Global Economy, Global Technology, Global Corporations: Reports of a Joint Task Force of the National Research Council and the Japan Society for the Promotion of Science on the Rights and Responsibilities of Multinational Corporations in an Age of Technological Interdependence (1998)

As the borderless economy advances throughout major economic regions, most globally minded companies are expanding their businesses across national borders in order to maintain competitiveness. The number of MNCs operating in major markets, without regard to the level of technological development, is rapidly increasing. It is desirable from the basic industrial operation point of view that end user products should be manufactured as close as possible to the local market since it permits providing products to meet local users' needs, minimizes energy use for transportation, and hence reduces air pollution, and provides jobs to local people. The role of MNCs in the global community has to increase dramatically.

Since the end of the Cold War, the world economy has been strongly distorted by political intervention. Even though politically oriented trade frictions are being heightened at the government level between Japan and the United States, industrial leaders of the two countries are aggressively forming strategic alliances and promoting friendly collaboration. This tide of corporate level competitive interdependence and global alliance activity is gradually becoming a significant element in the world economy. Indeed it is paradoxical, but relying on corporate alliances and interdependence is perhaps a better strategy for increasing industrial strength than economic nationalism.

The science community has long enjoyed a favorable climate for international communications and collaboration. Unfortunately, the engineering community has experienced numerous constraints due to national economic and security reasons. These constraints may not be removed in the foreseeable future. However, without better management of international engineering and science relationships for improving R&D productivity, we cannot cope with the crucial problems that have put world peace and the survival of the human race at risk.

Modern MNCs are desperately seeking many ways to ensure their own survival. They no longer can survive considering only their own and their national interests, but they need to be good citizens in their host countries as well. They have to receive full support from the engineering community and customers in order to be successful. Hence they are establishing better engineering and science relationships in local communities. Strategic alliances in business and technological development are a step forward. R&D cooperation between Japan and the United States and further with all nations throughout the world should aim to solve global environmental problems such as acid rain, global warming, and preserving the rain forests, as well as developing a cure for AIDS, an epidemic that continues to grow rapidly on a global scale.¹

In industrially advanced countries, the people demand highly sophisticated information products since their societies are rapidly becoming highly-information oriented societies. The application software of such products is very much dependent on local culture and is very difficult for engineers from different cultures to develop. Such software has to be developed by local engineers with knowledge of the market. This trend is not limited to information

technology products but is also tree for any other product dependent on the market. Therefore, research and development have to be globalized.

The paradigm of modern technological innovation is rapidly changing. It is no longer as simple as the industrial sector enjoyed decades ago. It is increasingly market driven rather than technology driven. It is more interdisciplinary, interdepartmental, interindustrial, and international in nature. The innovation model is no longer explainable by a simple linear model, rather, a complex network model enjoys popularity among Japanese industrialists. In order to cope with the paradigm shift, many companies are forming strategic alliances across national borders in order to survive. The alliance network is so complex and tight that even nationalistic political pressure no longer can break such alliances. We think this trend is very desirable for increasing international collaboration and for improving world peace. International industrial collaboration is a strong weapon for comprehensive national security.

The strategic business alliance is a useful means of improving international collaboration; however, we have to move a step forward to establish global symbiotic competition kyoseiand kyocho to kyoso,² as it is called in Japan. Looking into the 21st century, we see a much more difficult age that will require inventing numerous new technologies and applying them effectively in order to solve the many difficult problems we face if we are to achieve sustainable development. The cost of developing new technologies is increasing very rapidly. Global environmental science and technology are still difficult to promote based on an industrial economy.

Semiconductor technology is still a driving force for advancing the highly information-oriented society. However, the evolutionary innovation of current technology may reach a limit sometime in the first decade of the 21st century. We have to surmount major technological barriers for major technological innovations. Many scientists have been striving toward this goal; however, from an industrial point of view, there is no visible sign of a major breakthrough.

Global environmental problems and the shortage of food and energy resulting from the world population explosion are crucial problems for the human race as well as for nature. We have a serious challenge in creating and developing new technologies in order to solve such problems. Industry can develop evolutionary new technologies for saving energy and resources and reducing wastes and pollutants. However, the cause of global environmental problems has not been clearly correlated scientifically and Life Cycle Analysis is still difficult to apply without creating many problems even if the concept of LCA is very valuable.

In order to solve the global environmental problem, we have to develop a major new industry, which recycles wastes into useful resources. It has been said that the recycling industry is economically unjustified and has been looked down on as a low-technology industry. No substantial national R&D investment has been provided. Many countries have subsidized or even nationalized so called high-technology industry in order to develop the national economy and for the sake of national security. Why should we not be able to provide a similar support to the recycling industry? The new industry will provide substantial employment opportunities for people around the world. We have to develop new industries for improving the world economy and the global environment for sustainable development. For that aim, we have to further promote science and technology. If a company or even a nation alone cannot invest sufficient

resources into such activities, we have to collaborate globally in order to create and develop precompetitive generic technologies and then compete with each other to apply those generic technologies for the welfare of society and for the prosperity of the company. MNCs can play and should play important roles in such global collaboration. This is why Japanese are looking forward to pursuing comprehensive national security. The increasing current trend of strategic alliances being formed by MNCs is very encouraging.

The basic philosophy agreed upon by Japanese industry is the coexistence with other industries in the global community. Kyoseiis a common goal of industry, hence most Japan based MNCs are aiming toward meeting this goal.

Japan relies on other countries for most of its natural resources, energy and food. Japan does not have any military power to invade resource-rich nations to confiscate resources nor has any intention to do so. Hence Japan can survive and maintain the public welfare only within the framework of peaceful coexistence.

Japan has learned and established its basic philosophy the hard way through a history in which she made many mistakes, not only in national security but also in business practices. During the 1960s and 1970s, before establishing such a philosophy, some Japan based MNCs neglected the interests of local communities and received severe criticism locally as well as domestically. Most of them either improved their management or else failed in business and closed overseas operations.

Now Japan based MNCs have the strong belief in the coexistence that aims for mutual benefits for the advancement of social welfare. That means that local cultures and customs have to be respected and the unilateral enforcement of domestic business and labor practices should be avoided except as otherwise agreed upon by both parties for their mutual benefit.

Since Japan is constitutionally prevented from dispatching military forces to protect other nations, in order to pursue kyosei, we have to have sufficient economic and technological strength to support it and prevent in advance any war in those countries. It may seem to be too idealistic; however, it is the only way Japan can contribute to the advancement of world peace.

Hence most Japanese believe that the concept of national security should be changed. Military power alone no longer can secure world peace as history has clearly proved. Militarily strong nations may be able to secure their national security temporarily after the sacrifice of public welfare and other nation's security. We think that a new concept of comprehensive national security should be promoted and all possible efforts be devoted to aim for the ultimate goal of world peace.

The concept of comprehensive national security is nothing special. Most countries have been pursuing what we call comprehensive national security for their national interests; however, we would like to correctly balance economic and technological strength with military power compared with conventional conceptions of national security that have overestimated military power.

We never underestimate the great benefits that Japan has received from the U.S.-Japan Mutual Security Treaty. We do not deny the fact that the Japanese economy has advanced more rapidly than it otherwise would have. However, Japan has also made extra efforts to make this possible within the framework of various restrictions. Many Japanese companies have been restricted in their businesses to peaceful applications for national security reasons.

The causes of various skirmishes in many countries after the end of the Cold War go back to poverty. We have to help those under-developed countries to build their own industries to raise their living standards above critical levels. In order to reduce the trade in military weapons, we have to help these countries manufacture tradable consumer products. The world is becoming a borderless society whether we like it or not. The national security of one nation is heavily influenced by other nations' security. There is no longer a one sided winner. We have to be mutually interdependent.

¹ Yoda, Naoya. 1994. “The Polymer Industries, Beyond the Year 2000.” Digest of the IUPAC Polymer Conference.

²Kyoseiis a Japanese word for symbiosis. However, when Japanese industrialists use kyosei, it means more than symbiosis. It has a connotation of progress by collaborating and competing, which is exactly what symbiotic competition denotes. Kyocho to Kyosomeans cooperation and competition. This is a homonym meaning collaboration and competitive creation. These are also synonyms of the symbiotic competition.