Can the United States stay on the throne of IT?

New report urges an odd mix of Reaganomics and socialism to help ensure its reign

Should we really care if the United States falls behind in IT? Some argue that tech is the only sustainable lead we have on the rest of the world and that it’s worth holding on to. Others say we’re so far ahead economically and militarily, we could lose a lot of altitude in 20 to 30 years and still maintain some kind of edge.

I lean toward urgency, so when I see a new report such as “America’s Technology Future at Risk” by the Economic Strategy Institute, I take notice.

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The 90-page report has a “Chicken Little” feel to it. America’s falling behind on advanced technology, ESI claims, especially telecommunications -- and it’s the government’s fault. “America is well on its way to surrendering leadership in advanced telecom products and services,” ESI says. We rank only 16th worldwide in broadband penetration and 42nd in cell phone penetration. We generate less than one-fifth of the Internet traffic per capita that South Korea does. And we’ve been slow on the uptake of 3G services.

What’s more, foreign companies make up most of the top 10 U.S. patent recipients, the study claims, and the United States awards fewer B.S. degrees today than it did 20 years ago -- and each of Japan, the European Union, China, India, and Korea award more than the United States.

So where did we go so wrong? This is where the report gets iffy, blaming the broad decline on flawed U.S. regulatory policies. The U.S. government didn’t do its part to stimulate investment in important broadband technologies because it didn’t have a strategic vision like the European Union and Asian countries. Worse, the government tied the hands of the big telephone companies, preventing them from entering one another’s markets. And so the big telecom investments in the late ’90s flowed down the drain, to the wrong places -- CLECs, dark fiber, and so on -- the report claims.

Here’s where I flash back to that Animal House scene where Belushi’s trying to rally the Delta troops who’ve been placed on double secret probation by Dean Wormer: “Was it over when the Germans bombed Pearl Harbor?” I’ve heard the America-is-falling-behind-online argument before, particularly in the ’80s when France was ahead with its Minitel network, a full 10 years before Netscape.

I tend to think we all share responsibility for the underlying fundamentals: education, innovation, and just plain hard work. … It’s certainly not too late for America to rally.

ESI does have some worthy proposals to consider. Deregulate telecom as much and as fast as possible. It favors capital grants and tax holidays to attract more telecom manufacturing and endorses giving more financial aid to technology students. The report espouses a weird mix of Reaganomics and communist central planning -- but, with tech, you never know.

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