With the growth of high‐technology industries and knowledge intensive services, the pursuit of industrial competitiveness has progressed from a broad concern with the processes of industrialisation to a more focused analysis of the factors explaining cross‐national variation in the level of participation in knowledge industries. From an examination of cross‐national data, the paper develops the proposition that particular elements of the domestic science, technology and industry infrastructure—such as the stock of knowledge and competence in the economy, the capacity for learning and generation of new ideas and the capacity to commercialise new ideas—vary cross‐nationally and are related to the level of participation of a nation in knowledge intensive activities. Existing understandings of the role of the state in promoting industrial competitiveness might be expanded to incorporate an analysis of the contribution of the state through the building of competencies in science, technology and industry.