At the beginning of the 1980s, the United States was the world's largest producer of machine tools and had developed a new technology — computer numerical control — that would soon revolutionize the industry. By the end of the decade, U.S. production amounted to less than half that of Japanese and German firms, and the federal government felt compelled to protect the domestic market. Despite a recent resurgence, the industry is far from recapturing lost market share. Concerned by this decline, Congress asked RAND's Critical Technologies Institute to conduct a comprehensive study of the machine-tool industry in the United States, Japan, Germany, and Italy. The study analyzes the causes of the U.S. decline and offers policy options for aiding its recovery.
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