Major Common Themes: 2005

V. Exploring New Systems for Innovation

RIETI seeks to clarify the linkages between science and technology (S-T linkages) and those between technology and industry (T-I linkages), the strengths and weakness of Japan's technological innovation and the role of regional clusters, and to explore technology innovation for information appliances, i.e. digital appliances that are capable of communication.

V-(1) Science-Technology-Industry (STI) Network

35. Study on the S-T-I Network

Leading Fellow(s)

Overview

Current policy studies do not include sufficient quantitative scientific analysis of the scientific and technological systems for generating technological innovation and new industries. This is one reason why it is difficult to formulate a comprehensive and strategic policy for industrial technology. This study will carry out a quantitative analysis by using Japanese patent and other data in order to achieve an overall understanding of the knowledge interface linking science, technology, and industry.

In this way, the study is expected to deepen understanding of the relationships between research at universities and public research facilities, innovation in industry, and the systems (including government policy) designed to promote them. It will also suggest directions for the formulation of industrial-technology policy in Japan.

Major Research Results

Economic Policy Analysis Series

RIETI Discussion Papers

V-(2) Intellectual property rights and strengthening competitiveness

36. A Theoretical and Empirical Study of the Industrial Economics of Product and Process Architecture

Leading Fellow(s)

Overview

In recent years, the impact of product and process architecture (basic design concepts) on industrial competitiveness and business strategy has become a focus of increasing interest. In order to incorporate the architecture concept in analyses of industrial competitiveness, it is essential to measure the modularity or integrality of architecture; as yet, however, there is neither an adequate method of measurement nor a firm theoretical foundation.

With this in mind, the research team aims to develop a theoretical formula for evaluating product architecture. In connection with this effort, it will
(1) characterize product architecture, production process, and corporate organization in terms of the design of coordinating mechanisms, and analyze the interdependence among these elements; and
(2) using selected products, devise a measuring system for product architecture and test it in a pilot study.

Analysis will focus on theoretical research, while incorporating knowledge drawn from existing surveys, field studies, empirical analysis, and so forth, where necessary.

Major Research Results

Economic Policy Analysis Series

RIETI Discussion Papers

37. Survey and Analysis of Determinants in the International Competitiveness of Japan's Semiconductor Industry

Leading Fellow(s)

Overview

This survey and study will analyze the causes of the rapid decline in the international competitiveness of Japan's semiconductor industry since the 1990s from the perspective of economics. Methodologically, the emphasis will be on interview surveys of Japanese and foreign manufacturers of semiconductors, equipment, and materials.

From a technological standpoint, the semiconductor industry has grown increasingly complex, as seen in the dramatic rise in the level of automation accompanying the rapid technological innovation predicted by Moore's Law, as well as the problem of mutual interference between processes. Moreover, such complexity is exacerbated by increasing market complexity caused by the diversification and heightened sophistication of consumer preferences - a result of both increasing affluence and the globalization of markets attending the rapid development of transport and communication systems. Faced with such complexity, Japan's semiconductor industry has revealed various organizational limitations and has seen its strength decline in many areas - not only research and development but also design, production technology, and manufacturing. Furthermore, the same trend is becoming apparent even in the areas of management and sales.

This survey and study will elucidate the factors and systems underlying these organizational limitations and explore possible solutions.

Major Research Results

Economic Policy Analysis Series

RIETI Discussion Papers

38. Developmental Life Stages of SMEs and Venture Businesses

Leading Fellow(s)

Overview

In many industrialized countries, scholars have been reappraising the role of small and medium enterprises (SMEs) and start-ups as engines of economic revitalization since the 1980s. In other advanced countries, numerous analyses have been carried out using data from individual companies to assess the contribution of small businesses to economic revitalization, and these studies have had a major impact on policymaking. In Japan, however, there have been very few such analyses.

Accordingly, this project will use micro data from questionnaire surveys conducted by the Small and Medium Enterprise Agency to carry out an analytical study addressing such policy-related issues as the decisive factors affecting start-up rates, characteristics of SMEs that contribute the most to employment, and the factors behind SMEs revitalization.

Major Research Results

RIETI Discussion Papers

RIETI Books

RIETI Policy Symposium

39. China and Hi-Tech Industries: Economic Strategies and Their Implications

Leading Fellow(s)

Overview

The purpose of this project is to analyze the strategic policies of the Chinese government for developing China's hi-tech industries and using these as engines for economic growth. The project will study the impact of these policy initiatives on the relative competitive advantage of Chinese and multinational companies in several hi-tech industries. In particular, it will attempt to assess whether the Chinese government's policies are helping or hurting Chinese companies striving to close the competitive gap with multinational rivals from developed countries such as Japan, South Korea and the U.S.

Specifically, the project will analyze the following questions:
(1) What are the strategies of Chinese high-tech firms operating in high-tech markets in which they face established multinational firms? How can they leverage the Chinese government's industrial policies to their advantage?
(2) Conversely, how are the foreign companies adjusting their strategies to these policies? How are they responding to the improved competitiveness of China's hi-tech sector?

Finally, the project will consider the broader ramifications of the development of China's hi-tech industries on the outlook for China's economic growth and industrial competitiveness.

40. Innovation and Regulation in Multisided Markets

Leading Fellow(s)

Overview

This project is a study of high-technology industries organized around platforms that allow consumers to buy, access, or use a wide variety of products.

Such platforms and the markets in which they function are referred to as multisided markets. One example of such a market is found in the video game industry, where the game console is the hardware-software platform that must appeal to the producers of game software as well as to the consumers who play them. In this market, most of the game software is provided by third-party or independent producers. For the platform to succeed, it must be priced so as to attract both consumers and game manufacturers.

This type of industrial organization has become particularly important in the industries that constitute the core of the "new economy," namely, computers, consumer electronics, and communications equipment, including cell phones. The research will focus on analyses using case studies and economic models. In terms of empirical analysis, it will carry out case studies and model-based analyses that can aid in understanding the unintuitive business aspects of software platforms. With regard to policy, it will again perform model-based analyses and conduct a survey of actual and possible policies directed at these industries.

One major goal of the project will be to provide information that may be useful in the drafting of industrial policy aimed at improving the profitability and international competitiveness of Japan's household appliance industry, an undertaking currently under way at the Ministry of Economy, Trade and Industry.

Major Research Results

Economic Policy Analysis Series

41. East Asian Economic Integration and Urban Agglomeration in Japan

Leading Fellow(s)

Major Research Results

RIETI Discussion Papers

RIETI Books

42. Global Management and Innovation of Japanese Companies

Leading Fellow(s)

Overview

In the knowledge-based economy, progressive global companies use innovation as an engine for corporate growth. To maintain dynamic competitiveness in the markets, such companies seek to dynamically differentiate their products and services through the development of globally optimized innovation chains.

This project will seek to provide a new perspective for examining the responses of Japanese companies to the requirements of global management. For this purpose, this project will undertake the following.
(1) Requirements for 21st century global management by Japanese companies will be identified in terms of corporate structure, organizational design, and organizational capabilities required for global management. A research framework will be developed to provide a new overall view of organizational design by industry for Japanese global companies in the age of the knowledge-based economy, and corporate behavioral principles concerning product supply and innovation, including the design of organizational capabilities. The validity of this framework will be checked against progressive Japanese companies.
(2) The findings of this research will be presented to policy authorities, researchers, companies and others.

Major Research Results

RIETI Discussion Papers

RIETI Policy Symposium

43. Evaluation of Developments in Intellectual Property Rights in Japan

Leading Fellow(s)

Overview

How can Japan escape its post-bubble economic stagnation and respond to catching-up by China and others in the globalized economic environment? To survive in the 21st century, Japan must maintain and strengthen industrial competitiveness by making further advances in innovation. This will require Japan to make improvements in its innovation environment. As part of such efforts, it has been argued since the second half of the 1990s that Japan should learn from the experience of the United States in the 1980s and make the transition from its conventional emphasis on the absorption of technology to pro-patent strategies. In a General Policy Speech delivered in 2002, Prime Minister Koizumi advocated "intellectual property as a national strategy." This was followed by the formulation of the Intellectual Property Policy Outline, the enactment of the Basic Law on Intellectual Property, and the establishment of the Intellectual Property Policy Headquarters (2003).

Emphasis on intellectual property is desirable in that it promotes technological development and contributes to higher value-added production. However, there are also some pitfalls. First, the objective must be the creation of intellectual property and not the creation of intellectual property "rights" per se. Second, because intellectual property "rights" are essentially exclusive in nature, they may give rise to market distortions or other negative effects. Hence, it is necessary to establish a proper balance between heightened protection of intellectual property "rights" and market competition. It is notable that in the U.S., the origin of pro-patent policies, there has been in recent years a review of pro-patent policies from the perspective of competition policy.

Is it possible that recent developments in Japan represent the bolstering of intellectual property "rights" in the name of pro-patent policies? This question will be examined by analyzing the developments and initiatives undertaken between the end of the 1990s and the present. This project will reevaluate the "real intent" underlying Japan's shift to pro-patent policies and will examine possible courses for future development.

V-(3) Regional cluster and enhanced industry-university collaboration

44. Study on Industrial Clusters Focusing on TAMA

Leading Fellow(s)

Overview

Although recent developments suggest a trend toward the return of manufacturing facilities to Japan, such manufacturing requires an industrial structure that can generate high value-added products on a continuing basis in order to overcome the tendency toward hollowing out of industry and to revitalize the Japanese economy over the medium and long term.

In the region called TAMA (Technology Advanced Metropolitan Area), located in the western part of the Tokyo metropolitan area, there are a lot of product-developing small and medium-sized enterprises (SMEs), as well as R&D facilities of large corporations and universities of science and engineering. The TAMA Association, established to take advantage of such industrial concentration, is performing the most advanced activity among the projects being carried out under the "Industrial Cluster Project" promoted by METI, with activities designed to promote a wide range of university-industry partnerships and to support new businesses.

By shedding light on the industrial cluster formation and innovation mechanisms underlying TAMA, the project aims to make positive suggestions for the formation of industrial clusters in other regions of Japan.

Major Research Results

Economic Policy Analysis Series

RIETI Discussion Papers

45. Innovation and External Partnerships in Research and Development

Leading Fellow(s)

Overview

As competition in research and development heats up internationally, Japan's major corporations, once characterized as deliberately self-contained, have been actively collaborating with various outside entities (forming external partnerships), including other companies, universities, and public research facilities.

This project will carry out a quantitative analysis of the relationship between the creation of such external partnerships in corporate R&D and performance, using micro data from RIETI's Survey of External Partnerships for Research and Development. It will also carry out a comparative analysis using data from China, which has been pursuing reform of its innovation systems based on external partnerships.

Major Research Results

Economic Policy Analysis Series

RIETI Discussion Papers

*Title Abbreviation SF: Senior Fellow / F: Fellow / FF: Faculty Fellow / CF: Consulting Fellow