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BOX 3-2

Another Point of View: US Competitiveness

“Americans are having another Sputnik moment,” writes Robert J. Samuelson, “one of those periodic alarms about some foreign technological and economic menace. It was the Soviets in the 1950s and early 1960s, the Germans and Japanese in the 1970s and 1980s, and now it’s the Chinese and Indians.”a Sputnik moments come when the nation worries about its scientific and technological superiority and its ability to compete globally. And, according to Samuelson, the nation tends to be overly concerned.

Sputnik led to the theory of a “missile gap that turned out to be a myth. The competitiveness crisis of the 1980s suggested that Japan would surge ahead of us because they were better savers, innovators, workers, and managers. But in 2004, per capita US income averaged $38,324 compared to $26,937 for Germany and $29,193 for Japan.”

Similarly, Samuelson argues that our current fears are unfounded, another “illusion” in which “a few selective happenings” are transformed into a “full blown theory of economic inferiority or superiority.” He argues that low wages and rising skills in China and India could cost us some jobs, but that US gains and losses in response to the rising economic power of those countries will tend to balance out.

Samuelson indicates that he believes “the apparent American deficit in scientists and engineers is also exaggerated.” He notes that only about one-third of our science and engineering graduates work in science and engineering occupations and that if there were a shortage, salaries for those jobs would increase and scientists and engineers would return to them. Of greater importance, Samuelson concludes, is that the United States must continue to draw on the strengths that overcome its weaknesses: “ambitiousness; openness to change (even unpleasant change); competition; hard work; and a willingness to take and reward risk.”


aR. J. Samuelson. Sputnik Scare, Updated. Washington Post, August 26, 2005. P. A27.

R&D spending increased 140%, from $177 billion to $245 billion, in the same period.18

The rapid rise of South Korea as a major science and engineering power has been fueled by the establishment of the Korea Science Founda-


Organisation of Economic Co-operation and Development. Science, Technology and Industry Outlook 2004. Paris: OECD, 2004. P. 190. The United States spends significantly more than China on R&D in gross terms and in percentage of R&D. However, if China’s US$65 billion in R&D spending were adjusted based on purchasing power parity, it would approach US$300 billion.

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