Federal Statistical Needs for a National Advanced Industry and Technology Strategy

Position paper by Robert D. Atkinson: “With the rise of China and other robust economic competitors, the United States needs a more coherent national advanced technology strategy.1 Effectively crafting and implementing such a strategy requires the right kind of economic data. In part because of years of budget cuts to federal economic data agencies, coupled with a long-standing disregard of the need for sectoral and firm-level economic data to inform an industrial strategy, the federal government is severely lacking in the kinds of data needed.

Notwithstanding the hundreds of millions of dollars spent every year and the thousands of economists working for the federal government, the exact nature of the challenges to U.S. capabilities with regard to the competitiveness of America’s traded sectors is only weakly understood. At least since after the Great Depression, the federal government has never felt the need to develop strategic economic intelligence in order to fully understand the competitive position of its traded sectors or to help support overall economic productivity.2 Rather, most of the focus goes to understanding the ups and downs of the business cycle….

If the U.S. government is going to develop more effective policies to spur competitiveness, growth, and opportunity it will need to support better data collection. It should be able to understand the U.S. competitive position vis-à-vis other nations on key technologies and industries, as well as key strengths and weaknesses and where specific policies are needed.

Better data can also identify weaknesses in U.S. competitiveness that policy can address. For example, in the 1980s, studies conducted as part of the Census of Manufactures (studies that have long been discontinued) found many smaller firms lagging behind badly in costs and quality for reasons including inefficient work organization and obsolete machinery and equipment. End-product manufacturers bought parts and components from many of these smaller enterprises at prices higher than those paid by foreign-based firms with more efficient suppliers, contributing to the cost and quality disadvantages of U.S.-based manufacturers. Legislators heeded the findings in crafting what is now called the Manufacturing Extension Partnership, a program that, if too small in scale to have a significant impact on U.S. manufacturing overall, continues to provide meaningful assistance to thousands of companies each year.5

Moreover, as the federal government institutes more technology and industry policies and programs—as exemplified in the Senate U.S. Innovation and Competition Act—better data will be important to evaluate their effectiveness.

Finally, data are a key 21st century infrastructure. In a decentralized economy, good outcomes are possible only if organizations make good decisions—and that requires data, which, because of its public goods nature, is a quintessential role of government….(More)”.