The Future of Japanese Innovation: Leader or Follower?

Japan is at a directional crossroads. Should the Japanese continue pursuing a policy based on the adaptation of existing technology? Or, is it the right time in its history for Japan to pursue a policy stressing innovation leadership? This article explores the social and infrastructure pressures that Japan faces as well as constraints on its business climate including the educational system, reluctance toward technological innovation, and organizational cohesion. In addition, these authors explore organizational influences on the business environment (such as the use of generalists and specialists), emphasis on big business, and preference for established firms. Finally, they examine the issue of what is needed for future Japanese success.

There are five stages of technological development: [1]

1. Modification and improvement

2. Technology applications in new product development

3. High technology production

4. Future technologies

5. Invention or discovery of revolutionary technological principles

By the early 1960s, Japan had reached an international standing in the first stage--technology development. After 1965, the country began to achieve dramatic results in the second stage by applying existing technology to the creation of new products. In the 1980s, Japan was excelling in the third stage.

Today, however, Japan has shown a weakness in the latter two stages of technological development. [2] The fourth stage requires basic R&D to be carried out. Thus far, Japan has put little effort into this basic research. [3] Likewise, any discovery of completely new technological principles by the Japanese appears far in the future.

Figure One shows that less than 25 percent of the registered patents in the United States were of Japanese origin. In contrast, more than half originated in the United States. Other researchers have outlined four major problems in the Japanese research and development system. [4]

* Government funding for R&D has been insufficient in improving facilities in universities and research institutes and promoting creative studies, especially in graduate schools.

* The activity of younger researchers has not been fully induced because of various regulatory limitations, which hinder the emergence of entrepreneurs. There also are many regulatory barriers, which spoil flexible and efficient performance of researchers.

* The infrastructure for advanced R&D, that is, databases, information networks, reference materials and standards, etc., is far from the required level.

* Public understanding and recognition of the role of science and technology is rather poor, and science literacy is lacking.

A brief look at two industries illustrates the current stage of technological development in Japan. The chemical industry is relatively weak, but steel is well established. The difference between Japan's spoor performance in chemicals and its leadership in steel may lie in the fundamental differences in these two fields.

There has been a steady stream of improvements in the steel industry. This has resulted from advancements in the automation process. In contrast, technological development in the chemical industry has come in sudden transformations rather than as steady growth. This type of intermittent growth has not been Japan's forte. Major innovation requires fresh and original thinking.

The lack of continuity makes it difficult to set clear goals. The unpredictability also makes technological innovation highly risky. The chemical industry requires technological sophistication and specialized applications. These traits are often reflected in limited markets.

In short, the transformation pattern in chemistry has not been well suited to the general work habits and attitudes of the Japanese. The Japanese prefer to emphasize a patient perseverance toward long term goals. They often reject small or uncertain markets--especially those that may require long-term commitments but lack prospects for immediate application.

If technological innovative leadership is the goal, the Japanese business culture has several internal weaknesses. This deficiency results from both tradition and infrastructure.

Education

The Japanese educational system appears to be better suited to adapting existing ideas than to fostering innovative skills. For example, the educational process stresses rote memorization. In the Japanese educational structure, instructors lecture while students take notes. Students never question the teacher and rarely discuss the topic.

The primary goal of the secondary school system is to prepare students for the college entrance exam. This exam frequently will determine the university students will attend and the jobs for which they will qualify. This system restrains intellectual development and originality. The rigidities of the process permit little individual intuition and experimentation. The Japanese education system places only limited value on conceptual thinking. [5]

School rules also are used to discourage expressions of student originality. From the earliest classes, students must adapt to a demanding organization that does not forgive failures. They are taught to sacrifice their dreams for the common good. Every pupil must simultaneously study the same material. Creativity is usually viewed as rebellious behavior.

Although the Japanese education system frustrates creativity, it fosters a spirit of cooperation and ensures that all students achieve a common level of knowledge and skills. The process is effective in training a labor force suitable for employment in the workplace of standardized production. New workers can be easily trained. The employees are patient and cooperative, and employers know they will accomplish their assigned tasks with diligence and accuracy. The Japanese education system produces a steady supply of young people with good minds that can be efficiently trained by industry.

Innovation Reluctance

Over the years, the Japanese have exhibited a reluctance for scientific creativity and technology discovery. [6] The requisite ingredient in Japan's economic prosperity has been a remarkable talent to modify the ideas of others. Success has come from making products more user friendly through an adaptive, rather than innovative, process. They seem to excel in perfecting the wheel rather than inventing it.

As a culture, the Japanese are often reluctant to explore the unknown alone. They typically prefer to follow others into new fields. For example, Figure Two shows that since 1901 Japan has produced only four Nobel Prize laureates. This can be compared with the 425 prizes won by United States researchers during this time.

Highly outspoken or independent-minded people who challenge the professional wisdom are often ostracized in Japan. There it is unusual for a person to set out to establish a new company. Individuals who leave established companies to start new firms are usually considered eccentric and become outcasts. The Japanese culture has no role model equivalent to Horatio Alger.

The risk-taking entrepreneur in Japan has many social pressures on the way to success. Parents, family, friends, and colleagues often conspire to discourage a person from becoming an entrepreneur. Entrepreneurs are called datsusara, which means "a salaryman who has broken loose." This term connotes a rebel who cannot work with other people. There is no inference of a ground-breaking pioneer. This maverick will be isolated, ridiculed, ignored, and banished (murahachibu) from the group, in much the same way that misfits were treated in the traditional Japanese village. Thus, a small company with an innovative idea may not be able to bring the idea to market. Large companies, by contrast, may reflect a rigidity that is not conducive to innovation. [7]

Organizational Cohesion

A major hindrance to innovation is the deeply ingrained tradition of Japanese business. Often these traditions are the same procedures that made Japan an industrial powerhouse. The heritage includes acquiescence to authority, strict seniority, a stable but immobile workforce, and little debate. On the one hand, these customs often inspire loyalty among factory workers and teamwork among engineers. On the other hand, they can also stunt free-ranging thought in young scientists and entrepreneurs. If technological leadership is a goal, Japan must not continue to rely on ground-breaking scientific work outside her borders. That is, Japan must become independent of the international R&D community.

The trend in the Japanese labor market shows workers are getting older. The number of women in the workforce has also increased sharply. Finally, many Japanese companies are moving the manual work of manufacturing out of Japan to low-cost countries. These trends have expanded the domestic workforce.

Organizational Influences

The primary organizational influences on the Japanese innovative process can be grouped into three patterns:

1. The use of generalists rather than specialists

2. The dominance of large firms over small ones

3. The preference for established firms rather than new ones