15 September 2009

Investing in Research and Education

This article is excerpted from the book Outline of the U.S. Economy, published by the Bureau of International Information Programs. View the entire book (PDF, 3.26 MB).

American investments in research and development (R&D) and education have been a bulwark of U.S. trade competitiveness. The U.S. Manufacturing Institute has listed important new technologies on which U.S. companies rely, including computer-aided design, robotics, just-in-time inventory controls, and radio frequency identification technology used in tracking the flow of goods from factories or warehouses to stores.

The institute also reports that U.S. manufacturers are leaders in applying the new science of nanotechnology, which harnesses the distinctive physical properties of individual molecules to create improved products. Nanotechnology is producing lighter, stronger, and more rustproof motor vehicle components. It creates stain-proof clothing and military armor, and it greatly extends the shelf life of bottled products.

But U.S. industry leaders warn that the long-standing U.S. lead in R&D spending is shrinking. Total R&D spending by China, Ireland, Israel, Singapore, South Korea, and Taiwan is expected to exceed the U.S. total before 2010. The United States increased R&D investments by nearly 40 percent between 1995 and 2005, but China’s investments tripled during those years, albeit from a much smaller base.