Management of Technology and Innovation in Japan

116 Marian Beise
National fondness for particular products is often a cause of national competitive
advantage. The world consumes French luxuries, Italian clothes, German
automobiles, American fashion and fast food. Japanese products might lack an
overly national flavor. Yet, it will be argued here that there is the same home market
advantage for Japanese home electronics, cameras and office equipment.
For this purpose, the history of twelve innovations in which Japanese companies
have succeeded in the world market was reviewed under the hypothesis that
the domestic market played a role in shaping the innovation and facilitated the international
success of Japanese companies. The products are electronic calculators,
television sets with cathode ray tube (CRT), television sets with flat panel
displays, traditional silver halide cameras, digital cameras, game consoles, hydraulic
excavators, audio and video tape recorders, facsimile machines, copy machines,
and semiconductors. In all these innovations Japanese companies have
achieved a high world market share or even global dominance. First, it can be
shown that these innovations are somehow related to the Japanese market. The
reasons for their global success will be discussed in the final sections below.
Demand in Japan is idiosyncratic in many respects which creates disadvantages
for export oriented firms but also unique innovation opportunities. Cultural, linguistic,
traditional factors, values, and motivations make the preferences of the
Japanese market different from those in other countries. A closer look reveals how
the Japanese culture has shaped globally successful Japanese products as much as
the American way of life has shaped global fast food. Besides culture, the Japanese
market context as a whole, the strategy the domestic market evokes and the
interaction between the market and innovators determine the design and the technology
of Japanese innovations.
Japanese innovations are domestically shaped by three factors which are described
in the next section. First of all, the structure of demand in Japan is different
in details compared to Western countries. The complementariness between
technologies and between technologies and infrastructure as well as price disparities
and varying national budget preferences ensue different demand structures
from country to country. Second, the cultural context of Japan gives rise to specific
innovations or increases the preference for certain designs varying from high
density displays to super-hygienic fresh food. At first glance, these innovations are
not considered as cultural-specific; nevertheless the Japanese are more inclined to
them than consumers in any other country. Third, significant market structure
conditions in Japan in a number of industries channel the attention of users, producers,
and human resources and bring about particular product designs as well as
production techniques. The strategic-fit theory suggests that successful companies
follow strategies and management techniques in order to match the requirements
of the home market (Venkatraman and Prescott 1990). New management techniques
may well have been introduced because of the unique market context in Japan.
The government is another factor that has been believed to be influential in
shaping the domestic industrial structure. Yet, the industrial policy and the support
that Japanese firms have received from the government, albeit influential as initiator
and driver of the rapid growth of the heavy and chemical industry in post-war