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Science and Engineering Indicators 2004
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Chapter 6:
U.S. Technology in the Marketplace
New High-Technology Exporters
International Trends in Industrial R&D
Patented Inventions
Venture Capital and High-Technology Enterprise
Characteristics of Innovative U.S. Firms

Industry, Technology, and the Global Marketplace

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Chapter Overview
Chapter Organization

Chapter Overview  top of page

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.[1]

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  top of page

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.


[1]  This chapter presents data from various public and private sources. Consequently, the countries included vary by data source.

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