National Academies Press: OpenBook

New Strategies for New Challenges: Corporate Innovation in the United States and Japan (1999)

Chapter: Need to Continue Scholarly Work on Models and Frameworks for Innovation

« Previous: Greater Reliance on External Sources of Innovation.
Suggested Citation:"Need to Continue Scholarly Work on Models and Frameworks for Innovation." 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.
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EXECUTIVE SUMMARY 5 Shifts in Corporate R&D Strategies and Organizations As large U.S. corporations restructure to achieve efficiency and competitiveness, their internal basic research is diminishing, whereas some Japanese companies are beginning to enhance their research organizations and investments. Even though U.S. firms continue to increase linkages to universities and other external performers of basic research and innovation, some observers worry that if U.S. firms fail to continue internal research in leading edge fields, their attempts to rely on universities and other institutions may fail for lack of the ability to identify and absorb the help they need. Japanese corporations, on the other hand, seem to be protecting their internal basic research even as their overall R&D spending has declined or been fiat over the past several years. Role of Consortia in Setting De Facto Standards The emergence of business consortia to set de facto technology standards is a major development which will have far-reaching impact on industrial competitiveness and innovation.6 The formal standards process is often too slow and too open to meet all the needs of firms, especially in information industries, to find a path to open systems that is consistent with business objectives. In the past, electronics markets could be divided into proprietary systems built to proprietary standards, and proprietary systems built to open standards.7 Increasingly, "owned" open standards are emerging in electronics, exemplified by the VHS video format (Matsushita), the x86 microprocessor architecture (Intel), and the MS-DOS operating system (Microsoft). However, the growing number of business consortia composed of multinationals based in the United States, Japan and other countries that set de facto technology standards, while solving commercial needs, has raised antitrust concerns because these standards are often proprietary. This is likely to be an important issue in future multilateral trade negotiations. More attention needs to be devoted to this issue as well as to the proper role of national governments. RECOMMENDATIONS Need for More Data on U.S., Japanese and Global Trends in Corporate Innovation Much more systematic data collection and analysis is needed in order to make it possible to identify and understand the significant trends in corporate innovation practices. In particular, lack of data to measure the extent of sourcing of innovation, and international trends in particular, is perhaps the most serious impediment to understanding the relationships of transnational outsourcing of innovation on industrial dynamics and on international relations. Need to Continue Scholarly Work on Models and Frameworks for Innovation Continued work on new frameworks of analysis of systems of innovation is needed in order to better understand the discrepancies between the changes that are truly occurring in corporate and government policies and those that are merely being advocated. Changes taking place today in the structure of high technology industries, the methods being used to optimize the technological components of competitiveness, and the importance of transnational as well as domestic relationships among firms, are occurring so rapidly that the

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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.

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