Despite increasingly open markets and a pervasive move toward international production methods, national governments continue to pursue remarkably distinctive policies for promoting innovation in industry. J. Nicholas Ziegler analyzes this apparent paradox by comparing government efforts to promote technological advance in Germany and France. His findings reveal a great deal about the roots and limits of public strategies for economic change.

Through close comparison of three technologies - digital telephone exchanges, computer-controlled machine tools, and semiconductors - Ziegler shows how each country displays characteristic strengths and weaknesses in promoting innovation. These distinctive capacities have more to do with the links between administrative and technical elites than with the structure of the state or the industry in question.

As business outcomes depend less on economies of scale and more on knowledge-based competition, the politics of contending interest groups steadily gives way to a competition for status and jurisdiction among more specialized professional groups. As a result, Ziegler argues, institutional approaches to public policy need to pay more attention to the professional identities of different occupational groups.

Using evidence from extensive fieldwork, Ziegler shows that France's system of state-created elites appears particularly well suited to mission-oriented strategies for breakthrough innovations. Germany's order of state-certified professions is, by contrast, better suited to incremental strategies for diffusing new technologies through entire sectors of the economy.

Furthermore, Ziegler finds, these patterns of technological change persist even as governments and businesses try to promote crossborder cooperation in research and development.