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governments reliance on individual initiative and a lack of government support for new industries has allowed Japan to catch up to the U.S. in the area of high technology. In the coming years the U.S. could not just lose its advantage but fall behind if it fails to redirect government subsidies from failing firms to emerging sectors of the economy copying Japan's industrial development model...

In Japan the government both during the Meiji period and the post World War II period followed a policy of active, sector selective industrial targeting. Japan used basically the same model during both historical periods. The Japanese government would focus its tax incentive programs, subsidies, and R&D on what it saw as emerging industries...

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