Does America Need a Technology Policy?

From semiconductors to supercomputers, jumbo jets to HDTV, technology is probably the single most important factor driving the evolution of global competition. The accelerating pace of technological innovation is spawning new businesses, transforming old ones, and redefining the rules of competitive success. Little wonder, then, that the national debate about the competitiveness of U.S. industry—and government’s role in improving it—is increasingly becoming a debate about technology policy.

Usually, this debate centers on the question of whether government can or should play an active role in stimulating commercial technological innovation. Proponents of technology policy argue that a society’s capacity for sustained technological innovation is crucial to its economic well-being. At a time when U.S. companies are steadily losing market share in strategic high-tech sectors, government support for R&D on “critical technologies” is absolutely essential.

Critics counter that however painful the loss of market share by U.S. companies might be, any governmental cure would be far worse than the disease. In a global economy where capital, technology, and people are mobile and where barriers to trade are falling, innovation itself is becoming global. Any effort by government to pick winners or otherwise unilaterally control technological outcomes within its own borders is certainly doomed.

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