Recent findings indicate that the Japanese IT sector increasingly lags the U.S. IT sector in software innovation and that this underlies Japan's weakening competitive performance vis-à-vis U.S. IT. This article explores alternative explanations for this outcome and analyzes what explains the Japanese software industry's trajectory. The sources are found in the late understanding of the transformational role of software and its value-creating potential as well as in the evolution of the industry's structure. Finally, this article considers what policy makers in other nations might learn from the Japanese experience in building a more vibrant software industry.
- High Technology
- Software Industry
- Information Technology
- Path Dependency
- Strategic Management
The authors gratefully acknowledge research funding from: the Institute for Technology, Enterprise and Competitiveness, Doshisha University, Kyoto, Japan; the Ministry of Education, Culture, Sports, Science and Technology Supported Program for the Strategic Research Foundation at Private Universities, 2009-2013, and JSPS KAKENHI Grant Number 23243059; the Garwood Center for Corporate Innovation, Institute for Business Innovation, at the Haas School of Business, UC Berkeley; and the California Management Review. We are indebted to our anonymous reviewers for their revision proposals. We are also indebted to the encouragement and advice received from the following individuals: Eva Chen, Takahiro Fujimoto, Michael Ger, Kenji Hiranabe, David Hodges, Toshiro Kita, Hideko Kunii, Kazuyuki Motohashi, Shinji Takai, Tetsuo Tamai, Masato Takeichi, Hirofumi Tatsumoto, Hugh Whittaker and Hideyuki Yamagishi. We owe a special debt to Katsutoshi Shintani, former Chief Advisor, Software Engineering Center, Information-technology Promotion Agency (IPA). He showed enormous patience with our endless questions and pointed us to many relevant data sources.
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