Archives:Technological Competitiveness: Contemporary and Historical Perspectives on Electrical, Electronics, and Computer Industries



Competitiveness became a fashionable topic during the Reagan presidency. His administration argued that if businesses could improve themselves in various ways and the federal government could lower taxes and remove onerous regulation, American industry could fend off challenges from other countries, especially Japan, and the nation would resecure its position as world leader in business and technology. Competitiveness was supposed to be achieved, however, without benefit of a national technology policy targeting specific industries for special treatment -- for this smacked of social planning. Nevertheless, certain technologies, such as high-definition television, supercomputers, and semiconductors, did come in for special attention from the federal government.

Many of these technologies involved electronics or computing. This was to be expected because they are among the most "high-tech." They are ones that could not be developed without a skilled professional labor force, substantial research and development, and advanced manufacturing technologies. And it was in these areas that the United States assumed it had its greatest advantages because of its existing educational and research infrastructure and its general availability of venture capital. Electrotechnology, an embracing term which we use to include electrical, electronic, and computer technologies, was thus at the core of national competitiveness as it came to be understood in the 1980s.

Competitiveness was of course an issue before the 1980s. By the end of the nineteenth century, companies at the cutting edge of technology were competing fiercely in international markets for business viability. The contested technologies were different then: fine chemicals, metallurgy, business machines, automobiles, electrical power and appliances, and telecommunications. But research and development, venture capital, university-industry relations, patents, and many other factors were at that time similar to what they are today in technologically competitive industries. Thus there is a century of experience with technological competitiveness among firms and among nations on which we can draw to understand today's situation.

It was clear to us at the IEEE-Rutgers Center for the History of Electrical Engineering that there was potential for increased understanding if contemporary competitiveness issues were investigated in a historical context. We knew that a number of historians of technology had investigated both successful and unsuccessful technological businesses from the past, and there was every reason to believe that what they had learned about research and development, manufacturing, management, marketing, government regulation, trade policies, and many other issues could give insight into our contemporary situation. We also knew that many business leaders, government policy analysts, and academics had carefully considered these same issues for today's firms and nation-states, and that their insight into contemporary affairs might teach historians about the intricate interplay of many factors of competitiveness and help historians focus their research.

We could identify hardly anybody who had both contemporary and historical perspectives on technological competitiveness. We decided, therefore, to hold a conference bringing together the two perspectives, as represented by business-oriented historians of technology and seasoned engineers and engineering managers with first-hand experience competing in the global marketplace. Electrotechnology has been highly competitive continuously for more than a century. Our decision to restrict the conference to this technology provided a cohesive subject for analysis, but one still large and important enough that these were ample numbers of historians who have studied it and engineers who have experienced it. A generous grant from the Alfred P. Sloan Foundation enabled us to invite to our conference some of the very best engineers and historians from around the world. We believe that the results on electrotechnology can be widely applied to other technical areas where competition occurs.

The conference was held October 10-13, 1991 at and near the Rutgers University campus in New Brunswick, New Jersey. There were thirty-two invited speakers and commentators representing nine countries of North America, Europe, and Asia. (The appendix lists the program.) Historians presented case studies and engineers commented on them. Eighteen of the case studies and commentaries are published in this volume. In order to leave more more room for outside viewpoints, we decided not to have staff of the IEEE-Rutgers history center give papers at the conference--even though some of the staff were working on competitiveness issues. But we have included in the published record one paper by staff member Eric Schatzberg. All articles were refereed, and the authors had an opportunity to revise their papers on the basis of the commentaries and the extensive discussion given at the conference. Thus we regard the papers as finished publications rather than conference proceedings.

Because of the different mix of papers, this volume is organized differently from the conference. Both are organized primarily according to type of technology. There are several intellectual and practical reasons for this decision. Competitiveness factors tend to be similar across a given technology; two computer firms are more likely to confront similar issues of competitiveness than, say, a computer firm and a power supplier. Because historians have not traditionally focused their studies on competitiveness (but rather more generally on the history of technology in a business setting), there is not yet much historical literature on specific aspects of technological competitiveness, such as the role of manufacturing technology or of the marketing of technical products and services. The one exception is the well-established body of historical literature on research laboratories. Historians are more likely to identify with other historians who study similar technologies than with those who study similar business aspects. (If we had selected historians who were foremost business historians, this may not have been true; but few business historians have grappled with businesses that are technologically driven. It is instead the historians of technology who have addressed issues that can be categorized as concerning competitiveness.) On a more practical level, in several places we had to retain the conference structure because commentaries referred to specific papers.

The first section of the book addresses issues that are at the heart of contemporary concerns about technological competitiveness. Two papers by academics who are not historians describe aspects of the Japanese system and its tremendous advances in electronics since the Second World War. The first paper is by Lennart Stenberg, a social scientist at the University of Lund who tracks science and technology policy for the Swedish government. Through a case study of molecular beam epitaxy, Stenberg demonstrates the strengths and weaknesses of the research infrastructure in Japan. He emphasizes the strong role played by the business sector and the relatively weak role of the academic sector in shaping the research infrastructure. He considers such factors as the rigidity and segmentation in the research system based on business and government practices and the importance of knowledge-transfer networks from university professors to their students working in industry. The second paper, by electrical engineering professor Yuzo Takahashi of the Tokyo University of Agriculture and Technology, considers the electronic components industry in Japan since the Second World War. Takahashi argues that, while attention has often focused on Japanese computers and supercomputers, perhaps more can be learned from an examination of the electronic components industry, which enabled Japanese manufacturers to provide quality and reliability in more complicated electronic systems and devices. Takahashi identifies the importance of consumer markets to Japanese electronics firms, and the importance of mechanized manufacturing for improvements in quality, reliability, and cost. He draws comparisons with the American system.

The second section continues this comparison through an examination of the U.S. electronics industry. The first paper, by James Gover, an engineer with Sandia National Laboratory and vice-chairman of the IEEE Competitiveness Council, provides an overview of the U.S. electronics industry and draws many comparisons between the United States and Japan. Of particular interest in his paper are the differences between these two countries in the mix of "upstream" electronics (packaging, software, semiconductor manufacturing, materials, and manufacturing equipment) and "downstream" electronics (communications, manufacturing, data processing, consumer electronics, and defense electronics). In the next paper, Stuart Leslie, a historian of technology at Johns Hopkins University, examines Silicon Valley, the great American success story that serves as a model for virtually every high-technology regional economic development plan promulgated during the past two decades. Leslie considers federal spending, industry-university relationships, corporate strategies, and technological innovation. He concludes that Silicon Valley was shaped largely by Cold War defense policy and may actually offer little guidance for peace-time technological development policy. The paper by Robert Smith, a historian at the Smithsonian's National Air and Space Museum and a close student of NASA, completes the section. Smith investigates the phenomenon of Big Science, such as space telescopes and superconducting supercolliders, and its relationship to national competitiveness. He argues that American policy makers have placed great hope and huge amounts of money in Big Science projects, but they have not had the intended payoffs in industrial innovation or productivity which were promised as part of the justification for such large expenditures.

The third section turns to the closely allied topic of electronic computers. The first paper is by Martin Campbell-Kelly, a historian and computer scientist at the University of Warwick who has written the definitive study of ICL, the main British computer firm. Drawing from that study, Campbell-Kelly investigates British government policies for promoting and defending its indigenous computer industry from foreign, especially American, competition between 1949 and 1985. He describes British military sponsorship of three computer centers which spun off their prototype computer systems to the commercial sector, efforts on limited budgets to guarantee markets for British computer firms, government intervention to rationalize the computer industry through forced consolidation, and actions to protect the remaining firm (ICL) from market forces so that it could undertake research and implement long-term strategies. Boelie Elzen, a historian of technology at the University of Nijmegen in the Netherlands, and Donald Mackenzie, a sociologist of science and technology at the University of Edinburgh, prepared the final paper of this section. It explores the interplay between technical development and social relations in the American supercomputer industry. It argues against a commonly held view that U.S. science and engineering lost competitive advantage through insufficient access for U.S. researchers to supercomputer power. It also argues that the social networks established between the manufacturers of supercomputers and their customers created a mutual dependency that imposed a barrier on new entrants to the supercomputer industry and affected the design of subsequent generations of supercomputers, including a diminished value given to computing speed.

The fourth section studies telecommunications. In the first paper, Kenneth Lipartito, a business historian at the Harvard Business School, notes that the term "technological competitiveness" is usually applied to companies that compete with one another for customers, profits, markets, or survival--or more recently to nations or other geopolitical units that compete to insure wealth for the geopolitical region through the success of its technological businesses. It is hard to understand, he acknowledges, how this concept applies to industries that are monopolistic or under public ownership. He extends the notion of competitiveness to include the rivalry between different groups for the determination of how a technology should be employed, to what aims, and for what benefits. This broader concept of competitiveness he explores through a case study of telecommunications in the American South between 1880 and 1920. Pascal Griset, a historian of technology at the Centre national de la recherche scientifique in Paris, considers the case of competitiveness in the French telephone industry since 1945. At the beginning of this period, the French telephone system was antiquated and French telephone companies were subsidiaries of foreign companies. A modern national telephone system was needed to improve the competitiveness of France's commerce and industry. But the French government wanted an indigenous telephone industry to develop the new telephone system, in order to reduce France's dependence on foreign technology and to improve its national balance of payments. The tension between these two aims is the main subject of the paper. Amos Joel, a retired Bell Laboratories engineer, the recipient of the 1992 IEEE Medal of Honor, and a leading authority on telephone switching, provides commentary on the Lipartito and Griset papers. His comments are mainly directed at changes in the 1980s caused by competition in interexchange toll service and additional competition that is likely to occur in the near future through the introduction of new technologies.

The fifth section considers electrical technology for the home. In the first paper, Arne Kaijser, a historian of technology in the Royal Institute of Technology in Stockholm, analyzes the fierce competition between three technologies (gas, oil, and electricity) for the domestic lighting and cooking markets in Sweden between 1880 and 1960. Two aspects of his analysis have wider applicability. The first is his analysis of technical performance, pricing, propaganda, and political pressure as factors in technological competitiveness. The second is his analysis of grid-based energy systems (e.g., electricity, gas, and district heating), in which the energy is delivered to users through a special physical network constructed for this purpose, versus non-grid-based systems (e.g., oil, coal, and biomass fuels), where the energy is delivered to users through existing transport systems. Susan Douglas, a historian of technology at Hampshire College, wrote the other paper in this sections. Douglas uses the examples of ham radio operators, hi-fi enthusiasts, and FM programmers to exemplify oppositional uses of commercially developed technologies by subcultures of American tinkerers, and explains how they helped to identify underdeveloped or completely neglected technologies. The paper analyzes the competition among three subcultures (youth, engineering tinkerer, and corporate) in determining the future shape of technology.

The sixth section considers electrical technology for industry and commerce. The first paper is by Eric Schatzberg, a historian of technology employed by the IEEE-Rutgers Center. He investigates the competition between three technologies (steam, cable, and electricity) in the last quarter of the nineteenth century to mechanize urban transit in the United States. He argues that electrical technology, which in the end won the competition, was initially not known to be clearly superior on cost. He gives two non-technical reasons that provided support for electricity in the initial period when costs were uncertain: American enthusiasm for the progressive new electrical technology, and structure of the electrical equipment industry. The second paper is by Anne Milbrooke, a historian of technology at United Technologies, the maker of Otis elevators. She traces the competition within Otis primarily between hydraulic and steam elevator systems in the late nineteenth and twentieth centuries and explains how business, technical, and regulatory factors reversed the use of these two technologies in elevators over time. The third paper is by Ulrich Wengenroth, a historian of technology at the Technical University of Munich. Wengenroth examines the competition of electric motors to replace steam engines in the period 1890 to 1925. Steam engines were better suited for many manufacturing applications, were less expensive per unit of energy produced, and were more frequently customized to specific applications. Electric motors were able to win the competition, however, because they had greater versatility and allowed industrial designers to take a new approach to production technology. W. Bernard Carlson, a historian of technology at the University of Virginia, prepared the section's final paper. By considering events in the American electrical industry that led to the formation of General Electric in 1892, Carlson illuminates the interplay between competition and consolidation in technological industries. While competition can lead to better products and lower prices, it can also engender inefficiency, duplicative effort, and waste. Carlson's study provides insight into the influence of individuals and their personalities on the level of competition and the timing of mergers, the importance of competition between firms for sources of capital, and the value of having the right organizational structure beyond having good products, low prices, and low production costs.

The final section considers electric power. Not unlike telecommunications, power companies tended to be monopolistic or publicly held, so there is some question about what competitiveness means in such an industry. Mark Rose, a historian of technology at Florida Atlantic University, explains how the nature of competition in the American power industry changed over time. In his case study of the power utilities in Denver and Kansas City between 1880 and 1970, he shows that competitiveness changed from being competition between rival firms supplying power, to being competition of a regulated monopoly for the best rates and rates of return for the company. He focuses on the importance to competitiveness of geo-political factors, such as the siting of power plants, special interests of political groups and individuals, accommodating to legislative agendas of the Progressive Era, and working the politics of public rate structures. The other two papers consider the French power industry. Alain Beltran, a historian at the Institut d'histoire du temps present, examines the history of Electricité de France since 1946. His story tells of three different kinds of competition at play; competition of nuclear technology with coal, oil, and natural gas; competition of French power companies with other firms in the European Economic Community; and competition of France with other nations through industrial strength. Beltran's paper is interesting for its discussion of how economic competition was simulated in a monopolistic environment, his discussion of how tax laws shape the competitive environment, and his brief consideration of the sociological factors that enabled nuclear power to succeed in France. Gabrielle Hecht, a historian of technology at Stanford University, examines in the volume's final paper the relationship between engineering work and politics, economics, and culture in the French nuclear power industry between 1955 and 1969. Hecht traces three stages of competitiveness: first a period characterized by competition between government agencies (for nuclear weapons and nuclear power) over their conflicting agendas, next a period of economic competition to deliver power from the monopolistic nuclear power industry at as low a price as possible and preferably at competitive prices with conventionally produced power, and finally a period of competition of the French industry against non-French firms and non-French technologies to construct power plants around the world.

The greatest value of the conference was to bring engineers and historians together to discuss an important contemporary issue from their complementary perspectives. The volume includes many good papers, and all of the contributions address some aspect or another of competitiveness; but it is clear that these papers represent only a first attempt to study competitiveness from an historical perspective. No standard literature and no standard set of issues existed when these contributors were preparing their papers, and most of these papers are spin-offs from other historical research projects--none of which focuses specifically on competitiveness. This is not because we invited the wrong set of people to the conference, but rather because this subject has been largely neglected by historians of technology up to this time.

We will not take up the space required to give a thorough needs-and-opportunities assessment for the historical study of technological competitiveness, for it seems premature to do so. A few remarks can be made, however. To a large degree, the factors are the same ones that business historians address: research, development, manufacturing, capital and finance, education, marketing, patents and litigation, strategic planning, organizational structure, etc. The balance and character of these factors, however, is significantly different in technologically competing businesses from commercial enterprises or other non-technology-based businesses. For example, technological businesses are set apart by the rapid obsolescence of products and services, which leads to unrelenting pressure for research and development. To remain competitive, these businesses often have to employ advanced, expensive packaging and manufacturing technologies. The work requires a generally educated workforce and highly educated key personnel, which often leads to close associations with universities and affects business aspects ranging from the siting of plants to the conditions of employment of professional employees. Extensive venture capital is required to turn innovative, often untested technologies into businesses, which leads to unusual relationships between company management and its financial backers. Technological businesses often compete in international markets, where national regulation of import-export of advanced technologies and other factors may entirely shape market conditions. Many technological products are dependent for their existence on the military for their markets or even for the basic research and development on which they are based, leading to some special conditions for competitiveness. These and many other factors differentiate technological businesses from non-technological ones.

Rather than try to characterize all the factors of technological business, I direct the reader's attention to Bruce Bruemmer and Sheldon Hochheiser, The High-Technology Company: A Historical Research and Archival Guide (Minneapolis, Charles Babbage Institute, 1989). This book gives an introductory description of industrial activity and documentation in high-technology companies and cites some of the existing literature on high technology and its history. It gives overviews of basic business functions (planning, basic research, research and development, production, marketing sales, product support and enhancement) and support services (financial, legal, and others). An introduction to many of the important factors of technological competitiveness can be abstracted from this account.

There are many good opportunities for research on technological competitiveness. We hope that this book encourages further study that informs both historical scholarship and our contemporary world.


Stenberg, Lennart, "Technological Strength Needs and Feeds a New Research Infrastructure in Japan," in Technological Competitiveness: Contemporary and Historical Perspectives on Electrical, Electronics, and Computer Industries (Piscataway, NJ: IEEE Press, 1993), 5-36.

Takahashi, Yuzo, "Progress in the Electronic Components Industry in Japan after World War II," in Technological Competitiveness: Contemporary and Historical Perspectives on Electrical, Electronics, and Computer Industries (Piscataway, NJ: IEEE Press, 1993), 37-52.

Gover, James E., "Review of the Competitive Status of the United States Electronics Industry," in Technological Competitiveness: Contemporary and Historical Perspectives on Electrical, Electronics, and Computer Industries (Piscataway, NJ: IEEE Press, 1993), 57-74.

Leslie, Stuart W., "How the West Was Won: The Military and the Making of Silicon Valley," in Technological Competitiveness: Contemporary and Historical Perspectives on Electrical, Electronics, and Computer Industries (Piscataway, NJ: IEEE Press, 1993), 75-89.

Smith, Robert W., "Big Science, Competitiveness and the Great Chain of Being," in Technological Competitiveness: Contemporary and Historical Perspectives on Electrical, Electronics, and Computer Industries (Piscataway, NJ: IEEE Press, 1993), 90-99.

Campbell-Kelly, Martin, "ICL and the American Challenge: British Government Policies for the Computer Industry, 1945-1985," in Technological Competitiveness: Contemporary and Historical Perspectives on Electrical, Electronics, and Computer Industries (Piscataway, NJ: IEEE Press, 1993), 105-118.

Elzen, Boelie and MacKenzie, Donald, "From Megaflops to Total Solutions: The Changing Dynamics of Competitiveness in Supercomputing," in Technological Competitiveness: Contemporary and Historical Perspectives on Electrical, Electronics, and Computer Industries (Piscataway, NJ: IEEE Press, 1993), 119-151.

Lipartito, Kenneth, "The Strategy of System-Building Telecommunications and the American South, 1885-1920," in Technological Competitiveness: Contemporary and Historical Perspectives on Electrical, Electronics, and Computer Industries (Piscataway, NJ: IEEE Press, 1993), 157-175.

Griset, Pascal, "The Centre National d'Etude des Telecommunications and the Competitiveness of French Telephone Industry, 1945-1980," in Technological Competitiveness: Contemporary and Historical Perspectives on Electrical, Electronics, and Computer Industries (Piscataway, NJ: IEEE Press, 1993), 176-187.

Kaijser, Arne, "Fighting for Lighting and Cooking: Competing Energy Systems in Sweden, 1880-1960," in Technological Competitiveness: Contemporary and Historical Perspectives on Electrical, Electronics, and Computer Industries (Piscataway, NJ: IEEE Press, 1993), 195-207.

Douglas, Susan J., "Oppositional Uses of Technology and Corporate Competition: The Case of Radio Broadcasting," in Technological Competitiveness: Contemporary and Historical Perspectives on Electrical, Electronics, and Computer Industries (Piscataway, NJ: IEEE Press, 1993), 208-219.

Schatzberg, Eric, "The Mechanization of Urban Transit in the United States Electricity and Its Competitors," in Technological Competitiveness: Contemporary and Historical Perspectives on Electrical, Electronics, and Computer Industries (Piscataway, NJ: IEEE Press, 1993), 225-242.

Millbrooke, Anne, "Technological Systems Compete at Otis Hydraulic Versus Electric Elevators," in Technological Competitiveness: Contemporary and Historical Perspectives on Electrical, Electronics, and Computer Industries (Piscataway, NJ: IEEE Press, 1993), 243-269.

Wengenroth, Ulrich, "How They Won the Market Electric Motors in Competition with Steam Engines, 1890-1925," in Technological Competitiveness: Contemporary and Historical Perspectives on Electrical, Electronics, and Computer Industries (Piscataway, NJ: IEEE Press, 1993), 270-286.

Carlson, W. Bernard, "Competition and Consolidation in the Electrical Manufacturing Industry, 1889-1892," in Technological Competitiveness: Contemporary and Historical Perspectives on Electrical, Electronics, and Computer Industries (Piscataway, NJ: IEEE Press, 1993), 287-311.

Bertran, Alain, "Competitiveness and Electricity: Electricité de France Since 1946," in Technological Competitiveness: Contemporary and Historical Perspectives on Electrical, Electronics, and Computer Industries (Piscataway, NJ: IEEE Press, 1993), 315-325.

Hecht, Gabrielle, "Constructing Competitiveness: The Politics of Engineering Work in the French Nuclear Program, 1955-1969," in Technological Competitiveness: Contemporary and Historical Perspectives on Electrical, Electronics, and Computer Industries (Piscataway, NJ: IEEE Press, 1993), 326-351.