about the extent of convergence. Box 3-1 describes the Joint Task Force's approach to convergence.

Box 3-1 Defining "Convergence"

Amid the changing strategies for corporate innovation on which the Joint Task Force has focused, it is clear that certain aspects of U.S. and Japanese corporate innovation have grown more similar to each other while others have remained distinct. Just what can be said about the aggregate trend of these changes and the resulting implications is less obvious. For this reason, the question covered in this chapter—whether or not U.S. and Japanese companies are moving toward similar approaches to innovation—is a central issue in the report. In order to address this question, the task force employed the concept of convergence as a tool with which to elucidate the complex and often confusing array of adaptations occurring in corporate innovation strategies. Such a framework enables the strategies to be analyzed in light of the innovation process itself. Therefore, the Joint Task Force thought it would be useful to clarify its own definition, and relate its approach to other debates over U.S.-Japan convergence.

One usage of convergence which is distinct from the usage by the task force is one which we call "productivity convergence." This is an aspect of growth theory that concerns the striking postwar convergence between industrial nations in terms of productivity, per capita income and other indicators. Productivity convergence research attempts to understand the mechanisms that have enabled the convergence to occur and is thus positive (empirical) in nature. Its focus is on the catch-up process of lagging nations rather than on new strategies for corporate innovation.1

Another usage, which we call "institutional convergence," addresses the desire for a common ideology as a way for industrial nations to overcome the challenges of globalization. In theory, as the ideologies of nations converge, national policies, particularly economic policies, can be brought in line with each other through negotiated agreements so as to allow smooth transnational interactions. Implementation may be problematic, however, particularly when proponents of convergence adhere too rigidly to a specific model. In the case of the United States and Japan, some proponents of convergence have assumed that Japan should fit into the set of constructs used to analyze U.S. trade policies. It may make more sense to build upon the individual constructs of each country to form a set applicable to both the United States and Japan. As Eileen M. Doherty observes, "Historically, U.S. trade policy has been based on the belief that market economies can, and should, converge. Consequently, trade talks have centered on the need to remove trade barriers. More recently, (beginning primarily with the Uruguay Round), negotiations have focused on ways to harmonize trade-related rules (such as intellectual property rules and trade-related investment measures) and domestic regulatory structures."2

Advancement of one-sided convergence concepts has elicited strong criticism, such as this one by Chalmers Johnson: "The idea of Japanese-American convergence is a Western intellectual conceit with roots in the Allied Occupation of Japan after World War II and in the United States' shift from an alliance with China to an alliance with Japan as the basis of its Cold War strategy in East Asia."3

In the view of the Joint Task Force, institutional convergence is an attempt to change the nature of corporate innovation rather than a result of the changing nature of corporate innovation. Biased implementation of it may create rather than resolve problems associated with globalization. The Joint Task Force wants to make it clear that it is not advancing an analogous one-sided concept of convergence in the area of corporate innovation.

In this report, the Joint Task Force would like to advance the concept of "problem convergence" as an outgrowth of the process of innovation itself. Problem convergence is based on two factors common to all players. The first factor is the driving force of technological innovation in today's businesses (companies on the cutting edge must increasingly respond to similar market conditions in similar ways). The second factor is the growing inter-penetration of vanous players into each other's markets due to the process of globalization (markets themselves

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