In the era between World War II and the early 1990s, a drastic transformation in the world’s division of industrial labor took place. The recovery of West German industries, the rise of Japanese industrial capabilities, the rapid catchup of newly industrialized economies (NIEs), the high growth rates of South- east Asian countries and China, and the relative decline of U.S. international competitiveness changed the world’s industrial power configuration. The distribution of industrial power in the world became increasingly multi-polar, which created unprecedented international competition among developed countries and NIEs. Developed countries, facing constant threats from other developed countries and from rapidly approaching NIEs, searched for avenues to strengthen or maintain their international competitiveness by developing highly sophisticated technologies and by swiftly transforming their domestic industrial structure. Questions were constantly raised by government officials, businessmen, and scholars as to how international competitiveness in high technology industries could be maintained or enhanced. Their attention was not limited only to types of management or technology, but was extended to include institutional arrangements.
KeywordsFunctional Area International Competitiveness Allocative Efficiency Spot Market High Technology Industry
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- 1.Learning from the Japanese experience, the U.S. Government recognized the importance of cooperative research among private companies, previously considered a violation of the Anti-Trust Law. The National Cooperative Research Act passed in 1984 legalized cooperative research, and allowed the government and the private sector to create cooperative ventures. For example, the Defense Department and the private sector jointly established SEMATEC, while a number of companies cooperatively established the Microelectronics and Computer Technology Corporation (MCC) and the Semiconductor Research Corporation (SRC).Google Scholar
- 2.Finan and Frey (1994) term the period between 1960 and 1984 the golden age of the Japanese electronics industry and identify 1984-1991 as a declining period. The Japanese semiconductor industry shows a delayed cycle. The golden age started when the VLSI cooperative succeeded in developing 64K-bit DRAM in 1977 and continued as long as Japanese companies kept leadership in the world market share. It ended in 1992 when they came to share the top position in the world market with U.S. companies.Google Scholar
- 3.Cooperation is understood as joint or collaborative behavior directed toward some goal based on common interest and mutual expectations.Google Scholar
- 4.Interview with Company Q ManagerGoogle Scholar
- 5.Unless specified, the semiconductor refers to any type, namely, the discrete or compound semiconductor, the monolithic integrated circuit (IC) that consists of two types of the MOS IC and bipolar IC, linear IC, or hybrid IC (for details, see Appendix Table 2.1). I focused more on the memory IC than other types. This is because (1) Japanese companies had the largest world market share (23.3% in 1990), (2) the most intensive development of more advanced process technology in Japan has been taking place in this field, and (3) Japanese success in this field led to the world leading position.Google Scholar