Globalization and the High-Tech Policy Response

Globalization and the High-Tech Policy Response makes the case that U.S. economic growth policy has not responded to the growing competitive pressures from globalization. Specifically, the federal government has placed excessive reliance on business-cycle management and recently on trade barriers in the form of tariffs to allegedly force access to foreign markets for U.S. firms and repress unfair trade practices by foreign governments. The correct policy response requires an investment-oriented approach that targets the four major categories of assets that drive productivity growth and hence incomes: (1) technology, (2) physical and intellectual capital (hardware and software), (3) skilled labor, and (4) a high-tech infrastructure to support the first three asset categories. The focus of this monograph is the characterization of these four asset categories and the economic rationales for emphasizing investment in them. It systematically documents and analyzes the set of policies and investment trends and resulting impacts on rates of growth over the post World War II era. These trends highlight a very inadequate growth policy, which is the result of failing to admit that Americas dominant post-war position in the global economy has been steadily eroded by superior growth strategies in other economies.