of pure market relationships, beginning at afair

of further innovation in the industry, initiated elsewhere and then later adapted byfirms in Stuttgart.For instance, in 1975 the Institute for Machine Tools at the Technical Universityof Berlin cooperated with one of the largest German lathe producers, Gildemeister,to develop an ‘…integrated operating system for numerically controlled lathes…'(Ziegler 1997: 132). In one of our firm interviews we discovered that these machineshad later been bought by a small machine tool firm in Stuttgart from Gildemeister,which itself had obtained government aid up to DM 1mn. for the development. Thefirm which had first bought the new machine arranged a press conference andinvited other Stuttgart machine tool makers, in order to present the latestdevelopment on numerically controlled lathes for which the firm in Stuttgart thendeveloped parts of the machine tool system (Interview BW-F-10). From this eventdeveloped many new firm contacts including a long term relationship withGildemeister. However, these had been pure market relationships, beginning at afair for machine tools. No horizontal ties had been established.German machine tool firms tried to acquire LCCGs through corporatist interestnetworks in which solutions for newly emerging collective goods problems werejointly articulated and solved. Such arrangements existed on the level of the federaland Länder governments with a corresponding associational support that is typicalfor Germany (Mayntz 1989). These arrangements were needed in particular whenthe federal government realized the necessity for further support of SMEs in themachine tool industry. The first programme carried out according to the researchdemand of smaller machine tool firms (i.e. up to 1,000 employees) was implementedin 1979 by the prominent Arbeitsgemeinschaft industrieller Forschungsvereinigungen(AiF). This is an intermediary organization responsible for such tasksat SME level (Hirsch-Kreinsen 1993: 195). The FDP-led Ministry of Economicscontested the ignorance of SMEs’ problems of the SPD-led Technology Ministry, anddid not force firms to follow a particular strategy for innovation. Technical optionswere to be chosen by firms themselves, respecting their standard of technology andspecialization within the industry. This conflict between the policies of two federalministries was less a result of different party control of the ministries than a generalproblem resulting from the fact that the Technology Ministry was concerned withstructural policies. Although intervention in this field was originally a task of theLand government, the federal government expanded its competences, but aimed atlarge enterprises only. It took time until the federal government realized that it could