Inter-Fields Technology Spillovers Leveraging Co-Evolution Between Core Technologies and Their Application to New Fields - Service Oriented Manufacturing Towards a Ubiquitous Society

Summary

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Contrary to its conspicuous achievement, Japan's economy has been experiencing a long lasting economic stagnation over the last decade. This can largely be attributed to an organizational inertia clinging to a traditional business model based on growth oriented development trajectory during the course of the high economic growth period in an industrial society while shifting to an information society and also to low economic growth era under mature economy. Thus, switching to new functionality development initiated trajectory from growth oriented development is urgent. Inter-fields technology spillovers leverage co-evolution between core technologies and their application to new fields, and contribute to such a shift. This paper, on the basis of an empirical analysis focusing on Japan's leading electrical machinery firms over the last quarter century, attempts to demonstrate this postulate. Significant relationship between technological diversification, assimilation of spillover technology and new functionality development is demonstrated both theoretically and empirically. Sources of a virtuous cycle and a vicious cycle between success firms and failed firms are identified, thereby firms' strategy toward a ubiquitous society characterized by 'on demand', 'all actors participation and cooperation', and 'seamless' community is postulated.

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Inter-Fields Technology Spillovers Leveraging Co-Evolution Between Core Technologies and Their Application to New Fields - Service Oriented Manufacturing Towards a Ubiquitous Society

(ProQuest-CSA LLC: ... denotes formulae omitted.)

INTRODUCTION

Japan's high economic growth after World War II can be attributed to its remarkable technological improvement which can largely be attributed to industry's vigorous efforts to invest in R&D, resulting in the rapid enhancement of its technology contributing to the improvement in its productivity levels. Improved productivity and the resulting increase in production induced further vigorous R&D which again resulted in further enhancement of technology. Through this mechanism, Japan constructed an elaborate virtuous cycle between technology and economic development (Watanabe, 1995). This success instilled Japan's business model a myth that R&D contributes to increase in production, improves productivity and enhances profits.

However, contrary to such a conspicuous achievem...

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