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A.

u.s. Technological,Economic,and SocialDevelopme for the21stCentury

251

take place. Autos, appliances, TVs, the mass "production"

of higher education,

health,

and

social

services,

the

affluent

American

and welfare

capitalism,

fol-

lowed. roughly

It is the core thesis from 1950 to the

of the early

reindustrialization analysis 1980s, the seven elements

that in this period, were not properly

maintained or adapted to changing circumstances, and economy deteriorated or becameunderdeveloped. Briefly

that consequently the revisiting the sevenel-

ements makes this point.

Innovative Capacity:UnevenErosion

According to one wit, there is one file at the National Science Foundation for "rosy" R&D indicators, and another for gloomy ones. According to the political need, one or the other is used to make the case for "our strong scienceand tech- nology" ("We are all to be proud of. ..") or to point out signs of decline and fall (" ...calling urgently for additional infusions of funds and talent"). Whether this tale is true or tall, it reflects the ambiguous status of this sector. One often-used indicator of innovative capacity is the proportion of GNP dedi- cated to researchand development. As a percentageof GNP, total R&D expendi- tures fell from 3 percent in 1964 to 2.2 percent in 1978, then rose to 2.6 percent in 1984(U.S. Bureau of the Census, 1986, table 1004). However, as R&D spe- cialist John Logsdon haspointed out, much of the decline from 1964to 1978was due to reductions in space and weaponry R&D, which is relatively costly; the overall drop does not necessarily reflect an across-the-boarddecline in R&D ac- tivities (Logsdon, 1983). Similarly, the recent upturn in R&D expenditures does not reflect an across-the-board increase. Rather, it is attributable mainly to the

Reagan administration's military build-up.

While neither percentage of GNP nor any other measure provides a reliable yardstick for the health of innovation in the United States, several indicators are troubling. For example, it is widely agreed that the paceof America's technolog- ical development has slowed. A Commerce Department economist found one major technological development in the United States during the 1970s: the microprocessor, or silicon chip. In contrast, he listed at least six from the period between the late 1930s and the late 1940s, including the transistor, nuclear

power, and synthetic fibers (Samuelson, 1980, p. 1283). America's position in the world technological market has grown more precari-

ous as other industrial nations, particularly West pumped more and more funds into their own R&D. penditures were falling relative to GNP (1964-78), from 1.6 percent of GNP in 1964 to 2.2 percent in

Germany and Japan, have While America's R&D ex- West Germany's increased 1978, and Japan's from 1.5

percent of GNP in 1964 to 2.0 percent in 1978. By 1983, both countries had caught up to the United States,allocating about 2.6% of their GNPs to R&D. If one assumesthat nondefense R&D expenditures add more to technical competi- tiveness than military R&D expenditures, then the U.S. lags far behind its com-

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