FIGURE 1 The Japanese challenge in high technology. Source: Dr. Hisao Kanamori, from Daniel I. Okimoto ''The Japanese Challenge in High Technology,'' Ralph Landau and Nathan Rosenberg, eds., The Positive Sum Strategy: Harnessing Technology for Economic Growth (Washington, D.C.: National Academy Press, 1986).

contributions made by technological improvements.3 According to one prominent Japanese economist, technology (much of it imported) was responsible for more than half of Japan's economic growth between 1955 and 1980 (see Figure 1). Other nations and industries—such as the U.S. shipbuilding industry in the eighteenth century—have implemented "catch-up" strategies in which the transfer of technology from abroad was a major element. What is significant about Japan's experience is the systematic, organized way in which technology has been imported.

In return for billions of revenue dollars generated by the transfer and adaptation of foreign technology, Japanese companies paid a relatively modest cumulative sum of only $17 billion. Amortized over 33 years, Japanese industry paid, on average, only about $500 million per year, a fraction of what it undoubtedly would have cost to develop the technology at home, provided Japanese companies could have achieved the breakthroughs. For

3  

Edward F. Denison and William K. Chung, "Economic Growth and Its Source" in Hugh Patrick and Henry Rosovsky, eds., Asia's New Giant: How the Japanese Economy Works (Washington, D.C.: The Brookings Institution, 1976), especially pp. 125–130.



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