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Abstract
During the late 1980s and early 1990s, the governments of the United States and Germany developed specific policies to aid the domestic semiconductor industry. Using a wide variety of interviews and written sources, I examine the politics involved in the formulation, execution, and final effectiveness of these policies. The results of this research contain important findings about the power of corporations, the nature of federalism, and the importance of the nation-state, as well as policy-oriented conclusions.
Several factors give corporations the advantage in controlling science and technology policies: they have leading-edge proprietary knowledge, have an international orientation, and can withdraw from government programs which do not serve their needs. Furthermore, corporations may be able to play governments off against each other. Governments can decrease the influence of major corporations by coordinating policymaking at various levels and opening policymaking to a wider range of groups, although major corporations dominated the policymaking process in both the United States and Germany despite the different state-society structures of these two countries.
From a policy standpoint, the experience of U.S. and German policies towards the semiconductor industry shows that such policies may be beneficial, if adopted with considerable caution. Like "industrial policy," the term "science and technology policy" covers a wide range of programs. The tendency of some such policies to aid large corporations must be balanced against the government's need to gain the cooperation of leading-edge and financially strong firms. The possibility that such programs might cause trade conflicts must be balanced against the need for the government to maintain economic growth and national military security.
