Management of Technology and Innovation in Japan

The Domestic Shaping of Japanese Innovations 117
Japan, have had surprisingly little impact on the trade specialization of Japan.
While en vogue in the 1980s as an explanation for Japan’s success, it is commonly
agreed today that in the latter stage of Japan’s economy industrial policy had a
more preserving effect on the less successful part of the Japanese economy but
was hardly accountable for the internationally very successful part. The officials in
the Ministry of Industry and Trade which has been given overly high credit for
Japanese innovation successes in the past (e.g. Johnson 1982, Ozawa 1974, Shinohara
1982) was much more conservative and uninspiring in its views regarding
what technologies and products were promising and should be pursued by Japanese
companies. In the 1950s, MITI set up a list of the most “desired technologies”
which were to receive preferential treatment in the resource allocation process
(Ozawa 1974, p. 21). It listed – among others – artificial fibers, chemicals,
petrochemicals, pharmaceuticals, aircraft, steel and medical equipment but not a
single consumer good. All these industries have eventually been set up in Japan.
Yet, Japan did not gain a sustainable competitive advantage in most of the listed
industries compared to consumer electronics, automobiles, and optics that did not
receive the same official attention.
Instead, the role of entrepreneurs and visionary CEOs, who perceived market
opportunities in the domestic consumer market, is apparent throughout the history
of technology in Japan since Sony’s founders Masaru Ibuka and Akio Morita were
convinced that the transistor radio, the tape recorder, and television sets were the
most promising products to pursue. While becoming most visibly successful they
were not alone in their perception. Sharp, Kyocera, Canon, Matsushita, Yamaha
and many others experienced a clear preference in the Japanese market for specific
consumer goods and office equipment that were in line with the Japanese context.
Stereotypes about Japanese needs and skills, however, don’t travel far, when studied
more thoroughly than in an anecdotal way. For instance, miniaturization and
integration are attributes often named as the foundation of Japanese competitive
advantage (Albach 1993, p. 81). But these terms are too general to explain the pattern
of success and failure in Japan. Japan is not the overall master of miniaturization,
automation and integration. For instance, Japan has been constantly successful
in semiconductors related to consumer goods, but its ambitious goals in the
computer industry have never been achieved. Nor are Japanese companies always
leaders in electronic gadgets in general. While Japanese manufacturers did succeed
in commercializing VCRs for a mass market by transforming the large video
recorder for the professional segment into a version suitable for the private home
(Rosenbloom and Cusumano 1987; Prahalad and Doz 1987), the markets for
pocket computers (PDA) and MP3 players are dominated by US firms (because of
the specific market conditions in the USA). Japan did not become the main exporter
of cellular mobile phones, a masterpiece of miniaturization and integration.
Instead, two Scandinavian companies and one American company are the world
leaders. These are countries hardly notorious for their miniaturization skills
(Economist 1995, p. 60).