1998 Reports

Japanese technology policy

Flath, David

Because Japan was a late developer among the industrial countries, it adopted science and technology policies that hastened the diffusion and dissemination of existing discoveries rather than promoting new discoveries. For example, Japan's patent system encourages the early revelation of new discoveries, promotes patent licensing on terms favorable for users, and affords patent holders only limited rights of exclusivity. By encouraging imitation, Japan's patent system erodes the incentive to develop major innovations but probably does not greatly damage the incentive for large firms to develop minor advances. This explains why most of the private research efforts of Japanese firms have been directed towards development of process innovations with immediate commercial application, not towards basic scientific advances. Public support for research in Japan also reflects some of the same biases as its patent system. In spite of these aspects of Japanese technology policy, Japan has still achieved important contributions to the world's stock of knowledge including the recent perfection and diffusion of the Toyota production management system.