Innovation.

The microelectronics industries demonstrate several of the defining characteristics of the American economy during the 1980s. One segment of the economy would prosper while other businesses suffered. Innovation and entrepreneurship marked the origins of industries and fortunes, some of which then proved uncompetitive in the global economy. Americans were behind the scientific advances that created the industry: the transistor, the semiconductor chip, and computers large and small. Microelectronic industries such as IBM, Digital Equipment, Intel, Apple, and Xerox led American business.

Competition.

Yet America's share of the microelectronics market fell during the decade. The U.S. share of semiconductor production fell from 60 percent to 40 percent during the 1980s. By the end of the 1980s three Japanese companies, NEC, Toshiba, and Hitachi, were the leading semiconductor companies in the world. Underlying this trend was the American pattern of early innovative technological...