Internationalisation and the changing government-industry alliance in Japan

This thesis studies the cumulative impact of technological progress and internationalisation on Japan's strong and globalising private sector and the changing government-industry alliance that shapes industrial policy. An attempt is made to examine whether, how and to what extent, the traditional policy-making process and actors associated with Japanese industrial policy have changed in response to the twin challenges presented by internationalisation and technological innovation. The government-industry alliance is studied as a key to understanding Japan’s evolution from follower to pioneer nation with unique Asian characteristics. Attention is also paid to the unique organisational response of Japan’s institutions and systems to the new technological age. The intense period of late industrialisation in Japan, coupled with her more gradual internationalisation experience, are analysed from: (i) a historical review of both processes; (ii) a study of technological development in Japan; and (iii) a case study of the information and communications technology (ICT) industry. The thesis shows that in coping with global change and the new international role of Japan as a global leader, the traditional government-industry nexus has been transformed from one where strong industrial policy was required to guide the nation to full industrialisation and economic progress and affluence, to one which is more pluralistic and relies more on private sector resilience and dynamism to cope with international change. The nexus has become more open to outside change and as such more connected to evolving global issues, on which members within the national nexus participate more freely and openly with their international counterparts. Part of this openness and internationalisation has occurred as an extension of Japan's traditional export orientation and receptivity to western technology. A further development has been Japanese financial liberalisation which although occurring in a gradualist fashion, enhanced the competitiveness of Japanese financial institutions, and indirectly her manufacturing, construction, commercial and related service sectors. Japanese corporations have emerged as important agents of change and have played a crucial role in setting the pace and direction of internationalisation and industrial policy. In turning to export markets, overseas production facilities and foreign direct investment, and engaging in the global financial marketplace, Japanese corporations and financial institutions are shown to have successfully adopted international traits, corporate cultures, objectives and practices. Technological change loo has had a special role in enacting change and internationalisation. With advancement to the scientific and technological frontier, has come the formulation of new strategies in planning and coordinating national scientific and technological activities, and a greater recognition of an international role for Japan in furthering science and global development. Greater account has been made of novel and strategic elements of research activity, and efforts have been taken to incorporate increased pluralism in constructing a planned agenda for national research activity in order to ensure creative and strategic expansion of knowledge. Increased technological collaboration and technology transfer has also occurred, not only among corporations but also with other countries collaborating on big R&D projects. Emphasis has been placed on ICT as the first of the set of enabling new technologies in the new paradigm. ICT has not only had horizontal and vertical linkages with other industries and technologies, but has also changed, liberalised and decentralised the institutional networks in the political and cultural system. These systems are now much more pluralistic than in the earlier industrialisation phase. Such changes are expected to continue with the dynamic unfolding of the technological paradigm