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DEWEY
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ALFRED
P.
WORKING PAPER
SLOAN SCHOOL OF MANAGEMENT
Technology and Alliance Strategies
for Follower Countries
Jong-Tsong Chiang
June 1988
WP 21 02-88
MASSACHUSETTS
INSTITUTE OF TECHNOLOGY
50 MEMORIAL DRIVE
CAMBRIDGE, MASSACHUSETTS 02139
Technology and Alliance Strategies
for Follower Countries
Jong-Tsong Chiang
June 1988
This paper
is
to
appear
in
WP 2102-88
Technological Forecasting
and Social Change.
MASSACHUSETrS INSTITUTE
OF TCCHNQLOGY
NOV
1
4 2000
LIBRARIES
Abstract
This paper starts with a simplified model and then modifies
it
with
accelerated innovation process, changing comparative advantages and
emerging global strategies
international trade
and
to explain the
contemporary situations
industrial transplantation
innovative product or product class, and the
countries.
assumes
new challenges
to follower
the U.S. as a leading innovator, and examines
the historical experiences of Japan (a
in
induced by a global
order to explore the feasible strategies for the follower
In
countries, this paper
follower)
of
their
first
follower)
and Taiwan
(a
second
catching-up courses. The preliminary conclusions are as
follows:
(1)
will
very
(2)
The
follower countries mainly relying on "traditional strategies"
likely
be unfavorably impacted by the new
The concerted
national technological cooperative system
management
international
situations.
of foreign
bases
and
to accelerate "technological
metabolism," as Japan's experience shows, can contribute decisively
follower country's rapid progress
appropriability of
(3)
The
economic
in
especially process technology
in
and
on process technology as suggested by
Japan's successful locus should not be taken
as shown
a
benefit from innovation.
historical priority
follower countries.
to
New emphasis
the case of Taiwan.
for
granted by today's
should be placed on product innovation
To implement
this strategy,
the
geographical deployment of innovation functions to and the international
alliances with innovative countries are crucial to success.
(4)
Aggressive
joint efforts
by follower countries, as
illustrated
by
the close connection between Japan and Taiwan, can bring about extra
benefit to participants
and also shorten
their lags
forerunners.
1
behind the innovator and
Contents
I.
International Product Life Cycle
and Follower Countries
•A Simplified Model
•Accelerated Innovation Process, Changing Comparative
Advantages and Emerging Global Strategies
•New Challenge
II.
The
to Follower Countries
First Follower's Strategy
- Japan's Case
•National Technology Transfer and Cooperative
•International
Management
of Supporting
Systems
and Forward Bases
•Effects of Japan's Strategy
III.
The Second Follower's Strategy - Taiwan's Case
•Relative Strength in
Technology Imitation and Diffusion
•Synergistic Links with Japan and Western Countries
•New Threats from Protectionism and Advanced
Technologies
•New Emphasis on Product Innovation Strategy
Notes
I.
A
International Product Life Cycle
and Follower Countries
ModeP
Simplified
For simplicity, suppose that a global innovative product which starts a
new
productive unit^ or a
new product
class^ appears
in
the U.S., and
all
the countries are categorized into three aggregate groups:
In
(1)
the innovator (supposing the U.S.
(2)
the other (moderately) advanced countries, and
(3)
the developing countries.
in this
case),
respect to world trade flows and industrial transplantation, the
following sequential stages
Stage
provided
1
:
The U.S.
initially for
is
will
probably happen:
the only producer. Most of
Stage
greatly
2:
products are
domestic market, only a small proportion
are exported to other advanced countries with
and consumption
its
somewhat
of
which
similar industrial
structures.
The export from
and the export
to the
the U.S. to other
advanced countries expands
developing countries begins
to
increase
significantly.
Stage
3:
Other advanced countries
start to
produce the products by
importing the necessary technology, sometimes accompanied by U.S.
capital, or
by imitating or developing the technology themselves. These
countries also begin to
compete
with the U.S. for the market
in
developing
countries.
Stage
4:
Other advanced countries increase the market share
developing countries and
start to
export the products back to the U.S.
Meanwhile, the developing countries also begin
substitution
technology.
to
implement import
and indigenization strategy by importing
The U.S. thus
in
gradually
moves
its
or imitating foreign
production bases to these
countries with a view to lowering cost and keeping or acquiring local and
Other advanced countries also follow
international markets.
often
fall
a
little
Stage
this track but
behind the U.S.
5: After satisfying their
domestic needs, the developing
countries begin to pursue export expansion strategy, partly for the sake of
foreign exchange,
and export
countries. Their products
their
products to the U.S. and other advanced
have usually been standardized and might be
of
lower quality than those the U.S. and other advanced countries presently
produce, but most of the time these products are better than those
previously exported by the U.S.
Figure
1
this simplified
roughly depicts the development of the international trade of
model.
Insert Figure
1
here.
Accelerated Innovation Process, Changing Comparative
Advantages and Emerging Global Strategies
If
the product
later benefit
life
cycle
is
long enough, then
most countries
economically from the innovation. And
if
will
sooner or
the followers can
take advantage of the relatively low uncertainty at the later development
stages faced by them and concentrate their limited resources on
appropriate strategic
effectively
behind the forerunners might be
reduced over time.
However,
likely that
fields, their lag
some
if
the product
life
cycle
is
somehow
shortened, then
it
is
before the international trade of the former product evolves to
stage 4 or 5 (see Figure
product class
will
1),
another
new
cycle based on a
appear and replace the old one.
In this
new product
case the
or
followers
be
will
in
an unfavorable
because
situation, either
deterred export expansion from which foreign exchange
import stage of the next cycles,
production
is
or,
never transplanted
development
level will thus
if
seriously,
them.
Some
earned
because
for the
of the
countries below a certain
be excluded from the potential economic
more frequent
prosperity brought about by
innovators or pioneers,
to
more
is
of the
innovations. Conversely, the
equipped with strong production capability
Including process innovation
and
productivity
-- will
--
enjoy relatively more
benefit.
the recent incorporation of modern information technology
In fact,
into
product and process design and the automation of production
in
many
advanced countries have already exerted such a far-reaching impact as
just
mentioned. This
R&D and
new
introduction of
comparative advantage
Another
trend can not only shorten the time needed
new products and processes,
typified
by labor cost
crucial factor lies in the
global strategies adopted by
many
in
but also reduce the
many developing
emergence
of
in
countries.
more comprehensive
multi-national corporations.
These
strategies include the global deployment of the elements of "value chain"^
across country boundaries from the very beginning or at early stages,
therefore making the traditional sequential strategy unnecessary any more.
The prevalent
"triad alliances"
Europe and Japan^ are
sustainability
remains
just
to
among
world class corporations
well-known examples. Though
be seen due
in
the U.S.,
their
to the potential instability
rooted
in
the possibilities of strategic inconvergence, imbalance of appropriability,
incompatibility of blending competition
global strategies of this kind
countries of
many
will
opportunities.
and coorperation, and so
forth,
no doubt deprive many developing
the
New Challenge to
After
Follower Countries
World War Two, the diffusion
of
many major
innovations invested
during wartime and their incremental evolution contributed dramatically
to the prosperity of the
Many developing
world economy.
countries also
The optimism
greatly improved their originally impoverished situations.
thereby involved for non- and less-oil-producing countries lasted
many new
shock. Nevertheless, from the late 1970s
technologies again gave rise
economy and technology
still
many
expected that the world
some
structural
lagging countries only dismal prospects,
technologies and industries
In
is
It
are to undergo
passively dependent on the
initiatives to
hope.
promising
But the issues as previously described
of this century.
leave
to
to
until oil
if
change by the end
will
very probably
these countries are
more advanced countries
to transfer
them and could not take more
active
cope with the new challenge.
order to explore the strategies for the follower countries, the next
two parts
will
examine the experiences
of
Japan and Taiwan.
Japan, once regarded as a follower by many western advanced
countries,
is
now
standing out as the world's second largest economic
power and threatening technologically even the U.S. - the most innovative
country after World
War One. Taiwan, once
a developing country, has
already been categorized into a special group
--
"newly industrialized
countries (NICs)." For this reason, the development
countries
may
provide
some
insightful
loci of
these two
lessons for other follower
countries.
For
first
simplicity, in their
follower
catching-up courses Japan can be treated as a
and Taiwan as a second follower
the U.S., which
is still
leading the world
in
relative to the innovator
most pioneering
fields.
-
The
II.
First Follower's Strategy
- Japan's Case
National Technology Transfer and Cooperative Systems
It
is
obvious that technology import from advanced countries has long been
among
the highest priorities
in
Japan's history of modernization. However,
Japan's rapid technological progress and
economic growth need
So
far,
many reasons
control, collectivism, etc.,
paper
to
tremendous impetus
to
further elaboration.
administrative guidance,
this
its
explaining Japan's success, including
human resource development,
have been proposed. And
total quality
is
it
not the purpose of
review them. According to the author's point of view, one of
the few determinants which are extremely important and deserve other
countries' special attention
is
technology transfer and cooperation.
this
mechanism
mechanism
the national
Its
facilitating
uniqueness rests on the
involves not only policy guidance
and resource
fact that
allocation
but also the autonomous, and sometimes coercive, participation and
support from
many
parties with different goals
and
interests.
Figure 2
explicates the historical evolution of Japan's national technology transfer
mechanism,^ and Figure 3 abstracts
of the
major parties concerned.''
shown by Figure 3 was
was organized one
first
It
use
worth noting that the framework as
after the Meiji
new government
century ago.
&3
effective operation of this
of imported technology
together
nation-wide cooperative structure
deployed soon
Insert Figures 2
The
is
its
here.
mechanism makes possible
and enhances the indigenous
many complementary
resources.
R&D
the great
by pooling
Based on
this foundation, several national technological
such as VLSI, biotechnology,
successfully
in
Japan
etc.,
were launched and implemented
after the mid-1 970s. ^
efforts outside military,
programs,
On
the contrary, similar
aerospace and nuclear areas
in
the U.S. and
several western European countries have faced big difficulties.^
Japan's cooperative framework
In fact,
is
also conducive to the
grouping of industrial corporations and integration of
"national value chain."
the innovation process
In
many elements
where uncertainty
of
incurs
high transaction cost, Japan's clan-like network originated from long-term
relationships
and mutual
trust
has
its
special advantage over
many
western countries where many independent innovative companies spend
relatively
fair
much more
effort in finding
appropriate partners, negotiating
terms, transfering technology across compartmentedly organizational
boundaries, monitoring execution and preventing opportunism. Moreover,
Japan's cooperative mechanism also enables
better
economies
of scale
its
manufacturers
and protection from market
Therefore, Japan's system greatly contributes to
appropriability of
economic
fluctuations.
its
members, and accumulating
Actually, this
greater
benefit from innovation by taking concerted
actions quickly, absorbing fluctuations and sharing risks
interrelated
to obtain
system also leads
to
among
learning experience "internally."
Japan's special strength
in
process
technology.
International
Management
of Supporting
Since the Meiji Restoration, Japan has been
and Forward Bases
diligently
managing several eastern Asian countries as
bases. The only difference after World
its
War Two
and deliberately
supporting and forward
is
that
Japan gave up
its
several colonies and military imperialism, and had to resort principally to
8
the
more
implicit
economic operation. Japan
realizes very deeply that
without the so-called "Great Eastern Asian Circle" to back
could hardly be optimistic
in
Guided by
unique strategy
up,
Japan
competing with western powers whose threat
triggered Japan's nationalism
century.
it
and modernization
this national policy,
in
the late nineteenth
Japan has long been adopting a
to "accelerate" the international
product
life
cycle.
For most other advanced countries, the export of a product usually
begins
when
the domestic market approaches maturity, and the export of
technology and capital
export of the product approaches maturity. Despite
western countries
in
financial resource
usually shortens the
when
production to foreign countries begins
for
its
lag
and technological
above cycles by one
or two stages,
behind
the
many
Japan
capability,
and moves many
production bases to Taiwan, South Korea, etc. as exemplified by several
major products
In
From the
1950s.
1
,
if
there
table, for instance,
and the export
late
Table
of transitor radios
is
it
no obvious "boomerang
is
evident that the domestic market
began almost
the late 1960s, Japan for the
In
technology from the U.S., but
it
effect."
at the
first
same
time
in
the
time imported IC
immediately subcontracted the assembly
to
Taiwan, Hong Kong and South Korea. This strategy aims at moving ahead
or at least not later than, western companies, even those from which
acquired
new
technologies.
By doing
so,
Japan
tries to attain
Japan
the following
goals:
(1)
possible
(2)
It
can enter the market early and thereby gain the greatest
profit.
It
can make
earlier
for international competition.
(3)
Informal,
It
can
which
use
of the better
and cheaper
local
''^
affect the local industrial standards, both formal
will
very
resources
likely result in
and
favoring the connection with
of,
Japan and
(4)
fields,
and
It
isolating the
can spare
its
western latecomers.
relatively
scarce resources
for
more advanced
which can be interpreted as a strategy accelerating "technological
industrial
metabolism."
Insert Table
With
far less
counterparts
in
1
here.
average direct investment than
its
western
individual foreign projects, Japan's firms
successfully established comprehensive networks
have
most eastern Asian
in
countries through technical cooperation, subcontraction, purchasing,
financial credit
arrangements, and supply of key materials, parts and
equipments. Moreover, Japan's
relative strength in
process technology
which usually has less externalities than many product innovation designs
do also helps encourage
its
cooperation with
some aggressive Asian
countries. This fact could be illustrated by the
case
of the close
connection between Japan and Taiwan.
Before the
oil
shock which caused a drastic change
structure, Taiwan's imports from
total imports.
15%
of
its
Meanwhile, Taiwan's exports
total exports.
to the U.S. in recent
the materials
total
Japan accounted
On
to
for
import cost
in
more than 40%
Japan came
to only
years has been nearly
40%
of
Taiwan's
about
total exports,
cost of the exported products. Furthermore, according to
about 40
its
the other hand, although the share of exports
and parts purchased from Japan usually amount
unofficial estimate,
of
to
60% of the
to
40%
of the
some
export orders by value received
by Taiwan are controlled directly or indirectly by Japanese-owned
companies.
be found
in
In effect,
similar or
even more "severe" situations could also
South Korea and several other Asian countries. Therefore,
10
to
a
considerable extent, these countries have
become Japan's
"satellite"
production and indirect export bases.
Effects of Japan's Strategy
Japan's national technological cooperative framework as described above
has the effect
simplified
of
moving the Japan's curve
model (see Figure
international strategy of
Japan's and
its
1)
-
to the
managing
--
left.
foreign
the second
one
However,
Is
It
in
the
Japan's
bases that moves both the
follower countries' curves to the
left
and makes Japan and
these countries gain relatively more economic benefit than otherwise
could be expected. This example highlights the possibility of creating
extra benefit by joint forces of followers
elements
integration of
though Japan
in this
follower countries
III.
among whom some
of "international value chain"
case may enjoy the
may
fall
lion's
close vertical
can take place,
share of the
profit
and
its
much dependency on Japan.
into too
The Second Follower's Strategy - Taiwan's Case
Technology
Relative Strength
in
Supposing that the
total benefit of
Imitation
and Diffusion
the adoption of an innovation could be
represented by the multiplication of the relative advantage of that
innovation and the degree of
diffusion,"'^
progress could be attributed at least as
second
factor as to the
high quality
much
to
its
special strength
in
for diffusion of innovation
manpower
the
one. Through several decades' investment
and education, Taiwan has established a very favorable
infrastructure
environment
first
then Taiwan's remarkable
and
cultivated a strong
to carry out the technological imitation
improvement.
11
base
and
of
in
Another
Taiwan
relative strength of
industry. This industry
owns a
large
entrepreneurs and workers, even
number
many
machinery
lies in its traditional
whom
of
experienced
of diligent,
do not possess adequately
modern hardware and advanced knowledge. Through them many promising
technologies,
not
if
beyond Taiwan's
potential capability, will very
probably be imitated and diffused rapidly and widely using similar or
smaller production scales and/or with equivalent or lower product quality.
The machinery
industry thus supports
making
of
full
use
many
other industries of Taiwan
in
imported technology through imitation, adaptation and
diffusion. '2
Certainly,
of import substitution
crucial
development process Taiwan's government
in this
and export promotion, and protection
domestic industries have also played an important
policies
some
of
role.
Synergistic Links with Japan and Western Countries
Taiwan's close
tie
with Japan, which
is
particularly
technology and productivity, also gives
some
similar
combined with other indigenous
special strength
further induced
It
many western companies
to
good
advantages. This
characteristics has
move
Taiwan
more
in
order
significant
in
to
compete
sense, Taiwan
heavy
with Japan.
this kind of
And
cooperation
this trend
has become
recent years especially given the fact that
American companies prefer
this
its
thus partly mitigated.
many western companies seek
Ironically,
with
is
--
bases
their production
Taiwan. Taiwan's potential vulnerability resulting from
dependence on Japan
process
at
to
close their production bases
a second follower
attractiveness to the innovator
without the long-time close
link
--
--
the U.S.
with the
benefits a
in this
first
12
lot
from
many
in
the U.S.
its
simplified model.
follower
--
Japan,
this
Yet
In
to
extra benefit might not have occurred.
New
Threats from Protectionism and Advanced Technologies
Recent protectionism reacting
to the trade deficit in
many western
countries has forced Japan to refrain from unrestrictively exporting to the
U.S. and other countries. This pressure also unfavorably affects the
Taiwan and some other export-oriented countries and
trading position of
Japan's indirect export through them. As a
traditional strategy
and
tried to invest directly in
countries which constitute
Japan nowadays
its
principal markets.
the most active
is
result,
in
Japan has modified
those advanced
As a matter
of fact,
creating the "triad alliances."
former production and indirect export bases
in
its
some NICs,
Its
including
Taiwan, are thus becoming less desirable.
On
automation and
relative
Many advanced
of
some
Taiwan's more traditional production capability.
countries can
value-added products
the
production technologies, such as
manufacturing systems, have also reduced
flexible
advantage
Still
many advanced
the other hand,
in
their
more steeply
now economically produce many
own
countries.
declining learning curves
products, especially those associated with
have made the time-consuming
high
in
many new
modern information technology,
international technology transfer or
subcontraction less attractive.
Facing these threats,
to counterfeit
in
a variety of products, particularly
technology-related
fields, in
strong responses from
government
some companies
example, the speed
in
in
recent years began
information
order to sun/ive. These actions incurred
some advanced
to intervene.
Taiwan
countries and forced Taiwan's
However, taking personal computer as an
of imitation,
which usually can succeed
1
3
in
three to six
months
announcement
after the
of a
new
product
in
the U.S., and the far
lower price, often only one fourth of that of the original brand, also
many
surprise
foreign companies. And, interestingly, this recognition
many new
again brings
orders
to
Taiwan.
This embarrassing dilemma reveals the very unbalanced technological
which could be summarized
capability of Taiwan,
the bottleneck of
manpower
in
some
developing
into
a
brief evaluation of
high-tech information
products as Table 2 shows.
Insert Table 2 here.
New Emphasis on
From
above
the
Taiwan
to
analysis, the essential strategy for a
adopt now
This does not
mean
Product Innovation Strategy
that
it
mean
should
is
to
that
it
upgrade
should
join the
its
try
second follower
like
potential for product innovation.
major product innovations, but does
competition
in
the earlier stages of
some new
products or product classes than ever before. Continuing to import
well-defined product ideas and produce them, even with
advantage
in
production capability,
will
very
likely
some
suffocate
the allegedly approaching technology innovation era as that
in
the
first
Japan's
direction
part of this paper.
In
time.
future
in
was analyzed
other words, Taiwan cannot follow
historical strategy track.
in
its
competitive
It
has
to adjust its
development
Figure 4 briefly explains this situation.
Insert Figure 4 here.
However, Taiwan's present environment, which
1
4
facilitates imitation
and incremental process improvement,
activates product innovation.
move
its
R&D and
suggests the
to
advanced
may
Some
exchange.
is
Therefore,
right
some
partners
functions,
just
in
about
to learn
addition to the
how
new
process technology
still
in
The recent investment
in
potential risk,
that
it
one
advanced
in
this
deployment
to
exchange
of
stories, not to
new
strategy emphsizing
have
for
its
challenge.
more
internal
its
special
more advanced product
to
Taiwan
cooperation with Philips Co.
application specific integrated circuits (ASICs), despite
can thus be
justified
as a reasonable strategy
in
the
helps prevent Taiwan from being excluded from the "triad
alliances."^'*
1
5
in
mention
of innovation
mainly rely on
US$300,000,000
Semiconductor Manufacturing Co. and
(Netherlands)
manage
to
international
Taiwan presently may
in
if
external acquisition strategies for
have been few successful
development and the novel
sense
to
to
not be so helpful as originally expected, because, even
countries, there
Taiwan which
its
seeking
difficulty in
new businesses as proposed by some researchers
countries"'-^
designs.
and innovation functions
is
with appropriate infrastructure.
has nothing valuable
strength
which
that
to the international alliances, the increasingly prevalent practice
of cross-licensing
entering
same as
reason, one feasible strategy
this
related product design
advanced countries
As
For
not the
is
.
Notes
1
A
similar
model was
revised by him
Hypothesis
in
in
a
Economics and
first
1979.
New
Raymond Vernon
raised by
in 1
966 and then
See Vernon, Raymond, "The Product
International Environment,"
Statistics 41 (4),
Cycle
Life
Oxford Bulletin of
255-267 (1979), and "Sovereignty
at
Bay: Ten Years After," International Organization (summer, 1981).
2.
For productive unit as unit of analysis, see Abernathy, William
James
Utterback,
M., "Patterns of Industrial Innovation,"
and
J.
Technology
Review 80,41-47(1978).
3.
For product class as unit of analysis, see Moor, William
Michael
L.,
Readings
"Managing Innovation over the Product
the
in
Management of Innovation, Moor,
Tushman, Michael
4.
L.
eds..
985.
In fact
William
L.
and
The
for
The Free Press, New York, New York,
the concept of "value chain" can apply to the national and
international levels
"triad alliances"
as
this
among
paper suggests.
the U.S., Europe
and Japan are discussed
example, Ohmae, Kenichi, Triad Power, The Free Press,
New
This
New
in,
York,
York, 1984.
is
a condensation
Transfer
7.
Life Cycle," in
For the definition and analysis of "business value chain," see Porter,
1
6.
and Tushman,
Pitman Books, Marshfield, Mass, 1982.
Michael, Competitive Advantage,
5.
L.
(in
of
Chapter 35
of Saito,
Masaru, Technology
Japanese), Bunshindor, Tokyo, 1980.
For a more detailed discussion, see Chiang, Jong-Tsong, The Formation
of Japan's Integrated Strength
(in
Chinese), Chapters
1
&
7-10,
STAG/ITRI, Taipei, Taiwan, 1984.
8.
For Japan's VLSI program, see Sakakibara, Kiyonori, "From Imitation
Innovation:
The Very Large-Scale
Integrated Circuit Program,"
1
6
MIT
to
Sloan School Working Paper No. 1490-83. For other national programs,
see, for example, Japan Long-Term Credit Bank, Japan's High Technology
Industries, Tokyo, 1983.
9.
For the
difficulties
faced by the U.S., see,
for
example, Horwitch, Mel,
"Managing Large-Scale Programs: The Managerial Dilemma," Technology
in
Society
161-171 (1984).
6,
10. Japan's strategy of accelerated product
goals as discussed here are analyzed
op.
1 1
cit.,
Chapter 38, Sec.
This model
is
discussed
in
1
2.
in
more
details
in
first
two
Saito,
Masaru,
Chiang, Jong-Tsong, The Industrial
in
Taiwan
(in
Chinese), 18-19,
Taiwan, 1980.
For more detailed analysis, see
13. See, for
cycle and the
2.
Technology Development and Transfer
ITRI, Taipei,
life
ibid.,
example, Roberts, Edward
Businesses: Selecting Strategies
33-36,
B.
for
and
1
62-1 88
& 239-242.
Berry, Charles, "Entering
Success," Sloan
New
Management
Review, 3-17 (spring, 1985).
14. This
case
is
analyzed
Management
and
in
Chiang, Jong-Tsong, Determinants of
of National Technological Programs
Implications, unpublished
2nd year paper
Doctoral Program, 46-51, July 1987.
1
7
in
- Taiwan's Experience
MIT Sloan School
Net
Export
Developing
Countrios
Other
Advanced
Net
Import
Countries
the
Fig.
1.
US
International Trade Evolution of An Innovative Product
Mel j l Era
Western
Advanced
Foreign Subsidiaries in Japan
Government R&D Institutes
High Education Institutes
^
Countries
Before World War
Western
Advanced
Countries
Before World War
Western
Advanced
Countries
>
Private
Industries
II
Foreign Businesses In Japan
Government R&D Institutes
High Education Institutes
Japan's Big Trading Companies
Trade Associations
—
Private
Industries
I
Foreign Subsidiaries in Japan
Government R&D Institutes
High Education Institutes
Japan's Big Trading Companies
^
->
> Developing
Countries
j
^ Private
Industries
T
After World War
Western
Advanced
Countries
—
II
Foreign Businesses In Japan
Government R&D Institutes
High Education Institutes
Japan's Big Trading Companies
Business R&D Departments
Private R&D Institutes
Technology Transfer Agents
Others
Developing
r^ Countries
y
r
->
Technology
Transfer
Agents
Private
Industries
d^
Fig. 2.
Development of Japan's Technology Transfer Mechanisms
>1
o
o
c
X
u o
Mature
Market
Self-R&D
New
->
Market
High Technological Risk
Technology
Leader
Japan
Low
Economic^
Risk'
Technology
Import
Low Technological Risk
Process /
Focused^
Fig. 4.
High
^ Econonnic
Taiwan Risk
Technology
Follower
\Product
Focused
Technology Strategy Mix and Corresponding Situations
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