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Congress repeatedly has examined the idea of an industrial policy to develop a coordinated approach on issues of economic growth and industrial competitiveness. Technological advance is both one aspect of this and an altogether separate consideration. In looking at the development of an identified policy for industrial competitiveness, advocates argue that such an effort could ameliorate much of the uncertainty with which the private sector perceives future government actions. Some commentators have argued that consideration and delineation of national objectives could encourage industry to engage in more long-term planning with regard to R&D and to make decisions as to the best allocation of resources. Such a technology policy could generate greater consistency in government activities. Because technological development involves numerous risks, efforts to minimize uncertainty regarding federal programs and policies may help alleviate some of the disincentives perceived by industry.


The development of a technology policy, however, is a contentious issue. There is widespread resistance to what could be and has been called national planning, due variously to doubts as to its efficacy, to fear of adverse effects on our market system, to political beliefs about government intervention in our economic system, and to the current emphasis on short-term returns in both the political and economic arenas. Opponents of a national industrial policy may see this approach as government interference in the marketplace to "pick winners and losers." Instead, it is argued, measures that would occasion a better investment environment for industry to expand innovation-related efforts would be preferable to government decision-making in technological advancement.

What constitutes a "technology policy"?[]

Consideration of what constitutes government policy (both in terms of the industrial policy and technology policy) covers a broad range of ideas from laissez-faire to special government incentives to target specific high-technology, high-growth industries. Suggestions have been made for the creation of federal mechanisms to identify and support strategic industries and technologies. Various federal agencies and private sector groups have developed critical technology lists.

However, others maintain that such targeting is an unwanted, and unwarranted, interference in the private sector which will cause unnecessary dislocations in the marketplace or a misallocation of resources. From their perspective, the government does not have the knowledge or expertise to make business-related decisions. Instead, they argue, the appropriate role for government is to encourage innovative activities in all industries and to keep market-related decision-making within the business community that has ultimate responsibility for commercialization and where such decisions have traditionally been made.

The relationship between government and industry often is a major factor affecting innovation and the environment within which technological development takes place. This relationship can be adversarial, with the government acting to regulate or restrain the business community, rather than to facilitate its positive contributions to the nation. However, this may be changing as the benefits of industry/government cooperation become more apparent. There are an increasing number of areas where the traditional distinctions between public and private sector functions and responsibilities are becoming blurred.

Many assumptions have been questioned, particularly in light of the increased internationalization of the U.S. economy. The business sector is no longer viewed in an exclusively domestic context; the economy of the United States is often tied to the economies of other nations. The technological superiority long held by the United States in many areas has been challenged by other industrialized countries in which economic, social, and political policies and practices foster government-industry cooperation in technological development.


  • Wendy H. Schacht, Industrial Competitiveness and Technological Advancement: Debate Over Government Policy 3-4 (CRS Report RL33528) (Mar. 13, 2012) (full-text).