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3 New Technologies American Companies Fumbled to Foreign Rivals

The Chinese mag-lev train in Shanghai: our tech, their fare box.
America is great at technological innovation, and it's also pretty good at giving that ahead-of-its-time intellectual property away for peanuts. The edge goes to Asia, where researchers often pick up the ideas that U.S. companies discarded and turn them into leading-edge products. Sometimes the former tech leaders get back into the game later, but with a fraction of the lead they had the first time around. Consider just three recent examples:

Lithium-ion batteries: The future for pocket change
Seth Fletcher's new book Bottled Lightning documents some unlikely history: Early research on lithium batteries, which now power everything from iPods to electric cars, was done by an American oil company, Exxon (XOM). Through a pioneering skunkworks called Exxon Enterprises, in-house scientists in the early-to-mid 1970s developed the lithium battery (not yet li-ion) to the point where it could power early watches and portable alarm clocks.

But around 1980, as the nation slowly recovered from a recent recession, Exxon honchos declared they weren't interested unless li-ion could be a billion-dollar business. "It could be a neat $50 million business, but it's tough to make it a billion," self-proclaimed "battery geek" Bob Hamlen told his bosses. That answer fell flat, and the technology was sold off to Japanese and European companies, as well as to Eveready. But after the Bhopal disaster, Eveready fumbled the ball, too, selling all its lithium work to Sony for-- get this-- $12 million. Fletcher told me:

Western companies hired a bunch of very smart people to do pioneering battery research, but when the payoff didn't seem immediate enough, they scrapped it. Asian companies picked it up and built an industry out of it. Now we're scrambling to catch up.
Fuel cells: Giving away under-the-hood hydrogen
Did Toyota (TM), Honda or Nissan develop the proton-exchange-membrane fuel cell, standard issue in the hydrogen cars headed for commercialization in 2015? Nope, it was American-as-can-be General Electric (GE) that did most of the pioneering work on PEM fuel cells in the early 1960s.

The initial mission had nothing to do with cars: GE developed its PEM cells for the Gemini space program. But because the cells it built cost hundreds of thousands of dollars for every kilowatt they generated, GE saw no practical consumer application, and definitely didn't see the cars coming. And it let many of its patents run out.

Around 2000, GE noticed all the progress being made, mostly in Asia and Europe, on PEM cells and announced a partnership to start selling stationary versions for home-based power. But this time it was licensing the technology its own scientists had developed. That venture didn't get off the ground, and today GE is involved in big solid-oxide fuel cell power plants that don't have much to do with that critical PEM tech it pioneered. Sigh.

Mag-lev trains: Our plans, their hardware
The pioneers of this tantalizing technology, which suspends heavy trains above the track to dramatically reduce friction losses, worked at the federal Brookhaven National Laboratory on Long Island in the 1960s. They looked ahead to the 300-mile trains the technology made possible.

But mag-lev is really expensive per-mile, and so a 1999 Department of Transportation pilot program to build a mag-lev train in Pittsburgh was stillborn. "This is a business the U.S. is going to miss out on," snarled the disappointed Pennsylvania-based Patriot News. These days we're best known as the country where tax-crazed governors give back high-speed rail funds.

But the Japanese didn't ignore mag-lev, and a prototype they built set a world speed record of 341 mph in 1997. The Germans and British got into mag-lev with test trains also, but haven't commercialized the technology. As The American Prospect put it, "The story of how Japan and Germany are racing to capitalize on yet another American invention has a depressingly familiar ring to it."

The Chinese, who follow U.S. scientific breakthroughs closely, went further than its competitors -- in 2003 a 250-mph mag-lev train opened in Shanghai, plying the world's first commercial route. It's not yet a huge financial success, but it's been running for eight years, daily giving the world the impression that mag-lev is a Chinese innovation.

There's still talk of a Disneyland to Las Vegas mag-lev, but don't expect it to go anywhere, particularly in this train-hating, budget-cutting historical epoch. It looks like we never learn. Even now we're cooking up world-shaking technology that other countries are going to carry home to commercialization.


Photo: Shanghai Mag-Lev Transportation Development Co.
Note: Check out the authorized Ukrainian translation if you're so inclined.
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