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[overview and site map] |
CURRENT RISKS |
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By not exporting high technology goods, we will necessarily deprive US companies of revenue. Every supercomputer that China or Russia does not buy from the United States (whether for civilian or military purposes) is one less sale for IBM, SGI, Sun, or Intel. Even worse is the situation where the item can be procured from some foreign competitor. For example in the case of software encryption, US companies who provide E-commerce and online banking solutions to companies in Germany are unable to provide solutions that include strong encryption. They must turn to alternate suppliers of this technology who operate outside of the US. One such suppier is the German company, Brokat. On their homepage (http://www.brokat.com) a text box reads: BROKAT has rapidly developed into one of the world's leading supplier of secure solutions for Internet Banking, Internet Brokerage and Internet Payment. All solutions are based on the modular E-Services platform BROKAT Twister True, in a short time BROKAT has developed into a leading supplier of strong encryption products, but only because the leading US companies were unable to compete. The fear is that this sort of situation will repeat itself over and over in high technology fields. Dominant US firms will have markets stolen by upstart foreign firms, thus leading to less revenue / profits for US high technology firms and over time a general weakening of US technology companies. Without worldwide revenues or the ability to set global standards, it is feared that top notch US corporations will be eclipsed, causing economic weakening of the US and a lessening of the US technological lead. According to the Economic Strategy Institute (ESI) report, the United States will lose between $35 billion and $95 billion between the years of 1998 and 2002 due to the current encryption export restrictions. These losses include revenue loss from direct encryption based software sale, less confidence in E-commerce, networking equipment reflecting this lower utilization, and "spillover" effects. While these numbers may seem extreme, they do demonstrate the real measurable economic effects that export restrictions can create. ESI Report |
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[overview and site map] |