Pathways of Technological Diffusion in Japan

American policymakers, during the Cold War, treated technology and economic strength as means to achieve military and political ends. The Japanese, in contrast, never subordinated economic interests to defense objectives and, indeed, rejected arguments to that effect as naive. Instead, the Japanese saw technology and territory alike as vital national interests that could and had to be defended. Two different ways of approaching civilian and military technology development thus grew from the divergent ideas that the United States and Japan had about national interests. For years, the Cold War obscured the consequences of that divergence and made it possible for Americans to believe that they had found the single right way of defining and organizing to meet their defense needs.

In the United States during the Cold War, private research and development grew considerably smaller relative to public R&D. In Japan, the opposite was true. Military R&D became the single largest source of R&D spending in the United States, whereas, in Japan, it virtually disappeared. Since both military and trade relationships depend increasingly on technology, and since the end of the Cold War is stimulating considerable readjustment, the relationship between civilian and military activities within each of our economies has become central to the U.S.-Japan relationship. Americans have lessons to learn from the way the Japanese have subordinated defense production yet have emerged as one of the most technologically sophisticated nations in the world. The Japanese may have demonstrated, like the Venetians and the Dutch before them, that butter is as likely as guns to make a nation strong and, further, that nations cannot be strong without advanced technology.

Undergirding each nation’s policy was a coherent, consistent view of technology as the source of national security. I call this view “technonationalism” and differentiate it from what often is excoriated as “technoprotectionism.” The embrace of technology for national security in Japanese practice was a very positive force. Japanese technonationalism never isolated defense production from the general commercial economy. To the contrary, industrial, technological, and national security concerns have long been fused in the institutions of the Japanese economy. Japanese technonationalism is derived directly from ideas about adversaries; the “imaginary wars” of Japanese leaders are interpreted in technological and economic, as well as military, terms.

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References

1. See “Rich Nation, Strong Army” for a fuller treatment of the Japanese security and technology ideology.

2. A typical Japanese prime subcontracts more than 65 percent of its total business: 20 percent goes to other primes, 45 percent to domestic specialist parts suppliers, 17 percent to “backshops” or manufacturers with close links to the primes, and 18 percent to imports. These estimates are derived, with permission, from proprietary data received from one of Japan’s prime aircraft contractors, January 1992. Sources indicated that other primes’ subcontracting ratios are generally similar.

3. Asahi Shimbun Shakaibu, Heiki Sangyo (The Weapons Industry) (Tokyo: Asahi Shimbunsha, 1987), pp. 227–228.

4. In 1986 alone, several years before the end of the Cold War, there were seventy mergers and acquisitions of U.S. military contractors. See:

D.C. Morrison, “Up in Arms,” National Journal, 11 July 1987, pp. 1782–1786.

5. Kikai Shinko Kyokai and Keizai Dantai Rengokai Boeiseisan Iinkai, eds., Boei Kiki Sangyo no Jittai (Conditions of the Defense Machinery and Arms Industries) (Tokyo: Kikai Shinko Kyokai and Keizai Dantai Rengokai Boeiseisan Iinkai, July 1965), p. 282.

6. Japan Key Technology Center, unpublished internal planning document, 1987.

7. Officially the center was a jointly conceived cooperative initiative, but intrabureaucratic fighting for control of funds derived from the privatization of Nippon Telegraph and Telephone (which were earmarked for research) was fierce. MITI prevailed, though, as Johnson aptly puts it: “The center is a typical Japanese hybrid: the product of bureaucratic competition, funded from public but not tax monies, and incorporating private sector supervision and participation.” See:

C. Johnson, “MITI, MPT, and the Telecom Wars: How Japan Makes Policy for High Technology,” in C. Johnson et al., eds., Politics and Productivity: How Japan’s Development State Works (Cambridge, Massachusetts: Ballinger, 1989), p. 230.

8. Kukita reports this project as stimulating ATP research in Japan. See:

S. Kukita, Kokuki Buhin (Aircraft Equipment) (Tokyo: Nihon Keizai Shimbun, 1990), p. 152.

9. Nihon Koku Uchu Kogyokai, ed., ATP Ki Sangyo Gijutsu Chosa Hokokusho (Research Report on Industrial Technology for Advanced Turboprop Aircraft) (Tokyo: Nihon Koku Uchu Kogyokai, June 1985), p. 61.

10. Unpublished Key Technology Center “Project Outline” memorandum, 1991.

11. See D.L. Doane, “Two Essays on Technological Innovation: Innovation and Economic Stagnation, and Interfirm Cooperation for Innovation in Japan” (New Haven, Connecticut: Yale University Department of Economics, Ph.D. dissertation, 1984).

12. R.J. Samuels, “Research Collaboration in Japan” (Cambridge, Massachusetts: MIT Japan Program, working paper 87-02).

For evidence of the importance of keiretsu ties in superconductivity research, see:

G. Hane, “The Role of Research and Development Consortia in Innovation in Japan: Case Studies in Superconductivity and Engineering Ceramics” (Cambridge, Massachusetts: Harvard University, John F. Kennedy School of Government, Ph.D. dissertation, 1992).

13. The number of suppliers is derived, with permission, from proprietary data my colleague, David Friedman, received from one of Japan’s prime aircraft contractors, January 1992. Two other prime aerospace contractors that he visited in December 1991 confirmed these numbers. Parts of this section are based on his field research. For reports of similar levels of outsourcing by U.S. prime contractors, see:

D.C. Mowery, Alliance Politics and Economics: Multinational Joint Ventures in Commercial Aircraft (Cambridge, Massachusetts: Ballinger, 1987), pp. 34–35.

14. Y. Sanemoto, “Chukyoken no okeru Kokuki Sangyo” (The Aircraft Industry in the Central Region) (Tokyo: Ochanomizu Women’s University, Department of Geography, undergraduate thesis, 1989);

Nihon Ritchi Sentaa, ed., Koku oyobi Kokuki Buhin Sangyo (The Aircraft and Aircraft Parts Industry) (Tokyo: Nihon Ritchi Sentaa, 1982), p. 27.

15. Sanemoto (1989), pp. 78, 81. See also:

T.W. Roehl, “Emerging Sources of Foreign Competition in the Commercial Aircraft Industry: The Japanese Aircraft Industry” (Seattle: University of Washington, unpublished manuscript, 1985).

16. Nihon Koku Uchu Kogyokai (1985).

17. The study also found that aircraft engine technology was transferred through technical exchanges between large and small manufacturers, through joint development projects involving users and makers, through technology exchange agreements between engine makers and systems controls manufacturers, and through the active use of “controlled leaks” of technological information. See:

Nihon Koku Uchu Kogyokai (1985), pp. 208–209.

18. A particularly interesting example of such a transfer at the management level occurred in 1988 when, for the first time in the history of Shin Meiwa, a general manager for aircraft was appointed who had no experience in that sector. His previous experience was limited to consumer durables, including the mass production of refrigerator showcases for supermarkets. Shin Meiwa appointed him at the time of its first Boeing order (for B-767 and 757 trailing edge subassemblies) in order to make the transition from limited volume military aircraft to larger volume commercial transports. The system he introduced, new to the military side of Shin Meiwa, was subsequently used to fulfill Shin Meiwa’s subcontract with McDonnell Douglas as well (interview, general manager, Shin Meiwa, 18 October 1991).

19. I am grateful to Baba Junichi of Mitsubishi Electric for helping explain this process. Nakagawa Ryoichi, a retired senior managing director of Nissan, reports that in the 1950s, he was expected to do “a little of everything — helicopters, aircraft, autos, and machinery. At Nissan, we thought it was important to move our engineering personnel across product and functional areas” (interview, Tokyo, 13 January 1992).

20. Y. Morino and F. Kodama, “An Analysis of Space Commercialization in Japan” (Dresden: Forty-first Congress of the International Astronautical Federation, paper, 6-12 October 1990), p. 7.

21. Data derived from Nagoya Kokuki Seisakusho 25 nen shi Henshubu, ed., Nagoya Kokuki Seisakusho 25 nen shi (The Twenty-Five-Year History of the Nagoya Aircraft Works) (Nagoya: Mitshubishi Jukogyo, 1983).

22. Nagoya and Kakamigahara field studies, December 1991; interview, general manager, Shin Meiwa Industries, 9 and 18 October 1991.

23. See Boeicho Gijutsu Kenkyu Honbu, ed., Boei Gijutsu Kenkyu Honbu Nijugo Nenshi (The 25 Year History of the Defense Agency Technical Research and Development Institute) (Tokyo:Boeicho Gijutsu Kenkyu Honbu, 1978); and

interviews: general manager, MELCO Radar Group, 1 and 8 October 1991; FS-X project engineer, 10 November 1991.

24. There is some dispute about this within the U.S. government. In March 1989, a U.S. industry representative reported that the MELCO APAR was unsophisticated, of “soldering iron vintage.” A 1990 report of the U.S. General Accounting Office agreed. A subsequent, unclassified report by the U.S. Air Force countered in 1991 that “Japanese [radar manufacturing] facilities are as modern and as well equipped as anything to be found in the United States.” See:

“FS-X Radar Report” (Dayton, Ohio: US Air Force F-16 Systems Project Office, August 1991).

U.S. FS-X project engineers claim that some of MELCO’s gallium arsenide production techniques were more advanced than those at Texas Instruments in 1991 (interview, 10 November 1991). In June 1992, MELCO displayed its APAR module in the United States, and several U.S. firms (Westinghouse, Hughes) reportedly began negotiations for a license. See:

Nikkei Sangyo Shimbun, 8 October 1992; and

Nihon Keizai Shimbun, 24 June 1992.

In early 1993, MELCO reportedly signed an agreement to supply the APAR module to the U.S. Department of Defense. See: Nikkei Weekly, 1 February 1993.

25. Boei Kiki Sangyo Jittai Chosa Iinkai, ed., Boei Kiki Sangyo Jittai Chosa (Research on the Actual Conditions of the Defense Machinery Industries) (Tokyo: Boei Kiki Sangyo Jittai Chosa Iinkai, July 1968), p. 16.

26. Ibid.

27. S. Kamata, Nihon no Heiki Koba (Japan’s Arms Factories) (Tokyo: Shio Publishers, 1979), pp. 246–247.

28. Information derived from T. Tamama, “Waga Kuni no Denshi Kogyo Gijutsu” (Japan’s Electronics Industrial Technology) (Tokyo: unpublished manuscript, 20 November 1990);

Boeicho Gijutsu Kenkyu Honbu (1978), pp. 154–158; and

interviews, MELCO radar engineering manager, 1 October 1991.

29. Boeicho Gijutsu Kenkyu Honbu (1978), p. 155, p. 167.

30. Ibid., p. 158.

31. Unlike most U.S. primes, aerospace subcontractors often perform military work jointly with commercial business. More than 75 percent of Puget Sound defense subcontractors sold less than half of their output to military projects. See:

P. Sommers, D. Carlson, and H. Birss, “Diversifying the Defense Contract Industry in King County” (Seattle: University of Washington, Northwest Policy Center, draft report, January 1992).

Field studies by David Friedman in Los Angeles and Washington also demonstrated that nonprime U.S. manufacturers frequently combined defense and nondefense aerospace work within the same facility, as did the Japanese.

For a national survey of U.S. metalworking firms, see also:

M.R. Kelley and T.A. Watkins, “The Defense Industrial Network: A Legacy of the Cold War” (Pittsburgh, Pennsylvania: Carnegie-Mellon University, Heinz School of Public Policy and Management, unpublished manuscript, 1992).

32. Puget Sound field study, January 1992.

33. Institute for Defense Analysis, “Dependence of U.S. Systems on Foreign Technologies” (Washington, D.C.: U.S. Government Printing Office, 1990), p. 3.

Acknowledgments

A more comprehensive list of references appears at the end of chapter 8 in “Rich Nation, Strong Army”: National Security and the Technological Transformation of Japan (Ithaca, New York: Cornell University Press, 1994).