Since the UFO encounters are global phenomena, the film takes place all over the globe, including Mexico's Sonoran Desert, Mongolia, and India's Gobi Desert. Most of the early action is set in Muncie, Indiana—home of Roy and Jillian. The dramatic encounter with the extraterrestrial spacecraft takes place at Devils Tower National Monument in Wyoming.
The opening scene informs us the film takes place in the present day. At first it seems like a silly inclusion. "Oh really," you think, "They didn't have cars and Navy bombers in colonial America? Thanks for getting me up to speed."
That's what we thought, at least, but then we started to wonder: Why does the movie make a point of telling us its story takes place in the present day when that's obvious?
Of course, the present day that was the present day of the film is not the present day that is the...present day. So before we get into why the setting is important, we're going to have check out 1970s America.
Squeezed between the counterculture '60s and the Reaganomics '80s, the '70s can be an overlooked but important decade. It was characterized by an economic recession thanks to competition with overseas workforces and slow growth back to normalcy. There were two gas crises thanks to America's reliance on foreign oil and its rocky relations with the Middle East. Americans went through the Watergate scandal and the resignation of President Nixon. The decade saw fear continue to dominate foreign policy as the Cold War continued and the country saw military defeat in Vietnam. People were terrified of Communism. Plus, the hairstyles were ridiculous.
Now that we write it all out, it sounds a lot like our own decade but with no Facebook and way more shag carpeting.
(Not So) Far Out
Speaking about the idea driving the film, Richard Dreyfuss said, "It was that we are not only not alone but we have relatively little to fear. People don't realize, or it's hard for them to remember, that Close Encounters was truly the first cultural, iconic moment that said, 'Calm down, we're okay. They can be our friends.'" (Source)
CE3K was about providing an uplifting film and message for an audience in 1977 living through an economically trying decade when Americans believed that another superpower could nuke us at any time. To drive that message home, the story needed to be set in the 70s.
We Are the World
A global phenomenon requires a global solution. Lacombe is a French scientist working with U.S. researchers and the United Nations. It took that kind of cooperation to coordinate the massive effort needed to manage the encounter at Devils Tower
Many of the problems of the '70s—the Cold War, less-than-honest governments, dependency on fossil fuels, the encroach of globalization on world economies, etc—weren't only American problems. They were issues that the world was facing together. Close Encounters seems to suggest that by working together and innovating, the countries of the world can start to address those common challenges.
It was a reassuring message for a troubling time, kind of like the famous 70s Coke peace-and-harmony commercial. Spielberg bought the world a Coke and taught it to sing in harmony, just like the earthlings and aliens at Devils Tower.