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Study: U.S. to hold onto tech lead

Despite the rise of Asia as an IT manufacturing powerhouse, the United States will continue to lead in global technology, according to a Rand report.

The United States will stay at the helm of the global technology scene for years to come despite the rise of Asia as a tech manufacturing powerhouse, according to a U.S. government-funded study.

This vote of confidence was expressed in a report on the competitiveness of countries released this week by Rand's National Defense Research Institute, a research and development center financed by U.S. government agencies.

Rand said the U.S. will cement its lead in the global information technology revolution because its authorities provide "a hospitable environment to IT business development."

"U.S. businesses are focused on innovation, and Americans readily accept change," the report added.

The United States is ahead because it is willing to let uncompetitive industries fail, said the report.

"Unlike many other nations that concentrate on protecting existing businesses and institutions, the United States presses ahead with change even when it means 'creative destruction' of companies that drive its economy today in order to build a stronger economy tomorrow," said Richard O. Hundley, the lead author of the study.

The report took a snapshot of IT developments around the world and concluded that most countries are lagging behind the United States, with the possible exception of China in times to come.

"Asia already dominates IT manufacturing, accounting for 70 to 80 percent of total world output of a wide range of important IT materials, components and products. China is rapidly emerging as a major IT player in Asia and the world," Rand said in a statement.

The research center added that China's ascension to IT prowess could come at the expense of Asian powerhouses such as Japan, if that country's economic stagnation persists.

The Rand report comes amidst growing fears of job losses in the U.S. technology sector as tech companies continue to outsource parts of their operations to lower-cost Asian countries such as China and India.

Opponents of offshore outsourcing also fear the trend will erode the country's technological leadership. The Rand report, however, skipped the topic of IT outsourcing.

Indian IT association Nasscom recently published a statement on its Web site, saying the cost savings and productivity gained from sending software-coding and business-process jobs to India increased employment in the United States.

Other findings from the Rand report include:

•  Europe's restrained approach to the information revolution and its lack of willingness to let uncompetitive industries fail means that it will continue to fall behind the United States in most technology areas, except wireless telephony.

•  Most Latin American nations are "also-rans" in the IT revolution, and this will continue into the future.

•  In the Middle East and North Africa, only a few nations--Bahrain, Qatar, Kuwait and the United Arab Emirates--will effectively use IT to their economic advantage. Israel held promise a few years back, but is being affected by the Arab-Israeli conflict.

•  Most countries in sub-Saharan Africa lack educated populations and adequate financial and physical infrastructures. These nations will continue to be laggards in IT for several decades.