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The Speed and Cost of Industrial Innovation in Japan and the United States: External vs. Internal Technology

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  • Edwin Mansfield

    (Center for Economics and Technology, University of Pennsylvania, Philadelphia, Pennsylvania 19104-6297)

Abstract

This study, based on detailed data obtained from carefully selected samples of about 200 Japanese and American firms, seems to be the first comprehensive empirical investigation of the differences between Japan and the United States in innovation cost and time. Whereas the Japanese have substantial advantages in this regard in some industries (notably machinery), they do not seem to have any substantial advantage in others (notably chemicals). Whereas they have great advantages in carrying out innovations based on external technology, they do not seem to have any in carrying out innovations based on internal technology. Japanese firms allocate their resources quite differently than do American firms, a larger percentage of total innovation cost being devoted to tooling and manufacturing equipment and facilities, a smaller percentage being devoted to marketing startup. A large part of America's problem in this regard seems to be due to its apparent inability to match Japan as a quick and effective user of external technology.

Suggested Citation

  • Edwin Mansfield, 1988. "The Speed and Cost of Industrial Innovation in Japan and the United States: External vs. Internal Technology," Management Science, INFORMS, vol. 34(10), pages 1157-1168, October.
  • Handle: RePEc:inm:ormnsc:v:34:y:1988:i:10:p:1157-1168
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    File URL: http://dx.doi.org/10.1287/mnsc.34.10.1157
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    Cited by:

    1. Jeffrey Cummings, 2003. "Knowledge Sharing : A Review of the Literature," World Bank Publications, The World Bank, number 19060.
    2. A. Heirman & B. Clarysse, 2004. "Do Intangible Assets and Pre-founding R&D Efforts Matter for Innovation Speed in Start-Ups?," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 04/238, Ghent University, Faculty of Economics and Business Administration.
    3. Da Mota de Pina E Cunha, A.M., 1998. "Determinants of Product Innovation in Organizations : Practices and Performance in the Portugese Financial Sector," Other publications TiSEM e6e4e56e-b72a-4392-8d79-f, Tilburg University, School of Economics and Management.
    4. Diamond, Arthur Jr., 2003. "Edwin Mansfield's contributions to the economics of technology," Research Policy, Elsevier, vol. 32(9), pages 1607-1617, October.
    5. Maria JOSE SILVA & Gastão SOUSA & Jacinta MOREIRA & Jorge SIMÕES, 2011. "Innovation Activities in the Service Sector: Empirical Evidence from Portuguese Firms," Journal of Knowledge Management, Economics and Information Technology, ScientificPapers.org, vol. 1(6), pages 1-17, October.
    6. Qiangbing Chen & Yali Liu, 2011. "The Diffusion of a Process Innovation with Gently Declining Production Cost," Journal of Industry, Competition and Trade, Springer, vol. 11(2), pages 109-129, June.
    7. Bischi, G.-I. & Dawid, H. & Kopel, M., 2003. "Gaining the competitive edge using internal and external spillovers: a dynamic analysis," Journal of Economic Dynamics and Control, Elsevier, vol. 27(11), pages 2171-2193.
    8. Ito, Kiyohiko & Rose, Elizabeth L., 1999. "Innovations and geographic focus: A comparison of US and Japanese firms," International Business Review, Elsevier, vol. 8(1), pages 55-74, January.
    9. repec:eee:jbfina:v:85:y:2017:i:c:p:146-164 is not listed on IDEAS
    10. Liu, John, 2000. "On the dynamics of stochastic diffusion of manufacturing technology," European Journal of Operational Research, Elsevier, vol. 124(3), pages 601-614, August.
    11. Morris A. Cohen & Jehoshua Eliashberg & Teck H. Ho, 2000. "An Analysis of Several New Product Performance Metrics," Manufacturing & Service Operations Management, INFORMS, vol. 2(4), pages 337-349, July.
    12. Bischi, G. -I. & Dawid, H. & Kopel, M., 2003. "Spillover effects and the evolution of firm clusters," Journal of Economic Behavior & Organization, Elsevier, vol. 50(1), pages 47-75, January.
    13. repec:spr:manint:v:54:y:2014:i:2:d:10.1007_s11575-013-0199-7 is not listed on IDEAS
    14. Baldwin, John R. & Beckstead, Desmond & Gellatly, Guy, 2005. "Canada's Investments in Science and Innovation: Is the Existing Concept of Research and Development Sufficient?," Economic Analysis (EA) Research Paper Series 2005032e, Statistics Canada, Analytical Studies Branch.
    15. Luísa Carvalho & Teresa Costa & Jorge Caiado, 2013. "Determinants of innovation in a small open economy: a multidimensional perspective," Journal of Business Economics and Management, Taylor & Francis Journals, vol. 14(3), pages 583-600, June.
    16. Giovanni Dosi & Valérie Revest & Alessandro Sapio, 2016. "Financial regimes, financialization patterns and industrial performances : preliminary remarks," Post-Print halshs-01418040, HAL.
    17. Kafouros, Mario I. & Forsans, Nicolas, 2012. "The role of open innovation in emerging economies: Do companies profit from the scientific knowledge of others?," Journal of World Business, Elsevier, vol. 47(3), pages 362-370.
    18. Rosenbusch, Nina & Brinckmann, Jan & Bausch, Andreas, 2011. "Is innovation always beneficial? A meta-analysis of the relationship between innovation and performance in SMEs," Journal of Business Venturing, Elsevier, vol. 26(4), pages 441-457, July.
    19. Deeds, David L. & Decarolis, DONA & Coombs, Joseph, 2000. "Dynamic capabilities and new product development in high technology ventures: An empirical analysis of new biotechnology firms," Journal of Business Venturing, Elsevier, vol. 15(3), pages 211-229, May.
    20. Deeds, David L. & Decarolis, Dona & Coombs, Joseph E., 1997. "The impact of firmspecific capabilities on the amount of capital raised in an initial public offering: Evidence from the biotechnology industry," Journal of Business Venturing, Elsevier, vol. 12(1), pages 31-46, January.

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    Keywords

    innovation; research and development; economics;

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