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Overview
Chapter Organization
Chapter Overview
 A nation's competitiveness is often judged by its ability to both
produce goods that find demand in the global marketplace and to
simultaneously maintain—if not improve—the standard of living among
its citizens. Science and engineering and the technological developments
that emerge from S&E activities enable high-wage nations like
the United States to compete with low-wage nations in today's highly
competitive global marketplace. Although the U.S. economy continues
to rank among the world's largest, and Americans continue to enjoy
a high standard of living, many other parts of the world have advanced
their technological capacity and increasingly challenge U.S. prominence
in many technology areas.
This chapter focuses on industry's vital role in the nation's science
and technology (S&T) enterprise and how the nation develops,
uses, and commercializes the investments made in S&T by industry,
academia, and government. It presents various indicators tracking
the U.S. industry's national activity and its standing in the international
marketplace for technology products and services, technology development,
and industrial research and development performance. Using public
and private data sources, U.S. industry's technology activities
are compared with those of other major industrialized nations, particularly
the European Union (EU) and Japan and, wherever possible, the newly
or increasingly industrialized economies of Asia, Central Europe,
and Latin America.
Past assessments showed the United States to be a leader in many
technology areas. In the chapter prepared for Science & Engineering
Indicators — 2002, it was shown that advancements in information
technologies (computers and communication products and services)
drove the rising trends in new technology development and dominated
technical exchanges between the United States and its trading partners.
In this 2004 edition, many of the same indicators are reexamined
from new perspectives influenced by international data on manufacturing
and selected service industries for the advanced nations, updates
to the Georgia Institute of Technology high-technology indicators
model that identifies developing nations with increased technology
capacities, and selected data from a recently completed survey of
information technology (IT)-based innovation by the National Science
Foundation (NSF).
Chapter Organization
This chapter begins with a review of industries that rely heavily
on R&D, referred to herein as high-technology industries.
No single authoritative methodology exists for identifying high-technology
industries. Most calculations rely on a comparison of R&D intensities,
typically determined by comparing industry R&D expenditures
or the numbers of technical people employed (e.g., scientists, engineers,
technicians) with the value R&D adds to the industry or the
total value of the industry's shipments. In this chapter, high-technology
industries are identified using the R&D intensities calculated
by the Organisation for Economic Co-operation and Development (OECD).
High-technology industries are noted for their high R&D spending
and performance, which produce innovations that can be applied to
other economic sectors. These industries also employ and help train
new scientists, engineers, and other technical personnel. Thus,
the market competitiveness of a nation's technological advances,
as embodied in new products and processes associated with high-technology
industries, can serve as an indicator of the economic and technical
effectiveness of that country's S&T enterprise.
The global competitiveness of the U.S. high-technology industry
is assessed through an examination of domestic and worldwide market
share trends. Data on royalties and fees generated from U.S. imports
and exports of technological know-how—sold or rented as intangible
(intellectual) property—are used to gauge U.S. competitiveness.
Also discussed are indicators designed to identify developing and
transitioning countries with the potential to become more important
exporters of high-technology products over the next 15 years.
This chapter also explores several leading indicators of technology
development by examining the changing emphases in industrial R&D
in major industrialized countries and comparing U.S. patenting patterns
with those of other nations. In addition, the disbursement of venture
capital in the United States, which is money used in the formation
and expansion of small high-technology companies, is examined by
both the stage of development in which financing is awarded and
the technology area receiving funds. The chapter concludes with
a discussion of summary results from NSF's Information Technology
Innovation Survey.
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