The Interaction Between Technology and Economy: National Strategies for Constrained Economic Environments (The Case of Japan)

Over the last two decades, Japan has constructed sophisticated and successful interactions between technology and economic development. These resulted from a combination of industry's efforts and the Government's (chiefly MITI's) attempt to stimulate and induce such efforts. As economic growth and technological development continued in the mid-1980s, concern for the globalizing world economy increased. Consequently, Japanese industrial technology reached a turning point requiring further intensive efforts towards basic and creative technology, overcoming energy and environmental constraints, not only for Japan's sake, but also for the sake of the global community. While MITI has restructured its National R&D Program due to the "bubble economy" and its bursting, the Japanese industry faces a structural stagnation in R&D activities which may have negative implications for these historically successful interactions between technology and economic development. This paper demonstrates the source of the interactions, the role of policy and its mechanism, and the current fear regarding their future