Introduction: from frontier-follower to frontier-leader

The late 1970s marked a watershed in the evolution of the Japanese computing, electronic devices and optoelectronics industry. In many technology areas in this industry Japanese companies had caught up with the international leaders by this time and had begun to pull ahead in some of them.

This had extremely important implications for technology policy in companies and in government. The main reason was that it was now far more difficult to learn by following the international leaders. Where Japanese companies were leaders or joint leaders with companies from other countries, they were unable to take their cue from more advanced companies and had to make their own decisions about the technological directions they wished to pursue. Furthermore, since they had become an increasing competitive threat, moves were made by Western companies and their governments to limit the outflow of technological knowledge to Japanese companies. This further reinforced the need for Japanese companies to increase their own longer-term research activities. An additional pressure, with similar effects, came from Western governments who argued that Japan must increase its contribution to the international stock of technological knowledge from which it had derived so much benefit. Finally, as a result of their attempts to compete through innovation, Japanese companies, having developed considerable strengths in ‘downstream’ areas such as manufacturing and processing, now tended to move increasingly ‘upstream’, into areas that in the final chapter of this book are referred to as oriented-basic research.