Study: U.S. Advanced Technology Products Lead Threatened

ByJohn S. McClenahen Is the U.S. losing its global competitive advantage in advanced materials, pharmaceuticals, scientific equipment and other products heavily dependent upon R&D and technology-focused personnel? In a study published April 15, Ernest H. Preeg, senior fellow in trade and productivity at the Arlington, Va.-based Manufacturers Alliance/MAPI, suggests that could be the case. Looking at newly released U.S. Commerce Department data on U.S. trade in advanced technology products, he observes, "A reasonably healthy surplus in 1998 is now a sizable deficit." Indeed, the numbers show that a $30 billion U.S. trade surplus in advanced technology products in 1998 was a $27 billion deficit in 2003 and that, by a wide margin, the $21 billion U.S. deficit with China was America's biggest bilateral shortfall in advanced technology products last year. "Based on the usual rule of thumb that $1 billion of trade accounts for 10,000 jobs, the $57 billion deterioration of the [advanced technology products] account over the past five years equates to a loss of more than a half million jobs in these technology-intensive industries," Preeg says. Preeg notes that more analysis needs to be done to determine the reasons for the downturn, including such matters as the level of U.S. investment in advanced technology and public policies affecting competition. "But we cannot afford to wait for such analysis before taking action," he stresses. "The threat of decline in U.S. high-tech leadership is real and urgent in character."