International Competitiveness in Electronics. INSTITUTION Congress of the U.S., Washington, D.C
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DOCU'tENT RESUME ED 245 883 SE 044 576 TITLE International Competitiveness in Electronics. INSTITUTION Congress of the U.S., Washington, D.C. Office of Technology Assessment. REPORT NO OTA-ISC-200 PUB DATE Nov 83 NOTE 547p. AVAILABLE FROMSuperintendent of Documents, U.S. Government Printing Office, Washington, DC 20402. PUB TYPE Reports Evaluative/Feasibility (142) EDRS PRICE MF02/PC22 Plus Postage. DESCRIPTORS Automation; *Competition; *Electronics; Employment Patterns; Engineering Education; Financial Support; Aigher Education; *Industry; *International Relations; *International Trade; Manufacturing; *Policy; Science Education; Secondary Education; Technology IDENTIFIERS *Industrial Policy; United States ABSTRACT This assessment continues the Office of Technology Assessment's (OTA) exploration of the meaning of industrial policy in the United States context, while also examining the industrial policies of several U.S. economic rivals. The major focus is on electronics, an area which virtually defines "high technology" of the 1980's. The assessment sets the characteristics of the technology itself alongside other forces that exert major influences over international competitiveness. Specific areas addressed include: electronics technology; srr,,Acture, trade, and competitiveness in the international electronics industry; quality, reliability, and automation in manufacturing; role of financing in competitiveness and electronics; human resources (education, training, management); employment effects; national industrial policies; and U.S. trade policies and-their effects. The report concludes by outlining five options for a U.S. industrial policy, drawing on electronics for examples of past and prospective impacts, as well as on OTA's previous studies of the steel and automotive induStries. A detailed summary and iltroductory comments are included. Also included in appendices are case studies in the development and marketing of electronics products, a discussion of offshore manufacturing, and a glossary of terms used in the assessment. (J1,0 *-********************************************************************** * Reproductions supplied by EDRS are the best that can be made * * from the original document. , * *************-*******p*******************,*************-:***************** Inteationa ompetitiveness In Electronics US. DEPARTMENT OF EDUCATION NATIONAL INSTITUTE OF EDUCATION EDUCATIONAL RESOURCES INFORMA.TION CENTER IER1Ci IThis document has been reproduced as recewed from the person or organaation onginatmg It Minor changes nave been made to improve reproduction quality, Ponts of view or opinions Staled in this docd- ment do not necessarily represent official NIE position or policy. 44 O L13. ;" CONGRESS OF THE UNITED STATES *tee* Office of Technology Assessment 41 Wastfington. D. C. 20610 Office of Technology =assessment Congressional Board of th-. r.:41:h. Congress MORRIS K. UDALL, Arzr:::-1, TED STEVENS. Alaska,. Senate House ORRIN G. HATCH E. BROV' ",JR. Utah ' California CHARLES McC. MATHIAS. JR- ..7,":";"1-IN D. Mary land Michigan EDWARD M. KENNEDY .:`..A,R.RY WINN, Ill. Massachusetts Kansas ERNEST F.. HOLLINGS CLAYA.F.NCE E. South Carolina Ohio CLAIBORNE PELL '1..'90PER EVA Rhode Island Iowa JOHN H. G -1.717-.."N'..5 Advisory Courmif CHARLES N. KIMBALL. Chairman JAMES C. FLETCHMt RAC) '14, Midwest Research Institute University of Pittsburgh Um, f EARL BEISTLINE S. DAVID FREEMAN University of Alaska Tennessee Palley Authority Hamlweekt & Quist CHARLES A. BOWSHER GILBERT GUDE DAVID PUTTER General Accounting Office Congressional Research Service General \P. Mors Corp. CLAIRE T. DEDRICK CARL N. HODGES LEWIS THOMAS California Land Commission University of Arizona . MemorLI Sloan-Kettering I. Cancer Center Director JOHN H. GIBBONS The Technology Assessment Board approves the reh:ase of this report. The views expressed in this report are not necessarily those of the Board, OTA Advisory Council, or of individual 'members thereof. International --C in Electronics OTA Reports are the principal documentation of formalassessment projects. These projects are approved in advance by the TechnologyAssessment Board. At the conclusion of a project, the Board has the opportunityto review the report, but its release does not necessarily imply endorsement of the results bythe Board or its individual members. CONGRESS OF THE UNITED STATES Office of Technolnly Assessment vidsn.ngton.o C 20510 Recommended Citation: International Competitiveness in Electronics (Washington, D.C.: U.S. Congress, Office of Technology Assessment, OTA-ISC-200, November 1983). Library of Congress Catalog Card Number 83-600610 For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402 Foreword This assessment, requested by the Senate Committeeon Commerce, Science, and Transportation, the House Committeeon Ways and Means, and the joint Eco- nomic Committee, completes a series of three reportson the competitiveness of U.S. industries. The series began with Technology and Steel IndustryCompetitive- ness and continued with U.S. industrial Competitiveness: A Comparison of Steel, Electronics, and Aufoinobiles. Today. the subject of international competitiveness hasmore visibility among the general public than ever before. it has emergedas one of the primary economic issues facing Congress. Debates over "reindustrialization" and "industrialpolicy" beginning several years ago have been renewed. Thisassessment continues OTA's exploration of the meaning of industrial policy in theU.S. context, while also ex- amining the industrial policies of several ofour economic rivals. Electronics virtually defines "high technology" in the1980's. Th;s assessment sets the characteristics of the technology itselfa technology already ofsuch ubiq- uity that microprocessors and computers outnumber peoplein the United States alongside other forces that exert major influencesover international com- petitiveness. These factors range from humanresources and costs of capital to the priorities that corporate managers placeon manufacturing Technologies and the quality of their products. The report concludes by outlining fiveoptions for a U.S. industrial policy, drawing on electronics for examples ofpast and prospective im- pacts, as well as on OTA's previous studies of the steel and automobile industries. OTA is grateful for the assistance of the advisory panel forthis assessment, as well as for the help provided by many individuals in other parts of the Federal Government. OTA assumes full responsibility for the report. JOHN H. GIBBONS Director lit Electronics Advisory Pane! Katherine Seelman, Chairperson New York, N, Y. Jack C. Acton Richard A_ Kraft Greensburg, Pa. Matsushita Industrial Co, Steve Beckman E. Floyd Kvamme AFL-CIO Apple. C.."61711Tater-inc. A. Terry Brix Geraldine McArdle Temar Ltd. Reston, rVa. Richard P. Case Charles Phipps IBM Corp. Texas Instruments, Inc. Ruth Schwartz Cowan K. M. Poole SUNY-Stony Brook Bell Laboratories William Kay Daines Benjamin t`,.t Rosen American Retail Federation Sevin .Rosen Management Co. Leonard Dietch Kate Wilhelm Zenith Radio Corp. Eugene, Dreg. Isaiah Frank Robert B. Wood Johns Hopkins University International Brotherhood of Electrical F. Willard Griffith II Workers GC International Michael Y. Yoshinu Harvard Business School Robert R. Johnson Mosaic Systems Inc. iv 7 International Competitiveness in ElectronicsProject Staff Lionel S. johns, Assistant Director, OTA Energy, Materials, and International Security Division Peter Sharfman, Program Manager international Security and Commerce Program 1Tt't Martha Caldwell Harris Robert R. Miller* Contributors Robert Fisher* Phillip Otterness* Robert Rarog* Barbara Sachs* Contractors L. W. Borgman 84 Co. Mary Ann Maguire Princeton, N.J. University of Maryland, College Park Consultant Services Institute, Inc. Mitsubishi Research Institute, Inc. Livingston, N.J. Tokyo, Japan Developing World Industry & Richard W. Moxon Technology, Inc, University of Washington, Seattle Washington, D.C., Sterling Hobe Corp. Hamilton Herman, et al. Washington, D.C. Potomac, Md. John H. Wheatley, et al. H. C. Lir University of Washington, Seattle Untverrsiry -6f-Ivta-ryta OTA Publishinn Staff John C. Holmes, Publishing Officer John Bergling Kathie S. Boss Debra M. Datcher Joe Henson Glenda Lawing Linda A. Leahy Cheryl J. Manning OTAcontract p Contents Chapter Page 1. Part A: Summary 3 Part B: Extended Summary 23 2. Introduction 55 3. Electronics Technology 67 t.trucTure and i rade in the international Electronics industry 107 5. Competitiveness in the International Electronics Industry 163 6. Manufacturing: Quality, Reliability, and Automation 217 7. Financing: Its Role in Competitiveness in Electronics 253 8. Human Resources: Education, Training, Management 301 9. Employment Effects 343 10. National Industrial Policies 377 11. U.S. Trade Policies and Their Effects 429 12. Federal Policies Affecting Electronics: Options for the United States 463 Appendix A: Glossary 505 Appendix B: Offshore Manufacturing 510 Appendix C: Case Studies in the Development and Marketing of Electronics Products 520 Index 539 vii CHAPTER 1 Part A: Summary Contents Firiciings 5 I i i: lli*:_li,ulliptlIlll.ti l'ilSaillli ilIilltil......:^).Lit.i.l.,:ftnlit., fliiUStr 1 1 .1' --',II.:',.1-.1-,L.;p',, ,- 15 Cr)nciusif):.! IJ 2 l\lartri$ ();; G./11:1/11tl'iti allf1 5 'I 11fi Ii( jIi1r)1) if 111.10.giat.lqi Cirtsuit l'ruciuct;()p. Liltv 11 t;t 1)tica!-; 72 T.)+, 1 (:(ouptit..:r ht. Value :1!:(1 11111 1.:(plip!noW.