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ALFRED
P.
WORKING PAPER
SLOAN SCHOOL OF MANAGEMENT
From
"Mission-Oriented"
"Diffusion-Oriented"
New
Trend
of
U.S.
Industrial
Jong-Tsong
November 1990
to
Paradigm:
Technology
Policy
Chiang
WP
3225-90-BPS
MASSACHUSETTS
INSTITUTE OF TECHNOLOGY
50 MEMORIAL DRIVE
CAMBRIDGE, MASSACHUSETTS 02139
From
"Mission-Oriented"
"Diffusion-Oriented"
New
Trend
of
U.S.
Industrial
Jong-Tsong
November 1990
to
Paradigm:
Technology
Policy
Chiang
WP 3225-90-BPS
From
"Mission-Oriented"
New Trend
of
Industrial
U.S.
Paradigm:
"Diffusion-Oriented"
to
Technology
Policy
Abstract
As
the
War
post-World
history
II
Japan and Germany
countries,
shows, several "diffusion-oriented"
particular,
in
have performed better
economically than some "mission-oriented" countries, like France and
As
the U.K.
"mission-oriented," innovator and "first
the leading
mover" country with three decades' economic and technological
dominance and impressive "spin-off" achievements, the U.S. has been
eclipsed
in
followers"
assets,
its
competitive advantage by
traditional
and could rapidly assimilate innovator's technical advances
and compete away innovator's economic rewards.
Federal
government
industrial
This
new
is
technology
trend
policy
also reflects
"diffusion-oriented"
active participation
rather novel
some
policy
in
strategic
delicate
toward
the
revive, the U.S.
"diffusion-oriented"
"generic"
growing skepticism and even
"spin-off"
rationale.
In
and "precompetitive" technology
in
involved
R&D
its
paradigm.
framework, U.S. Federal government
movement
issues
cooperative industrial
To
undergoing a structural transition in
disillusionment about the conventional
are
many "smart
which have strong technical resources and complementary
country.
However, there
especially,
"precompetitive"
this
in,
remaining to be solved.
is
a
still
From
"Mission-Oriented"
New Trend
of
"Mission-Oriented"
Technology
Industrial
"Diffusion-Oriented"
vs.
Paradigm:
"Diffusion-Oriented"
to
U.S.
Policy
Policies
In technology policy, the U.S., the U.K. and France could be
described
"mission-oriented"countries,
as
"diffusion-oriented"
while Japan
hybrid between both.
a
is
Mission-oriented
radical innovation.
new
based on
ideal
So
technologies.
of technology
is
and
new
tends to compete in the early phase
it
aerospace-related,
are
addition
sophisticated
highly
high-end technological
"less
More
high-end" applications.
R&D
performance products,
the
contracts
or procurements
contractors
They then seek commercial
"trickle-down"
government
specifically,
upgrade technical
can
2
process to civilian industry,
initial
contrast,
costly
By
applications.
investment can
diffusion-oriented
it
is
hoped
concentrates
attempts
value-added for existing products
increase
to
increasing
create brand
efficiency
new
or
industries.
entering
as
on
industry.
in
It
by improving
niche markets, rather than
Moreover, especially
cost and lower risk fields are normally
that the
be justified.
ultimately
policy
"spin-off" or
this
and assimilation of technology
to
that,
of high-
acquisition, diffusion
quality,
normally
accumulate production experience, and drive down th3
capabilities,
By
nd
achievements can somehow lead to many
than
through government
cost.
<
expected
is
It
accomplishing the designated missions, the large-scale,
to
smaller-scale,
"big science
These programs, mostly
put more emphasis on performance than on cost.
in
industries
cycle, and emphasize "heroic" efforts in
life
and technology," or major programs.
defense
and exploit
generate
to
create entirely
to
Switzerland,
1
attempts
policy
Its
compared with
as
such as Germany, Sweden and
ones,
first
targeted,
in
Japan, lower
and then used
stepping stones to accumulate experience and economic profits for
So incremental
competing
in
the
innovation
is
emphasized, and there are few large scale programs
initiated
next higher-end products.
by government mission agencies aimed
technological
advancement.
at
Though moving toward
radical
earlier
phases of
technology
to
cycle
life
also pursued, the key notion of this policy
is
be a "smart follower"
This
most.
fields,
microelectronics,
notably
mover" who
instead of a "first
first,
so-called "trickle-up."
is
civilian
may
This
"market-pull"
down"
than in mission-oriented
policy
activities,
any.
if
supports
then
"technology-push"
and
In
performance
key
of
It
markets,
or
"trickle-
"spin-off"
parameters),
also worth noting
is
R&D
countries' defense
non-defense
is
connected
security policy
to their national
These three
expenditures as a share of total
R&D
shares in
GNP
three decades.
In
the
As
GNP
are
result,
a
much
the
of the U.S., the U.K. and France have
Germany
constantly been lower than those of Japan and
mid-1980s the
for the past
of the former to the latter
ratio
percentage was about two thirds. 4
the
less
successful economically than the diffusion-
The
oriented Japan and Germany.
large military efforts in
former countries have apparently not led
particularly
to
was an exception
competitiveness
of
at
least
some
Principles
Based on
a
general
science and technology
is
until
the
industries
and
to
"Spin-off"
consensus
to
1970s when
began
that
the
favorable
However, the U.S.
positions on civilian markets of high technology.
Policy
France
post-war history shows, the mission-oriented
and U.K. have been
U.S.
(e.g.,
mission-oriented policy of the
that the
higher than those of diffusion-oriented countries.
As
(e.g.,
whereas diffusion-
seeking greater degree of technological self-reliance.
GNP
the
initial
emphasizes more process innovation
to
in
manufacturing). 3
U.S., the U.K. and France
in
In
policy.
more on product innovation
functional
oriented policy tends
further
greater role
a
terms of innovation pattern, mission-
oriented policy tends to focus
efficient
plays
government designated missions create
case,
latter
the opposite
is
well be called "spin-on."
Comparatively speaking,
diffusion-oriented
some
technology thus cultivated
could be largely used for military applications.
of "spin-off," and
risks the
also turned out that, in
It
is
its
international
erode significantly.
Achievements
government involvement
overcome market
failures,
appropriability and capital market imperfections,
that
especially
cause
in
low
underinvestment
fundamental
do,
in
R&D,
government
U.S.
research, just
scientific
as
traditionally
only supports
other developed
all
countries
and well-defined mission-oriented technological programs
which government has
strong
a
and direct procurement
of the very few exceptions in the history
R&D
is
in
One
interest.
the early agricultural
and extension program.
Because of lack of knowledge about commercial potential and
to induce uneven distribution of benefits, Federal
government basically follows free-market principles and leaves
Though some
civilian technology development to private industry.
reluctance
policy
designed
initiatives
to
expand Federal government role have
been proposed for the past three decades, few of them were enacted
beyond the
or lasted
initiating
administrations'
term of office. 5
So
in
the arena of industrial technology policy, the U.S. has a cumulation of
programs,
mission-oriented
strategically-oriented
but
approach
as
comprehensive and
a
compared with Japan and many
Besides, U.S. Federal government does not
West European
countries.
"pick winners"
or purposefully
a big policy distinction
lacks
nurture
This
"national champions."
is
between the U.S. and many European
countries as well as Japan.
During the three decades following World
achievements based on
fairly
impressive.
a
trajectories),
II,
U.S. "spin-off"
number of mission-oriented programs were
Well-known examples include
high-performance fighters
missile
War
and
jet
computers
bombers),
engines (for
(for
plotting
semiconductors (for missile guidance systems),
numerical control (NC) systems (for carving out aircraft structural
parts),
lasers
sharing,
(for
beam weapons), and time
tank range finders and
communications and computer graphs
digital
(for
air
defense
system). 6
As
a matter of fact, the impacts of
some U.S.
"spin-off" cases,
most notably semiconductors and computers, are extremely
far-
They have triggered "technological paradigm" change, and
reaching.
created a
new
heuristics
or
protocols. 7
constellation
intellectual
of basic
principles
technological
which
dictate
artifacts
the
and
working
They have also induced "technology system" change, and
brought about
a
range of technological
and innovative activities
What
clustering around them.
more, they have been affecting not
is
merely one industry or group of industries, but spilling over
economy, including working practices and
entire
they
have even caused "techno-economic paradigm"
way
to
modern "information
a
are
temperature
high
rather
than
superconductivity
Though both came from
By any measure
early post-war era
fact,
(if
Many
pioneering
the major sponsor.
is
possible), U.S.
achievements
"spin-off"
were unmatched by any other country.
U.S. "spin-off" contribution
territory.
to
basic
from mission-oriented programs, they are also
of U.S. origin, and Federal government
the
is,
and led the
shift,
two recent cases which may have some potential similar
semiconductors and computers.
research,
the
society." 8
and
engineering
Genetic
to
That
styles.
life
is
by no means confined
in
In
to its
other countries could also benefit from U.S.
progress.
Measurement
and Patterns of "Spin-off"
Despite some apparent and great "spin-off"
however, very difficult
quantify
to
fundamental
the
technological innovation.
In
general,
is,
it
measure rather accurately the
or
Many
economic terms.
"spin-off" impacts, even only in
involved also concern
cases,
difficulties
it
may
issues
assessing
in
be easier to take account
of "first order" cost saving or price increase resulting from
incremental process innovation, but
order,"
it
is
assess brand
industries.
new
products,
some
of
to
civilian
it
is
to
consider "second
nearly impossible to
which may even lead
Because U.S. modern military
more emphasis on performance than on
more
difficult
long-term and indirect effects, and
R&D
new
normally puts much
tends
cost,
to
to
contribute
product than to process innovation, and has created new
markets and even new industries
in
several
economic impacts of "spin-off" are thus very
When
evaluating
opportunity cost
cost-effectiveness
is
cases,
difficult
to
the
measure.
taken into account, the challenge of
becomes even
more insurmountable.
For example, the defense technology programs could be compared
with
R&D
sponsored by the National Science Foundation, by other
Federal agencies, or by commercial companies.
They could
also be
And
assessed against a system differently managed.
there could
even be investments of different weights along the spectrum of basic
validation.
In
Certainly,
development,
research,
applied
research,
fact,
many
and
testing
standards and criteria could be used. 9
can be argued that
it
engineering,
inappropriate to consider cost of
is
it
"spin-off" because the cost should be charged against the targeted
But when the investment
missions.
becomes one reason
consideration of "spin-off"
makes some
terms,
however
cost,
patterns.
In
cases. 10
For instance,
be useful to understand
also
semiconductors and computers,
in
though the Department of Defense
the
(DOD)
supported relevant
key technological progress did not take place under
direct sponsorship of
R&D
Instead,
contract.
procurements of high performance products
induced some firms
to
achieved great success.
aircraft
In
purposes.
In
systems,
like
assured
any prices
resources, and they
commercial
The
civilian industry
technically
existing
technological
satellite
communications,
infrastructure
and
support
therefore could
efforts. 11
Still,
grow economically
the
at
some programs were
conservative and mainly focused on exploiting the
state-of-the-art
scientific
a
abundant nuclear technical data, space launch vehicles,
margins of the military
progress
DOD's
virtually
the case of jet engine, the
nuclear power and
defense needs created
etc.
R&D
own
invest their
at
could utilize rather directly the products developed for
military
the
then the
quantitative
regard, there have been some studies of
"spin-off"
this
may
it
important
DOD's
difficult
in
sense.
For strategic implications,
research,
very big and "spin-off"
is
part of the investment,
to justify
rather
than
tried
and technological advances.
to
generate
significant
But they accelerated the
by overcoming the resistance to technological change
through demonstration.
As an example,
the use
of computers in
highly visible space programs was said to have greatly increased the
acceptance of computers by the business world.
history
(mainly
of semiconductors shows,
DOD
and
NASA)
the
to establish
practice
Finally,
of mission
a competitive
later
took
the early
agencies
market
encouraged and supported many small innovative firms.
them
as
Some
over some conservative established firms'
of
leading
and rejuvenated the industry. 12
position
here
variety
the
exhibit
Under
the
Though
necessarily
the cases discussed
they
representative,
and complexity of "spin-off" patterns.
Technology
Recent
nor
exhaustive
neither
are
Policies
Reagan administration, integration of economics and
science and technology was generally emphasized with a view to
enhancing
industrial
competitiveness. 13
Without an explicit and
coherent agenda, the underlying technology policy
may
well be
deduced from the budget decisions.
Along with
the
R&D
military build-up, defense
funding (only a
very small fraction of which was for basic research) was increased
from
50%
1988.
14
for
one
R&D
of total Federal
In
third of national
R&D
estimated to be five times
R&D
all
spending, $9.3 billion.
investment
R&D
1989 U.S. defense
1980
in
to nearly
70%
in
spending, $46.3 billion, accounted
spending, $134.2 billion, and was
OECD
the other
In the
same
investment was $87.9 billion, less than
countries' total defense
year, U.S. non-defense
all
the other
OECD
R&D
countries'
billion. 15
$117.1
addition,
In
under the Reagan administration, a number of very
"mega programs," such
costly
as
National Aerospace Plane, Space
and Strategic Defense Initiative (SDI), were promoted.
Station
"spin-off"
arguments, like "Oriental Express,"
Some
were also raised by
proponents.
In
the meantime,
DOD
became more
active in developing
technology with broader application potential.
in
consistency with the administration's
logic
of the Mansfield
DOD's
military
Amendment
initial
(passed in
In fact,
was not
ideology similar to the
1969) that restricts
technological activities to those areas directly concerned with
needs.
But the obvious importance of increased defense
expenditures to the economy, which was losing
competitiveness, led the administration to have
the
this
civilian
industry. 16
several programs,
Under
this
its
DOD
new philosophy
international
do something
of pragmatism,
such as the Very High Speed Integrated Circuits
(VHSIC) Program and
the
Strategic
rather explicit non-military intention.
Computing Program, included
Moreover,
in
1987
DOD
for
started
underwrite
to
Semiconductor Manufacturing
the
Materials Research Consortium
(SEMATECH),
Semiconductor Industry Association.
civilian
sponsored the research
whole,
in
In
relied
DOD
even
(HDTV).
On
1988
high-definition television
Reagan administration
the
implementing
in
technology policy.
statement
17
was published
Congress.
the U.S.
fields,
Bush administration,
the
In
In this
in
the
first
technology policy
September 26, 1990, and delivered
namely, robotics, high performance computing,
semiconductors,
superconductivity,
imaging
advanced
and
and demanding multi-agency
responsibilities
biotechnology,
R&D
as
However,
this
technology policy statement mentions
including
part
of
transfer
applications
in
precompetitive
contrast
with
the
in
the
undergoing
paradigm
seems
is
a
to
R&D
results,
research
and government
on generic technologies
Bush administration
If
this
distinction
is
structural
change.
is
in
rather
sharp
The
traditional
it
And one
driving force
"Spin-off"
behind
Rationale
is
"mission-oriented"
this
be the growing criticism against the traditional
toward
to
purposeful, then
The "diffusion-oriented" paradigm
rationale.
Skepticism
that
say that the U.S. industrial technology policy
on the wane.
momentum.
to
devotes a
measures,
Reagan administration's seeming "addiction"
highly visible programs.
would be prudent
it
about
This low key treatment of major mission-
commercial applications.
programs
also
to contribute to a broad range of government and
have the potential
oriented
are
funded technology, commercial
of Federally
of defense and space
participation
little
Instead,
content to diffusion-oriented
its
others,
government strong support. 18
Federal
major mission-oriented programs explicitly.
significant
Some
efforts.
energy and transportation,
alternative
requiring
identified
gaining
to
document, some advanced technological
technologies, are targeted as also falling into Federal
like
the
more on mission-oriented,
mainly defense-related, programs than ever before
its
and
an initiative of the
new
is
trend
"spin-off"
recent years,
In
there
have emerged many negative opinions
new given
(though some of them not really
the
long-existing issues)
of "spin-off." 19
"conventional wisdom"
challenging the
One argument
contends that there has been a tendency toward diverging design
requirements of military missions and civilian applications.
leads
diminishing commercial returns and even
to
technology"
"stealth
semiconductors
radiation-resistant
supersonic military aircraft.
For the
applications.
by
civilian
machine
last one,
were evaluated
and
so far only subsonic aircraft
The
be far more
to
were thus not cost-effective
a
in
needed
is
NC
the
is
military
advanced than what the
user industry needed and could afford.
civilian
efforts
weapons,
The former two have few commercial
sponsored by the Air Force.
tools
and bombers,
fighters
nuclear
for
Another somewhat controversial case
airlines.
requirements
military
for
of
Some apparent examples
commercial technology development.
include
This
"distortion"
The technological
commercial sense.
could
It
even be argued that these efforts were "misled" by the military.
Another argument claims
increasing
unit
cost,
mainly caused by the rapidly
that,
most military procurements of high-tech
systems demand only small volumes.
manufacturing productivity which
This contributes
now one
is
of the U.S.
A
argument maintains
third
contracting
present
the
that
system does not encourage cost consciousness which
commercial competition.
and
fixed-fee
by
replaced
largely
schemes
to
still
A
firm-fixed-price
the
accommodate
widely
defense
R&D,
serious
barriers
fifth
is
contract
and
is
crucial
types
have
been
fixed-price-incentive
past four decades,
there
are
still
many
So cost-plus contract
cost overruns.
in
though cost-plus-
that,
is
in
used. 20
argument
fourth
communication of
A
The main reason
cost-plus-incentive-fee
contract types during
R&D
the
to
industry's
weaknesses.
serious
effect
little
asserts
classified
that
the
restriction
of
information and the "isolated"
system of
even within a firm, for accounting purposes constitute
to
technology sharing and diffusion.
argument points out
contracts
that
DOD's
and production contracts
in
principle to separate
order to encourage
competition
both areas in effect retards the incorporation of
in
As
manufacturability into development phase.
markets,
civilian
Finally,
force
argument says
contractors to share
DOD's another
that
DOD
principle to
R&D
sponsored
results with
indicated other firms in order to ensure multiple supply sources
to
decline to bid on defense projects for
proprietary
information and advantage in civilian
makes some high-tech firms
of losing
fear
markets.
these cases both
In
The
their
and "spin-on" are retarded.
"spin-off"
Strategic Defense Initiative (SDI)
is
a case in point.
marks the highest point of embracing high technology
major problems of national security
in
unprecedented
the post-war U.S.
and managed.
integrated
many
a
ultimate
Its
"spin-off"
potential
will
In
still
vehement advocacy
for
this
facilities,
will
of
depend on
remaining
benefits have been
be done.
to
largely ruled out as
But DOD's
convincing factor to justify SDI's astronomic budget. 21
initial
to
developed,
be
feasibility
technical advances
big scientific and
far the
complexity
technological
It
a solution
as
program, a "super" system, comprising ground and space
So
final
any.
if
sixth
a
R&D
its
DOD
the
result,
a
even after adaptation, are normally too expensive for the
products,
boost phase defense
using directed-
energy weapons (the really novel part of SDI as compared with the
old
missile defense") and
"ballistic
many features of its systems
DOD's reaction to some
design have proven rather unfounded.
outside
has
studies
ignoring
revealed
also
some fundamental
even
when SDI was announced by
its
inappropriate
rules. 22
natural
self-defense
In fact, since
President Reagan, the
R&D
phase defense have fluctuated greatly—from chemical
ground-based
and, finally,
traditional
proclivity
to
Policy
As
"generic"
(using
relay
space
mirrors),
laser,
to
free-electron
laser
space-based rockets (relying on kinetic energy, the most
killing
justification
New
laser
1984
foci for boost
mechanism). 23
endorsing
for
their
Arena:
indicated
in
grandiose
These
facts
seem
DOD's
to exhibit
programs even with insufficient
main missions.
Generic
the
and
Precompetitive
recent technology
and "precompetitive" technology
10
is
policy
Technology
statement,
a critical
field
where
government
Federal
an increasingly important role. 24
play
will
the passage of the National Cooperative Research
fact,
Act
In
1984,
in
which eliminated treble-damage penalty and thus largely reduced
firms'
fear of antitrust violations in joint
way.
And
is
has already paved the
mentioned DOD's expanding role
the previously
defense technology
R&D,
more
also
non-
in
or less in this line.
Generic technology means a concept, component or process, or
the
investigation
further
phenomena,
of scientific
has the
that
potential to be applied to a broad range of products or processes.
R&D
Precompetitive technology covers
up
activities
the
to
where technical uncertainties are sufficiently identified
assessment of commercial potential and prior
prototypes. 25
application-specific
investment
that
its
these definitions,
main missions.
permit
to
development of
to
it
and precompetitive technology
generic
in
diffusion as one of
By
stage
is
evident
is
aimed
at
may
as
Therefore, this strategy
be categorized into the framework of "diffusion-oriented"
well
policy.
Through active support of generic and precompetitive
technology, U.S. government will
beyond
traditionally
its
expand
effect
in
engineering," and cover more "downstream"
for
government involvement now
good-natured,
public
proprietary
R&D,
rather than
the attention
R&D
linked
results.
the
to
In
fact,
R&D.
R&D
and
R&D
from the properties of
application-specific,
new
activities
perspective turns
to
Policy formulation could therefore be
industry
the usage of
more closely
needs.
perspective,
strategic
this
criteria
between
on the distinctions mainly between
other words, this
In
activities
The new
on the distinctions
rest
non-proprietary
science and technology.
R&D
its
domain—science and "academic
"legitimate"
with a
little
modification,
could also accommodate the present "spin-off" dilemma.
That
is,
government should support the development of generic and "dual
use" technology which can benefit both military and civilian
industries. 26
This argument
technology tends
application
military
be
to
stage,
is
is
grounded on the
critical
have their origin
a typical
example.
1
1
fact that
stage rather than
the generic
and many modern
applications
Microelectronics
at
in
at
technologies
civilian
The U.S.
"dual use"
the final
utilized
for
sector.
military has
shown
deep concern over
main
DOD
among
far,
to
SEMATECH's
endorse
this
a broad
others,
of manufacturing technology
field
support. 28
has been identified as needing government crucial
a response to a widely perceived structural shortcoming
That
competitiveness.
products and production
the U.S.
This
is
U.S.
in
manufacturing productivity, process
in
is,
concurrent engineering
innovation,
the
is
semiconductor
technology. 27
manufacturing
So
And
dependence upon Japanese.
its
explicit reason for
simultaneous design of
(i.e.,
processes), etc.,
there
is
ample evidence
has been surpassed by, especially, Japan in
many
that
industries,
despite that U.S. capabilities in science and "big technology" are
still
generally superior to the rest of the world.
Some
practice,
In
speaking,
strictly
between
differences
there
technology
generic
Generic technology
technology.
R&D
Precompetitive
about
Issues
precompetitive
and
conceptually broad and ambiguous,
is
On
and implementation maneuvers.
precompetitive technology
delicate
This would give government more room
but strategically appealing.
for policy
some
are
more
is
the contrary,
specific.
Precompetitive technology emphatically implies that
among
shared
the
financial
"potential
incentives
competitors,"
for
individual
hopefully
firms
to
commercial products and processes based upon
with cooperative
As
Federal
activities
R&D
is
develop and market
it.
So
it
is
associated
strategy.
Trade Commission, vigilantly guards against anti-competitive
if
they cannot be justified by other entailed potential
However,
in
the face of Japanese challenge
believed to be partly rooted in a series of
cooperative
like
can be
a long tradition in the U.S., government, mainly through the
benefit to the society.
which
it
without reducing
R&D
its
national
programs (most notably the VLSI program), U.S.--
many European
countries
and EEC—virtually adjusted
its
stand,
exemplified legislatively by the enactment of National Cooperative
Research Act as indicated above.
cooperative
R&D
But
to
avoid anti-trust violation,
should be pre-competitive (or even pro-
12
boundaries are
the
fuzzy.
fairly
For the partners
R&D"
"competitive
relations
fairness
in
from
with other firms.
may become
financially
some
a
may
the joint projects, they
not do
But they
the perspective of their relations.
R&D"
do "competitive
quite definitely will
their
Nevertheless,
anti-competitive.
not
competitive),
from the standpoint of
may
Controversies
serious
issue
thus arise, and
government underwrites
if
private cooperative projects.
In
some
regard,
this
experience outside the U.S. renders some lessons.
In
the following
as
R&D,
protection
against
concerned
EEC
program,
it
possible
applies
was found
that
have
controversies
R&D
"competitive"
foreign
against
projects were
happened. 30
from
charges
other
"precompetitive" Alvey
In U.K.'s
many
also used as a
is
anti-competitive
departments. 29
"precompetitive" joint
But no
"competitive."
In Finland, the
national
projects are expected to be as
countries
as
possible. 31
In Japan,
technology in the national information programs
"precompetitive"
the
reality
they must be working on precompetitive
Besides, the term "precompetitive"
stages.
in
"workable" definition to justify their decisions: So long
firms cooperate in
big
EEC management
"precompetitive" ESPRIT,
common
technology of
interest
to
the
is
participant competitors. 32
EEC, "precompetitive"
Therefore, in these countries and
technology seems to be a term mainly to legitimize government and
EEC
support for industrial joint
"anti-competitive"
mood
character
R&D.
Its
potentially detrimental
overwhelmed by strong "competitive"
is
against foreign competitors (in the case of
and the U.S.).
But
this
strategy
may
EEC, mainly Japan
not be so easily applied in a
country like the U.S., where government historically has played a
regulatory rather than promotional
embrace most or
projects because
adversarial
all
a
climate,
strong
may
is
difficult
to
in joint
and where the firms outside the joint
"legitimate"
right
possible abuse of this policy design.
technology
it
of lack of cooperative experience or rooted
industrial
projects have
where
role,
major players from relevant industries
trigger
to
protest
against the
Therefore, precompetitive
much more debates
in
the U.S. than in
other countries, like Japan or European countries, as to
13
how
to
many
assess
application-general
the
and commercial potential,
uncertainties
technical
R&D, and how
and application-specific
In the early post-war era, the U.S., based
technological
was
superiority,
the
"first
on
mover"
to
economic and
its
introduce most
high value-added innovations to the domestic
markets.
draw
to
Remarks
Concluding
original,
define
to
between precompetitive and competitive.
"line"
It
made heavy investment, took
high economic rewards.
applied
how
in the
first
Potential
great risk,
was almost also
"spin-off"
In this period, the U.S. led
U.S.
and world
and captured
be
to
most other
developed countries by a significant edge.
In recent years,
invested
however, the U.S. ability to appropriate
innovations has been
Many
severely eclipsed.
have been catching up with large enough
R&D
The modern transportation and communications, and
many
large
a
"consuming"
also facilitate
prevent others from
to
more rapid technology
transfer and
Despite some mechanisms, like patents and trade secrets,
diffusion.
limit
it)
number of individuals and
"owner"
organizations and difficult for the
the
emergence
the
science-based technologies (science has the nature of public
good—widely "consumed" by
to
countries
and technical
and could quickly assimilate other countries' innovations.
resources
of
its
the
exploitation
by others of an innovator's achievements,
lead time an innovator could enjoy
"Smart followers"
manufacturing,
with
strong
distribution,
has been largely shortened.
complementary assets—including
maintenance
and
service
capabilities,
and close relations with key customers— may easily compete away
the
innovator's
ultimately. 33
innovator
different
"supernormal profits," and, based on their
improvements and higher efficiency, even defeat the
incremental
Therefore, the present scenario
from the past one and,
in
many
respects,
disadvantage of the U.S. as an innovator and
government
mission-oriented
traditional
scrutiny and criticism.
statement
is
is
a
correct
If
the recent
"first
policy
has
is
to
is
the
mover."
thus
very
Federal
been
under
White House technology policy
message, then a departure from the old track
taking place: the U.S.
is
moving
in
14
the direction of diffusion-
many
oriented policy paradigm, in spite of the fact that
such
issues,
R&D,
"precompetitive" cooperative
those involved in
as
remain to be
solved.
Notes
The typology of "mission-oriented"
1
policies
discussed
is
The terms
2
and
technology
"diffusion-oriented"
Ergas (1986).
in
and
"trickle-up"
"trickle-down"
are
proposed
Branscomb
in
(1989), pp. 5-6.
For the
3
Utterback
of product and process
cycle
life
4
Nelson (1990).
5
Roessner (1987), pp. 230-233.
°
See Mowery and Rosenberg (1982) for
semiconductors,
lasers,
innovations,
Abernathy and
see
(1978).
p.
125.
Katz and Phillips (1982)
and National
Research
Council
jet
for
(1983)
engine.
Levin (1982) for
computers,
(1987)
Seidel
and Noble (1984)
for
for
machine
tools.
7
a
For
new
8
9
Ten standards used
pp.
"technological
Dosi
trajectory"
follows
"techno-economic
paradigm,"
see
Freeman and
to
evaluate the effects of defense
Carter (1989),
pp.
R&D
spending are
4-6.
6.
6-8.
small
For defense
and
innovative
firms
See, for example,
Keyworth
II
space
to
programs'
enter the
demonstration effect and
markets,
see
Lepkowski (1984) and Keyworth (1985).
was science advisor
to
President
14
Smith (1990),
15
Carter (1989). pp. 3-4.
16
Smith (1990), pp. 143-145.
p.
Bromley (1990).
stimulation
of
Schnee (1978).
George A.
Reagan and director of
House Office of Science and Technology Policy during
17
(which
(1982).
For a brief discussion of these three "spin-off patterns, see Carter (1989),
12
!3
in
See also note
11
and
system"
and
see
(1986).
identified
10
paradigm"),
For "technology
Perez
paradigm"
"technological
"technological
the
White
1981-1988.
133.
D.
Allan
Bromley
is
presently
science advisor to President
Bush and director of the White House Office of Science and Technology
15
Policy.
18
Bromley (1990),
19
10-12.
pp.
The following arguments, except noted otherwise,
OTA
U.S.
in
Technology
with
interview
author's
January
in
comments
personal
from
are
several
an
Review, August/September
French
former
a
Minister
1989,
of
integration
sources,
of
including
Brook and Lewis
129-158; an article interviewing Harvey
(1989), pp.
Branscomb
Paris
and
analysis
qualitative
pp.
55-64;
and
Industry
and
the
Research
in
1990.
20
Burnett and Scherer (1990), pp.
21
See, for example,
300-303.
Council on Economic Priorities (1988), especially pp.
119-
144.
22
This could be judged by reviewing the following documents:
background
OTA
April
in
(3)
Paper"
OTA
to
to
on July
letter
The boost phase defense
24
Bromley (1990),
25
See, for example, U.S.
"Dual
Use
Cambridge,
27
U.S.
28
U.S.
Taft's
background
response to the above Defense
Brower (1987).
Institute
of Standards and
(1989), pp. 33-38; and papers presented in the
International
Perspectives"
by
held
School of Government on October 21-22,
1989
in
MA.
OTA (1988),
OTA (1990).
pp.
13-15.
in
EEC
Based on an interview with
interim
Secretary
of the
has been traced by Clausen and
Technologies:
Based on an interview
30
8,
Federal Register, Vol. 55, No. 142, July 24, 1990.
OTA
Harvard University Kennedy
Deputy
withdrawal
Director's
May
8.
the
in
Defense
the
Both definitions are from U.S. National
workshop
29
the
Space" on
1984.
13,
R&D
pp. 5 and
Technology, published
26
OTA
1984; and (5) the
2^
(4)
requesting
in
Comments on OTA's
General Abrahamson's
unknown);
(date
Deputy Secretary's
the
(1)
Space published by U.S.
in
SDI Director General Abrahamson's "Department of
(2)
Director Gibbons
paper on June 4,
Defense
Missile
on Directed Energy Missile Defense
OTA's "Response
Background
letter
1984;
Comment
Defense
1984;
Directed Energy
paper
evaluation
of the
Alvey
in
a
Brussels on Dec.
7,
group of researchers,
program,
in
1989.
who had done
Manchester University
on
the
Dec.
1989.
3
1
Based on an interview with the vice president of the Technical Center of
Finland (VTT)
in
Helsinki on
May
19,
1989.
16
11,
32
Samuels (1987).
33
Teece (1986).
17
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20
in
Manufacturing,
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069
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