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close this bookThe Japanese Experience in Technology (UNU, 1990, 282 pages)
close this folderPart 1. Overview
Open this folder and view contents1. Development and technology in post-war Japan
Open this folder and view contents2. The Japanese experience: The problems and attempted solutions
Open this folder and view contents3. Theoretical summary: A preliminary examination and an interim conclusion

Japan in the world

Japan's share in the total GNP of the world was 9.0 per cent in 1980, a position exceeded only by the United States and the Soviet Union.

Because at the beginning of the twentieth century Japan accounted for a mere 1 per cent of the world's total GNP, compared with 30 per cent for the United States and 20 per cent for the United Kingdom, this rapid structural change, and the Soviet Union's rise to second position, are remarkable. The changes in the scope and the structure of the world economy are readily apparent in the 1980 shares of world GNP held by the United States and the United Kingdom, 21.9 per cent and 3.6 per cent, respectively.

In terms of per capita GNP, Japan has achieved a level comparable to that of both the United States and the United Kingdom, inasmuch as its population is slightly more than half that of the United States and slightly less than that of the United Kingdom. In other words, over the past 80 years, the Japanese economy has grown 30 times as fast as the US economy and 20 times as fast as the UK economy. However, this is merely a matter of flows; in stocks, it should be noted, unfavorable gaps remain for Japan compared with either the US or the UK, the latter especially.

With regard to the power of a nation to influence the international community, the United States and the United Kingdom are in a far better position than other nations because English is a nearly universal language. The Japanese language, on the other hand, is not even treated as an official UN language. Thus, when it comes to the question of a country's international political influence, its economic power is not always the decisive factor; this is obvious in the examples of China and India.

Taking population as a criterion, a country with a population of more than 100 million may be regarded as big, but Japan has barely enough population to enable it to count itself among the big countries. Even the United States and the Soviet Union are far smaller in this regard than China and India.

A country with less than US$10,000 per capita national income and less than 100 million population may not be expected to make effective use of a full set of modern technologies because it cannot realize economic efficiency at a level these technologies would require.

Judged, then, in different aspects, Japan may fall outside the group of front runners, but it may be inappropriate to place it among the second-group runners considering the great distance between the two groups. Seen in terms of its industrial power and its governmental system, Japan is Western, but culturally it remains Asian.

Beginning in the 1960s and continuing for more than a decade, the Japanese economy was able to achieve what was then called a miraculous annual growth rate exceeding 10 per cent. Though this was in many ways ascribable to the previous low level of its economic development and to the nation's recovery from World War II, it also reflected the rapid expansion of the scope of production through technology transfer.

Worth noting here is the difference between Japan and the other industrial countries in how it coped with the oil crises of the 1970s, an epochal situation in contemporary history that threw most of the world into hard times. Whereas most countries viewed the crises as a stoppage of the oil supply, Japan saw them as signs of the need to rationalize through technological innovation.

When the economies of the industrially advanced nations were confronted by stagflation, and the United States, which had led the post-war world, suffered a growth rate that had declined to as low as 3.5 per cent (the EC countries had an average of 3.1 per cent), Japan managed to maintain a growth rate not lower than 5 per cent. By the end of the 1970s, much to the perplexity of the Japanese, the world looked to Japan and West Germany to play the role of locomotive, to pull the world economy out of its recession.

It is beyond my ability to fully answer the question of how Japan managed to surmount the crises of the 1970s. One answer that has been offered relates the Japanese success to its capacity for technological innovation, and without doubt, technology has contributed much to the high economic growth rates of Japan since the mid-1960s, a ratio of contribution calculated at 30 per cent. Just as it managed to tide over the oil crises that had brought the high-growth period to an end, Japan also managed to overcome the difficulties caused by industrial pollution that emerged in the 1960s and 1970s by developing technologies to control or prevent pollution and others to conserve energy. These accomplishments brought world recognition to Japan as a technologically advanced country.

Is Japan the front runner of the developing countries, or is it running on the heels of the developed countries? It may be that it has elements of both. In some technologies, though, it is without doubt a leader.1

From the time we undertook this project, and especially since 1980, an unusually keen world-wide interest has centered on technology. It seems that the second oil crisis, in 1979, and the ensuing economic difficulties compelled many countries to seek technological innovation as a way to change the status quo.

Something that made it less difficult for Japan than other industrial nations to cope with the oil crises was that industry largely accounted for Japanese oil consumption, thus relegating that portion used by individuals to a less important position than in other countries. This made it easier to develop energy-saving technologies and possibly easier to implement them with more resounding effects. Yet no one can say for certain that technology will be able at all times to play the lead role as a problem solver, as perhaps it has until now.

Indeed, technology alone has not the power to solve economic and related problems. Managerial skills are absolutely vital, as the Japanese experience shows; at the same time, Japan's strategy must be acknowledged as a general solution and not one that is peculiarly Japanese. Thus, it could be said that the Japanese solution is merely one form of the general solution. There have been some studies that pursue this perspective, but we need to examine the question further before coming to any conclusions.

Although technology is not all that counts, its importance is undeniable. In this context, it is not surprising that Japanese technology, with its peculiar history of formation and its unique structure, should have aroused interest among other nations. It is with this in mind that we decided to study the problem.

Our conception of technology and development may differ from the usual. While science is universal, technology is not. What may be called the internal and external links of technology cannot be broken when innovation occurs. In other words, although the internal logic or built-in mechanism of a technology is autonomic, the external conditions under which it must operate are not. Herein lies the dilemma of technology.

Economy and technology in post-war Japan

With the world's mining and manufacturing production index for 1975-the year after the oil crisis hit-given as 100, the corresponding figure for Japan in 1980 was 124. By 1980, the economies of all the industrialized countries except Japan stagnated, and the index for the United Kingdom fell below even the 1975 level.

The first to recover from this crisis was Japan, its corresponding index scoring 142 in 1981, followed by the United States (128), France, and West Germany. In terms of per capita GDP in 1980, ignoring the oil-producing countries of the Middle East with figures as high as US$30,000, the Japanese figure, at US$9,890, was 61.8 per cent of the Swiss figure and 89.9 per cent of the US figure. This placed Japan seventeenth among all countries (though fifteenth in 1975). Japan has the smallest personal income gap between rich and poor.

To give a fuller picture, we must consider that Japan depends on imports for 95 per cent of its energy consumption, for 90 per cent of the important raw materials for its manufacturing and mining industries, and for more than 60 per cent of its food requirements. It must be said, therefore, that Japan, though often called an economic superpower, is a vulnerable power-even a minor power in respect to natural resources-a nation that has no other choice but to keep itself going on the basis of technology and foreign trade. Despite the high economic figures for Japan in terms of flows, the livelihood of its people, if not poor, is still far from being rich if seen in terms of stocks. A European Community leader once aptly commented that the average Japanese is "a workaholic who lives in a rabbit hutch."

Even so, the Japanese living standard, not well-to-do but not badly off, is something enviable for people in the third world. The Japanese may live in rabbit hutches, but in the third world even a small dwelling would be satisfactory if clean and sanitary and supplied with tap water and electrical home appliances. For many people in the third world, beset with chronic underemployment or latent unemployment and lacking decent homes, Japan could be a not-so-far-away goal at which to aim. Note too that Japan grew nearly to what it is today in not much more than a quarter-century.

While Japan scored 124 in the mining and manufacturing production index in 1980, the Republic of Korea registered 210. Obviously, the movement of the production index, like that of the growth rate, has no direct bearing on amount in absolute value. The smaller the absolute value of production, the greater the index movement might be, and conversely, the greater the absolute value of production, the smaller the index movement. The continued rapid economic growth of post-war Japan indicates that, because of the great war damage the country suffered, its economic reconstruction had to start from limited, but deliberate, activity and a low level of living.

Post-war recovery

The cities of Hiroshima and Nagasaki were each destroyed by a single atomic bomb. A great many Japanese cities, with the well-known exceptions of Kyoto and Nara, ancient capitals of Japan, suffered from bombing: in the 119 cities bombed, 2.2 million houses (about 20 per cent) were destroyed and 9 million people made homeless. Because few new houses were built during the war, in post-war urban Japan more than one family - sometimes several - would be jammed together into a house that was already past its prime.

The devastation affected everything connected with daily life, from factories, roads, bridges, electric lines, and waterworks to schools, hospitals, and communications systems. About 40 per cent of civilian national wealth was lost, and the few machines and pieces of equipment that survived were overused, poorly maintained, and short of parts and accessories.

For several years after the defeat, the nation's standard of living hovered at a level of 30 per cent of the top pre-war (1935-1937) level; mining and manufacturing production in 1946 stood at a mere 6.6 per cent of the pre-war high. The greatest losses were in shipping: from a total tonnage of 6.3 million, only 1.53 million (or 24 per cent) had survived.

The railroads were more fortunate, with track loss at 50 per cent and rolling stock loss at a mere 10 per cent, and hydroelectric power plants had suffered only slightly. But with 6 million Japanese being repatriated from overseas and with the presence of the Occupation forces, whose requirements had priority over everything else, the capacities of these two sectors, even if fully worked, could not meet the demand.

Before and during the war, Japan had been largely dependent on Korea for its supply of rice, beans, iron-ore, and anthracite; on Taiwan for rice and sugar; on Sakhalin for timber, wood-pulp, and coal; on Manchuria for iron-ore, coal, and soya beans; and on China for salt, iron-ore, and coal. The stoppage of their supplies as a result of the defeat badly affected Japan's mining and manufacturing industries, and the people suffered from a great shortage of daily necessities.

Extremely short in supply were textiles, with production at merely 33 per cent of the pre-war high; ammonium sulfate was at 42 per cent, paper at 46 per cent, and bicycles at 20 per cent. And manufacturing came to a halt after raw materials were exhausted. The shortage of goods went hand in hand with inflationary spirals.

Intending to materially disarm the militarist-fascist state, the Allied victors prepared a plan toward the end of 1945 for "reparations in kind" to be imposed on the defeated nation. This called for removing or dismantling 50 per cent of the machine tools, all manufacturing equipment of the light-metal and ball-bearing industries, 20 shipyards and naval arsenals, and all plants having a capacity to produce more than 2.5 million tons of steel (the total steel-producing capacity of Japan was 11 million tons). More than 1,000 plants were designated for reparations.

Industrial capacity left untouched at the time was meant solely to produce goods for reparations. It was intended that Japan would revert to a small agricultural nation governed by what Westerners then understood as Asiatic standards; it was to be kept at the level at which it had stood immediately after the 1929 slump.

In other words, Japan should never again rise above the levels of the Asian countries it had trampled underfoot by armed aggression. Its annual production of crude steel, for instance, was not to exceed 1.5 million tons, a level at which it had stood 20 years earlier (1926), and its production would rely solely on domestic ores.

The year of defeat happened to coincide with a very bad rice crop, the second worst in this-century, which was further aggravated by typhoons and floods. The rice yield dropped to 60 per cent of an average year, and fears were strong that 10 per cent of the nation's 80 million population might die of starvation. Even through a food rationing system, the Japanese government could not ensure a per-capita daily intake of 1,300 calories.

One observer, an American journalist arriving in Japan at the end of 1945, described the aftermath this way:

The closer we came to Yokohama, the plainer became the gravity of Japan's hurt. Before us, as far as we could see, lay miles of rubble. The people were ragged and distraught.... There were no new buildings in sight. The skeletons of railway cars and locomotives remained untouched on the tracks. Gutted buses and automobiles lay abandoned by the roadside. This was all a man-made desert, ugly and desolate and hazy in the dust that rose from the crushed bricks and mortar.2

One scholar referred to the Gayn descriptions as a record of a situation characterized by "great heaps of useless war equipment laying about, with throngs of people running pell-mell for the few scraps of consumption goods that remained."3

Raw materials could not be imported, and a shortage of fuel greatly hampered transportation. As for electricity, voltage was so low that lamps barely shone. As the currency lost popular confidence, economic life became one based mostly on exchange and barter. A state of marginal existence under rampant inflation from an extreme shortage of goods lasted more than three years. The people were in constant lethargy. A judge, believing that "a bad law is still a law," refused to buy food on the "unlawful" black market and died of malnutrition in October 1947.

Priority production system and the dodge line

Despite the economic difficulties, there were some improvements: The Occupation authorities steadily effected measures to demilitarize and democratize the defeated nation. The emperor myth was unveiled, and the forces that had operated under the aegis of the "inviolability of the Imperial prerogative" were politically ostracized. Women were enfranchised and workers given the right to organize. The education system was reformed. The special political police organization was dissolved, and freedom of speech and freedom of the press were assured.

One of the most important reforms was the land reform, which swept away the semi-feudal landlord-tenant relations. In the three years after 1946, a total of 1.87 million hectares, or 81 per cent, of tenant land, and 240,000 hectares of pasture-land were released from landlord ownership. Most tenant farmers became owner-farmers, with the maximum of landownership set at 1 hectare, excluding some provinces and forest land. Land reform was fundamental in expanding and deepening Japan's domestic market.

The House of Peers, whose membership had been restricted to high taxpayers and absentee landlords, was abolished. This collapsed the material foundation of the ultraconservative forces that had been opposed to all reforms on the strength of the "inviolability" of the emperor. There are several reasons that explain the quick and successful execution of the land reform.

First, it was done under orders of the Occupation forces; second, the new farmers' unions throughout the country were a force to prevent landlords from sabotaging the reform; and third, landlord rule over tenant farmers had been on the wane through the war as economic controls such as fertilizer rationing and the rice delivery system were imposed. Also, since the 1910s, when tenancy disputes began to be frequent, the government had posted kosaku-kan (officials in charge of tenancy relations) with police power in all prefectures. The kosaku-kan had kept detailed accounts of the tenancy disputes they had handled, and these records were helpful in reform administration.

During the time of the reforms, the economic life of the nation, aggravated by inflation, showed no signs of improvement. A plan was drawn up to give priority in recovery to the basic industries, namely, steel, coal, fertilizer, gas, cement, and railroads. Under this plan, the "priority production system," labour and money were first to be put into coal-mines; then coal was to be produced for manufacturing iron and steel, and the steel materials were to be used for increasing coal production. It was hoped that in this way allied industries and others would be stimulated and the inflation resulting from the shortage of goods would gradually be overcome.

This recovery plan, though theoretically reasonable, was misguided. To begin with, the existing coal-mines had obsolete, worn equipment whose maintenance had been neglected in the wartime drive for more coal. Skilled miners were in short supply, 20 per cent of the total being inexperienced. Three to five years would be necessary before many of the mines could recover their pre-war levels of output. The annual coal output per miner was only 90 tons, versus the pre-war (1930-1934) average of 200 tons.

Second, although daily-necessity consumer goods were in extremely short supply, the demand for steel and other basic producer's goods was not great enough for their manufacturing capacities to operate profitably or for the labour force to be effectively employable. Hence, their market prices had to be even lower than their production costs. The government, therefore, subsidized these industries to cover the backspread.

Since the steel industry was more capital-intensive than coal-mining, it could recover faster than mining when supplied with imported raw materials and subsidized by the government. The priority production policy thus stimulated recovery in these industries, but it did not eliminate inflation.

Priority was also given to the increased production of ammonium sulfate fertilizer, needed for rice cultivation. As symbolized by the 1946 "Food May Day" demonstrations, the food shortage was an important part of the critical economic conditions and a key factor in the political and social unrest at the time. The government therefore treated the chemical fertilizer sector with special political care, and by 1949 it had recovered its pre-war level of production.

Although the estimated requirement of steel materials for use in coal-mines in 1946 was 98,000 tons, only 80,000 were allotted, of which 25,000 were illegally disposed. Only slightly more than half the required steel, therefore, was put to use in the mines. The Occupation authorities ordered the Japanese government to make available 2 million tons of coal monthly for the people, but the government was hard pressed to raise its target level even to 1.2 million tons. The actual monthly output of coal in November 1945 was only 554,000 tons.

The situation regarding cement was no better. Under the cement distribution system, at least 70 per cent of the requirement was to be made available, but what actually appeared was less than 50 per cent. Workers often blamed management for sabotaging production by concealing and illegally disposing of goods and materials. Struggles of the newly legalized labour unions sometimes even led to worker control of production.

A strong distrust of the management running the mines, in which a vast amount of state funds were invested, clouded their operations. This distrust was clearly evident in the proposal by the British representative on the Allied Council for Japan that the state take control of zaibatsu coal-mines for three years. There were even apprehensions about entrusting to the private sector the nation's post-war rehabilitation. The proposal for state control of the coal-mines was finally abandoned after a frantic resistance by management. And management soon regained control of the mines where production had come under worker control.

By 1949, thanks to the government's emergency aid in addition to the intended effects of the priority production system, industrial production had largely caught up with inflation. Then, however, the Occupation authorities ordered the Japanese government to change its policy: first, economic aid to Japan was discontinued; second, the price-offsetting subsidies were ordered discontinued; third, a balanced finance policy would be taken to cope with inflation; and fourth, Japan was brought back into the international economy by the introduction of a single exchange rate of US$1: Y360.

With this policy change, the coal industry, which had been allowed to operate with an over employment of labour to increase coal output, was now compelled to raise its productivity and therefore to rationalize and mechanize its production system. It was imperative now not merely to produce more but also to realize lower prices through increased productivity. The steel industry and other basic industries, which, with the aid of government subsidies, had been able to buy coal for Y1,000 a ton, were now forced to pay Y3,344 a ton. These high prices formed a bottle-neck that impeded economic reconstruction.

As a part of the mechanization in the coal industry? coal diggers and loaders were imported from the United States with aid funds. But with pit conditions, coal-beds, and other production conditions being much different from those in US coal-mines, they were soon found awkward to handle and left unused. It is easy to see that this early case of technology transfer failed because of the casual handling under foreign aid. But it is important to note that the unusableness of the American machines (even though this pushed up the price of coal) gave impetus to manufacturing the machines domestically. Because the machinery industry had been very much munitions oriented during the war, it found itself in need of new markets in this period; consequently, the coal industry was a welcome customer.

The Japanese coal industry next turned to Europe for the necessary technologies, and in 1950 it introduced the Kappe method of coal-mining from West Germany. By the following year, this technology had begun to be adopted by the leading coal-mines, and, coupled with the successful development of shafts that had been in progress in some of the major coal-mines, it raised productivity. Coal output approached 50 million tons in 1951, and productivity became comparable with the levels of most European countries.

The steel industry began peacetime work with three operating blast-furnaces at the Yawata Ironworks (in its heyday, the industry had had a total of 37 blast-furnaces). The newest of the nation's furnaces (affecting 22 plants, or the equivalent of three-fourths of total capacity) were designated for reparations, most chief executives were purged, and the biggest of the enterprises was dissolved under the economic democratization policy of the Occupation authorities.

The recovery of steel production was slow, but after a mere 560,000 tons in the year of defeat, it recovered four years later to 70 per cent of the pre-war level (or to 4.84 million tons in crude steel). Then came the government's abrupt changes in economic policy and, like the coal industry, steel suffered a serious blow. Although it had succeeded in introducing a technology enabling it to use ordinary coal instead of raw coal, the steel industry could not achieve marketability without the aid of price subsidies.

As we have seen, the government's abrupt policy change dealt a serious blow to the recovering economy. Major corporations were forced to dismiss their employees on a massive scale, and some were even driven to bankruptcy. The government's reduced budget policy came suddenly, at a time when industry had not yet managed to fully recover productivity and when many enterprises were unable to meet market needs because production costs were too high. The new policy, the so-called Dodge Line policy, quickly ended inflation, but it increased uncertainty about the future of the Japanese economy.

The strategy for economic recovery based on coal and steel thus had to be discontinued, and priority was shifted to shipping, electric power, and transportation. Of all branches of the economy, shipping had suffered most, and if Japan were to be brought back into the world economy, the recovery of this sector was urgent.

But a more important reason for a priority shift to shipping was that the Occupation policy, which had designated shipping for reparations of a punitive character, was now beginning to change. As the cold war progressed, the United States, which had played an almost exclusive role in the Occupation, was now increasingly in favour of using Japan and West Germany as factories to help rehabilitate their respective neighboring countries. Also, many US politicians were beginning to feel that if the financial burden on the American taxpayer were to be lessened, the Japanese economy should be made to stand on its own feet.

The Korean War and Japanese Recovery

An unexpected turn of events came with the outbreak of the Korean War in June 1950; it galvanized the Japanese economy back to life. Social reforms that had been dragging amid the chaotic economic conditions began to show progress as the economic life of the nation grew active.

Within the first year of the war, the "special procurements" reached US$340 million; this more than cleared all the backlogs in the manufacturing industries that had been caused by the Dodge Line policy. Goods and materials for use by the UN forces ranged from locomotives, rails, trucks, steel materials, iron posts, electric wire, barbed wire, and other heavy-industry products to chemicals, processed foodstuffs, clothing, and medicines. The procurements reached into all branches of Japanese industry; three branches alone - metals, machinery, and textiles - accounted for 70 per cent of the special procurements.

Covering also the goods and materials for the post-war rehabilitation of South Korea, the special procurements amounted to a total of US$2.4 billion in the four years after 1950, which, even after deducting the cost of imported raw materials, left Japan with a big dollar surplus. The Japanese economy had thus struggled free of its worst difficulties.

The special procurements demanded that Japanese industry mobilize all its existing equipment, however worn and used, so that most of it soon needed replacement or renovation. And this was made possible by foreign currency earnings. Indeed, the first real impetus for Japan's post-war recovery came from the special procurements connected with the Korean War; in other words, the stimulus came from outside Japan.

For example, the steel industry, whose reconstruction based on the priority production system had been stopped by the Dodge Line policy, took advantage of the Korean War to expand its capacity by importing new equipment and realized not only lower prices for its products but also improved quality. What made this possible was the favorable conditions in the international technology market. Technology transfers were very liberal, and Japan's steel industry acted wisely in its choosing and importing of new technology. We will return to this point later in the discussion.

The strip mill is an example of the sort of technology transferred at this time. Compared with older types, it was automated and of far greater speed. Though new to Japan, the technology was already well established in countries with advanced steel industries. Japan had failed to introduce this technology earlier mainly because of the heavy military orientation of the steel industry and because the industry was under state control. The post-war transfer of technology was aimed just as much at the recovery of the steel industry as it was at overtaking the advanced nations.

Another new technology was the basic oxygen steel-making process, also known as the LD process, which was, at the time, the day's newest technology. As an Italian case later reveals, it had not yet been globally established. Nevertheless, the Japanese steel industry adopted and eventually improved the process by adding new ideas and devices, thus laying the foundation for the industry's future development.

Because a strip mill rolls steel in a continuous process at a high speed, mass production became possible. Moreover, the production of high-quality steel sheets had not been possible with the old rolling mills. Thus, Japan was now able to produce materials for use in cars, small electric appliances, and other durable consumer goods, and steel makers could now also mass-produce materials for the general machinery industries. This was all of great significance to the steel industry, which had functioned entirely under the limitations of steel-plates, bar-steel, and section-steel production. Also, with the introduction of LD converters, indispensable for the mass production of rolled-steel products, the two processes of input and output became well balanced. (In most developing countries, they tend to be poorly balanced.)

In another area of the steel sector, a plan for an innovative mill materialized at this time, and the result elevated Japan to a position of world influence among steel makers. Kawasaki Steel Corporation drafted plans for a seaside mill in which the continuous operation of pig-iron production and steel-making was possible. It was a completely new plan both in mill placement and layout. Raw materials (ore and coal) would be unloaded on a wharf at the mill site, undergo manufacturing processes, and emerge as manufactured goods for shipment from another wharf at the same site. At the Yawata Iron Mill - the oldest of Japanese iron and steel works, where a half-century of expansion had meant one new shop or facility after another - the seemingly endless adding-on of the intramill transport railroads extended some 400 kilometres. Plant redesign shortened this by 90 per cent.

Though a change in mill layout may appear to be an insignificant adjustment, when done correctly it can save immense transportation time and fuel costs, which grow in scale as production increases. The result of this amazing foresight soon became status quo as all other steel mills hastened to follow suit.

The idea had been developed during World War II, but the Japanese military had opposed it, and even during the post-war reconstruction, it had failed to materialize. Then came the Korean War, which helped move it from the drawing-board to reality. With the mill's new location and layout, Kawasaki Steel was able to produce 700 tons of steel a day. But there was still some opposition, this time from voices in government circles who felt Kawasaki's transition from a major manufacturer using electric furnaces to one using blast-furnaces might bring on an overproduction of steel. In 1950, Japan's annual output of crude steel had been only 5 million tons.

Overproduction did occur in the 1970s, when the productive capacity for crude steel in Japan reached 110 million tons a year. And a decade later, amid a drop in the world demand for crude steel, Japan's top steel manufacturer, with an annual crude steel production capacity of 50 million tons, had to curtail operations to 60 per cent of capacity.

One of our collaborators in this project, Professor Hoshino Yoshiro, has pointed to several factors that sparked the remarkable growth of the Japanese steel manufacturers, growth that saw the capacity of one soar to 10 times what the immediate post-war output level of all Japan had been.

According to Hoshino, at the time, steel manufacturers throughout the world were competing to enlarge the scope of production, and each country was developing components of technology with little regard for what other countries were doing. Under these circumstances, if a steel manufacturer were observant and could collect data on these various component technologies and integrate them into a single system, he could build the most advanced steel mill in the world. And indeed, Japan at the time was fortunately in a position to fully utilize the advantages of the late comer and ready to spend the time and expense necessary to do this.

This was true not only with steel-making technology but with nearly all other technologies, and here the Japanese experience can serve as an important and useful example. Collecting, examining, and appraising relevant information and bringing it together into a consistent whole should constitute a part of the technological development capability of all the technologically less-developed.

In the third world today, however, several factors make this difficult, if not impossible. These include factors inherent in current technologies and factors relating to the lack or immaturity of external conditions of certain technologies that might enable the less-developed to make use of advanced technologies.

Nevertheless, each developing country must work to overcome these obstacles by setting goals and executing plans based on its particular philosophy of development. Ultimately, development is a matter of national sovereignty.

Post-war Japan had an urgent need to rehabilitate itself, and there was an overwhelming national consensus regarding the indispensability of promoting science and technology through introduction from abroad. There was also the general feeling that Japan's defeat in World War II was due in large part to the antipathy of the Japanese military toward science.

There was a wide range of views, arguments, and counter-arguments in regard to the policies for rehabilitation, especially concerning whether Japan should follow an autarkic line of development or one that would make it an integral part of the world economic system. Throughout, however, a national confidence in science and in democracy prevailed and, indeed, characterized the nation's state of mind in the postwar years before the period of rapid economic growth.

From recovery to rapid growth

Rehabilitation and Technology Transfer

As stated earlier, the Korean War was an unexpected shot in the arm for the Japanese economy, which, before it had managed to rehabilitate itself, was drowning in a stabilization crisis. It gave Japan a springboard for rapid recovery in the 1950s and for rapid economic growth in the 1960s. It may even be said that the Korean War changed the entire outlook of the Japanese economy.

Post-war Japan may be divided into five periods:

1. Post-war chaos (1945-1949)
2. Decade of recovery (1950-1959)
3. Decade of rapid growth (1960-1969)
4. Decade of adjustment (1970-1979)
5. Contemporary uncertainty (1980s)

There are those who contend that Japan's rapid economic growth began with the Korean War, because in the late 1950s its economy had already posted high growth rates, high even on an international scale. An official Japanese document concluded in 1956, only 10 years after the end of World War II, that "the post-war period is over."

Some indicators may in fact justify the belief that the special procurements during the Korean War enabled the Japanese economy to recover its pre-war levels. Under this line of argument, Japan entered the period of rapid economic growth in the latter part of the 1950s, a period that continued until the oil crisis of 1973. A similar view also characterizes the years from the late 1960s to 1973 as a period of uncertainty for Japan, pressured as it was to internationalize its economy.

For my part, however, I do not consider the post-war period to have ended in 1956, as the Japanese government declared. At that time, Japan's per capita national income was only US$220 (less than 7 per cent what it was in the United States and 50 per cent in West Germany); more than 45 per cent of Japan's population belonged to the primary industry sector; and as the special procurements came to an end, only light-industry goods such as textiles and sundries were competitive as exports.

To be sure, some economic indices for 1955 might compare favorably with those for 1930, but in the early 1960s the nation had really only recovered what it had lost in World War II. The 10-year income-doubling programme was officially declared in 1960, by which time full employment had been realized and there had developed a shortage of labour as the economy increasingly internationalized. Also at this time there were official plans for the liberalization of trade and capital transactions.

Technology transfer began to increase rapidly as Japan prepared for the imminent arrival of foreign capital and technology, considered a possible forerunner of another national crisis.

Furthermore, the technology transfers of the 1960s differed from those of the 1950s. Whereas the earlier effort was aimed at recovering pre-war production levels, the transfers of the 1960s aimed to prevent an influx of foreign goods and to strengthen Japan's position in the impending international commercial war in which Japan would be forced to compete. Thus, the enlarged scale of production was for much more than domestic demand, and, moreover, the technologies would be the world's most advanced.

The situation much resembled the one 90 years earlier, when the new Meiji government committed itself to building an industrialized country under the slogans "promotion of industry" and "prevention of imports." The great difference between the two times, however, was that the national consensus in the Meiji period was based on creating a "rich nation and a strong army," while in the 1960s it was restricted to non-military wealth and power.

Thus, technology transfer in the 1960s was characterized not so much by an intention to expand the scale of production, to mechanize and rationalize, as was the case in the preceding decade, but by the aim to transform the production system itself into automated high-speed mass production.

There had been a mass-production policy in the 1950s, at least in some industry sectors, but it did not stress high-speed production, much less automation, because a plentiful, good-quality, labour force was then available, making automation less attractive.

Technology transfer in the 1950s, the 1960s, and the 1970s may be characterized as follows:

1. In the 1950s technologies were transferred to bridge the wartime gap in such sectors as steel, shipbuilding, chemical fertilizers, and textiles, sectors that were already active in Japan.

2. In the 1960s technology was transferred in such fields as automobiles, small electric appliances, and petrochemicals, industries that were already well developed in the United States and in the industrialized European countries, but that were still in their infancy in Japan. As a result of the transfer, these products began to be mass-produced as domestic products and became highly competitive with foreign goods in Japan's home market.

3. Technologies transferred in the 1970s included electronics, high-polymer chemicals, and atomic energy, which had been developed during and after World War II. In these fields - except for atomic energy - and in particular electronics, Japan followed a painful path of quickly overtaking the advanced countries, then being outrun, overtaking them once again and, in some fields, taking the lead.

Even before Japan's international competitiveness in the most advanced technologies had become globally recognized, its steel-manufacturing technology was drawing foreign attention. In 1964, one of the biggest new steel mills in Europe, an Italian steel maker in Toronto, had newly completed construction of two blast-furnaces with a capacity of 2,000 tons each and a converter with a capacity of 3,000 tons. When it encountered problems in its blast-furnace operations, it turned to Yawata Steel for technological advice. Within six months, Toronto had been able to increase its output 15 per cent.

Later, Yawata exported converter technology to British Steel Co., in Wales, the birthplace of modern iron-manufacturing technology. Japan's export of such technology culminated in a series of plant exports to developing countries, including Brazil (Usinas Siderúrgicas de Minas Gerais, or Usiminas), Malaysia (Malayawata Steel Co., Ltd.), and the Middle East (Qater Steel Co.).4

In the 1960s, the world steel industry entered an age of large blast-furnaces and LD converters, although these plants were still at the planning level and were not yet practical as operational technologies. Thus Britain, a long-time iron-manufacturing country, had to seek help from Japan. This reveals that the components of a technology are usable only when they comprise equal elements of the technology. The question of whether a technology can be used is determined by the least developed of its components This is where technology differs from science, which endeavours to uncover a new principle and theoretically build upon it. It is important to keep this difference in mind when discussing science and technology.

Although scientific creativity is directed toward the discovery of principle and theory, technological creativity lies in finding a new way to co-ordinate and direct a set of skills and devices toward a definite practical purpose of operation. In R. & D., or research and development, the R may be expressed as a total of ds: R = d1 + d2 + d3 + ... dn

Japanese science and technology have sometimes been characterized with a small r and a large D, r. & D., but I believe they have both contributed their share to the world's Rs and Ds. All national experiences are different, none being superior or inferior to any other. The evaluation standards for pure science must not be applied to technology, which is for meeting the daily needs of the populace.

The post-war Japanese experience can be summarized by taking microelectronics as an example. Until recently, the vacuum tube was used in communications and computational equipment. In the mean time, the transistor was invented, just at a time when Japan was taking great pains to improve the performance of vacuum tubes and to mass-produce them. Nevertheless, Sony Corporation introduced the transistor into Japan - the first to do so - from the United States, where the technology had been used mainly for military purposes. After 1956 Sony began to develop and manufacture transistor radios, although they were too expensive then for most Japanese.

By 1960, Japanese transistor radios were finding their way into the American market. The transistor itself, as small as a grain of rice, was easier to put together and required the use of fewer hands to produce than the vacuum tube, but it required intensive labour to attach the reed wires to each tiny transistor, to set the resistor, condenser, coil, and variable condenser, and to run through the complicated process of wiring before a radio was completed.

Thus, "the greater the transistor radio industry grew in scale, the more hands were needed. It was the ideal growth industry for Japan at that time where a comparatively cheap labour force with fairly high technological ability was amply available.5 Japan thus became the top transistor manufacturing country in the world by around the mid-1960s.

In 1960, Japan took another punch, the IC shock. The US corporation Texas Instruments invented ICs and sold them to the US Air Force, though at the high price of US$700 per circuit. The switch from transistors to ICs represented also a change in the substrate material, from germanium to silicon. In effecting this substrate change, the Esaki diode, a diode discovered by a Japanese scientist, was used, which in itself indicates the character of Japanese industry. As with the invention of KS magnetic steel by Honda Kotaro in 1933, however, it was not Japanese industry that put it to practical use. Science and technology will not be put to practical use where there is no need; even when a need exists, it might not always lead to a practical application. In any event, Japan had no military need for the new technology at that time.

ICs began to be manufactured in Japan in 1966. As is well known, the IC comes in two types: the bipolar type, which is good at quick calculation but not at minuteness, and the MIOS type, which shows just the reverse characteristics of the bipolar model. Though the bipolar type is preferred for aerospace and military purposes because of its high-speed logic circuitry, the MIOS type was chosen in Japan to develop IC manufacturing for civilian purposes because of its better storage capabilities.

One difficulty Japanese manufacturers were facing at the time arose from the fact that some leading US manufacturers were having their units built in South-East Asia, where cheap labour was available. The Japanese makers knew, however, that if they could double their output through mass production, they would be able to realize a 30 per cent lowering of cost; consequently, they introduced more than six times the number of existing automated lines to rival the US manufacturers.

Then in 1971, Japan was hit by the advent of the LSI. The Japanese-made IC would lose the war. Japanese manufacturers managed to cope with the difficulty, however, by increasing the integration density of IC components by one digit, which resulted in a one-digit cost decrease.

An important factor at the time was a curtailment of manufacturing processes. The existing equipment for SSls and MSls, including even what had been installed within the past two years, were scrapped to prepare for LSI manufacturing.6 This heralded a fierce competition between the ability to develop technology and to manufacture it, a waste, it may be said, of human energy. This sort of battle is being fought even today in areas of product development between Japan and the United States and among Japanese manufacturers.

With the LSI, the efficiency and control of machines was greatly enhanced. Industrial technology, whose products in the 1950s and the 1960s were characterized as "big, long, heavy, and thick," was producing in the 1970s goods that were "small, short, light, and thin."

Due to the complexity of the LSI, manual labour had a limited part in its manufacture. Rather, highly complex equipment was necessary, which required heavy capital investment, and this, in turn, demanded a big market. Japanese LSI manufacturers chose non-military areas in which to sell their goods.

IC manufacturers in the United States tended to be venture businesses with a specialty line, but in Japan the chief manufacturers of instruments had their own IC branches, thus their comparative advantages in capital investment, marketing, and product development.

The Effects of Technology

What will the rapid development of semiconductor technology bring to mankind? One argument made in response to this question at a UN University meeting underlined that the development of micro-electronics (ME) would radically change the information and communications networks in the developing countries. The effects of using ME for educational purposes were also discussed and opposing arguments heard. A situation might arise, it was argued, in which a country's central government would make use of ME for monopolizing information so that central needs might be met at the cost of provincial needs.

Does the LSI signal a new industrial revolution? The arguments began when the IC was first used to operate machine tools (the advent of the numerically controlled, or NC, machine tools). More interest was aroused when the machining centre (MC) made its appearance, followed by robots for welding and painting. The NC machine tool in its early years differed from today's in output and price as greatly as the IC and the LSI did.

In 1980, the NC machine tool almost doubled its built-in capability, compared with its predecessor of a year earlier. The machinery industry prompted the appearance of these automated machines in its call for higher-speed mass production and greater product precision. In the automobile industry, for example, the structure of which is shown in figure 1, each car required about 30,000 parts, constituting 5,000 different types. Even the largest car makers manufactured an average of only 30 per cent of these parts. The rest were supplied by small independent manufacturers, and that is where the need for NC machine tools was felt the most.

The adoption of robots in Japan (initially in the small- and medium-scale industries) to weld and paint was encouraged by a labour shortage and the lower prices of LSls. The introduction of the robot was, it should be noted, a labour-saving device only at this stage, since the intention was to meet the existing tact of the production line; consequently, there was no time savings or loss.

The appearance of the NC machine tool represented an important innovation for the machine tool in the machinery industry. As noted earlier, machines were changed in the 1960s, and in the 1970s, factory layouts were altered. Furthermore, to be able to handle the new machines well, the workers were required to have the basic mechanical and mathematical knowledge of a technical high school graduate. Today's machines, however, require less ability to operate. It is clear, though, that higher educational standards are a prerequisite for higher technology.

Though the NC and MC revolutionized the parts-manufacturing processes, some 75 per cent of the labour and working hours in the machinery industry were in assembly. Consequently, assembly process automation was the next object of rationalization. The Japanese machinery industry is currently testing assembly automation, referred to as factory automation (FA), and the flexible manufacturing system complex (FMSC). It is estimated that, if such automation can be successfully implemented, labour productivity could be enhanced 30 to 40 times. At the same time, workers would be expected to have the skills of a multi-skilled mechanic, skills far exceeding in quantity and quality what they have today. That would require additional investment for education, whether public or private.

Complex manufacturing systems result in lower prices and diversification. The LSI has already changed the character of the mass-production system, allowing, as it does, the production of a uniform product through the assembly of a great many standard and exchangeable parts.


Figure 1. Division of labour in the Japanese automobile industry

Notes:

1. Percentage of in-house manufactured parts =


2. Sub-contracting manufacturers of primary parts do not necessarily work for Company "A" alone.

3. In Japan, parts manufacturers are, as a rule, affiliated with one or more controlling companies; in the United States, they are vertically integrated with automobile manufacturers; in Europe, there is a horizontal division of labour between the two. With Japanese auto makers, despite the comparatively low percentage of parts made in-house (25% to 30% for Japan versus 50% to 60% for the United States and Europe), quality control and cost control are well maintained because they control their sub-contractors' technologies, capital, and personnel.

Sources: Chüshõ kigyõ hakusho (White paper on small - and medium-scale enterprises), 1980 edition; Industrial Bank of Japan - Research Department, ed., Nihon sangyõ doku-hon (A reader on Japanese industry), Tokyo, Toyo Keizai Shimpo Sha. 1984, p. 163.

Computers enable mass-production lines to meet the specifications for more than 200 parts that go into the manufacture of a particular car model. Thus, mass production has undergone immense qualitative change, from the mass production of a single kind of Colt rifle (the first mass-produced product) to that of highly diversified products. What has made this possible was the development of the electronics industry in the 1960s and thereafter and the introduction of its products into the manufacturing process.

The development of the electronics industry has caused great concern about how the advances would affect employment. In Japan, this worry has so far proved unfounded, according to an official survey.7 The appearance of the quartz watch is an example: Technological innovation in one of the manufacturing processes increased productivity four times. But, rather than simply decreasing the number of workers by four times, it was the policy of Japanese business to transfer those displaced to another process. Here we see a great difference between management practices in Japan and those in the United States and Europe, where management is characterized by functionalism.

The enhanced productivity called for an expanded market, and the rapid economic growth of Japan at that time provided it. Without enlarged markets resulting from product diversification, enhanced productivity as a result of technological innovations will reduce employment.

In Japan, increased productivity, a realization of full employment, and wage increases led to an enlarged and deepened market, which proved the government's growth-oriented income-doubling policy effective. As a result, the world-wide reputation of Japanese goods being cheap but poor changed in the 1960s to cheap and good, and since the 1970s they have been regarded as expensive but superb. After IC manufacturing became automated, the cost performance of the Japanese electronics industry began to be highly regarded in the American market.

Besides changing the nature of its products, Japanese industry has now begun to change its employment structure. The total number of employees in the manufacturing sector is on the decline, while in the non-manufacturing sector, especially in sales and in R. & D., it is increasing. In manufacturing, the technology is mature, and the use of ICs and LSls has generally had a great skill-saving effect, resulting in differences in the quality and efficiency of goods between major and minor manufacturers being almost indiscernible. To use our terms, M3, Ma, and M5 have become weightier.

In the case of a certain calculator manufacturer, 1,000 of 3,500 employees are engaged in R. & D. at a technology centre. At a motor cycle manufacturer, salesmen participate in meetings for technological development so that the company's manufacturing technology may better meet market needs, and in the manufacturing department, workers are encouraged to acquire skills not directly related to those required for their current employment. For example, an assembly-line worker may be encouraged to qualify as a maintenance technician, as a plumber, or as an operator of high-pressure machines or instruments. Though this practice may pose a risk to the employer that skilled workers will resign their jobs, it is considered desirable that a single-craft worker should become an all-around worker: hence, the big investment in employee education. Current technological development and innovation require the convergence of a wide range of engineering and scientific knowledge, and, likewise, it is necessary for workers, at all levels, to have a proficiency in several areas, and this represents a new means of skill formation.

It should be noted, however, that the development of technology in Japan was not without cost. First, it widened regional gaps in development; second, it aggravated industrial pollution. The underground water pollution caused by LSI factories has recently attracted attention.

Growth-oriented economic calculations, with their peculiar values, disregard such social problems. If a pollution victim loses all income because of illness, the case will be counted a negative in the economic calculation, but if the victim receives medical care, it will be counted a plus. In the same sense, the building of anti-pollution facilities will mean an increase in GNP. This should be taken into consideration when one makes use of macro-economic calculations.

Between the periods of recovery and rapid economic growth, Japan's industrial picture underwent radical change. The four major industrial centres of pre-war Japan combined to form a single long belt. This concentration widened the income gap between the urban and rural sectors, which further intensified the concentration of population in the cities, aggravated the urban housing problem, and pushed up land prices to result in the mushrooming of "rabbit-hutch" dwellings. At the same time, the exodus of young people from the remoter towns and villages created areas of underpopulation.

When a community's population decreases below a given level, the community cannot continue to exist; once its working-age inhabitants are gone, its social balance is lost. The phenomenon of village disintegration (muratsubure) appeared in many parts of the country, brought on by the decline in the primary labour population because of industrialization. This went hand in hand with mechanization, which also contributed to a decreased labour force.

The middle-aged and the elderly, unable to adapt to the changes brought on by the rapid economic growth, were placed at a disadvantage. This may be said to parallel the problems arising in third world countries in their development. Their problems today and the problems facing Japan during post-war industrialization are essentially the same in character and structure.

The pollution problems Japan faced also parallel the situation in the developing countries. In the period of rapid economic growth, which was strongly oriented toward the heavy and chemical industries, little attention was paid to the problem of pollution.8 Aside from automobile exhaust fumes, the noise and vibration from the Shinkansen (superexpress bullet trains), and the smoke and dust from the growing steel mills, air pollution caused by petrochemical plants gave rise to asthma and related disorders among the populace in the areas around the plants, and the heavy-metal effluence from fertilizer plants, ingested by fish, eventually culminated in the tragic outbreak of Minamata disease.


Figure 2. Transactions in automobile production (for every 1 million yen, based on 1975)

Note: Numbers in circles correspond to the size of transactions; the structural relations shown here indicate the structure of transactions between different branches directly and indirectly necessary for producing a unit of automobiles.

Source: Prepared by Watanabe Toshio and Kajiwara Hirokazu on the basis of Ozaki Iwao, "Reaction of Economics to Changing Structures: Technological vs. Economic Systems," Kikan Gendai Keizai, no. 40 (1980). Taken from Ajia suihei hungyõ no jidai (Horizontal division of labour in Asia) (Tokyo, JETRO, 1983).

It should be noted here that the "experts" in the mercury poisoning cases denied, on the basis of data from oversimplified laboratory experiments, any causal relationship between the probable sources of the pollution and the illness of the victims. Even when they were unable to deny the facts any longer, these "experts" aligned themselves with those responsible for the pollution in minimizing the harm. Political parties and labour unions failed to act effectively for the relief of the victims, and in the end, only unrelenting protest and demands for respect for human rights by the victims proved effective.

If primary industry was a victim of the heavy and chemical industries in the period of recovery, it was the creator of victims in the period of rapid economic growth. Heavy and constant applications of chemical fertilizers polluted the soil and water, and agricultural chemicals made the users both victim and the source of pollution. In addition, farming based on mechanization and chemical fertilizers caused a rapid decrease in the fertility of the soil, which in turn required more fertilizer to make up for the loss; in sum, a vicious cycle that prompted many people to forecast gloomy times for the agriculture industry and for the food economy of Japan, which was already dangerously far from being self-sufficient.

Some scholars look to genetic engineering and say that new fertilizer-free crop varieties may and should be mass-produced. Not all people, however, are optimistic about attempts to solve agricultural and ecological problems through engineering. Indeed, the pollution problems have made people increasingly sceptical about the nineteenth-century notion that what is born of science and technology can be remedied by new science and technology: the problems have, in fact, made scientists and technologists even less self-confident. Although many scientists, especially those in the United States, are unwilling to recognize ecology as a science on the grounds that it lacks objectivity and cannot be quantified, it is now the object of a great deal of attention. Science and technology began to be openly questioned in the 1970s, and the century-old philosophy of modern science is now being critically re-examined.

Keeping this in mind, let us refer to tables 1 and 2, which present the Japanese government's view of future prospects for Japanese technological development in comparison with the industrialized West. Table 2 includes findings from a survey of Japan's neighboring countries in regard to technological development. From table 2 it is apparent that the Asian countries have developed their light, labour-intensive industries at an extremely rapid pace. Although for the time being these industries can be supported by domestic demand, eventually they must depend on export markets for their products, and their international competitiveness will greatly depend on an acquisition of high-level skills.

The long time needed traditionally to acquire skills is now being remarkably shortened by the introduction of new and efficient machinery. Industries whose raw material requirements are met domestically can remain internationally competitive through the introduction of new machines and technology. On the other hand, labor-intensive industries that depend on imported raw materials will quickly lose their international positions. As the introduced technologies become obsolete, the value of technology will come to depend on the locations of either resources or markets, and the advantage of cheap labour might be lost. Thus, it is very likely that developing countries will need to creatively reorganize their markets.

Table 1. Levels of technology and potential for its development in Japanese industries in comparison with the United States and Europe (1978: actual; 1985,1990: estimates) (Japan is: Q= Higher; O= Comparable; D= Lower)



1978

1985

1990



Level

Development potential

Level

Development potential

Level

Development potential


Industry

US

Europe

US

Europe

US

Europe

US

Europe

US

Europe

US

Europe


Synthetic fibre

O

O

D

O

O

O

O

O

-

-

-

-


Spinning

O

O

O

O

O

O

-

-

-

-

-

-

Textiles

Weaving

D

D

D

D

D

D

D

D

-

-

-

-


Apparel

D

D

D

D

O

O

O

O

-

-

-

-

General printing

O

O

O

O

O

O

O

O

Q

Q

O

O

Paper, pulp

D

O

D

O

D

O

D

O

-

-

-

-

Cement

O

O

O

O

O

O

O

O

O

O

O

O

Packing

D

D

O

O

O

O

O

O

O

O

O

O

Daily necessities

O

O

O

O

O

O

O

O

O

O

O

O

Flat glass

O

O

O

O

O

O

O

O

O

O

O

O

Fine ceramics (electro magnetic, biochemical, optional functions)

O

O

O

O

D

O

D

O

O

O

D

O

Fine ceramics (mechanical, thermal, chemical functions)

D

O

D

O

D

O

D

O

O

O

O

O


Chemical fertilizers

O

O

O

O

O

O

O

O

D

O

D

O

Chemical

Petrochemicals

O

O

O

O

O

O

O

O

O

O

O

O


Fine chemicals

O

O

D

D

O

O

O

O

O

O

O

O

Light alloy rolling

D

O

D

O

O

O

O

O

O

O

O

O

Aluminium refining

D

O

D

O

O

O

O

O

-

-

-

-

Non-ferrous metals

O

O

O

O

O

O

O

O

O

O

O

O

Ferro-alloys

O

O

O

O

O

O

O

O

O

O

O

O


Pig manufacturing

O

O

O

O

Q

Q

O

O

O

O

Q

Q


Steel manufacturing

Q

Q

O

O

Q

Q

O

O

-

-

-

-

Iron and steel

Rolling

Q

Q

-

-

Q

Q

O

O

O

O

O

O


Special steel

O

O

O

O

O

O

O

O

O

O

O

O


Surface-treated steel plate

O

-

O

-

O

-

O

-

O

-

O

-


Steel pipe

O

O

O

O

O

O

O

O

O

-

-

-

Oil refining

O

O

D

O

O

O

D

O

Q

Q

O

O

Coal

Production

O

O

D

O

-

-

-

-

-

-

-

-


Use

O

O

D

O

-

-

-

-

-

-

-

-

Crude oil, natural gas

D

O

D

O

O

O

O

O

-

-

-

-

Non-metal, non-ferrous mining

-

-

D

-

-

-

D

-

-

-

D

-

Gravel

-

D

-

-

-

-

-

-

-

-

-

-

Thermal-power generation

O

O

D

O

O

O

O

O

O

O

O

O

Electricity

Hydraulic-power generation

O

O

O

O

O

O

O

O

O

O

O

O


Transmission

O

O

O

O

O

O

O

O

O

O

O

O

Gas

O

-

O

-

O

-

O

-

O

-

O

-


Chemicals

O

O

D

O

D

D

D

D

D

D

D

D


Large showcases

O

-

D

-

O

-

O

-

O

-

O

-


Food processing (meat)

D

D

D

D

D

O

D

O

D

O

D

O


Food processing (cereals)

O

D

O

O

O

O

O

D

O

D

-

-


Packing

O

O

O

O

O

O

O

O

O

O

O

O


Metal working

O

O

O

O

O

O

O

O

O

O

O

O


Business

D

O

D

O

D

O

D

O

-

-

-

-


Printing

O

O

O

-

O

-

O

-

O

-

O

-

General machinery

Forging and compressing

O

O

D

O

O

O

O

O

-

-

-

-


Sectioned materials

O

O

D

D

O

O

O

O

O

O

O

O


Textiles

O

O

O

O

O

O

O

O

O

O

O

O


Construction

O

O

D

O

O

O

D

O

O

O

D

O


Agricultural

O

O

O

O

O

O

O

O

O

O

O

O


Freezing and air conditioning

D

-

D

-

O

-

-

-

O

-

O

-


Export and engineering of plants

D

O

D

D

O

O

D

O

O

O

O

O


Atomic energy(light water reactor)

D

O

D

O

D

O

D

O

O

O

O

O


Electrical equipment (for medical use)

D

O

D

O

O

O

D

O

O

O

O

O


Electrical guages

D

O

D

O

D

O

D

O

D

O

D

O


Electrical materials

O

O

O

O

O


O

O

O

O

O

O


Semiconductors and ICs

D

O

D

O

O

O

O

O

O

O

O

O


General electronic parts

D

O

D

O

D

O

D

O

D

O

D

O

Electric machinery

Household electric appliances

O

O

O

O

O

O

O

O

O

O

O

O


Micro computers

O

O

O

O

O

O

O

O

O

O

O

O


Information processing (software)

D

-

-

-

O

-

-

-

O

-

-

-


Power generators

O

O

D

O

O

O

O

O

O

O

O

O


Lasers

D

O

D

O

D

O

D

O

O

O

O

O


Data bases

D

O

D

O

D

O

D

O

-

-

-

-


Computers

D

O

D

O

D

O

O

O

O

O

O

O

Aeroplanes

D

D

D

D

D

D

D

D

D

O

D

O

Automobiles

O

O

D

O

O

O

D

O

-

-

-

-

Cameras and other optical applicances

O

O

O

O

O

O

O

O

O

O

O

O


Ocean development

D

D

D

D

-

-

-

-

-

-

-

-


Housing

O

O

O

O

-

-

-

-

-

-

-

-


Atomic-energy industry

O

O

D

O

-

-

-

-

-

-

-

-

Other

Social system (medical information system)

D

O

O

O

D

O

O

O

-

-

-

-


Social system (audio visual daily information system)

D

O

O

O

D

O

O

O

-

-

-

-

Source: Institute of Industrial Technology, Ministry of race and Industry. Sõzõ-teki gijutsu rikkoku o mezashite (Toward self-reliance in technology) (Tokyo, Government Printer. 1981), pp. 72-79.

Table 2. Levels of technological development of Asian countries (1978)

Manufactured good

Thailand

Indochina

Philippines

Malaysia

Singapore

Hong Kong

Taiwan

R. of Korea

Atomic energy equipment

1

1

1

1

1

1

1

2

Washing machines

1

1

1

1

2

3

4

4

Refrigerators

2

2

2

2

3

3

3

4

Lighting equipment

2

2

2

2

2

3

4

4

Communications equipment

1

1

1

1

1

1

2

2

Radios

3

3

3

3

3

4

4

4

Televisions

2

2

2

2

3

3

4

4

Computers

1

1

1

1

1

1

1

1

Electrical instruments

1

1

1

1

2

2

2

2

Resistors, condensers

1

1

1

1

2

2

3

3

Semiconductors

1

1

1

1

2

3

3

3

Batteries

3

3

3

3

-

4

3

4

Cars

1

1

1

1

1

1

1

3

Buses, trucks

1

1

2

1

1

1

2

3

Car parts

2

1

2

1

1

1

2

3

Motor cycles

1

1

1

1

-

-

3


Bicycles

1

-

-

-

-

-

3

3

Railway cars

1

1

1

1

1

1

3

3

Shipbuilding

1

1

1

3

1

3

3


Aeroplanes

-

-

-

-

-

-

1

1

Cameras

2

2

2

2

2

3

3

2

Boilers

1

1

1

1

1

1

1

2

Power shovels

1

1

1

1

1

1

2

2

Valves

2

2

2

2

2

1

3

3

Tanks

1

1

2

2

2

3

3

3

Bearings

-

-

-

-

-

-

-

1

Pumps

2

2

2

2

2

2

2

3

Waste-water disposal
equipment

1

1

2

2

3

3

3

3

Agricultural machinery

2

2

2

2

2

1

3

3

Lathes

1

1

1

1

1

1

2

2

Textile machinery

1

1

1

1

1

1

2

3

Sewing machines (for home use)

1

1

1

1

1

1

2

2

Desk calculators

-

-

-

2

3

3

3

3

Electronic registers

1

1

1

1

1

2

2

3

Integrating watt meters

-

-

-

-

-

-

3

3

Wrist-watches

1

1

1

1

2

3

2

2

Lighters

-

-

-

2

-

-

-

-

Generators

1

1

1

1

1

1

2

3

Motors

1

1

1

1

2

4

3

3

Transformers

1

1

1

1

2

1

3

3

Notes: 1a. Figures 1, 2, 3, and 4 denote, respectively, that it would take "more than 10 years to catch up with Japan." "5-10 years," "less than 5 years," and "already comparable with Japan."

b. Enterprises covered here include those of native capital and joint ventures with advanced industrialized countries. For those items of which appraisals varied widely, figures are based on the majority of answers received.

c. Sixty-five Japanese manufacturers operating in Asian countries were interviewed about the 40 items shown in this table.

2. I would make no comment on this survey except to point out that it was conducted before the second oil crisis. The situation has changed. especially after 1985, because of the decline of the US dollar. Technology transfers were carried out in these countries on an unprecedented scale, which pushed up their position in the world.

Source: Nihon Keizai Shimbun Sha, Asu no raibaru - Oiageru Ajia no kikai kõgyõ (Tomorrow's rival: The Asian machine manufacturing industry in pursuit) (Tokyo, Nihon Keizai Shimbun Sha. 1978).

Since technological innovation usually reduces employment, it is important that new markets be developed to absorb increased productivity. Second the labour saved through innovation should be absorbed in the same branch of technology. which would require a new investment capacity.

A situation where investment is made for technological innovation and there is still capacity to invest is a typical picture of prosperity, a phase in which each investment calls for another. This situation, rarely seen, was experienced by Japan only in the period of rapid economic growth.

Such prosperity brings on inflation. which widens the gaps in the rates of growth between enterprises and industries. Gaps of this kind can pave the way for technological and managerial dualism, even on an international scope. In countries where social integration is not sufficiently high and a national consensus on the goals and means of development are lacking, political and social disorder and unrest may arise, which might paralyse technology and even bring on the loss of capital and technology. Consequently, countries responsible for their own development should be prepared to proceed carefully with technological innovation and should seek effective international co-operation.

Technology transfer in post-war Japan

I have dwelt upon aspects of the technological history of post-war Japan because my impressions, after having spoken with people from both developing and developed countries, lead me to believe that there is a great deal of interest in Japan's post-war technological, especially high-technological, development. There is a misunderstanding, however, that Japanese attainments in high technology have been due solely to technology transfer from the advanced countries. Anyone acquainted with the history of technology should be aware that this cannot be true, but not all people want this acquaintance, and further, people tend to expect too much of technology, without first learning exactly what technology is, especially what its internal logic or internal mechanisms are.

Technological change in post-war Japan has been remarkable, undergoing a radical change nearly every decade. Machines were renewed within a period of 10 years, and within the next 10, factory layouts were also changed completely. Some say that this is unprecedented. If so, it should be encouraging for those now struggling to develop their countries, because obviously it is not unattainable.

Of course, Japan did carry out a number of technology transfers from abroad, but many other countries have also had such possibilities. The first question we might ask, then, is, Why was it that some did not try to introduce advanced foreign technologies? And if they did try, but the technologies failed, why did they fail? By way of response to these questions, let us return to the Japanese case.

We may first of all point to Japan's need to recover from its heavy war damage, an urgent need obvious to anyone. But not all industries were successful in introducing new technologies, nor earnestly willing to do so.

To take the most successful case, the steel industry chose to introduce rolling technology, the final manufacturing process. That was logical, since at the time rolling was where Japan lagged farthest behind the other industrial nations. Any other country in a similar situation would have done the same, and in fact that is what some South-East Asian countries are now doing. This kind of technology transfer makes it possible to economize in construction, operation, and fuel costs (the Japanese steel industry economized on construction costs by 30 per cent) compared with technology requiring new construction, such as that for sintering, blast-furnace, or converter processes in the continuous operation of iron and steel production.

When the LD oxygen furnace was introduced, for example, it represented an optimal choice, making full use of the advantages of the late comer. In 1979, the ratio of LD converters to total furnaces was 81 per cent for Japan, compared with 66 per cent for West Germany, 56 per cent for the United States, and 21.4 per cent for the Soviet Union. As for blast-furnaces with a capacity exceeding 3,000 m3, in 1985 Japan had 12, the Soviet Union 2, West Germany 1, and the United States none.

Japan began using LD converters in the 1960s. The US steel industry had built many open-hearth furnaces in the 1950s, which made it unnecessary and untimely to switch over to the LD converter. Besides, because American iron-ores are highly sulfuric, the open-hearth furnace is better at making high-quality steel.

At the time, most LD converters were operating at an average rate of 40 charges per day, and Japan's Yawata was running them with 50 tons per charge; the corresponding figures for an open-hearth furnace were 5 or 6 charges per day at 200 tons per charge. The productive capacity gap (2,000 tons versus 1,000-1,200 tons per day) was obvious. Moreover, the former had the advantage in fuel costs (6 to 10) and in construction costs ( I to 2).

According to a view dominant in Japan, theoretical innovation in this branch of technology did not take place globally in the 1960s, and, consequently, competitiveness naturally depended on a factory's scale of operation. In Japan at the time, there were few obstacles in the way of enlarging the scale. And, as the scale grew larger, the Japanese steel industry proved to have advantages over others in the operational skills needed to handle the growing capacity. Thus, Japan turned out to be the rare case in which the late starter had the advantage.

The Japanese industry's own efforts toward innovative design of the entire manufacturing process, from factory layout to factory location, were another contributing factor. Thus one can see that an accumulation of modifications in operation and processing or both, minor as they might appear from the point of view of engineering, can have effects that are not at all minor. It also becomes evident how standardized the technologies were in this industrial branch and how much steel technology had matured. Factors such as operational skills and factory layout, what may be called soft technology or technology management, can greatly increase competitiveness in this branch of industry. Strangely enough, however, little attention has been paid to this fact. There seems to be an unfortunate tendency for engineering-oriented technologists to neglect the question of the extent of maturity of the relevant technologies when discussing the ability to develop technology.

As for the failure of technologies to transfer successfully, the second of our two questions posed above, it should be pointed out that modern technologies differ from pre-modern technologies in that they are freely transferable on a commercial basis. However, they cannot be freely joined; they require related technologies and the availability of supporting services. So, when a technology fails to transfer successfully despite the enthusiasm and serious efforts of the parties concerned, or when a technology, once transferred, does not meet expectations, most likely it is because it lacks the necessary pre-conditions and supporting services. In other words, the cause of failure can be found in inadequate feasibility studies concerning optimal type, level, and scale of transferable technology or in a lack of efforts in preparing the necessary conditions for the transfer, such as enhancing the levels of fringe technologies and services.

Japan succeeded because it already had the right conditions; the related technologies had been sufficiently readied to make the transferred technology operative and thus it could further develop the transferred technologies.

This being the case, it is perhaps worthwhile to look back on Japan's history of technology to find out how those pre-conditions and supporting fringe technologies were built, because they were not brought into being on short notice after the war, nor were they provided by foreign countries. Indeed, Japan won its success at tremendous social cost. The problem of occupational diseases was and is even now very serious. In addition to the problems of pollution and such phenomena as mura-tsubure. there is another problem perhaps worth mentioning.

In the old-style ironworks, rolling was a process that required skills that could be acquired only through many years of experience. Half-naked, muscular workers, with sweat glistening on their skin, would toil long, and yet in a high-spirited manner, creating a sight that would make any observer stand in awe of human labour. This way of work has already passed into history.

Yet, it later turned out that the latest computerized factories had to consult the old skilled workers for advice; despite automation, their skills and knowledge were still needed, as automation demanded highly and multi-skilled workers. Automation may have displaced the value of single-craft skills, but the latest automated processes open reveal themselves to be inferior to the human skills of former days, as will be discussed later. Suffice it to say that the skills of management and workers constituted important factors in the success of Japan's technology transfer.

The Japanese steel industry, with its highly matured technology, is now being pressed to choose for its survival among three alternatives: (1) to remain as a supplier of materials, not only iron but also new materials; (2) to change over to a compound-processing technology that ensures higher value added; or (3) to try to survive in a new general engineering field. The Japan Steel Corporation, for example, while emphasizing the development of new materials and electronics, continues to develop new iron-manufacturing technology.

The equipment of the Japanese steel industry is now nearing the last phase of its life in an economic sense, but capital investment for its renewal has not been active. Because the location merit of technology tends to shift globally from consumption to resources, developing countries are planning to build their own steel mills. For an output of 1,000 tons per annum, 1,000 tons of steel will be required for construction and equipment, which would mean that demand for steel would be on the rise for a long time to come.

However, it is now down, which compels the existing steel manufacturers to cut back in their operations. For the cut-back not to cause a great income loss, it becomes necessary for the manufacturers to develop and invest in higher technologies different from those of the production expansion period, and this acts as a brake on capital investment for equipment renewal. Steel technology is now said to be in its last stage of glory. Whether or not this is true, we may be sure that steel technology is no longer the leading technology.

1: Expectations from outside

The United Nations University, in commissioning this project on the Japanese experience, observed that Japan, once an importer of modern technologies from the West, has now developed itself to the point of being an exporter of the latest technologies, and, further, that what it was that made such a transformation possible was a matter of great interest to developing countries.

At about the same time, a meeting of experts sponsored by the University released a document that concluded that theories of development were in a state of "disarray." Although it did not state explicitly reasons for the disarray, I would like to present some of my thoughts on the basis of experiences I had in sessions I attended at that function. First, developments invalidate theory; second, theories have long been questionable, but persuasive data to overthrow them have not been available; and third though development needs have become diverse, theory has failed to keep up.

For these reasons, Japan has become the focus of attention among the developing countries, and I find this interest perhaps may have great practical value and, at the same time, it poses an exciting challenge: (1) Might the Japanese experience not be made useful in filling the information gap caused by the disarray of development theories? (2) Could it not provide practical suggestions to meet development needs?

Though their interests were too diverse for easy generalization, one thing seemed certain: too much attention was focused on Japan's "miraculous" post-war technological success; little interest was shown in the social and historical context in which transferred and domestic technology were able to flourish. Moreover, development in general tended to be discussed with technology in general, with no awareness of the particular and multifaceted relationship between them.

Technology can be discussed practically only on the basis of concrete data and for the purpose of discovering possible solutions to existing problems. Any discussion of technology that is too generalized tends to veer away from technology as such and slide into abstract arguments on policy and the international politics of technology transfer.

Such discussion may reflect their own national experiences, which are none too pleasant. Where technology transfer has already been more or less institutionalized through the ODA, the politics of technology may have proved both important and inevitable. In many of the aid-recipient countries, academic freedom to carry out scientific study of technology and development, which may reveal weaknesses and conflict in development policy, is restricted. Some intellectuals in these countries are calling for a moratorium on development.

Under these circumstances, the more urgent the development needs, the greater may be the danger of a political treatment of the problem and of neglecting to be alert to the inner mechanism of technology. In other words, by politicizing a problem that requires a technological solution, one might well be producing a result more harmful than beneficial.

As for the relationship between development and technology, just as there are different levels of development, ranging from the level of village or province to that of an entire country, even to the international level, so there are different levels of technology. This is an important fact to be considered when transferring technologies for the purpose of national development.

If technology is a means to development, it is undesirable that the end and the means exist in a one-to-one relation; it is preferable to have several means. Yet, a mature technology requires materials, processes, and equipment that are all standardized, and the methods, equipment, and technologies used in the manufacturing operations are also fixed. Thus, in the case of a transfer of a mature technology, the recipient country has little possibility of adapting or improving the technology. Here, then, the relation between the end (development) and its means (technology) must, in practice, be one to one. In other words, the end is restricted by its means.

That is where the problem of technology begins to emerge in a developing society. In order for a country to avoid the diseconomy of a technology transfer that would result from introducing a mature technology, it is important to (1) select a technology with a rich potential for expanding and upgrading the links among existing sectors of industry and (2) observe and gradually adjust the transferred technology to successfully meet the needs of country, region, and local community, both in quality and quantity. Technology modified in this manner to meet local conditions and needs is what we refer to as intermediated technology, an alternative technology free from standardized pre-conditions and processes for operation.

In general, modern technologies are freely transferable but not always easily integrated. Therefore, the range of choice of technologies for transfer is usually limited. The possibility for a developing country to find a ready-to-transfer alternative or high technology suited to its own conditions is quite limited. But a developing country often has no other way to solve its technology problems, hence the necessity for an extensive knowledge of technological science and technological history.

The view one often encounters of the general relationship between development and technology is too optimistic; it tends to exaggerate the diachronic and cross-cultural nature of technology and also to expect too much of technology's power of breakthrough. The impression is that the problem of development and technology has not been rightly grasped in all its implications. This seems also to be reflected in the way in which alternative technologies and intermediate technologies are frequently discussed. I believe a real understanding of the painful experiences of developing countries in the past 30 or so years is still not evident. There are gaps between expectations and realities and between wishes and capabilities with respect to development and technology, and therefore it is urgent a solution be found.

Because of the complexity of today's development problems, the information the Japanese experience might provide seems inadequate to meet the needs of developing countries. But because it is the experience of a late starter, it should enrich their knowledge.

As stated earlier, we will avoid here the politics of technology transfer as much as possible. The approach here is one free of non-technological values, and our aim is to present practical results from case-studies and avoid speculative and abstract reasoning. It is important to find opportunities for generalization, not the other way around.

Our hope is for a dialogue based on actual cases of technology transfer; it may not be possible to achieve all our expectations, as gaps in perception of the problem are bound to occur from country to country. But continual and multi-pronged efforts must be made to bridge these gaps.

Although the social sciences have working methods not bound by national borders, quite obviously, each social scientist has his or her own nationality. The way in which one investigates, constructs, and pursues work on a problem is to some degree rooted in the characteristics of one's native country. Therefore, in treating the theoretical handling of our problem, we must first determine what is common to the many diverse national characteristics.

Until now, however, efforts to do so do not seem to have met with success, at least not in the way we had expected. The present volume thus represents an attempt to cover the distance that separates us from this goal, a step that may be termed a methodological prelude to better dialogue. It is one of many possible methods that may be used to attack the problem and, consequently, is subject to correction and change. In any event, we do not advocate methodological exclusivity. Likewise, we do not wish to make the Japanese experience a dominant or universal model; but neither do we intend to minimize or ignore it.

Our methodological pluralism, therefore, does not exclude cross-national or diachronic analysis; both are necessary. But their descriptive powers concerning technological problems, even if not yet exhausted, have become increasingly unable to meet real needs and expectations. New problems that can no longer be handled by earlier social science theories and new propositions have come to assume importance. This is why the Japanese experience seems to have attracted so much attention abroad as a case for study.

It should be understood that the social sciences, necessary and useful as they are, are not almighty. They can breed error, just as other sciences can. Unless it is realized that their validity is circumscribed by time and circumstance, whatever is scientific in them will be lost. The social sciences as discussed here denote an intellectual discipline based on the theorization of confirmed contemporary and historical reality and capable of making policy proposals.

Development problems can and should be solved finally and decisively only by each nation concerned. All we can do is to help other nations in their attempts to develop. Whether the Japanese experience is worth studying must be judged by third-world intellectuals themselves. and different nations may very well make different evaluations as a result of their different, often unique, development problems.

The results expected from a study of the Japanese experience tend to be exaggerated, and as knowledge of the experience accumulates, interest tends to diversify and demands to grow.

A gap may arise between what we can do to meet the demand for information and how much we want to release. Too little information may generate a too keen and unbalanced interest. A most important part of our effort, therefore, should be to prevent this from happening. It may be very difficult to acquire an accurate and deep understanding of another country, but the person who attains it will learn to know his own country better.

Our approach to the Japanese experience in technology and development began by classifying development problems on the basis of our own group's experiences in research tours to developing countries, in gathering scientific information, and, more important. in continued dialogue with intellectuals from these countries. We tried to elucidate how those problems were overcome in Japan or why some remain to be overcome. In a sense, our approach to development problems is provisional.

2: Japan's response

Economy and Technology

Two views have characterized Japanese studies of the relationship between development and technology in Japan: (1) technology is a dependent variable of the economy; (2) technology possesses its own inner mechanisms that make it relatively independent of non-technological elements. I would like to expound the first view. As mentioned, in the middle of the nineteenth century, Japan was forced to open its doors to foreign trade and to establish diplomatic relations with the Western powers, which had already achieved their own industrial revolutions. Compelled to accept unequal treaties, Japan was on the brink of being colonized. The Tokugawa regime, however, lacked the leadership necessary to surmount the crisis and preserve national independence. So it was up to the new Meiji government to build a strong modern state, through enhancement of the country's wealth and military power and through a series of political and social reforms. A popular slogan of the time was Datsu-A Nyu-O - "Withdrawal from Asia and Entry into Europe."

The Meiji government introduced modern technologies and spurred the nation's economic development, with the aim of building a capitalist economy at the hands of the state. The emphasis in industrialization was placed on a realization of self-reliance in weapons and arms supply, deemed necessary for both national defence and controlling domestic discontent. Because foreign currency was necessary to finance industrialization, the government established state-operated industries and factories, into which it introduced modern technology.

Although Japanese industrial technology was largely pre-modern in character until the end of the nineteenth century, a few state-operated factories were exceptionally equipped with imported modern technology and machinery, operating, however, to meet the needs of government, not of the general public. Economic rationality was belittled because domestically produced goods were higher in price and lower in quality and durability than imported goods. The state-run, bureaucratically managed factories proved unprofitable and were sold to the private sector. Because the change of hands involved not only equipment but also engineers and workers, the result was a large-scale secondary transfer of technology.

The military arsenals, which remained under state control, were better equipped and in possession of higher levels of technology compared to the other factories. The favoritism was also evident in the application of energy: the military had steam-power, while the private sector generally had access to only human power or water-power.

Thus, industrialization and the national formation of a modern technology network were brought to completion in Japan on the basis of a structural dualism - government vs. private; industry vs. agriculture; big enterprises vs. small; heavy industry vs. light industry and handicrafts; and central vs. provincial.

The view that technology is a dependent variable of the economy thus stresses the necessity of the modernization of Japan, for, without a modern economic system, technology could not have developed. It does not aver that the role of the government was of exclusive importance, because there was an active response from private interests. When, some 20 years after the Meiji Restoration, government enterprises were sold to the private sector, technology transfer ignited a great entrepreneurial boom. This centred on light industries, notably textiles and food processing, but paralleled or preceded the development of mines and railroads.

The Meiji government, nationalistic towards other countries, took an autocratic, "statist" position toward its own people. So what should have been regarded primarily as the economic evils of capitalism tended to be viewed as political evils, and a chain of urban riots and peasant revolts resulted. It is worth noting, however, that antistatism did not necessarily mean a denial of nationalism among the Meiji Japanese.

Thus, Japanese industrialization, even if a capitalist development "from above," followed the historical path of light industry first, then heavy industry. However, the initial dualism between government and private enterprise in favour of the former remained in Japan's industrial structure. It favoured big business, which took over the government enterprises, and the gap between the big and the small came to be fixed not only in technology but also in the ability to develop technology.

Since the costs of a technology itself, and also of its development, are high, technology is subject to economic laws. Those who are late to enter a business are exposed to competition from those advanced in technology and in possession of the ability to develop it. Thus confronted both within and outside the country and in need of keeping abreast of technological innovation, the government and large private enterprises often separate parts of their technologies and manufacturing processes into new, independent companies to disperse risk and lessen fixed costs. Skilled workers also often become independent when business conditions are good, acting as producers and suppliers of goods required by the parent enterprises.

The diversity of smaller enterprises and their high technological standards are considered to have been the basis of Japan's strength in technology. Although some of the smaller enterprises failed to keep abreast of the parent companies in technology development and had to drop out from the ranks of subsidiaries or subcontractors, those that managed to secure a high-enough technological standard and the ability to enhance it were able to expand their transactions and stabilize their positions.

From the standpoint of the parent companies, this separation of processes enabled technological spin-offs that acted as buffers and a reorganization of manufacturing processes according to the logic of capital. In Japan, this kind of relationship has long been viewed critically as the source of wage dualism between larger and smaller enterprises and of the problem of the smaller being tyrannically dominated or exploited by the larger.

Although spin-offs have sometimes produced large, technologically advanced conglomerates that eventually succeeded in establishing world-class concerns, very many have, to the contrary, caused the parent company to fail in accumulating sufficient technological power when it was badly needed, resulting in bankruptcy. Both results have occurred in mining, which seems to indicate that mining demands two things to modernize: a complex system of technology and a careful study of how management should relate to that system.

Some economists maintain that dualism in management and in technology weakened during the period of rapid economic growth in post-war Japan. But I believe that dualism is evident in big factories even today; it can be found in the labour structure, that is, obvious gaps exist between the jobs, skills, wages, and welfare benefits of regular workers and those who are sub contracted or part-time. The latter do not have permanent employment, which results in a high percentage of job changing. The rapid progress of technological innovation and changes in the leading sectors have made it difficult to organize national unions in Japan. Labour unions have been overwhelmingly enterprise unions or in-house unions of mixed lots of workers.

In the sectors of technology that had achieved global maturity before 1960 and that have seen little change since, innovation has tended to take place only in such directions as enlarged scale and capacity of operation, increased speed of operation, and expanded automation in pursuit of merit of scale. This is particularly so where the technology has already been standardized. But in some areas, machine tools, for example, the ability to accumulate superskills and to develop technology is increasingly to be found in the smaller-scale enterprises. This is especially true in some of the most advanced technologies.

The dual structure, which an analysis from the first viewpoint would say characterizes the Japanese type of industrialization, thus may be said to persist even today, though its forms and dimensions have changed. However, the problem of dual structure in industry in the developing countries, subject as it is to both domestic and international industrial structures, must be treated as being qualitatively different from the problem in Japan.

A period of dualism may be inevitable for a country late in starting industrialization. When I accompanied a group of scholars from developing countries visiting factories in Japan, I noted they were impressed that the dual structure system encouraged competitive coexistence of the parent and subcontracting enterprises, not merely coexistence with little mutual contact. Further, at a factory making products for export, even though its scale was much smaller and the equipment used much older than at factories in the visitors' home countries, they saw immediately that good operational skills and high managerial capability more than offset any such disadvantages.

This was their "discovery of Japan." It should be kept in mind, however, that the Japanese approach - or the concerns prevailing among Japanese academics - cannot be applied to the developing countries without adjustments or revisions in the light of the existing conditions of these countries. What the Japanese take for granted is not always understood or accepted by other nations. This is due as much to differences in natural conditions, resource allocations, and production activities as it is to historical and cultural backgrounds, and the differences should not be reduced simply to development stages.

So, whether analyses based on the first view are applicable in treating the development problems of developing economies - and to what extent - must be reexamined through in-depth case-studies in each country and in each industry. This task can be accomplished only through international collaboration. Our study of the Japanese experience, therefore, for its conclusions and analysis to serve a useful purpose, must be supplemented. Though our work has benefited from co-operation with other countries, it has only just begun.

The Fixed Logic in Technology

The second view, that technology is independent of non-technological elements by virtue of its inner mechanisms, addresses directly the severe difficulties of technology transfer. This contrasts with the first view, which regards technology transfer as a natural historical process. While the first view addresses the aftermath of transfer, the second considers how the transfer begins and progresses and details of the practical and functional problems of technology at the shop-floor level. These aspects are supposed nearly independent of non-technological problems, of political and economic laws and customs.

Thus, the second position assumes that the inner mechanisms of technology, the laws firmly set in technology, cannot be arbitrarily changed or modified. Thus, when a technology is transferred with some political or other intention, this view facilitates the clarification of why it did or did not succeed, i.e., whether for technological or non-technological reasons.

For example, if a transferred technology encountered trouble after initial success, working on the basis of this second view, one would pin-point the trouble in raw materials, poor operation, maintenance and repairs, improper management or technology control, or in the general plan itself.

For example, before the Meiji Restoration, a commercial representative from the Netherlands, then the only Western country allowed access to Japan, stated in a secret report that the Saga clan in Kyushu was attempting to manufacture a steam-engine:

The Japanese seem to simply assume that they can master this manufacturing technology, but the only equipment they have are poor furnaces and moulding factories. Iron of low quality is processed with poor machines and by unskilled workmen. They have a will to manufacture, but little means for it.

This brief report gives an idea of the technological picture of Japan at that time. Modelling their endeavour after a finished engine they had seen, members of the Saga clan set about to do nearly the impossible with the help only of a technical manual, but their supply of fire-brick was insufficient (because the Saga area had no natural resources), and they knew little about what the interior of a furnace should be and what temperatures were required. Further, they had little knowledge of what quality of iron to make and how to process it. What they did have was an immense desire; what they lacked was the means. There were too many obstacles: raw materials, fuel, instruments, machines, methods, to name those most prominent.

From what the Dutch representative observed (it remains unclear whether he was an engineer), it seems evident that a great gap in technology separated the West from Japan. Obstacles lay everywhere blocking Japanese efforts to adopt technology. Nevertheless, they remained convinced their goals could be achieved - no matter the problem - through mobilization of all their traditional skills and abilities. Opinion may vary as to whether that was a mindless or an admirable position.

The second view recognizes that some technologies were already present in Japan, though of low standards, and attaches importance to them as the Japanese predecessors of modern technologies, even if they were of little direct use as they were then, and had to be wholly redesigned; their very existence made a great difference in the future of Japan and its development of modern technology.

In those pre-Meiji times, Japan was divided into some 240 large and small feudal domains, all variously endowed. Thus, it was politically impossible to bring together the empirical knowledge and skills that had been accumulated by carpenters, masons, builders, forgers, potters, and other craftsmen of different domains into a national technology plan. Moreover, Western scientific knowledge was regarded as serious political criticism of the system, and its students were in danger of conviction and execution for treason.

The rush to import Western science and technology began only about 30 years before the Meiji Restoration, when engineering experts armed with modern science were free to appraise and implement the empirical knowledge and skills of their predecessors without fear of conviction for political of fence. The foreign experts later hired by the new Meiji government could not be expected to appraise and use traditional Japanese knowledge and skills, so all they could do was introduce their own technology as it was, a point we will discuss later in more detail.

Such was true even in the successful transfer of spinning technology. A foreign engineer, whenever and wherever he may serve, tends to be a believer in the transcultural and diachronic validity of technology. That is where his usefulness and his limits will be found. Regarding iron manufacturing in Japan, only the Japanese engineers were able to domesticate the transferred foreign technology. And, as is well understood, technology can spread only after it has stabilized.

Scholars holding the second viewpoint insist there is no leap in technology. They say that rapid progress in technology, whether vertical or horizontal, can be achieved only after proper and adequate operational and manufacturing skills have been accumulated. They are interested in the process in which accumulated technologies and skills come to be applied. Technologies concerning materials, processing, and design are developed individually before being integrated, and only after this process are theoretical levels of engineering and technology refined, and thus the applicability of the technologies is assured. Adherents of the second position grasp this process of technological development as one peculiar to each country, to each time, and to each enterprise or plant.

More important, this position is attentive to the role of labour as a factor of technology, especially to the indispensability of engineers and skilled workers. It has often been assumed that production and productivity gaps between countries, regions, and factories would be narrowed or altogether removed if machines and equipment were standardized. The fact is, however, that conditions under which different factories operate vary widely, and the closing of the gaps may be far more difficult than imagined.

These differences should first of all be attributed to the human factor in technology. In the latter half of the nineteenth century, Japanese spinning factories adopted ring spinning, the most efficient spinning technology in the world at that time. The ring spinner was far easier to handle than the mule, and it was hoped that the new technology would raise production efficiency three to four times, as it had in Great Britain. In actuality, however, as an official report of 1903 declared, productivity in Japanese factories was as low as one-eighth of what it was in British factories, where even obsolete machines were in use.9

The report further describes the British spinning workers as professional soldiers and the Japanese as rabble, and attributes the Japanese weakness to the very short average terms of employment; most workers quit within two months of employment. Most obvious in the report is that, while in theory a farmer's labour is equivalent with that of an industrial worker, in reality, a farmer cannot easily make the transition from the soil to the factory.

A similar situation was evident in the watch and camera factories - where primarily originally agricultural labour was used - of some South-East Asian countries. In their first years of operation, the percentage of end products meeting standards was as low as a tenth what it was in Japan. What this shows is that farm skills and labour fall far short of the needs of industry and, not surprisingly, the work roles of factory workers and farmers are not easily exchanged. Because state-of-the-art machines require less skill from labour, the productivity gap between skilled and unskilled workers and between the new and old industrial nations has become narrower than when simpler machines and tools were in use. But the gap remains, and the apparent narrowing should not be misinterpreted; the latest machines, though efficient, are far more expensive than the ones they made obsolete. And throughout technology, the human factor, the skills and accumulated experience, are indispensable at any time, at any place, in any sector. As the machines and equipment change, so do the type and the substance of skills required to operate them.

In another example, there is a steel mill with the latest equipment which has an automated control centre that is notified of every activity in every process at the mill. If any process deviates from the programme, the centre is immediately informed. On one occasion, a process was found to be in trouble. The prescribed corrective measure was taken, but it had no effect and the trouble spread quickly downstream. Investigation determined that the other processes and the programme itself were functioning properly, and the trouble was found to be confined to the process that had shown misfunction.

Because the mill is wholly automated, the cause of a malfunction can usually be determined and remedied through an examination of records; which, however, can be a two-week job. The search would mean suspended operations and perhaps customer demands for compensation for losses and delays. It could even mean having to remove some equipment for repairs.

So the mill in this case looked to veteran skilled workers for help, even to retirees. They were quickly brought in by chartered plane, and once there, closely checked the processes, paying close attention to sound, light, temperature, and the shapes of processed goods in order to determine the problems.10

Automated equipment is designed to fit the movements and judgements of skilled workers and will never favourably compare to human labour that is highly skilled and efficient. In a modern automated plant operated at a high degree of stability, the importance of human efficiency and skill may not be as great as it once was, but it remains a necessary ingredient of the manufacturing process, especially at the startup of production and for maintenance checks. In the chemical industry, for instance, groups of skilled workers, now retired, have organized businesses to provide help when technology breaks down.

Needless to say, what is possible theoretically is not necessarily possible in practice. A manufacturing technology must be established under restrictions and conditions vastly different from those of an experiment, which usually can be stopped and resumed at any time. Science and technology differ greatly here, and thus a correct diagnosis will not necessarily lead to a cure.

3: Why do we begin with the Meiji restoration?

The Sixty Years towards Self-Reliance in Technology

At the beginning of the present report, I presented my own thoughts on development and technology in post-war Japan, a theme not included in our project activities on the Japanese experience in technology transfer and development.

I included it because, during many of our discussions with collaborators from the developing countries, interest centred on that aspect of the Japanese experience.

But it must be kept in mind that the technological development in post-war Japan was possible only because of the nation's pre-war legacy of development in the technology network. This cannot be overemphasized because the favorable conditions for technology transfer did not exist only in Japan. In fact, Japan was unable to attain complete self-reliance in technology until after World War II, especially in the 1970s, but this was made possible only because it first progressed through the recovery of the pre-war level of technology development. The ability to absorb state-of-the-art foreign technology was ensured by the country's first regaining the pre-war levels in the technology-supporting sectors and services. This recovery was helped by technology transfers, but more important is that it took place along with demilitarization. This differentiates the formation of the post-war technology network from that of the pre-war period.

The isolation and set-backs technology suffered during World War II caused Japan to lose much of its ability to develop technology, and the country fell drastically behind in this area after the war. Even today, Japan has much in common with many developing countries. The only difference is in the level and scope of national technology formation. That is why I have placed Japan as a front runner of the technologically less-developed group.

And yet, the Japanese experience differs from that of the presently industrializing countries in the method and time of technology network formation. In particular, the time difference has had much to do with whether technology transfer will prove easy or difficult.

Thus, our study of the Japanese experience in forming a national technology network through technology transfers should attend to the different phases of transfers, which corresponded with the changes in the level of technology in Japan. Consequently, initial attention must focus on the time when Japan began to absorb foreign technology, the Meiji Restoration, because this time factor influenced both the direction and the pace of the network formation.

The Meiji Restoration represented a political turning point. Though it was not a turning point of technology, it did pave the way for one. Only after the Meiji Restoration were there suitable conditions in terms of politics and socio-economics to domesticate and develop imported technologies. In the earlier cases of technology transfer, the Tokugawa regime had failed to create these conditions.

By the same token, the turning point in Japanese technological development after World War II would never have been reached without a series of reforms carried out as a result of another great political change, namely, the nation's defeat in the war.

The Meiji Restoration and the defeat in the war both clearly illustrate the relationship between technology and political and social factors. However, the political and social conditions of the restoration greatly differed from those of the defeat; the restoration was far more decisive for technology than the war as a turning point. That is, the Meiji Restoration represented an attempt by an agrarian society to turn itself into an industrial society, whereas the post-war development meant a change in direction and an upgrading of levels in a society that was already basically industrial. The latter experience thus was not primary, and as a secondary experience it was less painful and shorter than the first.

Technology Transfers Accelerated by Self-Reliance

Social and cultural conflict in Japan was far more serious at the start of industrialization in the Meiji period than after World War II. While the two periods are both characterized by a blind worship of foreign technology, and both experienced a flood of technology transfers, they differ in the way they absorbed them. Regarding the post-war period, for example, the formation of a national technology had already been basically completed by the 1920s, and the technology transfer after World War II was completely in the hands of the private sector.

In the 1920s and again in the 1960s, the formation (and, in the 1960s, the recovery) of a national technology network did not lead to a rejection of foreign technology; rather, it made it easier to absorb higher-level foreign technologies; indeed, it accelerated the process.

In examining this historical background, let us first focus on the period from the Meiji Restoration (1868) to the 1920s. At this time, government involvement in technology and industry was relinquished in favour of business groups.

One thing the developing countries share with Japan is that, once having set forth on the road to industrialization, all have had to tackle social and technological problems common to once basically agrarian societies. On the other hand, some of today's developing countries could choose to reject industrialization, as some in fact have. This may be a commendable choice for some, but not for all. As for Japan, it resolved more than a century ago to abandon being an agrarian society, and the national consensus on this is worth special note. Although the nation had agreed on the transformation, there was no unanimity on how it should be accomplished. Even today there is debate regarding Japan's choice to industrialize. Obviously, however, Japan has gone too far to revert to being an agrarian society.

Nevertheless, rising agricultural productivity supported Japan's industrialization and its growing population. And now, agriculture has become increasingly dependent on industry for farm machines, fertilizer, and agricultural chemicals. Japanese agriculture today could not survive without industry. So the question arises as to whether countries that have chosen to remain agrarian can continue without facing insuperable difficulties.

This seems especially true for countries with rapidly increasing populations. Since the international environment when Japan struggled towards industrialization was quite different from that of today, the developing countries may never experience many of the difficulties and pains that confronted Japan, though they will likely face others. It is our hope in presenting the Japanese experience that they will learn whatever lessons might be helpful in steering them away from, or at least minimizing, those difficulties and pains.

In this study, particular attention has been paid to the view expressed by some of the participants in our project which says that a comprehensive study of the Japanese experience should begin with the Meiji Restoration as the primary experience of modernization in Japan, but that, in regard to technology, greater relevance (for the developing countries) is to be found in the period since the 1920s, when global technological monopolies came into being. We do not agree with this view, however, because, for one reason, monopolized technologies have always been the most advanced technologies, which are not always useful for developing countries. What is urgently needed now are intermediate or alternative technologies.

From Agrarian to Industrial Society

The transition from an agrarian to an industrial society undertaken beginning with the Meiji Restoration meant that farmers were now working in the manufacturing and service industries on a nation-wide scale. This transformation entailed a lifetime of effort in acquiring new skills and experiencing conditions that were entirely new.

In the initial stage of industrialization, farmers and workers can perhaps assume each other s tasks, but as industrialization progresses, the inter-changeability of roles is gradually lost. A farmer can only hope to become an unskilled worker, and an industrial worker can only expect to perform well as a farm labourer, not as a farmer. For farmers, industrialization brought a process whereby they necessarily became principally farmers, agricultural specialists, no longer able to maintain sideline occupations. The change began with the Meiji Restoration and gradually spread throughout the country. Thus Japan became an industrial society, and it became impossible to return to what it had been.

During this period of social change, the role played by women from rural areas was great. In the textile-led transformation of Japan into an industrial society, females had begun to account for more than half the industrial labour force by around 1910. As light-industry development gradually gave way to the stage of heavy- and chemical-industry orientation, males began to exceed females in the labour market. Also, a little later in this period (late 1900s), more graduates of the imperial universities in Tokyo and Kyoto, who were expected to form an élite corps in the service of national interests, were choosing business careers in big zaibatsu corporations and banks rather than in the government bureaucracy.11

Nevertheless, juvenile female textile labourers, forced to work long hours under severe conditions, played a central role in Japan's development of self-reliance in technology. In families who had been squeezed out of their farm villages, the men s wages alone were not enough to support their families, and it was necessary for wives and children to earn what they could from odd jobs they could do at home. This phenomenon has been referred to as zembu koyo (whole-family employment), to be distinguished from full employment. This whole-family labour corresponded with the practice of young women labouring in the spinning mills, sending all their extremely low wages back to their home villages to support their parents.

This phenomenon and its related problems suggest the need to consider not only the economic aspects of technology transfer and development but also the social and historical changes that result. Thus, focusing on the technological development of Japan after World War II would not give an accurate and practical analysis of the Japanese experience. Such a study must begin with Meiji, when Japan was a late starter.

Technology in theory - The five Ms

Although science and technology are closely interrelated, each is relatively autonomous, perhaps similar to civilization and culture. Where civilization is universal, culture is individual. Today we live in an industrial civilization, an age in which nations are often ranked according to the level of their technological development. Such a narrow basis, however, overlooks cultural differences among nations.

At the same time, cultural differences are often taken to mean the superiority or inferiority of one culture to another. It should be too obvious to mention that cultural differences are not equivalent to differences in value.

By the same token, neither the wooden weaving machine nor the one made of metal has an advantage in principle over the other. Their mechanisms are based on the same scientific principle, and in this sense they are equal in value. They differ in durability or efficiency, perhaps, but these and similar differences should not be assumed to indicate the superiority of one over the other.

Any evaluation of them from the perspective of national development should also consider, besides productivity, the relative advantage for each of manufacturing operationability, procurement, maintenance, and repair to the indigenous user. The relative advantage of the wooden or the metal loom will depend on the production purpose and on what sort of consumer need its products must satisfy. For example, one option may be mass production and mass consumption; or goods may need to be produced and consumed in small quantities. The particular needs and conditions will determine relative advantage.

No society or culture exists without a technology of its own. Similarly, no community or culture today can avoid contact with the outside world, with foreign technologies, a fact that may hold fortunate or unfortunate consequences. As pre-modern, pre-industrial societies and cultures confront problems of population increase, many have been made keenly aware of the limitations of their traditional technologies. Consequently, there is an eagerness to introduce modern foreign technology. But the demand for new technology is often unaccompanied by the pre-conditions required by new technology, and this poses a difficult problem. Moreover, because the creation of these pre-conditions often makes it necessary to bring about changes in the traditional values and social organization, conflicts are bound to result. The Japanese experience shows that what minimizes conflict is the attainment of a national consensus, which is a matter of political leadership and of cultural legitimacy.

Confronted with powerful modern technology from abroad, Japan was at first seized with awe and confusion. This soon yielded, however, to a national realization of the need to absorb modern technology. After the initial blind rejection in some corners of society, the country recognized the importance of modern technology. While this both contributed to and resulted from political stability, by the time of the Meiji Restoration, Japan had achieved a high degree of social integration, which was an obvious aid to the formation of a national consensus. The high degree of social integration was due in part to the country's small size and to its several hundred years of complete isolation from the outside world.

In the years before the country opened its doors, the samurai class was the first to recognize the power of modern weapons. Many of the leaders of the new Meiji regime, in visits to Europe and the United States, marveled at the West's industrial technologies, especially those in marine transportation, railways, and mining.12 Also, ordinary Japanese' terrified by the contagious diseases that raged as an immediate result of the opening of the country, experienced the miraculous effects of modern medical science and technology and marveled at this just as much as they did at the strange, new products, devices, and machines from the West.

The Japanese experience began with a naive, overwhelming encounter with modern technologies, which, however, quickly inspired a national zeal to master and possess them.

Today's developing countries have not had so dramatic and innocent an encounter with modern technologies. They have been using technologies far more refined and sophisticated than those that so shocked the Japanese more than a century ago, but what they have been using and enjoying have not always been suitable for the purposes of their development. Developing countries often lack a national consensus as to the purpose and priorities of development, and their expectations are frequently too great. Finally, the way in which technology has been used has possibly not always been wise.

Definition of Technology

To assure an effective dialogue, it may be necessary for us to agree on the concept of technology. In general terms. it comprises all scientific knowledge deliberately and purposefully used for production, distribution, consumption, and utilization of goods, services, and information, especially that which concerns mechanical apparatus and systems.

This definition of technology, mindful especially of modern industrial technologies, could be useful in considering nearly all the chief problems of development in the developing countries. Of course it may require adjustments, but, in any case, what is important is to enrich our dialogue' more than seeking a definition of technology as an end in itself.

The scientific rationality present in traditional technologies have often been overlooked. Overconcern for the high efficiency of modern technologies may conceal the presence of scientific principles in use by the scientifically illiterate. The Japanese have been guilty of this neglect. Furthermore, an exaggerated reliance on rationalism is apt to oversimplify matters, to elevate technology to the point of being a panacea. This kind of thinking, often ridiculed as being an engineer's way of thinking, lacks concern for important cultural values.

Technology should be evaluated not in relation to its principles alone but in the light of its contributions to the development of the society and country in which it is at work. There are technologies that have served otherwise, of course, but for our purposes, the most desirable use of technology is to serve the national development of the less-developed countries.

The practical experiences of development have shown that because technology-though applied according to scientific principles-is affected by such factors as natural conditions, natural resources and their processing and transportation, and how the technology is used, the attainment of one and the same technological aim may take widely different forms in different countries and regions.

Therefore, unlike science, which is universal in nature, technology consists of intermediated knowledge and skills, which are largely conditioned by geographical, social, cultural, and historical factors. In other words, a scientific principle becomes a technology only when it is intermediated by these factors.13 Technology becomes stable only after such modification, and is free to disseminate only after it has been stabilized.

The Five Components of Technology

Technology consists of the following five elements, or what we may call the five Ms:

1. Raw materials and resources (including energy): M1
2. Machines and equipment: M2
3. Manpower (engineers and skilled workers): M3
4. Management (technology management and management technology): M4
5. Markets for technology and its products: M5
Modern technology must have all of these elements to function properly.

Money and information are also indispensable components. The monetary aspect has been discussed more than adequately elsewhere, so we will ignore it here. As for information, technology requires various types and levels of information, which control and integrate the five Ms. The collection of information is itself a technology that requires a certain level and range of knowledge, a processing system, and a capability to make full use of the relevant instruments and equipment. The more advanced a technology, the greater the amount of information required, and also the higher the level of intellectual capability needed to collect and analyse it.

The effective functioning of technology requires information processing technology, which in turn lends information itself an objective value and cost. Hence, information becomes a central aspect of the managerial policy of an enterprise and, as such, an object of legal protection.

The notion of the five Ms helps us locate problems wherever they might exist in the relationship between development and technology. For example, the same machine will give qualitatively different results depending on the country or company where it is being used for Knowledge of the five Ms is useful in making possible the attainment of the same results from the same machine, or, if not, in finding out what makes it impossible to get the same results.

The five Ms are not present, however, in the same way at all times and places. They exist in different proportions in different countries, enterprises, and factories. This explains the differences among countries in national technology formation. This fact may also be useful for studying comparative national advantages from the viewpoint of an ideal international division of labour in technological development.

From the viewpoint of development strategy, a strategically selected area of technology means a strategically selected industrial sector, which, moreover, takes into consideration the particular characteristics of the goods to be produced. The choice of technology would then need to be made taking into consideration the development levels of allied areas of technology and the links among them. If a technology was chosen where such links were nonexistent, they would need to be created, and, in such a case, it would be necessary to conduct a careful feasibility study on the basis of the five Ms as to the appropriate level and scale of the chosen technology. The success of this would depend on the R. & D. capability of the country or enterprise importing the technology.

In regard to the technological self-reliance of a country, native engineers should ultimately play the most important role in R. & D. Foreign engineers and technologists can and should play only a supplementary role. This is an essential finding of our project on the Japanese experience. This is because, in spite of the diachronic, trans-cultural nature of technology, it cannot function independently of the society and culture in which it is expected to function. Only members of that society can make the best use of a technology. In other words, only native engineers can adapt a foreign technology to their country's climate and history, can intermediate, stabilize, disseminate, and, finally, root it firmly in their country.

The Japanese Engineer

Just as technologies have both synchronic and diachronic aspects, engineers may also be so characterized. In some countries, it is necessary for technologists to go abroad for their education, and it is natural that, as a result, foreign technology will be applied in these countries. However, if technologies are to be developed and modified so as to serve national development instead of being always something foreign, the role of native engineers is decisive. Bearing this in mind, let us now discuss the Japanese engineer.

In the advanced and now in the developing countries, there has been a marked tendency for engineers to categorize themselves by function, a trend perhaps paralleling the development of modern technology. In the case of the Japanese engineer, however, he was responsible for a broad range of tasks and functions. Thus, design engineers were also shop-floor manufacturing engineers, and likewise, the shop-floor engineer was expected to develop expertise and experience in the area of design.

Whether the Japanese experience should be made a model in this regard must be left to the developing countries to decide. However, if a technology is being transferred from Japan, for example, it will be necessary to investigate whatever particularly Japanese characteristics might underlie the technology; otherwise, the recipient might find it difficult to see why the technology has failed to perform as well as it did in Japan should such a problem occur.

There is the complaint in many developing countries that Japan and other technology-exporting countries have merely sold their machines and equipment and kept the most important know-how to themselves. These complaints are, in fact, not without foundation, depressing as this is to us and to other investigators. But it must be borne in mind that when a technology is transferred, the culture of that technology is not transferred with it.

One important characteristic of the Japanese engineer is that the functional division of engineering into design, operation, and manufacturing is only relative and temporary. Engineers may be classified by function in a relative sense, but they are not confined to it throughout their careers.

Thus, electrical engineers, mechanical engineers, and civil engineers are not functionally restricted to these disciplines; they are expected to have as wide a range of engineering knowledge as possible, encompassing technologies that reach beyond their own specialties. This has allowed for overlap among the different branches of technology during the period of technological innovation that has been occurring since the 1970s.

Furthermore, Japanese engineers are expected, above all, to be shop-floor leaders, to be able to solve actual problems side-by-side with the workers. They are expected to cover for any shortage of skilled labour and to conduct on-the-job training to increase workers' skills. These are the most important elements setting the Japanese engineer apart.

Because Japanese engineers are usually assigned to design or manufacturing only after on-the-job experience. they are capable of making minor improvements or modifications in production processes and in the design and manufacture of machines to enhance their efficiency and safety. The Japanese engineer first moves horizontally from one sector to another, sectors not necessarily of primary concern to him, on the basis of which he gradually builds himself into a full-fledged engineer. Instead of climbing vertically, then, to become a specialist, the Japanese engineer becomes an all-rounder in technology.15

Therefore, when we talk about the characteristics of Japanese technology, we are also referring to the peculiar way of training engineers in addition to technology control and management.

The point here is not that this approach is better than others; the important thing is that Japan became self-reliant in technology aided by this particular way of training its engineers. That the birth of this type of engineer took place in the initial stages of industrialization, when the absolute number of engineers was small, may prove to be useful information when studying the problems of development and technology.

It might be of interest to add that, even in the days when there were few engineers, they did not occupy very high positions at their work places, and their social status was not high. Their salaries were relatively good, but they usually had only limited power. Perhaps this is a phenomenon peculiar to a technologically less-developed country; we met many engineers in the developing countries we investigated who had much to complain about because of their social positions. Their problems were similar to the ones Japanese engineers once faced.

Japanese trained engineers first began assuming leading corporate positions in the 1910s and 1920s, a period when the country had succeeded, for the first time, in developing indigenous modern technology. Engineers began to widely occupy the highest executive posts in corporations only after World War II, when corporations became owners of technology and possessed what amounted to armies of engineers.

In considering the relationship between scientists and engineers in the initial years of industrialization, attention should be paid to the following two relational aspects.

The Relationship between Engineers and Techno-Scientists

The two now belong to categories relatively independent of each other, though they were interchangeable at earlier stages. The techno-scientist's primary job has been to collect technological information from different parts of the world and analyse it. Although this group has formed a key part of the core for technological development in Japan, their work has centred on basic research and experimentation, being removed from shop-floor operations, though the distance has been shortened somewhat in recent years.

Techno-scientists have long served as advisers to the state in the formulating of Japanese science and technology policies, whereas Japanese engineers began only recently to make themselves heard from the shop-floor in terms of national technology policy.

Finally, at the earlier stages of industrialization, techno-scientists made great efforts to train successors as well as skilled workers in new fields. Their contributions to the education of engineers and skilled manpower since the end of the last century have created a bridge between science and technology; bonds like those between a master and his disciples were forged between techno-scientists and engineers (though new problems arose later). Such bonds, and the camaraderie among fellow-students, aided the growth of industry-university co-operation, especially in the areas of technology that played a leading role in the formation of a national technology network and in which Japanese technology has risen to world prominence.

Workers' Attitudes towards Engineers

In the earlier stages of industrialization, when the number of engineers was small, a higher or specialized education was evidence of one's family's elevated social status. Not surprisingly, engineers enjoyed more favorable circumstances in terms of both the status and conditions of employment; yet in spite of that - or because of it - engineers were always the shop-floor leaders, and the workers, though sometimes the envious subordinates, held those superiors who could competently address and solve their problems on the shop-floor in high regard. If their superiors were incompetent, the workers would remain obedient, but, at the same time, lose the incentive to work hard, for the quality of shop-floor leadership had a direct effect on worker safety, productivity, and wages.

Japanese workers dislike having designs and specifications changed while work is under way and will sometimes even openly oppose any such changes. The European-style functionalistic attitude of workers, who may not object to such alterations so long as they receive their due pay, is rare in Japan, where the attitude of both workers and engineers towards technological skill and competency is strict. Even labour union leaders are not likely to be elected merely on the basis of their capabilities to organize and bargain. In the early years of the labour movement, all union leaders were workers of outstanding skill. This reveals the great importance Japanese workers place on labour and skill, not unlike the value an artisan places on craftsmanship.

It was natural that such ethics should have been reflected in both the consciousness and roles of engineers, and thus the Japanese engineer was formed.

The Five Stages towards Technological Self-Reliance

The Japanese experience has shown that, if technology transfers are eventually to lead to technological self-reliance in a given nation, it must create its own style of integrating the five Ms and its own corps of native engineers.

The Japanese road to technological self-reliance was marked by a series of painful efforts and several stages extending for more than a century.

Although the work of our project was based on case-studies in diverse sectors of industrial technology, we may generalize them and divide the history of development of modern technology into the following five stages:

1. Acquisition of operational techniques (operations)

2. Maintenance of new machines and equipment (maintenance)

3. Repairs and minor modifications of foreign technologies and equipment, both in the system and in operations (repairs and modifications)

4. Designing and planning (original design and creation of a system)

5. Domestic manufacturing (self-reliance in technology)

To attain complete self-reliance in technology, none of these five stages may be skipped. The advantage of a late starter is the possibility to economize on the time, money, and energy to be spent at each stage of development. It is not necessary, nor is it possible, for every country to attain complete self-reliance in technology or to develop all areas of technology in an autarkic manner. What a late starter must do is choose a sector of technology in which it has an advantage, taking into account its own development needs and the optimal types, levels, and scales of technology.

We have outlined these five stages of technology development because, as many shop-floor engineers and historians of technology have pointed out, there is no such thing as a leap in technology. We hope this breakdown will serve as a useful tool when considering the relationship between a nation's development and technology. Judging from discussions of the subject, it seems there is a tendency for the argument to jump from stage 1 to stage S. to the problem of manpower or to the politics of technology, with little attention given to stages 2 and 3.

To clarify what is presently the most urgent of the technology problems of each developing country, it might be useful to combine the five stages with the five Ms of technology. Modern technologies are interrelated. Therefore, even if national self reliance in each transferred technology were attained through the five stages, the path would not be straight, but would, rather, follow a spiral course to self-reliance. Thus, a technology enclave, a technology transfer at the hands of a transnational corporation, having no intention of developing the related technology outside its own sphere, would not contribute to the formation of a national technology network in the host country, and we can, therefore, disregard cases of this kind here.

Modification of the Five Stages

The five stages of technology development may need some modification for selected technology transfers. For example, reversing the order of stages 2 and 3 may be appropriate: this may apply to transfers in a country that has reached a level of technological development characterized by comparatively simple machines and facilities. One of our collaborators, Professor Hoshino Yoshiro, drew our attention to the existence of this situation in China.

According to Hoshino, where individual skilled workers are capable of improving machines, for example, there may be a lag in establishing a national maintenance standard, and this would bear directly upon stage 4. Therefore, the order of stages 2 and 3 might be reversed.16

On the other hand, in such a complex technological system as a manufacturing plant, the maintenance technology should be established first. Repairs and minor improvements or modifications will be possible only once that has been done. In countries unable to manufacture basic automobile parts and accessories, for example, maintenance technology is vital.

To take examples from Japan, a world-famous clock and watch maker started business as an importer and repairer of foreign clocks. A well-known manufacturer of electrical appliances began as the engine-repairing section of a mining company. To begin with maintenance and repairs and go upstream to higher technological areas is a quite ordinary way to accumulate technological capacity.

In our field-work at several factories, we found that maintenance training through the periodic dismantling of machines and equipment for overhaul is very important to maintain the efficiency of machines. We also learned that the dismantling itself was regarded as an apt index for evaluating mechanics' skills. In recent years, however, several chemical plants have increasingly entrusted maintenance work to outside specialists; some engineers have criticized this division of technological labour, saying it will lead to a diminish- in workers' skills. It should be noted, though, that there are now cases in some areas of technology, especially in those of already mature technologies, where skills in maintenance and repair do not always lead to the enhancement of operational skills. The question of whether to build up a maintenance technology for each industrial technology or to leave it to outside specialists should be a matter of choice for each country.

There is another important consideration regarding the five stages of technology development. The five stages as a whole have information as a common factor on the one hand and manufacturing capability as a common factor on the other, just as the five Ms of technology have financial resources in common on the one side and information on the other. That is, the same technology may be observed in use at different levels of the five stages in different countries because of their divergent information and manufacturing systems and capacities. Therefore, it might be better in some cases to order machines and equipment from foreign manufacturers if they can design them to suit the user's domestic conditions, instead of trying to manufacture them domestically.

But constant reliance on foreign technology is undesirable. Developing a national/local capability in maintenance and repairs and in making modifications is important because foreign technologies often lack uniformity in their standardization; this is a result of the society in which they originated. Nevertheless, it cannot be denied that establishing a stable connection with specialized foreign enterprises may be a choice a developing country wishes to make.

Three Elements of Technology Management: Eliminating Muri, Muda, and Mura

Modern machines and tools have become increasingly maintenance-free. This has been made possible through the development of stronger materials. But unlike their predecessors, modern equipment is less flexible with respect to function and durability. In any case, handling skill, support services, energy supply, etc., still have an effect on the output and durability of the equipment. 17

Even when the technology is embodied in the final goods, in an automobile or a machine tool, for example, it - and the skills that applied it - will affect the output and service life of the goods. In production technologies, handling and control affect the efficiency and quality of the products even more, and, thus, the quality of management in the enterprise that owns the technology is of great importance.

For example, at the Amagasaki mill of Kobe Steel, there is the slogan "Eliminate 'Muri,' 'Muda,' and 'Mura' " (muri - to overwork or do something forcibly; muda - to waste, diseconomy; and mura - irregularity or inconsistency). This watchword, emphasizing rationality, safety, efficiency, economy, and a high standard of quality control, pin-points the essence of factory management and technology control today.

During our visit to the mill, I noticed that, although most Japanese were impressed by the slogan, representatives from developing countries seemed unmoved. The difference in response seemed not to indicate any personal disagreements; it merely reflected the state of technological affairs in the visitors' home countries. The questions they asked the factory staff centred mostly on such matters as the strategic placement of the steel mill's technology in regard to defence from sea - based attacks, labour management, and QC circles - matters taken for granted by the Japanese.

In addition to concern for cost, quality, and security, prompt delivery might also be mentioned, for it is what clients especially demand of producers of intermediate goods. In automatic production, for example, where assembly lines handle hundreds of component parts and accessories, delivery dates and times have a decisive importance in maintaining productivity. The higher the level of technology, the more important the punctuality of delivery, because such technologies are dependent on complex, wide-ranging support sectors. A refined delivery schedule enhances performance, and a poor schedule creates operational diseconomy. Toyota's "just in time" delivery system (the Kanban method), for example, eliminates the necessity to stock many spare parts and to maintain large warehouses, which, in turn, reduces production costs considerably.

Obviously, this system requires punctual deliveries to maintain a high level of productivity. Since punctual deliveries over long distances depend on good communications, information, transportation, and other services, some of which are beyond the manufacturer's direct control, there must be some safe guards against unexpected snags and losses. An essential factor in technology and factory management is to be constantly prepared to overcome any crisis that threatens to disrupt constant full-scale operations.

Factors such as these constitute the heart of technology management and control, though they are often overlooked by technology users, and this is one difficulty Japanese technology exporters have sometimes encountered, even in the industrialized countries.

In the light of the experiences of the developing countries, the five stages of technology development might be supplemented by another one preceding the first; namely, a careful assessment of the costs and benefits likely to result from a transfer of technology. Even should a country find it necessary to transfer a technology, it might lack the right conditions to do so. For instance, where large-scale equipment must be introduced, the necessary port and transportation facilities may be lacking. Feasibility studies carried out before technology transfer, however, might reveal important difficulties. For example, even if it is found indispensable to prepare or build infrastructural facilities to make a transfer possible, it might be determined that, if the infrastructure were built, it would be needed only at the time of the transfer and would later prove useless. The costs, including the cost of maintenance and administration of the infrastructure, would then be ruled too high to carry out the transfer.

Many developing countries are also often obliged to import technologies that are too large for their needs, but they would have to have an exceptionally high level of R. & D. capacity and engineering ability - both usually rare in developing countries - to modify the scale of the technology As a result of this difficulty, technology transfers to developing countries often prove unsuccessful.

The question of economic rationality in the choice of technology also arises. If the technology importer is a private enterprise and alert to economic rationality, it will likely modify its transfer policy to avoid diseconomy. However, the transfer of a technology to answer the technological needs of the state may present a different case.

The needs of the state have often been those of the political or administrative élite, who tend to pursue only the latest technologies and equipment. As a result, the maintenance, management, and the products themselves are apt to be inferior, yet expensive. This can be expected because the élite lack the required expertise and an alertness to the aforementioned three elements of technology control.

Japan is a good example of this. Many of the early, state-run factories using newly introduced foreign technologies proved unsuccessful. Once in private hands, however, they exhibited significant improvement in both managerial and technological capabilities.

Kamaishi Ironworks, for example, modified the foreign technology it had taken over from the state to suit the raw materials that were locally available; further, it reduced its scale to stabilize operations. Two important reasons for the failure of its Predecessor were the original design by foreign experts. who had introduced their technology to Japan without modification, and the Japanese government's policies on technology. It was Japanese engineers who had to remove the difficulties.

We heard similar stories in the developing countries we visited. The quality-control movement that Japanese experts tried to introduce there did not at first prove successful, but after a change in management, it was learned, the movement was proposed anew by native engineers and successfully realized.

A Chinese scholar stated that he was impressed that in Japan a thorough preliminary cost-benefit assessment was usually made before a technology transfer. This is taken for granted in Japan, but the remarks remind us that technology transfers often occur under the auspices of development aid, in which cases primary importance is attached to government needs, and the analytical assessment of the technological and economic rationality of the transfers is ignored. The urgency of development tends to justify these sorts of technology transfers to developing countries that are unconcerned with techno-economic rationalism. It is important to remember, however, that modern technology is primarily based on economics, even if it cannot be free from national and international politics.

It may also be added that technology, like economics, will be sure to stagnate without free and fair competition, and so will the quality of engineers. Where engineers and skilled workers are few, the ability to develop technology is difficult to foster. In Japan, the technologies that remained long under government control developed and spread more slowly than those that did not.

For example, the spread of telephones under government administration in the 50 years they were in use before World War II was incomparably slower than in the 30 post-war years when the telephone business was in the private sector. In pre-war days, because extension of telephone lines was very slow, even having a telephone was considered a symbol of wealth and social status, and telephone owners tended to support the restricted availability of telephone access. The extension of telephone lines was made both possible and necessary through innovations in telephone technology and the increased popular demand for telephones, resulting from the greater income of the people and changes in their life-styles. In sum, state-run businesses tend to be slow to respond to a nation's needs.

Though bureaucratic control of technology may cause greater difficulties than market-oriented, privately run, business-oriented management, the bureaucracy itself is not the same in different countries and in different times. The intention here is not to suggest that bureaucratic control is always inefficient and uneconomical; nevertheless, a monopoly on technology, whether state or private, is not good for its diffusion.