Despite signs of a slowing economy,
the United States continues to rank among the leaders in all major
technology areas. Advances in U.S. aerospace, computer, and telecommunication
industries continue to influence new technology development and
dominate technical exchanges between the United States and its trading
partners. New data on patenting trends in the United States bears
this out and may suggest a level of optimism by U.S. and foreign
inventors in the U.S. economy.
The United States also continues to be a leading provider of knowledge-intensive
services, but it may face greater competition in the near future
as European countries devote more resources to service-sector R&D.
For now, however, exports of U.S. technological know-how sold as
intellectual property continue to exceed U.S. imports of technological
Though strong, U.S. high-technology industries have struggled in
the shrinking economy and in the aftermath of the September 11 terrorist
attacks. Declining investment in IT has clearly affected the bottom
line in U.S. firms producing computer hardware and software. Firms
involved in all aspects of communication, along with those in the
U.S. aerospace industry, may be facing the greatest challenges.
Airlines have sharply cut back orders due to declines in travel
and tourism, and they face tougher competition in their struggle
to retain market share while addressing the challenges raised by
the events of September 11 and the still evolving societal and economic
reactions to them. The event itself affected the nation in myriad
ways, but it set an already struggling U.S. aerospace industry on
its heels, and the industry continues to lose world market share.
Asia's status as both a consumer and developer of high-technology
products has been enhanced by development in many Asian economies,
particularly Taiwan, South Korea, and China. Several smaller European
countries also exhibit growing capacities to develop new technologies
and to compete in global markets.
The United States continues to be a leading developer and supplier
of high-technology both at home and abroad. This success has likely
been influenced by a combination of factors: the nation's long commitment
to investments in S&T; the scale effects derived from serving
a large, demanding domestic market; and the U.S. market's willingness
to adopt new technologies. These same market dynamics already show
signs of benefiting Asia and a more unified Europe and will likely
enhance the value of their investments in S&T.