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  • Recovering from Success: Innovation and Technology Management in Japan
  • Leonard H. Lynn (bio)
Recovering from Success: Innovation and Technology Management in Japan. Edited by D. Hugh Whittaker and Robert E. Cole. Oxford University Press, Oxford, 2006. xi, 335 pages. £63.00, cloth; £24.99, paper.

Imagine a contemporary Rip Van Winkle awakening from a 20-year nap. Suppose this modern Van Winkle was an avid follower of trends in technology, business, and the international political economy. As he braced himself to catch up on the world by reading current issues of the Wall Street Journal, New York Times, and Business Week, Rip would expect to see countless articles attesting to the dawning of a Japanese century in technology and business. Japanese companies should dominate the biotechnology industry. [End Page 543] The U.S. Congress Office of Technology Assessment had said as much in a well-documented 1984 report.1 So did numerous articles in the New York Times,2 Business Week,3 Wall Street Journal,4 and other leading publications. So too, Japanese firms should dominate the production of personal computers (PCs). The Japanese not only had outstanding production technology but were superb at the kind of incremental innovation that 1980s pundits thought would be critical to win the markets for this technology as it matured.

Further, Japanese technology firms were, everyone had said, adroitly backed by various policies of the Japanese government. The Japanese financial system freed firms from dysfunctional short-term pressures of the sort U.S. firms endured from Wall Street, allowing Japanese firms to plan for the long term. Japanese citizens were universally trained to high levels of math and science literacy. Japan trained far more engineers per capita than the United States.

And yet, when Rip awakens, Japanese firms are not strong in biotechnology. Nor do they lead in PCs, semiconductors, or cellular telephones. Rip would doubtless wonder, “What went wrong?” And, “How enduring are these setbacks to Japan’s steady progress over most of the last century and a half?” This volume edited by D. Hugh Whittaker and Robert E. Cole gives some insights into these two questions, though much more to the former than the latter. The volume includes a provocative introduction and conclusion by the editors and 15 other chapters by a range of scholars and Japanese policymakers, many of them associated with Kyoto’s Doshisha University. The chapters address Japanese competitiveness in a wide range of technologies, including electronics, pharmaceuticals, semiconductors, and computer software. The emphasis is on high technology industries where in recent years Japan has not done well.

In their introductory and closing chapters, Whittaker and Cole suggest that the successful Japanese innovation model of the late twentieth century was based on “low cost high quality precision hardware achieved through continuous process improvement in a framework of dense communication of design information across organization units” (p. 13). One problem for Japanese competitiveness in the early twenty-first century is that East Asian and Western firms began to close the gap with the Japanese in their ability to deliver production efficiency and product quality. Meanwhile, U.S. and [End Page 544] European firms began to optimize supply chains and to aggressively seek international alliances, trumping the advantages Japanese firms had gained from collaborative learning in keiretsu groups. This allowed both drastic reductions in costs and accelerated innovation. There was a loss of competitive advantage, then, both within Japanese firms and in the relationships between Japanese firms and their keiretsu partners.

Japanese firms continue to be strong in building quality into their products, but Takashi Yunogami in a chapter on the semiconductor industry posits what he calls the “excessive quality thesis.” He argues that in designing and producing semiconductors, Japanese firms developed an almost fetishlike attachment to the importance of quality and reliability. These product characteristics were the keys to competitive advantage during the age of mainframes, but in an era of low-cost PCs the Japanese firms are providing more quality than users are willing to pay for. Moreover, the pursuit of perfection causes Japanese firms to be slow to market new products. The result is that they have lost market share to competitors in East Asia and...

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