US FUTURE IN ELECTRONICS SEEN SHAKY

US FUTURE IN ELECTRONICS SEEN SHAKY

Global competition for customers and capital as well as mergers and joint ventures will dominate the electronics industry in the coming decade, according to a survey of executives from American electronics firms.

Some 775 electronics chief executives were mostly optimistic about the future of electronics, despite their expectation of escalating turmoil in the industry.''We found that chief executive officers are pumped up and feeling aggressive about dealing with competition," said Steven Burrill of Ernst & Young, the consultancy that co-sponsored the survey.

The executives expect America's technology edge to decline significantly in the next five years, as other countries match the U.S. industry in innovation and new products. New customers will be attracted only by increasing productivity, product quality and consumer service.

The main concern among electronics executives is a growing shortage of American engineers graduating from the nation's universities.

The survey, co-sponsored by Ernst & Young and Electronic Business magazine, was a comprehensive look at views of executives in electronics from aerospace to hardware and software computer manufacturers.

''The most surprising finding was that the executives see America's technology edge declining," said Mr. Burrill. Another surprise, he said, is the extent that globalization of the field has occurred.

More than 75 percent of the firms surveyed have foreign sales, and one in four said sales to Western Europe are important to overall business strategy, according to the survey.

Western Europe is seen as an especially important growth market by the executives, with 42 percent expecting it to be a big part of their sales within five years.

The perception of Japan as a tough market to enter was bolstered by the poll, which found that more than 60 percent of U.S. firms had tried to establish sales there, but nearly one of three failed. By comparison, failure rates for U.S. companies entering Canada and Western Europe was one in 10.

The corporate leaders also expect a significant shakeout in their industry. Approximately 16 percent of the chief executives expect their firms will be merged or acquired within two years and 35 percent expect that to happen within a decade.

Electronics is at the cutting edge of American technology and the leaders in the field expect to continue funding research and development at about the same level in the future as they are now. But they also expect this country's competitive position to decline.