IEEE Letters Opposing Government Intervention

From the Letters to the Editor in the May 1993 Computer Magazine of the IEEE:

... In contrast, Boeing leads the world in jetliners despite (not because of) DoD funding of R&D for a multi-engine jet tanker. DoD funded R&D for other aerospace firms, but somehow, that never translated into market-leading commercial products. Indeed, many of those firms are no longer in (the aerospace) business.

So it must take something other than abundant federal R&D funding to enable a business to capture and sustain market leadership in high-tech products. And it is that "something" that federal buereaucrats cannot identify, let alone nurture. Would an activist industrial policy "help" the world-leading US computer industry? Hardly! Would federal subsidies and regulations increase market share for Intel or Microsoft? You must be kidding!


However, there is no such thing as the absence of industrial policy. So, if an activist policy can only do harm, then the US should explicitly adopt a passive industrial policy...

David A. Nelson, Information Engineering, Bellevue, Washington

... On the issue of industrial policy and the government's role, there are some examples of successful industry-government collaboration. The one cited in the magazine appears to be a success. However, one just has to look at government funding of supersonic transport to find real failures. Failure would probably be much more frequent than success. The problem is that money is generally cheap to government; it is just taxes. There is no one to call a halt to developments that are not promising.

Stig Nilsson, Cupertino, CA

As a native Taiwanese, I appreciate your high regard for our "miracle" economy. But I'd like to point out that even a "successful" industrial policy is not without its drawbacks.

Among the three most vibrant Asian economies -- Japan, Taiwan, and South Korea -- Taiwan has, in my opinion, the best industrial policy. Not because its policy was better planned, better coordinated, or better executed, but because Taiwan generally offers the most "hands off" policy. The strength of Taiwan's economy has always been its small and medium size businesses. Those small but highly nimble, totally market-oriented companies and factories are the true heroes of the "Taiwan Miracle."

... Japan's mighty Ministry of International Trade and Industry (MITI) ... was, after all, the agency that told Honda to stay out of the automobile business and Sony to stay out of electronics. Unfortunately for their American competitors, Honda and Sony did not listen. It is striking to note that the majority of Japan's most competitive companies are the ones who received little or no help from their government.

... For the past 40 years countries like Japan and Taiwan have been trying to catch up with us. The path of development was clear-cut for them. It is obviously easier to make decisions when you know exactly where you are heading. On the other hand, America has been and always will be at the technology frontier. It is much more difficult to forecast your direction when there is no one ahead of you; just ask IBM.


Julian T. Su, Advanced Technology Systems, Vienna, Virginia