Public and Private Sector Policy Implications

While many US-based industries were losing global market share during the 1970s and 1980s, many government official, business leaders, and economists urged the federal government to take a more active and direct role in helping US industries against foreign-based competitors. The advocates of a US industrial policy looked for role models to the Japanese and European governments, which had supportive relationships with their domestic-based industries. Prior to 1940 most of the fmancial support for scientific and engineering disciplines had come from state governments through their educational institutions or from private foundations, individuals and business. The development of business-government consortia in the US stems from the National Cooperative Research Act which was enacted in 1984. The Act was primarily a response to heavy lobbying by computer firms that claimed that the Japanese government’s $1.3 billion fifth generation computer project would devastate the US computer industry.