For the last five decades the U.S.’ global dominance in large part depended on its ability to develop new technologies and industries faster than any other country. America’s scientific prowess and technological entrepreneurship ensured economic prosperity. However, the technological edge that enabled America to invent the semiconductor, the personal computer and the Internet, is slipping through our grasps.

In order to see this progression, all you have to do is open up an Apple iPhone. While the firm that sells the device is American, the components inside are almost entirely Asian. The screen is from Japan, the flash memory is from South Korea and it was assembled in China.

While research and development in America and Europe grew 1-2 percent between 2001 and 2006, in China it ballooned 23 percent. China is slated to pass Japan in total research spending, emerging from almost nothing a mere decade ago.

The Organization for Economic Co-Operation and Development ‘s research shows that Taiwan now has more high-tech researchers than the UK. A list outlining the world’s 250 biggest technology firms shows that Taiwanese companies spend more on R&D than Canada and the UK. Furthermore R&D spending in relation to sales for the leading technology companies in America, Europe and Japan was either fell between 2002 and 2006, but increased in three technologically emerging Asian countries.

South Korea has rapidly cut away at the U.S.’ advantage in manufacturing computer chips and telecommunications software. South Korean firms spend more on R&D at 6.5 percent, as a percentage of sales than Japanese and European firms which average 5 percent. South Korean firms are catching up to American firms which spend 8 percent, and South Korea has more high-tech researchers than the UK and Germany.

While America may currently lead the pack in spending, our record budget deficit which is set to top $1.2 trillion may undermine future government R&D. Basic research which is driven by scientific curiosity rather than specific commercial application may suffer the most, depriving the economy of the building blocks of future innovation. According to projections by the American Association for the Advancement of Science, the Defense Department will spend more on weapons development and neglect basic and applied research. Further exacerbating decreases in funding is the economic meltdown which will impact privately funded R&D which currently accounts for 60 percent.

These anticipated decreases in funding may further deteriorate an already stagnating labor force. The number of Americans pursuing advanced degrees in sciences and engineering is declining as the job market for these occupations is lessening for Americans. American companies are opting to hire more foreign individuals with H-1B visas so they can hire them for a fraction of the salary they would pay their American counterparts.

As our job market no longer caters to Americans, American university science and engineering programs are growing more dependent on foreign born talent. Of the Ph.D.’s in science and engineering awarded to students in the U.S. from 1985 to 2000 more than half went to students from China, South Korea, Taiwan and India. Overly depending on foreign talent will critically weaken the U.S. in the future as Americans decrease education in these areas and foreign applicants also decline. Booming R&D sectors in foreign countries have led to better education and career opportunities abroad. Foreign students who used to stay in the U.S. after graduation are finding that staying in their homeland is becoming an increasingly attractive opportunity. As technology companies emerge elsewhere in the world and new research companies startup, scientists from Asian countries are returning home after being educated in the U.S., taking their knowledge with them.

China, Japan, Taiwan and India are using tax, education and fiscal policies to create clusters of domestic entrepreneurship. By offering tax holidays and priority access to water, land and electricity they are attracting high-tech companies from the U.S. as our country adheres to its disastrous offshoring policy made possible by debilitating “free trade” agreements.

The U.S. needs to continue increasing its funding in R&D so that our technological primacy is not completely lost. We need to nurture our homegrown technology and develop a market for American scientists and engineers. The U.S. cannot prosper if nothing viable is emerging from our technology sector. Other countries are gaining speed in R&D and America cannot afford to completely lose the edge we spent the last 50 years developing.

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