Edited by Akifumi Kuchiki and Masatsugu Tsuji
Chapter 11: Agglomeration and Local Innovation Networks in Japanese SMEs: Analysis of the Information Linkage
* Masatsugu Tsuji and Syoichi Miyahara 11.1 INTRODUCTION The revitalization of Japanese SMEs (small- and medium-sized enterprises) is one of the most important issues in the Japanese economy, and weakening SMEs surely leads to a loss of competitiveness across all Japanese manufacturing industries, since the former is the essential basis for the latter. Countless measures to revitalize the industrial sector have been implemented thus far, especially by all levels of government, from central to local, and a significant amount of public funding has been poured into various projects, such as promoting venture businesses or supporting academia/industry/government collaboration. The reality of Japanese SMEs, however, shows that revitalization has not been achieved, and such policy measures have not been successful in promoting SME revitalization. There are many ways of achieving upgrading and innovation; one is that each SME is responsible for its own upgrading and innovation, and mobilizes all resources for this purpose, and the other is that the region has responsibilities and utilizes all policy measures available to achieve this goal. In other words, the former is the framework of the market mechanism, while the latter is that of public policy. For local innovation policy, the most important factor is how SMEs obtain cutting-edge information on technology, market conditions, financing, and so on, which are essential for innovation. There are many sources of such information, such as reverse engineering, licensing technologies from other firms, obtaining patents, and recruiting mid-carriers or senior engineers. The key players in this context are universities or local...
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