Mergers Are Key To Ensuring America’s Technological Edge

y all indications merger and acquisition activity is on the rise. In the first five months of 2019 companies announced over $1 trillion in mergers and acquisitions, a 14% increase from the same period in 2018. This is generally good for the economy, the consumer, and the shareholders as all Americans are set to benefit from the economies of scale, the increased innovation, lower prices and stronger stock market returns that generally accompanies this kind of activity.

While it is difficult to pinpoint one specific reason for the increase in corporate consolidations, recent developments including the president’s tax reform bill, large corporate cash reserves and strong equity and debt markets may all be contributing to this flurry of activity. The need to maintain our technological edge in the face of growing global competition is another.

The United States is quickly losing its research and development edge against the rest of the world, a key metric of economic success. In 1960 the United States accounted for over two-thirds of all R&D activity. Since then the total U.S. share of R&D has fallen to 28% and is risk at of greater decline as foreign competitors put a strong emphasis on developing new technologies.

Over the past two decades China, for example, has emerged as a global science and…