The United States had a favorable but declin- 

 ing "patent balance" (patents of United 

 States versus foreign origin awarded in each 

 country) between 1966 and 1970; the de- 

 cline was due to a reduced number of patents 

 of U.S. origin in France, West Germany, and 

 the United Kingdom, combined with 

 increased U.S. patents of Japanese origin. 



Starting from a higher base, increases in 

 labor productivity in U.S. manufacturing 

 industries between 1960-71 were the lowest 

 of all countries — 39 percent — compared with 

 210 percent for Japan, 86 percent for West 

 Germany, 81 percent for France, and 50 per- 

 cent for the United Kingdom. Productivity 

 gains in the United States offset increased 

 labor costs until the mid-1960's, but rose less 

 rapidly than such costs during the 1966-71 

 period. 



The United States had an increasingly 

 favorable position in the sale of "technical 

 know-how" — patents, techniques, formulas, 

 franchises, and manufacturing rights — dur- 

 ing 1960-71; Japan was the major purchaser 



of U.S. "know-how," surpassing all 

 Western Europe after 1967. 



of 



o The favorable U.S. balance of trade in tech- 

 nology-intensive products grew throughout 

 1960-71, but was increasingly negative in 

 nontechnology-intensive areas. 



D Within the technology-intensive areas, prod- 

 ucts with the fastest rising trade surplus are 

 aircraft, computers, and plastics. Product 

 areas in which the growth of imports ex- 

 ceeds exports include office machinery, 

 chemical elements and compounds, medicinal 

 products, and telecommunication apparatus. 



D The favorable trade balance of the United 

 States in high technology products rested 

 primarily on purchases by developing nations 

 (55 percent in 1971) and countries of 

 Western Europe. A deficit balance with 

 Japan, developed in the mid-1960's and con- 

 tinuing to grow through 1971, exists in elec- 

 trical machinery, scientific and professional 

 instruments, and nonelectrical machinery. 



■ The basis chosen for appraisal of U.S. science 

 and technology in this chapter is an inter- 

 national one, where the position of the United 

 States is compared with that of other developed 

 countries, particularly the major R&D-per- 

 forming OECD (Organisation for Economic 

 Cooperation and Development) member 

 nations. 2 For reasons cited previously, compari- 

 sons are usually restricted to measures of rela- 

 tive magnitude and to general trends. 



LEVEL OF RESEARCH AND 

 DEVELOPMENT 



Expenditures for R&D 



Figure 1 presents expenditures for R&D as a 

 percentage of gross national product for the six 

 major R&D-performing countries included in 

 the study. The United States, as well as France 

 and the United Kingdom, show a declining ratio, 

 as compared with increases for the U.S.S.R., 

 Japan, and West Germany. Over the 1963-71 

 period (the only years for which data are avail- 

 able or can be estimated for all countries), the 

 United States exhibits the largest reductions, the 

 U.S.S.R. and Japan the largest increases. 



The principal indicators of the level of a 

 nation's R&D effort are the expenditures and 

 manpower devoted to such activities. The 

 general objectives of such efforts, in turn, are 

 suggested by the specific areas (e.g., defense, 

 space, and economic development) to which 

 these resources are directed. 



- The U.S S.R. is included in the comparisons wherever 

 the available data permit. Limited data and differences in 

 definitions restrict the comparisons which can be made. 



R&D Manpower 



Another indicator of the level of a country's 

 R&D effort is the magnitude of the manpower 

 (scientists and engineers) it devotes to these 

 activities. This indicator should be regarded as 

 only an approximation of the true level of R&D 

 in that it fails to account for certain national dif- 

 ferences, such as the designation and training of 

 scientists, engineers, and technicians, and the 

 quality of the research equipment available. 



