Is This The End of the American Century?

This site features updates, analysis, discussion and comments related to the theme of my book published by Rowman & Littlefield in 2008 (hardbound) and 2009 (paperbound).

The Book

The End of the American Century documents the interrelated dimensions of American social, economic, political and international decline, marking the end of a period of economic affluence and world dominance that began with World War II. The war on terror and the Iraq War exacerbated American domestic weakness and malaise, and its image and stature in the world community. Dynamic economic and political powers like China and the European Union are steadily challenging and eroding US global influence. This global shift will require substantial adjustments for U.S. citizens and leaders alike.

Friday, October 24, 2008

U.S. Loses High-Tech Dominance

For most of the 20th Century, the U.S. was the world leader in science, technology, and innovation, with the best scientists, the best universities and the most advanced research and development programs. But all of that has begun to change as other countries and regions have become more advanced and more competitive and increasingly challenge U.S. dominance.

A recent article in the New York Times addressed the U.S. technological decline, and the ways Senators Obama and McCain have approached the issue. This story includes some eye-opening statistics about the loss of U.S. primacy in technology, innovation and R&D. At the top of the story, the Times points out the importance of this sector for America’s economy and role in the world:

For decades the United States dominated the technological revolution sweeping the globe. The nation’s science and engineering skills produced vast gains in productivity and wealth, powered its military and made it the de facto world leader. Today, the dominance is eroding.

One sees this in multiple indicators, but perhaps the most important is the country’s high-technology balance of trade. Until 2002, the U.S. always exported more high-tech products than it imported. In that year, the trend reversed, and the technology trade balance has steadily declined, with the annual gap exceeding $50 billion in 2007.

The U.S. has also fallen behind in spending on research and development, which drives high-tech innovation and development. As a percent of GDP, total R&D expenditures have remained flat since the 1960s, while federal government spending on R&D has declined steadily. The U.S. has fallen to 8th place worldwide on R&D spending as a share of GDP, behind Israel, Sweden, Finland, Japan, South Korea, Switzerland and Iceland (Popular Science 11/08).

China is not yet on that top-ten list, but may not be far behind. The country is ramping up support for high tech innovation and R&D, and President Hu Jintao this year called on Chinese scientists to challenge other countries in this area: "We are ready for a fight,” he said, “to control the scientific high ground and earn a seat on the world’s high technology board.” ("China's Industrial Ambition")

The U.S. is also slipping, relative to other countries, in the creation of patents, scientific inventions, the publication of science and engineering articles, and the number of students focusing on science, math and engineering. In international comparisons of scientific and mathematical literacy, and in international competitions in those fields, American students fare poorly, often ranking near the bottom of the group of wealthy countries. Increasingly the top science and engineering students in this country are citizens of other countries, who then return home. Science magazine (7/11/08) recently reported that the most likely undergraduate alma maters for those who earned a U.S. Ph.D. were—get this--Tsinghua University and Peking University—both in Beijing.

These worrisome developments prompted a major study recently, “Rising Above the Gathering Storm,” from the National Academies, the nation’s most eminent scientific and engineering organization, calling for the U.S. to strengthen its international competitiveness. The authors of the report were “deeply concerned that the scientific and technological building blocks critical to our economic leadership are eroding at a time when many other nations are gathering strength” and were “worried about the future prosperity of the United States. A review of high tech by the magazine Popular Science (11/08) puts it a but more bluntly: “The technological dominance of the United States may soon go the way of the dollar.”

Fortunately, the man who will probably take over as President next January, Barack Obama, is on top of these issues, often speaks about them, and has aggressively promoted efforts to remedy them. In his book The Audacity of Hope, he called for a doubling of federal funding for basic research and the training of 100,000 more engineers and scientists over the next four years. He co-sponsored a bill in Congress based on the recommendations of “The Gathering Storm” and called for increased federal support of science education, especially for women and minorities. The Senate passed the bill 88 to 8 ( Senator McCain abstained), but has not yet funded the programs. It will be an expensive proposition—about $43 billion for the first three years—which will be all that much more difficult to manage in this time of economic crisis. But these long-term investments are critical to recovering America’s economic dynamism

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J Payne said...

One could find a political means by which to dismiss the point regarding R&D spending, but it reveals both a decline in human investment in the United States, not to mention revealing the overall collapse of the American infrastructure. On a 'meta' level, this reveals the continuation of the Cold War dynamic inside American policy circles. Institutionally, it seems that America continues to emphasize the tools of the 20th Century at expense of a rapidly changing world.

In relation to China, there can be no mistaking that the regime in power has been quite clever in what industries they are investing public monies in - Chinese schools are increasingly impressive by any standard. Routinely, elite high school students are trained in three languages (one is always English) and get the greatest amount of scientific training. Yet, the rise of China's high-tech sector and its emerging collection of tech professionals is less a sign of China's emerging economic power and more a measure to dam up a problem throughout the population. China's rise has not been universal - rural areas remain impoverished, with little by way of infrastructure reaching rural areas in the East and most areas (urban or rural) in the West. China's income inequality and unbalanced job market shall lead to the same economic inefficienies and market instability that we see occuring in the West right now. In fact, China's economy has quickly slowed with the global finance crisis. What I am interested in seeing is how China's rising group of tech and policy experts react to the first economic downturn in 25 years - it is an environment that has not been faced by this generation of leaders...

DSM said...

These are thoughtful and informed comments (from a China expert), and I agree with all of them, and am also intrigued by how China's leaders will deal with a possible economic slowdown.

The U.S. and China are obviously in a symbiotic relationship, where China's manufacturing supplies (and underwrites) America's consumption. So when American consumption declines (as it is doing, and will continue to do), China will have to find other ways to grow, or other markets for its products.

While my book presaged many of the economic problems now afflicting the U.S., I did not adequately foresee how much American decline would ripple across the rest of the globe. China, India, and the EU--which I see in "The End of the American Century" as rivals and successors to the U.S.--are also suffering economic decline, even as the U.S. does.