Japan's High Technology Industries: Lessons and Limitations of Industrial Policy

By Larry Meissner; Hugh Patrick | Go to book overview

Chapter 7

Japanese High Technology Policy:
What Lessons for the United States?

George C. Eads

Richard R. Nelson

In 1971, we published an article commenting on what seemed at the time to be a possible major new trend in U.S. government support of advanced civilian technology (Eads and Nelson 1971). Two large and extremely expensive projects—the supersonic transport and the breeder power reactor—were being funded with massive amounts of federal aid. The uniqueness of these two projects was that the products they were intended to yield were to be solely commercial. The government itself would not be a customer. To a large extent, the model for this form of assistance was taken from Europe, where such "launching aid" was commonplace. Indeed, one important rationale for the U.S. government's support of both the supersonic transport and the breeder reactor was the existence of similar European programs. If we did not match these programs, the argument went, important commercial markets would be lost to this country.

In examining the history of U.S. support for advanced civilian technology and the European examples that were serving as models, we questioned the conclusion that the European experience with "launching aid" had produced a record deserving of emulation. In fact, by and large, the projects where it had been used were commercial failures. We also suggested that there were lessons to be drawn from the U.S. experience in the fields of aviation and agriculture, where successful programs had been mounted in support of civilian technology. It was noteworthy, we argued, that the governmental R&D support in these fields had focused on the development (and, in the agriculture case, the dissemination) of generic technologies—that is, technologies not associated with particular proprietary product designs. The commercialization decisions involving specific products were left to private industry. We urged that U.S. policy makers devote more attention to how these successful domestic models

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