From knowledge dependence to knowledge creation: Industrial growth and the technological advance of the Japanese electronics industry

The thrust of the argument put forward in this paper is that the postwar technological advance of the Japanese electronics industry was in essence a product not a primary cause of industrial growth. We demonstrate that the industry's surge forward resulted from the interaction of a unique combination of political, economic and cultural forces. Business leaders took full advantage by investing on a massive scale in physical, organizational, human and technological resources. It was success in the marketplace and strong cash flows that allowed Japanese firms to import technology on a large scale, invest in scientists and engineers, and progressively develop world class technological capabilities. In establishing themselves as global players, Japanese electronics firms moved over the years from a position of knowledge dependence to one of knowledge creation. We explore how this transformation was achieved and how they learned to control and exploit knowledge creating systems and processes. In particular, we establish the multi-faceted context and complex set of relationships that have conditioned strategic decision making and the creation of technological capabilities.