The role of government should not decrease in a linear fashion but rather must increase at the upper middle-income stage. Economic growth at the low-income stage follows a country’s comparative advantages and does not require considerable direct government intervention. Upgrading to enter high value-added sectors may require more direct intervention by the government, such as public–private R&D consortiums, because firms at this stage face increased difficulty in terms of entry barriers, IPR disputes, and technology transfers. To overcome the challenge of strategically managing global–local interfaces, two modes of government involvement are possible. The slow but steady mode of catch-up corresponds to the case of the IT cluster in Penang, Malaysia, and the auto industry in Thailand, where the main focus of public intervention was on re-skilling and up-skilling local labor forces. The faster mode of catch-up more closely corresponds to the situation of Shenzhen and the Chinese auto sector where asymmetric intervention was mobilized to foster domestically owned firms. A final question addressed by this chapter is how to generate big businesses as an engine for growth beyond the middle-income stage, as well as how to promote the coevolution of big businesses and SMEs.