Research on determinants of the international competitiveness of Japanese manufacturing industries

Overview of Research Activities

Japan's postwar economic development has been supported by the rapid growth of manufacturing industries such as steel, automobiles, and electronics. However, since the collapse of the bubble economy and since the latter half of the 1990s in particular, a large cloud has overshadowed the international competitiveness of Japan's manufacturing industries as driving forces for economic development. The automobile industry, led by Toyota, can indeed be proud of its continued high level of competitiveness. In semiconductors, however, which play a key role in the electronics industry, although Japan accounted for more than half of world production at the beginning of the 1990s, that share has fallen to around 20 percent today. (See chart below.) *1 The same phenomenon can be observed in consumer electronics, another mainstay of the electronics industry.

During the current fiscal year, research on the determinants of the international competitiveness of Japan's manufacturing industries will be carried out from theoretical and empirical perspectives based on an awareness of the above conditions. Primary emphasis will be placed upon three industries that comprise the semiconductor industry: semiconductor devices, manufacturing equipment, and materials. A major reason for focusing on the semiconductor industry is that it is considered to possess pervasive characteristics that will have a major influence on the competitiveness of the Japanese manufacturing into the future. Those characteristics include the following.

1. a) It is a typical science-based industry (an industry in which scientific results are directly incorporated at a rapid pace) as well as an industry in which the market it confronts is very much global in scale.
2. b) Wide-ranging strategic alliance among corporations and effective collaboration among business, academia, and government are required to achieve innovation (innovative activities that bring about market results).
3. c) The advancement and broadening of the specialized and integrated knowledge, expertise and know-how required by scientists, engineers, and technicians is remarkable.
4. d) Competitiveness at the industry level is strongly influenced by the national innovation system that affixes the higher education system, industrial policy, and labor market characteristics on a national level.

Source:

SIA (Semiconductor Industry Association)