Collaborative Advantage

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[This article appeared in the National Academies of Science journal Issues in Science and Technology Winter 2006. www.issues.org.]

Almost daily, news reports feature multinational companies—many based in the United States—that are establishing technology development facilities in China, India, and other emerging economies. General Electric, General Motors, IBM, Intel, Microsoft, Motorola—the list grows steadily longer. And these new facilities no longer focus on low-level technologies to meet Third World conditions. They are doing the cutting-edge research once done only in the United States, Japan, and Europe. Moreover, the multinationals are being joined by new firms, such as Huawei, Lenovo, and Wipro, from the emerging economies. This current globalization of technology development is,we believe, qualitatively different from globalization of the past. But the implications of the differences have not sunk in with key U.S. decisionmakers in government and industry.

It is not that the new globalization has gone unnoticed. Many observers are concerned that the United States is beginning to fall into a vicious cycle of disinvestment in and weakening of its innovation systems. As U.S. firms move their engineering and R&D activities offshore, they may be disinvesting not just in their own facilities but also in colleges and regions of the country that now form critical innovation clusters. These forces may combine to dissolve the bonds that form the basis of U.S. innovation leadership.

A variety of policies have been proposed to protect and restore the preeminent position of U.S. technology. Some of these proposals are most concerned with building up U.S. science and technology (S&T) human resources by strengthening the nation's education system from kindergarten through high school; encouraging more U.S. students to study engineering and science, specifically inducing more women and minorities to pursue science and technology careers; and easing visa restrictions that form barriers to talented foreigners who want to enter U.S. universities and industries. Other proposals include measures to outbid other countries as they offer benefits to attract R&D activities. Still others call for funneling public funds into the development of technology. Some observers, for example, believe that the technological strength of U.S. firms would be improved by the government's greatly increasing its support of basic research.

Our studies of engineering development centers in multinational home countries and in emerging economies lead us to a concern that many U.S. policymakers and corporate strategists, like the proverbial generals preparing to fight the previous war, are failing to recognize what is distinctive about today's emerging global economy. Indeed, in some cases they are pinning their hopes on strategies that were not notably successful in past battles. Although our research suggests several trends that may be problematic for the United States, we also see strong possibilities that the nation can benefit by developing "mutual gain" policies for technology development. Doing so requires a fundamental change in global strategy. The United States should move away from an almost certainly futile attempt to maintain dominance and toward an approach in which leadership comes from developing and brokering mutual gains among equal partners. Such "collaborative advantage," as we call it, comes not from self-sufficiency or maintaining a monopoly on advanced technology, but from being a valued collaborator at various levels in the international system of technology development.

First, however, it is necessary to understand the trends that could lead to a vicious cycle of disinvestment in U.S. S&T capabilities and, most important, how these trends differ from previous challenges to the U.S. system.

Note: This report is available in its entirety in the Portable Document Format (PDF).

The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders.

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