Management and policy concerns in the transition to the knowledge driven economy in Japan

Summary form only given. When one considers the transition to the new economy, the traditional areas of strength will be relevant, but they will have to be complemented by new areas of strength. The traditional areas of strength have been based on fairly stable market conditions and stable innovation networks. Japanese firms, which have evolved steadily and have been under hierarchical management will have to become more agile and quicker in their decision making processes. This means more than the traditional Japanese manufacturing agility in speeding up the delivery of a new variant of a car. Japan will have to act quickly to overcome these weaknesses to successfully achieve the transition into the new economy since basically Japan has been locked into the old economy mode. Government policies which have been based on technology push thinking will have to be more demand driven and diffusion oriented. The dynamic shifts in the patterns of innovation in the new economy raises new concerns at the management and policy levels. Even if government pours trillions of yen to strengthen the research base, it will not be effective unless changes are made. The various ministries which have been acting independently, will have to work together on a cross cutting theme such as information technology