RUTHFULLY YOURS

Americans invented the core high-technologies that enable the modern digital age, but they didn’t get a large share of the jobs created by these new industries. High-tech is dominated by Asia, where governments target its growth as vital to their economic development. The relationship between industry and the state is tight. In countries like China, Taiwan and South Korea, government-corporate partnerships provide patient capital, skilled workers and protection for intellectual property.

Their progress has been remarkable. Between 1999 and 2014, the World Bank reports, global exports of high-technology products (computers, aerospace, electrical machinery, pharmaceuticals and other “R&D intensive” products) rose by about 220%. China’s share of that soared to 26% from 3%. America’s fell to only 7% from 18%.

American innovations from the 1960s, the peak of the government’s commitment to defense and aerospace R&D, created the basis for a trillion-dollar electronics industry. Researchers with corporate and federal support invented the key components: microchips, lasers, LEDs, flat-panel displays, memory chips, imaging devices and solar-energy panels, among others. Today, these manufacturing industries employ millions of Asians but relatively few Americans.

Asia got the jobs because Asian governments set out to build innovative industries. They helped license the technology from the U.S., educated engineers and skilled workers, subsidized joint ventures with American firms that provided crucial experience, and underwrote new industries with grants and low-interest loans.

Solar energy is the latest example. As R&D made solar cells commercially viable, American venture capitalists poured money into startups. But Asian companies, with government support, moved into solar beginning around 2000. They bought German technology and by 2007 had cut market prices so low that American manufacturers couldn’t compete. When those kind of jobs move overseas, it’s largely a one-way trip. Since Asia produces most of the components, bringing solar-panel factories back to the U.S. would be difficult.

But the model of having governments choose industries comes with a dark side: the incestuous relationship between business cartels and the state. In the long run it can stifle innovation and breed waste.

The U.S. needs government support in economic development, but with policies that leave private enterprise in the driver’s seat. Instead of duping the Asian model, here’s what Washington should contemplate:

First, encourage innovation, which is the precondition for economic growth. The U.S. can’t bring back most of the jobs it has lost, but Americans can create new and better ones. It goes without saying that Washington should aggressively defend intellectual property rights and enforce anti-dumping laws. But that isn’t enough.

Although private investors should take all the risks in commercializing new technology, federal R&D support is key. The civilian spinoffs of defense research gave us many of the new products of the past 30 years. Yet federal R&D spending as a share of the economy has fallen almost in half, to 0.73% of GDP in 2013 from 1.2% in 1987, at the peak of Reagan’s Strategic Defense Initiative. The next administration should raise R&D spending back to 1.2% of GDP by 2018.

Second, ensure that the resulting innovation turns into American jobs. High-tech is capital intensive, and modern manufacturing is expensive. But CEOs have learned that the market rewards companies that are light on capital investment and big on share buybacks. To change this behavior, lawmakers could give companies tax incentives to invest in capital assets in the U.S.

Washington should also enforce strict U.S. content rules for sensitive defense technology. Many of the Pentagon’s military systems depend on imported components. That’s a concern on security grounds alone. Procurement rules should be changed to require that critical components be manufactured in the U.S.

Making the U.S. an attractive place to do business would help, too. High regulatory costs and uncertainty scare off capital investment. Combined with tax incentives, regulatory relief will produce a gusher of new investments. For instance, why would anyone build a manufacturing plant in the U.S. if changes to EPA rules can make it obsolete practically overnight?

Finally, and perhaps most critically, is workforce development. To compete with Asia, Americans must be adept at using sophisticated tools, including software, and flexible enough to learn new technologies rapidly. Manufacturing thrives in Germany, Switzerland and Sweden, despite high wages. German auto workers earn roughly twice as much as their American peers. The difference is the quality and productivity of the workforce. Germany and its neighbors mesh industry-based apprenticeship programs with public technical universities to train workers up to the highest standards in the world.

When Russia took a lead in the space race with the 1957 launch of Sputnik, the U.S. responded with aggressive support for science and engineering education. That helped make America the world’s leader in innovation.

This should be a Sputnik moment. High schools could offer intensive training in science, technology and math. The U.S. should develop—with local, state and federal support—technical institutes on the German model to channel students into corporate internships and, ultimately, well-paid industrial jobs. Americans are at a turning point. They can either resign themselves to decline or revive their country’s industrial pre-eminence.

Mr. Kressel, a former director of RCA Labs, is the author of “Competing for the Future: How Digital Innovations Are Changing the World” (Cambridge University Press, 2007). Mr. Goldman, who formerly led research groups at Wall Street firms, is a columnist at Asia Times