This assumes A) that the state is better at picking winners than the private sector and B) that competitiveness can be raised simply by throwing money at the problem. I am not saying that the state should never provide subsidies to young industries with potential (although the whole Solyndra debacle clearly illustrates the danger in that), but the key word is temporary.

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In which old industries do the markets not determine success or failure?
The banking, oil, natural gas, nuclear power, defense, and agricultural industries disagree with you. Nat gas and nuclear might be more "new" industry, but all the rest have been around for centuries and depend enormously on government largesse/policy/regulatory authority to survive.