1432 



IMPORTANCE OP THE RELATIONSHIP OF TECHNOLOGY WITH ECONOMICS 



Considerations germane to the Bureau of Economic and Business 

 Affairs (EB) would seem to include such matters as the multinational 

 corporation and technolog}^ transfer, materials shortages and negotia- 

 tions to ease them, cooperation in international fuel and energy pro- 

 grams, the use of the technological base to characterize national 

 economies, and economic-technological initiatives on a multilateral 



The importance of science and technology in the economic affairs 

 of State was highhghted in 1973 by William J. Casey, Under Secretary 

 of State for Economic Affairs.'^, While granting the importance of 

 productivity, quality, price, exchange rates, and trade barriers, 

 he said, "today we consider none of these more important than sup- 

 porting science to nourish technology and enlisting our technology 

 to pay our way in the world and to meet the world's development and 

 environmental needs." 



As examples, he cited a $2.8 billion net surplus in royalty and fee 

 earnings from foreign subsidiaries and licensees. The United States, 

 he said, has an "enormous economic stake in science and technology." 



As we look ahead we can see that the outflow of dollars necessary to bring in 

 from abroad the fuel and the raw materials needed to keep our plants and house- 

 holds going and to maintain our living standards will grow sharply. 



Under Secretarj^ Casey foresaw "forces and programs which will 

 put still heavier responsibilities on our high technology industries 

 and our engineering and managerial skills." He went on — 



We find our chief competitors, Japan and the European Community, with more 

 or less conscious plans to shift labor intensive, energy intensive and fuel intensive 

 industries beyond their boundaries — to Taiwan, Korea, Southeast Asia, Latin 

 America and Africa. At the same time, we see them developing policies to sub- 

 sidize and otherwise promote the development of high technology industries at 

 home — aircraft, computers, jiuclear power, communications equipment and so on. 



Many of our own corporations find it necessary to shift labor intensive industries 

 to Latin America and Asia in order to meet world competition. At the same time, 

 the Soviet Union and the oil rich Persian Gulf States are seeking to attract 

 industries which find a significant economic advantage in cheap hydro-electric 

 power and proximity to raw materials which they have to import in order to 

 manufacture in the United States. These are fundamental economic forces which 

 are loose in the world. We will have to adjust to them, and we will have to look to 

 science and technology to fill the gap in our employment and national earning 

 power which seems likely to arise from these forces. 



As this implies, our position in the world economy hinges on: 



— the export of products incorporating advanced technology; 

 — the international diffusion of advanced technology; and 

 — the introduction within the U.S. of technological advances whose effects 

 will reach beyond the domestic economy. 



However, the main thrust of Mr. Casey's address concerned the 

 transfer of U.S. technology to foreign countries or foreign industry. 

 A case in point was the increased activity in the U.S.S.R. to encourage 

 the importation of U.S. technology. His Department's concern was 

 that this transfer be in "conformance with U.S. national interests." 

 He did not elaborate very far on what these interests were, and 

 explained that: 



One of the difficulties we face in the broad area of attitudes and policies re- 

 garding the international transfer of technology is specifying the national interests 



iMWilliam J. Casey, Under Secretary of State for Economin Affairs, "Science, Technology and World 

 Economics Affairs," an address before the Induitrial Research Institute, Cliic^o, October 17, 1973. 



