During the 1970s and 1980s, American manufacturing enterprises saw their technological dominance challenged by increasingly tough competition from abroad. This book investigates business responses to those challenges. On average, F.M. Scherer shows, 308 US companies reacted to rising imports of high-technology products by cutting back research and development expenditures as a percentage of sales. The cutbacks were particularly large in industries protected by voluntary trade restraints agreements and other trade barriers. Using statistical data and 11 case studies, Scherer finds that company responses to new high-technology competition from abroad were highly diverse. Aggressive reactions predominated in firms producing colour film, wet shavers, medical imaging apparatus, fibre optics, and earth-moving equipment. But the efforts of US manufacturers in other lines such as colour television, VCRs, and facsimile machines, were too meagre to repel technologically innovative overseas challengers.
Exploring why reactions differed so much from case to case, Scherer finds systematic explanations in such variables as the multinationality of enterprises, domestic market structure, links to academic science bases, and the educational background of top managers. He concludes by offering proposals to improve the competitiveness of American high-technology companies.