Industrial Innovation in Japan

Takuji Hara,Norio Kambayashi,Noboru Matsushima

• Editorial: Routledge
• Año: 2008
• ISBN:
  9781134098873
• Edición: 1
• Categoría: Commerce
• Categoría: Commerce Général

In this new book, Hara, Kambayashi and Matsushima gather together a collection of case studies of innovation in various industries in modern Japan, including automobile, electronics, semiconductor, component, chemical, pharmaceutical and service industries. Unlike other books in this area, this book focuses on a broader range of Japanese indus

1 Introduction

Takuji Hara, Noboru Matsushima and Norio Kambayashi

Rethinking the Japanese model of innovation

In the 1980s and the early 1990s, Japanese industries, in particular, those in the manufacturing sector, were regarded as a model system for producing innovations continuously. Numerous studies on “the Japanese model” of innovation (or product development) were published at the time. Most of these works were based on empirical studies on the automobile and/or electronics industries in the 1970s and 1980s, partly because of the remarkable worldwide performance of Japanese industries in such fields at the time and partly because of their unique practices in comparison with those of their Western counterparts. Different writers attempted to characterize the Japanese model of innovation in different ways.

For example, Imai et al. (1985) insist that six intrafirm factors have contributed to the speedy and flexible new product development process in Japan:

1. top management functioning as a catalyst,
2. self-organizing project teams,
3. overlapping development phases,
4. multi-learning,
5. subtle control, and
6. organizational transfer of learning.

In other words, the supportive attitude of the top management toward innovation, the autonomy of project teams, the development process based on close interactions among different functional groups, the promotion of learning at individual/group/company-wide levels, the “self” control with monitoring and peer pressure based on visibility and information/value sharing, and intraorganizational transfer of knowledge are the characteristics of new product development in Japan. They also argue that several interorganizational factors (in particular, those regarding the manufacturers/suppliers relationships) are as important as the intrafirm factors: self-organizing networks, the division of labor and risk sharing, interorganizational learning for efficiency, information exchange, and the reciprocal relationships.

Womack et al. (1990), who compared the automobile industries in the United States, Europe, and Japan, stated that the Japanese “lean” system of product development has four characteristics: powerful project leaders, cross-functional project teams, early problem solving, and simultaneous development between products and processes. They also notice the stronger ties between technology development and marketing in Japanese automobile companies. Clark and Fujimoto (1991) also compare the Japanese, American, and European automobile industries. They argue that stage overlapping and intensive communication in the development process, less specialized division of labor, simple and flatter organizational structures, powerful “heavyweight” product managers, the customer-oriented attitude of engineers, and the manufacturing for design – all of which tend to be more often observed in the Japanese automobile industry – are important for better performance in new product development. Dertouzos et al. (1989) examine various industries in the United States and Japan. However, they reach a similar conclusion about the characteristics of the Japanese innovation system: designing for manufacturability and quality, teamwork in the product development process, focus on the manufacturing process, and continuous improvement. Not all of these researches regard these practices as being inherent characteristics of Japanese industries. They believe that these practices are transferable beyond society.

Based on their analysis of Japanese companies, mainly in the electronics area, Kenney and Florida (1993) advocate innovation-mediated production as a new model of production organization. They mention five basic dimensions of the new model:

1. a transition from physical skills and manual labor to intellectual capabilities and mental labor,
2. the increasing importance of social or collective intelligence as opposed to individual knowledge and skills,
3. acceleration of the pace of technological innovation,
4. the increasing importance of continuous process improvement, and
5. the blurring of lines between the R&D laboratory and the factory.

They argue that teams are a cornerstone of Japanese R&D organizations. This integration is reinforced and bolstered by the career cycle of Japanese R&D scientists and engineers. They also characterize the Japanese model in its integration across different industrial sectors such as computers, semiconductors, telecommunications, and consumer electronics. They claim that the integration of key component and end product divisions within the same company facilitate the easier diffusion of new technical development into mass-market goods and that of the income from the sales of mass-market goods to fuel additional innovations. They also notice close linkages and integration between high-technology manufacturers and mature suppliers in Japan.

Fransman (1990) also studies Japanese electronics companies and recognizes both the intrafirm and the national systems of innovation in Japan. He indicates that the Japanese intrafirm form of organization that facilitates innovation is characterized by just-in-time production, the elimination of buffer stocks, total quality control (TQC), decentralization, effective flows of information between the R&D laboratories and production divisions, and vertical integration. He also emphasizes that the national technology-creating system in Japan – which consists of public research institutions, government-initiated cooperative research projects, governmental support for research cooperation between companies, spontaneous interfirm research cooperation, and competitive pressure for innovation as well as R&D activities of individual private companies – is promoting innovation in the country.

Overall, it can be stated that previous studies tend to characterize innovations in Japan with such aspects as vertical integration, teams and cross-functional organizations, overlapping processes, intensive communication, continuous and incremental improvement, and strong orientation toward cost reduction. In addition to these intrafirm characteristics, they also tend to mention the close interfirm linkage between manufacturers and suppliers and the supporting role of governmental institutions as characteristics of Japanese innovations. However, how have Japanese innovations been since then? More than ten years have passed by. There was a long recession in Japan during the period between then and now. The business performances of Japanese companies declined drastically and the focus on them also eventually reduced. There has been the worldwide development of the Internet and other information technologies. The expansion of the market economy (in particular, the growth of the Chinese economy) and the globalization of competition have also occurred. Those contextual changes are likely to bring about some transformations in industrial innovations in Japan. Therefore, the mission of this book is to update our knowledge of Japanese innovation in different industries including not only the automobile and electronics industries but also other manufacturing and service industries. With the help of this knowledge, we will examine the changing, continuing, and diversifying characteristics of Japanese innovation and will consider their relationships with the Japanese society. We believe that these attempts will help us improve our knowledge of innovation, industry, and society in Japan and in general as well.

The aim of this book

To accomplish our mission, this book examines innovations¹ in different industries in Japan from the historical and cross-sectional points of view, in order to identify the characteristics of industrial innovation in the country. It then attempts to reveal the relationships between the characteristics of innovations in Japan and the features of the Japanese society. Through these attempts, this book aims at contributing to the development of innovation studies and also at providing some implications for the promotion of innovation in Japan and other countries.

The characteristic features of this book

This book possesses several characteristic features.

Broader research fields

This book deals with not only celebrated Japanese industries such as automobile and electronics but also other manufacturing industries such as carbon fiber, pharmaceuticals, wristwatches and machinery components, and service industries – including car dealing, security financing, and content creating. We attempted to provide a more balanced view of Japanese innovations, compared with the existing works based on the study of the automobile and/or electronics industries.

Historical transition

This book shows the changes in the characteristics of innovations in Japan from the postwar era to recent years. Readers can access the Japanese innovations after the 1990s, which are not included in the previous studies mentioned above.

The relationships between innovation and society

This book considers the relationships between the characteristics of innovations in Japan and the features of the Japanese society. Most existing studies do not seem to pay sufficient attention to these relationships. We, however, are much more conscious about them, as can be seen below.

Framework of analysis

This book adopts the framework of the social shaping of technology (SST) as a framework for analysis. The SST is a collection of studies on technology and society, which attempt to explore the complex relationships between them. Innovation, which includes technological and social changes, constitutes the main area of interest for the SST. Although the SST involves various perspectives based on sociology, economics, anthropology, and management studies as will be seen in Chapter 2, the authors of the studies share several views. First, they recognize the interactive relationship between technology and society. Second, they are basically oriented toward the social control of technology. Third, they examine the minute contents of technology and the detailed process of innovation. They believe that truly useful implications lie in the details (MacKenzie and Wajcman 1999; Williams and Edge 1996). These views are common among all the case studies in this book, even though each author of this book has a unique perspective on innovation.

Furthermore, the editors would like to provide a general framework for analysis in this book, which consciously follows the perspective of the SST. First, the factors constituting society and innovations in society constantly shape each other. This book focuses on the relationships between the Japanese society and innovation. Second, the factors constituting society include individual and organizational actors, each of which has a specific worldview, interests, and intentions, and eventually acts based on them. Third, the social factors also include institutional and structural factors such as output markets, input markets, laws and regulations, industrial structures, social hierarchies, and existing technology. They restrict interactions between individual and organizational actors. Fourth, national culture is also included in the social factors. National culture more latently but persistently affects the interaction between actors and the construction of institutional and structural factors. Fifth, the human society consists not only of these social factors but also of material factors. The actions of actors are always accompanied by material things. Institutional, structural, and cultural factors are also supported by things. Therefore, we should pay attention to the material constraints as well. Sixth, there are other societies in the world. We should not ignore the influence of other societies on the society we are focusing on: in this book, the influence of foreign or international societies on the Japanese society will also be considered. Seventh, the influences of innovations might transcend national boundaries. For example, the Japanese model of the production system, the so-called lean production, has diffused worldwide. Although the relationships between different societies and innovations in different societies are reciprocal, this book focuses only on a part of the complex relationships.

The framework for analysis adopted by this book can be schematized as Figure 1.1.

Basic discussion of this book

Based on detailed case studies in different fields, this book claims the diversity of industrial innovations in Japan: the characteristics of innovations in Japan are different with regard to the features of market, technology, relevant regulations, industrial structure, and the strategies of organizations. Therefore, it might be misleading to describe Japanese innovations in general by using the stereotypical terms mentioned at the beginning of this chapter. We should avoid overgeneralizations when attempting to understand innovations in Japan.

This book, however, does not insist that there are no common characteristics among different industrial innovations in Japan. Another essential claim of this book is that the characteristics of Japanese innovations should be analyzed from various angles. There are similarities and differences among different innovations in Japan. In addition, some characteristics change while others continue with time. Therefore, we should classify the characteristics of Japanese innovations into categories if we attempt to understand them.

Figure 1.2 shows the classification of various characteristics of Japanese innovation that are extracted from the case studies in this book.

Figure 1.1 The theoretical framework of analysis.

The characteristics that indicate recent general trends in industrial innovations in Japan are classified into the upper left quadrant. There are three major trends.

The focus of innovation is shifting from products to business systems

Some case studies in this book demonstrate that recent innovations in Japan are those of business systems rather than those of products (Chapters 3, 4, 9, 10, and 11). Even the case studies of recent product innovations include an accompanying change in business systems such as the change of division of labor or the establishment of a global joint new product development (JNPD) project (Chapters 7 and 8). Therefore, it can be stated that the focus of innovation is shifting from products to business systems. However, this is not always the same as saying that innovation itself is shifting from products to business systems. A careful examination of older case studies of product innovations re...