Figure 10 



U.S. Payments and Receipts for Patents, 



Manufacturing Rights, Licenses, Etc., 1960-71 



(Millions of Oollats) 



I960 '62 64 '66 



SOURCE US Oepattment of Commetce 



70 71 



Figure 11 



U.S. Balance of Payments for Patents, 

 Manufacturing Rights, Licenses, Etc., 

 by Country, 1960-71 



manufactured products into two groups: tech- 

 nology-intensive and nontechnology-intensive 

 products. The grouping is based upon the rela- 

 tive extent of R&D performed by the industries 

 which manufacture the products. Products from 

 industries with (a) 25 or more scientists and 

 engineers engaged in R&D per 1,000 employees 

 and (b) 4 percent or more of their net sales 

 directed to R&D are designated here as "tech- 

 nology-intensive" products while those with a 

 lower level of R&D investment are regarded as 

 "nontechnology-intensive" products. Based on 

 these criteria, the product areas which are tech- 

 nology-intensive are (a) chemicals, (b) non- 

 electrical machinery, (c) electrical machinery, (d) 

 aircraft and parts, and (e) scientific and profes- 

 sional instruments. All other manufactured 

 products are regarded as nontechnology inten- 

 sive.* 



The U.S. trade balance (exports minus 

 imports) associated with these two categories of 

 products is shown in figure 12. The favorable 

 balance in technology-intensive industries is 

 clearly indicated; the balance doubled over the 

 1960-71 period. In contrast, the United States 

 had a large and increasing deficit trade balance in 

 nontechnology-intensive products.' 



The favorable U.S. export position in high 

 technology products results in large measure 

 from the extensive use of scientists and engi- 

 neers as well as other skilled manpower.'" Thus, 

 the U.S. comparative advantage for inter- 

 national trade in manufactured products appears 

 to be in the export of goods that are intensive in 

 the use of highly educated and skilled personnel 

 rather than in low technology mass-produced 

 goods. 



The favorable U.S. trade balance in the tech- 



1960 '62 '64 '66 



lal E>cept U.K SOURCE: US. Department of Commeic 



70 71 



» This grouping, of course, is an approximate one. 

 Products and industries, although highly correlated at the 

 gross level, do not perfectly coincide, with the result that not 

 all products manufactured by a high R&D-performing 

 industry are technology-intensive. Further, the criteria used 

 here result in placing "automobile and parts" products in the 

 nontechnology-intensive group, instead of the other group 

 where they are sometimes assigned. 



" The U.S. trade position may also be viewed in terms of 

 capital and consumer goods. The favorable U.S. export 

 performance is largely accounted for by capital goods, almost 

 all of which are produced by technology-intensive indus- 

 tries, while the unfavorable import situation lies largely in 

 consumer goods. 



10 W. H. Bronson and H. B. Junz, "Trends in U.S. Trade 

 and Comparative Advantage," Brcwliii^s fa^en on Economic 

 Activity, 2, 1971. 



15 



