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Originally Posted by Undertoad
Can the government innovate? In the late 70s and 80s it founded the Department of Energy, and was suddenly spending big bucks funding alternative fuels, in the search to replace gasoline. How'd that go? Well two generations later, we've replaced 10% of gas with a more expensive alternative in order to get political support from the farmers. Good goin'!
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It also about investing in new battery technology like the Japanese, Chinese and Koreans have done, with government support, in lithium-ion battery cells. US companies produce a miniscule share of this market.
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I do love how two of your examples are providing a competitive advantage/monopoly to certain private companies. Way to go government! Oh sure, the computer industry would have been a flop without these "de facto subsidies" to IBM! 
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It is about public/private initiatives like SEMATECH which provides government support along with private investment so the US doesnt lose the semi-conductor market and can compete with heavily subsidized foreign companies.
It is about the NCSA super computer, the largest in the world, from which the private sector can research new technological applications.
I could go on if you like.