Academic Entrepreneurship: A Comparison of U.S. and Japanese Promotion of Information Technology and Computer Science

Abstract

Manufacturing hardware is increasingly a commodity product with low margins. The reason for the diminished value of hardware is that more and more of the value in high-tech products is contributed by software meeting user needs, through enabling new functionalities and services. Those firms better able to create and use software advances, improve their competitive outcomes. Japanese high-tech firms have been slow to recognize and act on the growing importance of software and have suffered competitively. The reasons are many. It is widely recognized that human capital is a critical component of software innovation and thus would be central to any explanation of Japanese firms’ weakness in software. For this reason, I focus on the role of university engineering education in IT, comparing the U.S. and Japan. My analysis documents the leadership role played by U.S. universities and in particular, the academic entrepreneurship demonstrated by leading computer science departments. The contrasts with leading Japanese universities, the University of Tokyo in particular, are striking. On the Japanese side, they include a slowness in recognizing the importance of software and in adopting state of the art curriculum, a failure of MEXT to regulate the way in which universities implemented their mandate to develop information technology, an egregious sabotaging of the new information technology departments by university administrators, and a reluctance of leading firms to hire computer science graduates. Finally, centralized faculty decision making allowed engineering faculty in other departments to resist changing student quotas (teiin) in favor of the new discipline. Taken together, these factors inhibited the development of computer science as a distinctive discipline and put a break on any faculty entrepreneurs seeking to promote the new discipline. By contrast, I will show how institutional practices in the U.S. acted to promote academic entrepreneurship enhancing the growth of the new discipline