From the U.S. perspective, benefits from technological collaboration with Japan in the context of the defense relationship could come in a number of forms, as described below.

“Hard” Technology

This category of benefits can be defined as specific product or process knowledge that can be transferred in a straightforward way, mainly through data exchange. Hard technology is generally proprietary in nature, with transfer occurring through licensing or cross-licensing. Most of the defense technology that the United States has transferred to Japan through licensed production of U.S. systems and other mechanisms is of this type. In the case of the FS-X codevelopment, Japan was provided with about 95 percent of the 10,550-document F-16 technical data package.1 The “flowback” of Japanese improvements made to U.S.-derived technologies is written into government-to-government and many industry-to-industry agreements. For example, Mitsubishi Heavy Industries has transferred data on the FS-X composite wing to Lockheed Martin as flowback. To transfer hard technology effectively, exchanges of technical personnel and other forms of instruction are often required to supplement exchanges of data or drawings.

“Soft” Technology

This term describes knowledge that can be applied in improving quality or productivity but is not specific to particular products or processes. Soft technology includes techniques and practices for managing manufacturing systems and product development processes, which are developed over time in organizations (so-called tacit knowledge). In many cases, soft technology can be described, transferred, or adapted, given a favorable organizational context. One of the best-known examples of soft technology originating in Japan is the Toyota Production System, the set of practices for managing manufacturing.2 Although the transfer of such knowledge is facilitated by direct experience, soft technology of widespread significance tends to quickly become a public good.3

Leverage for Scarce Resources

Collaboration with Japan in defense-related R&D or production could leverage U.S. government or industry resources. For example, collaborative R&D in technical areas of mutual interest might facilitate access to a given scale of R&D effort at reduced cost. Codevelopment of systems or subsystems could leverage government budgets and industry engineering efforts. Licensing income from production of U.S. systems in Japan can be reinvested in developing more advanced technologies.


U.S. Congress, General Accounting Office, U.S.-Japan Codevelopment: Update of the FS-X Program (Washington, D.C.: U.S. Government Printing Office, June 1992), p. 5.


See Toyota Motor Corporation, The Toyota Production System (Toyota City, Japan: Toyota Motor Corp., 1992). The Toyota Production System, or TPS, is also known as “lean manufacturing.”


A growing number of U.S. manufacturers are adapting Japanese management practices in manufacturing and product development. See Rajan R. Kamath and Jeffrey K. Liker, “A Second Look at Japanese Product Development, ” Harvard Business Review, November-December, 1994, pp. 154-170.

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