The high-technology sector in California has exhibited fast growth and serves as a standard for other states. This chapter presents an analysis of the demographic and economic structure of California. It discusses the state's approach to building a science and technology policy. The chapter examines state policy for higher education and the Microelectronics Innovation and Computer Opportunities (MICRO) program. Policy decisions are made by the MICRO policy board, which is comprised of three members each from industry, state government, and the University of California. In early spring, the MICRO executive committee sends out requests for proposals to University of California faculty members. The faculty member is responsible for arranging private-sector support and must explain all MICRO policies concerning the binding letter of support, delivery of product, termination procedures, and patent provisions. MICRO favors research projects that will yield results in the mid- to long-term future.