In two recent books and several articles, William Lazonlck has examined the proper industry policy for countries during periods of significant innovation. On the basis of the historical development of Britain, the USA and Japan, he concludes that successful innovation requires the establishment of large, vertically-integrated firms that are able to manoeuvre flexibly because their workers are willing and able to cooperate with change. Although Lazonick’s arguments are persuasive in many respects, they are based on assumptions of future developments that are not necessarily correct. In particular, large firms may not be the best vehicles for the development and implementation of innovation. Moreover, increasingly ‘intelligent’ machines may erode the need for a flexible workforce, much as happened with the advent of Fordism in the early decades of the twentieth century. As a result, nations should be wary of committing themselves to centralised and uniform policies when the nature of the problem is still uncertain.