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This project was made possible by the invaluable assistance of a number of people at Tokyo University, including Professor Yasunori Baba (http://www.aee.u-tokyo.ac.jp/baba/index.html) of the Research Center for Advanced Economic Engineering (AEE) (http://www.aee.u-tokyo.ac.jp), who supervised my research. Fumio Kodama, formerly of the Tokyo University Research Center for Advanced Science and Technology (RCAST) (http://www.rcast.u-tokyo.ac.jp ) and the Center's faculty and staff provided important resources. Any errors of interpretation in the project are solely my own. Follows is a summary of the research project, including methodology and key findings.
Project Summary
Globalization in technology and information flows has allowed corporate conglomerates to expand their global reach, facilitating unprecedented control over production processes. Local communities, comprised in part by small firms and their workers as well as local governments, have struggled to keep up with these changes in the global marketplace. The demands of globalization force local firms and governments to become technologically savvy in order to attract and retain new business and re-tool existing firm capacities. Local firms and governments that have done so successfully serve as models for innovative communities elsewhere. For example, successful innovative communities in Japan, Germany and the United States provide a basis for cross-national comparison.
What are the (internal and external) dynamics of these innovative communities? Are they a new organizational or institutional form or rather a re-emergence of earlier formations? Are the institutional forms in these communities variations on a particular model or inextricably embedded within particular cultural and political histories? What is it about the configuration of the institutional/ regulatory environment and policy framework that makes certain clusters of firms successful? This research explores these questions with a related policy goal in mind - if and how governments can create successful innovative communities elsewhere. The number of policy failures both within other regions in these economies and in developing countries illustrates the problematics of bringing local communities and firms Aon-line@ with the accelerating pace of globalization. Arguments about the utility and likelihood of convergence of national systems of government-business practice (i.e., to conform to "Western" models) fall flat in the face of these failures.
At the same time, vibrant local communities play critical roles in new business creation and supporting stable and improving standards of living (which in turn maintain a healthy tax base and therefore local infrastructure). Second, these innovative communities serve as a bulwark against the increasing inequity and inequality (e.g., between big and small firms, technology "haves" and "have nots") that are part and parcel to the ever-increasing power of global corporate conglomerates. Finally, healthy and stable local communities are an important foundation of civil society and democratic practice.
Consequently, systematic and rigorous comparison of the reproducible elements of these emerging/re-emerging forms is an important research agenda in both normative and positive terms. The research methodology involves the use of both quantitative and qualitative measures and analysis, using a survey/interview format. This project provides a foundation for further comparative research through an analysis of successes and failures in creating and maintaining innovative communities in select regions in Japan - paying particular attention to the interplay between local firms and local governments.
The project focused on specifying the most significant factors behind successful community-level (firm clusters within regions) systems of innovation. I analyzed local and regional government / international nexuses and policy frameworks supporting the most innovative communities of firms, particularly in terms of assimilation of information technology (e.g., Internet and e-commerce usage). For this purpose, I selected communities of top innovators in Japan (measured by R&D output, new business creation, IT diffusion, etc.) for analysis. Professor Yasunori Baba (http://www.aee.u-tokyo.ac.jp/baba/index.html), (AEE), provided continual guidance throughout the project.
The research methodology included a survey/interview format, quantitative and qualitative measures of innovative activity and output, government policies, international linkages, and so forth. I interviewed the presidents and managers of 43 high technology firms in three regions ( Tokyo, Kyoto and Osaka) as well as government ministry officials and local and regional government representatives.
Outcome/Findings
The findings contribute to the growing body of comparative literature in political economy on the embedded enterprise. Second, in terms of policy relevance, the findings address which policy/institutional nexuses work at the local and regional level and which do not in fostering innovation and new business creation. I identified specific effective local/regional government policies while accounting for the institutional context and environment within which these successful policies are embedded. In future publications, I intend to compare and contrast my findings with work on innovative communities in the U.S., Germany and Taiwan (Fields, Saxenian, Streeck). The most interesting finding was that more than a particular configuration of institutions and/or regulations, it was what I call civic entrepreneurship that seemed to lead the most to innovative outcomes. Civic entrepreneurs are savvy at incorporating the needs of the local community with the strategic interests of firms and they lead others in community network formation and product initiatives. This civic entrepreneurship was concentrated in Kyoto (of the three regions in this study).
I have disseminated a number of the findings in "Alternatives to Hierarchy in Japan: Business Networks and Civic Entrepreneurship," Journal of Asian Business and Management, August 2004. Findings also appear in Innovation and Entrepreneurship in Japan: Politics, Organizations and High Technology Firms, Cambridge University Press, forthcoming.
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