Evaluating Japanese Technological Competitiveness

1. Evaluating Japanese
Technological Competitiveness
Eric Vanderburg, MBA
August 7, 2004

2. Highlights
Japan has emerged from being an
importer to an exporter of technology
(favorable balance of payment). 1.9 x
(import expenditure)
3.2% of GDP spent on R&D (1998)
Increase in patent numbers (1998)
Improved Innovation Index position
Economic Recession
Questioning Japanese competitiveness in
emerging technologies

3. Competitiveness based on
Product Innovation & Niche
Market
Technological convergence- case of
electronic appliances-PCs, Cameras,
TVs, Refrigerators, Car Systems
Product innovations- Minidisks, Flat
screen and high definition TVs,
subcompact cars, advanced
refrigerators, eco-cars, noiseless
Vacuum Cleaners
Niche markets- product
miniaturization, capital goods etc.

4. List of Niche Market Areas
High quality epoxy resin for sealing semi
conductors (60 % world market) Sumitomo
Chemical
Semi conductor testers- 62% of world
market for memory testers- Advanced Corp.
YKK- Zippers (also air & watertight)
Nippon Kodoshi- Electrolytic condensers
(largest market share)
Heat & chemical resistant material used in
nuclear reactors & rocket discharge nozzle
(50% world market share)- Toyo Tanso Co.

5. List of Niche Market Areas
Artificial chemical polisher (80% global market
share)- Ujiden Chemical Industry Corp.
Semi conductor silicon wafers (25% global
market share)- Shin-Etsu Handotai
Cargo oil pump and turbine (major shares)-
Shinko Co.
Semiconductor cutting & grinding technology
(80% of global market)- Disco Corporation
Ceramic Insulator Capacitors (60% global
market share)- telecommunication machinery &
equipment –Kyocera

6. R&D : Japan US Comparison
R. Landan & N. Rosenberg (1986)
JAPAN
.Applied Research
and Development
.Incremental
Improvements
.Commercial
Applications
.Process and
Production
Technology
.Components
.Hardware
.Predictable
Technologies
.Quality Control
.Miniaturization
Standard, Mass
Volumes
USA
.Basic Research
.Breakthroughs and
Inventions
.Military Applications
.New-product Design
.Systems Integration
.Software
.Less Predictable
Trajectories
.New Functionalities
.New Architectural
Design
Customization and
Semicustomaization

7. National competitiveness
Factors
Domestic Market characteristics
Industrial cluster and local competition
Social Needs Vs. Technology strategy
Factor Conditions (supportive factors)
Human resources, physical resources
Knowledge resources, Capital resources
Infrastructure
### Globalization now impacts-some of
the factors- capital, and even R&D
activities

8. Conclusion
Japan has remained competitive in
certain areas more so the niche
markets and has also continued to
do quite well in product innovation
which represents a huge market
size.

9. R&D Intensity of Leading OECD
Nations, 1999 (Total R&D Spending
as % of GDP)
Sweden- 3.80
Finland- 3.22
Japan- 2.93
Switzerland- 2.73
United States- 2.65
Korea- 2.47
Germany- 2.44

10. R&D Spending- % of GDP
Iceland- 2.32
France- 2.19
Denmark- 2.06
Netherlands- 2.05
Belgium- 1.98
United Kingdom- 1.87
Canada- 1.83
Austria- 1.83

11. R&D Spending- % of GDP
Norway- 1.70
Total OECD- 2.21
Chinese Taipei- 2.05
Singapore- 1.87

12. Caution
The significance of the
percentages must be understood
vis â vis the size of the GDP of
each country.
The percentages indicate the
level of commitment to R&D

13. Summary
Japanese government’s commitment
to Science and Technology is quite
clear
Positive impact on competitiveness
most likely
Niche markets/technology will remain
important for competitiveness
*** Survey: Which are the Industries
in which Japan shows
competitiveness?