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Creation of relational assets through the ‘library of equipment’ model: an industrial modernization approach of Japan's local technology centres

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  • Hiro Izushi

Abstract

SMEs with a weak internal R&D capacity show the tendency to shy away from using external sources of technical expertise. The tendency deters providers of industrial modernization services from supporting such structurally weak SMEs. This paper examines how Japan's local technology centres -- kosetsushi -- remove the bottleneck and reach out to a significant proportion of SMEs with a weak R&D capacity in their localities. Kosetsushi centres sustain habitual interactions with client firms through ‘low information gap’ services solving immediate needs and lead the clients to a riskier and longer path toward innovation capacity building. This gives kosetsushi centres a position distinct from universities and consultancies in the regional innovation system. While long-term relationships between kosetsushi centres and their client firms can increase switching costs and produce lock-in effects, a case study of two kosetsushi centres illustrates the importance of ‘low-information gap’ services and relational assets created thereby to the modernization of SMEs with a weak internal R&D capacity. The paper calls for long-term commitment by the public sector if it addresses the issue through modernization services.

Suggested Citation

  • Hiro Izushi, 2005. "Creation of relational assets through the ‘library of equipment’ model: an industrial modernization approach of Japan's local technology centres," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 17(3), pages 183-204, May.
    • Handle: RePEc:taf:entreg:v:17:y:2005:i:3:p:183-204
    DOI: 10.1080/08985620500102832
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    1. Odagiri, Hiroyuki & Goto, Akira, 1996. "Technology and Industrial Development in Japan: Building Capabilities by Learning, Innovation and Public Policy," OUP Catalogue, Oxford University Press, number 9780198288022, Decembrie.
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    Cited by:

    1. Andrés Barge-Gil & Aurelia Modrego-Rico, 2008. "Are Technology Institutes a Satisfactory Tool for Public Intervention in the Area of Technology? A Neoclassical and Evolutionary Evaluation," Environment and Planning C, , vol. 26(4), pages 808-823, August.
    2. Nobuya Fukugawa, 2011. "Impacts and channels of university spillovers before the national innovation system reform in Japan," International Journal of Transitions and Innovation Systems, Inderscience Enterprises Ltd, vol. 1(4), pages 383-393.

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