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US losing tech edge to India

October 08, 2004 12:30 IST

US technological superiority, long taken for granted, may be slipping and 'the most serious threat' is coming from Asian countries like India, China, Singapore, South Korea and Taiwan, a media report says.

Indian companies are quickly becoming the second largest producers of application services in the world, developing, supplying, and managing database and other types of software for clients around the world, Adam Segal, senior fellow in China Studies at the Council on Foreign Relations, writes in the November-December issue of Foreign Affairs magazine.

South Korea has "rapidly eaten away" the US advantage in the manufacture of computer chips and telecommunications software, and "even China" has made impressive gains in advanced technologies such as lasers, biotechnology and advanced materials used in semiconductors, aerospace and many other types of manufacturing, Segal says in the article.

Although the US technical dominance remains solid, the globalisation of research and development is exerting considerable pressure on the American system. It won't be easy for the US to keep its privileged position in the world.

The number of Americans pursuing advanced degrees in the sciences and engineering is declining, and university science and engineering programmes are growing more dependent on foreign-born talent. Thirty-eight per cent of the nation's scientists and engineers with doctorates were born abroad, the article says.

Segal wrote that cheaper communications technologies have allowed US companies to operate more globally, dividing production into discrete functions, contracting out to producers in different countries and transferring technological know-how to foreign partners.

Contrary to conventional wisdom, not just labour intensive manufacturing is being moved offshore. Microsoft, Intel, Bell Labs, Motorola and other firms increasingly perform advanced research abroad.

The attraction of emerging technology clusters in places such as Shanghai, Bangalore, Hsinchu in Taiwan was at first based on their cheap labour supply. But these hubs have started supporting innovation of their own, the article says.

Craig Barrett of Intel has said that the Chinese are now capable of doing any engineering, software and management job that people in the US are capable of. Microsft has reportedly contracted with the Indian companies Infosys and Satyam not only to do simple software coding but also to provide highly skilled software architects.

The United States, says Segal, cannot and should not prevent the emergence of new technology clusters in Asia. Instead, it should prepare to develop and absorb new technologies as they emerge elsewhere.

Segal urges the US to "meet the challenge from Asia head-on." It must "actively engage with new centres of innovation and prepare itself to integrate rapidly and build on new ideas emerging in China, India and South Korea."
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