commercial technology to companies, protect domestic producers from imports helped Japanese companies in the 1970s and 1980s seize a commanding global market share in dynamic random-access memory chips, sending the U.S. semiconductor industry into crisis. U.S. companies dominated the nascent photovoltaic industry through the 1980s. Leadership in mass production of cells and modules, however, was assumed by Japan in the 1990s—and then Germany, Taiwan, and China—after each of these nations or regions enacted policies to build domestic markets for solar power or to promote manufacturing. The lithium-ion industry is one of several high-tech sectors that grew from U.S.-invented technology but was never industrialized domestically. Instead, Japanese companies were the first to mass-produce rechargeable lithium-ion batteries for electronic devices and notebook computers because of their largescale production of consumer electronics. South Korean and Chinese manufacturers followed their lead. Asian producers, therefore, have a huge advantage in the small but extremely promising market for rechargeable batteries for cars and trucks.

The four industries illustrate different aspects of the public policy debate. The U.S. semiconductor industry is a case study in how a strategic sector that had lost competitive advantage in production and a once-dominant market share was able to regain global leadership through cooperation on precompetitive R&D and public policy initiatives with responsive government actions. The public-private research consortium SEMATECH and assertive U.S. trade policies in response to Japanese dumping and protectionism enabled the industry rebound.

The photovoltaic industry is an example of a U.S. high-tech sector that has lost global share but has a solid opportunity to re-emerge as a leader with the right mix of federal and state policy support. In the case of solar power, a deciding factor will be whether the United States will become a big enough market to support a large-scale, globally competitive manufacturing industry. Federal and state incentives will be essential for the next few years, until the cost of solar energy can compete against electricity generated from fossil fuels without subsidies. Another question is whether U.S. companies that focus on products incorporating promising new technologies will be able to survive surging imports of low-cost photovoltaic cells and modules based on mature technologies long enough to attain economies of scale. What’s more, because technologies are still evolving rapidly, and there are not yet commonly accepted manufacturing standards, the global race for future leadership remains wide open. Public-private research partnerships will be essential to ensure that the U.S. can be a leader in the race for global market share.

The emerging U.S. advanced battery industry represents a bold experiment by the federal government in direct financial support of private companies to establish a domestic manufacturing industry. Prior to 2008, the



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