STATUS REPORT ON CCCT STUDY ON HIGH TECHNOLOGY INDUSTRIES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84T00109R000100070016-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 7
• Document Creation Date: December 20, 2016
• Document Release Date: August 1, 2007
• Sequence Number: 16
• Publication Date: March 17, 1982
• Content Type: MEMO

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TRANSMITTAL SLIP I
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FROM: Ch/ECD
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REPLACES FORM 36-8 (47)
FORM NO. 241 WHICH MAY BE USED.
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MEMORANDUM FOR THE RECORD
SUBJECT: CCCT Meeting
'i. On 17 March, I attended that portion of a CCCT meeting
devoted to a status report on the CCCT Study on High Technology
Indus ries. (A copy of the report is attached.)
2. Secretary Baldrige began by introducing the fellow
currenLiy responsible for drafting the report, Bill Finan.
Following Bill' s summary of the attached status report,
Ambassador Brock said that he had talked with lots of CEOs of US
high technology companies recently and none seem to have been
approached about this exercise. He thought that they should
be. He suggested bringing in 10 to 15 CEOs to discuss the draft
report when it is ready on 10 April. Secretary Baldrige agreed
and said that he and Ambassador Brock should put together an
appropriate list. (If the DCI wants to make some suggestions
about this list, he should call Secretary Baldrige who appears to
be taking the responsibility for forming the external panel.)
3. Bill Niskanen of the CEA suggested that the study should
focus on the question of whether or not US defense spending, on
balance, helps or hurts US high technology industrial
development. Ambassador Brock observed that he had heard from
many people that defense industries are five to ten years behind
non-defense industries in applying high technology.
4. Bob Hormats and William Baxter observed that the study
should focus on antitrust law and the tax treatment of R&D.
Several. members of the CCCT observed that the US is now behind in
robotics, an area we once dominated. The study should explain
how this happened. Tim McNamar said that government procurement
STAT
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was an important part of the issue. He said that it was
embarassing that Treasury had only this year gotten rid of its
last IBM 1401 computer. William Baxter agreed with this
observation, pointing out that Justice had acquired two new
Amdahl computers which no one in his building knows how to use.
Chief,
Economics Division
Office of Global Issues
At tach,nent :
As stated
OGI/ECD bas~ (17 March 1982.)
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 _.ssar oc co. i _
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SECRETARY OF COMMERCE
q V ington.O.C. 20230
?p TT 3 as
MEMOR.ANDUA FOR:
FROM:
SUBJECT-
MEMBERS OF THE CABINET COUNCIL ON
COMMERCE AND TRADE (CCCT)
Malcolm Baldrige , Chairman Pro Tempore A4
Cabinet Council on Commerce and Trade
Status Report on CCCT Study on High Technology
Industries
1. The four components of the CCCT study are-
A. overview of U.S. high technology trade competitiveness,
B. examination of specific industries (for example,
software, robotics, etc.)
C. examination of economic, national security implications,
D. examination of relevant factors affecting competitiveness
- financial
human resources
industrial policies
- industrial organization
2. To broaden the information base we have:
A. Consulted with relevant Industry Sector Advisory
Committees (ISACs);
B. Developed informal contacts with Labor, Defense, USTR,
ITC, and State;.
C. Developed informal contacts with the following
Congressional offices: Office of Technology Assessment,
Congressional Budget Office, Joint Economic Committee, and
the House ways and Means Committee;
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D. Meet with executives of U.S. high technology companies;
E. Contacted others conducting research on high technology
industries, such as the National Academy of Science;
F. Involved the Commerce?s Bureau of Industrial Economics
(BIE) in industry sector analyses.
3.
For
are
the purposes of the CCCT Study, high
those which are research intensive.
technology
Industries
industries
so identified
are
components of the following basic sectors:
- aerospace _
- chemicals
- machinery (electrical and non-electrical)
- scientific equipment
Research and development efforts relative to gross sales for
these industries is markedly greater than for all other
manufacturing sectors.
4. Some service-related activities such as software development or
computer assisted design are integrally related to high
technology manufacturing sectors (e.g. computer equipment and
semic)nductor production.) This blurs the clean distinqtion
often made in international negotiations between services and
goods. Although the study will assess the linkages between these
sectors, service activities, per se, are not in themselves
identified as high technology.
Regardless of the way high technology industries are identified,
various measures of competitiveness, such as share of world
exports, show a consistent decline.
5. There are several policy initiatives relating to issues of high
technology trade, either already underway or likely to begin in
the near future. For example:
USTR is pressing to have high technology discussed in the
GATT Ministerial and a working group formed afterwards,
the Secretary General of the OECD has identified high
technology issues as potentially needing attention,
the Japanese have suggested that a bilateral "forumo be
established to discuss high technology industry issues.
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The CCCT study will form the backdrop for possible USG
initiatives on high technology issues in these forums.
6. Despite difficulties in precisely defining the term high
technology" industry and the fact that industries covered by the
defin4.tion represent a wide variety of industrial activities,
there seem be compelling reasons for the USG to seek to have
certain issues addressed under the high technology label. The
following preliminary observations illustrate why we have a
greater stake than our major trading partners high technology
industries.
U.S. exports are more heavily tilted towards high
technology goods than those of any other country,
U.S. high technology goods have lost competitiveness in
world markets; this is especially evident in third world
countries;
the maturation of world economies, especially those of
Japan, France, and Germany, has eroded the relative
advantage the U.S. used to enjoy in research; the
industrial infra-structures of these countries aze
approaching the U.S. in sophistication; for example, while
the U.S. maintains an absolute lead in the numbers of
scientific and technical personnel, the relative advantage
has declined,
- other governments are actively channeling resources into
high technology sectors -- these activities may intensify
the process of general erosion of U.S. technical lead,
Japan has closed rapidly on the U.S. lead in a number of
high technology sectors; the likely result is that in the
future both countries will be specializing in exporting
similar products; this underscores the need to gain access
to the Japanese markets for U.S. high technology products.
7. An initial draft of the four components identified in paragraph I
will be circulated for review by April 10.
W-0430b
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