Industrial policy will bring you up to a point, and apparently, no further.

Anyway, it was wildly successful in Japan, Germany, and the US. Up until the time it stopped working. It has been arguably less successful in China, but still good enough to create massive change.

I don't really disagree. You need, sorry, effective capitalism and a legal structure underneath the policy but that doesn't replace entrepreneurship and broader cultural norms.

The problem is that industrial policy seems to be incompatible with effective capitalism and universal rule of law to some extent.

It's not very clear (at least to me) how and why. But it never seems to be a positive thing after some point, instead, it seems to have very negative impacts on more developed countries.

> It's not very clear (at least to me) how and why

It's good at the initial stages and unproductive later on. The problem is that when you need to remove it is also when its recipients are most powerful.

There's probably reasonable disagreement on the extent of anti-trust enforcement etc. in developed economies. We may see a case study in the coming years.

Of course, China has also been a very different animal politically. There's also the whole demographic equation which factors into Japan, China, and (at least eventually) the US.

Japan does not have a big enough domestic market, which means their industrial policy requires a lot of foreign cooperation to be effective. Once others started seeing them as a threat their game was over.

As an IT industry analyst, Japan also seemed always determined to do things their own way--see Itanium. Which made things more difficult for selling to a wider marker. Could make some of the same comments for Europe for which I also attended a variety of industry events.

China tried to promote TDSCDMA for 3G, which also didn't work. At least they didn't make it their exclusive choice. In their more successful cases they didn't pick winners.