D was found to be a necessary but not a sufficient condition for competitive ability. Critical additional determinants are total factor productivity and levels of industrial basic research spending. The findings suggest that US R&D policies may enhance US technological innovation, but not necessarily the transformation of that skill into competitive strength.

In defense of corporate myopia

Much has been written recently about the decline of US industrial competitiveness in world markets.' In fact, two members of President Clinton's economic policy team, Laura Tyson and Robert Reich, have written about the need to improve American productivity, focusing on high-tech R& D and worker skill upgrading. A major focus of both popular and professional writings on the problems of American business has been the alleged short-term orientation of American firms relative to European and, especially, Japanese companies. The first Annual Report to the President and Congress by the Competitiveness Policy Council (Chaired by economist C. Fred Bergsten) stated that one of the most important causes of declining competitiveness 'is America's proclivity to think and act with a short-term horizon. By contrast, our competitors around the world plan and execute their actions against far more extended time horizons.'2 This 'corporate myopia'-too narrow a focus on short-term profits-has been linked to US tax and antitrust policy, takeover laws, the lack of lifetime tenure at US firms, and a culture of greed. Proposals have been made for government policy to modify this behavior.3 Granting, for our purposes, the existence of this myopia -which can be seen as a higher rate of time preference (or subjective discount rate) by US corporate decision makers relative to those in Europe and Japan-the question we raise in this paper is the following: 'Would there be an unambiguous gain from a move to a longer-term view by US business?' This paper suggests some caution, noting as a point of departure that those countries in which a longer-term business perspective is applauded by US observers tend also to be those in which collusion, tacit or otherwise, has seemed to be an ingrained part of the business culture. Coincidence? A sociological phenomenon? Perhaps, but this paper offers an alternative explanation. The point is that an emphasis on short-run profits by American firms may have contributed to the generally competitive environment of most US industries. While others have expressed concern about the anti-competitive implications of cooperative activities in the RD one could certainly object to the intervention of government into corporate decision making on other grounds as well.

Rethinking technological economy of scale

Until about a decade ago, American business still believed in the of scale. Big was better in every aspect of industry. This myth has been crumbling in view of the decline in US industrial competitiveness. There has been a shift from centralized, big machines and capital-intensive processes to smaller systems characterized by do it yourself and, in some cases, just in time operations. The natural course of almost any technology leads to fragmentation and smallness. Technological economy of scale is temporary, but has been perpetuated for too long both by monopolists and advocates of centrally planned economies. >

The Impact of the Strategic Defense Initiative on US Civilian R&D Investment and Industrial Competitiveness

At a time when US industrial competitiveness was at its lowest point in the modern era, the Reagan Administration requested unprecedented sums for research and development of the Strategic Defense Initiative (SDI). If funded at the levels requested, SDI would further weaken the US competitive position by substantially reducing the amount of civilian R&D investment. Past military R&D has made a negligible contribution to US economic performance, and the exotic nature of SDI technology suggests that its contribution will be even smaller. Given the current state of the US economy, the consequences of a policy which greatly undermines US competitiveness are likely to be much more serious now than they would have been in the past.

Responsive technology for improving US industrial competitiveness

Responsive technology for improving US industrial competitiveness