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The Puzzle of Japanese Innovation and Entrepreneurship

By Michael A. Cusumano

Communications of the ACM, Vol. 59 No. 10, Pages 18-20

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After living in Japan for seven of the past 40 years, I recently returned for an institutional development project at Tokyo University of Science. Tokyo University of Science is a private university founded in 1881 with over 20,000 students, and is the largest source of engineers and scientists for Japanese industry. The university is also the Japan host for an educational and research initiative called MIT REAP (MIT Regional Entrepreneurship Development Program).a

We have been dealing with the following puzzle: Japan was once renowned for creating powerful, global companies, especially in manufacturing industries like automobiles, consumer electronics, semiconductors, and computer hardware. Japanese government and industry partnerships also once promised to revolutionize information technology, with bold initiatives such as the VLSI (Very Large-Scale Integration) Project of the 1970s for semiconductors and the Fifth Generation Computing Project of the 1980s for artificial intelligence. Japanese companies have since developed admirable hardware skills and competence in many aspects of software. But we no longer see bold innovation initiatives in Japan, nor do we see much entrepreneurial activity. What happened?


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