Discusses technological innovation and its relationship to international economic activity. The computer industry demonstrates that technological supremacy is not equivalent to market leadership, and that both government and international markets are very important. Several generalizations are supported by the history of computers. Most fundamental is the importance of good ideas. Such ideas are subject to competitive forces at many stages--during design and development, during testing, and ultimately in the marketplace. International trade patterns based on technological innovation are intrinsically temporary and depend principally on a continuing stream of new products or capabilities. Using this framework, some observations are made on Japanese activity in semiconductors and federal concern over a slowing of innovative activities. The author emphasizes the need for increased federal support for basic research and for better incentives for firms to bear the risks inherent in technological innovation.