Advanced industrial nations face many difficult political and economic problems due to the accelerating pace and evolving character of technological change. In this volume, economists and political scientists discuss analytic and policy issues relating to the current state of technological capability in the United States, Japan, and Western Germany from a historical perspective and as a basis for future technological development. They also examine the problems and the issues involved in competition and cooperation among high technology firms and in evolving a more harmonious trade regime. The essays presented here explore from an international perspective the theoretical underpinnings of policy issues that are shaped by increasing internations competition and by the changing form and character of the international trade regime. Issues are discussed against the background of declining American technological dominance and intensifying competition as well as increasing international cooperation among high technology firms. Specific topics include the internationalization of basic research; the closing gap between basic and applied research; the effect of nation specific interfirm relations and various characteristics of labor markets on technological progress; and the effectiveness of various forms of government research and development assistance (or, more broadly, industrial policy). Three essays present overviews of the technological capability of and major policy issues faced by the United States, Japan, and Western Germany. Others raise major theoretical and policy issues from the perspectives of political science and economics, and address specific policy issues or groups of related issues.