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America's tech decline: A reading guide

A growing body of literature says America's best days may not be ahead

WASHINGTON -- The U.S. imagines itself as the world's leader in technology, and for good reason. American tech dominates many world markets.

Yet just about every report that looks at where America is and where it is going sees this nation in decline or at risk of it.

It is a theme that's been picked up by President Barack Obama and Secretary of Energy Steven Chu, who won a Nobel Prize in physics. Both have warned recently that the nation is facing a "Sputnik moment," with a shrinking share of the world's technology export market.

This view also arises as the U.S. continues to lead the world in new tech directions, such as cloud computing. U.S. tech firms are building highly energy efficient data centers at shopping mall-sized scale to serve global customers.

Even India's rise as a technology center would not be possible without the U.S. India's big offshore companies continue to earn more than 50% of their revenue from North America. If it wasn't for Apple , China wouldn't be manufacturing iPhones and iPads .

The impact of U.S. innovation continues to be enormous and surprising, creating such technologies as social networking. Facebook and Twitter proved to be important tools in reshaping the Middle East.

So what's up with the World Economic Forum, which this week ranked Sweden as the number one country in its annual Global Information Technology Report? Did the report's authors mistake Ikea for IBM?

The U.S. placed fifth for the second consecutive in the forum's annual report -- behind Singapore, Finland and Switzerland.

The report maintains that "there is no area on the globe that has an inherent advantage" in the digital economy. The rankings are based on those countries it believes are making the best use of new technologies and high-speed networks, while it measures PCs per population, mobile devices with data access, political environment, and so on.

The value of comparing the U.S. against four front-running countries with a combined population of 26.6 million (California has almost 37 million people) is probably an open question.

It would not be difficult to poke a stick at the World Economic Forum's tech rankings. But there's a growing body of evidence that says the U.S. is in decline or in danger of it. These reports and cogent opinions analyze R&D spending, education, the business climate and many other things, and they are increasingly influencing the debate in Washington.

Here's a look at some of it.

1. Rising Above the Gathering Storm, Rapidly Approaching Category 5 . This paper, originally published in 2005 and updated last year, was prepared for the presidents of the National Academy of Science, National Academy of Engineering and the Institute of Medicine.

In the five years since the original report, its authors concluded that "the nation's outlook has worsened." It cited problems in education, particularly in math and science, and federal spending. It's filled with observations, such as: "Of Wal-Mart's 6,000 suppliers, 5,000 are in China," and "Only four of the top ten companies receiving United States patents last year (2009) were United States companies."

2. Unlike many in government positions, the DOE secretary doesn't speak from the safety of rigidly prepared text. But a richly illustrated presentation he prepared for a talk last fall at the National Press Club outlined his concerns about America's tech decline, particularly in manufacturing. It makes numerous comparisons to China, including a quote from Chinese Premier Wen Jiabao in 2009: "We will make China a country of innovation."

3. The Atlantic Century: Benchmarking EU and U.S. Innovation and Competitiveness . This report by the Information Technology & Innovation Foundation found that of the 40 countries that were compared to the U.S, all of them made faster progress toward a knowledge-based economy than the U.S. The report ranked China first.

"It is a quite serious problem," said Robert Atkinson, of the ITIF, in an interview, "because if we can't compete on the innovation side and the technology side anymore then what do we have left?"

4. in a provocative essay in Businessweek last year, Andy Grove: How America Can Create Jobs , the former chairman and CEO of Intel challenged the idea that the U.S. could thrive as its ships jobs overseas.

Wrote Grove: "You could say, as many do, that shipping jobs overseas is no big deal because the high-value work -- and much of the profits -- remain in the U.S. That may well be so. But what kind of a society are we going to have if it consists of highly paid people doing high-value-added work -- and masses of unemployed?"

5. A Pew Charitable Trust report last year pointed out that U.S. investment in clean energy was lagging. Clean energy is an industry the government has cited as important to future growth.

"The United States is on the verge of losing its leadership position in installed renewable energy capacity, with China surging in the last several years to a virtual tie," according to the report Who's Winning the Clean Energy Race?

6. The World Economic Forum's Global Competitiveness Report 2010-11 examines what it calls the "12 pillars of competitiveness" among nations. The report lowers the U.S. ranking by two places, to fourth, with the U.S. trailing behind Switzerland, Sweden and Singapore. China moved up two notches, to 27 from 29. The U.S. still has a commanding lead but the forum's sees "escalating weakness" in the U.S. economy, namely from its fiscal deficits.

Bonus read: Lawmakers in Washington almost shut down the government recently over a series of contentious budget riders that had nothing to do with technology. But to learn what Congress did to the less visible issues in such areas as science, research and technology funding, then keep an eye on the work on the Computer Research Association's policy blog , written by Peter Harsha.

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 .

Read more about it leadership in Computerworld's IT Leadership Topic Center.


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