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LOSING THE EDGE : U.S. Is Still the Front-Runner, but Its Lead Is Slipping

TECHNOLOGY RACE: The Competition Spanning the Pacific. A special report on technology development, based on a survey of 282 executives from the U.S., Japan and newly industrialized Pacific economies conducted by The Times and Booz-Allen & Hamilton, a management consulting firm. One of a Series

February 21, 1988|JONATHAN PETERSON | Times Staff Writer

Despite competitive setbacks in recent years, the United States continues to hold a commanding lead in key modern technologies but may be losing its edge in certain areas that will become critical to success in the future, according to a survey of U.S. and Asian executives conducted by The Times and the Booz-Allen & Hamilton management consulting firm.

"Right now we're in good shape," said Jack M. Nilles, a research scientist at USC and former aerospace engineer. "But five years from now, 10 years from now--given the way things are going--we're not going to be in good shape relative to the rest of the world."

The survey reinforced the view that America still enjoys the world's most fertile climate for scientific and technological breakthroughs. For example, big majorities of those responding rated the United States far ahead in developing the most sophisticated computers and software, the instructions that tell computers what to do. They also described this country as the world's front-runner in using computers to design products, an approach that will become increasingly critical in industry.

"We have tremendous advantages over everybody else in the world, if we just get our act together," maintained D. Bruce Merrifield, assistant secretary of commerce for productivity, technology and innovation. He warned, however, that many U.S. companies trail in emerging technologies "and are now terribly vulnerable to the innovations that are coming on line everywhere in the world."

Already, Japan leads the world in the development of industrial robots, according to survey respondents, a technology not expected to yield its biggest benefits until years in the future. Japan also is seen as having surpassed the United States in much of the huge market of semiconductors, or "chips"--miniature building blocks for modern electronics, used in computers and other products.

"The Japanese have already shown their ability to take advantage of our industrial and strategic mistakes and catch up with us," Nilles declared.

The U.S. technological edge is eroding for several reasons, according to experts who did not take part in the poll. They said, among other things, that America's schools do an inadequate job of teaching science, and its corporations shy away from products that promise no quick payoff.

For now, however, the United States still holds the high ground in much of modern technology, at least in areas that have great commercial significance, according to most of the business executives queried.

Asked which country leads in software engineering, for example, 98% of Japanese firms said the United States was ahead. The United States also was ranked in first place by 91% of the non-Japanese Asian firms. Of the U.S. firms polled, 97% agreed that their own country was in first place.

The lead is an important one: Software is increasingly key to companies' competitiveness as it becomes more sophisticated and its uses grow. Various industrial advances--for instance, in running factories and inventory systems--will rely more and more on computerized instructions as a way to maximize efficiency.

"The United States, with literally thousands of companies in this area, turns out things (in software) that no one else touches," said Arthur J. Alexander, an economist at the RAND Corp., a think tank in Santa Monica.

Alexander credited U.S. software innovations in large part to "a generation of kids who are equivalent to the kids that built the cars and jalopies and Model Ts 50 years ago." He added: "The generation of hackers are now entrepreneurs."

Yet the survey suggested that small, entrepreneurial U.S. firms are not the only source of high-tech breakthroughs. IBM--hardly a mom-and-pop company--was cited most often as the world leader in software development, for example. Other responses, however, backed up the notion that big innovations can emerge from smaller companies. Cray Research, dwarfed in size by IBM, was named the leader in the advanced computers known as supercomputers, which are used to tackle incredibly complex puzzles, such as the outcome of a nuclear explosion.

The United States also was viewed as at the technological frontier in what may be the most challenging area of computer science: artificial intelligence. This is the development of computers with human traits, such as the ability to "learn" from experience. Although progress in artificial intelligence has been limited, America was rated the world leader by 92% of Japanese respondents, 85% of non-Japanese Asians and 94% of Americans surveyed.

The United States also was seen in the forefront in high-performance materials--the sorts of metal alloys, plastics, fibers and other new substances needed for breakthroughs in product design and performance. The Japanese rated the United States in first place by 77%, with non-Japanese Asian firms and U.S. firms also ranking America No. 1 by majorities of 63% and 64%.

Tricky Business

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