Asia’s Innovation Systems in Transition

Asia’s Innovation Systems in Transition

New Horizons in the Economics of Innovation series

Edited by Bengt-Åke Lundvall, Patarapong Intarakumnerd and Jan Vang

The success of Asian economies (first Japan, then Taiwan, South Korea, Singapore, Hong Kong and, more recently, China and India) has made it tempting to look for ‘an Asian model of development’. However, the strength of Asian development lies less in strategies that reproduce successful national systems of innovation and more in the capacity for institutional change to open up new development trajectories with greater emphasis on knowledge and learning. The select group of contributors demonstrate that although there are important differences among Asian countries in terms of institutional set-ups supporting innovation, government policies and industrial structures, they share common transitional processes to cope with the globalizing learning economy.

Chapter 9: Advance of Science-based Industries and the Changing Innovation System of Japan

Hiroyuki Odagiri

Subjects: economics and finance, economics of innovation, innovation and technology, economics of innovation


Hiroyuki Odagiri INTRODUCTION With the decline of demand in existing industries, intensifying technological competition on a global scale, and the rapid progress of scientific knowledge, Japan now aims at advancing science-based industries. In 2001, based on the recommendation of the Council of Science and Technology Policy, the Japanese Government drew up the ‘Science and Technology Basic Plan’, in which four areas were given strategic priorities. They are life sciences, information and telecommunication, environmental sciences, and nanotechnology and materials. It is hoped that the promotion of these sciences will foster the development of industrial technologies, such as biotechnology, IT technology and nanotechnology-based materials, thereby stimulating the development of related industries. Accordingly, Japan’s national innovation system is changing. In part, it is a spontaneous change that is occurring in response to changing market needs. Also, it is a consequence of conscious policy efforts because the advance of such industries made the existing institutional, legal and policy framework obsolete. In this chapter, I intend to describe such changes in Japan, occasionally taking biotechnology as a case, and show how technological changes, socio-economic changes, and institutional changes interact with each other, creating a new and yet path-dependent national innovation system. In the first section, I begin by describing Japan’s national innovation system up to the 1980s, followed by the comparison of its experience with those of Korea and Taiwan in the next section. Then, in the third section, I discuss how the conditions underlying Japan’s system have recently changed. In the fourth...

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