High-Technology Competitiveness

Debates about U.S. policy on everything from trade to education have increasingly focused on the ability of American producers to compete successfully in global markets. High-technology products have received considerable attention because their strong performance has been linked to increases in overall economic performance and growth. This report assesses U.S. competitiveness in high-technology areas, considering, in particular, trends in U.S. performance over the last decade and comparisons with Japan. GAO considers several basic questions. First, what is the significance of high-technology performance and how well can it be measured? Second, what do measures of overall U.S. performance in high-technology areas suggest? And third, for 11 industries--pharmaceuticals, civilian aircraft, telecommunications equipment, fiber optics, semiconductors, semiconductor equipment and materials, robotics, flexible manufacturing systems, supercomputers, advanced materials, and consumer electronics--what has been the relative performance of U.S. producers and U.S. research efforts during the past decade?

GAO found that: (1) aggregate performance indicators provide some evidence of a decline in the U.S. leadership position in developing and marketing technology-intensive products, particularly relative to Japan; (2) evidence on trends in the U.S. trade balance in high-technology products is mixed, with measures of high-technology trade sensitive to which products are included; (3) several indicators yield evidence that the technology gap between Japan and the United States has narrowed in recent decades; (4) measures of research output show Japanese gains; (5) the United States is the world leader in the production and consumption of telecommunications equipment; (6) the share of U.S.-owned firms in the domestic and world consumer electronics markets has declined dramatically over the last 40 years; (7) Japan is the world's largest market and producer of semiconductors; and (8) the decline in U.S. position in some industries has been strongest in the less technologically sophisticated industry segments.