Earlier quoted context omitted.
The US, although much less so recently. China, with heavy state subsidies, has also proven to be pretty effective. Interestingly, it hasn't had to embrace immigration because it has over a billion people.
Do Chinas state subsidies encourage innovation? This story is a great example of the system taking a brilliant person, and stomping their opportunity down because they were from the wrong class. But replace class with whatever you like.
The main thing they do is stack the market to be very favourable for a given industry and then have extreme competition between the companies.