In a world where new science and technology can easily cross borders, the fastest-growing rich countries are not necessarily the ones creating the most new inventions. Rather, it's the countries that figure out how to apply inventions to the broadest range of new or improved products, plus more efficient processes for making existing products. Japan used to be a master at this, but, as I detailed in a previous post, they're not as good as in the past, nor as good as their counterparts in other rich countries.

            I recently asked several Japanese experts to ask how this deterioration happened. While Japan's leaders are focused on overcoming its relative decline in basic research--a worthy goal --these conversations convinced me that this won't solve the problem unless companies regain their past ability to transform scientific advances into economic value. In this post, I discuss two factors in companies' absorption weakness: a dearth of PhDs working in private firms, and a shutdown of Japan's former industrial labs.

For details, see https://richardkatz.substack.com/p/japanese-companies-losing-their-ability

Richard Katz

The Contest for Japan's Economic Future