AbstractThe author sets out to critically reassess the conventional wisdom that, in the high‐tech semiconductor market at least, R&D and innovation demands inter‐firm collaboration and significant government intervention and funding. The hinge of his critique is that arguments for extensive collective work are dominated by technology and underestimate the need of individual firms to put the effect on their competitiveness first when new technology is on the agenda for development. Government sponsored collective agreements may in fact result in loss of competitiveness if they encourage technology inappropriate for market needs. In fact, R&D is not the only important contributor to innovation; licensing‐in an existing technology new to the firm may be an equally effective means of achieving competitiveness.The author concludes that the value of technical agreements to a firm will differ from industry to industry and from nation to nation, but, whatever the situation, in making the decision whether or not to participate it must be expected a firm will give priority to maintaining its competitiv