Japanese acquisitions of firms in industries with both commercial and military markets, such as semiconductors, semiconductor manufacturing equipment, and machine tools, cause particular concern because some important industry segments are already dominated by Japanese companies. The fear is that dependence on Japan for particular products and technologies might leave the United States vulnerable during a crisis or have a negative long-term impact on the defense industrial base. 8 Yet if Japanese firms are the world's leaders in a product or technology, excluding them from producing here may reduce U.S. weapons quality and/or increase costs.

Also relevant is the growing tendency of the U.S. government to promote commercial technology development by supporting U.S.-based R&D consortia through subsidies and non-financial measures. Should it be possible for a Japanese company to acquire a U.S. firm that has a unique technological capability developed with U.S. government support?9 Excluding Japanese affiliates from such projects would hardly square with U.S. efforts to open Japanese R&D consortia to foreign participation. But the continuing perception that American-owned companies do not enjoy opportunities to participate in the Japanese economy equivalent to those Japanese firms enjoy in the United States is germane to this discussion. For if this imbalance in opportunity holds, it deprives U.S. firms of an important means to expand their access to Japanese technology.

This report of a workshop organized by the Committee on Japan, with assistance from the Office of Japan Affairs, brings together some of the highlights of the discussions. Chaired by I.M. Destler, member of the Committee on Japan and Director of the Public Policy and Private Enterprise Program at the University of Maryland's School of Public Affairs, the workshop was designed to provide a forum to explore the aggregate data on Japanese investment and technology transfer, to consider the industry-specific evidence in semiconductors, consumer electronics and automobiles, and to examinethe policy implications for the United States. The report was reviewed by individuals who made presentations at the workshop and members of the Committee on Japan, but it is not a consensus document or a conference proceedings.

8  

For example, U.S. Congress, Office of Technology Assessment, Holding the Edge: Maintaining the Defense Technology Base (Washington, D.C.: U.S. Government Printing Office, April 1989).

9  

See Committee on Japan, R&D Consortia and U.S.-Japan Collaboration: A Report of a Workshop (Washington, D.C.: National Academy Press, 1991).



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