Without Timely Action, the U.S. Faces a Decline in Competitiveness as Other Countries Catch Up
Decline can be avoided if the United States stops ignoring the factors that sparked the technological breakthroughs of the last 60 years

Washington, D.C. - AeA’s new report, Losing the Competitive Advantage?:  The Challenge for Science and Technology in the United States, finds that America can no longer remain idle if we hope to continue our lead in science and technology.   We are neglecting the factors that sparked the U.S. technology revolution.  Ultimately, this threatens U.S. economic vitality and our competitiveness in the global marketplace.

"Even if we were doing everything right, the United States still faces major new challenges from an intensely competitive world.  But we are not doing everything right, which exacerbates the challenges before us," said AeA's President and CEO, William T. Archey.  "In our report, we analyze a number of competitiveness factors that, when taken in isolation, as they so often are, would not necessarily constitute a crisis.  But the interrelationship – the cumulative effect of these trends – makes the more compelling argument that the status quo is unsustainable."

The report finds that other countries, including but not limited to China and India, are catching up in critical areas.  These countries have restructured their economies to benefit from the free market system they once resisted.  They are dramatically increasing the skill sets of their workforce, investing in research and development (R&D), and adopting advanced technologies, all to create wealth and spur economic growth.

"The good news is that as more countries adopt free markets, they open their doors to U.S. products and services.  But, this also presents a challenge for the United States as these countries now aggressively compete against us – or soon will,” added John V. Harker, Chairman of AeA's Board of Directors and Chairman of InFocus Corporation based in Wilsonville, Oregon.  “The United States can no longer take its technological dominance for granted.” 

The report analyzes how R&D funding supports innovation by investing in the technologies that advance society, increase productivity, and ultimately improve standards of living.  The Internet, MRI scanning technology, Doppler radar, and GPS – to name a few – were all born from U.S. federally sponsored research.  While funding remains available, it has decreased from its peak in 1987 and has declined substantially as a percentage of the economy.

Losing the Competitive Advantage? also finds that the American K-12 educational system is failing to provide the math and science skills necessary for kids to compete as knowledge workers in the 21^st century.  In an information economy, the majority of jobs – not just those specifically in high tech – require a grounding in math and science.  The U.S. higher education system is also not graduating enough engineers, computer scientists, and mathematicians to support the growth of the U.S. high-tech industry.

At the same time, the United States has raised the bureaucratic barriers for high-skilled immigration.  Foreign workers are indispensable to American science and engineering; one out of five U.S. scientists and engineers are foreign-born.  These workers make significant contributions to the U.S. economy by creating intellectual property and hundreds of thousands of jobs.  Yet, the number of skilled workers immigrating to the United States has declined by 27 percent between 2001 and 2003.

"While no country can totally control the forces governing world commerce, innovation, and competitiveness, it can improve its chances for success by being prepared," said Archey.  "We need to better educate our domestic workforce, tap into the world workforce through immigration, and rebuild a system that supports innovation and technology adoption.  Confronting the issues that threaten future U.S. competitiveness can no longer be deferred."

The report includes a list of recommendations and priorities to address these challenges.

A copy of the report can be found at http://www.aeanet.org/competitiveness.

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About AeA
AeA, founded in 1943, is a nationwide trade association that represents all segments of the technology industry and is dedicated solely to helping our members’ top line and bottom line. We do this in partnership with our small, medium, and large member companies by lobbying governments at the state, federal, and international levels, providing access to capital and business opportunities, and offering select business services and networking programs. AeA also produces a number of reports, which analyze the technology industry from a state, national, and industry perspective.    For more information, please visit http://www.aeanet.org.

This page was last updated on 02/14/05.