Nations Compete to Foster Leading-Edge Industries

IN the global battle for high-tech leadership, the key question is not whether governments should have a technology policy but what policies work best. Even the United States has encouraged some technologies for defense purposes. US competitors target civilian industries directly.

Europe has plowed more government money into civilian high-tech projects than either Japan or the US and it has less to show for it. The European Community is debating plans to spend $9 billion to $14 billion over the next four years on high-tech projects.

Japan's government - generally credited with playing a role in the country's high-tech success - is shifting its focus from guiding specific industries to aiding basic scientific research.

Australia, like other relative newcomers to the game, is boosting its efforts. Annual research-and-development funding has tripled in the past decade to $2 billion.

Reports on three US competitors follow: Japan

For the next five years Japanese researchers will be working on basic technology for industrial uses of complex carbohydrates, a fundamental material in living bodies.

This project, begun in 1989, is indicative of a shift occurring at the Ministry of International Trade and Industry (MITI), the agency that funds much of Japan's government support of technology. Rather than trying to target industries, "MITI is now funding broader-based technologies which may be useful to a wider array of industries," says Martha Harris, director, Office of Japan Affairs at the National Research Council, an arm of the National Academies of Sciences and Engineering, a private nonprofit g roup.

MITI divides its technology projects into five categories: "large-scale" research and development projects such as a new super/hypersonic transport propulsion system; "next generation" developments such as the carbohydrate technology; "moonlight" energy research such as a project to develop a more efficient electric power system using superconducting technology; "sunshine" alternative energy projects such as coal liquefaction; and "key technology" funding for projects such as an automatic-translation tel ephone or high-definition television.

In addition, Japan's Science and Technology Agency funds separate projects including basic research at universities and research labs.

"I don't think there are any signs Japan will change its interest in supporting civilian R&D," says Dr. Harris, who believes the effort has been largely successful.

But not all MITI efforts have been winners. In 1981, the agency began an effort to develop a "fifth generation" computer, which was supposed to be able to think. Over 10 years, eight companies worked in a brand new government laboratory. Analysts say the project did not produce any new fundamental technical advances or marketable products.

Yet there may have been a silver lining in the failure. Like many of MITI's projects today, the computing involved a public-private partnership of many companies. "It did cause the industry to do some coordination, they all learned at the same rate and they did not spend money separately to find out something was not going to work," says Jan Herring, vice president for business intelligence and strategy at the Futures Group in Glastonbury, Conn. Europe

In 1986, the European Community (EC) began a $740 million effort

to set the standards for high-definition TV. In February it abandoned the project.

To some analysts, the failure symbolizes Europe's difficulties in translating science into technology. "It's been a bottom-up kind of approach to try to make Europe competitive in technology. It just has not been successful since it has had the flaw of trying to pick winners in technologies," Mr. Herring says.

In a document issued last October, the EC itself admitted an "essential weakness of the European research system," including a lack of investment in industrial research and the inability of businesses to convert scientific and technological breakthroughs into commercial success.

The document proposed concentrating its efforts for 1994-98 on a small number of key technologies. The program, said the report, should be guided by "continuity and novelty."

There is certainly a fair amount of novelty. The proposal suggests using science and technology "in the struggle against social exclusion," looking at how science and technology relates to the urban environment, and researching ways to preserve European cultural heritage.

The program, to be finalized in June, has already become a target. In an April 14 report the European Policy Forum, a London think tank, said the EC was using technology policy "more as a political chess piece in a game of industrial subsidy than a means of strengthening Europe's base in science and engineering."

Walter Hirche, economic affairs minister in Brandenburg state, Germany, wants to encourage universities to have a closer relationship with the corporate world. "There is no concept of how to profit or make profitable the tax money in the institution." Australia

Isolated people in the bush will soon be able be able to connect with fellow Australians via a satellite-based mobile phone system - the first in the world. Meanwhile, an Australian microwave guidance system helps airplanes land on the country's runways.

These are two of many innovations developed in cooperative ventures between the government, scientific research organizations, and industry.

As a country with an commodity-based economy, Australia has not had much money for R&D. The private sector has one of the lowest rates of R&D investment among industrial nations. So the government promotes research activity through several programs, including:

The Commonwealth Scientific and Industry Research Organization. Funded 70-percent by government, CSIRO conducts research projects with industrial partners.

The Generic Industry Research and Development Scheme. A company with an idea it wants to develop links up with a university or CSIRO and then applies for a government grant.

Cooperative research centers. University campuses are home to 50 of these focused research bodies, which collaborate with industry on research in the natural sciences and engineering.

In addition the government provides a 150-percent tax incentive for R&D investment.

Foreign firms operating here must contribute to the process by signing agreements with the government to set up local R&D and to export out of Australia. The latest deal, signed April 20, is with Taiwan's Acer Inc., one of the top 10 personal-computer manufacturers. The four-year agreement is part of a program aimed at expanding Australia's information-technology industry.

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