The American Challenge

The European fear of gaps between themselves and the superpowers derived from changed political, military, and economic realities after World War II. Germany was devastated, occupied, and dismembered. Italy was torn between its Fascist past, the resistance movement led by the Communists, and the Catholic Church. France had been defeated by Nazi Germany, then riven by hostilities between the Vichy regime, Charles de Gaulle’s Free French, and the Communist Party. Britain was victorious, but the war depleted its treasury and exhausted its people. By contrast, the Soviet Union’s armies advanced into and remained in Central Europe. The United States emerged from the war with sole possession of the atomic bomb, a booming economy, and growing resources. The Soviet Union and the United States became the superpowers, relegating Western Europe to second-tier status.

Many American diplomats believed a strong, united Europe was the best means to defend against Soviet military expansion or internal chaos that might lead to Communist takeover. To strengthen the German economy without antagonizing France, American diplomats in 1947 offered the Mar­shall Plan to European countries on the condition that they work together to allocate funds. This led to the creation of the Organization for European Economic Cooperation, which later became the Organization for Economic Cooperation and Development (OECD). The Communist coup in Czechoslo­vakia and the Berlin blockade inaugurated negotiations that led to military cooperation with the North Atlantic Treaty Organization in 1949.1

European leaders also sought to cooperate with each other, apart from the United States. France decided to control German ambitions by forming a strong alliance with its historic enemy. The Low Countries, which needed a strong European economy with which to trade, and the Italians, who needed an outlet for unemployed workers and access to technology and natural re­sources, combined with France and West Germany to form the European Coal and Steel Community in 1950. The same countries agreed to the Common Market in 1957, which lowered mutual tariff barriers and created the large market they believed critical for economic growth.

Nuclear technology development also benefited from European integra­tion. Physicists Pierre Auger of France and Edoardo Amaldi of Italy led efforts to create a European laboratory for high-energy physics research to com­pete with U. S. physics researchers. European research leaders agreed to create CERN in February 1952 to develop a large particle accelerator and support­ing facilities. The need to distribute and control uranium for nuclear reactors led to the creation of EURATOM in the 1957 Treaty of Rome that created the Common Market. Despite these European efforts to enlarge their market and pool resources for nuclear technology, American developments in electronics and computers, and the American and Soviet development of rocketry and missiles, appeared to keep the superpowers several steps ahead.2

In 1964, French journalist Jean-Jacques Servan-Schreiber wrote a book that served as a manifesto to European governments and industry: The American Challenge. He described the penetration of American industry into Europe and argued that the cause was not ‘‘a question of money.’’ Rather, the United States had developed better and more widespread education, leading to more flexible policies and management. As he put it, ‘‘Europe’s lag seems to concern methods of organization above all. The Americans know how to work in our countries better than we do ourselves. This is not a matter of ‘brain power’ in the traditional sense of the term, but of organization, education, and train­ing.’’3 Significantly, he illustrated American dominance by using the examples of the computer and aerospace industries.

Servan-Schreiber had influential readers on both sides of the Atlantic. U. S. Secretary of Defense Robert McNamara thought ‘‘the technological gap was misnamed,’’ believing it to be a managerial gap. Europeans needed to develop their educational systems. McNamara noted, ‘‘Modern managerial education — the level of competence, say, of the Harvard Business School—is practically unknown in industrialized Europe.’’4 West Germany’s defense minister, Franz Josef Strauss, also agreed with the French journalist, believing the technology gap was due to advances in space technology, computers, and aircraft con­struction, three areas he thought decisive for the future. Because large corpo­rations performed the majority of research and because of the large domestic market, American companies had the advantage of scale over their European competitors. Strauss’s solution was to create an integrated European com­munity with common laws and regulations and to pool European resources. European countries needed to launch large, multinational high-technology projects to provide opportunities for European corporations to work on big research and development endeavors.5

Both Servan-Schreiber and McNamara believed that their societies needed more and better management. According to McNamara, ‘‘Some critics today worry that our democratic, free societies are becoming overmanaged. I would argue that the opposite is true. As paradoxical as it may sound, the real threat to democracy comes not from overmanagement, but from undermanage­ment. To undermanage reality is not to keep it free. It is simply to let some force other than reason shape reality.’’6

Servan-Schreiber’s views were similar: ‘‘Only a deliberate policy of reinforc­ing our strong points — what demagogues condemn under the vague term of ‘monopolies’ — will allow us to escape relative underdevelopment.’’ But he did make one allowance: ‘‘This strategy will rightly seem debatable to those who mistrust the influence and political power of big business. This fear is justi­fied. But the remedy lies in the power of government, not in the weakening of industry.’’7 Given the economic and military importance of technology devel­opment, Servan-Schreiber and others accepted the risks of government and business power.

Academic analysts of the technology gap used more sophisticated means to reach similar conclusions. Analyses by the OECD generally recommended increases in the number and scale of integrated European high-technology projects. The technology gap ‘‘is not so much the result of differences in tech­nological prowess, except in some special research-intensive sectors,’’ said economist Antonie Knoppers, ‘‘as of differences in management and market­ing approaches and—possibly above all-in attitudes.’’8 He believed the dis­parities were in ‘‘middle or lower levels’’ of management. Economist Daniel Spencer believed that a ‘‘more fruitful way of assessing the technological gap’’ was ‘‘to define it as a management gap’’ because American managers were ‘‘alert to opportunities created by the research of a military or nuclear or space type.’’9

Officials debated about the existence of the gap, its causes, and solutions. British leaders worried about an American “technological empire’’ and a ‘‘brain drain’’ of technical experts to the United States. The French feared the loss of economic and cultural independence. German leaders worried that the gap exposed flaws in German education and management. American poli­ticians minimized the significance or existence of a technological gap, shift­ing the argument to differences in culture and management. In 1967, Presi­dent Lyndon B. Johnson sent Science Advisor Donald Hornig to Europe with a team of experts to study the problem and asked the National Aeronautics and Space Administration (NASA) to explore new cooperative ventures with the Europeans to ease their fears. All agreed that European countries needed educational reforms to bridge the various gaps. This would take a while to ac­complish, so in the meantime, the most obvious idea was to mimic American management methods on large-scale technology programs.10

In the early 1960s, space launchers beckoned as a particularly fruitful field for integrated efforts. Developing space launchers would eliminate European dependence on the United States to launch spacecraft and also aid national efforts to develop ballistic missiles. A multinational launcher program would teach European companies to manage large programs and spur Europe’s edu­cational system to become more responsive to advanced technology and man­agement. Many advantages would accrue, if Europeans could overcome their differences.