ABSTRACT
The markets in technologically based industries, such as computers, are those most likely to change rapidly as technological innovation alters products. In the case of the computer industry it is almost impossible to separate grants for research and development from grants for investment in general. This chapter shows that the British government's intervention in the computer market has not been flexible. The feature of British government intervention in the computer market has been the encouragement or discouragement of rationalisation. Nationalistic considerations, the fear of domination by American technology, can be seen in the British government's rationalisation of the computer industry and its original decision to support ICL. The policy, through which mainframe computer, software and peripherals were bought from ICL, clearly conflicted with an extension of the use of external software consultants and with government support for peripherals companies other than ICL. But public sector preferential purchasing of British minicomputers would have favoured ICL.
