They found that changes in private-sector strategies and public policies contributed to the recovery. Many U.S. firms, for example, restructured their product lines instead of competing with the Japanese in established markets. Rather than pursue the market in memory chips, the semiconductor industry focused on the microprocessors and customized devices in which innovative design conferred an advantage. Cautious federal fiscal policies, deregulation, and trade liberalization helped. They also found that all the news is not so rosy.
National data suggest a decline in public and private funding of some key fields.
The federal government's support of electrical engineering research declined 36 percent between 1993 and 1997. Human resources for innovation are dwindling. The positive growth figure for FY 2000 may represent the end of the persistent declines. On the other hand they see America heading towards an end to its prosperous new economy. The combination of asset inflation, rising productivity, price competition, and labor mobility, that have contributed thus far to the new economy is approaching an end.