Despite many handicaps, Japan achieved a rapid enhancement of its technology and productivity levels by focusing its efforts on improving the productivity of the relatively scarce resources (constrained production factors) in each respective era (1). Such remarkable improvement can be largely attributed to private industryís vigorous efforts to invest in R&D resulting in a rapid enhancement of technology contributing to improvement in industry productivity levels, leading to national development (Fig. 1). Improved productivity and the resulting national development induced further vigorous R&D which again resulted in further enhancement of technology, leading to the construction of a virtuous cycle (i.e. successful stimulation and induction interaction) between technology and national development (4). To date, a number of studies have identified the sources supporting Japanese industryís technological advancement and consequent national development (7, 26). Thus far, however, limited attention has been paid to an inducing mechanism, Japanís way of technological education, leading to the construction of such a virtuous cycle (62).
Similar to an ecosystem, Japan constructed an elaborate system between internal technology and external technology (47), which can be distinctly observed in the above virtuous cycle (57). This system, formulated by a combination of industry efforts and government stimulation, functioned quite well during the period of rapid economic growth of the 1950s and 1960s, and succeeding grave energy and environmental crises of the 1970s and early 1980s (39). MITI (Japanís Ministry of International Trade and Industry Ė responsible for industrial technology policy, in particular) stimulated and induced industryís efforts by establishing a sophisticated policy system which has strengthened dynamism conducive to technological development (37, 38). However, since the relaxation of energy constraints and the succeeding "bubble economy" (1987ó1990) and its bursting (1991), Japanese industry has faced a structural stagnation of R&D activities (44, 49) which may result in the collapse of the above virtuous cycle (58).
Focusing on the perspective of such a metabolic aspect of technological development in a context of its interaction with national development, this paper analyses the source of the inducing mechanism, Japanís way of technological education, leading to the construction of the virtuous cycle between technology and national development. Section 2 demonstrates an empirical review of Japanís path and with respect to national development and technologyís contribution to paving such a path. Section 3 attempts an empirical analysis of policy contribution and its mechanism. Section 4 briefly summarises some implications of an interaction between technological education and national development.
2. The Role of Technology: Japanís Path
Japanís success over the last four decades in achieving sustainable development can be attributed to an elaborate system between internal technology and external technology which can be distinctly observed in a virtuous cycle between technology and national development (4). This mechanism, can be decomposed into a complementary relationship between technology and capital, and technology substitution for scarce resources (constrained production factors) (57).
2.1 Complementary Relationship between Technology and Capital
The Japanese economy has shown tremendous growth due to the motivating influence of industrial development. Japanís world GDP share was 4.1% in 1960, 6.4% in 1970, and 9.1% in 1980. It increased to 14.8% in 1990 as illustrated in Fig. 2, and it is currently more than 18%. Such tremendous growth can be attributed largely to rapid technological progress as demonstrated in Fig. 3 (11).
Whereas agriculture, forestry, fisheries and mining generally stagnated in the post-war period, manufacturing industry took a leading role in stimulating Japanís economy as a whole as illustrated in Fig. 4 (36). The manufacturing industry displayed distinctive dynamism and initiative in shedding obsolete equipment, facilities and technology and venturing into new lines of activity, all of which rapidly enhanced technology and productivity levels (24). These efforts resulted in the attainment of levels outmatching other competitors and recognition as being among the worldís most advanced nations (7).
Such remarkable improvement has mainly resulted from private industryís vigorous efforts to invest in R&D (Fig. 5). The marginal productivity of Japanís industryís capital investment has exceeded those levels found in the USA and European countries (67). In addition, the marginal productivity of its R&D investment (rate of return to R&D investment) has proven to be much higher than capital investment (61), and the internal rate of return to R&D investment has maintained an extremely high level in comparison to other advanced countries (20, 61).
This high level of rate of return to R&D investment in Japanís industry induced further efforts by private industry to increase R&D investment. It is important to note that these efforts were incorporated with capital investment (57, 67).
Thus, through the support of a complementary relationship between R&D and capital investment, Japanís manufacturing industry displayed distinctive dynamism and initiative in shedding obsolete equipment, facilities and technology, resulting in a rapid enhancement of its technology and productivity levels.
2.2 Technology Substitution for Constrained Production Factors
Despite many handicaps, Japan achieved a rapid enhancement of its technology and productivity of the relatively scarce resources (constrained production factors) in each respective era (10). This mechanism can be attributed to an elaborate system between internal technology and external technology (Fig. 6).
Internal technology focused to improve external technology by improving the productivity of the relatively scarce resources, and improved technology, in return, induced further internal technology. Although capital was a scarce resource up until the 1950s, with economic development, the scarce resources shifted to labour in the 1960s, environmental capacity from the mid-1960s to the start of the 1970s, energy following the first energy crisis in 1873 up until the early 1980s, and again labour after the relaxation of energy prices starting from 1983 as illustrated in Fig. 7. While many have attributed this achievement to the complementary relationship between R&D and capital investment, technology (which is a relatively constraint free production factor) in fact provided the strongest contribution through its substitution for scarce resources (constrained production factors).
Facing the energy crisis in the 1970s, despite damaging impacts due to the sharp increase in energy prices (Fig. 8), under the support of the above mechanism, Japan was able to maintain sustainable growth by shifting from an energy dependent mode to a "greener" mode as illustrated in Fig. 9. Fig. 10 illustrates trends in value added (GDP, production, energy consumption and CO2 emissions) in Japanís manufacturing industry over the period 1955ó1994. Looking at Fig. 10 we note that Japanís manufacturing industry achieved sustainable development over the last two decades while minimising energy dependency and CO2 emissions, and that this was enabled largely by efforts to improve energy efficiency or decrease unit energy consumption. Such efforts were results of technology substitution for energy thereby Japanís manufacturing industry was able to overcome energy environmental constraints while maintaining sustainable development.
Thus, despite numerous handicaps, through the support of the complementary relationship between technology and capital and technology substitution for scarce resources, Japanís manufacturing industry displayed a distinctive dynamism and initiative in shedding obsolete equipment, facilities and technology, resulting in the rapid enhancement of its technology contributing to the improvement in its productivity levels. Improved productivity and the resulting increase in production induced further vigorous R&D which again resulted in further enhancement of technology. Through this mechanism, Japan constructed an elaborate virtuous cycle between technology and national development.
3. Policy Contribution and Its Mechanism
Over the last four decades, technology has played a significant role in Japanís achievement of sustainable development despite numerous handicaps. Among production factors, technology has identical characteristics, including intangible, uncertainty, huge risk, high cost, and a long lead-time. These characteristics contain two important implications. First, private industry generally flinches from challenging technological investment without certain favourable conditions. Second, technology can maximise its potential performance in a comprehensive organic socio-economic system.
With such implications, Japanís success in constructing an elaborate virtuous cycle between technology and economic development is considered to be attributed to a sophisticated combination of industry efforts and government stimulation. Government stimulation was focused on constructing an elaborate socio-economic system in which technology could maximise its potential performance. Such a system is not static. Rather it is dynamic, comprehensive and organic, corresponding to both domestic and international environments in each respective era.
3.1 Economic Environment and Social and Cultural Foundations
Fig. 11 illustrates trends in Japanís governmental support for R&D investment by industry. Looking at Fig. 11, we note that Japanís governmental R&D funding represented 5 to 10% of total industry R&D expenditures by the mid-1960s. As Japanís economy expanded, the relative level of government R&D funding decreased and currently, it is only 3%. Interestingly enough, Japanís governmental support for R&D investment by industry is extremely small compared to that of other advanced countries, as summarised in Table 1. Fig. 12 compares ratio of governmental R&D funding in advanced countries which indicates that the ratio of Japanís total governmental R&D funding is 1/5. Out of Japanís total governmental funding MITIís share for industrial R&D is only 1/8 as summarised in Table 2.
This observation implies the effectiveness of Japanís R&D policy system in stimulating industry R&D effectively when it has such limited financial resources. Despite a limited financial role, MITI has developed other methods and techniques which permit it to play a leading role in the stimulation of the industrial technology development process in a comprehensive organic system. This can be interpreted as "Japanís way of technological education." In order to elucidate this, a review of the factors which contributed to the rapid improvement of Japanís technology should be made.
Analysing the important contributing factors to the rapid improvement of Japanís high-technology products over the period when Japan enjoyed its Ďhigh-technology miracle" (chiefly in the first half of the 1980s), the following factors can be pin-pointed:
Sources which enabled Japanís smooth and effective assimilation of technology import and active improvement of such imported technology can be attributed to the above socio-cultural systems as illustrated in Fig. 14.
3.2 Mechanism of MITIís Policy System
In line with the above mechanism, MITI has established a sophisticated policy system (Fig. 15) in its comprehensive industrial policy system. The basic principle of MITIís industrial policy system is to (i) promote free competition in the market place, (ii) stimulate the competitive nature of industry and (iii) induce the vitality of industry. In accordance with this principle, the basic approach encompasses (i) leading edge technology foresight (Fig. 16), (ii) close co-operation with related industrial policies as a policy web (Fig. 17) and dependence on an active and flexible approach, and (iii) best utilisation of innovative human resources at both national research laboratories and universities. Through such an approach MITIís industrial policy system, in co-ordination with other related industrial policies, aims at inducing a chain reaction of the vitality of industry by stimulating industryís potential desire for active R&D. Technology complementation with capital as well as substitution for constrained production factors such as labour, energy and environmental capacity can thus proceed. Such a stimulation process functioned particularly well against grave situations such as the energy and yen crises. Such crises acted as a spark which ignited leading to a chain reaction. The mechanism for such stimulation and inducement in MITIís policy system can be summarised as follows 39) (Fig. 18):
Industrial technology policy initiated by MITI focused on inducing industry to respond to the above historical demands (37) (Table 4). Japanís success over the last four decades in constructing a virtuous cycle between technological development and national development in the face of numerous constraints can be attributed to such a dynamic and flexible policy approach corresponding to a dynamic change in domestic and international environments (10).
Through the above review, a systematic view of the mechanism for inducing the vitality of industry in Japan has been developed as illustrated in Fig. 19. In this comprehensive organic system we note that, on the basis of a strong economic environment and upon the corresponding social and cultural foundation, there exists a strong potential desire for active R&D similar to the oxygen rich atmosphere in a chemical reaction.
Given such a condition, the role of government policy is how to further motivate such a strong potential desire leading to a chain reaction of industry vitality similar to the role of a catalysis. Thus, a relatively small government financial contribution can maximise its effect.
3.3 Japanís Industrial Technology Programme at a Turning Point
MITIs sophisticated policy system functioned very well, particularly in inducing industryís vigorous R&D challenges in overcoming the crisis in the 1970s and electronics oriented high-technology development in the first half of the 1980s. In line with this path, the source of Japanís leading high technology has been steadily shifting from an imported base to an indigenous base (24). This policy system can be interpreted as "Japanís way of technological education."
A new stream of technological innovation which emerged in the late 1980s suggested that it was necessary to develop a "new technological education system." This implied not only build on existing technology, but also to initiate creative technological innovation which would induce broad new technologies based on new scientific inventions and discoveries, whose results could be used to resolve global problems (14, 31). At the same time, with economic growth and technological advancement, Japan was requested to make a significant contribution to the international community through the R&D process, its outcome and its ripple effects (24). Furthermore, confronting economic stagnation and mounting concern for future sustainable development due to malevolent CO2 emissions resulting from energy use, a new direction was sought to recognise the critical role technology must play in (I) revitalising the worldís economy and (11) providing a solution which can simultaneously overcome energy and environmental constraints while maintaining sustainable growth (45). Identifying such a simultaneous solution was considered the only survival strategy for Japan as it faced crucial energy and environmental constraints.
Under these conditions, Japanís industrial technology programmes have reached a crucial point in which the following requests have been made (Fig. 20):
Facing the above mentioned turning point, MITIs new task became the structuring of a new policy system which encourages forefront efforts in industrial technology to promote R&D on both basic technology and energy and environmental technologies so as to strengthen transnational independence (41).
In order to respond to such a global requirement in the 1990s, MITI decided to consolidate six existing national R&D programmes2) into the following two comprehensive programmes in 1993 (55) (Fig. 22):
(i) The Industrial Science and Technology Frontier Programme
Based on the recognition of the two-sided nature of the global environment issue and energy consumption, this programme aims at a comprehensive approach for overcoming global energy and environmental constraints while maintaining sustainable growth through the integration of the Sunshine Projects (R&D on New Energy Technology; 1974), the Moonlight Project (R&D on Energy Conservation Technology: 1978) and the Global Environment Technology Programme (1989) (18).
The reorganisation of AISTís (the Agency of Industrial Science and Technology of MITI) national research laboratories, which includes establishing the National Institute for Advanced Interdisciplinary Research and extensively reviewing policy programmes for stimulating industry R&D activities, is expected to maximise the effectiveness of such a restructuring (Fig. 27).
4. Implications for an Interaction between Technological Education and National Development
The remarkable development of the Japanese economy has been largely attributed to a virtuous cycle between technological development and national development. This cycle was enabled by an elaborate system between internal technology and external technology. Such an elaborate system, formulated by a combination of industryís efforts and government stimulation, functioned quite well. MITIís efforts focused on establishing a sophisticated policy system which stimulated and induced industryís efforts towards formulating the above elaborate system.
This policy system based on such basic principle as to(I) promote free competition in the market place, (ii) stimulate the competitive nature of industry, and (iii) induce the vitality of industry encompasses the following basic approach:
Facing such circumstances, we should keep in mind the example of an ecosystem, which demonstrates that once a cycle begins to collapse and fall into a vicious (negative) cycle, remediation of the system becomes impossible. Similarly, as an ecosystem requires consistent efforts to improve quality for its own maintenance, so does the interaction between technology and surrounding social, economic and natural environments. Thus, prompt remediation of the current vicious cycleís signature is urgent.
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