Competitiveness, FDI and Technological Activity in East Asia
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Competitiveness, FDI and Technological Activity in East Asia

Edited by Sanjaya Lall and Shujiro Urata

This book addresses this imbalance with new country studies on the interaction between foreign direct investment (FDI) and technological activity in building export competitiveness. The book covers China, Indonesia, Japan, Korea, Malaysia, Philippines, Singapore, Taiwan and Thailand, highlighting different strategic approaches to building capabilities in industrial enterprises. The book also includes a general overview and studies of Japanese multinationals overseas.
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Chapter 4: Building technological capabilities with or without inward direct investment: the case of Japan

Akira Goto and Hiroyuki Odagiri


Akira Goto and Hiroyuki Odagiri1 Learning is usually treated as a supply-side matter, thought to follow teaching, training, or information delivery. But learning is much more demand driven. People learn in response to need. When people cannot see the need for what’s being taught, they ignore it, reject it or fail to assimilate it in any meaningful way. Conversely, when they have a need, then, if the resources for learning are available, people learn effectively and quickly. (Brown and Duguid, 2000, p. 136) 1. INTRODUCTION Innovation and learning are, as Cohen and Levinthal (1989) argue, the ‘two faces of R&D’. Both indispensable to technological and economic development. They were particularly important for a late-starter like Japan (after the Meiji Restoration of 1867 or after the defeat in World War II), because the acquisition of advanced technology from abroad was essential to help it build technological capabilities of its own. In this chapter, we examine the process of technology acquisition and the building of technological capability by Japanese manufacturing industries, focusing on the period from the end of World War II to the early 1970s. Post-war Japan imported many advanced technologies and used them to upgrade its level of industrial technology, which in turn contributed to the competitiveness of such industries as automobiles, steel, semiconductors and machine tools. Japan was able to become the world’s largest producer in these industries by the 1980s. We concentrate on how Japan acquired foreign technologies; this is probably of most relevance to developing...

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