چرخه مطلوب بین تحقیق و توسعه، توسعه قابلیت ها و ظرفیت همگون سازی برای استراتژی رقابتی در صنعت با فن آوری پیشرفته ژاپن

Under an unexpected long-lasting economic stagnation, R&D activities in Japan’s leading industries have been stagnating leading to destruction of Japan’s ambitious virtuous cycle between technology and economic growth. Considering that Japan is undergoing a paradigm shift from an industrial society to an information society that emerged in the 1990s, structural sources of such economic stagnation can be attributed to qualitative heterogeneous nature of such paradigm shift. Provided that new functionality development, the globalization of the economy and consequent global technology spillovers increase as an information society emerges, R&D activities, functionality development and assimilation capacity for effective utilization of spillover technology construct a subtle dynamic structure essential for the firms’ competitive strategy and decision-making policy. This article, in order to reconstruct competitive strategy for Japan’s high-technology industry by shifting a vicious cycle to a virtuous cycle between R&D, functionality development and assimilation capacity, analyzes the dynamism regarding the impacts of functionality development on assimilated spillover technology leading to gross technology stock with significant contribution of sales and R&D intensity.

Japanese society has been undergoing a paradigm shift from an industrial society in the 1980s to an information society in the 1990s (Watanabe and Kondo, 2002). On the other hand, due to an unexpectedly harsh economic stagnation, R&D activities in Japan’s leading industries have been suffering from this stagnation resulting in the destruction of Japan’s ambitious virtuous cycle between technology and economic growth (Watanabe, 1995). In the context of the globalization of the economy, an information society induces functionality development and enhances global technology spillovers as a fruit of R&D activities (Watanabe et al., 2001 and Griffy-Brown and Watanabe, 1998). Essentially, functionality development, a similar concept to innovation waves, particularly innovations involving new multifaceted functions, with assimilation capacity for effective utilization of spillover technology construct a subtle dynamic structure for the firms’ competitive strategy and decision-making policy. To date, a number of studies have identified the role of R&D activities, and the sources of the inducement of such R&D activities. In addition, some works have already studied the significance of assimilation capacity and the relationship between R&D activities and assimilation capacity (Suzuki, 1993, Berntein, 1998, Cohen and Levinthal, 1989 and Watanabe et al., 2002a). However, none have identified the link between R&D activities, functionality development and assimilation capacity in a systematic way. Jaquemin and Berry (1979) analyzed the entropy as a proxy to measure the state of versatility, which is considered the main source of functionality development. In addition, Kodama (2000) and Watanabe et al., 2002b traced the logistic growth function within a dynamic carrying capacity approach to identify functionality development of IT. Meyer and Ausbel (1999) postulated that dynamic carrying capacity depicts the orbit of innovation waves. Since functionality development is a similar concept to innovation waves, its features could be traced by an orbit of innovation waves. Thus, logistic growth within a dynamic carrying capacity approach can be applied to measure functionality development. These works provide constructive suggestions to measure functionality development, thereby correlating this with R&D activities and assimilation capacity for the effective utilization of spillover technology. This article, in order to reconstruct the competitive strategy for Japan’s high-technology industry shifting a vicious cycle to a virtuous cycle between R&D, functionality development and assimilation capacity, analyzes the dynamism regarding the impacts of functionality development on assimilated spillover technology leading to gross technology stock with significant contribution of sales and R&D intensity. Section 2 analyzes the dynamic interaction between sales, R&D intensity and technology spillover, leading to the significance of functionality development. Section 3 develops the concept of functionality development and its measurement. Section 4 demonstrates the impacts of functionality development on spillover technology. Section 5 identifies the contribution of functionality development to operating income to sales. Section 6 briefly summarizes the concluding remarks.

In light of the understanding that new functionality development, the global economy and consequent global technology spillover has led to the emergence of an information society, R&D elasticity, functionality development and assimilation capacity for the effective utilization of spillover technology construct a subtle dynamic structure that is essential for the firms competitive strategy and decision-making policy, the dynamism between functionality development and assimilation capacity for the effective utilization of spillover technology are analyzed. On the basis of these analyses, the significant correlation between the state of versatility and functionality development is identified. In addition, impacts of functionality development on assimilated spillover technology leading to gross technology stock with significant contribution of sales and R&D intensity are analyzed. Noteworthy findings include: (i) functionality development concept can be materialized by correlating technology elasticity to sales, logistic growth within the dynamic carrying capacity and diversification represented by degree of entropy; (ii) the contradictory impact of functionality development on spillover technology characterizing that elasticities of R&D entropy to assimilated spillover technology in electrical machinery is much higher than that of pharmaceutical industry, stagnation of R&D entropy in electrical machinery reacted to decrease in assimilated spillover technology while assimilated spillover technology in the pharmaceutical industry maintained no decrease despite the decrease in its R&D entropy; (iii) considering that the decrease in functionality development in pharmaceutical industry is not so dramatic as in electrical machinery, non-sensitivity of functionality development due to utilization of spillover technology leads to not a serious impact of functionality development on assimilated spillover technology. These could be the symptoms of a self-propagating structure incorporated in the pharmaceutical industry while in the case of electrical machinery all elements mentioned so far act reversely leading to serious impact of functionality development decrease on utilization of spillover technology, which in turn shows the fragile structure of this industry; (iv) comparing the elasticities of functionality development (proxied by technology elasticity to sales) to operating income to sales, it is realized that elasticity of electrical machinery is much higher than that of pharmaceutical industry. This demonstrates that pharmaceutical industry maintains sustainable increase in its operating income to sales despite decrease in functionality development. This demonstrates its self-propagating structure contrasting clearly with the behavior of electrical machinery, which is sensitive to the stagnation of its functionality development. Due to lack of any shock-absorbing mechanism against economic recessions, electrical machinery industry could not afford to stand against the decline of operating income to sales. Important suggestions supportive of competitive strategies for high-technology firms under a new paradigm can be focused on the following five points: (i) the significance of successive functionality development, (ii) elasticity against unexpected change in functionality, (iii) sustainable versatility for functionality development, (iv) incorporation of a complementary system for maintaining versatility, and (v) construction of a virtuous cycle among the foregoing factors leading to a self-propagating structure. Shifting current vicious cycle between R&D stagnation, losing functionality development, and decrease in assimilation capacity for effective utilization of spillover technology, of which electrical machinery has currently been suffering, to a virtuous cycle between reactivated R&D, successful functionality development, and improving assimilation capacity could be a key strategy to constructing a virtuous cycle among the foregoing factors. Under a long-lasting economic stagnation, since significant increase in indigenous R&D expenditure is difficult, practical solution could be found in a systems option between functionality development and improvement of assimilation capacity for effective utilization of spillover technology. Considering a strategy for functionality development, the fundamental nature of pharmaceutical industry in which the mode of function leads to the development of new additional indicators in a successful manner would provide a constructive suggestion. It should be noted that in electrical machinery, AE-1 4 for auto-focus lens used for a camera transferred to photocopy machines and also to printers, successfully exhibited functionality development similar to mode of function in the pharmaceutical industry. Another important point is to shift from suppliers initiated functionality development to joint functionality development initiated by both suppliers and customers through the interaction between them. Typical example could be seen in a success of development of i-mode (cellular phone with mobile Internet access service). In order to improve assimilation capacity, systems option between selective strategic alliances, tie-ups with universities, and assimilation of fresh institutions while developing overseas R&D activities would be a key strategy. Points of future work are summarized as follows: (i) broader application of the methodology and postulate obtained by this analysis through electrical machinery and pharmaceutical industry to other sectors including service industry; (ii) incorporating the forefront of the new stream of innovation such as IT and biotechnology as well as the synchronization of IT and biotechnology (long boom); (iii) explore more concrete suggestions practical and applicable to high-technology venture start-ups; (iv) in-depth analysis of the effect of systems options between R&D consortia, strategic alliance, and industry–university tie-ups. (v) international comparison of sales, R&D functionality and technology spillover dynamism focusing on the difference of institutions.