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Technological Innovation in Japan and the United States
| Article
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14776 |
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Section : |
NATURAL SCIENCE
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| Issue
Date : |
11 / 1988 |
7,888 Words |
| Author
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Jon K.T. Choy
Jon K.T. Choy is senior economic analyst at the Japan Economic
Institute of America. The views expressed in this article are
expressly his own and do not necessarily reflect the viewpoint
of the institute. |
The towering U.S. trade deficit and the growing shares of American markets held by imports have ignited a national debate on the global competitive position of U.S. industry. A central issue in this debate is the ability of American businesses to rapidly convert basic scientific advances into commercially useful technology. Technological innovation is a keystone in the foundation of economic growth, not only for the United States, but also for Japan and the European nations as well. Only Japan, however, is viewed as a strong competitor across a broad range of areas, particularly in high-technology fields. Japan is also viewed as highly successful at quickly commercializing new technology, earning it even closer American scrutiny.
Why innovate? Innovation is a critical component of a successful business strategy. New technical or design features sharply differentiate a firm's products from those of competitors, allowing the firm to develop brand loyalty and perhaps command a higher price. Continuous innovation also serves to discourage new competitors from entering the market by never allowing them to match leading-edge products. Innovation in manufacturing processes can reduce production costs or improve quality, both important competitive factors. Innovation is the motor of progress and growth, justifying American concern over the apparent sputtering performance of domestic firms.
Innovation: The Fancy Two-Step
In broad terms, technological innovation is the application of knowledge that leads to new or better products or processes. Process innovation is often overlooked in the American debate, even though it is a major element of Japan's commercial success. While it is not as glamorous as making path-breaking discoveries, refinement and improvement of the production process is a major determinant of international competitiveness. Process and product go hand in hand, a relationship that has not been clearly recognized in the United States. The problem facing most American semiconductor manufacturers, for example, is not that they lack the technology to design state-of-the-art dynamic random-access memory (DRAM) chips, but rather that they lack the process technology to make them as economically as Japanese chip makers.
Technological innovation can therefore take many shapes and forms, many of which are not immediately obvious to outside observers. It is therefore difficult to generalize about the process of technological innovation and the difference in the process between the United States and Japan. Corporate culture
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