Chihiro Watanabe

Industrial dynamism and the creation of a “virtuous cycle” between R&D, market growth and price reduction: The case of photovoltaic power generation (PV) development in Japan

In light of the global environmental consequences of CO2 emissions resulting from energy use, systems options for the rational use of energy, particularly of energy efficiency improvement and renewable energy technology, have become crucial. Despite its leading efforts in developing extensive renewable energy, Japan has not necessarily achieved comparative advantage in this field owing to inherent resource constraints for renewable energy. One of the exceptions is photovoltaic power generation (PV). PV is considered to be a “footloose” renewable energy which is expected to overcome Japans own geographical disadvantages as a technology breakthrough. MITI (Japans Ministry of International Trade and Industry) initiated PV development under its Sunshine Project (R&D Program on New Energy) aiming at maximizing these advantages by: (1) encouraging the broad involvement of cross-sectoral industry, (2) stimulating inter-technology stimulation and cross-sectoral technology spillover, and (3) inducing vigorous industry investment in PV R&D, leading to an increase in industrys PV technology knowledge stock. An increase in this technology knowledge stock contributed to a dramatic increase in solar cell production. These increases led to a dramatic decrease in solar cell production price, and this decrease induced a further increase in solar cell production. An increase in solar cell production induced further PV R&D, thus creating a “virtuous cycle” between R&D, market growth and price reduction. This paper, on the basis of an empirical analysis of Japans PV development, demonstrates the industrial dynamism of this “virtuous cycle” as a policy initiative.

Patent statistics: deciphering a ‘real’ versus a ‘pseudo’ proxy of innovation

Abstract Patent statistics have fascinated economists concerned about innovation for a long time. However, fundamental questions remain as to whether or not patent statistics represent the real state of innovation. As Griliches pointed out, substantial questions involve: What aspects of economic activities do patent statistics actually capture? And, what would we like them to measure? He pointed out that these statistics can be a mirage appearing to provide a great number of objective and reliable proxies for innovation. This paper aims to address some of these questions by making a comparative evaluation of the representability of patent statistics in four levels of the innovation process, using as examples research and development (R&D) in Japans printer and photovoltaic solar cell (PV) industries over the last two decades. Furthermore, this research provides a new set of patent statistics which could be considered a more reliable proxy for innovation.

Global Technology Spillover and its Impact on Industry's R&D Strategies

Investigates trans-national technology spillover mechanisms involving host firms in Japan and donor firms elsewhere. Included in these mechanisms are the technology spillover contribution to production increase and the role of assimilation. Two terms are used to describe the parties involved -- the donor is the firm that undertakes the R&D activities to create or improve the technology while the host is the firm that benefits from the work of the donor. The host needs to possess an assimilation capacity in order to enjoy such benefits. Cooperation between the donor and host allows both firms to achieve the greatest return from technology spillover. It is important to link technology spillovers to production if firms want to maximize the effects on socio-economic development. The assimilation capacity that is required consists of the following abilities: to distinguish profitable technology spillovers, internalize accepted technology spillover, and embody the internalized stock of technology spillover to production process. To better understand the assimilation capacity, the electrical machinery industry in Japan from 1975 to 1995 is explored. Results show that the assimilation approach using labor quality demonstrates a very real behavior. The assimilation capacities in Japans electrical machinery industry increased until 1987 but then drastically decreased during the bubble economy. This decrease is attributed to the stagnation of informatization and the trend in aging of the labor force. While Japan is the primary country considered in this analysis, the observations are a common trend throughout the world. (SRD)

Constructing a virtuous cycle of manufacturing agility: concurrent roles of modularity in improving agility and reducing lead time

Abstract The implementation of modularity coupled with the application of platform strategy enables vertical product line extension to satisfy dynamic fast-changing customer preferences. Modularity plays crucial roles in strengthening positive correlations between a platform of products and models, and/or its derivative models. Simultaneously, modularity increased manufacturing agility. This paper focuses on the automotive industry with the objective of investigating the concurrent roles of modularity in improving the agility of manufacturing and reducing manufacturing lead time. Our findings provide supportive demonstrations to the research hypotheses. First, in investigating the effect of modularity towards agility, we find that by playing with various possibilities for combining modules, it is possible to assemble a single flexible production line: (i) a single model in several variants, as long as production is organized in such a way as to ensure the co-ordination of the variety, (ii) several models, whereas each of which is a variation of a single platform, and (iii) customized models, simply by rearranging the different variations of the modules. Second, with respect to these findings, there is evidence that an increase in manufacturing agility reduces manufacturing lead time, which has become a significant factor in corporate competency. Modularity as a source of comprehensive innovation kickstarts the learning process that enables auto manufacturers to explore new methods of designing and manufacturing automotive products.

Diffusion, Substitution and Competition Dynamism Inside the ICT Market: A Case of Japan

Under the new information society paradigm that emerged in the 1990s, contrary to its conspicuous achievement as an industrial society, Japan is experiencing a vicious cycle between non-elastic institutions and insufficient utilization of the potential benefits of information and communication technology (ICT).

Formation of IT Features through Interaction with Institutional Systems: Empirical Evidence of Unique Epidemic Behavior

While emerging information technology (IT) is hastening the paradigm shift from an industrial society to an information society and providing all nations of the world with numerous potential benefits, effective utilization of these benefits will differ greatly depending on the nation, particularly on their institutional elasticity. This can be attributed to the specific features of IT. Since IT performs its function in connection with institutional systems unlike technology in general, its specific features can be formed through dynamic interaction with an institutional system. Considering the unique features of IT formed through such dynamic interaction, this chapter focuses on an analysis of the epidemic behavior of IT and attempts to identify specific features of IT in light of interaction with institutions. Reprinted from Technovation, 23 No. 3, C. Watanabe, R. Kondo, N. Ouchi and H. Wei, Formation of IT features through interaction with institutional systems – Empirical evidence of unique epidemic behavior, pages: 205–219, copyright (2003), with permission from Elsevier.

Institutional Elasticity as a Significant Driver of IT Functionality Development

Institutions drive innovation and stimulate broad diffusion. Not surprisingly, national systems of innovation are influenced by their institutional elasticity in response to changing market conditions. As nations move from industrial to information-based societies, a key factor governing institutional elasticity is how institutions integrate IT. Since IT functionality is intimately connected with institutional dynamics, unlike simple manufactured products such as refrigerators, ITs specific functionality is formed through dynamic interaction with institutional systems. Consequently, institutional elasticity is a critical factor in the functionality of IT and its subsequent self-propagating behavior.

Identification of the role of renewable energy : a view from Japan's challenge : the New Sunshine Program

Despite intensive efforts aiming at substituting oil with technology-driven new energy, i.e. primarily with renewable energy, a limited amount of renewable energy has become practically utilized. In response to increasing concerns of the global environmental consequences of CO2 discharge resulting from energy use as well as from the rapidly increasing energy consumption in developing nations, renewable energy has again become the highlight in view of global security, its cleanness and accessibility to developing nations. In order to respond to these global expectations, on the basis of 20 years experience in developing renewable energy, it is extremely important to identify the current role of renewable energy in a global context. In response to such a requirement, Japan reorganized its long-lasting Sunshine Project (R&D on New Energy Technologies) towards a more comprehensive New Sunshine Program (R&D on Energy and Environmental Technologies) in 1993. In the process of this reorganization, an intensive assessment with a view to identifying the current role of renewable energy was undertaken. This paper presents a review of such an identification on the basis of the assessment of the contribution of the Sunshine Project to its initial objectives (i.e., to induce the industry to substitute technology-driven clean energy for limited energy sources, mainly oil).

The Co-evolution Process of Technological Innovation: An Empirical Study of Mobile Phone Vendors and Telecommunication Service Operators in Japan

While the development of information and communication technology (ICT) is usually measured by quantitative indices such as penetration rate, the qualities and characteristics of all countries can be different even if their achievements seem to be similar judging from quantitative standards. The mobile phone market represents the kind of market that should be analyzed from both quantitative and qualitative perspectives.

Policy options for the diffusion orbit of competitive innovations—an application of Lotka–Volterra equations to Japan’s transition from analog to digital TV broadcasting

Timely introduction of emerging new technologies that substitute for existing technologies is essential for enhancing a nation’s international competitiveness in a globalizing economy. However, such substitution is generally slow because of a lack of information about new technologies, fear of substitution and a reluctance to pay the cost of switching to new technologies. While hasty substitution sometimes accomplishes nothing, delayed substitution can result in a loss of national competitiveness. Thus, policy options for the diffusion orbits of competitive innovations are crucial. This is particularly the case with respect to Japan’s transition from analog to digital TV broadcasting, as the Japanese government, in order to minimize the impact of a transition delay, is urging a rapid shift from analog to digital TV broadcasting. In an ecosystem, in order to maintain sustainable development, predator–prey systems demonstrate a sophisticated balance. Given that an ecosystem can be used as a masterpiece system, this sophisticated balance provides suggestive ideas in deciding an optimal orbit of competitive innovations. This paper analyzes the optimal orbit for Japan’s transition from analog to digital TV broadcasting, and on the basis of an application of Lotka–Volterra equations that analyze the sophisticated balance of predator-prey systems, it demonstrates the optimality of the Japanese government’s scenario for shifting from analog to digital TV broadcasting.