Before 1978, Caterpillar Tractor enjoyed a hefty 85 percent share of the Soviet market for heavy equipment. But when the Carter administration imposed sanctions that required a lengthy licensing process, Caterpillar began losing ground to Komatsu - a Japanese manufacturer.
Today, the Japanese hold more than 85 percent of what was once a US-dominated market. This is just one example of how American industry loses its competitive edge in the global marketplace.
The Commerce Department figures that international trade now accounts for 25 percent of the nation's gross national product (GNP) - the sum value of all goods and services produced - compared with 10 percent in 1960.
At the same time, the American slice of the world export pie has been shrinking in many basic industries such as steel and textiles. Even in high-technology products, the United States share has declined from 25 to 20 percent of the world total during the last decade.
But this trend could be turned around, according to a wide-ranging report just issued by a group of 78 top US business and academic leaders. What's needed , they say, is a coordinated effort to increase competitiveness through such things as retraining workers for expanding high-technology industries and altering domestic regulations that inhibit the flow of international trade.
''We feel there needs to be a national crusade similar to what happened in the post-Sputnik era,'' says Wesley Posvar, chancellor of the University of Pittsburgh and an executive committee member for the Business-Higher Education Forum, which prepared the report.
Forum members are tentatively scheduled to meet with President Reagan later this month to discuss proposals.
The forum made one overall recommendation: ''As a nation, we must develop a consensus that industrial competitiveness is crucial to our social and economic well-being.'' Arriving at this consensus, the report contends, will require a major reshuffling of national priorities.
In addition, the forum proposed that the President take four actions as soon as possible:
* Appoint a White House adviser on economic competitiveness, who would focus attention on diverse concerns such as regulatory reform and technological innovation.
* Name members to a previously announced private-sector National Commission on Industrial Competitiveness.
* Create an Information Center on International Competitiveness in the US Department of Commerce.
* Deliver a public address to describe the competitive challenge and outline requirements of a national response.
In addition, the forum put together a list of public- and private-sector initiatives. One idea, for instance, would be to establish a nationwide displaced-worker program patterned after the GI Bill. The program would give educational ''vouchers'' to unemployed workers, financed jointly by employers, workers, and the federal government.
Industry could do its part through measures such as emphasizing professional development of scientists and engineers and giving more money to education.
''In some ways, the tasks faced by universities are better defined than they are in the business sector,'' says David Saxon, president of the University of California. The most obvious, he says, are to hoist admissions standards and upgrade the equipment in laboratories and libraries.
A major problem with competition-enhancing proposals is that they often conflict with other national priorities such as environmental concerns, says Gerald Laubach, president of Pfizer Inc., a pharmaceutical manufacturer.
''What's needed is a mechanism which shows the trade-offs to competitiveness when you pass other types of regulation,'' he says.
The report is likely to make popular reading at the White House, where trade and innovation have become hot issues.
''Many of the things they've addressed are things the administration has also been looking at,'' says Bruce Abell, assistant to presidential science adviser George A. Keyworth. ''Most of the conclusions are consonant with the approaches the administration has been taking.''
Most appealing, he says, is the forum's emphasis on creating a climate that strengthens US industry, rather than ''trying to protect our way into competitiveness.'' Congress now has a stack of protectionist trade bills in the hopper, including provisions that would aid the steel and auto industries. The White House officially opposes such measures.