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A struggle to acquire high-tech knowledge: the U.S., Japan and Europe.


A current topic of extreme importance is that of technology transfer. The world is seeing how the acquisition of high-technology has become a crucial ingredient in a nation's performance in international trading and economic success. Technology has become a valuable commodity, and it is now being aggressively sought after by every nation. Advanced technology issues have reached the table at the General Agreement on Tariffs and Trade (GATT) discussions. In the United States, economists agree that a major factor in increased productivity is technological innovation (See Figure 1).

One definition of technology transfer, which has been derived from months of research, basically defines technology transfer as a process where an idea or a certain body of knowledge is moved from its source, which can be a company, a university, a government laboratory or any combination of these, to another entity that can use the information. This definition simplifies a very complex process. An idea or a certain technology faces many barriers and different paths before it can used to the benefit of its owners.

A recent study (see Perrino and Tipping) conducted by Booz-Allen & Hamilton on global technology management showed that technology has become a key factor in national survival. Top managers in the United States, Europe and Japan overwhelmingly ranked "leveraging of technology for competitive advantage" the number one challenge their companies face.

The field of technology transfer is very complex, with a maze of facts, figures and conflicting opinions.

* What are the main forces that drive the United States, Japan and Europe to transfer technology within their borders and outside to the world?

* What are the barriers each is facing with respect to technology transfer?

* What are the future trends in technology acquisition in each country?

Problems the U.S. faces

The U.S. has led in technological innovations for many years. Joiner expresses how Americans have been the innovators of many high technology products. From the technology in transistors to genetic engineering, the newest advances in many fields have come from U.S. scientists and engineers. What is ironic about this, is many foreign enterprises have been successful in capitalizing on these advanced technologies.

There have been numerous clues that point to a mismanagement of valuable technology. According to Joiner and Krupp:

* U.S. trade deficit included high-tech goods for the first time in 1986 and reached $156.2 billion, and has continued to climb.

* Over the last 20 years, our proportion of world trade has dropped from over 30 percent to under 15 percent. Figure 2 shows the U.S. drop in comparative shares of the world export market.

* The U.S. writes 35 percent of all scientific articles published; however, the number of Japanese research articles has risen to 25 percent as they continue to close the gap on the U.S.

* More and more frequently, U.S. firms are becoming general contractors relying on foreign firms to roll out new products. The production of transistors, memory chips, solar cells, lasers and video cassette recorders are all examples of this trend.

* The U.S. growth of GNP per person and productivity in manufacturing has not increased as fast as many other foreign competitors (see Figure 3).

All of this is happening at a time when the U.S. is leading the world in the development of new technologies. The U.S. currently ranks first in total R&D expenditures at $123 billion in 1989. However, this number can be a little deceiving, because when you compare the total R&D expenditures as a percent of total GNP a different picture emerges (see Figure 4). The U.S. still ranks first, but not by the margin one might expect. This graph also shows how each country has realized the importance of gaining new technology by continually increasing their spending on R&D.

No matter how much money is spent, the U.S. can still claim to be the world's leader in science and innovation. Joiner cites the breakdown of Nobel Prizes awards since World War II to see the U.S.'s lead. American scientists have won 127 times compared with 88 European and five Japanese winners. Another factor that points to the U.S. lead is the higher number of patents is has claimed. How can the U.S. have a tradition in technological innovation, yet lack the capability to transfer this technology?

Barriers to technology transfer in U.S.

The U.S. does have serious problems with its industrial competitiveness; however, a part of this problem can be attributed to foreign competitors becoming extremely successful in world markets. One of the reasons why these foreign industries have become so competitive is their effective implementation of state-of-the-art technology.

If one looks at the historical use of technology in the U.S., one gets a better understanding of why this country is lagging behind in its industrial competitiveness. After World War II, the U.S. was an industrial giant with the latest in manufacturing technology. We did not have any real competitors and could rely on our own large domestic markets to sell our goods. It was a different story for our foreign competitors. Many of the European industries had been wrecked during the war, so they were starting out new. Japan was also in complete shambles. These countries looked to America to acquire the technology needed to regain their industrial strength.

The key difference between us and our competitors was the different way technology was viewed. Many of our foreign competitors, especially Japan, treated technology as strategic weapon that could be used to make them competitive again. As a result, Japan geared itself to collect technology throughout the world. The U.S., on the other hand, has many industries that are content with the technology they are using. This is especially true with many of the antiquated manufacturing processes that are still being used for production. Now that European and Japanese products flood our once untouched domestic markets, U.S. industries are starting to pay more attention to new technology. They want to know how to acquire it and use it more effectively.

Internal barriers

Badaway states that many U.S. corporations have failed to understand the barriers to technology transfer and have left many problems unaddressed. Perhaps the largest problem that U.S. companies have is the linear process of technology transfer that has been traditionally used. Going from concept development to final production, a technology must go from one department to the next. To succeed, there must be clear and open communications. However, differences in attitudes and values between the departments usually inhibit this process.

Badaway believes that a lack of "people movement" is one of the reasons this extremely important communication link is hindered. Many times paper is used to pass crucial ideas. This may cause discrepancies between departments, which slows the process down. Instead of paper transfer, a multidisciplinary team should move technology within an organization. Japan uses this team approach, where people from R&D, marketing, and manufacturing work to move technology in an efficient manner.

The need to develop fast and effective ways to transfer newly developed technology has become a critical issue in the structure of U.S. corporations. Ezzat, Howell and Kamal explain how General Motors is addressing this need and has set up the General Motors Research Laboratories (GMR). GMR has recognized the following internal barriers with technology transfer from R&D to various divisions in a corporation:

* Insufficient manpower and resources to deal with new technology at division

* Premature selling of the technology by the research unit

* Insufficient incentives at the division to employ new technology

* Lack of appreciation of division's problems by R&D staff

* Emphasis on the short-term at the production unit

Management problems

The internal problems discussed in the previous section can be directly related to the management styles followed in the U.S.. Witt and Badaway both explain how too few top U.S. executives have technical backgrounds. These managers do not understand the importance of technology for corporate success.

In Japan, promotional policies differ. One of the main requirements for managers is that they demonstrate technical competence. This policy has had many positive results. Joiner expresses that one of the most evident is how these technical managers have realized the importance of manufacturing for a company to be a success. This has resulted in having the most talented researchers assigned to developing manufacturing technology. The Japanese now possess production processes that far surpass the majority of U.S. manufacturing firms.

Another problem with U.S. managers is their insistence on short range goals. Baron states that too many top managers have set short term missions for reasonable return on investment. Morone and Joiner both agree that it takes 10 to 15 years to develop a market from an invention. This has scared off many U.S. firms from investing in technology for the long-term benefits. However, this truly is a mistake, because if you look at the Japanese you can see the payoffs in long-term planning horizons.

A prime example of the Japanese digging-in for the long run is the production of video cassette recorders. VCR technology was first developed by the U.S. RCA who was developing this technology fell by the wayside, because the company did not persist to make the technology commercially marketable. The Japanese on the other the hand stuck with it. In fact, it took Sony 15 years before actually tapping the market. You can go into any electronics store and see the results of this long-term approach.

Failure to go elsewhere

Another barrier to technology transfer is that the U.S. has not aggressively gone overseas to gather technology. For example, a study carried out Robert Cutler on comparing Japanese and U.S. high technology transfer practices indicated the following:

* In Japan, 83 percent of researchers surveyed said they were aware of the current research advances made by foreigners in their field;

* In the U.S. only 30 percent said they knew of any.

One comment Lepkowski says he keeps hearing is how information in Japan is inaccessible. However, very few companies have set up research operations in Japan. In fact, it seems it is not the unwillingness of the Japanese to collaborate with research, but the failure of U.S. companies to fund corporate researchers in Japan that makes the information inaccessible.

Government R&D

One subject that has been given much attention with respect to technology transfer, is the U.S. government's role in national R&D. Since the end of World War II, Federal R&D spending has largely been geared for military purposes.

This emphasis on military R&D has caused a controversy over the benefits to civilian industry. Rosenberg explains that the most obvious "spillover" benefits have been to commercial jet aircraft, computers, semiconductors, communications satellites and nuclear power technology. However, he concludes that these benefits have come with a very high price tag - $32 billion in 1984 alone. He understands that some of this cost is justified in the pursuit of national defense; however, he believes that the huge expense has not benefitted the civilian sector tremendously. He cites Japan's success with organizing their technological capabilities in alternative ways that have yielded higher rates of return than military R&D.

One last factor affecting government R&D is the cultural differences between U.S. government labs and commercial industry. Seymour Baron, who has been the associate director for at Brookhaven National Laboratory, explains traditionally government laboratories do research for research's sake and not with any product in mind. Generally, he says there is no cost-benefit analysis in national labs.

Kazis gives a good example of this culturally difference with the experience the apparel industry had going to Draper Labs, which is primarily known as a military R&D facility. A cooperative of the apparel industry asked Draper to design a system that would fully automate the sewing of a man's coat sleeve. Draper produced a machine that reflected the firm's engineering wizardry, but also its distance from the realities of a highly competitive industry. The machine they designed was too heavy and far too expensive. One executive for the apparel industry called it "the big blue monster."

In conclusion, Cutler provides us with a good comparison of the way the U.S. government and the Japanese research systems are set up:

In the U.S. government agencies support most of the basic and applied research performed at universities for public purposes such as military defence, public health and space exploration. By contrast, most of the high-technology research in Japan is funded and performed by industrial companies for commercial purposes. Furthermore, Japanese government agencies and professional societies take a more active role in organizing and energizing the civilian technology transfer process than do the counterpart organization in the U.S.

Steps to improve technology transfer

The first step on U.S. industries' road to improved technology transfer is to acknowledge that there is problem. Several U.S. industries have realized this. They understand that to compete globally, they must have access to the latest technology and the ability to implement it effectively. Many companies have turned to cooperatives to pool their resources together to accomplish this challenge. Some examples of these cooperatives are the R&D consortia Sematech of the semiconductor industry and the computer industry's MCC. Richard Kazis, a graduate student at MIT, has researched the cooperative of the apparel industry, known as Textile/Clothing Technology Corp. (TC).

The purpose of this consortia is to modernize the apparel industry. In 1986, TC established the National Apparel Technology Center. This center is a technical-support organization emphasizing technology transfer to improve productivity. By pooling their resources, many smaller apparel firms were able to access new technology. This center has been a valuable source of information and has helped the industry stay more competitive in global markets.

This trend towards cooperative and joint ventures in the U.S. is becoming more and more evident. Another trend is the increased attention to R&D. An annual study conducted by the Industrial Research Institute (IRI) (Mitchell and Carlisle) has indicated there has been a sustained build-up in the interest of U.S. industries' top management in R&D since 1985. Last years survey indicted over 46 percent of respondents expect to see top management attention to research on longer strategic issues increase by more than five percent in 1990.

U.S. industry seems to be restructuring itself to gather technology more effectively. The evidence can be seen in top management's changing attitudes toward R&D. They are starting to realize technology can be another valuable asset that can make a business more successful. Companies are forming partnerships with competitors to gain a strategic technology advantage. Those companies that are able to develop sound technology strategies will be the leaders in the new global marketplace.

Government actions

Baron states that too often industrial and national laboratories invest in costly equipment that is duplicated and not sufficiently used to be cost effective. However, in the past, agreements for collaborative and contract work between industry have taken an inordinate amount of time to organize. This along with the culturally differences mentioned before have scared off many possible partnerships with the government.

To improve this situation, the federal government has taken a number of initiatives:

* The Stevenson-Wydler Act called attention to the need for the executive branch to transfer technology to industry.

* The Dole-Bayh Act was passed to give federal contractors clearance to titles and inventions.

* The 1986 Technology Transfer Act and Executive Order 12591 established systems of cooperative agreements to increase technology transfer between laboratories and private firms.

* In 1988, the National Bureau of Standards was changed to National Institute of Standards and Technology (NIST). Its new mission is to support U.S. industry and to improve this nation's industrial productivity.

Each national laboratory is required to have an Office of Research and Technology Applications (ORTA) which serves as a point of contact between industry and laboratories.

* The Department of Energy has started a fellowship program to encourage industrial laboratories to locate near government ones. They are coaxing industry to do this through favorable tax deductions.

These are just some of the initiatives that are already in affect. New bills in Congress are likely to pass that will give laboratory directors more freedom to deal directly with industry. Baron, who is an associate director for Brookhaven, discusses how they have implemented an awareness program for their staff:

* Scientists will share a part of the royalties to their inventions

* Technology transfer would be a factor in evaluating their performance.

Hopefully, as these initiatives take hold, government labs will be more effective in identifying technologies that will help industry.

The U.S. has devoted a vast amount of resources to R&D and has developed some of the newest technologies. However, America is having problems implementing this creativity effectively. Leaders in industry and government must continue to take action to improve technology transfer in the U.S. If we fail do this, I believe we will see U.S. industrial problems continue to grow.

Technology transfer in Japan

How have the Japanese been able to achieve such great success in world markets? What are Japanese industries doing to produce these products that are in such high demand? These are some of the questions that everyone wants to answer.

Cutler explains that one frequent reason cited for Japanese commercial success is its ability to assimilate and apply new technologies derived from foreign research. To understand how the Japanese have been able do this, it's helpful to look at the historic background of industry and technology in Japan.

This acquisition of Western technology and ideas can be traced back to the Meiji Restoration in 1868. At this time, the Japanese reformed their whole political and social system, patterned on western countries. Westernization was regarded as important means of establishing national power. These reforms were designed to: upgrade education; transfer technology from the West; encourage research and development; improve the commercialization of Japanese products; and help with the diffusion of technology and product innovation in Japan.

To accomplish these reform goals, Japan took certain steps to improve their educational system. These steps to a greater extent are still in process today:

* Established engineering schools at university levels

* Sent select students to study abroad for training in science and technology.

* Higher education was strongly oriented toward practical goals.

There are two key factors that Oshima states to help explain how the Japanese went about rebuilding their industries after World War II:

* Japan lost its right to military power entirely, and the development of military technology was banned.

* Japan's prime concern during postwar period was its gap with U.S. in civilian technology.

With this in mind, postwar Japan concentrated its financial resources and best technical manpower in the civilian sector. In contrast, many of the Western nations' top brains were engaged in more sophisticated areas of research and development, such as aerospace or the military. The Japanese government encouraged firms to close the country's technology gap by importing technology.

The result of the first and second oil crises of 1973 and 1978 led Japan to accelerate towards less energy-intensive industries. Oshima explains during these periods, industrial innovation was focused on blending several different high-technologies. For example, Japan started to perfect interfaces between mechanical and electronic devices like robotics, CAD/CAM and office automation.

Japan's historical background and culture have played an important role in the way they transfer technology. Another factor that should be included is Japan's need to export to balance the large imports of fuel and other resources. This has driven Japan to aggressively go after the larger markets abroad. To accomplish this, Japanese companies have concentrated on developing the technical skills of their engineers and workers. They sent people all over the world to seek out and learn about the latest technologies.

The majority of technical people in this country seem to have little idea how the Japanese coordinate their technology policy. Several authors stated that most people believe that the Japanese government makes all the important decisions for industry; however, this is not the case. The actual process is centrally coordinated by the government; however, the final decisions are based on a concensus-based government-relationship. Japanese industry provides the majority of funding; it seems logical that they would play a large role in the decision of which technologies to invest in.

How does this industry-government relationship work? Cutler explains that the central coordination comes from the Ministry of International Trade and Industry (MITI). MITI organizes committee meetings with industrial leaders, academics, and consumers. The purpose of these meetings is to form a general consensus on which new technology industry should concentrate on.

Cutler believes there are two main reasons why this technology system in Japan has worked so well:

* The cohesive national policy on technology development.

* A scientific "old boy network" present in Japanese industry.

This network consists of engineers and CEO's of many different companies that went to the same university. Since Japan is a small country compared to the U.S., many of Japan's top researchers and businessmen went to the same school where they built lasting friendships. Whenever one company comes up with a good idea, this network usually goes into action diffusing the information to other companies.

It would be extremely difficult to organize the same type government-industry relationship in the U.S. The main the reason it has succeeded in Japan is that for many years their government and industry have had the same goals. This, along with the Japanese culture and team spirit has enabled them to accomplish this cohesive technology policy. In the U.S., the cultural barriers that have developed between industry and government would seriously hinder this kind relationship.

A precompetitive agreements between U.S. industries could work. We have already seen this to an extent with industrial conferences and cooperatives. U.S. industries can help each other keep focused on what technology is needed to remain competitive. By having precompetitive research agreements, companies would have the resources to develop many new valuable technologies. the competition would then depend on how well each firm used the technology that they developed together.

The industrial policy that the Japanese formulate is successful because their companies are able to transfer the needed technology very effectively. Why has U.S. industry not been able to master this process? What are the Japanese companies doing that has enabled them to achieve a technological advantage?

Joiner states Japanese companies are geared to capitalize on technology opportunities emerging anywhere in the world and then integrate them with other resources. To make these technology seeds a success, they have set up the following steps:

* They assign the brightest young engineers to evaluate new technologies under the direction of a senior manager.

* They screen new technologies. if they decide it is good, they don't lose it!.

* They continue experimentation until all the roadblocks are removed so the technology can implemented effectively.

A major factor in the success of integrating new technology in the workplace has been the positive response of workers. Oshima states that studies have shown that Japanese labor unions are more open to the introduction of new technologies than European workers. Many Japanese managers believe that this stability in the workforce has been especially crucial for the quick assimilation of the technology. This stability can be attributed to the lifetime employment policy most Japanese companies have.

Japan has long been transferring technology from the U.S. and other foreign countries. Evan Herbert has explored some of the methods that the Japanese have been accessing U.S. technologies. He came up the following mechanisms:

* Relationships with elite research universities.

* Joint ventures with U.S. firms.

* Licensing.

* Contracted R&D projects.

* Laboratory adjuncts to Japanese subsidiaries in the U.S.

* Reciprocal arrangements to exchange research personnel.

* Export of technical knowledge via databases.

Japanese companies have gone to U.S. research universities to acquire some of the latest in innovative technology. Japanese universities primarily do research in response to a certain need in industry and lack the innovative qualities U.S. universities display. This has driven Japanese companies to look to the U.S. for possible technology that can create new markets.

The Japanese use a series of databases to transfer technology. The two databases that are most often used are the Japanese Information Center of Science and Technology (JICST) and Japan Patent Information Organization (JAPIO). Another action that has enabled swift movement of valuable information is the formation of the Japan External Trade Organization (JETRO). The purpose of JETRO is to collect and disseminate data on overseas trade, economic trends and information useful in identifying licensing and joint venture opportunities.

Herbert cites a recent trend that is becoming more evident is Japanese companies - siting of R&D facilities near their U.S. manufacturing plants. There are two main reasons for doing this:

* The Japanese recognize that R&D facilities in the U.S. become more closely attuned to the trends and requirements of a major market.

* Key personnel can be transferred from R&D to manufacturing to make the movement of technology more effective.

Badaway provides a summary on specific steps and strategies that Japanese companies have used to maximize their return on technology:

* Technology transfer is recognized as a strategic weapon in Japan.

* Direct person-to-person contact is the most effective means of transferring technology. Frequently, R&D personnel are moved to other organizational units.

* Japanese government combined with Japan's industry formulates visions of the future.

* Promotional policies are different (more technical personnel are promoted to top management positions).

* Labor stability is achieved through policies such as lifetime employment.

* Rather than detailed directions, management sees that there is open communication and the needed resources.

* Movement along the product development chain is carefully controlled for efficiency. Product teams or the transfer of key individuals or both are common.

The main force behind these steps is Japanese management driving technology acquisition hard. They realize the importance of swift technology development and have been through the process several times. This management style has had a strong influence on success of Japanese industry.

Problems Japan faces

Japan has been riding on an economic high, and to the casual observer it seems they do not have any severe problems. This is not the case. Japan has recently become a target of international criticism explains Oshima. Many of their competitors believe that Japan has only been taking from the world's technological base. Japan is now under increasing pressure to develop a new scheme of international technological exchange.

Japanese government officials and industrialists are insisting that Japan's traditional "catch-up syndrome" is ending. They believe they are reversing their role of the technological borrower to a giver of technology. Japan's rate of importing technology has decreased significantly in several industries and the Japanese have been continually increasing their research expenditures, indicating that Japan is paying more attention to creating its own technology.

One other problem that was cited in a recent Business Week article is the increasing labor shortages Japan is facing. Many more women and immigrant workers are entering their traditional male workforce. With the labor force changing its face, The stability they have had will be tested. Japan is also facing outrageous housing and property rates. These factors combined are causing many Japanese to think twice about the success of their present government and industrial system.

Technology transfer in Europe

After World War II, the majority of European industry had been destroyed and needed to be rebuilt. Several of these industries and their technology rose to great strength. For example, pharmaceuticals and chemicals in West Germany, robotics in Great Britain, nuclear power and commercial rockets in France are industries that are globally competitive. However, in the last several decades European technology and industry have not been as competitive as the U.S. and Japan.

This seems surprising when Europe's spending on R&D is almost double that of Japan and two thirds of the U.S. Press states that in the past Europe has not realized a full return on its investment in science. Recent articles explain that this is changing, Europe is now in the process of integrating resources to become more competitive. A recent article in the Houston Post pointed out that Europe is gaining ground on the U.S. and Japan in industrial technology.

Press explains that Europe has suffered from a lack of technological unification. This has caused some serious problems with the competitiveness of European industry. Data compiled by John M. Marcum, shows that the European Economic Community (EEC) has been in an inferior position to the U.S. and Japan in the following:

* Growth in exports of high-technology products - 1975-1984.

* Trade balance in high-intensity R&D products - 1983.

* Applications of new technology in manufacturing.

* Consumption of advanced technologies such as communications, data processing, semiconductors and robots - 1984.

* Industrial R&D expenditures as a percentage of industrial domestic product - 1983.

* Number of scientists and engineers as a fraction of the labor force - 1982.

* Enrollments in higher education as a fraction of total population - 1982.

Europe's technology barriers

Several factors for Europe's technological problems have been cited and can be broken down into three main areas. First, European governments' protectionism of their industries has very often slowed down the innovation process. De Benedetti has discovered that very often the protected companies feel less of a need to achieve greater competitiveness by investing in new technologies.

Traditionally, the EEC has not been very effective in integrating European industry and technology. There are two main reasons for this. First, the EEC has been viewed as being overly bureaucratic with an insufficient budget and political clout to very effective. Secondly, Press explains that each country's self interests have usually dominated the common good.

The third major barrier to European technology transfer is the environment that the companies are operating under. Presently, Europe does not operate under a single legal environment which exists in the U.S. and Japan. Companies are confronted with a maze of national company laws, tax systems, and antitrust rules. A combination of these has drastically inhibited cross-border competition and cooperation. Press explains this lack of integration has been estimated to cost European firms more than $10 billion a year in customs payments. However, numerous steps to integrate the European economic and technology systems are under way.

One last barrier that Europe faces is the disparity of languages and of university degrees. This has made the process of creating a homogeneous scientific community very difficult. To correct this, degrees are being harmonized by law.

The key to Europe's problems has been a lack of integration. This absence of coordination can be directly linked to three key factors, which Haklisch presents for the poor performance of European industries. First, he states that European firms have had a difficult time generating sufficient R&D funds for long-term projects.

The next factor he presents is that companies often face fragmented markets each having its own standards. In the past, these markets have often been protected by national governments to allow their own industries to remain in business. These barriers to free trade have hindered motivational forces that would have driven European industries to modernize. Europe has realized this and is in the process of making cross-border competition more accessible.

The third reason cited is the traditional political and economic rivalries between countries. This is probably the largest barrier they face. Different cultures and backgrounds have caused some strong differences between the countries. This has hindered many of the past joint ventures that Europe has entered.

One major advantage that the Europeans have is that every country realizes that this lack of integration has hindered their industrial competitiveness. Europe has invested vast resources into R&D; however, this research is often duplicated or does not have the large funding needed for long-term projects. So over the past decade, Europe has initiated a series of programs to integrate the scientific community. They are also in the process of deregulating their borders to increase competition.

One of the steps to integrate Europe has been the use of joint R&D projects. Haklisch explains the work plan for these projects is to focus on "precompetitive research." The goal of these programs is to develop a more coordinated network of research resources. A breakdown of these programs is provided.

ESPIRIT (European Strategic Program for R&D in Information Technology) launched in 1984 was designed to accomplish three goals:

* To promote European industrial cooperation upstream.

* To allow European industrialists to observe technologies that will be useful in reinforcing their position in the next five to 10 years.

* To establish a united European platform in preparation for movement toward international norm

Curien explains that the research conducted would be precompetitive - that is, upstream of the actually production processes. ESPIRIT spans fields such as microelectronics, software technology, the architecture of information systems, and factory automation techniques. Price tag: $5 billion by 1993.

BRITE (Basic Research in Industrial Technologies for Europe) is, in large part, the equivalent of ESPIRIT. Research is geared to develop new technology for traditional industries, mainly aeronautics and advanced materials. Price tag: $722 million by 1992.

RACE (R&D for Advanced Communications technology for Europe) is an EC sponsored program to develop technology for Europe-wide high-speed data telecommunications network. Price tag: $580 million by 1991.

EUREKA was formed to further help Europe's industrial integration. Research conducted on new technology is based on market requirements. Eureka was designed to prevent industry's resources from becoming exhausted through the development of identical goods and processes. Price tag up to 1989 is $10.3 billion.

In 1992, the world will see a deregulation of national barriers in Europe. Candice Stevens explains that the goal of this unification is to improve the performance of European high-technology companies. As a result of this process, Stevens believes that there are three areas that will impact the technology sphere in Europe:

* Integration of research - This unification process will provide Europe with a central means of coordinating their research efforts. The EC has set framework for the combined R&D efforts (see Figure 5).

* Integration of standards - Presently, European firms must manufacture numerous product designs to comply with up to 10 to 12 national standards or technical regulations. This has added tremendous costs to R&D, production and marketing.

* Integration of companies - By lowering the policies that have made joint ventures between companies from different countries very difficult, many new

partnerships will form between European companies to make them more competitive.

Europe's most severe technological problem has been a lack of an integrated research community. Duplicated efforts have drained valuable resources. To improve this situation, Europe has taken a number of steps to tie-together the economic and scientific communities. I believe that they are on the right-track. By allowing each country in Europe to compete freely, their whole industrial system is bound to get stronger.

Europe's technological future seems to be the most predictable. There are many signs that their steps for economic and scientific integration are here to stay. Already, many European countries have poured large sums of money into joint R&D projects such as ESPIRIT. Many experts believe that this cooperation will continue to grow, and they expect Europe to become very competitive in the next decade.

As for the future of the U.S. and Japan, it is very hard to make any certain predictions. Japan has experienced a rapid technological growth over the last several decades. This should continue, but not to the same extent. Japanese industry may experience increased labor instability due to the changes in demographics and social needs. This may cause serious barriers in their near-perfect technology transfer process.

The process the U.S. uses to transfer technology has serious problems. On the same note, the U.S. has been taking steps to improve the situation. Open communication between once separated departments is being stressed. The government has realized that it can play an important role in helping U.S. industries regain their competitiveness. However, first they must overcome the current barriers that are present between our government and industry. If we are to become industrial leaders in the near global markets, we must pay critical attention to new technology and its transfer.

PHOTO : Figure 1 The Role Technology Plays in Increasing Productivity

PHOTO : Figure 2 Comparative Shares of World Export Market

PHOTO : Figure 3 Growth And Productivity Growth In OECD Countries (%)

PHOTO : Figure 4 Total R&D Expenditures As A Percent of GNP

PHOTO : Figure 5 EC's Framework For Research Spending
COPYRIGHT 1991 Institute of Industrial Engineers, Inc. (IIE)
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Author:Brunsell, Mark
Publication:Industrial Management
Date:Nov 1, 1991
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