High Technology and International Competitiveness

(Hardback)

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Following World War II, the US manfacturing sector emerged as the dominant industrial force in the world in virtually all areas, including productivity, market share, innovations and capital investments. Though other countries have caught up with and surpassed the United States in many industries, Romesh Diwan and Chandana Chakraborty argue that America can recapture its dominant role by moving forcefully into high-technology industries. In this work, they examine competitiveness in a range of high-technology enterprises, analyzing the industries as an aggregate as well as through three specific examples: semi-conductors, telecommunications and computers. The authors provide a complete understanding of the technical changes and developments that are taking place in US high technology, and offer guidance to policy makers in promoting competitive strength. Their work defines and quantifies the high-tech industrial sector of the US economy, and analyzes the productivity of this sector by utilizing a translog cost function, which provides information about the structure of the input-output relations in a particular industry. Using these functions, Diwan and Chakraborty answer quantitatively a number of questions relating to the growth of various inputs, productivities and outputs, which lead to conclusions regarding the structure of production, costs, and capacity in US industry. Their conclusions - that technical change is biased in the main in favour of capital and material and that capital and skilled labour are complements - are consistent with new ideas and theories in the field. This work should prove a valuable reference source for professional economists and policy experts, as well as for scholars and students in international trade, finance and development.

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Diwan and Chakraborty identify the industries that form the high-technology sector, industries that account for one fifth to one quarter of total manufacturing. Historically, the United States has had a comparative advantage in these industries, but the strength in high technology appears to be eroding. This pattern is consistent with a progressive wave of deindustrialization that began with labor intensive industries, then inundated heavy industry, and now is threatening high technology. The authors recommend promoting high technology through targeting R&D and having corporations spend more funds on worker training. They justify the latter recommendation on the basis of their finding that skilled labor and capital are complements in the high-tech sector. This book evolved from a dissertation and contains detailed explanation of statistical and theoretical matters that will distract the nonspecialist. University collections. * Choice *

Author Bio

Romesh Diwan is professor of economics at Rensselaer Polytechnic Institute. He is the author of numerous books and articles on economics, productivity, and competitiveness, including Essays in Gandhian Economics, Productivity and Technical Change in Foodgrains, and Alternative Development Strategies and Appropriate Technology: Policy for an Equitable World Order. Chandana Chakraborty is assistant professor of economics at Montclair State College. She has presented numerous papers to economics conferences and has published articles in Economics Letters and Eastern Economic Journal.