of private corporate decisions, and allow markets and firms to operate entirely independently. The result is that where strategic government support for industry is required to foster technological development, the U.S. government may come to pick up the signals to this effect only late in the day:

"American government officials and businessmen negotiating economic matters feel at a great disadvantage because Japanese officials are much better informed, not only about Japanese companies, but often about American companies."27

Economists and policy advisors tend to overemphasize the efficacy of their policy recommendations, since it is in this way that they persuade their audience and ultimately the policymakers. It seems unlikely that through policy changes alone the United States could raise the rate of technological advance in her industry to Japanese levels. The structure of institutions and local technological competence is different in the United States, and it is simply much more costly for her to undertake the deep shift required to bring her closer to a structure that better fits the new technology paradigm. However, this is not a recipe for doing nothing, as under these conditions the U.S. position may deteriorate further. With the appropriate technology policy; support for science, education, and training; encouragement of new organizational structures and industrial relations systems; and new forms of association between finance and industry, the costs of the transition to the new technology paradigm will be reduced, the rate of technological change will rise, and longer-term benefits will follow. This is one of the lessons of the Japanese experience.


E.F. Vogel, Japan as Number One (Tokyo: Turtle, 1980) cited in Freeman, op. cit., footnote 6.

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