Abstract

This paper provides a general background of the characteristics of the Japanese economy that relate to its use of technology to promote economic growth. We do not consider the common view that Japan just catching up with the technological level of other industrialized countries explains its remarkable rate of post-war economic growth. Rather we argue that the effective importation of technology requires complementary resources of management, skilled labor, capital, and domestic R&D as well as public to facilitate the transfer of technology. Japan has such complementary resources and public policies. The first part of the paper describes the process of technology importation and current concerns in Japan about dependence on imported technology. The second part of the paper describes Japan's domestic R&D effort and its major reliance on private sector R&D, supplemented, however, with government intervention in selected industries. The third part of the paper examines the institutional settings that had the significant impacts on Japan's introduction of new technology. These institutional factors include 1) post-war economic growth and changes in industry structure, 2) the character of competition, 3) the business group and 4) characteristics and organization in the supply of labor.

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