U.S. tech lead at risk, says Obama's top scientist

Energy Secretary Chu issues blunt warning on U.S. tech manufacturing and competition from China

U.S. Secretary of Energy Steven Chu, the only member of President Barack Obama's cabinet with a degree in a hard science, believes the U.S. is at risk of losing its leadership in technology as the nation's competitiveness deteriorates.

Chu, co-winner of the Nobel Prize in physics in 1997, used statistics and blunt language in a speech at the National Press Club in Washington Monday to point out that the U.S. lead in technology is declining and is in need of turnaround. He characterized the current situation as a " Sputnik moment " for the U.S., particularly in the area of clean energy development.

Chu illustrated his concern, in part, by describing the decline of the U.S. share of worldwide high technology manufacturing. The U.S. hit a peak in 1998 by capturing about 25% of the world's technology export market. The U.S. share has declined steadily since then to the current 12% to 13% of the global market.

Chart: Percentage of global high-tech exports from the U.S., EU and China.

The U.S. has developed "the greatest innovation machine" in the world, but Chu said that "today this leadership is at risk - we are no longer leaders in manufacturing, but more startling we are no longer the leaders in high technology manufacturing."

China has seen its global share of tech export market increase from 6% in 1995 to 20% in 2008, Chu said.

TechAmerica, an industry group, reported Tuesday that the overall value of tech exports fell 16% in 2009, from $223 billion in 2008 to $188 billion.

Josh James, vice president for research and industry analysis at TechAmerica, attributed last year's decline to the economic downturn. Otherwise, tech exports in the U.S. exports have been increasing. From 2003 to 2009, the value of U.S. tech exports increased by 13%, he said.

The U.S. overall increase in tech exports is due to rising global demand. TechAmerica produces the annual export report, in part, to help make a case that Congress should pass pending free trade agreements, this year with Columbia, Panama and South Korea.

High-tech exports account for nearly 1 million jobs in the U.S, he added.

Chu cited the role of some of U.S. technology developments, such as transistor, integrated circuit, GPS and the Internet, for the "wonderful things" they did to create wealth in the United States in past years. Similarly, Chu sees development of alternative energy vehicles, renewable energy, high speed rail and supercomputing, as important to maintaining U.S. technology leads.

Chu sought to dispel the idea that China is rapidly expanding its overall share of worldwide trade solely due to low cost labor.

He noted that China is expanding research and development efforts, citing Applied Materials opening last year of a 400,000 square foot solar research and development center there as an example.

The U.S. "still has the opportunity to lead in a world" in producing inexpensive, carbon free technology, and in doing so create a way to "secure our future prosperity," said Chu. "But I think time is running out."

Chu believed the U.S. can maintain its leadership with investment and government policies that help drive these industries.

He cited the airplane manufacturing industry as an example of how all is not lost in the technology race. Although the U.S. invented the plane in 1903 (Wright Brothers), it lost ground to the Europeans. In 1915, the U.S. established NASA's predecessor, the National Advisory Committee on Aeronautics, to turn that around and conduct cutting edge research.

Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov , or subscribe to Patrick's RSS feed . His e-mail address is pthibodeau@computerworld.com .

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Copyright © 2010 IDG Communications, Inc.

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