664 



That American export trade reflects this bias toward "exotic" tech- 

 nological products is confirmed by several sources. One confirmation 

 is presented in Table 3. A similar view was recently offered by Patrick 

 E. Haggerty, chairman of Texas Instruments, Incorporated. He 

 -asserted that only in technology-intensive products does the United 

 States have a favorable commercial balance in its trade with the rest 

 of the world. This balance (for such products) amounted to $8 or $9 

 billion annually. Mr. Haggerty's main thesis, however, was that ". . . 

 •even in technology-intensive products, and after our tremendous na- 

 tional expenditures for research and development, our lead over our 

 industrial competitors and customers in the industrialized world is 

 narrowing rapidly," ^^^ 



However, in the field of computers, which are widely considered 

 "among the most significant indicators of the new technology," the 

 United States has installed 56,000 compared with 20,000 in Western 

 Europe, 5500 in the Soviet Union, and 6000 in Japan. "A look ahead 

 to the late 1970s is instructive, when the United States will have about 

 100,000 of a world total of 215,000 computers, Western Europe 50,000, 

 the USSR 35,000, Japan 20,000, and the remaining three-quarters of 

 the world only 10,000." ^" 



By comparison, long-established technologies appear to be lagging 

 in the United States. According to Walter J. Campbell, editor of In- 

 dustrial Week, American steel production — while still leading the 

 world — had declined in world markets from 57 percent to 31 percent 

 and domestic sales from 99 percent to 90 percent, from 1950 to 1969. 

 Quantitatively, while U.S. production of steel had risen during this 

 period from 96 million tons to 141, Japan's steel production had in- 

 creased from 5 million tons to about 90 million. Similarly, the auto- 

 mobile industry, which in 1950 supplied more than 75 percent of the 

 world market, now served only 34 percent."^ 



THE SPREAD OF MULTINATIONAL BUSINESSES 



Too much should not be made of visible trade balances. Trade 

 statistics do not reflect the fact that many American corporations are 

 •doing business on foreign soil and are actually contributing to trade 

 deficits in particular areas. The Servan-Schreiber thesis relies heavily 

 on the fact of the extensive penetration of American corporations into 

 European countries, either through wholly-owned subsidiaries or in 

 consortia with European partners. 



There has indeed been a great outward movement of U.S. capital 

 in recent years. During the 15-year period after 1950, external U.S. 

 investments tripled and investment in Europe rose more than tenfold. 



Information on the vutnber of American firms operating in Europe is more 

 diflSeult to obtain tlian information on the flow of funds. One survey shows that 

 there were over 3.700 "new operations" — acquisitions, expansions of existing 

 plant, or ne~w establishments — by American firms In Europe in the eight years 

 1958-65, of which over 2,800 were in the countries of the EEC [Common Market] 



"* Testimony before Subcommittee on Science, Research, and Development, House 

 'Committee on Science and Astronautics, on National Science Policy, (Mimeo, August 13, 

 1970). 



"' Lee Stull. "Continuity and Change in the International E^nvironment." Foreign Service 

 Journal (January, 1970), page 17. 



ii8Walter.J. Campbell. "Shrinking Share." Industry Week. ("October 19, 1970), editorial 

 3>age. 



