Flying high: A case study of Japanese industrial policy

Japan's policies with respect to industry promotion consist of much more than picking winners and subsidizing them to ensure their success. The highly flexible and adaptive character of Japan's policies is illustrated by the country's efforts to enter the world aerospace industry, an industry in which Japan is handicapped by the absence of a substantial domestic market. To meet the challenge, Japan has concentrated its efforts on altering the very structure of the world market in which it hopes to compete. Japan has participated systematically in international consortia, hoping to use such consortia as a conduit for acquiring access for foreign technology and foreign markets.