TIME: Almanac 1995

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<text id=89TT0144> <link 93HT0501> <title> Jan. 16, 1989: Battle For The Future </title> <history> TIME--The Weekly Newsmagazine--1989 Jan. 16, 1989 Donald Trump </history> <article> <source>Time Magazine</source> <hdr> BUSINESS, Page 42 Battle for the Future </hdr><body> Unless the U.S. can match Japan's all-out research effort, the race to dominate 21st century technology may be over before it has begun If a modern-day Rip Van Winkle were to fall into a deep sleep for the next ten or 20 years, he might wake up to the whoosh of trains being propelled through the air by superconducting magnets. He might observe crowds of commuters toting supercomputers the size of magazines. In average homes, he might see 7-ft. TV images as crisp as 35-mm slides and enticing new food products concocted in the lab. But if he could read the labels on those futuristic creations, he might also discover the outcome of America's struggle to remain the leading technological superpower. Sad to say, a majority of those products might well bear the words MADE IN JAPAN. That is the worrisome analysis of U.S. experts in Government, industry and academia. Virtually every week seems to bring fresh evidence that Japan is catching up with the U.S. -- and often surpassing it -- in creating the cutting-edge products that long were the turf of U.S. firms. Last week the American Electronics Association reported that from 1984 through 1987 electronics production rose 75% in Japan, vs. a paltry 8% in the U.S. Most ominously for the U.S., Japan made its gains in increasingly sophisticated components, such as the disk drives and optical-storage devices used for today's higher-powered computers. Says L. William Krause, chairman of AEA: "The Japanese are eating their way up the electronics food chain." Now come indications that Japan is ahead in developing many of the building blocks of 21st century technology. Last week a presidential panel reported that U.S. efforts to exploit recent breakthroughs in superconductivity were seriously fragmented alongside Japan's. The Japanese have not only filed more than 2,000 patents worldwide, but have already started to develop motors and generators using the superconductors. U.S. projects are still in the planning stage and, in the words of the report, "unlikely to survive what we believe will be a long-distance race." U.S. researchers harbor similar fears about falling behind in a broad range of disciplines, from optical electronics to supercomputers. While the U.S. is still plowing ahead in pure science, American industry has fallen behind in the race to turn those advances into products that are reliable, reasonably priced and directed toward the needs of consumers. "America is probably the world's greatest innovator nation," says Robert White, president of the National Academy of Engineering, "but we don't have the ability to capture the benefits of those scientific discoveries." The risk is that the U.S. will lose its competitive advantage even before the marketing contest has begun. For the U.S., the good news is that the Government is waking up to the threat from Japan and beginning to respond in a very Japanese way: by encouraging rival firms to cooperate rather than compete on the most difficult research tasks. The U.S. is making concerted efforts in several strategically important fields: Superconductors. These extraordinary materials, which carry electrical current without resistance, may be used to build battery-like devices that store power indefinitely or supercomputers many times smaller than today's. In 1986 American researchers discovered a new class of ceramics that become superconductors without having to be cooled to nearly absolute zero (-460 degrees F). Nine months later, President Reagan announced an eleven-point Superconductivity Initiative that included plans for relaxing antitrust laws to allow joint-production ventures. Last week's report, citing Japan's rapid advances, called for creation of four to six research consortiums that would pool the talents of leading scientists from industry, academia and the national laboratories. Advanced semiconductors. Scientists on both sides of the Pacific are moving beyond silicon as a base material and creating superfast computer chips of such exotic materials as gallium arsenide and indium phosphide. The Japanese have already taken a decisive lead in a new manufacturing technology that could pack a thousand times more data into a single chip by using X rays rather than light to etch the tiny circuits. The U.S. semiconductor industry has responded by forming a research consortium called Sematech to develop advanced chipmaking tools. Last year Austin-based Sematech got its first $100 million transfusion from the Department of Defense, bringing its annual budget to $250 million. High-definition TV. The Japanese have taken a daunting head start in the race to develop television of the future. In 1987 Japan launched a 20-year project to perfect and market HDTV worldwide. The new televisions would not only double the resolution of the images on home TV screens but could also have a ripple effect on the rest of the electronics industry by creating huge market opportunities in semiconductors, computers and VCRs. Support is building in Congress and the Commerce and Defense Departments for a national program to ensure that the market for this product does not become another virtual Japanese monopoly. The AEA's Krause has proposed a joint Government-industry venture to wire almost every U.S. home with cables capable of carrying HDTV signals, a project he estimates would cost about $20 billion annually for a decade. Biotechnology. Prowess in creating new life-forms in the lab is one of the bright spots on the U.S. technological horizon. Yet Japan has launched an initiative targeting biotechnology as one of the "next-generation industries" it wants to dominate. The centerpiece of the U.S. response is the Government's mammoth effort, known as the genome project, to map and analyze all the genetic material in the human cell. Last fall the National Institutes of Health announced that the $3 billion, 15-year project would be led by biologist James Watson, the Nobel laureate who discovered the molecular structure of deoxyribonucleic acid (DNA) with Britain's Francis Crick in 1953. Cooperative projects are not the only ingredient in Japan's stunning progress. Japan has other advantages that may be more difficult for the U.S. to imitate: first-rate technical-training programs, intense corporate loyalty among its work force, and a culture that confers high status on manufacturers and engineers. But a little Japanese-style teamwork, in which companies pool their resources on long-term research, could do wonders in the U.S. "The Japanese don't share all their secrets either," says John Young, CEO of Hewlett-Packard. "They get people to develop the basic technology, and then they go home and build like crazy." The first high-tech consortiums in the U.S. have had rocky beginnings. The Austin-based Microelectronics and Computer Technology Corp., which a group of electronics companies formed in 1982 for research in advanced computer technology, was shaky at first because member firms were reluctant to share their best researchers and ideas with rivals. But retired Admiral Bobby Inman, former deputy director of the CIA who headed MCC until 1986, melted their resistance. Now under the stewardship of former Texas Instruments executive Grant Dove, MCC has brought to market its first products, including a new method for connecting chips to circuit boards and software that uses artificial intelligence to speed the development of complex microcircuits. Such cooperative efforts tend to go against the grain in the U.S., where entrepreneurs often view their colleagues as blood rivals. "America has been wickedly competitive within itself," observes Robert Noyce, a co-inventor of the integrated circuit and near legendary figure from Silicon Valley who now heads Sematech. The danger is that by focusing too much on short-term competitive standings, U.S. industry will spend too little time preparing for the future. The most complex technologies require long-term planning and investments, and the payoffs, while potentially enormous, may be long delayed. But U.S. business leaders are showing signs that they realize, as the Japanese surely do, that the technological leader of 2009 is being determined today. </body></article> </text>