TABLE 4-1 Company-financed R&D Contracted to Outside Organizations by R&D-performing Companies, 1993 and 1996, million dollars

 

 

1993

1996

Total

 

 

 

Manufacturing

3,462

5,833

 

Nonmanufacturing

2,339

4,293

Total as a percentage of company-financed R&D

3.6

4.9

 

SOURCE: National Science Foundation, Division of Science Resources Studies, Survey of Industrial Research and Development: 1996.

TABLE 4-2 Japanese Industry R&D Funding Paid to Outside Organizations, 1993 and 1996, million dollars

 

 

1993

1996

Total

4,722

5,113

 

Manufacturing

3,576

3,824

 

Nonmanufacturing

1,146

1,289

Total as a percentage of company-financed R&D

8.6

9.1

NOTE: Purchasing power parity values used for currency conversion.

SOURCE: Government of Japan, Management and Coordination Agency, Report on the Survey of Research and Development, various surveys 1993-1997

technological cooperation between original equipment manufacturer and supplier. This trend is facilitated by the use of computer-aided design and manufacturing systems linked through computer networks, allowing co-development in the OEM supply chains.

Japanese OEMs have enjoyed more or less exclusive vertical relationships with their suppliers, and conducted research and development jointly with commitment by the OEM to buy and by the supplier to produce. Although the evidence is mainly anecdotal at this point, members of the Japanese working group point to a trend in which more Japanese suppliers are expanding to diagonal relationships, diversifying their research, and expanding markets, leading to higher levels of outsourcing in the Japanese economy.

Japan's vertical keiretsu are an interesting model for U.S. firms. Some may wonder whether U.S. firms may make the mistake of mimicking old keiretsu, after Japan has moved to "diagonal" relationships across vertical alliance boundaries. However, it is unlikely that arrangements similar to Japan's traditional keiretsu would be allowed under U.S. law. Still, U.S. manufacturers such as Chrysler and Eaton have adapted aspects of Japanese supplier



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