Determining the structure of the United States marine instrumentation industry and its position in the world industry

Abstract

This report is a general, but comprehensive, description and analysis of industrial organization in the field of marine electronic instrumentation (MEl), a broadly defined "industry," which until now has received little systematic, scholarly attention. The report reviews the current literature on international trade and competitiveness, as well as trade and scientific journals relevant to the industry. The resul ts of a series of interviews with representatives of the industry and responsible government agencies are presented and industry and government data on R&D and output have been collected and analyzed together with other indicators of industrial performance. On the basis of these sources, the structure of the industry and its markets is characterized and the importance of marine electronic instrumenation in international high technology trade is established. Over 350 firms in the U.S. industry are identified, which annually earn total estimated gross revenues of approximately $5 billion. These firms fall into three largely distinct industry groups: (1) defense systems contractors; (2) commercial marine electronics; and (3) scientific instrumentation. The first group is by far the largest in sales volume and is oligopolistic in structure, consisting of a few large rivals for infrequent and complex defense systems contracts. The other groups are more purely competitive. Four major customer groups are distinguished: (1) military; (2) commercial and recreational shipping and boating; (3) offshore oil and gas; and (4) oceanographic/environmental. Most of the firms in the industry face international competititon. The importance of marine electronic instrumentation to technological advance and economic activity in the world's oceans is strongly apparent. Parameters affecting the international competitiveness of firms in this industry, including those relating to industry structure and behavior and governmental practices and institutions such as sponsored research, procurement, intellectual property rights, tax allowances, antitrust enforcement, small business encouragements, export controls, import restrictions, exchange rates, and technology transfer are summarized. A number of issues relating to international competititon, economic analysis, and government policy that are fruitful areas for further research also are identified.