National Academies Press: OpenBook
« Previous: Joint Initiatives in Manufacturing and Product Development
Suggested Citation:"Issues Raised by Globalization." National Research Council. 1999. New Strategies for New Challenges: Corporate Innovation in the United States and Japan. Washington, DC: The National Academies Press. doi: 10.17226/5823.
Page 23

Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

ARE THE U.S. AND JAPANESE INNOVATION SYSTEMS CONVERGING? EVIDENCE FOR AND AGAINST 23 Europe. For example, in 1995 Hitachi and Texas Instruments teamed up to build a factory in Richardson, Texas to manufacture first 16Mb and later 64Mb DRAMS.30 The venture, TwinStar Semiconductor, began operations in 1996. At about the same time, Motorola, IBM, Siemens and Toshiba announced an alliance to develop future generations of chips, such as the 1Gb DRAM. The alliance was built on the separate relationships in 16Mb DRAM manufacturing by Toshiba and Motorola (in Japan) and by IBM and Siemens.31 Also at about the same time, Toshiba and IBM announced their plans to establish a joint venture for the manufacture of 64Mb DRAMS in Manassas, Virginia.32 A similarly tradition-breaking development was the agreement by Hitachi to buy IBM's S/390 mainframe CMOS, Power, and PowerPC microprocessors for Hitachi computers. This was the first time that IBM had sold these microprocessors to other companies; and it is evidence of the difficulty which Hitachi had with its own microprocessor development strategy, and perhaps IBM's need to gain more value from its mainframe technology investment.33 Similarly, Toshiba, in a departure from its previous policy of keeping the manufacture of semiconductors inside Japan, licensed its 0.5 micron CMOS chips to Singapore's Chartered Semiconductor Manufacturing Ltd. due in part to the cheaper costs of production in Singapore.34 However, the same trends that led to these new initiatives have also made their survival difficult. Successful innovation which has lead to greater memory capacity of DRAMS; increased supply due to entry into the DRAM market by newcomers to IC production in countries like Korea, Taiwan and others; and the slump in demand due to Asian financial troubles among others have led to a glut in the DRAM market. This state has also been exacerbated by the emergence of DRAM alternatives like flash memory cards. According to Dataquest, demand is not expected to catch up to supply until 2001.35 As a result, Hitachi and TI have decided to end their joint venture, with TI buying out Hitachi's share of TwinStar Semiconductor.36 Furthermore, TI has decided to sell its remaining memory business—including the Richardson operation—to Micron Technology Inc. in order to focus on digital signal processing solutions and analog semiconductors.37 In a similar move, Motorola has decided to exit the DRAM business, but it will continue its manufacturing joint ventures with Toshiba in Japan, switching the production capability over to logic products.38 Meanwhile, Toshiba is balking at continued development of the 1Gb DRAM with Siemens and IBM due to Toshiba's desire to focus on stacked-capacitor memory while IBM and Siemens are backing trench capacitor cell technology.39 Issues Raised by Globalization Globalization of the world economy and corporate technology development raises important policy questions for the United States and Japan, which have been widely debated in recent years.40 On one side are those who believe that governments should embrace, not restrict cooperative technology development with foreign companies and governments and on the other those who believe that policies of openness that ignore reciprocity concerns are ideologically driven and ignore the enduring importance of national interest.41 The former emphasize the strong trend toward global technological and economic integration, the global spread of innovative activity, and growing technological cooperation among private firms. They believe that restrictive measures threaten to cut off a critical source of innovation, productivity improvement, and economic growth, namely the influx of

New Strategies for New Challenges: Corporate Innovation in the United States and Japan Get This Book
Buy Paperback | $47.00 Buy Ebook | $37.99
MyNAP members save 10% online.
Login or Register to save!
Download Free PDF

Innovation, "the process by which firms master and get into practice product designs and manufacturing processes that are new to them," is vital for companies wishing to remain competitive in today's rapidly changing high technology industries. American and Japanese firms are among the world's most technologically innovative and competitive. However, the changing dynamics of global competition are forcing them to rethink their technological innovation strategies. The choices they make will have great impact on their futures as companies as well as on the livelihoods of their employees and the communities in which they operate.

In order to understand the ways in which Japanese and American companies are changing their technological innovation strategies and practices, the Committee on Japan of the National Research Council and the Committee on Advanced Technology and the International Environment (Committee 149) of the Japan Society for the Promotion of Science (JSPS) organized a bilateral task force composed of leading representatives from industry and academia to assess developments in corporate innovation strategies and report on their findings. Through a workshop discussion of the issues and subsequent interaction, the task force explored the institutional division of innovation in both countries: the structure and performance of technology-based industries, the role of the government in the support of science and technology, and the role of universities in the science and technology system. The task force was particularly interested in exploring the points on which the two systems are converging,-i.e., becoming more similar in strategy and practice-and where they continue to be distinct and different.

Although a comprehensive study of these trends in U.S. and Japanese innovation was not easily feasible, the task force was able to develop several conclusions based on its workshop discussion and follow-up interactions that were substantial in time and content. This report identifies a set of issues whose further elucidation should be helpful in guiding public policy in both nations. These issues include the role of external sourcing of innovation, transnational activity and globalization, the organization and performance of R&D, and the role of consortia, joint ventures and other joint activities. A call for greater international efforts to collect and analyze data on these important trends is the central recommendation of the task force.

  1. ×

    Welcome to OpenBook!

    You're looking at OpenBook,'s online reading room since 1999. Based on feedback from you, our users, we've made some improvements that make it easier than ever to read thousands of publications on our website.

    Do you want to take a quick tour of the OpenBook's features?

    No Thanks Take a Tour »
  2. ×

    Show this book's table of contents, where you can jump to any chapter by name.

    « Back Next »
  3. ×

    ...or use these buttons to go back to the previous chapter or skip to the next one.

    « Back Next »
  4. ×

    Jump up to the previous page or down to the next one. Also, you can type in a page number and press Enter to go directly to that page in the book.

    « Back Next »
  5. ×

    To search the entire text of this book, type in your search term here and press Enter.

    « Back Next »
  6. ×

    Share a link to this book page on your preferred social network or via email.

    « Back Next »
  7. ×

    View our suggested citation for this chapter.

    « Back Next »
  8. ×

    Ready to take your reading offline? Click here to buy this book in print or download it as a free PDF, if available.

    « Back Next »
Stay Connected!