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Increased HDTV development urged

By Sanjay Manandhar

"When, where and how do you get into a business that you're not in?," asked Lester C. Thurow, dean of the MIT's Sloan School of Management, of High Definition Television (HDTV).

Thurow, Robert Cohen, an economics consultant, and Lee McKnight, a postdoctoral fellow at the MIT Center for Technology, Policy and Industrial Development, spoke at yesterday's MIT Communications Forum on HDTV, which attracted over 100 people from MIT, industry and government.

HDTV is a high resolution TV with 1125 scan lines refreshed 50 or 60 times a second (conventional TVs in the United States have 525 lines refreshed 30 times a second). Commercial applications like billboards and indoor mini-theatres have already started in Japan and Europe. Medical, military and industrial applications are just as promising.

US efforts lag behind

All three speakers stressed the concerted efforts being made both in Europe and Japan to further HDTV. In contrast, lack of organization and resolve has left the United States behind in this strategically important industry, they argued.

This gap will have "dramatic implications" in other industries, Cohen said. He likened HDTV with the semiconductor and advanced computer industry which have "critical linking" with other industries.

Cohen pointed out that Nippon Telephone and Telegraph spends between $5.5 and $10 billion per year on HDTV alone (not including spinoffs) and has, to date, spent $20.5 billion on HDTV. In Europe, the figure is three or four times higher, Cohen added. But in the United States, only a total of $30 million has been spent on the new technology. "You can't play this game if you can't put big bucks into R&D," Cohen said.

Thurow indicated that the Bush Administration's view that "we've got no problem" is "passing up the strategic moment." In Washington, ideological debate is being waged "in a very abstract world with religious fervor. They are not discussing real issues."

Thurow noted that corporate rules are different in Japan than in the West, but he said this does not necessarily make them less fair. Japan is protectionist, he noted, but so are Europe and the United States. Japan is not being unfair, it is only playing the game more shrewdly, Thurow argued. America has always wanted competition, "now competition is here."

McKnight gave a case history of a concerted effort for HDTV in Europe through the EUREKA project. This organization, with membership from 19 European countries and Turkey, operates out of a "little office" and has absolutely no bureaucracy. The member countries pool their money, and EUREKA reviews propositions in 45 days, he said.

Similarly Cohen noted that in Japan, joint ventures between the government and the private sector pool money and offer loans for the first three years without any interest, and half-of-prime-rate interest for several years following, as well as deferred payments. Thurow stated that in the United States there is a marked dichotomy between the government and the private sector; in Japan this is an unclear boundary.

Catching up

When Professor David H. Staelin, a member of the audience, asked about the concrete steps to help "catch up" in the wake of "bureaucratic fumbling and company buy-outs," Thurow answered that there ought to be an industry-led industrial policy that the US government supports. HDTV is an expensive proposition: it might take 15 years and $15 billion; the private sector alone cannot bear the burden, he added.

McKnight noted that current standards of HDTV research are of European or Japanese origin. Accepting the dominance of either nation in this field is strategically unsound; promoting open systems like those developed at MIT will help "leapfrog" the standards clinch, he observed.

When a person in the audience indicated that the Americans have an edge in the software area, Thurow replied, "[Market mechanisms say] winners win, and the winner does not have to be an American." This lead is not "innate" and the Japanese could catch up in software in five years, he said.

Cohen said that non-market solutions, like the farmers' subsidy program and student loans, ought to be initiated.

Just as Sputnik I galvanized the space program, and, after the Second World War, the Department of Defense spinoffs helped invent TV and the computer, Thurow insisted that the United States would have to bear a social cost to stay in the HDTV race. Further, he noted that since the consumer electronics industry is second only to the automobile industry in size, the United States cannot afford to lose sight of the lead.