The role of governments in a market economy: Future strategies for the high-tech industry in America

Abstract

Principal topic In the 20th century, we witnessed the struggle between governments who championed capitalism on the one hand and other governments that promoted centralism and control of economy. In 1992, the struggle came to an end with the demise of the Soviet Union, the leader of policies for central control and promotion of equality. Obviously, that system did not work. However, its demise does not conclude that the capitalistic system has triumphed. A long-range strategist will argue that now we are in that transitional phase in history in which each nation will need to define its role in the post-Cold War new economic order. The issue, therefore, is what is the role of governments vis-à-vis the industrial growth of the nation. Obviously, how to manage the high-tech industry has been the subject of considerable debate in recent years at all levels in the society. Should the government join forces with US industry to forge an economic partnership? This economic partnership would then jointly determine a specific, concise industrial policy for high technology, a partnership which is currently being practiced in Japan, in other Pacific Rim countries as well as in EC nations. Major findings Two conclusions became apparent. One was what leading businessmen felt could be done to improve the productivity and competitiveness of American companies. The second was the views of a select group of academicians and students themselves who will be the future managers. Selected university students and scholars were chosen because they have played a valuable role in the evolution and operation of US corporations throughout the history of America. The ones selected for this research were those who are taking or teaching Strategic Management/Policy Formulation and International Business Courses. Because these courses deal with the long-term prospects of American businesses and the ramification of international business competition, and the student and professor who take or teach them have developed an expertise on corporate management, they are very appropriate for viewing the question of government involvement in a key industry. The initial finding was the identification of the variables that corporate leaders indicated could be effective strategies to promote American industries. Three survey was conducted of : 1. (1) CEOs from Fortune 500 companies; 2. (2)Nearly 600 CEOs in all major segments of the Electronic Industry; and 3. (3)CEOs from a cross-section of Fortune 1000 companies. These surveys indicated that key variables could be divided into two major categories of government activity; one was for government policy changes and the other was for government financial assistance, with eight and seven specific recommendations, respectively. Using these variables, separate surveys were conducted of 141 university professors and 75 students identified as having a current or future impact on the high-tech industry. Results indicated that the two most important tasks for the United States government in the long run is to: 1. (1) upgrade the American educational system; and 2. (2) promote an intelligent and flexible work force, specifically trained in scientific and technical skills. Some other specific conclusions reached were that the government needs to assist in: 1. (1) increasing government-sponsored commercial R&D expenditures; 2. (2) attacking the barriers to free and open trade; 3. (3) providing financial incentives for Domestic R&D; 4. (4) providing financial incentives to encourage long-term capital investment by US business; and 5. (5) transferring technology from military to commercial R&D. Implications A major key proposal that has emerged from the research was that it is deemed crucial that an economic partnership among business, education, labor and government be established. The study conclusively reveals that corporate leaders, educators, and future business leaders agree that the US government must take responsibility for a more active role in promoting industrial financial incentives, trade policies, etc. In fact, the research shows that an industrial policy would be beneficial to the interests of the high-technology industry in America. However, while there appears to be agreement that the government needs to develop an industrial policy, there is no agreement on what that policy should be.