U.S. Tech Exports Dip

Published December 1, 2008

In another nugget of bad news for the U.S. economy, international demand for the nation’s technology exports is falling.

According to the American Electronics Association, U.S. tech exports fell 3 percent in 2007, to $214 billion. That’s the first annual decline since 2002.

Government Policies Blamed

Technology experts say much of the decline, highlighted in the association’s September report, is attributable to government policies impeding technological advancement.

“Problems with policies in the past few years may have affected exports in terms of keeping up with innovation,” said Bruce Abramson, CEO of San Francisco-based Informationism.com. “Copyright law moved in the wrong direction. There are a large number of policies that are creating a huge threat to the U.S. tech sector.”

Reduced exports to the nation’s three largest U.S. technology importers, Mexico, Japan, and South Korea, are being partially attributed to improved technology production in those countries and to trade with other countries.

Competitors Also Face Hurdles

The United States is not the only country where tech regulations are stifling innovation and growth, analysts note.

“Europe tends to have government policies that slow innovation, and their entrepreneurs are in a similar place as those in the United States,” said Sonia Arrison, a senior fellow at the San Francisco-based Pacific Research Institute, a free-market think tank.

“I think antitrust policy is creating problems on the domestic and international level, and properly dealing with these constraints is really important to maintaining U.S. competitiveness,” Arrison said.

Taxes Pushing Business Offshore

Experts say other obstacles to U.S. tech-sector success include high corporate tax rates and a lack of continuing education. Abramson believes these barriers have helped send tech production offshore.

“There are some are limits to where companies can move because of the need for the [labor force] intelligence to get the work done, unless companies want to pay to relocate U.S. workers,” Abramson said. “Corporate tax rates are also too high. Part of the problem is that we respond to every crisis by installing new regulations.

“We would do very well to get rid of many of the regulations we have and create a new [regulatory] infrastructure” that is less heavy-handed, Abramson said. “Markets can’t work without some regulations, but we need something that is reasonable.”

Aricka Flowers ([email protected]) writes from Chicago.

For more information …

“U.S. Technology Exports Total $214 Billion in 2007,” American Electronics Association: http://www.aeanet.org/PressRoom/prac_TCS_2008.asp