The United States must regain a foothold in consumer electronics if it is to safeguard its economic and security interests. Participation in future markets for high definition television (HDTV) may be the right vehicle for doing this. But because the U.S. consumer electronics industry has been greatly reduced in size and technological capability since the 1960s, it will be necessary to pursue a short-term strategy of cooperation with foreign-owned firms in developing and manufacturing HDTV systems together with a long-term strategy of building indigenous strength in underlying technologies such as displays, consumer chips, and electronics manufacturing. A combination of economywide and industry-specific measures is called for. Economy-wide measures should focus on increasing the rate of investment; industry-specific measures should focus on developing generic technologies through R&D consortia. The likely governmental role in approving the participation of foreign firms in publicly funded R&D consortia gives it an opportunity to define "good behavior" on the part of both domestic and foreign firms operating in the U.S.
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