Government, Innovation and Technology Policy
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Government, Innovation and Technology Policy

An International Comparative Analysis

  • New Horizons in the Economics of Innovation series

Sunil Mani

This unique book offers a comprehensive analysis of the changing role of government with respect to domestic technology development in eight countries in both the developed and the developing world. The author distinguishes between those countries which can be classed as creators of new technologies (Japan, Korea and Israel) and those which possess the potential to create new technologies (Singapore, Malaysia, India, South Africa and Brazil).
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Chapter 2: The Japanese Model of Low Government Intervention

Sunil Mani

Extract

2. The Japanese model of low government intervention The Japanese Innovation System (JIS) is a complex system comprising processes, institutions and forms of organisation. These include the market process, intraand inter-corporate organisation, government regulation and intervention, and university teaching and research. As with any complex system, the analysis of JIS involves a simplification, an abstraction of some of the major factors which influence the system and its behaviour and performance. Like the proverbial elephant, JIS can be all things to all people. For example, those who see market forces as the motor of capitalism see in JIS, cut-throat competition between Japanese companies and a government which spends a relatively small proportion of national income while ensuring that its interventions are exclusively of a market-conforming kind. On the other hand, those who believe in the virtues of government intervention see in JIS a strong state which is oriented to the development of the nation’s economy and which is prepared to put considerable pressure on Japanese companies to move in the directions in which government feels is desirable. (Fransman, 1996) In the previous chapter we saw that government does play an important part in the area of technological development of both the developed and developing countries. In the light of the arguments and experiences presented above, in the present chapter we analyse the experience of Japan. The Japanese model of organising industrial R&D is important for two reasons. First, it is a well-documented fact that technology is an important...

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