The World's Stage: A public/private partnership can restore innovation and global competitiveness.

• Author: Augustine, Norman R.
• Position: TWO VIEWS: GOVERNMENT-CORPORATE PARTNERSHIPS: YEA OR NAY?

My three careers have been in business, government and academia. I have found each to be populated with many extremely talented and dedicated individuals. But these key elements of America's economy seem to have evolved a relationship that resides somewhere between disconnected and adversarial. As a result, the nation finds itself with a competitive machine wherein the whole is less than the sum of its parts. This matters.

How should government, industry and academia interact so as to maximize America's global competitive posture? One thing is certain: A centrally managed economy is not the answer. Ask the former Soviet Union about that.

America's free enterprise system, together with its democracy and freedom, over the years have placed the nation in an economic leadership position of such might that people from around the world clamber to enter its borders and share in the American Dream. But our free market system has an Achilles heel. In a global economy, if other governments choose not to play by the classical rules of free enterprise, for example by subsidizing their participants in the marketplace, imposing trade barriers and stealing intellectual property, independent firms seeking to compete against them will almost surely be doomed to failure. Independent companies simply cannot compete with governments: Governments make the rules, interpret the rules and enforce the rules--not to mention print the money.

So how, then, does America maintain a competitive economy and all that it supports when facing a rival such as the People's Republic of China, which openly embraces anti-competitive practices? If one suggests that the U.S. government should become more engaged in the activities of the business sector, the common response is, "Oh, you want the government to pick winners and losers?" One might note that the government has already done that for decades with regard to not insignificant segments of the economy when it allocates its "own" funds. For example, it does so by selecting specific universities for grants and specific companies for contracts. The distinction is that our government generally does not tell individual firms or industries how to spend their resources.

Fortunately, there is a middle ground concerning government's involvement with business (beyond the obvious functions such as assuring consumer safety and preventing monopolies) that is between total detachment and centralized industrial policy. It is for government...