Institutional Variety in East Asia

Institutional Variety in East Asia

Formal and Informal Patterns of Coordination

New Horizons in Institutional and Evolutionary Economics series

Edited by Werner Pascha, Cornelia Storz and Markus Taube

This illuminating book broadly addresses the emerging field of ‘diversity of capitalism’ from a comparative institutional approach. It explores the varied patterns for achieving coordination in different economic systems, applying them specifically to China, Japan and South Korea. These countries are of particular interest due to the fact that they are often considered to have developed their own peculiar blend of models of capitalism.

Chapter 10: Japan’s Silver Market: Creating a New Industry under Uncertainty

Cornelia Storz and Werner Pascha

Subjects: asian studies, asian economics, economics and finance, asian economics, economics of innovation, institutional economics, innovation and technology, economics of innovation


* Cornelia Storz and Werner Pascha 10.1 INTRODUCTION It has often been asked whether today’s Japan will be able to move into new and promising industries, or whether it is locked into an innovation system with an inherent inability to give birth to new industries (Anchordoguy 2000; Aoki 2000; Collinson and Wilson 2006). One argument, which has in earlier years been proposed by Aoki (e.g. 1994), reasons that the thick institutional complementarities among labour, innovation, and finance among its enterprises and the public sector favour industrial development in sectors of intermediate uncertainty like medium–high-tech industries, while it is difficult to move into areas of major uncertainty, for instance high-tech industries like bio-tech. Therefore it is recommended that Japan improves its institutional quality by a policy shift towards an ‘entrepreneurial framework’ with Silicon-Valley-like institutions in work and industrial organization (Goto 2000; Nezu 2004), which are said to allow for a higher productivity of entrepreneurship and a higher level of competitiveness (Audretsch and Thurik 2000; Bosma and Levie 2010; Sobel 2008; van Stel et al. 2005). In this chapter, we present the case of the silver industry or, somewhat more prosaically, the 60+ or even 50+ industry, for which most would agree that Japan has indeed become a lead market and lead producer on the global market. For an institutional economist, the case of the silver industry is particularly interesting because Japan’s success is based on the cooperation of existing actors, the enterprise and public sector in particular, which helped overcome the...

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