Is New Technology Enough? Making and Remaking U.S. Basic Industries

Is New Technology Enough? Making and Remaking U.S. Basic Industries

Is New Technology Enough? Making and Remaking U.S. Basic Industries

Is New Technology Enough? Making and Remaking U.S. Basic Industries

Excerpt

One of the most widely accepted ideas in discussions of international trade is that successful development and commercialization of new technologies are the key to maintaining the competitiveness of the U.S. economy. In this view our capacity to nurture technological innovation and to take maximum advantage of the employment, output, and export opportunities of the resulting "high-tech" industries is uniquely important to spurring U.S. productivity growth and avoiding the domestic economic disruptions caused by the growth of foreign competition in the 1980s.

Is New Technology Enough? challenges this accepted wisdom. While acknowledging the important role of new technology in industrial renewal and economic progress, the studies in this volume indicate that technology cannot be relied on as a "silver bullet" capable of ensuring America's preeminence in world trade. Four case studies of U.S. basic manufacturing industries (machine tools, steel, automobiles, and textiles and apparel) and two studies of families of modern technology (advanced ceramics and fiber optics) show that technological prowess is only one of many factors determining industrial performance, others being general macroeconomic conditions (tax, trust, fiscal, labor skills).

The studies also challenge the prevailing view of industrial change in the American economy that sees older basic industries as dying off while new, technology-based industries rise to take their place. In fact, U.S. basic industries are constantly adapting to changing economic circumstances, making use of both new technologies and nontechnical adjustments. The notion of "sunset" and "sunrise" industries is simplistic and false, failing to appreciate the richness and complexity of economic adjustment over time. Advanced technology is certainly important, but our search for a panacea for our competitive difficulties has led us to distort its true significance in economic and industrial change.

This volume is one of a series of publications and conferences sponsored by the American Enterprise Institute's research project Competing in a Changing World Economy, which is examining . . .

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