Following World War II, the U.S. manufacturing sector emerged as the dominant industrial force in the world in virtually all areas, including productivity, market share, invations, and capital investments. Though other countries have caught up with and surpassed the United States in many industries, Romesh Diwan and Chandana Chakraborty argue that America can recapture its dominant role by moving forcefully into high-techlogy industries. In this work, they examine competitiveness in a range of high-techlogy enterprises, analyzing the industries as an aggregate as well as through three specific examples: semi-conductors, telecommunications, and computers. The authors provide a complete understanding of the technical changes and developments that are taking place in U.S. high techlogy, and offer guidance to policy makers in promoting competitive strength. Their work defines and quantifies the high-tech industrial sector of the U.S, ecomy, and analyzes the productivity of this sector by utilizing a translog cost function, which provides information about the structure of the input-output relations in a particular industry. Using these functions, Diwan and Chakraborty answer quantitatively a number of questions relating to the growth of various inputs, productivities, and outputs, which lead to conclusions regarding the structure of production, costs, and capacity in U.S. industry. Their conclusions--that technical change is biased in the main in favor of capital and material, and that capital and skilled labor are complements--are consistent with new ideas and theories in the field. This work will be a valuable reference source for professional ecomists and policy experts, as well as for scholars and students in international trade, finance, and development.
Romesh Diwan is professor of economics at Rensselaer Polytechnic Institute. He is the author of numerous books and articles on economics, productivity, and competitiveness, including Essays in Gandhian Economics, Productivity and Technical Change in Foodgrains, and Alternative Development Strategies and Appropriate Technology: Policy for an Equitable World Order. Chandana Chakraborty is assistant professor of economics at Montclair State College. She has presented numerous papers to economics conferences and has published articles in Economics Letters and Eastern Economic Journal.