diversified businesses. SEI is more diversified than it might be if it followed a technology strategy based on core technical competencies. Even though it says it is in the cable business, it has grown by branching into nuclear fuels, super hard metals, compound semiconductors, automotive brakes, and electronic systems. The common denominators for these fields are materials science and engineering.10

Human Resources Utilization and Development

Many differences between Japanese and U.S. corporate organization cluster around human resource development and the careers of researchers:

  • Japanese corporations hire relatively few Ph.D. holders, considering them to be over-specialized and lacking commitment to corporate business goals. American corporations have been more willing to trade off these drawbacks for the Ph.D. holders' greater capacity to do independent and creative research. These disparities reflect U.S.-Japan differences in graduate science and engineering education as well as in corporate human resource practices.
  • Many Japanese corporations move R&D personnel into production divisions to follow their projects through the chain of production and into the market.11 In the United States, however, firms have drawn sharper lines among personnel in R&D, production, and manufacturing, permitting less crossover among these functional areas. The result may be to hamper intrafirm technology transfer.
  • In Japan, midcareer researchers rarely move from one large company to another, whereas in the United States the practice is quite common. For the Japanese corporation this means that all the investment that the corporation pours into the person—the education, experience, sabbaticals at U.S. and European universities, the contact network, the knowledge, etc.—stays with the corporation. This in turn creates substantial incentives for the company to continue to invest in that person (asset) because the person (asset) is secure and relatively riskless. It is more risky for a U.S. corporation to make the same calculation given the high probability that the person will leave. The incentives for companies reflect and contribute to the corresponding differences in incentives for Japanese researchers, who tend to identify more with their organizations, and U.S. researchers, who tend to identify more with their fields or professions.
  • Survey research indicates that technology strategy is more tightly integrated into overall corporate strategy by the top managements of Japanese companies than those of U.S. companies.12
  • U.S. industrial R&D organizations assign great importance to new product innovation versus the higher Japanese reliance on acquiring and enhancing externally generated technology and on incremental innovation. In addition, Japanese firms are often considerably faster at carrying out innovations based on external technology than are American firms.13

Notes and References


The list of innovation characteristics for this report was compiled from National Research Council, Learning the R&D System: Industrial R&D in Japan and the United States (Washington, D.C.: National Academy Press) 1990; Leonard Lynn, "Japan's System of Innovation: A Framework for Theory Guided Research," in Research in International Business and International Relations, Volume 6, pp. 161-187 (JAI

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