1762 



Further confirmation of the significance of technology for overseas-. 

 U.S. trade was offered in a series of studies by Dr. Michael Boretsky 

 of the Department of Commerce. An aspect of Dr. Boretsky's studies 

 was the comparison of low and high technolog}^ pioducts as elements 

 of the U.S. balance of international payments. He offered evidence of a 

 positive correlation between level of industrial investment in research 

 and development and economic growth and profitability as well as 

 ability to exploit export markets. A major reward of high technology 

 was the cash retiu'n from the sale of patents and licenses. Since one 

 criterion of the difference between high and low technology is the 

 intensity of the use of scientific research and development, these 

 studies led to the conclusion that applied science was a powerful 

 stimulus to export trade. 



Need for Attention to Low Technology 



It might be said in addition that high technology, based on extremely 

 high levels of "value added by manufacture," was science-limited, 

 while low technolog}^ involving close profit margins and laige 

 "through-put," was resource-limited. To the extent that this dis- 

 tinction is valid diplomats must needs give attention to the implica- 

 tions of the low-technology sector: the increasing reliance of the United 

 States on imported raAV material at ever-increasing prices imposes cost 

 penalties and threat of shortages on those industries least able to 

 tolerate them. Moreover, since the largest part of the Nation's indus-^ 

 try (e.g., steel, wood, paper, glass, and the like) would be classed as 

 "low technology," the need to strengthen this industrial sector is 

 apparent. Among the policy alternatives presented b}^ this trend in 

 analj^sis would seem to be the following: 



— Intensification of research and development supportive of 

 high technology to sustain and perhaps to advance the U.S. 

 lead in an industrial sector yielding a return both for exports of 

 hardware and for exports of technology itself; 



— Intensification of research and development in technological 

 advances for use in low technology industries to strengthen their 

 competitive position vis-a-vis their overseas counterparts, such 

 R. & D. to be coupled with improved arrangements for dissemi- 

 nating the technology to industrial users in the United States; 

 — Development of vigorous programs for the international 

 commercial exchange of technology — both low and high — to 

 enable all nations including the United States to benefit fiom the 

 best technology on a global basis, on the theory that ever}- nation 

 vail enjo}' some particular form of comparative advantage; 



— Selection of a more liiiiited number of specific industries., 

 perhaps including sorae from both high and low categories, for 

 more intensive scientific support, using the criteiion of probable- 

 U.S. comparative advantage in the selection of candid;itcs. 



Iioic oi the Department oj State 



It would appear that a number of Governmerit de})artnients and 

 agencies have roles to play in the formulation and execution of a 

 strategy to build a strong base for U.S. export industry. Thus, the 

 Energjv Research and Development Adnnnistration is expected to 

 generate a portfolio of valua])lc new technolog}' useful at home and 

 abroad to ease the energy shortage. The Departnu^ut of Agi'iciiUiire 



