In the 1950s and '60s, inventor George Devol took out several dozen patents for what he called his "programmed article handling device." He felt sure that American industry would be revolutionized by his ideas.
The patents were soon acquired by a struggling young company called Unimation, anxious to cash in on the new technology that seemed certain to sweep the country.
But U.S. companies showed little interest in Unimation's products, and in 1968 the company in desperation made a deal with Kawasaki Heavy Industries, allowing the Japanese firm to use its know-how.
Devol's "programmed article handling device" is known today as a robot. And today, Japan leads the world in the manufacture and use of industrial robots.
Now, Kawasaki and other Japanese companies sell robots to America's industrial giants, which are belatedly acknowledging the merit in Devol's ideas. Kawasaki robots, based on technology acquired from Unimation, will work on automobiles that will soon start rolling off Nissan Motors' first U.S. assembly plant in Tennessee.
"We're handing it to the Japanese on a platter," said Devol, now 71. "I just can't understand America."
Stories such as that, repeated across a wide spectrum of U.S. industry, raise deeply troubling questions about the nation's ability to compete in the demanding business conditions of the Information Age.
The United States developed the first computer-controlled robots, the transistor, the integrated circuit, the video cassette recorder, the communications laser, fiber-optic cable, gene splicing and the software that enables computers to design, test and manufacture products.
Yet good ideas percolating out of research laboratories and machine shops have not guaranteed the health of American industry. Japanese companies are ahead of or equal to the United States in several of the businesses that grew out of those innovations.
Is something fundamentally wrong with U.S. management? Are foreigners "ripping off" precious American technology? Has the country sold its ideas without giving enough thought to the impact on its future industrial competitiveness? Is America destined to relive the economic decline of Great Britain, another nation with a proud history of invention and technological innovation? Can an open, unplanned society that tolerates a high degree of economic confusion survive the challenge of societies operating on the principle of consensus and clear national objectives?
This series examines these questions in the light of the technology trade with Japan, America's principal economic rival. The ever increasing pace of technological advances and the way both nations use the new discoveries play a controlling role in the rise of some industries and demise of others.
Movement of technology from one country to another, through sale of a patent, purloining of a trade secret, the visit of a student, publication of a technical paper, establishment of a joint business venture or acquisition of a foreign company can influence the balance of economic power between countries in the 1980s as surely as the petroleum trade did in the 1970s.
It can sound the death knell of an industry, and cost American jobs, as it has in parts of the steel industry hit by imports of Japanese and South Korean steel manufactured with the newest continuous-casting processes.
For industrial countries, technology is a particularly precious asset, a trust for the future, that can help offset the competitive advantages that lower wages and less expensive social programs give some other nations.
As the United States shifts slowly from a manufacturing to an "information" economy, emerging high-technology industries offer one hope for generating new wealth and new jobs requiring skills greater than those available in overseas labor forces.
While high-technology industries in themselves will not generate enough jobs to solve the U.S. unemployment problem, application of a wide range of technologies to dozens of industries at least holds out the hope for a more productive, competitive and growing U.S. economy.
Ironically, American technology has played an enormous role in the emergence of the Japan now challenging the United States for economic supremacy.
Lacking natural resources and excess manpower, Japanese industry has prospered by a near-fanatical emphasis on maximum exploitation of advanced technology.
Between 1950 and 1980, Japanese companies acquired almost all of the world's available advanced technology by signing at least 30,000 licensing or technical agreements with western companies, mainly American. The price paid by Japan in royalties and fees has been about $10 billion, less than one-fifth of what is spent in the United States for research and development in one year. Exports Provide Industrial Base
U.S. licenses and advanced equipment have provided the base for numerous Japanese high-technology industries.
One example: U.S. computer graphics systems and electron-beam etching devices were used by Japan to produce 64,000-bit computer memory chips ahead of American chip makers.
Another example: The Pentagon-backed sale of dozens of sophisticated U.S. aerospace technologies to Japan under a joint weapons-production program is helping to create an advanced Japanese aircraft industry.
This massive transfer of technology, in the interest of strengthening a military ally, is upgrading the capability of Japan's expanding commercial aircraft industry to compete against Boeing and McDonnell Douglas by the year 2000.
"Japan is doing to us what we did in Europe after World War II," said Jacob Rabinow, consultant to the National Bureau of Standards and holder of 218 U.S. patents. "They are taking our science and making products out of it."
However, few who operate out of the "engine rooms" of advanced industries think that it would be desirable, or even possible, for America to put a sudden lock on its trade secrets.
"The horse is out of the barn," an aerospace executive said.
The web of transpacific business relationships that has grown over the years is much denser than most Americans probably realize. General Motors-Toyota, IBM-Matsushita, General Motors-Fanuc, General Electric-C. Itoh. These are just a few of the hundreds of joint ventures, partnerships or technical tie-ups now in place. Untangling this web would be almost unthinkable now.
Moreover, the United States no longer enjoys a technology monopoly in this relationship. Japanese steel companies, for example, are selling U.S. companies their processes for continuous casting and cold rolling, and Sumitomo Metals Industries is helping U.S. Steel build the first U.S. mill capable of turning out 48-inch, Arctic-grade pipe. Japan Seeks Breakthroughs
One of the most far-reaching comparisons of U.S. and Japanese technology, conducted last year by Japan's Society of Science, Technology and Economics, concluded that Japan was inferior to the United States in 56 key technologies but superior in 51. The survey examined 43 products in 37 industrial fields and compared the degree of automation, methods for testing product quality and design techniques.
Between 1970 and 1979, the five largest Japanese computer chip companies filed for almost as many U.S. patents (1,200) as the five largest U.S. firms (1,500).
If the United States is having trouble with Japanese competition when U.S. science and technology remain superior, some ask, what will the situation be later in the decade when Japan's concerted effort to create its own breakthroughs in the "knowledge intensive" industries begins to bear fruit?
Japan is not the world's only technologically advanced country. French aviation expertise, British computer software, Swedish robotics and Soviet missilery are impressive. But Japan is emerging as the strongest challenger in the 1980s. Tokyo's Ministry of International Trade and Industry (MITI), the superagency that guided the successful export drive in automobiles and consumer electronics in the 1970s, has put together consortiums of Japanese companies and banks to develop computers that think like humans, "intelligent" robots, a supercomputer 1,000 times more powerful than anything sold by IBM, an electric car, fuel-efficient ceramic engines, carbon dioxide lasers and a new generation of computer software.
Few U.S. industrialists underestimate the seriousness of this effort.
Recent American visitors to Japan, for example, have been impressed with efforts under way there to develop a new generation of powerful computers, capable of functioning at very high speed and emulating some of the flexibility and creativity inherent in human thinking.
"If these projects are successful, which appears likely, advanced economic and military research in the United States may become dependent on access to supercomputers of Japanese manufacture," concluded three computer scientists from Los Alamos National Laboratory in a report published in Science magazine last December.
For Americans who grew up in a postwar world in which the United States seemed to hold a virtual monopoly on technological advances, those statistics often seem bewildering. The United States has 124 Nobel Prizes in physics, chemistry and medicine to Japan's four, and American scientists are hard pressed to name a single Japanese innovation that has truly changed the world.
But Japan exports about $5 billion more in high-technology products to the United States than it imports. While the U.S. share of world trade in high-tech products and technical information declined from 31 percent in 1962 to 21 percent in 1979, the Japanese share rose from 5 percent to 14 percent.
To some extent, the government reaction to this has focused on a need to formulate policies that would safeguard U.S. technological advantages.
James C. Abeggien and Thomas M. Hout of the Boston Consulting Group in Tokyo have called sale of civilian technology to Japan at bargain prices "a disaster" and "the biggest fire sale in history."
"With the benefit of hindsight, it is now apparent that many U.S. firms overestimated the permanence of their technological supremacy and underestimated the 'boomerang effect' of their technology licenses," Washington trade attorney Carl J. Green said.
Companies explain their licensing of technology to Japan by saying that Japan's protectionist policies have often barred them from selling U.S.-made products there. Moreover, they suggest, royalties are often pure profit and help recoup past research costs. The $517,000 received by Unimation in royalty payments from Kawasaki in 1980 amounted to half of the company's net earnings.
However, such royalty payments often seem small compared with the benefits to Japan. RCA, industrialists note ruefully, still is receiving royalties for licensing color-television processes to Japanese companies, which compete aggressively with RCA.
At the same time that the issue of technology safeguards is being raised, there is equal concern that the United States not overlook its own well-documented industrial shortcomings.
"The problem in this country isn't innovation. We innovate like hell. The problem is that our developed industries don't adapt and adjust rapidly enough," said Prof. Leslie Eric Cross, acting director of the materials research laboratory at Pennsylvania State University.
In a report on Japan written in 1981, Washington consultants Harald B. Malmgren and Jack Baranson criticized U.S. industry for being too quick to move factories abroad to take advantage of low wage rates, "rather than redesigning and reengineering production techniques to meet Japanese competition."
Robert B. Reich, of the Kennedy School of Government at Harvard University, criticized government research policies "subject to sudden changes in national security needs and prevailing policies."
Inventor Jacob Rabinow is critical of U.S. corporate managers, a breed that he said suffers from "technological illiteracy."
"They're bankers and lawyers . . . . They'd rather sell a company than straighten it out," he said.
For all the concern about the failures of U.S. business, U.S. policy-makers stress the need for a sense of perspective. "Japan is not yet a technological giant," Undersecretary of Commerce Lionel H. Olmer said.
The race between U.S. and Japanese robotics companies shows why it may be risky to jump to conclusions about the demise of U.S. industries. The United States as Underdog
The United States is undoubtedly the underdog. Japan, with about 150 robotics companies, is on the verge of a major export push that will put new pressures on the United States. Although it now exports only about 5 percent of the robots it manufactures, Japan wants to increase that to 20 percent by the mid-1980s.
This strong Japanese position is in some respects a natural outgrowth of Japan's earlier concerns about manpower shortages, rather than a farsighted commitment to technological advances.
By 1972, these concerns had given rise to the Japan Industrial Robot Association (JIRA), formed with the backing of MITI. JIRA published papers, circulated technical information and raised the consciousness of Japanese businessmen about robots.
In 1980, an MITI-sponsored consortium comprised of 24 robot manufacturers and 10 insurance companies was set up to buy robots and lease them to Japanese manufacturing companies on a trial basis. This was a major boon because plant managers no longer bore all of the risk of introducing an untried and relatively expensive technology.
By contrast, the U.S. automobile industry, the largest potential market for fledgling robot companies in the mid-1960s, faced no such problems. Fear of labor union opposition, rather than potential manpower shortages, was the auto makers' dominant concern. General Motors, Ford and Chrysler were then in the position of having almost no serious competition that might have whetted their interest in radical productivity gains.
The major asset of U.S. robot companies in the new competitive situation is quintessentially American: superior technology.
While Japan has excelled at the mechanical engineering required for mass production of high-quality robot arms, gears and sensors, U.S. companies maintain that they are ahead in the increasingly important field of producing software programs that "teach" robots to perform tasks.
Automatix, a three-year-old company located in Billerica, Mass., amid one of the nation's fastest growing high-tech clusters a few miles from Rte. 128, is an example of a company gambling on technology to beat back the Japanese challenge.
Tucked away in the Massachusetts woods, Automatix exudes the hustle and bustle typical of small "start-up" companies founded by entrepreneurs eager to ride the expected boom in lasers, microwave communications, microelectronics, home computers, robotics and other Information Age industries.
In a workshop where gangly robot arms hang limply, half a dozen young men stare intently into a tangle of wires protruding from the open back of a computer. A guide explains that the men are "smart guys from MIT" who might be up all night trying to improve a program that guides the path of a robot arm along the line where two pieces of metal come together to be welded.
In a nearby room, a visitor is invited to try his skill at "teaching" a robot. Using a hand-held controller to make the robot arm move up, down, sideways and forward, the visitor moves the device into position while a computer records the trajectory to within eight-thousandths of an inch and memorizes it for future use.
Automatix started with excellent credentials and technical assets.
Its chairman, Philip Villers, had proved his entrepreneurial abilities as cofounder of Computervision, an aggressive computer graphics firm that had experience in Japan in the 1970s. Vice President Victor Scheinman helped design the "Stanford Arm" while working at the Stanford Artificial Intelligence Laboratory.
And Automatix had acquired a valuable piece of software from the Stanford Research Institute: algorithms used to give robots a primitive sense of sight, a step toward more versatile machines.
Automatix' major problem at the outset was lack of a robot for arc welding, the "niche" where Automatix wanted to make its mark. Its solution was to turn to a Japanese company, Hitachi.
Hitachi had just the robot the new U.S. company wanted, while Automatix had something Hitachi needed: a foot inside the U.S. market.
The deal struck by Automatix was to import Hitachi robots and outfit them with Automatix controls and software. As Vice President Michael J. Cronin said, it was a sort of devil's pact with few illusions on either side.
The Japanese strategy was clear to Cronin.
"Everybody in the United States would get to know the Hitachi robots and they would then come in and cut the price by a factor of two," he said. "They fully expected to take the whole market away from us by the end of 1982. We knew we had a year or two before Hitachi steamrollered in here. It was a chess game."
Right on schedule, Cronin said, Hitachi began an export drive midway through last year, placing glossy advertisements in magazines and sending Hitachi salesmen to Automatix customers. But by then, Cronin said, Automatix was ready to spring a "bear trap" of its own.
"We couldn't produce cheaper robots than they could, but we could advance the state of the art and redefine the market," he said. By late last year, Automatix was offering many new features in connection with the Hitachi robots it was selling.
Most important, the Automatix robot could be "taught" quickly "off line," meaning that small companies could program the robots for new tasks without shutting down production lines for hours. Building on the SRI algorithms, Automatix also offered a "vision system"--television cameras that are the working robot's "eyes" and allow it to make minor adjustments of its movements.
Cronin believes the strategy has worked. Chevrolet is using this Autovision II system to inspect truck front ends as they come off assembly lines, and Seiko in Japan uses it to inspect digital watches. Automatix has sold about 60 arc-welding robots at about $75,000 each to U.S. customers such as General Motors. He estimated that Hitachi has sold fewer than 10.
In essence, Cronin said, Automatix is taking a leaf out of the Japanese book by obtaining a "base technology"--the Hitachi robot--and "running like hell with it."
Soon enough, he added, Automatix intends to "attack Japan."
"I promised Hitachi I'd come back and try to sell 'em one of their own robots. We may not win over there, but we'll learn a lot. I'd rather get my bruises in Tokyo Bay than in Boston Harbor ...," he said.
"We're gambling that robotics is still in an evolutionary stage that will lead to robots developing eyes, ears and maybe even brains. We're looking way ahead and inviting companies to move with us down the technology road . . . .
"If we lose, it will be because we got fat and happy, because we worried about profit-to-equity ratios and mergers . . . . If we lose, it will be because we lost our stomach for battle."NEXT: Computer chip wars