New Horizons in the Economics of Innovation series
Edited by Bengt-Åke Lundvall, Patarapong Intarakumnerd and Jan Vang
Chapter 9: Advance of Science-based Industries and the Changing Innovation System of Japan
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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