Technopolitics: Security and Competition
March 6, 1993
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Panelists:
Clark Abt
Director, Center for the Study of Small States, Boston University; Chairman of the Board of Directors, Abt Associates. Inc.; Director, Russian- American Workshop on Defense Technology Conversion
Arthur Alexander
President, Japan Economic Institute; former Senior Economist, The RAND Corporation; Author, Comparative Innovation in Japan and the U.S. and Conversion Lessons from Declining Industries in Japan
Proctor Reid
Editor, National Interests in an Age of Global Technology; Senior Program Officer, National Academy of Engineering
Eleanor Westney
Professor of Management, Massachusetts Institute of Technology; Author, Organization Theory and the Multinational Corporation and Imitation and Innovation: The Transfer of Western Organization Forms to Meiji Japan
Edward C. Woollen
Vice President of Corporate Marketing, Raytheon Company; former Vice President of Raytheon Overseas Limited
Moderator:
Lewis Briggs
EPIIC Colloquium
One of the revolutionary changes in the world economy is the globalization of technology. Radical advances in information processing, telecommunications, and transportation have challenged accepted definitions of national borders, ideas of sovereignty, as well as conventions in the research and development of new technologies. Within these new patterns of global interdependence, military allies have become fierce economic competitors, particularly in commercial technology. Frequently, national security is pitted against economic security and corporate survival. One consequence of this rapid rate of innovation and dynamic technology flow is that comparative advantage is short lived. Intellectual resources are now the world's prime capital.
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New technologies have transformed the way products are made, the structures of corporations, and the nature of international trade. While firms have worked to ensure global market-share in order to maximize their comparative advantage, they have also recognized the need to invest in foreign countries and locate their R&D facilities throughout the world. Labels such as "Made in America" are becoming increasingly obsolete as products are assembled around the world. As former Citicorp CEO Walter Wriston noted: "Borders that were once the cause of wars are now becoming porous."
Rifts in diplomacy often result as countries engage in fierce competion for key technologies. The on-going chip wars between Japan and America typify this new tension. They have played a significant role in prompting the new administration to change its position on the development of high technology. Laura Tyson, the new chair of the President's Council of Economic Advisors, advocates an activist technology policy in order to maintain the nation's global lead in science-based industries. Most economists are quick to point out that government intervention is not a panacea. As Gary Saxonhouse, an economist at the University of Michigan, recently stated in the New York Times, "just as Washington is moving downstream toward commercial development, Tokyo is moving upstream towards basic research."
The globalization of technology raises new questions regarding regulations on technology diffusion, especially of dual-use technologies. During the Cold War, the world's military-industrial complex were driving economic forces. It is becoming increasingly difficult to separate civilian from military technology and to delineate strategic economic issues from national security concerns. For example, computers designed to plan Chinese irrigation systems may be used to produce nuclear arsenals for export to the Middle East.
Should developing countries be forbidden from acquiring high-technology important to their economic development because of their potential military application? As military budgets are cut and defense contractors are forced into foreign markets, the proliferation of weapons has become profit-motivated. Recent sales of nuclear arms technology from Russia to Chine and Iran obviate the need for discussion of these dilemmas.
The global diffusion of technology also affects economic security. For example, the South Korean company Samsung is now selling semiconductor chips at a lower price on the world market, though the technology is actually American.
How the high-tech race will impact developing nations is a major concern. Different views on the impact this technological revolution will have on these nations range from the hope that new alliances and intellectual breakthroughs will allow these countries to develop at a faster, more sustainable rate, to the fear that his revolution will have in its wake an underclass of nations with increasingly poor competition prospects. Investments of transnational corporations will probably be the determining factor.
The former superpowers face the challenge of converting from a defense based economy to a commercially motivated economy. The promotion of dual-use technologies is an integral component of this shift. Physicists at Los Alamos that previously developed missile technology have learned to work with shrinking federal funds. Former missile technologies are now augmenting up-and-coming technologies such as telecommunications, environmental technology, computers, consumer goods and more.
Many companies have found that in order to survive in today's competitive environment, consolidation with other major companies is necessary. The recent merger between Boeing and Airbus characterizes the new form of alliance. Toshiba, Siemens and Intel have also entered into a joint venture, sharing R&D and production capabilities. How the interests of the state and threats to national sovereignty fit into this quotient has yet to be fully ascertained.
The telecommunications industry has developed to a point that invention and research are global endeavors, promoting cooperation between scientists. Knowledge is disseminated to the most remote parts of the globe, allowing for faster product development. This internationalization causes complications when information transfers are unregulated, posing problems in maintaining patents, authorship, and other issues concerning intellectual property rights.
Developments in environmental technology and biotechnology are altering agribusiness and famine relief world wide, having a substantial impact on economic development. These breakthroughs will happen at an accelerated rate as people are able to communicate through a newly-developed, globally-linked database.