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What Happened to Japanese Innovation?

Japan was once known for itshigh-tech innovation and the incredible economic growth

that came with it, the organization paradigm for business supported new ideas and the

benefits they provided. Today Japan is more often than not associated with corporate

decline, sluggish growth and, unfortunately, general stagnation. However, a quick look

at Japans Research & Development numbers (both spending and the number of patent

applications) will show a Japan that is still highly capable of innovation, at least in the R

& D field. If the budget, know-how and technological capabilities are all there, and we all

know that innovation leads to new products, and that in turn leads to economic growth,

then what is the problem? Is there a new organization paradigm which is hampering

innovation? Why arent more Japanese innovations being transformed into products,which are then brought to the market where they will stimulate the economy?

On the Macro Level

There are a few common macro level answers for why Japan is no longer one of the

leaders of the world in the creation of innovative products. One is that Japan is heavily

regulated and that is making it an unattractive environment for entrepreneurs and

venture capital, especially FDI. This lack of available capital is one of the biggest andmost complex problems facing modern Japanese companies.

On the Micro Level

While funding is a huge problem its recently been noted that there are also issues

within the Japanese business organization paradigm which also pose huge challenges

to innovation and the associated opportunities. A survey recently conducted in Japan

illuminates some of these problems. The survey showed that both executive and

managers in countries other than Japan had far more confidence in Japans capacity for

innovation than managers and executives in Japan.

The organization paradigm has been adversely affected by peoples preconceived

notions, obsessiveness and loyalties, and bias or assumptions which all act as a

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restraining force on any potential Japan has for real innovation. Rather than supporting

possibility brought about by hard work Japanese companies are now acting as

restraining forces on creative thinking and implementation of creative ideas. Two

decades of recession have created an organizational paradigm in which new ideas andproducts are met with only resistance and doubt. This has led to decision making

policies which spend the bulk of the R & D budget on very conservative ideas, such as

minor improvements to existing and successful product lines. There is little in the budget

for the creation of new products and little to support the potential of anything coming

from Japan to revolutionize the market.

Taga

In Japan there is even a word to describe the various limits in innovative thinking.Taga,

which literally describes the metal hoops which keep a tight hold on the wooden boards

which make a barrel, is used to describe the current state of Japanese

innovation. Tagais what causes organizations to decide unconsciously and

automatically what is possible and what is not based on current circumstances, not

future predictions, hopes or opportunities. It stops completely the ability of a company to

adopt a positive attitude towards any change or new idea. Tagais usually fostered in a

tacit agreement to, or unspoken understanding of, customary rules or organizational

paradigms within a company. When new people join a company (usually its the hope

that new people bring new ideas) they tend to quickly become unconsciously

accustomed to thinking along the lines of the existing organization paradigm. This

means that it can be extremely difficult for a company to be aware of taga limiting

creativity and implementation of new ideas within your own company.

If your company is serious about innovation, finding ways to break free from thepowerful constraints created by taga, and moving beyond the bounds of self-limiting

perceptions should be high up on your agenda.