The structure of U.S. industrial policy like the structure of an advance welfare state has emphasized rewarding powerful lobbying groups and has not targeted emerging sectors of the economy. The current U.S. industrial policy is a distribution strategy and not a development strategy. Instead of this ad-hoc industrial policy, the United States should follow Japan's model of strategic targeting of emerging technology...
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The U.S. instead of pouring its money into subsidies and tax breaks for failing low-tech industries should provide loans, subsidies and R&D money for firms that are producing high technology products. Unfortunately, there are several impediments to copying Japan's model: first, tremendous political pressure from interest groups, forces politicians to give corporate welfare to failing established firms and not emerging firms...
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