Chapter 24

TECHNOLOGY

-President Bill Clinton

T

Jechnological leadership is vital to the national interests of the United States. As we enter the twenty-first century, our ability to harness the power and promise of leading-edge advances in technology will determine, in large measure, our national prosperity, security, and global influence, and with them the standard of living and quality of life of our people.

The United States has an unmatched capability for technological innovation - an unparalleled R&D enterprise; a world-class cadre of scientists and engineers; the world's most diverse manufacturing base and productive workforce; a broad and technologically sophisticated service sector; and a climate and culture that encourage competition, risk-taking, and entrepreneurship. These assets have positioned the United States to maintain its global technological leadership in the 21st century.

TECHNOLOGY AND THE U.S. ECONOMY

Technology is the single most important determining factor in sustained economic growth, estimated to account for as much as half the nation's growth over

the past 50 years. In fact, America's research-intensive industries aerospace, chemicals, communications equipment, computers and office equipment, pharmaceuticals, scientific instruments, semiconductors, and software - have been growing at about twice the rate of the economy as a whole over the past two decades. The performance of individual companies - the agents through which economic growth occurs — is strongly linked to their use of technology. A recent Department of Commerce analysis shows that the use of advanced technologies enhances manufacturing in virtually every important performance category. Firms that use advanced technologies are more productive, profitable, and pay higher wages. Between 1987 and 1991, employment at plants that used eight or more advanced technologies grew 14.4 percent more than plants that used no advanced technologies, and production workers' wages were more than 14 percent higher. Technology is transforming the very basis of competition enabling small businesses to perform highquality design and manufacturing work that previously required the resources of big business, while allowing big businesses to achieve the speed, flexibility, and proximity to customers that were once the sole domain

of smaller firms. Technology provides the tools for creating a spectacular array of new products and new services. It is creating new industries - advanced materials, mobile cellular communications, electronic commerce and revitalizing old ones like steel, automobiles, and textiles.

In today's highly competitive global marketplace, technological leadership often means the difference between success and failure for companies and countries alike.

TECHNOLOGY AND AMERICA'S
QUALITY OF LIFE

New technologies are improving the quality of life for all Americans. Medical research in pharmaceuticals, biotechnology, and medical devices helps us lead healthier lives and offers new hope for the sick. Environmental research brings better monitoring, prevention, and remediation technologies. Advanced monitoring and forecasting technologies - from satellites to simulation are helping to save lives and minimize property damage caused by hurricanes, blizzards, microbursts, and other severe weather. Sophisticated traffic management systems for land, sea, and air transportation enable the smooth and timely movement of more people and goods.

Agricultural research is producing safer, healthier, and tastier food products. Automobile research is providing safer, cleaner, energy efficient, and more intelligent vehicles. Aeronautical technology is making air travel safer, less costly, and more environmentally compatible. Energy research is helping to deliver cleaner, renewable, and less expensive fuels. And information and telecommunications technologies have enabled instantaneous communications around the globe.

THE FEDERAL MISSION

For more than 200 years, the Federal government has played a vital role in developing a scientific and technological infrastructure that has substantially contributed to U.S. economic growth and to the competitive success of American industry. Federal research has given birth to new industries, such as computers and biotechnology, and propelled U.S. firms into a leadership position in other industries, including agriculture, aerospace, telecommunications, and pharmaceuticals. Federal research has also made possible many other contributions to American life from better tasting frozen orange juice and highly absorbent disposable diapers to vaccines for malaria and closed-captioned television for the deaf.

For most of this century, our competitiveness and ability to create wealth have been based on how well we manipulate our human, technological, and material resources. Today, however, our global competitive standing depends increasingly on our ability to create knowledge and the speed with which we put that knowledge to work.

The emergence of the Information Age has created new challenges that are pressing at the forefront of government policy. Important issues include: fair rules of competition, the protection of intellectual property, the security of business transactions in electronic commerce, individual rights to privacy, law enforcement investigation, upgrading the skills of the American workforce, and integrating information technologies into the education system and the delivery of government services. The Clinton Administration has actively addressed these issues and enabled Americans to enjoy the benefits of rapid and full use of information technologies - economic growth and job creation, higher standards of living, and improved quality of life.

GLOBAL INVESTMENTS

Technology has become a global enterprise and the United States faces tough competitors worldwide. Support for research and technology development

remains strong in the advanced industrial nations, such as Japan and countries of the European Union. In July 1996, for example, the Japanese Cabinet approved a proposal to spend $155 billion on government science and technology programs over the next five years of this sum, 95 percent is targeted at civilian technologies. If these plans are implemented, Japanese government expenditures on civilian R&D will soon exceed U.S. funding in absolute terms.

While science and technology in Europe and Japan will continue to be important to the United States, a number of rapidly growing, newly industrializing countries have set their sights on joining the ranks of the world's technological leaders. Several Asian countries including South Korea, Taiwan, China, Malaysia, and Indonesia - are rapidly developing technical capabilities that will enhance their competitive position in global markets. Many industrializing countries are emphasizing the development of indigenous technological capabilities - increasing R&D investments, establishing research institutes and key technology programs, forming government-industry partnerships, boosting technical manpower development programs, modernizing key manufacturing sectors, and planning for information superhighways.

For the last 50 years, America's view of competition in high technology focused primarily on Europe and Japan. We must now account for a more dynamic global technology enterprise in which many nations are increasingly able to participate.

SHIFTS IN THE NATION'S R&D PORTFOLIO

For much of this century, America's premiere private sector laboratories played a major role in the advancement of new technologies in their early stages. Today, however, competitive pressures have driven many companies to emphasize near-term product development and process improvements that support their market strategies and the bottom lines of their business units. This kind of R&D focus has proven successful for many companies in the short term, however, it comes at the expense of basic and applied research, and threatens to reduce the pool of enabling and emerging technologies from which our country must draw in the future to remain competitive.

The Federal government's technology partnerships with industry are designed to ensure that the United States has a rich base of key technologies to serve as building blocks for new products and services, new industries, and technology-driven productivity gains in the twenty-first century.

THE FEDERAL GOVERNMENT'S R&D BUDGET

The Administration has taken care to develop plans to balance the Federal budget without compromising our nation's investments in the future. We recognize that our ability to achieve an array of social goals and maintain our standard of living requires a strong economy that depends on sustaining the Federal investment in R&D. Historically, these investments have led to many of the new ideas, insights, and innovations the private sector needs to generate growth and jobs.

While the FY 1996 Federal R&D budget is conventionally reported as $71 billion, this figure includes approximately $31 billion which the Department of Defense (DOD) spends on highly specialized development of specific weapons systems. Federal investment in research and development - that could accurately be termed the science and technology base is only about $40 billion. Of this $40 billion Federal investment in science and technology, more than a fourth ($12 billion) is spent for health-related R&D, leaving $28 billion to invest in research and development to support every other field of science and technology physics, environment, energy, mathematics, aerospace, electronics, computing, communications, materials, software, simulation and modeling, agriculture, and more.

The Administration recognizes that this part of the nation's R&D investment is most likely to yield economic benefits and meet a wide range of social goals beyond health and defense.

PRESIDENT CLINTON'S
TECHNOLOGY POLICY

In February 1993, President Clinton set forth his vision for
a national technology policy in Technology for America's
Economic Growth: A New Direction to Build Economic
Strength. This policy a core element of the
Administration's strategy for long-term economic
growth outlines measures to ensure America's global
technological leadership into the next century.

The technology policy set forth by the Administration is guided by these principles:

• We must retain a long-term commitment to research, education, and innovation even in this period of budgetary constraint.

• The primary role of the Federal government in technology policy is to create a business environment in which the innovative and competitive efforts of the private sector can flourish.

The Federal government must encourage the development, commercialization, and the use of civilian technology.