In a laboratory at Genentech, the south San Francisco genetic engineering company, bearded biologists in white gowns hover over trays of purple-colored cultures of interferon that someday may fight human viruses from colds to herpes.
Across the country, in Short Hills, N.J., Martin Lepselter of Bell Laboratory's advanced microelectronics division proudly displays a snapshot of something that looks like a row of fences across a sandy desert. Actually, the picture shows parts of an electronic circuit narrower than a human hair, etched by an X-ray machine on a tiny silicon chip.
Reassuring as those glimpses of the nation's high-technology resources may be, they are not an automatic guarantee of America's economic future. As examples used in this series show, innovations produced in U.S. laboratories frequently have resulted in products made in Japan.
This phenomenon has evoked an angry reaction from U.S. politicians and the public.
Protectionist sentiment is running high on Capitol Hill, and Congress has taken up one of the most restrictive pieces of legislation since World War II: the "domestic content bill," which would require that foreign automobiles sold here include an arbitrarily established percentage of U.S. components.
The Reagan administration opposes the measure but has taken a tough approach in negotiations with Japan aimed at breaking down Japanese barriers to U.S. trade and investment.
"The time has come to act . . . . We're already 10 years too late," said William C. Norris, the outspoken chairman of Control Data Corp., who has suggested "kicking out" all Japanese working in U.S. research facilities as a warning shot across Tokyo's bow.
Such suggestions are indicative of a mood of rising anger at Japan. Whether the steps contemplated so far will change the Japanese-American technological equation is moot.
Trade restrictions certainly would invite retaliation not only from Japan but also perhaps from countries such as France, where U.S. companies fare well. Moreover, in today's interconnected global economy, technology has become increasingly internationalized. Ideas travel with jet speed across borders, not only from America to Japan but also in return. Science is universal.
What distinguishes economies today often is not who is first with the technology but who first uses it effectively.
This is more than a technical problem. It involves organization, availability of capital and such subtle factors as motivation, determination and national will. These are not easily quantified or readily fitted into theories of "scientific management" that have prevailed in the United States since the 1950s.
Japanese companies already are shifting their strategies in anticipation of more antagonistic U.S. policies, forming joint ventures with U.S. companies and investing in U.S. industry.
But for the United States to think in terms of retaliation alone, warned Robert B. Reich of Harvard University's Kennedy School of Government, would be to miss an unprecedented opportunity for national self-examination. This is a process that he and other experts say must take place before American industry can return to full health.
The problem, as Reich sees it, is that politicians and their policies are lagging far behind changes reshaping the world economy.
As this series has suggested, the fragmented U.S. business community has often sold technology to Japan too cheaply and with too little consideration of its long-range impact on U.S. competitiveness. Washington has contributed to the problem by aggressively promoting sale of U.S. technology abroad as part of weapons co-production programs.
By contrast, Japan controls export of technologies developed with government support and is tightening copyright laws on computer software as Japanese industry improves its skills in this area.
But in talks with more than 150 businessmen, government officials, scientists, researchers and economists, many other explanations for flagging U.S. competitiveness were given. Prominent among them:
* The U.S. research and development effort, the world's second largest after that of the Soviet Union, has suffered from its emphasis on defense. Half of all research and development dollars spent in America are from the federal government, and more than half of those are defense-related.
While much of the Defense Department's support for research on computers, microelectronics, lasers and aerospace has potential commercial spinoffs, the U.S. government lacks effective procedures for getting it quickly into commercial channels.
By contrast, Japan's New Technology Development Agency provides financial assistance to private firms to help them convert work done at government laboratories into products.
* Big corporations and government alike tend to overemphasize research on basic science and underemphasize research on less exotic but important technologies. One example cited was robotics.
U.S. research stresses vision systems but, according to one senior executive, American robots are in urgent need of improved ability to grip objects, a mundane but crucial part of a robot's work. Although the payoff presumably would be enormous, no company has found a way to reduce drastically the time required to wash and dry clothing by machine.
In Japan, government-supported research and development often goes to less exotic "medium-tech" projects with immediate commercial potential. In the United States, "nobody wants to do the routine stuff," said Rustom Roy, a fellow at the Brookings Institution. Japan Helps With Tradition of Cooperation
* The federal government is "spending more but getting less" for its research dollars, according to S.J. Buchsbaum, Bell Labs' executive vice president for research. The more than 700 government research laboratories are "diffused" and lack well-defined goals. Materials research, which "underlies everything," is especially splintered, he said.
* The United States does not pay enough attention to foreign technological developments. Only 20 percent of Japanese technical publications are translated into English, according to John A. Alic of Congress' Office of Technology Assessment.
* "The[cooperative]Japanese system stands in stark contrast to the adversary relationship that typically prevails between U.S. industry and government," according to Washington consultants Harald B. Malmgren and Jack Baranson.
Robert M. Price, president of Control Data, said the most important difference between the two countries is "development of a Japanese tradition of cooperation in developing and exploiting base technologies."
* U.S. antitrust laws are ambiguous and outdated. Japan helps establish research cartels while seeing to it that companies compete vigorously in marketing products resulting from the research. But U.S. industrialists said U.S. antitrust laws make forming such research consortiums here risky.
* Unlike Tokyo, Washington lacks "anti-cyclical" policies to keep emerging industries growing and developing during recessions. As a result, Japanese companies have been able to exploit periods of slack business activity to catch up with U.S. competitors squeezed for capital and customers during these periods.
* With some notable exceptions, such as IBM, Texas Instruments and American Telephone & Telegraph, managements of large U.S. corporations pose major stumbling blocks to the exploitation of new technologies.
Prof. Leslie Eric Cross, acting director of the materials research laboratory at Pennsylvania State University, noted that large U.S. corporations often leave development of new technologies to smaller companies "to which they can dictate terms." Large Japanese companies, however, are "technology driven," and take the lead in new areas.
* "Takeover fever" and "paper entrepreneurialism" distract U.S. management from production problems. RCA announced in 1979 that it lacked the $200 million needed to develop an American video recorder, the fastest selling appliance of the decade. But in the same year it spent $1.2 billion to acquire a finance company.
* Large U.S. corporations, which depend on the stock market to raise much of their capital, are much more concerned with impressing potential investors with short-term profits than are Japanese firms, which tend to borrow from banks with which they have close and longstanding associations.
The net result is that Japanese companies feel freer to spend capital on long-range goals, including development of new products.
* U.S. corporate managements are more removed from the production process than are their Japanese counterparts. Until recently, Ford Motor Co. had five more layers of management between the factory floor and chairman of the board than Toyota had.
* U.S. management has devoted fewer of its research and development efforts to quality control than has Japan, and Japanese quality has consistently been superior to that of America.
* The U.S. public education system has fallen far behind Japan, West Germany and the Soviet Union in math and science preparation. Half of the engineering graduate students in the United States are foreigners because Americans either are not applying or are not qualified.
The American Association for the Advancement of Science has said that "far too many students . . . lack motivation to study science and mathematics" because of "boring" teaching and a school climate "unfavorable to the pursuit of excellence."
Whether all or some of these reasons can explain Japan's successes in its technology race with the United States, they suggest the myriad factors that influence it.
Much has been made of the government-industry cooperation that foreigners nickname "Japan Inc.," and there is no doubt that the Japanese government has made a difference.
Current government-backed efforts involving tax breaks, research funding and pooling of research information and other subsidies are under way in genetic engineering, automated manufacturing, superspeed computers, optical communication and measurement, manganese nodule exploitation and subsea oil exploration.
An example of how the Japanese government nudges an emerging industry forward was its establishment of Nihon Aeroplane Manufacturing Co., a special corporation. Government and private firms invested in NAMCO, but the government bore the main financial risk. NAMCO developed the 64-seat YS11 civilian plane, not a great success, but the work helped companies acquire experience.
Subsequently, Japan set up the Civil Transport Development Corp., a consortium of three large aircraft companies established to coordinate Japan's work in building part of Boeing's new 767 jetliner. However, at that point direct government financial support was reduced because the companies were deemed strong enough to shoulder more of the financial risk.
Meanwhile, Japan's Ministry of International Trade and Industry (MITI) has sponsored another consortium to enable the nation to be a 50-50 partner with Britain's Rolls-Royce in construction of a new turbo engine for the next generation of international airliner, the 150-seater.
Several experts warn against placing too much importance on the government role in Japan's success. The U.S. government pumps far more money into the American scientific and industrial community for research and development than does Japan. The Tokyo government supplies only 30 percent of the total of such funds in Japan, while Washington supplies more than 50 percent in this country.
Japan's success also clearly owes much to the ingenuity, determination and flexibility of private industry.
William J. Abernathy and Richard S. Rosenbloom of the Harvard Business School, who studied the way Japan captured the U.S. video recorder market, cited "the element of persistence" in Japanese companies.
Betamax, they noted, was the fourth generation of video recorder developed by Sony and the first that succeeded with U.S. consumers. With no assurance of success, Matsushita established an entire department of 1,200 employes to develop a video recorder for the commercial marketplace.
Little things, rather than big, often make a crucial difference, according to Americans who have studied Japanese industry.
Toyota and other auto makers save warehouse space and cash by using a "just-in-time" delivery system for components. Parts arrive only when they are ready to be installed, sometimes with less than an hour to spare. Working with tiny inventories, the auto makers can adjust quickly to ups and downs of demand.
In at least one key technological area, auto design methods, the United States is superior to Japan, according to a detailed comparison published last August by Japan's Society of Science, Technology and Economics.
While Congress' Office of Technology Assessment does not discount the importance of Japan's lower wage rates in the auto makers' success, it said recently that another key element was the Japanese refusal "to quit the American market when their first offerings proved unappealing; they persisted and steadily improved their sales."
U.S. businessmen speak almost with awe of the speed with which Japanese companies master new technologies and make high-quality products.
"Every time they do something, they do it better than the last time ," said former Boeing vice president William Beeby, who worked on development of the Boeing 767, parts of which are manufactured in Japan. "The quality coming back from Japan is better. We saw that."
"The Japanese have been organized to tap the pool of science in this country," said Dan Burg of Carnegie-Mellon University. "They send teams here, and it's done in an organized fashion. They'll send post-doctoral students to spend time at our locations, but it's rare for U.S. students to go to a Japanese university."
Whether the United States should, or could, respond to the Japanese challenge by adopting some of Japan's methods is an open question among politicians, industrialists and economic experts.
The Office of Technology Assessment has described the fragmented U.S. industrial policy as a "potential strength."
"Our pluralistic system, which is responsible for so much of the ad hoc character of U.S. policies toward industry, creates an environment where flexible and innovative responses are sometimes possible," the OTA said.
Nevertheless, there is a growing sense in industry and academia that government needs to provide more consistent direction. Washington Hinders With Stop-and-Go Policies
An example of Washington's stop-and-go tendencies are Reagan administration proposals to curtail energy research just as it has made progress after the 1973-74 oil-price scare.
"Science isn't run on a six-month basis," Brookings' Roy said. "You have to wait 10 years for results."
While the Japanese ministry has announced a seven-year, $140 million research effort involving 10 private companies to develop "intelligent" robots capable of assembling dozens of different products, including an entire automobile, the U.S. government's main robotics research program, at Wright-Patterson Air Force Base in Dayton, is geared primarily to making defense contractors more efficient.
"U.S. industrial policy is a mess," a congressional aide said. "It doesn't add up. It's little bits and pieces. The political element is always dominant here. The kind of political system we have just isn't conducive to coherent policies."
There are, however, some signs of change. The Reagan administration has given other indications of its readiness to consider new approaches.
In a highly significant move, the Justice Department's Antitrust Division has allowed 10 competing U.S. computer companies to establish a joint research company, Microelectronics and Computer Technology Corp. No Japanese companies are members, and Japanese firms seeking access to MCC's technologies must deal with the consortium, not a single company.
Some have described this project as "America Inc."
In 1981, Congress passed the research and development tax credit, enabling companies to accelerate their depreciation on R&D equipment. It is credited with spurring a dramatic increase in the amount invested in new, "high-tech" ventures, from $58 million in 1978 to $1.7 billion in 1982. And California, under then-Gov. Edmund G. (Jerry) Brown Jr., established the first Commission on Industrial Innovation to recommend state policies that would help "high-tech" industries.
These steps have the advantage of not requiring a political confrontation with Japan. For, in the heat of the present, it is easy to forget that Japan is actually a great American success story.
It has reached its position of near technological parity through American aid, open market and technical prowess. Now, Japan is forcing the United States to take stock of its own economic performance and is becoming a teacher to its own postwar teacher.
But, as Undersecretary of Commerce Lionel H. Olmer has said, "Japan is not yet a technological giant."
The United States is still bigger and richer. Japan's labor productivity, the measure of the man-hours required to turn out products of a certain value and indirectly a measure of technological prowess, still lags behind that of the United States, although the difference is narrowing and Japan is an equal or ahead in some key industries such as automobiles.
The $15 billion spent by Japan annually on civilian research and development is only half the amount spent by the United States. The Japanese government's annual spending for research on supercomputers is less than that of IBM.
Japan's vaunted system of national planning is not infallible. It has made serious miscalculations, such as promoting growth of an aluminum industry now on the brink of bankruptcy.
Some even think that Japan's success in international trade may be exposing its companies to forces that will weaken its society's traditional discipline and unity of purpose that has characterized Japanese industry.
"The rapid evolution of Japan's economy toward the creation of a 'knowledge intensive' society carries with it enormous potential opportunities," Olmer said. " . . . The technological race does not need to be a zero sum game. Both sides can win, and the results will be of enormous benefit to all."