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More state backing is great when starting out on the path because it’s relatively straightforward; provide education, infrastructure and stability and your country will take care of itself. You can even goose the figures a bit by boosting a select few companies to be your champions.

The problem is that as you get richer and move up the value chain, you start requiring industry that is more creative, or entirely new creative industries. When creativity is required state backing is horrible at picking winners. And then those industrial champions are now sucking up a lot of the capital within a country.

Eventually the champions become slow and sluggish. But they’re too big to fail; as an extreme example, Samsung’s revenues are 17% of South Korean GDP, to say nothing of their suppliers.

Samsung is a world leader in display tech, memory tech and probably many other things. Slow and sluggish, you say? :)

Before that we had Sony, Sharp, and Toshiba at the top of the world. You can lose your competitive advantage very quickly, and then all of a sudden you'll either get launched into a lost decade or two (Japan) or beg the IMF for money and have to sell off the crown jewels (Korea, 1998).

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