The United States is a net exporter of technology sold as intellectual property. Royalties and fees received from foreign firms have been, on average, three times that paid out to foreigners by U.S. firms for access to their technology. U.S. receipts from such technology sales totaled $2.6 billion in 1991, up from $1.7 billion in 1987. (See figure 6-14 and appendix table 6-7.)

Japan is the largest consumer of U.S. technology sold in this manner. In 1991, Japan accounted for 47 percent of all such U.S. receipts, while the Western European countries (i.e., the European Community) together represented 18 percent. South Korea increased its purchases of U.S. technological know-how sharply during the 5 years for which data are available. It became the second largest consumer of U.S. industrial processes with a 9-percent share in 1991, up from just a 2-percent share in 1987.

To a large extent, the U.S. surplus in the exchange of intellectual property is driven by trade with Japan and the newly industrialized Asian economies. In 1991, U.S. receipts (exports) from technology licensing transactions were 11 times U.S. firm payments (imports) to Japan. On the other hand, the U.S. trade surplus with Europe in sales of technological know-how declined over the past 5 years (1987 to 1991). Germany represented the largest European trading partner in these transactions; moreover, it was the only country in the world with which the United States had a persistent technical knowledge trade deficit.

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