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Scientific Matters The Technology Gap Paris, January 14, 1966, 2013Z. /1/Source: National Archives and Records Administration, RG 59, Records of the Department of State, Central Files, 1964-66, SCI 3 OECD. Limited Official Use; Priority. Passed to the White House. Cedto 580. Pass OST for MacLeod, NSF for Haworth, Commerce for Holloman. Subject: Science Ministers Meeting./2/ /2/The January 1966 meeting of OECD Science Ministers was the second held by the organization. The initial session in October 1963 opened a debate on the importance of science and technology to the broader economic and social objectives of the OECD. At the 1963 session, Ministers commissioned a comparative study of national research and development efforts and agreed to reconvene in January 1966. The paucity of data uncovered by Professor Christopher Freeman of the University of Sussex led the OECD to redouble its efforts at comparison and analysis. The problems of disparity uncovered by these studies formed the basis for discussion at the 1966 session, and an additional series of studies on what became known as the "technological gap" was commissioned. For more information on the early years of OECD science policy, see Alexander King, Science and Policy: The International Stimulus (London, 1974). King was Assistant Secretary General of the OECD for Scientific Affairs, 1961-1974. 1. Science Ministers Conference January 12-13 concentrated on discussion papers prepared by interim committee. Agreement reached to continue science policy work, to meet again at ministerial level in two years, and to establish a working party to make proposals to OECD Council within three months for continuing work of interim committee in association with OECD activities. 2. Highlight of meeting was Dr. Hornig's speech January 13 on fundamental research, text of which eagerly sought by other delegates and press. 3. Disparity in financial and scientific resources for R&D and in technological development between U.S. and Europe and between large and small countries was major underlying theme in discussions. Speaking for PriMin Harmel/3/ and noting his general comments on January 12, Ockrent especially emphasized growing technological gap between U.S. and Europe. He stated Europe can no longer "suffer" emigration its scientists. Lauding Marshall Plan for saving Europe from economic catastrophe after World War II, he asked for cooperative efforts to close "technological" gap to avoid "future catastrophe."/4/ Sharply asserting that new technology kept from Europeans, he suggested U.S. investment in Europe should be not just in production but also in R&D. In reply, Dr. Hornig pointed out that aerospace and defense electronics industry development not closely related to civilian market and U.S. has no clear idea of magnitude direct economic effect of R&D in these fields./5/ As to suggestion, he commented that if Europeans prepared make progress in economic integration, Kennedy Round and on monetary reform, then progress could be made in their obtaining new technology. /3/Pierre C.J.M. Harmel of Belgium. /4/The OECD was the successor organization to the Organization for European Economic Cooperation, which administered the Marshall Plan. /5/Hornig's comments are in telegram 4054 from Paris, January 14. (National Archives and Records Administration, RG 59, Records of the Department of State, Central Files, 1964-66, SCI 3 OECD) 4. Smaller countries emphasized their special problems and emphasized need for international scientific cooperation. 5. French delegation was restrained and did not press argumentation on "technological gap" but left lead to Belgians in this respect. French hesitancy to formalize science policy activities within OECD framework was evident throughout discussions future work and possible institutional arrangements for its future conduct. 6. In sum, meeting, while devoted to science policy matters, focused primarily around economic, social and political effects of modern science and technology. Discussion seemed to clear air on some issues but European concern about technological gap, "brain drain," and alleged failure U.S. companies carry out R&D in Europe, was not dispelled. Trezise Washington, June 6, 1966, 1:01 p.m. /1/Source: National Archives and Records Administration, RG 59, Records of the Department of State, Central Files, 1964-66, SCI 1-1 EURW-US. Secret; Nodis. Drafted by Under Secretary Ball on June 6, cleared by John Walsh (S/S), and approved by Ball. Secretary Rusk was in Brussels attending a NATO meeting. After stopping briefly in Bonn and London, he returned to Washington on June 10. Tosec 92. For the Secretary from the Acting Secretary. I recognize the problem of the technological gap between the United States and Europe, but until our ideas on this question have been thoroughly digested I would suggest we play it in a low key./2/ The technological gap exists primarily because European industrial enterprises have failed to organize themselves on an adequate scale of size and have not developed the practice of investing a sufficient proportion of their sales dollars in research. The Europeans now have a big common market and European firms should be encouraged to consolidate to meet the requirements of that market. At the same time, they should modernize their practices and increase their research budgets. /2/Rusk had raised the idea of a "Marshall Plan for Technology" with Italian Foreign Minister Amintore Fanfani on June 5. (Telegram 309 from Brussels, June 5; ibid., SCI 1-1 NATO) For us to assist this process by a technological subsidy would, I think, be doubtful wisdom, since it might serve to perpetuate bad European practices. Moreover, a substantial part of our favorable trade balance with the world depends upon our technological superiority and we should not give it away for nothing. My views on this question are not fully developed and I would not wish to prejudice the evolution of some progress in this field, but I feel that we should be quite restrained in suggesting such a program before we have thoroughly thought it through./3/ /3/Although Rusk made no further offer during this meeting, Fanfani initiated discussions within the Italian Foreign Ministry on June 21. (Telegram 3198 from Rome, June 21; ibid.) See Tab A to Document 4. Ball
3. Memorandum From the President's Special Assistant for Science and Technology (Hornig) to President Johnson/1/ Washington, June 7, 1966, 7:30 p.m. /1/Source: Johnson Library, Papers of Donald F. Hornig, Box 4. Secret. Drafted by Spurgeon Keeny on June 7. Attached to the source text is a June 7 note from Hornig to Rostow indicating that the memorandum was transmitted to Rostow for action and that a copy was sent to Francis Bator. SUBJECT At Walt Rostow's suggestion, I am reporting for your information a number of measures that I believe could be helpful in attacking the "technological gap" between the United States and Europe. Dean Acheson discussed this problem with me last week in connection with his study for NSAM 345./2/ We agreed that the basic problem of the "technological gap" relates to such fundamental issues as the size of European markets, European management procedures, and policies toward capital investment in industry, research and development and education, and that these problems could not be cured by any package of technological proposals that we might offer. /2/National Security Action Memorandum No. 345 dealt primarily with nuclear planning, but in it the President also noted his "wishes to have developed other forward-looking proposals that would increase the cohesion of NATO and the North Atlantic Community." For text of NSAM No. 345, see Foreign Relations, 1964-1968, vol. XIII, Document 159. At the same time, I do believe that there are specific proposals that would point the Europeans in the right direction toward solving these problems, would have a unifying effect on Europe, and would help remove the widespread impression in Europe that the United States was trying to perpetuate the "technological gap." I have given some preliminary thought to the following specific proposals on which we could move relatively quickly: 1. NATO Computer Center. Europe is considerably behind this country in the use of modern computers which are fundamental to advanced technology, business management, economic planning, etc. Although these computers are on the open market, the required investment is too great for the smaller European countries and most industrial concerns. We could therefore propose that a very advanced computation center, using both US and European hardware, be established and operated by NATO. This center, which could be remotely connected with other facilities by existing telephone lines, could serve NATO governmental and industrial enterprises directly in solving military, commercial, and research problems. We would offer our assistance in organizing the operation and in introducing Europeans to the full range of possibilities involving the best modern computer equipment./3/ /3/NATO discussion on and plans for a NATO computer center continued throughout the Johnson administration. A later reference is in telegram 5052 from Brussels, October 20, 1968. (National Archives and Records Administration, RG 59, Records of the Department of State, Central Files, 1964-66, SCI 3 NATO) 2. Technological Information Service. The Europeans are very concerned that they do not have access to the advanced technology emerging from our advanced military and space projects. We have tried to make such information available to domestic concerns through such programs as the NASA Technology Utilization Program and the State Technical Service Program of the Department of Commerce. To help overcome this problem in Europe, we could propose a NATO technological information service that would perform similar services there. The participating governments would pool the relevant technological information available to them in this organization. These are examples of the kind of proposals that we could make in this area. On the basis of my preliminary look, I think that it will be possible to put together a reasonably good package that would ease the political tensions resulting from the "technological gap" problem even though it would not solve it. Donald F. Hornig/4/ /4/Printed from a copy that indicates Hornig signed the original.
4. Memorandum From the Acting Deputy Director of the Office of International Scientific and Technological Affairs (Joyce) to the Under Secretary of State for Political Affairs (Rostow)/1/ Washington, November 7, 1966. /1/Source: National Archives and Records Administration, RG 59, Records of the Department of State, Central Files, 1964-66, SCI 1-1 EURW-US. Confidential. Drafted by Henri Bader (SCI) and Eugene Kovach (SCI) and cleared by George S. Springsteen (EUR). SUBJECT Your office has requested an inventory of the major proposals outstanding for technological and scientific cooperation between Europe and the United States. Attached are brief notes on fourteen such proposals. There are a large number of bilateral and multilateral projects current between Europe and the United States; the ones we have selected represent only those presently under discussion or offering actual or potential political problems. ATTACHMENTS/2/ Tab F U.S. Proposal for a NATO Computer Center /2/Only Tab A is printed. Tab A The "Fanfani Proposal" to Bridge the Technological Gap Between the United States and Europe I. Background In a meeting at New York on September 19, 1966, Minister Fanfani presented a document to Secretary Rusk personally./3/ /3/Fanfani's proposal was the result of an Italian Foreign Ministry study sparked by his conversation with Secretary Rusk on June 5. See footnote 2, Document 2. A portion of the September 19 Rusk-Fanfani memorandum of conversation is in Foreign Relations, 1964-1968, vol. XIII, Document 205. Fanfani's paper was not found. A presumably identical document "Europe's Technological Gap and the Desirability of an International Collaboration for a 'New Drive,'" was presented to an Embassy officer in Rome by Ambassador Mondello on September 22. Mondello said that Minister Fanfani, encouraged by the interest of Secretary Rusk, had instructed the Foreign Office to transmit the document personally to representatives of all embassies of NATO countries in Rome. GOI officials have admitted to Embassy Rome that the main purpose of the Italian proposal is political, planned to breathe new life into the Atlantic Alliance by an action which will hopefully capture the public imagination. The Italians also hope that it may counter the effect of the French NATO policy and perhaps even induce France to reconsider the benefits of the Alliance. For this reason the Italians believe that their proposal should be taken up by NATO rather than EEC or OECD. II. Substance of Proposal The document notes that the technological gap between the U.S. and other developed countries of the Western World is growing and becoming a matter of serious concern. The prospects of economic unbalance and its undesirable political consequences, "psychological discomfort", and weakening of the West lead to the necessity of an initiative directed towards an increasing and balanced advancement of the countries of the Atlantic zone. The initiative should emphasize the paramount importance of close collaboration among European countries, and promote greater collaboration between Europe and the United States. In essence, two things must be brought about: 1. A "new technological drive" for Western Europe. 2. A "technological agreement" for collaboration with the United States. The initiative should be launched by a "common declaration" of the NATO Governments, proposing to convene a conference to negotiate a "technological agreement". Interested non-NATO Governments would be invited to participate. Then an "international institution" would be established to coordinate the European effort and to execute the agreement with the U.S. The immediate task would be to elaborate a "ten-year plan for technological development", with a determination of "priority areas", such as 1. computers 2. aeronautical industry 3. space research and booster rockets 4. satellites for every use 5. atomic and energy research 6. desalination and pollution control Another important requirement is the establishment of a method of cooperation between Europe and the U.S. There can be cooperation on "specific projects," such as planetary exploration, a great protonsynchrotron, and a hydrogen-oxygen space booster. One can also envisage "sector cooperation," for instance in electronics within a framework of "production agreements" with the U.S. Third countries, particularly those of Eastern Europe and developing countries, should not be ruled out. Comments Only a few preliminary comments have been received from posts in NATO countries. They indicate considerable interest in the Fanfani proposal but also skepticism. The existence and seriousness of the technological gap is generally recognized, but some think that OECD may be a better vehicle for action than NATO. The vagueness of the Italian proposal with respect to the nature of the "Technological Agreement" is noted, but no useful constructive comments have yet emerged. The President has twice (in the Erhard communiqué and in his New York speech on European policy)/4/ publicly welcomed the Italian initiative and recognized the desirability of cooperative action in the technological sphere. /4/For texts, see Public Papers of the Presidents of the United States: Lyndon B. Johnson, 1966, Book II, pp. 1079-1080 and 1127. The Department and other agencies are studying the proposal. We have put a number of questions to the Italians in an attempt to understand better their thinking--and perhaps to induce them to clarify their own ideas, which are clearly grandiose but also somewhat fuzzy as presented in their memorandum. We have told the Italians that we agree with the implication of the memorandum that the primary emphasis should probably be placed on project, as opposed to sector, cooperation, and that we see no necessary conflict between the Italian proposal and the study of technological potentials that the OECD is undertaking. We do not believe the value of technological cooperation depends on the validity of the "technological gap" concept, which is an oversimplified approach to the subject. We are sympathetic to the Italians' desire to use an approach to the technological problem to strengthen NATO and European unity. However, we will be in a better position to take a position on the specifics of their proposal when we receive a clearer view of it, which we expect to be presented at the NATO Ministerial meeting in December. We understand the Italians are refining their proposal.
5. National Security Action Memorandum No. 357/1/ Washington, November 25, 1966. /1/Source: Department of State, S/S Files: Lot 72 D 316, NSAM 357. Confidential. TO SUBJECT I have been impressed with the increasing concern in Western Europe over possible disparities in advanced technology between the United States and Europe. While many Europeans are convinced that this "technological gap" exists, there is substantially less agreement on its nature and extent, its causes and possible remedies. As I indicated in my October 7 speech,/2/ we must determine how best to develop science and technology as a common resource. I have, therefore, asked the Special Assistant to the President for Science and Technology to chair an interdepartmental committee which will examine all aspects of this problem and explore possible courses of action. The committee should also examine ways in which the United States might engage interested West European governments in a joint study of what should be done. I would like to receive a preliminary report by January 30, 1967. /2/For text, see Public Papers of the Presidents of the United States: Lyndon B. Johnson, 1966, Book II, pp. 1125-1130. This is to request that each of you name a representative to serve on this committee. Lyndon B. Johnson
6. Memorandum by the President's Special Assistant for Science and Technology (Hornig)/1/ Washington, December 2, 1966. /1/Source: Johnson Library, Papers of Donald F. Hornig, Box 4. Confidential. Drafted by David Beckler. MEMORANDUM FOR SUBJECT REF I have been asked by the President to chair an interdepartmental committee to examine the problems generated by the increasing concern in Western Europe over possible disparities in advanced technology between the United States and Western Europe, and to explore courses of action. A preliminary report to the President is due January 30, 1967. It is the purpose of this memorandum to request the early designation of a representative of your agency to serve on the committee, and to provide background for discussion at its first meeting which I propose to hold in Room 213 of the Executive Office Building at 2:30 p.m. on Friday, December 9th./2/ /2/Robert R. Bowie, Counselor of the Department, was designated as the State representative to Hornig's committee. (Memorandum from Read to Pollack, December 6; Department of State, S/S Files: Lot 72 D 316) No record of this meeting has been found. Although there have been many discussions of the matter (see attached background material), little has emerged in the form of specific proposals that would be appropriate and effective in dealing with the root causes of the European concern which has been expressed primarily at political levels in Europe. As the NSAM points out, there is less agreement on its nature and extent of the technological gap, its causes and possible remedies. It is clear that the problem is exceedingly complex and that no single factor such as relative technological capabilities or investments in R&D is responsible for differences in competitiveness within industrial sectors. Management attitudes, market size, availability of venture capital, educational infrastructure, mobility of technical manpower and ideas, among other factors, are necessarily involved. In light of the developments to date, it is timely to consider and devise constructive approaches to U.S.-European cooperation whereby the U.S. might appropriately facilitate technological advance and industrial innovation in Europe without restraining such advance in the U.S., and to utilize technological and industrial advance as a unifying rather than a divisive force in the Western community. The work of the committee should bring about a common understanding within the government of the nature of the problem, and should develop major new initiatives and a strategy for carrying them out through new modes of cooperation as well as through the various agency contacts with European governments and international organizations. In consideration of the above, the following questions come to mind. First, there are questions of policy and research cooperation, including: (a) What can, or should, the U.S. do to assist the European countries in acquiring (or regaining) status as leaders in scientific and technological advance? (b) Is the objective of meeting the concerns of European countries over deficiencies in technological capabilities in conflict with the need to maintain a vigorous pace of technological advance and innovation in U.S. industry? (c) How can European concern over the technological gap be channeled to promote a new spirit of cooperation among European countries leading to economic and technological integration and the creation of a more favorable climate for the growth of innovative industries? (d) In what ways can U.S. governmental policies influence industrial arrangements between U.S. and Europe, e.g., "Buy American" policies, licensing arrangements, joint ventures, investment in R&D in Europe, tariffs, tax and anti-trust policies, etc.? (e) To what extent can NASA and DoD research, development and procurement programs admit European companies on a basis competitive with U.S. industry? (f) Should measures be taken to lessen the migration of scientists and engineers from Europe to the U.S., e.g., through changes in visa procedures, control of recruitment practices of U.S. government contractors, etc.? Second, there are questions of organization and approach to European governments, including: (a) what combination of European countries are we encouraging to develop cooperative proposals--NATO, OECD, other; should similar cooperation be extended to Eastern Europe; (b) what is our position on the respective roles and activities of existing organizations, particularly NATO and OECD; use of international scientific organizations such as EURATOM, ESRO, ELDO; involvement of other organizations such as EEC, ECE, the Coal and Steel Community; (c) should further European initiatives be encouraged to organize intra-European discussion and to consider new forms of cooperation and organization (such as a Technological Community or a ten-year plan)? At the first meeting of the committee, I hope that your representative will be prepared to present views on the character of the problem, on the nature of your agency's involvement with the various facets of it, and on the questions that have been raised above, among others. Additionally, I would like to encourage you to submit any suggestions or proposals deserving future study or action by the committee. Donald F. Hornig/3/ /3/Printed from a copy that bears this typed signature. Attachment BACKGROUND MATERIAL ON TECHNOLOGICAL GAP As Mr. Moyers indicated in the attached transcript of the White House News Conference on November 26th (Attachment A),/4/ the creation of the committee is the result of a number of discussions during the past year between the President and heads of European governments and between other governmental officials. The development of European skills in advanced technology was discussed by President Johnson and Chancellor Erhard in December 1965 in the context of cooperative ventures in outer space./5/ The subject of the technological gap was mentioned during the Erhard visit of last September when the President indicated that the United States stands ready to respond to any proposals by our European allies in the area of advanced technology. Reference was made to the initiatives of the Italian Government (Attachment B)./6/ The matter was discussed further with Mr. Webb and with me during a visit last spring by the German Minister of Science Gerhard Stoltenberg, and by Mr. Webb during his visit to European capitals. /4/None of the attachments has been found. On November 30 the Department transmitted the transcript of the press conference to European posts in circular telegram 94188. (Johnson Library, National Security File, Agency File, Office of Science and Technology, Vol. I (1966)) /5/See Public Papers of the Presidents of the United States: Lyndon B. Johnson, 1965, Book II, pp. 1165-1167. /6/For a summary of this initiative, see Tab A to Document 4. More recently the subject was dealt with in the New York speech of the President on October 7th and in the addresses of the Vice President and Secretary Connor during the Commerce Symposium on Technology and World Trade. Belgian Prime Minister Harmel at the meeting of the Ministers of Science and OECD countries last January made a strong plea for U.S. technological cooperation; a copy of my response is attached (Attachment C). Also attached is a letter to me from Mr. Harmel, now Belgian Foreign Minister (Attachment D). As an outcome of the Ministers of Science meeting, the OECD Science Policy Committee has recently initiated a study of the differences in technological potential among OECD countries which will include a detailed examination of nine industrial sectors and will attempt to analyze all of the factors that influence the exploitation of technological potentials in attaining economic and other national objectives (Attachments E and F). The U.K. interest in this problem has recently been expressed in an address by Prime Minister Wilson on November 14, 1966, calling for the creation of a new European technological community (Attachment G). The French have raised this theme on a number of occasions, for example in computers and satellite communications, and in discussions I have had with French Minister of Science M. Alain Peyrefitte. U.S.-European cooperation in advanced technologies has also been mentioned in the NATO context as a means to achieve greater cohesiveness among member nations. It is raised, for example, in the Fanfani proposal. Perhaps the best summation of the European point of view on U.S.-European technological disparities is expressed in the attached talk by Mr. Theodore Lefevre, former Belgian Prime Minister, given at Harvard last December (Attachment H). On the other hand, a study by Joseph Rosa shows that the rate of economic growth in most Western European countries over the past 15 years compares very favorably with that of the U.S. (Attachment I). Washington, January 13, 1967, 8:09 p.m. /1/Source: National Archives and Records Administration, RG 59, Records of the Department of State, Central Files, 1967-69, SCI 1-1 EURW-US. Confidential. Repeated to all NATO and OECD capitals and USRO. Drafted by Percival (EUR) on January 11; cleared by Jacob M. Myerson (RPM), Oswald H. Ganley (SCI), William M. Kerrigan (E), Jonathan Dean (C), and Springsteen (EUR); and approved by Bowie. 118575. Subj: Technological Gap. 1. Following is general guidance on technological gap. Specific guidance for USRO action in NATO context as requested Paris 9979/2/ by septel. /2/Not found. 2. At December NATO Ministerial Meeting, Ministers recommended that North Atlantic Council perm reps study the procedure which might be followed for further examination and implementation of Italian proposal on technological gap, and report findings to Spring Ministerial meeting. 3. Three facets of technological disparities problem are politically important to U.S. First is problem of "technological gap" between Western Europe and U.S. which is primary subject this guidance. Second is implication any U.S. response may have in East-West context. Third is fact science and technology disparities is global problem and great gap between industrialized countries and LDCs is grave problem for economic development and world stability. 4. In one sense "technological gap" is by-product of American economic and military superiority over Europe and European reaction to this predominance. Europeans concerned that European industry will be unable to compete with marketable products of advanced technology even though technological superiority today in some areas rests with Europe. Gap concept reflects fear of "bigness" and is consciously used to stimulate larger government investment in science and technology. Problem unlikely be resolved in foreseeable future because Europeans unable on national basis to marshal resources needed to transform their societies at same pace as U.S. 5. In responding to gap problem, we will have three inter-related U.S. objectives: (A) in first instance, to deal directly with European attitude that U.S. is somehow responsible for gap; (B) to try to transform European concern with technological disparity into impetus for furthering intra-European cooperation and cohesion including UK relations with continent and European Communities; and (C) to improve Atlantic relations and strengthen OECD and NATO. 6. In pursuit of these political objectives, U.S. should: A. Indicate general willingness to cooperate with Western Europeans and to welcome initiatives, including that of Italians, leaving to Europeans responsibility for developing specific proposals which involve intra-European action and agreement. B. Actively continue mutually beneficial cooperative programs and joint projects underway and develop appropriate new ones in nuclear energy, space, exchange scientific information, in cooperative research as now carried out in OECD and in defense-related R&D and production. Institutionally Euratom provides an excellent partner for nuclear energy cooperation. We stand ready to cooperate in space activities with ELDO, ESRO, and bilaterally./3/ In OECD, cooperative research program is being more focused on problems of modern societies, water and air pollution, highway and auto safety research and problem of urban society. Moreover, major study of technological potentials has begun which we strongly support. NATO in addition to its science program provides opportunity and has machinery to deal with defense-related R&D and joint production as members may decide. /3/See Documents 21 ff. C. Review internally those policies and practices which lead to European charges that U.S. is responsible for "technological gap" and consciously seeks to maintain it. These may include a reassessment of our export controls, a look at U.S. corporate practices abroad, U.S. visa and immigration policy, and field of restrictive business practices. In this re-examination, U.S. must keep in mind that it would not be in our interest to restrain U.S. competitive position or to give away American technology through a Marshall Plan type program. Our aim is to diminish disparities through promoting a two-way flow of cooperation. At same time, we must recognize that the greatest volume of scientific and technological exchange occurs in private or commercial channels, and that role of U.S. government is minimal or merely facilitative. D. Pursue action on a low key which would support UK in using her considerable resources and strengths in field of science and technology as leverage for membership in the European Communities. E. React generally with restraint and minimum publicity to gap problem while Europeans are in process of sorting out their approach to this subject. F. Point out that much greater gap in education, science, technology and the other benefits of modern society exists between industrialized countries of OECD and LDCs. It is this gap which must be reduced in interest of world peace and stability. 7. U.S. is already fully committed to support basic study of composition and characteristics of gap by OECD. Results of this OECD analysis may remove mystique of "gap" and demonstrate that many aspects of solution lie in European actions such as scales of market, organization, education, corporate structure, management techniques, etc. 8. Fanfani also introduced this proposal into EEC Council of Ministers prior to NATO Ministerial. A thorough examination of "technological gap" is scheduled for EEC consideration early in 1967. Beyond this, British prefer avoid arrangements or institutions which would undercut their efforts to use technology as lever in effort to join EEC. Impulse toward integration would be best served if European Communities in concert with UK were to accept major responsibility for development of measures and institutions to deal with technological gap. 9. In short, we support pluralistic approach to scientific and technological cooperation, utilizing whole range of existing institutions. As short term measures this sense, in absence of European grouping which could effectively push European reforms and proposals for joint actions, we propose place greatest emphasis on OECD structure as vehicle for our discussion with Europeans, advancing our general philosophy on subject after it takes shape in interim report to President about January 30. Main role of NATO discussion in present phase as we now see it is to sort out organization aspect, break up problem into components which can be handled by NATO and other organizations. U.S. will lend full support to this effort. 10. In addition to what may be done in framework of existing institutions an eventual special US-European conference on matter might be desirable. Such a conference, however would be premature until NATO and OECD actions clarify this complex subject. Rusk Paris, January 25, 1967, 1723Z. /1/Source: National Archives and Records Administration, RG 59, Records of the Department of State, Central Files, 1967-69, SCI 1-1 EURW-US. Confidential. Repeated to the White House for Hornig, to the Office of the Secretary of Defense, and to Brussels and Rome. 11144. NATUS. BUSEC. Subject: Technological Gap. Ref: State 118575 circular./2/ /2/Document 7. 1. While topic of "technological gap" is not on the agenda, initial meeting of Conference of National Armaments Directors February 13 offers a first test of whether NATO is going to do something about the "technological gap" besides talk about it. 2. We are in general agreement with the analysis and basic U.S. posture set forth reftel. Looked at from the point of view of enthusiasts such as Fanfani, this analysis comes perilously close to the rather chilly U.S. reply that (a) the "technological gap" between Europe and the rest of the world is larger and more important than the gap between Europe and the U.S.; (b) the U.S.-Europe gap is primarily a question of political and economic organization, and insufficient effort on the part of the Europeans; (c) the U.S. has been generally forthcoming in making scientific and technical information available and in its readiness to cooperate with its European allies whenever they were willing to meet us halfway, so that U.S.-European technical cooperation is essentially a matter of trying to do a little better what is already underway; and (d) no single step, whether a "Marshall Plan" or a cooperation project, initiated by the U.S. cld substitute for an across-the-boards effort by Europeans to improve scientific training, support of basic and applied research, modern management techniques, intra-European industrial and governmental cooperation, and continued enlargement of markets and industries. 3. Sensible Europeans recognize these things and are trying to bring their governments and private leaders to act on these premises. Hearing them said gently by the U.S., in NATO and in the OECD and other Atlantic institutions, can help these Europeans, and we should not hesitate to speak the truth as we see it. 4. One result may be a more vigorous European partnership with us in nuclear energy cooperation in EURATOM, in space cooperation in response to the President's general offers or our specific defense COMSAT offers in NATO, last year and in cooperative research development and production in the military field under the general auspices of NATO. Some concrete cooperation of this kind needs to come about. Such major activities will be a visible demonstration to the Europeans that their dialogue with us on technological cooperation is leading to concrete results. It will also respond to the political need to show that Atlantic cooperation is better than European independence--even if European selfhelp is an indispensable prerequisite to cooperation. 5. In NATO we can anticipate a good deal of general discussion of the nature and causes of the "technological gap." We will probably conclude that the Europeans will need to get together in some fields through institutions like the European Communities either to cooperate or to compete with us effectively. Analyzing how technical advance can be transformed into technological progress will probably be recognized as the domain of the OECD. 6. These will be meritorious conclusions--but they will leave the question: what then can NATO actually do besides exhort? Some things are underway and can perhaps be given additional impulse: these include the defense communications satellite program, and such excellent NATO institutions as the SHAPE and SACLANT technical centers. 7. But the broadest, most important, and most central NATO role should properly be in fostering cooperation among NATO governments in the general field of military technology and future weapons research and production. It has, in the past, been a frustrating field in which to seek cooperation--but if we fail to find significant areas of cooperative development and production, then NATO will be subject to the criticism that it has failed to contribute in its peculiar area of responsibility to doing what could be done with the "technological gap" problem. Conversely, since a major reason for European difficulties in weapons development even with bilateral U.S. help is that the industrial capabilities and markets are too small on a national scale, we can use the current dialogue on the "technological gap" to urge again a broader European base and a multilateral approach. 8. As the "technological gap" comes under intensified discussion at the ministerial level and in public, NATO is just breaking in new machinery in its continuing effort to identify and initiate cooperative arms development and production. The Conference of National Armaments Directors is the capstone of a new committee structure which is intended to be more flexible and pragmatic than the old apparatus, dismantled last year, which succeeded in holding innumerable discussions and exchanges of information, but put in train very few actual hardware programs. 9. Because this is the first CNAD meeting, it needs to be a success. And because if NATO is to be relevant to the "technological gap" problem over the long-term, it must be so in this area, the U.S. representatives in the CNAD meeting should act and speak in a way which will move in this direction. 10. As a minimum this means two things: (a) the U.S. representative to the CNAD must be fully aware of the work and thinking of the Hornig Committee and be prepared to respond to the interest of his colleagues by saying something about how the U.S. views the problem and the potential contribution of the CNAD and its supporting committees to its solution; and (b) he should stress the importance of a flexible and pragmatic approach which, in the CNAD and in the advisory groups, seeks to identify practical programs of cooperation of mutual benefit to two or more NATO countries. If there is no other, the Defense COMSAT program is one obvious example to use--but surely there could be others. Cleveland
9. Letter From the President's Special Assistant for Science and Technology (Hornig) to President Johnson/1/ Washington, January 31, 1967. /1/Source: Johnson Library, National Security File, Agency File, Office of Science and Technology, Vol. I [1967], Box 42. Confidential. Dear Mr. President: On November 25, 1966, you asked me to chair an Interdepartmental Committee to examine the problem of the "Technological Gap" between the United States and Western Europe and to explore possible courses of action. The preliminary report which you requested by the end of January is submitted herewith./2/ /2/Not attached. A copy of the report is attached to a February 3 memorandum from Bowie to Rusk. (National Archives and Records Administration, RG 59, Records of the Department of State, Central Files, 1967-69, SCI 1-1 EURW-US) In this connection, the main issue which may face you in the near future concerns our position with respect to initiatives generated in Europe, such as the Fanfani proposal, and the development of constructive responses to such initiatives. The term was originated by Europeans and has been surrounded by a certain amount of controversy and confusion. Therefore, the first effort of the Committee has been to clarify the reality behind the expression "Technological Gap". Our preliminary assessment convinces us that the Technological Gap is mainly a political problem although it has roots in actual disparities. A much higher degree of European economic integration will surely contribute in a major way to alleviating the underlying economic problems. We cannot be sure at this stage whether real progress will be made in this direction. U.K. entry into the Common Market offers the most promise at this time for narrowing technological/industrial disparities, though the success of the U.K. effort is far from certain. If progress is not made, widening disparities could pose longer range economic problems for the United States. Therefore, we have recommended a strategy to convert European resentment over the Gap into a constructive source of support for greater intra-European cooperation. Furthermore, unless there is European progress in a host of factors, such as education at all levels, work habits, and management and marketing practices, as well as in properly conceived research and development programs, the U.S. advantage is not likely to be diminished. Since the Gap is an important factor in U.S./European relations, we need to develop a deeper understanding of its economic and political aspects. We believe that we have identified the general nature of the problem, but our formulation will not be complete until we have heard further from the European governments, which are just now beginning to discuss the question among themselves. We are also investigating specific actions this government could take both to show its good will and to deal with the substance of the issue, but are not yet prepared to recommend any of them to you at this time. This report is, therefore, an interim report. Its main object is to define the political and economic problem as we see it, to outline a strategy for U.S. steps to be taken abroad in the near future, and to indicate the areas we are examining for possible action by this government and the European governments. We expect to submit a final report to you this June. Respectfully, Robert R. Bowie, State/3/ /3/The following typed names appear on the source text. [Continue with the next documents]
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