Firm level analysis of information network use and productivity in Japan

This paper shows firm level micro analysis of information network use and its impact on firm's productivity. New evidences on economic impacts of IT by type of its application are provided, based on METIfs firm level data of Japanese manufacturers and distributors. It is found that productivity impact of information network use is different, depending on application of network. In addition, due to rapid progress of information technology, economic implications of information network are different also by the timing of its introduction. METI's datasets covers information on network use by its type, as well as firm's IT use throughout the period of 1990's. Detail analysis of information network use at Japanese firms can shed a new light on heterogeneous and dynamic nature of firm level IT use and its performance.

Information Technology and the Japanese Economy

In this paper we compare sources of economic growth in Japan and the United States from 1975 through 2003, focusing on the role of information technology (IT). We have adjusted Japanese data to conform to U.S. definitions in order to provide a rigorous comparison between the two economies. The adjusted data show that the share of the Japanese gross domestic product devoted to investment in computers, telecommunications equipment, and software rose sharply after 1995. The contribution of total factor productivity growth from the IT sector in Japan also increased, while the contributions of labor input and productivity growth from the Non-IT sector lagged far behind the United States. Our projection of potential economic growth in Japan from for the next decade is substantially below that in the United States, mainly due to slower growth of labor input. Our projections of labor productivity growth in the two economies are much more similar.

Firm level analysis of information network use and productivity in Japan

This paper shows firm level micro analysis of information network use and its impact on firm's productivity. New evidences on economic impacts of IT by type of its application are provided, based on METI's firm level data of Japanese manufacturers and distributors. It is found that productivity impact of information network use is different, depending on application of network. In addition, due to rapid progress of information technology, economic implications of information network are different also by the timing of its introduction. METI's datasets covers information on network use by its type, as well as firm's IT use throughout the period of 1990's. Detail analysis of information network use at Japanese firms can shed a new light on heterogeneous and dynamic nature of firm level IT use and its performance.

Global Business Strategy: Multinational Corporations Venturing into Emerging Markets

Emerging Markets/Globalization; Innovation/Technology Management; Business Strategy/Leadership; International Economics; Operations Managemen

Comparative Analysis of IT Management and Productivity between Japanese and U.S. Firms

This compares the use of IT at the firm level and its management practices between Japanese and U.S. firms, based on an analysis using data from the "International Comparative Survey of Firms' IT Strategies." According to our principal component analysis for characterizing the firm-level pattern of enterprise computing, three factors are identified: (1) overall IT-use intensity, (2) the degree of using information systems, and (3) the degree of using mission critical systems for the back office. In general, Japanese firms display high overall IT-use intensity, while the degree of informational system use is low. It is also found that the degree of informational systems and of using mission critical systems for the back office, instead of overall IT intensity is correlated with the total factor productivity (TFP) level of a firm, regardless of its nationality.

Economic Analysis of University-Industry Collaborations: the Role of New Technology Based Firms in Japanese National Innovation Reform

In this study, quantitative analysis of university industry collaborations (UICs) is conducted in case of Japan by using the dataset from RIETI's UIC Survey and METI's Basic Survey on Business Structure and Activities. A focus is put on comparing new technology based firms (NTBFs), to large firms in terms of the characteristics of UIC activities and the impact of UICs on R&D and production productivity. It is found that UICs are not simply adaptations of technology at university, but involves significant development activities at industry side. In this sense, UICs used to concentrate in large firm with substantial R&D resources 5 years ago. However, this activity has spread over to small firms recently, and R&D and productivity impacts of UICs can be found more clearly for small and young firm group. UIC activities by NTBFs are promising not only by the growth potential of these firms, but also by playing as agents of changes in Japan's in-house national innovation system toward network based dynamic one.

A Comparative Analysis of Japanese, U.S., and Korean Firms on IT and Management

In this paper, the contribution of information technology (IT) use to management performance is compared between Japanese, U.S., and Korean firms, based on an analysis using data from the "International Comparative Survey of Firms' IT Strategies" (RIETI). The results reveal that Japanese firms have received positive effects from "mission critical systems," which include routine business activities such as personnel management, accounting information systems, and ordering, whereas U.S. firms are effectively using "informational systems;" systems that perform intricate analyses of a firm's data, such as supporting management strategies or developing new customers. The results also show that Korean firms trail Japanese firms in deploying IT systems, with the exception of enterprise resource planning (ERP) systems. The section on the internal IT organization of the firm, which reveals the importance placed by firms on using IT as a tool to accomplish corporate strategy, indicates that U.S. firms place the highest importance, followed by Japanese firms, and finally by Korean firms. With regard to the relation with outsourcing firms of IT systems, U.S. firms are treating outsourcing firms as partners for consulting on technology trends whereas a large number of Japanese firms perceive them as a means of cost reduction.

Japan's Patent System and Business Innovation: Reassessing Pro-patent Policies

TSince current Japanese patent law was enacted in 1959, it has been revised several times, mainly for the purpose of international harmonization. Recently the Japanese government stresses the importance of pro-patent policies, i.e., strengthening intellectual property right in order to stimulate business innovation and to regain international competitiveness. This paper assesses the impact of series of revisions of Japanese patent system on firm's innovation activities, by using statistical data, firm level survey data and information from interviews for IP managers in IT and pharmaceutical firms. It is found that increases in patent application in the late 1990's are attributed to a surge of IT patents, as well as pharmaceutical ones. For IT and pharmaceuticals, technology fields covered by patent protection have been gradually expanded, such as in areas of software and biotechnology. This policy change may contribute to increase in patent application. However, it is difficult to separate this system factor from other factors such as expansion of technological opportunity. Although the impact of recent pro-patent policies on firm's innovation is not so clear, it is clear that IP section inside firm becomes to play more active role in firm's innovation strategy formulation, particularly in pharmaceutical firms. Tremendous technology opportunities in IT and biotech push a firm to rely on external knowledge pools by licensing activities, and it becomes important to coordinate in-house R&D with licensing activities to tap on external technology sources. In this context, IP section involves heavily in R&D and product development process inside firm. In addition, it is found that large firms in IT and pharmaceutical industry, focuses on US patent system, which moves relatively quickly for new technology field patenting, and pay less attention to Japanese one.

Licensing or Not Licensing?: Empirical Analysis on Strategic Use of Patent in Japanese Firms

In this paper, IP strategy at firm level is analyzed in a framework of use of patent as a tool for maximizing firm's revenue, based on a dataset from JPO's Survey of Intellectual Property Activities in 2004. Descriptive regressions of IP strategy indicators suggest a non-linear relationship between firm size and licensing propensity. For a small firm with less complementary assets, such as production facility and marketing channels, tends to license more. At the same time, a licensing propensity of large firm is also high due to the effect of cross licensing.

Software Patent and its Impact on Software Innovation in Japan

In Japan, the software patent system has been reformed and now software has become a patentable subject matter. In this paper, this pro-patent shift on software is surveyed and its impact on software innovation is analyzed. Before the 1990's, inventions related to software could not be patented by themselves, but they could be applied when combined with hardware related inventions. Therefore, integrated electronics firms used to be the major software patent applicants. However, during the period from the late 1990's to the early 2000's, when software patent reforms were introduced, innovative activities (measuring patent applications) by independent software development firms began. We used datasets linking the IIP (Institute of Intellectual Property) patent database (individual patent datasets by using JPO's publication data) and firm level data from the Survey on Selected Services (software part) (METI) and the Basic Survey of Business Activity and Structure (METI). Based on the panel datasets from approximately 550 firms from 2001 to 2005, we found that patent applications from software firms gradually increased from the 1990's, while we were unable to find a direct impact of software patent system reforms. In addition, it was also found that patent application is positively related to a software company's independent strategy of subcontracting out system headed by large system integrators.