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Suggested Citation:"NOTES AND REFERENCES." National Research Council. 1999. New Strategies for New Challenges: Corporate Innovation in the United States and Japan. Washington, DC: The National Academies Press. doi: 10.17226/5823.
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Page 37
Suggested Citation:"NOTES AND REFERENCES." National Research Council. 1999. New Strategies for New Challenges: Corporate Innovation in the United States and Japan. Washington, DC: The National Academies Press. doi: 10.17226/5823.
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Page 38

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NOTES AND REFERENCES 37 In addition, a second concern might well deserve the attention of technology leaders. It is well known from almost every example in consumer electronics how tightly linked standards questions are to competitive issues. The straggle to define HDTV standards around the world is one example, and there are many others. Another example is Digital Versatile (or Video) Disk standards. The agreement of five U.S. computer related firms (IBM, Compaq, Hewlett-Packard, Microsoft and Apple) to adopt a single standard for the DVD storage media in 1995 removed a major barrier to the development of the DVD industry by bringing together two rival groups led by Sony and Toshiba.17 In 1997, however, new obstacles arose as splits again occurred among the ten companies that originally agreed on a single standard.18 This example not only highlights the importance of de facto standards alliances, but also indicates the key role which de facto standards-setting plays in the complex relationships among Japanese and U.S. companies. What steps might be taken to ensure opportunities for equitable participation and returns as the number and influence on markets of such consortia grow? What are responsibilities of and legitimate roles for governments in such consortia? This deserves more in depth study to divert what seems likely to become a growing source of friction, as debates about the WTO role in technology already illustrate.19 NOTES AND REFERENCES 1 Council on Competitiveness, Endless Frontier, Limited Resources , Washington, D.C., 1996. 2 Government of Japan, Management and Coordination Agency, Report on the Survey of Research and Development, various issues, 1993-1997. 3 Tsuneo Nakahara, "Strategic Mutual Outsourcing between the U.S. and Japan for Innovation and Technology Transfer in the Post Cold-War Age," paper delivered at the meeting of the U.S.-Japan Joint Task Force on Corporate Innovation, Makuhari, Japan, September 11-13, 1994. 4 It is important to note that the suppliers of large Japanese manufacturers are often affiliated in a keiretsu, and these relationships are not arms-length. 5 See Rajan R. Kamath and Jeffrey K. Liker, "A Second Look at Japanese Product Development," Harvard Business Review, November-December, 1994, pp. 168-169. 6 For examples of the diversification strategies of several major Japanese companies, see Branscomb and Kodama, op. cit., pp. 38-53. 7 Ibid., p. 46. 8 See Florida, op. cit., and Roberts, op. cit. 9 See Science and Engineering Indicators 1996 (Arlington, Va.: U.S. Government Printing Office, 1996). For other countries, including Japan and Germany, OECD provides data of R&D performance by industry including aggregate numbers for "total services" (i.e., non-manufacturing industries R&D performance). See OECD, DSTI (STAN)ANBERD), 1994, Appendix Tables 6-4 (U.S.), 6-5 (Japan), and 6-6 (Germany). 10 Roberts, op. cit. 11 Remarks by Tsuneo Nakahara at the meeting of the U.S.-Japan Joint Task Force on Corporate Innovation, Makuhari, Japan, September 11-13, 1994. 12 Richard S. Rosenbloom and William J. Spencer, eds., Engines of Innovation: U.S. Industrial Research at the End of an Era (Cambridge, Mass.: Harvard Business School Press, 1996). 13 Roberts, op. cit. Alliances are followed by central corporate research, supplier-provided technology, and licensing. For research (not development) universities were the third most important source after central corporate research and divisional research. The survey also suggests that Japanese firms benefit more than do U.S. firms from university relationships, with U.S. universities rather than Japanese universities being most prominent as the source of benefits.

NOTES AND REFERENCES 38 14 In the U.S. context, these issues have also been explored in a national assessment of U.S. commercial technology policy commissioned by the Competitiveness Policy Council in 1998. See Branscomb and Keller, op. cit. 15 See Gerald J. Hane, "The Real Lessons of Japanese Research Consortia," Issues in Science and Technology Winter 1993-94, pp. 56-62. 16 Dean Takahashi, "U.S.-Japan Chip Pact Could Facilitate Push to Manufacture Larger Equipment," The Wall Street Journal, August 5, 1996, p. B5. 17 "IBM Nado Kikaku-an: Bei Go-sha Yuza Shudo e Kessoku," (Standards agreement between IBM and others: five American user-companies take the lead), Nihon Keizai Shimbun, May 5, 1995, p. 1. 18 Reuters, "Wait and See on DVD, Analysts Say," August 15, 1997. 19 Toward the end of the Uruguay Round negotiations, concerns were raised in the United States about the implications of emerging rules governing R&D subsidies. The U.S. government sought and achieved modification of these provisions.

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Innovation, "the process by which firms master and get into practice product designs and manufacturing processes that are new to them," is vital for companies wishing to remain competitive in today's rapidly changing high technology industries. American and Japanese firms are among the world's most technologically innovative and competitive. However, the changing dynamics of global competition are forcing them to rethink their technological innovation strategies. The choices they make will have great impact on their futures as companies as well as on the livelihoods of their employees and the communities in which they operate.

In order to understand the ways in which Japanese and American companies are changing their technological innovation strategies and practices, the Committee on Japan of the National Research Council and the Committee on Advanced Technology and the International Environment (Committee 149) of the Japan Society for the Promotion of Science (JSPS) organized a bilateral task force composed of leading representatives from industry and academia to assess developments in corporate innovation strategies and report on their findings. Through a workshop discussion of the issues and subsequent interaction, the task force explored the institutional division of innovation in both countries: the structure and performance of technology-based industries, the role of the government in the support of science and technology, and the role of universities in the science and technology system. The task force was particularly interested in exploring the points on which the two systems are converging,-i.e., becoming more similar in strategy and practice-and where they continue to be distinct and different.

Although a comprehensive study of these trends in U.S. and Japanese innovation was not easily feasible, the task force was able to develop several conclusions based on its workshop discussion and follow-up interactions that were substantial in time and content. This report identifies a set of issues whose further elucidation should be helpful in guiding public policy in both nations. These issues include the role of external sourcing of innovation, transnational activity and globalization, the organization and performance of R&D, and the role of consortia, joint ventures and other joint activities. A call for greater international efforts to collect and analyze data on these important trends is the central recommendation of the task force.

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