(FORTUNE Magazine) – JAPAN MAY BE ABLE to bring it off, but U.S. Inc. would flop. A high-tech juggernaut under centralized command would conquer nothing but itself. That doesn't mean a little cooperation wouldn't help. On everything from education to tax reform Americans should be thinking more about how to sharpen the country's competitive edge. With a work force poorly educated in math and science, not to mention language, the U.S. carries a burden that might have taken a weaker country out of the high-tech race altogether. At the top, U.S. science and math students are truly world class. But Japan, with only half as many people as the U.S., is producing nearly as many engineers, the people who turn science into commercial technology. Nor does the U.S. have a deep reserve of workaday technicians, foremen, machine operators, and others who can follow blueprints, observe tolerance requirements, and solve rudimentary problems that require, say, translating fractions into decimals. In an international competition two years ago, 7,500 American eighth graders and 6,000 U.S. high school students matched mathematical wits with students from 21 other countries and the British colony of Hong Kong. The American kids finished in the middle of the pack. The Japanese came out on top, and the Hong Kong Chinese were not far behind. The Japanese outscored the Americans on everything from simple computations to advanced algebra. The Japanese excel for a number of reasons, some of them cultural components the U.S. cannot and should not import. The school regimen is so rigid that Japanese children move ahead in lock step, no matter what their ability. Even the communal Japanese recognize that they are probably stifling creativity and ought to loosen up. Perhaps the U.S. should adopt the Japanese respect for teaching, but it almost certainly won't. Japanese hold even elementary instruction in high esteem and pay teachers about as well as middle managers. So teaching in elementary and high schools is a more attractive profession in Japan than in the U.S. The U.S. suffers for that. Bill G. Aldridge, executive director of the National Science Teachers Association, says 30% of U.S. science teachers are unqualified. And the competency level could drop further. The U.S. used to be able to exploit the brains of women who were clever with numbers or handy in the laboratory and had few alternatives to teaching. Today those women can go to medical school or trade bonds. What the U.S. can copy from the Japanese is the length of the school year. American children spend only 180 days or so a year in the classroom, and it's arrogant to suppose they can learn as much in that time as Japanese school kids learn in 240. A longer school year faces a lot of resistance, including that of a tourist industry eager to keep families mobile. At the industry's urging, Virginia passed a law this year forbidding schools to open before Labor Day. More school days will raise local tax bills considerably, so states and school districts will not rush to add months to the calendar, but they can start by adding days and weeks. The U.S. spends a generous chunk of its GNP on R&D (see chart). Industry pays out about $60 billion a year, universities, colleges, and foundations $4 billion, and the federal government $55 billion. But 70% of the federal share is for defense research, compared with a roughly fifty-fifty split between civilian and defense research five years ago. True, some military research has commercial applications. Strong, lightweight materials created for fighter planes help keep Boeing 747s and McDonnell Douglas DC-9s flying longer distances on less fuel. And the development of high-power lasers, particle beams, electronic sensors, new materials, and intricate computer networks for the Strategic Defense Initiative will likely yield benefits outside the military. But defense research money is increasingly earmarked for narrow, short-range programs. Erich Bloch, director of the National Science Foundation, argues that the shift in resources poses long-term dangers. He would like to increase the annual basic research outlays of $4.3 billion by about $2 billion, which the 2,000 universities and other research institutions that receive NSF grants could use to replace old equipment, build new laboratories, and support students. Bloch's request is persuasive. The money should be taken out of the Defense Department's research budget, which is more than ample. The laboratories of U.S. universities produce the world's most brilliant science. Some of it is never transformed into useful technology, however, because geography and hoary tradition often isolate academic workshops from corporate R&D centers. So last year the National Science Foundation began to hand out checks of from $1 million to $3 million to universities to establish engineering research centers. Groups of company sponsors have contributed money as well. So far, 13 universities have opened centers where academic and corporate researchers pursue questions of common interest. At Purdue, for example, Alcoa, Cincinnati Milacron, Control Data, Cummins Engine, Ransburg, and TRW are investigating the potential of intelligent manufacturing systems. The University of California at Santa Barbara has set up a center for robotic systems with 25 corporate partners, including Bell Communications Research, GMF Robotics, and Hughes Aircraft. ''We function as a sort of engineering clinic to fill company needs,'' explains Susan Hackwood, a director of the Santa Barbara program. ''One company wants to manufacture in a vacuum to avoid contamination. This requires designing motors, gears, and other mechanisms from scratch.'' The NSF has asked Congress for $35 million for fiscal 1987 to keep the current centers going and add another four. The rationale is sound and the cost to taxpayers relatively modest. Congress ought to give the NSF the money requested. To stay competitive internationally, U.S. companies will probably have to depend more on one another as well as on the campus. In Japan the Ministry of International Trade and Industry (MITI) brings corporations together for common ventures. The U.S. can't replicate MITI. For a start, civil servants don't command the same respect in the U.S. that they do in Japan. And even MITI's authority has declined. Bright as its bureaucrats are, they can be dangerously poor forecasters of corporate performance. The U.S. is likely to do better with cooperatives that are created by private initiative, such as Microelectronics and Computer Technology Corp. The 21 member companies of MCC, including Control Data and Martin Marietta, finance research into artificial intelligence and other far-range projects that they would not be able to afford on their own. Admiral Bobby R. Inman, who was the driving and cohesive force behind MCC in its first four years, has announced that he is going to resign as chairman at the end of 1986, making MCC's future seem a bit shakier than with Inman in command. BUT AT THE very least, MCC has set two important precedents. The Justice Department, at first suspicious that MCC might violate antitrust law, sanctioned the corporation with the understanding that cooperation would end and competition resume as soon as research turned into product. Just as important, the corporate members eventually conquered, or at least controlled, their mistrust of one another. And now the semiconductor industry is considering a cooperative like MCC that would look into better manufacturing techniques. For all its virtues in lowering rates, the coming tax reform bill could dull U.S. competitiveness. Companies will still receive a tax credit for increasing their R&D budgets, but the credit will amount to only 20% of the increase, not 25% as under current law. More important is the slowdown of depreciation schedules and the loss of the investment tax credit. A company weighing whether or not to install robots in Plant No. 3 may decide that without tax incentives the gadgets will take too long to pay for themselves. So the robot manufacturer loses a customer, and the unit cost of making robots goes up. When capital gains are taxed at the same rate as ordinary income, investors will have an additional reason for playing it safe rather than taking a flyer on a promising young high-tech enterprise.

But tax law is never finished. The investment tax credit, for example, has come and gone before. In a year or two Congress may look at what it has wrought and decide to bring back incentives once again.

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