| The "New Economy", in Japan often referred to as the "Information Technology (IT) Revolution", has transformed not only economic systems but all facets of social life, thereby creating an entirely new society. New business models based on the Internet, concurrent engineering and supply chain management (SCM) are coming into their own, replacing many traditional forms of commerce.
In recent years, Japan has lagged behind other nations in adopting IT, for well known reasons. Because the Japanese economy peaked in the mid-1980s, just before the take-off of IT, the engines of Japanese growth were not powered by the new technologies. Important examples are the employment structure, with its lifetime employment and seniority systems; the structure of industry, with a combination of large and small companies; the banking and manufacturing sectors; and Japan's vaunted industrial policies, which targeted new business areas and nurtured them by encouraging collaboration between the public and private sectors.
In theory, these features of Japan's economic system are based on long-term contractual relationships rather than market mechanisms. As is known, such relationships can lead to lower transaction and information costs than those prevalent in a system predominantly governed by market mechanisms. Economic agents can accumulate and share information through long-term relationships, primarily of a personal nature. Japan's success is due to the full exploitation of these economic relationships. IT, by contrast, allows information to be obtained and shared more efficiently. Thus, ingredients of Japan's success in the 1980s became obstacles during the IT Revolution. The major pillars of the Japanese economy became were weakened, which was one of the causes of Japan's "Lost Decade" of the 1990s.
Japan's success also derives from its small and medium-sized enterprises (SMEs), which, with their vast accumulated technologies, skills and know-how, have long been the foundation of Japan's manufacturing sector. As this paper will show, SMEs contribute much more to the economy than do large companies. But SMEs are not exempt from the requirements imposed by the IT Revolution. These crucial firms have lagged behind in adopting IT and face serious problems due not only to the IT gap but also to Japan's aging population. If Japan's economy is to return to its dynamic growth and innovation and once again assume a role as a world leader, an effort must be made to ensure that its myriad SMEs catch up in the new IT-based economy.
This study F focuses on IT use by SMEs and examines these firms' current situation and the issues they face. Using the results of a survey and empirical analysis, it identifies the factors that encourage SMEs to adopt new technologies, and it makes policy recommendations on how to encourage SMS in both regional and national networks to do so.
This study is the result of research conducted by a team composed of H. Miyoshi, COE fellow (professor), Institute for Technology, Enterprise and Competitiveness, Doshisha University (with support from its 21st Century COE Program); T. Bunno, associate professor, Department of Management, Kinki University; H. Idota, associate professor, Faculty of Modern Management Information, Osaka Seikei University; M. Ogawa, assistant professor, Department of Management, Kobe Gakuin University; E. Tsutsumi and M. Nakanishi, graduate students, Osaka School of International Public Policy (OSIPP), Osaka University; and Noah Smith, international research assistant, Centre for Regional Economic Studies (CRES), OSIPP, Osaka University |
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