models underlying many government policies and attitudes toward U.S.-Japan relations in science and technology may be outdated. There is a continuing need for private sector input into policy decisions that affect the environment for innovation.

Future study of national systems of innovation needs to reflect the increasingly global nature of markets and production networks. Various approaches have been suggested in order to better understand the emerging dynamics and characteristics of global innovation. Each approach attempts to illuminate a part of this complex issue. For example, market pull vs. technology push have long been employed as alternative analytical descriptors of different behaviors and stimuli for innovation. The concept of demand articulation, a two step process for working from market data to the development of products, explains innovation through an integration of supply and demand rather than from either the traditional supply or demand aspect alone. Innovation-mediated production, which recognizes that information is at the core of new industrial innovation, is premised on understanding the increasingly central role of knowledge in the process of value creation. It is used to comprehend the emerging patterns in the globalization of innovation. Each of these conceptual frameworks represents an attempt to capture and explain the essentials of real-world behavior and serve as a rough guide for innovation strategy.

Also needed are more realistic categories to measure and compare U.S. and Japanese technology resources and assets. The corporate technology stock model, which calls for accounting for R&D as an investment rather than as an expense, is one possible way of placing financial value on R&D activities that would lend itself to cross-national comparisons.

The task force learned that American firms have done much to address problems of competitiveness by adapting lessons learned from Japanese competitors. Japanese firms are also changing, but less is known about the extent of these changes.

Despite the existence of a large volume of literature on innovation, systematic collection of basic data is the greatest need for accurate analysis of developments in innovation. The task force recommends that government departments concerned with data collection and technology policy, such as the U.S. National Science Foundation (NSF), the Bureau of the Census, the Bureau of Economic Analysis of the Department of Commerce, and the Science and Technology Agency (STA) and Management and Coordination Agency in Japan, increase their efforts to collect meaningful data on innovation. Multinational agencies such as the Organization for Economic Cooperation and Development (OECD), the United Nations, and the Asia Pacific Economic Cooperation forum also have important roles to play.

Efforts in this area are already under way in agencies such as NSF and STA. However, without real encouragement from the private sector, such efforts may fall subject to budget constraints. This would be regrettable given the importance of innovation to economic performance. As the scope of interests covered by the subject of innovation is so broad and complex, many different kinds of data and analysis are needed. Specific areas for further work are included in the last chapter of this study.

Notes and References

  • 1  

    Richard R. Nelson, National Innovation Systems: A Comparative Analysis (New York: Oxford University Press, 1993), p. 4. The task force believes that it is important to examine comprehensively the conditions and practices underlying both the generation and exploitation of innovations.

  • 2  

    Box 3-1 explains the definition of convergence used by the Joint Task Force, as well as alternative formulations.

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