"The failure of some American businesses to meet technical challenges from abroad has been first and foremost a managerial failure." In reaching this conclusion, Professor Scherer of Harvard studied the responses to import competition in 11 diverse industries and then carried out an elaborate statistical analysis of a much larger cross section of American manufacturing. Faced with foreign pressure, an "appreciable fraction" of firms (including protected ones) reacted "submissively" by doing less research and development in proportion to sales than before. A larger group carried on without significant change. Those firms responding "aggressively" made up the smallest group, but included some of the largest companies. Unless slight signs of change prove significant (the study ends in 1987), he argues that "the erosion of U.S. technological leadership will almost surely continue." Although the statistics do not explain everything, this is one of the most interesting additions to the rising stream of books about high technology.
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