Democracy is nothing to do with it. Ask the Chinese how 'propping up certain industries' has worked out for them.
Wuhan in 1970.
Wuhan today. The lower photo is their new library. When was the last time you got a new library like that?
Looks like it's worked out pretty well in Wuhan. Multiply that same trajectory by 50 other Tier 1 and 2 Chinese cities.
Or we could take singapore, south korea, or taiwan. Here's Taipei in 1970.
Taipei today. Looks pretty good to me. And they sure as hell aren't commies in Taipei.
Or we could take Ireland. They are also not communists. Here's the Irish government's semiconductor industrial strategy:-
With Ireland continuing to strengthen its position as a global semiconductor hub through the Government’s “Silicon Island” strategy.
www.globalsemiconductorprojects.com
Ireland is near the top of the global GDP per capita rankings now.
Ireland is at number 3 in the world ranking. The US is at number 8; they have you guys beat. It looks like having a national investment strategy has worked out pretty well for Ireland. If you had suggested, in 1970, that Ireland would become the third most prosperous country in the world, by GDP per capita, and have a world leading high-tech semiconductor industry, you would have been laughed out of the room. It would have seemed even more crazy to suggest the same would happen in Wuhan.
The poor old UK is way down the list. The British government decided they didn't need to "pick winners" either, they would leave it all up to "market forces", and didn't have any semiconductor investment strategy whatsoever, for perhaps the last 45 years. As a result the UK basically has no semiconductor industry at all, today. I think there are one or two old, small fabs left over from the 80s and 90s, limping along on life support; but there hasn't been any major new investment in semis here for decades, which of course has left the country very much poorer.
See? Democracy - or not - is nothing to do with it, or at most, only obliquely related. Strategy, and investment, is the key.