competitiveness trends in key industries. The present report is part of a larger study by the Committee on Japan of the U.S.-Japan science and technology relationship.2

The task force addressed two key questions. First, are there structural features of the U.S. Japan science and technology relationship that affect U.S. capabilities to produce and utilize innovation? Second, are there general lessons and insights to be drawn from the U.S. experience with Japan that could be applied to international science and technology relationships in the future? Although the broader issues related to America's economic future and the role that science and technology will play in shaping that future are outside the scope of this study, the task force hopes that this effort contributes to discussion of those issues.

From today's perspective, the environment that gave rise to concerns over the link between U.S.-Japan science and technology relations and U.S. economic performance has shifted considerably. Japan's economy and its technology development complex have faced serious difficulties in recent years, while the United States has experienced something of a high technology resurgence. Concerns about the U.S.-Japan science and technology relationship have died down for the time being. The conventional wisdom about future prospects for the U.S. and Japanese economies has taken a 180 degree turn.

Despite these shifts in the prevailing mood, the task force believes that science and technology relations with Japan continue to have significant implications for the U.S. economy and will be more important in the future than is currently perceived. Companies and industries based in Japan will continue to be formidable global competitors, and Japan is taking a number of steps to address the challenges it currently faces. A notable ongoing development is the redoubled effort by the Japanese government to strengthen fundamental research capabilities through increased funding and related policy changes. The task force also believes that the U.S. industrial and high-technology ascendancy apparent today is not a permanent state of affairs. Not only Japan but also emerging industrial powers such as Korea and China will produce strong competitiveness challenges for the United States in the future.

Since U.S. policy debates over science and technology relations are not as heated or contentious today as they once were, the task force was able to focus more sharply on long-term trends and issues. Hopefully, the findings and recommendations developed here will contribute to building U.S. approaches to competition and cooperation with Japan in science and technology that strengthen U.S.-based innovation capabilities and allow maximum long-term benefits to flow to this country's economy and citizens.

MAJOR FINDINGS

Science and Technology Interactions Have Had a Considerable Impact on Economic Performance

The acquisition, effective adaptation, and improvement of technologies from abroad, mainly from the United States, served as a basis for Japan's rapid economic growth and international competitiveness in a wide variety of manufacturing industries. For the United States the economic benefits of science and technology interactions with Japan have been much lower in relative and absolute terms, but there are indications of growing benefits in recent years.

2  

While this report focuses on U.S. competitiveness and economic interests, a previously released companion report deals with U.S. national security interests. See National Research Council, Maximizing U.S. Interests in Science and Technology Relations with Japan: Report of the Defense Task Force (Washington, D.C.: National Academy Press, 1995).



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