Questions? Call 888-624-8373

Rights & Permissions

topleft topright

Learning the R & D System: Industrial R & D in Japan and the United States (1990)
Office of International Affairs (OIA)

Page
1
bottomleft bottomright
  E-mail
 Facebook
 Digg
 Stumble
 Twitter
More
Page
1

Below are the first 10 and last 10 pages of uncorrected machine-read text (when available) of this chapter, followed by the top 30 algorithmically extracted key phrases from the chapter as a whole.
Intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text on the opening pages of each chapter. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

Do not use for reproduction, copying, pasting, or reading; exclusively for search engines.

OCR for page 1
The Changing Context for Industrial R&D: Competition and Collaboration Japan and the United States stand at the brink of a world in which no sin- gle country dominates in science and technology. Rapid technological change and the development of worldwide markets for technology-based products have ushered in an era in which R&D useful to industry has been dispersed across international boundaries. The increasing sophistication and complexity of the technologies that form the basis for a wide range of prod- ucts have made it more and more difficult for even the largest corporations to sustain an in-house R&D effort in all relevant technologies. Scarce resources and the need to avoid duplication of effort have increased external pressure against "going it alone" in either R&D or production, particularly because shortened product life cycles have created a more urgent need for rapid prod- uct development and for research which is closely tied to production and mar- keting. The need to stay abreast of R&D under way overseas, in the face of limit- ed resources and rapid technology change, has created a context for expanded technological exchange between some types of industries in Japan and the United States. The semiconductor industry is a prime example. But unlike cooperation in basic science, which is fundamentally international and open, technological cooperation is a much more constrained process because of its potential impact on market competition among rivals. Indeed, some see R&D cooperation among rival firms as a minor part of the competitive strate- gies of most companies. Different historical backgrounds and fundamental structural differences in 1

OCR for page 2
2 the organization of industrial R&D in Japan and the United States make it inevitable that Japanese and U.S. corporations approach technology coopera- tion from different perspectives. Among the fundamental differences are (1) the comparatively high share of lapan's nondefense R&D as a percent of the gross national product (GNP)i and (2) the fact that Japanese industry funds a higher percentage of total R&D than does U.S. industry. In 1986 (~e most recent year for which complete data are available for both countries) Japanese industry funded nearly 70 percent of total R&D. The expenditures covered all R&D that Japanese industry performed and more. In the same year U.S. industry funded less than 50 percent of total R&D and 67 percent of the R&D that U.S. industry actually carried out (See Figures 1, 2, and 31. Japanese industry provided $46 billion for R&D in 1987, a year in which U.S. industry provided about $57 billion.2 Another contrast lies in the rapid rate of increase in R&D funded by Japanese industry, primarily for the civilian economy. As a percentage of GNP, Japanese industrial R&D more than doubled between 1965 and 1986, resulting in an increase in Japan's industrial R&D expenditures from less than one-tenth to one-third that of the United States' expenditures.3 Furthermore, Japanese industrial R&D funded by industry grew dramatically at a rate much higher than in other industrial countries in real teens in the 1980s.4 ~ con- trast, Japanese government expenditures on R&D have been much smaller (as 1 00% Go% 80% 70% 30% 20% 10% 0% 1 1 1 1 I I I I I I T I I I I ~ ~ I ~ 19701971 1972197319741975197619771978197919801981 1982198319841985198619871989 YEAR Japan ~ USA FIGURE 1 Industry share of total R&D funding. (Source: NSF, Science and Engineering Indicators: 1989, pp. 349-50.)

OCR for page 3
3 100% 90% 80% 50% 40% 30% 20% 10% _ _ 0% 1970 1971 1972 1973 197419751976 19771978 1979 1980 1981 1982 1983 19841985198619871989 YEAR Japan ~ USA FIGURE 2 Industry share of total R&D performance. Note: The figures used to produce the Japan line are from the Organization of Economic and Cooperation Development data base and do not agree precisely with those from the Science and Technology Agency. STA's figures would make the share of Japanese industry more closely resem ble that of U.S. industry. (Source: NSF, Science and Engineering Indicators: 1989, pp. 349-50.) ~ 05o/~ c, c' ~ 95% CJ v: To .s v, 90% 85% 80% 75% 70% 65% 55% 1 1 1 197019711972197319741975197619771978197919801981198219831984198519861987196 YEAR Japan ~ USA FIGURE 3 Industry contribution to R&D. (Source: NSF, Science and Engineering Indicators: 1989, pp. 349-50.)

OCR for page 4
4 a share of GNP),s although the results of government-funded R&D often are more accessible in Japan than those of R&D performed by industry. In the United States, meanwhile, company-funded R&D declined in the late 1980s.6 These contrasts, rooted in differences in markets, educational systems, and other structures, create asymmetries in access to R&D both real and per- ceived that influence how industry planners and researchers in each country evaluate prospects for technological cooperation. Japan's record of effectively commercializing technology developed abroad makes U.S. corporations somewhat cautious about technological cooperation outside the purview of structured business agreements. At the same time, however, technological cooperation between the two countries is expanding as the costs of R&D rise, as possibilities for complementary con- tributions from U.S. and Japanese partners are identified, and as Japanese investment in the United States increases. Under increasing pressure to reduce its trade surplus and share technology, Japan is eager to demonstrate a commitment to "internationalization" (kokuksaika) by opening some of its joint R&D projects to foreign researchers.7 Japanese industry also has taken steps to open its laboratories to foreign researchers, although the number of U.S. researchers participating in Japanese R&D through any public or private venue still is small compared to the number of Japanese researchers in the United States. Another difference complicating the prospects for collaborative tech- nology development are divergent views in Japan and the United States as to what constitutes precompetitive research. In a general sense there is agree- ment that precompetitive research is a middle ground of focused, cutting-edge research that lies between proprietary research conducted in corporate labora- tories and fundamental research conducted mainly at universities. But the border line between precompetitive and competitive research varies widely according to field, and it can shift quickly as well. Japanese participants in the U.S.-Japan meeting defined precompetitive research more broadly than their American counterparts, and they tended to be more optimistic about the prospects for collaboration in nonproprietary research.8 In contrast, U.S. com- panies have had less experience with collaborative R&D among rival firms involving government support. The situation is dynamic. In Japan there is increased interest in basic research, both because of its symbolism as a contribution to global well-being and because of a recognition that strength in fundamental research is the nec- essary foundation for leadership in technology development in the future. In the United States, meanwhile, there is increasing interest in promoting R&D useful to industry. These trends suggest, at least, the possibility that approaches to R&D in the two countries may become more similar in the

OCR for page 5
future. They also highlight complementarities in the two systems that could, in principle, form the basis for collaborative efforts. However, the fundamen- tal differences in industrial R&D in the two countries are unlikely to disap- pear quickly. Despite the significant constraints on technological collaboration, both domestic and international external forces dictate that interdependence-if not cooperation-between companies performing industrial R&D in Japan and the United States is likely to increase. Participants in the U.S.-Japan meeting on industrial R&D shared their first-hand experiences with what many of them evaluate as successful, mutually beneficial linkages between corporations in the two countries. Emphasizing that cooperation is not easy and must be built and nurtured carefully, the participants accentuated the pos- itive-exploring the factors that contribute to effective interactions. The next section deals with changes under way in the organization of industrial R&D in the two countries. Some of the mechanisms Joint ven- tures, licensing, and internationalization of R&D) for technological collabora- tion are then reviewed.

Representative terms from entire chapter:

technological cooperation