Innovation Strategies and Technology Policy

In the field of technology and innovation, the interplay between enterprises and government institutions constitutes a central issue. This research project dealt with its subject from both perspectives, while the general institutional conditions were taken into special consideration.

In the last fifty years Japan has passed through a rapid technological development, and changed from a backward country dependent on foreign technology to one of the leading technological nations. The commercial enterprises played the  central role in this process, while the state limited itself to setting general conditions favourable to the fast assimilation of technology.

In the 1990s, a consensus was formed in Japan that a fundamental technological reorientation was necessary. This consensus was founded on the judgement that the catch-up process with the West had been completed, even in technological matters, and that Japan should now increase its own efforts in technological development. The restructuring, however, took place only step by step because the institutional environment was still very much oriented towards the catching up and  assimilation of technical knowledge. The project yielded the following results:

1) Japan's industrial enterprises are technologically highly efficient, even in comparison to those in other leading industrialized countries. In the 1980s much capital was invested into long-term technology development whereas in the 1990s, under aggravated competitive conditions, resources were concentrated on development projects effective in the short and medium term.

2) Research and technology policy had been characterized for decades by relatively low investments in the research infrastructure, and a high priority given to the assimilation of technical knowledge. In the 1990s, however, government investments in research and technology increased considerably, and the promotion of innovation gained in importance.

3) Japan's education and university system supported the technological catch-up process by providing a high general standard of education. Nevertheless, the training of highly qualified specialists was neglected. A partial reorientation, through an expansion of postgraduate studies, was useful,  but relatively late.

4) The external labour and capital market for high-tech resources was less developed in Japan, so technological knowledge and the capital necessary for its enhancement have concentrated mainly on large-scale enterprises. In the 1990s a vitalization of the external factor markets could be observed, supported by governmental promotion programs such as venture capital credits.