The domestic shaping of Japanese innovations

Abstract

Every salesman who travels to Japan experiences differences of the Japanese market to the markets in Europe and the US. A unique culture, language, the traditional way of living have created a very special preference system. How can the sometimes overwhelming export success of Japanese companies and their dominance in particular innovations be explained? The rise of Japanese electronics, optics, and automobile industries and the decline of some of these industries in Europe and the US have been analyzed and discussed extensively. A commonly held conviction is that the Japanese have sidestepped their own home market and copied western technology and products for export. The competitive strength of Japanese companies has been credited - among others - to general management techniques, a hyper investment climate, long-term orientation of companies and institutions, and strong relationships to suppliers. The success of Japanese innovations has hardly ever been put down to originality but to new production techniques that increased operational effectiveness at companies like Toyota, Canon, and Matsushita to unprecedented levels. The ability to learn from western countries and the capacity to assess new scientific knowledge and quickly transfer new technology from western laboratories to the shop floor have long been both admired and decried in the west. High risk-taking and long-term commitment of Japanese mammoth conglomerates such as Toshiba, Hitachi, and Nissan would have ensured an investment driven growth backed up by governmental guaranties for survival (Johnson 1982). The remarkable entrepreneurship and vision of the CEOs of companies like Sharp, Yamaha, Honda, Kyocera, and Sony (e.g. Johnstone 1999), although often underestimated by western scholars, are important ingredients of the tremendous efforts of Japan to make new technology beneficial and affordable for a mass population. Yet, Porter (1990) and more specifically Porter, Takeuchi, and Sakakibara (2000) have pointed to another important factor of competitiveness: that the seemingly disadvantageous distinction of the Japanese market created a home market advantage in certain industries. In this chapter the effect of the characteristics of the Japanese market on innovations and on the international competitiveness of Japan shall be discussed. © Springer-Verlag Berlin Heidelberg 2006 Printed in Germany.