Follower at the frontier: international competition and Japanese industrial policy

Abstract

A dominant orthodoxy in political-economic analyses of international competition is to highlight how national industrial performance and the competitive balance between nations are determined by domestic features of national political economies. In contrast, this article reverses these causal arrows by highlighting how the international competitive environment itself can shape and reshape domestic and state structures. Japan's high-profile, large-scale national research and development programs in computer and semiconductor technologies serve as instructive testing grounds for this argument. Illustrating how shifts in international competitiveness can induce changes in domestic structures, Japan's R and D projects display a secular decline in the government's interventionist capabilities as the country's computer and semiconductor industry dramatically moves from industry follower to technological pioneer.