This Office of Technology Assessment report on the current state of research and development in the telecommunications industry in the United States examines four specific areas of research as case studies: computer architecture, artificial intelligence, fiber optics, and software engineering. It discusses the structure and orientation of some selected foreign programs as they challenge traditional U.S. market leadership in some areas of computers and communications. Finally, it examines a set of issues that were raised in the course of the study: manpower, institutional change, the new research organizations that grew out of Bell Laboratories, and the implications of trends in overall science and technology policy. Following an introduction and summary of the report, individual chapters address the following topics: (1) the environment for research and development in information technology in the United States; (2) selected case studies in information technology research and development; (3) effects of deregulation and divestiture on research; (4) education and human resources for research and development; (5) new roles for universities in information technology research and development; (6) foreign information technology research and development; (7) information technology research and development in the context of U.S. science and technology policy; and (8) technology and industry. (JB)