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University Start-up or Technology Transfer?:Japan-US comparison oncommercializat ion of new technology at the dawn of the computer age

著者Author(s) Takase, Susumu / Ito, Chiaki

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URL http://www.lib.kobe-u.ac.jp/handle_kernel/90002474

PDF issue: 2020-09-18

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University Start-up or Technology Transfer?

－Japan-US comparison on commercialization of new

technology at the dawn of the computer age－

Susumu Takase and Chiaki Ito

Kobe University Graduate School of Business Administration

Abstract

At the present time, Japanese university start-ups cannot be considered successful in starting a

business. This paper aims to provide a historical account of this situation, through a Japan-US

comparison on commercialization of new technology at the dawn of the computer age, with the

focus on differences between the eco-systems of Japan and the US.

The first successful university start-up in the US is Digital Equipment Corporation (DEC), a

manufacturer of minicomputers. Around the same time in Japan, the commercial computer was

created through technology transfer from Electronics Test Laboratory (ETL) to large companies at

the initiative of the Ministry of International Trade and Industry (MITI).

Computers back in those days were the core of military technology. In Japan, one of the

defeated nations of WWII, an eco-system for supporting commercialization of new technology was

formed without involving universities. This resulted in a difference between the US and Japan in the

commercialization path of new technology: "university start-ups" by university-based researchers in

the US, and "technology transfer" to large companies in Japan.

Keywords: university start-up, technology transfer, eco-system, and transistor computer

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1. Issues in question

This paper aims to provide a historical account of why Japanese university start-ups are not

successful in starting a business, from the viewpoint of the eco-system (1), through a Japan-US

comparison on commercialization of new technology at the dawn of the computer age.

Since 2000, with a plan for creating 1,000 university start-ups announced by the Ministry of

Economy, Trade and Industry, Japan has been encouraging university start-ups at the political level.

As of the end of fiscal 2008, the total number of university start-ups in Japan was 1,954, of which

1,339 were founded by researchers (Ogura, 2010, p. 2; p. 28). Looking at these numbers alone, one

may think that the original goal has already been achieved. This is not the case, however, according

to Tadao Kagono, a business scholar, and Kazuo Taki, an information-communication researcher

and founder of a system LSI designing company. In a panel discussion during the 11th national

convention of Japan Academic Society for Ventures and Entrepreneurs held in November 2008,

they presented the following three points of view in the light of the fact that most university

start-ups have not yet started a business (2):

First, there is a large difference between the role of a researcher who is responsible for research

and education at a university and that of an entrepreneur who identifies business opportunities in the

market. Secondly, no system is established in Japan for selecting university start-up entrepreneurs.

Thirdly, most university start-ups aim at social contribution or local cooperation, which is

incompatible with American-style venture capitals.

With the above problems in mind, we will compare representative cases of Japan and the US

about introduction of the transistor, which was a new technology at the dawn of the computer age.

The discussion will be centered on Ken Olsen, a founder of DEC, in the US's case, and on Shigeru

Takahashi of ETL in Japan's case (3).

2. Previous studies on the university start-up

2.1 Technology of the university start-up

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Several definitions have been proposed for the term university start-up (Roberts, 1991; Kanai,

2010; Kirihata, 2010). This paper will be based on a definition which focuses on technology: "a

new company founded to exploit a piece of intellectual property created in an academic institution"

(Shane, 2004, p. 4, translation, p. 5).

Having thus defined the university start-up, Shane (2004, translation, p.83) has noted seven

characteristics of the technology which leads to founding of a university start-up: the technology is

1) radical, 2) implicit, 3) at an early stage, 4) intended for general use, 5) highly valuable to

customers, 6) representative of a major technological advance, and 7) strongly protected by

intellectual property rights. According to Shane, if the technology has these characteristics, a

start-up is likely to be founded to exploit the technology.

Shane (2004) has argued that existing companies are at an advantage over university start-ups in

commercialization of universities' technology. He has noted seven characteristics observed in many

technologies invented at university: the technology is 1) incremental, 2) explicit, 3) at a late stage,

4) intended for specific use, 5) moderately valuable to customers, 6) representative of a minor

technological advance, and 7) weakly protected by intellectual property rights. According to Shane,

where these characteristics apply, the technology is likely to be licensed to existing companies.

In this respect, Shane (2004) has cited "cannibalizing existing assets" (Utterback, 1994) to

explain why radical innovations are avoided by existing companies. In short, technology of the

university start-up is radical, while that of the existing company is incremental.

On the other hand, Christensen (1997, 2003) has further developed the framework for analyzing

radical versus incremental innovations suggested by Utterback (1994). Christensen (2003) has

refined the concept "disruptive innovation", which is a counter-concept of "continuous innovation",

into "low-end disruptive innovation" and "new-market disruptive innovation", describing the former

as an innovation that "address(es) overserved customers with a lower-cost business model", and the

latter as an innovation that "compete(s) against nonconsumption" (Christensen, 2003, translation, pp.

55-63).

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Referring to "compete against nonconsumption", Nishizawa (2012) has expressed as "twofold

start-up risks" (p. 27), from the viewpoint that the university start-up involves not only a risk

associated with new technology but also that of creating a new market. A university start-up

entrepreneur, in a narrow sense according to Shane (2004), is defined as a person who achieves the

"new-market type disruptive innovation" which involves the "twofold start-up risks". In his case

study about DEC, which is a start-up of Massachusetts Institute of Technology (MIT) and will be

discussed in this paper, Nishizawa (2012) has shown how these "twofold start-up risks" accompany

the university start-up. Remarks related to the "twofold start-up risks" include "start-up from minus

two stage" by Shane (2004, translation, p. 174) and "start-up involving a valley of death" by Kanai

(2010, p. 8). To sum up the arguments above, the university start-up is the achiever of the

"new-market type disruptive innovation" which involves problems different from those faced in

technology transfer to existing companies or founding of an ordinary company (Christensen, 2003),

and these problems with "start-up from minus two stage" or "start-up involving a valley of death"

are expressed as the "twofold start-up risks".

Assuming that the university start-up is the achiever of the "new-market type disruptive

innovation" and necessarily involves the "twofold start-up risks" in terms of technology and market,

then how does a university start-up entrepreneur deal with the "twofold start-up risks"?

Christensen (2003, translation, pp. 99-100; pp. 128-132) has taken note of the transistor which

was the "disruptive technology" of the vacuum tube, and taken Sony as an example of the achiever

of the "new-market type disruptive innovation" to compare with the case of the vacuum tube and

Radio Corporation of America (RCA) which as an existing company achieved the innovation of the

vacuum tube. According to Christensen (2003), Sony has "succeeded in building 12 new-market

type disruptive innovations" in the period from 1950 to 1982 (p. 99), and among others,

productization of the transistor was the "new-market type disruptive innovation" which directly

contributed to founding of Sony. RCA, a major company at that time, targeted the existing market

of the vacuum tube (e.g., desktop radios and stationary televisions), and was struggling to apply the

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transistor technology. In contrast, Sony chose to "compete against nonconsumption" in the new

market for portable electronics, namely, the pocket radio (1995) or the portable black-and-white

television (1959), eventually creating a new sales channel which eliminated the need for

maintenance as required for the vacuum tube, and establishing a new value network.

Christensen (2003) has remarked that only about five engineers, including Akio Morita,

participated in these "new-market type disruptive innovations". Christensen has argued that careful

observation and conversation with customers, through a conceptual lens of "jobs-to-be-done"

(Christensen, 2003, translation, p. 99) which narrows down jobs to one which no products have ever

been able to do, are breakthrough for the "new-market type disruptive innovation" as well as a

method to "compete against nonconsumption".

On the basis of this argument, a person who has the "ability for identifying business

opportunities", despite the "twofold start-up risks" in terms of technology and market, is appropriate

as an entrepreneur who achieves the "new-market type disruptive innovation". This view agrees

with the recent trend in the entrepreneur study (cf. Venkataraman, Sarasvathy, et al., 2012; Shane,

2012).

2.2 Problems in commercialization of new technology in Japan

This paper deals with the case of commercialization of the transistor computer around 1957,

when Japan and the US were presumably at similar technological levels. The following two

questions remain unanswered: One is why is it that, in the computer field, founding of a company

by researchers, namely, the university start-up, was undertaken in the US, while in Japan,

technology transfer to existing companies was promoted? The other is why is it that, university

researchers were also able to achieve the "new-market type disruptive innovation" in the US, while

in Japan, the achiever of the "new-market type disruptive innovation" emerged only from the

private sector, like Sony's founder Akio Morita, but none emerged from university researchers for a

long time?

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The discussion so far has brought to light a problem for Japan: entrepreneurial human resources,

including Akio Morita, who understand technology as well as management, individually bear the

"twofold start-up risks". Christensen (2003) has pointed out that, since 1980 when Akio Morita

undertook political activities, Sony has created no "new-market type disruptive innovation". In the

case of Japan, entrepreneurs having the lens of "job-to-be-done" may have been burdened with the

"twofold start-up risks" behind the "continuous innovation" during the economic growth from 1950

to 1970.

In this regard, Nishizawa (2012) has noted a dissociation between micro and macro in creation

of start-ups in Japan, and introduced the concept of eco-system, as a mesolevel-framework serving

as a node of the micro and macro, into the discussion of the university start-up, and theoretically

explained the problem of the "twofold start-up risks". The eco-system is a concept not for analyzing

individual companies but concerned with a cluster or a relationship with a core company (e.g.,

Iansiti and Levien, 2004). The discussion of "triple helix" by Etzkowitz (2008), who has focused on

industry-government-academia cooperation, can be regarded as the first example of the eco-system

featured in the entrepreneur study. Etzkowitz (2002) has provided a historical account of why many

university start-ups were created by MIT. Accumulation of these studies shows that the

entrepreneurial university is noteworthy as a framework for realizing the "new-market type

disruptive innovation" beyond the "twofold start-up risks" which are imposed on individual

entrepreneurs.

3. Analysis framework and study subject

As a problem facing Japanese university start-ups, Kanai (2010, pp. 273-275) has described a

problem of entrepreneurs in the context of Japanese culture. However, it was 1955 that the Nobel

laureate William B. Shockley Jr. founded a company, which became the origin of Silicon Valley,

and in commercialization of the transistor developed by Shockley, as mentioned above, Sony had

already reached a similar technological level. Therefore, in view of the current situation where the

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achievers of the "new-market type disruptive innovation" are being exhausted in Japan, it would

have a certain significance to trace the roots of the university start-up in the US and clarify the

historical development leading to creation of the commercial computer in Japan which introduced

the transistor around the same time as the US.

To make a Japan-US comparison, we have selected the cases from around the same time. These

cases are events around 1957, when the transistor was gaining in popularity, and Japan and the US

were at similar levels of the technology required for computer development (Special Committee of

the History of Computing, Information Processing Society of Japan, 1998). We have therefore

determined that these examples would make it easy to clarify the differences between the countries

in commercialization of new technology and its historical development.

This paper will make a Japan-US comparison on commercialization of the transistor computer

at the dawn of the computer age, on the basis of the following three subjects: 1) when and how was

the transistor computer commercialized in the US?; 2) how was the transistor computer

commercialized in Japan around the same time?; and 3) what difference is found between Japan and

the US in the commercialization process of the transistor computer? By clarifying these questions,

we will extract and examine the problems that impede Japanese university start-ups from starting a

business.

4. Cases under study

This case study has a focus on Ken Olsen, the founder of DEC, as the US's case, and Shigeru

Takahashi of ETL as Japan's case.

The following table briefly describes their biographies.

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Table 1 Biographies of key persons in cases under study

Ken Olsen Ken Olsen, the founder of DEC, was born February 20, 1926, as a

second-generation northern European immigrant. In 1952, he earned his master's

degree in electrical engineering at MIT. At MIT Lincoln Laboratory, Olsen was engaged

in the development of TX-0, a successor unit to Whirlwind Computer. His

accomplishments include invention of the magnetic core memory and development of

the minicomputer. Ken Olsen passed away at the age of 84, on February 6, 2011.

Shigeru Takahashi Takahashi was born November 22, 1921. After graduating from Keio University, he

worked as president of Tokyo University of Technology, and later as vice-president of

Information Processing Society of Japan. He received the first Doctor of Engineering

from the Keio University. In 1944, Takahashi joined Electronics Test Laboratory, and

transferred to Hitachi, Ltd. in 1962. In 1980, he became a professor at the University of

Tsukuba. Shigeru Takahashi passed away at the age of 84, on January 4, 2005.

Now, let us take a look at the history of the transistor technology, which, as mentioned above in

Sony's case, provides the setting for this study. In 1947, the transistor was jointly invented by three

members at Bell Laboratory. Shockley, one of the members, aimed at commercialization of the

transistor and established Shockley Semiconductor Laboratory in Mountain View, California, in

1955. This eventually became the origin of Silicon Valley. In 1956, the three members including

Shockley of Bell Laboratory won the Nobel Prize in physics. In 1957, as a silicon-based

semiconductor research was canceled, eight researches left Shockley Semiconductor Laboratory,

and founded Fairchild Semiconductor International Inc. Among these "traitorous 8" were Robert

Norton Noyce and Gordon E. Moore, who established Intel in 1970.

5. Case study

5.1. Ken Olsen's case

5.1.1 Prototype unit TX-0 and commercial unit PDP-1

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In 1957, Ken Olsen, then a researcher with MIT Lincoln Laboratory, founded a company to

commercialize a prototype unit (TX-0), which was the result of the national military project, Project

Whirlwind. The company founded at that time is DEC.

When mention is made of the transistor, Olsen was responsible for implanting about 3,600

transistors into Whirlwind Computer (which started operation in 1951) produced with about 5,000

vacuum tubes. TX-0 (Transistor Experimental Computer; started operation in 1956) which Olsen

had worked on became the earliest-stage transistor computer and the world's most advanced

computer of the time (Ceruzzi, 2004, translation, p. 158).

Although the original purpose of the military research commissioned to MIT was computer

development for controlling flight simulators and air-defense missiles, setback of a project

succeeding TX-0 prompted the project members to found a company. After starting the company in

1957, Olsen, with his expertise in application of the transistor to the computer, adopted an

architecture which took full advantage of all the functions that the transistor can provide, and in

1961, completed a real-time computer PDP-1.

5.1.2 Military research at MIT and commercialization of its outcome

MIT became a pioneer of the "entrepreneur university" which aggressively commercializes

research outcome (Etzkowitz, 2002). Vice-president Vannevar Bush was a central figure in this

movement, and is known to have had an important governmental position concerned with military

research during World War II (Ueyama, 2009; Etzkowitz, 2002; Nishizawa, 2012). MIT Lincoln

Laboratory, where Olsen was active, had been invited to MIT by Bush for the purpose of the

national defense project, and established on the premises of Lexington Air Force Base near Boston.

Thus, it is reasonable to assume that the computer back then was regarded as a weapon just as

nuclear power generation was. That is, Whirlwind Computer was developed at MIT as the computer

for controlling flight simulators or air-defense missiles on a bountiful defense budget during World

War II and the Cold War.

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In the prelude to this event was Karl Compton, who was president of MIT from 1930 to 1948.

In order to restore Boston's economy, which, after prosperity of its textile industry, was beginning

to decline in the face of rise of the auto industry in the Middle West of the US, Compton introduced

a framework for industry-academia cooperation into MIT, in which MIT was to play a role different

from that played by "research universities", pioneered by Berlin University and including Harvard

University, Johns Hopkins University, and Chicago University (Nishizawa, 2012). One of the

features of the cooperative framework was a side job provision. When the Humboldt revolution,

which is a "fusion of study and education" at Berlin University in the late 19th century, is regarded

as the "first university revolution", then, this MIT's approach pursued by Compton can be called the

"second university revolution", an attempt to lead the research activities to promotion of economic

and social growth. In this way, MIT became the world's first "entrepreneur university" which

assumes three roles of education, research, and industry-university cooperation at the same time

(Etzkowitz, 2002; 2008).

5.1.3 Creation of American Research and Development Corporation: the world's first venture

capital

Under the initiative of Bush, MIT was enjoying the US federal government's support for its

military technology research, ample R&D funds, as well as a high degree of freedom during World

War II. However, no fund was provided for founding a start-up in which researchers had a personal

stake, which inevitably led to founding of companies in other regions based on MITs technological

seeds; Boston after the rapid economic growth had turned into a mature market with high labor cost.

There was an earnest proposal from Boston's financial circles for establishment of a venture

capital as a special monetary institution which provides an initial fund for MIT's technological

seeds as well as managerial support for helping the start-up out of debt at an early stage. In 1946,

the world's first venture capital, American Research and Development Corporation (ARDC), was

established by MIT's president Karl Compton and Georges F. Doriot, a professor of Harvard

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Business School. (Nishizawa, 2012).

5.14 Georges Doriot and Jay Forrester

The preceding events were setting up the stage for MIT, in terms of technology and

management, to create start-ups. In 1957, Olsen received a 70-thousand dollar investment for

founding DEC from ARDC headed by Doriot. By the time DEC went public in 1966, the market

value of the company had reached two million dollars. Thus, DEC is regarded as the world's first

successful university start-up, and ARDC as the world's first successful venture capital (Rafkin, et

al., 1988; Nishizawa, 2012).

Another factor which significantly contributed to the successful start-up of DEC is that the

invention of the magnetic core memory, which is a memory device of the computer developed in

the national project, Project Whirlwind, was jointly patented by the project leader Jay Forrester and

Ken Olsen (Patterson and Hennessy, 2007). In those days, computer development required huge

amounts of money and was shied away by inventors because of the difficulty of fund recovery. As a

condition for making an investment, Doriot allegedly requested change of the company name from

Digital Computer Corporation to Digital Equipment Corporation (DEC) (Rafkin et al., 1988). Olsen

adhered to Doriot's advice, and for several years since the company's founding in 1957, DEC was

dedicated to manufacture and sales of digital equipment, such as the core memory and the logic

circuit, for the company name's sake. Only after achieving a sale of digital equipment that can cover

the development cost of a real-time computer, Olsen finally embarked on development of PDP-1 in

1960.

5.1.5 Founder Olsen and launch of university start-up DEC

For better or worse, Olsen was a technology-oriented, unique entrepreneur. It is known that, by

the time of initial public offering in 1966, all the founding members of DEC except for the directors

sent from ARDC had left (Schein, 1985). After conclusion of Project Whirlwind, Forrester, Olsen's

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superior at MIT Lincoln Laboratory, assumed a post as a professor of system dynamics at MIT

Sloan School of Management, and acted as DEC's external board member. Later Forrester got into

bad terms with Olsen and stepped down when the company went public (Rafkin et al., 1988).

What is remarkable is that Olsen had had no business experience before he founded the

company. Olsen was a researcher who produced the prototype unit through the national project for

military technology development and acquired the patent which became the core of his business.

Doriot, on the other hand, compensated for Olsen's lack of business experience by raising funds and

sending directors to DEC's board meeting, providing a ground for Olsen to have experience in

managerial work. In short, Doriot established a framework for supporting entrepreneurs through

ARDC.

Computers back then were expensive. IBM therefore adopted a lease-based business model

(Ceruzzi, 2006). It was a common practice in the computer business before the appearance of DEC,

that software run on a leased computer was provided to the users for free, meaning that the software

development cost was included in the lease fee. Hence IBM users were prohibited from modifying

or changing the machine or software, as in that case the computer falls outside the scope of support.

In contrast, DEC introduced a business style of selling out the computers. It disclosed products

specifications and provided user-oriented manuals to encourage the users to modify or change the

machine or the software. For this reason, PDP-8, a successor unit to PDP-1, became a representative

minicomputer and found ardent support from hackers who were students of MIT Artificial

Intelligence Laboratory (Levy, 1984). Thus, DEC is regarded as the origin of "open innovation"

(Chesbrough, 2003).

5.1.6 MIT connection and matrix organization

Olsen adopted the MIT's rules when he set DEC's company rules (Rafkin et al., 1988). For

example, a sabbatical system as with university faculty was introduced. Gordon Bell, who led the

VAX system as the number two of DEC, was away from the company from 1966 to 1972 to be

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engaged in research of computer architecture with Allen Newell at Carnegie Melon University (Bell

and Newell, 1971).

DEC was a typical university start-up also in the sense that university's research culture which

values technology as in MIT was introduced as it is (Schein, 1985). University researchers present

their own argument obtained from research and discuss matters. This was also the case at DEC;

under the philosophy of "do what you proposed by yourself ", there was a constant discussion

toward productization (Kunda, 2006).

From the viewpoint of engineering, donation of PDP-1 from DEC to MIT, and adoption of the

interactive computer and user-friendly open architecture made the connection between MIT and

DEC even stronger. Eventually, researchers of Lincoln Laboratory started to crowd into DEC's

Maynard Mill, which looked just like a university laboratory (Rafkin et al, 1988, translation, p. 45).

This connection was the only way a start-up like DEC could compete against the large company

IBM (Ceruzzi, 2004).

After Forrester had left DEC at the time of the company's initial public offering in 1966, Olsen

invited Edgar H. Schein, a professor of organizational psychology, as a consultant from MIT Sloan

School.

This has some bearing on the fact that, around 1965, before going public DEC had introduced a

"matrix organization" as a system for managing business start-up by researchers (Kanter, 1983;

Rafkin et al., 1988). While a manager having overall authority for his/her own machine acted as an

entrepreneur who managed from research and development through marketing to service, there was

an incessant chaos due to such contradiction, as is often said, "1 man 2 bosses".

Schein made several attempts. Among them was a "woods meeting" in which future course

(strategy) of DEC was discussed in groups. This meeting was held monthly outside the company,

and the manager having overall authority for the products was freed from daily tasks. The role

Schein played there was a role known as that of a "process consultant" (Schein, 1969). It was a role

not to advise on business issues including the computer, but to promote the discussion process so as

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to evoke individuality amid the chaos of the matrix organization (Rafkin et al., 1988).

Schein's consulting activity for DEC lasted for over 20 years. During this period,

technology-related exchange with MIT became a source of technological innovations at DEC. In

particular, partly because the DEC's machine provided a foundation for the development of the

Internet or UNIX, Olsen's founding of DEC and the machine developed by the company are today

highly evaluated in the computer history (Ceruzzi, 2004).

5.2 Shigeru Takahashi's case

5.2.1 Split of Electronics Test Laboratory

In 1946, the world's first general-purpose computer ENIAC using vacuum tubes was developed

at the University of Pennsylvania with military funds intended for vast ballistic calculations. This

prompted the University of Tokyo (TAC), Osaka University, and Fujifilm Corporation (FUJIC) in

Japan to produce vacuum tube machines (Endo, 2010).

In 1948, the former Postal and Telecommunication Ministry's Electronics Test Laboratory,

which had been engaged in the development of military radars before World War II, was split by

General Headquarters (GHQ) into two bases: one is Denden-kosha's (Nippon Telegraph and

Telephone Public Corporation's) Electrical Communication Laboratory which succeeded the

communication engineering division of Electronics Test Laboratory, and the other is Electronics

Test Laboratory (ETL) of Agency of Industrial Science and Technology, which was virtually newly

established under the Ministry of International Trade and Industry (MITI). At these two bases,

research and development for the next-generation electronic computer were competitively pursued.

Following the commencement of a power distribution business in 1890, ETL was established in

1891 for inspection of telephone and telegraph equipment under the Postal and Telecommunication

Ministry. With the progress of the electrical industry, the laboratory took on research on electrical

power and its applications in 1903. Until the early Showa era, so-called heavy current engineering

(electric power field) such as power generation, transmission, and distribution accounted for a

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larger part of research activities. Since then, the light current engineering (communication field) has

also become popular as a research subject, and by 1941 when Japan plunged into World War II,

ETL had established a status as the national research center for military technology in the field of

electricity and electronics, and grown to be a large laboratory with more than 2,000 staff members

(Hiroshige, 1973; Imaoka, 1989).

The mission of Bell Laboratory in the US at that time was development and research. A

structure for placing orders for equipment exclusively with Western Electric, which is a

manufacturing division of its parent company AT&T, in other words, a structure of "AT&T as the

telephone company, Bell Laboratory for basic research, and Western Electric as the telephone

equipment manufacturer" was established. Japan followed this example and created a structure

constituted of Denden-kosha, Electrical Communication Laboratory, and affiliated domestic

manufacturers. It was a role-sharing system where Electrical Communication Laboratory provided

purchase specifications and the manufacturers designed and manufactured the products accordingly.

The name "Denden-family" was derived from this cooperative relationship (Toda/Matsunaga,

2003).

5.2.2 Transistor and parametron

In 1947, the transistor was invented at Bell Laboratory. It took a while for the transistor to find

new applications and surpass the vacuum tube in terms of cost as well as reliability. Meanwhile, in

1954, the parametron was invented by Eiichi Goto, who was then a graduate student at Hidetoshi

Takahashi's laboratory in Faculty of Science of the University of Tokyo, as a logic circuit element

utilizing the excitation phenomenon (Takahashi, 1998; Endo, 2010). Zenichi Kiyasu of

Denden-kosha's Electrical Communication Laboratory, taking notice of the parametron as a

computer element, encouraged the affiliated manufacturers and brought MUSASHINO-1 to

completion in March 1957. In line with Kiyasu's intension, Electrical Communication Laboratory

decided to focus exclusively on the parametron as a computer element (Endo, 2010, p. 93).

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At ETL, on the other hand, the transistor was intensively researched according to the intention

of Hiroshi Wada. Wada had been at MIT as a delegate of the MITI for one year after the conclusion

of the San Francisco Peace Treaty. During the visit, he saw real Whirlwind Computer (Takahashi, et

al, 2010). After returning to Japan, seeing Japan's future in the electronics such as the transistor and

the computer, Wada set up an electronics division in ETL in August 1954 and became its manager.

At that time Kiyasu suggested to Wada to adopt the parametron. Since Shigeru Takahashi who was

in charge of the relevant experiments reported that "(the parametron type) operates at low speed and

consumes a large amount of power", ETL decided to develop the transistor computer (Imaoka,

1989; Takahashi, 1998).

To sum up, in Japan, the two laboratories having the same roots in the Postal and

Telecommunication Ministry's Electronics Test Laboratory ― Denden-kosha's Electrical

Communication Laboratory and ETL ― competitively conducted research and development based

on the parametron and the transistor, respectively. In the mid-1950s, there was a movement of

commercialization of the computer, while weighing these two technologies against each other, by

large electronics manufacturers backed by Denden-kosha and the MITI.

5.2.3 MITI's computer policy

A 1972 report titled "Corporation Japan: close tie between government and industry" by the

United States Department of Commerce includes a case study on the Japanese computer industry,

which was written under the instruction of James Abegglen (Kaplan, 1972). According to this report,

the computer was first imported from the US in 1954, and five large manufacturers, NEC, Fujitsu,

Hitachi, Matsushita, and Toshiba, started licensed production of the transistor. These manufacturers,

fearing that Japan's computer market would be dominated by foreign manufacturers, made a request

to the MITI to speed up the development of domestic technology (Kaplan, 1972, translation, p.

135).

In response, the MITI set up the Electronic computer development committee in the Radio

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Engineering & Electronics Association in April 1955, and in the following year, started research on

foreign computers on a budget of 800 thousand yen. In May 1957, nine million yen was allocated

for an attempt to produce a computer superior in performance to the middle-sized machine IBM650

which was popular then, with cooperation of the large domestic manufacturers. Hiroshi Wada, the

manager of the electronics division of ETL of the Agency of Industrial Science and Technology

under the MITI took the initiative in this series of moves (Takahashi, 2003). In June 1957, to

promote the electronics industry including the computer, the MITI drafted the Act on temporary

measures for promoting the electronics industry. Hiroshi Wada had a strong interest in this drafting,

too, and instructed the ministry's officials in drafting the outline of the bill, and responded to Diet

questions. In August of the same year, the electronics industry section was established in the heavy

industry division of the MITI (Takahashi, 1998, 2003).

Since then, the MITI has held a leading position and put a great effort into protection and

cultivation of Japan's computer industry. Examples include: negotiations with IBM for a patent

agreement which was concluded on October 29, 1960; establishment of Japan Electronic Computer

Company which was a rental company and fifty-fifty joint venture of the government and private

sectors; and creation of large-scale industrial technology research and development system

(large-scale project) (Kaplan, 1972).

5.2.4 Computer development at ETL

The electronics division set up in ETL in August 1954 was constituted of 50 staff members and

three sections of the circuit, component, and electronic measurement. The manager Wada set a

strategic target of developing an electronic computer, which included many unknown elements then,

and a computer using transistors. Research and development were vigorously promoted, circuit

theory and circuit technology in the circuit section, and semiconductor components such as the

transistor and the printed circuit board in the component section (Narisada, 1995). Unlike the US,

research and development of the transistor and the circuit design of the transistor computer were

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conducted side by side in the component section and the circuit section, respectively, within ETL's

electronics division which had been directed by Wada since 1954.

As of 1954, before the transistor computer, ETL had already completed a relay type computer

ETL-mark I (Electronics Test Laboratory-mark I) in 1952, and an improved relay-type computer

ETL-mark II was subsequently under development. In November 1954, Shigeru Takahashi, who

became the leader of the newly established circuit section of the electronics division, Hiroji Nishino,

and Isokazu Matsuzaki, et al. started development of prototype unit ETL-mark III, which was not a

vacuum tube computer, but instead, used the next-generation "point-contact transistor" as its major

element.

ETL-mark III utilized T-1698, a point-contact transistor produced by Tokyo

Telecommunications Engineering Company (later Sony). Hiroji Nishino has recalled that, Sony's

former president Masaru Ibuka would often visit a laboratory of ETL in Nagata-cho with the

point-contact transistor T-1698 in his hand which had just been completed that day (Ukai, et al.,

2011). This T-1698 was the only one domestic high-speed transistor available at that time, cost as

much as 4,000 yen apiece, and still had problems in reliability (Takahashi, 2003). Active research

was conducted by Makoto Kikuchi, Yasuo Tarui, Seiichi Denda, et al., as a joint effort of the public

and private sectors, toward domestic production of the transistor including its manufacturing

technology (Aida, 1991).

As a result, the design work was finished in March 1956, manufacturing work in April, and

operation was started in July. Having started off in November 1954 with a total estimate of 2,840

thousand yen, ETL-mark III was completed in as short a period as one and a half years. Shigeru

Takahashi has attributed the early completion to the facts that all the production work except for the

components was performed within the laboratory and that reasonable specifications were adopted

(Takahashi, 2003).

5.2.5 Creation of ETL-mark IV

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ETL-mark III was the world's first stored-program transistor computer, which started operation

almost at the same time as TX-0 developed by Ken Olsen. As the point-contact transistor was used,

ETL-mark III operated at high speed, but often broke down (Nishino, 1985). In view of this,

development of ETL-mark IV using the junction type transistor was started in October 1956, in the

circuit section of the electronics division, to enhance the reliability even at the cost of speed. The

members were Shigeru Takahashi, Hiroji Nishino, Isokazu Matsuzaki, and Hiroshi Yoneda. At this

stage, domestic production of the germanium alloy junction type transistor had already been started

and become far more stable than the point-contact transistor (Takahashi, 2003).

ETL-mark IV used about 470 units of HJ-23 manufactured by Hitachi, and the total budget was

about five million yen. The binary-coded decimal notation (BCD) was adopted, and ETL intended

to commercialize ETL-mark IV by technology transfer. In November 1957, ETL-mark IV was

completed only after 13 months from the kickoff. Compared with ETL-mark III, ETL-mark IV was

much more stable and capable of performing calculations for obtaining large prime numbers

without being shut down for more than 100 hours in 5 days (Takahashi, 1976).

Many Japanese manufacturers wished to introduce the technology of ETL-mark IV, and there

were offers from four companies, NEC, Hitachi, Matsushita Communication Industrial, and

Hokushin Electric Works. Although Japanese manufacturers including Fujitsu, Hitachi, and NEC

had commercialized the parametron-type electronic computer developed by Denden-kosha and

Electrical Communication Laboratory, partly because five large manufacturers, NEC, Fujitsu,

Hitachi, Matsushita, and Toshiba had already started the licensed production of the transistor, by

1957, Japanese manufacturers began full-scale commercialization of the computer using the

junction type transistor.

5.2.6 Cooperative tie between Hitachi and ETL

In March 1962, Shigeru Takahashi left ETL and joined Hitachi. Before that, Takahashi had been

maintaining close contact with the company through technical guidance he provided on Hitachi's

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electronic computer (Imaoka, 1989). In the case of HITAC301, which is a commercial machine of

ETL-mark IV, it is known that Yasukichi Hatano, Shigeru Takeuchi, et al. of Hitachi had been

doing designing work in Takahashi's laboratory in ETL since around June 1958 (Takahashi, 1996).

Prior to this, Hitachi had completed parametron-type electronic computer HIPAC MK-1 in

December 1957 to respond to an internal need for a computer to be used by Hitachi Cable (an

electric cable factory then) for designing the tension of power lines for Electric Power

Development's Tadami-kansen line. In March 1958, a computer designing section of the radio

division was established in the Tozuka factory. Thus, the transistor electronic computer HITAC301

was completed in April 1959 under the direction of Shigeru Takahashi of ETL after about one year

from the start of development.

While DEC's PDP-1 (completed in 1961) has the roots in Whirlwind Computer designed for

controlling flight simulators and air-defense missiles and are characterized by its capability of

real-time processing, the system which became the origin of on-line, real-time processing in Japan

was a prototype of former Japan National Railways' seat reservation system, Magnetic-electronic

Automatic Reservation System (MARS), which is known today familiarly as "Green window".

At Japan National Railways' technology laboratory, since 1955, members including Mamoru

Hosaka and Yutaka Ohno spent a lot of time in study meetings and discussion aiming at

introduction of the computer for automatic control. Hosaka et al. were keenly aware of the need for

a seat reservation system, and had a technological vision of vacant seat pattern search, quick file

updating, and independent parallel processing of input and output, which are essential for the

system. In 1957, they set up a research committee with Hidetoshi Takahashi of the University of

Tokyo as the chairman, and external members from companies, etc., and officially started to

consider computerization of the seat reservation system. As a result, in 1958, MARS1 was

contracted to Hitachi and developed at the Tozuka factory mainly by Yoshihiko Tani.

In 1959, MARS1 was installed at Tokyo station and connected with reservation devices

provided at ten ticket windows. In February 1960, this Japan's first domestic on-line system has

-21-

started handling reservations for 15 days of about 2,100 seats for Tsubame and Hato trains, and in

the following year, MARS1 was also installed at Nagoya and Osaka stations to extend its service

area. The operation rate in the first ten months was 99.86%, which later grew to 99.95% or more

(Uraki/Odaka/Kawabe, 1985).

Shigeru Takahashi worked at Hitachi for about 18 years from April 1962 to April 1980. After

that, he became a professor at the University of Tsukuba. Here is a brief look back on his career: He

was originally in the position, as a researcher with ETL, to provide guidance on starting a computer

business in Hitachi. Then, at the stage where launch of the business came in sight, he moved to

Hitachi and took charge of design and development of major products such as HITAC 8000 series,

DIPS, and early M-series. Records show that, throughout his career at Hitachi, Takahashi played an

active role as a person responsible for product design in the company's computer operation

(Takahashi, 1996).

6. Findings

6.1 Findings from Ken Olsen's case

This chapter summarizes the findings from the case study. First, there are three findings from

Ken Olsen's founding of DEC, namely, the first successful university start-up, aiming at

commercialization of the transistor computer in the US, which is the first subject of this paper.

First, Ken Olsen of MIT Lincoln Laboratory, who developed the prototype unit TX-0 as a result

of the national military project, founded DEC and played a pivotal role in commercialization of the

transistor computer and setting up the accompanying business.

Secondly, founding of DEC was supported by many university researchers in terms of funds,

technology, and management. More specifically, in terms of funds, DEC obtained an investment

from ARDC headed by Professor George Doriot of Harvard Business School, which became the

world's first successful venture capital. In terms of technology, Olsen and Jay Forrester, who was

Olsen's superior at MIT Lincoln Laboratory and later became a professor at MIT Sloan School,

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obtained a joint patent for the magnetic core memory. In addition, Olsen received Forrester's

cooperation for joining as the director of DEC. In terms of management, process consultation was

provided by Edger Shein, also professor at MIT Sloan School, to deal with problems accompanying

introduction of the matrix organization.

Thirdly, after DEC's successful public offering in 1966, the university start-up and the venture

capital obtained acknowledgement, and each pioneered the eco-system for supporting

commercialization of new technology. These were transferred from MIT to Stanford, from Boston

to San Francisco, constituting the core of the industry accumulation in Silicon Valley.

6.2 Findings from Shigeru Takahashi's case

There are three findings from the second subject, commercialization of the transistor computer

in Japan, namely, the case of technology transfer from ETL to Hitachi by Shigeru Takahashi.

First, development of the transistor computer was jointly conducted between ETL and the large

companies subsidized by the MITI, under the direction of Shigeru Takahashi, et al. who was the

researcher in charge at ETL under the MITI. In Japan, researchers who developed the prototype unit

did not found a company to directly get involved with commercialization, but instead only provided

guidance on technology transfer to a large company. Then, by moving to the large company from

ETL, leading researchers promoted the technology transfer.

Secondly, Japan was technologically far behind the US as to peripheral equipment such as the

memory device and the input/output device, even though the countries had equivalent level of

transistor technology. For this reason, there was no other choice for Japan but to introduce patents

related to manufacturing technology by technology-sharing agreement with IBM, RCA, etc. This

case of joint development set a precedent for the system of cooperation between the government

and private sectors led by the MITI.

Thirdly, it was difficult for Japanese universities at that time to conduct research and

development of the computer for military purposes such as ballistic calculation supported by

-23-

military funds. Under such circumstances, the measures drafted by key members of ETL under the

MITI were implemented by existing large electronics manufacturers, who realized

commercialization of the transistor computer.

6.3 Findings from the Japan-US comparison

On the basis of the Japan-US comparison, this section presents findings about differences

between Japan and the US in commercialization process of the transistor computer, which is the

third subject.

Ken Olsen and Shigeru Takahashi were researchers representative of the US and Japan,

respectively, who implemented integration of the transistor into the computer. Judging from

perfection levels of their machines, Olsen and Takahashi are assumed to have been at similar levels

of technological capability including skills and knowledge around 1957. In the US, Ken Olsen

founded DEC with an investment from the world's first venture capital ARDC. In Japan, on the

other hand, Shigeru Takahashi as a researcher with ETL gave technical guidance to the large

electronics manufacturer, and then joined Hitachi to support its computer division.

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Table 2 Japan-US comparison on commercialization of transistor computer

Japan United States

Shigeru Takahashi Key person Ken Olsen

Electronics Test Laboratory Laboratory MIT Lincoln Laboratory

ETL-mark IV Prototype TX-0

Technology transfer to large companies

Method of commercialization of

new technology University start-up

HITAC301 Commercial unit PDP-1

Hitachi Technology transfer to DEC

One business division of a large company Business form Company specialized in

computer Protective measures by the

MITI Characteristics Commercialization of military

technology International competitiveness

of domestic computers (up to the 1980s)

Result Creation of the world's first

successful university start-up and venture capital

To sum up the findings above, researchers in the US and Japan, who had equivalent levels of the

ability for identifying business opportunities regarding technology (technological ability) of

"introducing the transistor to the computer", pursued commercialization in different paths, namely,

through "university start-up" and "technology transfer to large companies", respectively.

Accordingly, we infer that, unlike Ken Olsen, it is not necessary for Shigeru Takahashi to possess

the "ability for identifying business opportunities" regarding the market which is essential to access

a "fund source" such as a venture capital. Table 2 lists characteristics of commercialization of the

transistor computer in the Japan-US comparison.

7. Observation

This comparison study covers the dawn of the computer age about half a century ago. Our

comparison has shown that Japan and the US adopted different policies for commercialization of

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new technology (transistor computer). Commercialization of new technology was realized through

founding of companies by university researchers backed by venture capitals in the US, and through

technology transfer to large companies in Japan, and both countries are evaluated as successful.

Following these successful cases, efforts were made toward commercialization of new technology

in a manner suitable to the situation of each country.

This resulted in two important differences between Japan and the US in commercialization of

new technology: First, in the US, universities became the starting points of commercialization of

new technology, while in Japan, ETL and large companies served as the starting points, which was

established as their social roles. Specifically, in the US, MIT, Stanford, Carnegie Melon

Universities, etc. became the bases and led the computer study with military research funds

(Etzkowitz, 2002; 2008). In Japan, the cooperative structure of the MITI, ETL, and large companies

was established through national projects, while keeping out universities for fear of involvement in

military research. Of the social roles of universities, which were under the jurisdiction of the

Ministry of Education, Science, Sports and Culture, the educational aspect with the primary

objective of supplying human resources to large companies assumed more importance than

advanced research (Takahashi, 1996).

Secondly, in the US, young researchers who had experienced large-scale research projects

became creators of university start-ups, while in Japan, almost no university start-up was created by

young researchers who had experienced large-scale research projects. In this respect, since the

initial public offering of DEC (1966), many young university researchers have started a business

with the support of venture capitals (Shane, 2004). In Japan, by contrast, until 1999, the university

start-up was virtually not allowed by the code of faculty members of national universities (Ogura,

2010).

Now, in light of the differences between Japan and the US in commercialization of new

technology, we will consider the issue: why are Japanese university start-ups not successful in

starting a business? First of all, the framework for supporting commercialization of new technology

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discussed in this paper has already been explained by the concept of eco-system in previous studies

(Iansiti and Levien, 2004; Sugiyama/Takao, 2011; Nishizawa, 2012). Our comparison study has

shown that the eco-system for promoting commercialization of new technology was originated from

commercialization of the transistor computer about 50 years ago. On this basis, the difference

between the eco-systems of Japan and the US derived from the findings can be put in this way: an

"eco-system centered on the university start-up" in the US, and an "eco-system centered on

technology transfer to large companies" in Japan. In other words, the former is an

"entrepreneur-centered eco-system", while the latter is an "entrepreneur-absent eco-system".

In the US, cutting-edge technologies were developed at universities for military purposes, and

these developers were supported by venture capitals and encouraged to found a company, which led

to creation of university start-up entrepreneurs who has the ability for identifying business

opportunities and creating a business concept (Etzkowitz, 2008). In Japan, as the protective

measures were implemented for fostering the domestic computer industry, projects were

orchestrated to transfer technology from ETL to large companies based on the basic technology

which had already been successfully developed in the US (Takahashi, 1996). In this respect, as long

as Japan aims to catch up with the US, Japan faces little market risk, although with some

technological risk, thanks to the US market already in existence.

Technologies utilized for catching up with the US or technology transfer to large companies are

incremental technologies for which there is no need to worry about cannibalization or create a

business concept (Shane, 2004). Thus, in Japan under the protective policy, university start-up

entrepreneurs who bear the "twofold start-up risks" (Nishizawa, 2012) or achieve the "new-market

type disruptive innovation" (Christensen, 2003) were not necessary for a long time. That is, it was

not necessary for Japan, at least until the 1990s, to establish a system for cultivating university

start-up entrepreneurs.

8. Conclusion and future outlook

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This paper has dealt with the case of commercialization of the transistor computer and

compared the eco-systems of Japan and the US for promoting the commercialization of new

technology.

As a result, two differences have been found between the eco-systems of the US and Japan: one

is whether or not a "framework for cultivating the ability as an entrepreneur who identifies business

opportunities and creates a business concept" is in place, and the other is whether or not "funds and

experimental fields for exploiting the business opportunity" is secured. The first difference, the

position of entrepreneurs in the eco-system, is based on the assumption that the US is

"entrepreneur-centric" while Japan is "entrepreneur-absent". As for the second difference, funds

and experimental fields, the US promoted "development of advanced technology for military

purposes", while Japan took the approach of "protecting the domestic computer industry". In this

regard, it was difficult for university researchers in Japan, one of the defeated countries of World

War II, to found a company, as commercialization of computer-related new technology could have

been regarded as commercialization of military technology (Hiroshige, 1973). Thus, Japan achieved

commercialization of new technology through cooperation between ETL and large companies

without involving the universities.

It is not the point of our argument, however, that the US's eco-system for promoting

commercialization of new technology should be introduced to Japan as a model to follow. In today's

Japan, it would be difficult to secure "funds and experimental fields", similar to those of the US, for

the purpose of military technology development.

When the transistor appeared about 60 years ago, application of mounting the transistor to the

computer was termed as "real-time processing" (Takahashi, 1996). In the US, the application was

control of flight simulators or air-defense missiles, while in Japan, it was the seat reservation system

of Japan National Railways. How can one secure "funds and experimental fields" in

commercialization of new technology? The answer should not be to follow the US as a model but to

develop an approach while building a social consensus in a manner suitable to Japan's situation.

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For example, if in the context of "commercialization of disaster-prevention technology" instead

of "protection of the domestic industry", it would be relatively easier to obtain a social consensus. It

is known that the cleaner robot of iRobot Corporation, which is an MIT's start-up, is a spin-off from

research and development on military robots (4). Research and development of rescue robots for

Fukushima nuclear power plant which operate under extremely stringent conditions would fulfill

the purpose of protecting the workers from exposure to radiation as well as provide a fundamental

technology for rescue robots for counterterrorism, traffic accidents, or construction sites (5). For

commercialization of such robots, not only internal start-ups of large companies, but, from the

viewpoint of building a social consensus, university start-ups by university researchers should also

be involved. This is because action of designing an artifact inevitably involves the problem of value

which gives a social meaning to the artifact (Sakakibara, 2010; Sugiyama/Takao, 2011), and

requires "funds and experimental fields". In order to realize the "new-market type disruptive

innovation", it is necessary to develop a commercialization path also from universities which have

logics different from those of companies. When the technology or the eco-system is regarded as an

"artifact", a counter-concept of a "natural object" (Simon, 1996), it is essential to newly establish a

corresponding instrument (eco-system) in order to create a new value.

The limits of this study are that only the comparative cases of commercialization of the

transistor computer half a century ago have been described, and the generality of our findings

requires careful assessment. In the computer history, records show that, since appearance of the

transistor, Japan and the US have taken various measures for commercialization of new technology

(Ceruzzi, 2003; Takahashi, 1996). As mentioned above, commercialization of computer-related new

technology was initially positioned as the "cooperative project between the government and

universities" in the US, and as the "cooperative project between the government and large

companies" in Japan. Later, in the 1980s, the US launched a consortium including large companies

as a means to compete against Japan's "fifth-generation computer project" (Nishizawa, 2012). On

the other hand, since 2000, Japan has been officially addressing promotion of university start-ups

-29-

(Kanai, 2010).

However, the system for cultivating human resources of computer scientists, which was

established on the basis of successful experience at the industrial level, is path-dependent (Arthur,

1994), rigid, and difficult to change (cf. Kagono, 1998). In the US, excellent computer researchers

gathered mainly at three universities: MIT, Stanford University, and Carnegie Melon University

which were engaged in military research (Ceruzzi, 2003). Then, researchers at these universities

personally founded companies, further promoting accumulation of university start-ups (Etzkowitz,

2008). In Japan, by contrast, ETL exclusively gathered excellent students, and the typical career

path of the computer scientist is first experiencing national projects and being engaged for about a

decade in research, then being sent to a university to foster young people (Furukawa, 2010). This

system remains almost the same today, and the former ETL is now National Institute of Advanced

Industrial Science and Technology (AIST).

In order to further consider the issue of "why Japanese university start-ups are not successful in

starting a business", it is necessary to focus on former researchers with ETL in light of the computer

history. Kazuo Taki, a pioneer of university start-ups in the computer field in Japan, founded a

system LSI designing company and was a leading young researcher in the "fifth-generation

computer project" orchestrated by former researchers with ETL (Taki, 1993; Takase, 2012). The

parallel architecture of the fifth-generation computer he worked on has been passed down as the

basic technology of today's grid computer and parallel computer, and known as a world-class

research accomplishment. Taki has remarked that "today, more than 200 researchers who were

involved in the fifth-generation computer project are active at universities, but I have never heard of

anyone who addressed creation of a university start-up." (6) The problem of Japan's eco-system

including cultivation of entrepreneurs or researchers in the computer field will be clarified by

further studies focusing on moves of former researchers with ETL and the recent efforts of creating

start-ups by the AIST.

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Endnotes

(1) The definition of the eco-system according to Iansiti, who was the first to officially introduce the concept,

was: " a network relation among companies compared to a biological eco-system (ecological system),

and a concept representing a state of mutual coexistence for the purpose of common prosperity and

survival of loosely-connected network participants" (Iansiti and Levien, 2004). However, for the

eco-system in the context of commercialization of new technology to be discussed in this paper, the

definition by Sugiyama and Takao (2011) as follows is more compatible: "an aggregation of agents who

contribute to realization of a new value system by development/production of artifacts". Therefore,

especially in order to stress the necessity of evaluation of robustness of the environment in which

university start-up entrepreneurs are to live, this paper has adopted the latter definition.

(2) See Venture review Vol. 13 (pp. 59-68).

(3) The reason why Ken Olsen and Shigeru Takahashi have been selected as representative cases is that they

were responsible persons for introduction of the transistor to the computer. Progress of the computer was

realized mainly through start-ups by university researchers (Ceruzzi, 2003), and one of the technologies

which created most important new-market disruptive innovation in the computer history is said to be the

transistor (Christensen, 2003). In this respect, this paper recognizes the transistor as the "basic technology

which (consequently) created the framework of the university start-up".

There are three reasons why DEC has been selected as a representative case of the university start-up: 1)

it was founded by a university researcher, 2) supported (funded) by a venture capital, and 3) went public.

There are other cases including Hewlett-Packard supported by Professor Frederic Terman of Stanford

University, but DEC is positioned as the origin of the university start-up in that the company prompted

creation of the venture capital (Robert, 1991; Etzkowitz, 2002; Shane, 2004).

As described later (5.1.2), it was MIT's vice-president Vannevar Bush who promoted military research at

university, and Terman of Stanford University was Bush's student. Like Bush, Terman is also known to

have promoted military research. Hence it is believed that Bush and Terman have established the

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foundation of MIT and Stanford University which are today called entrepreneurial universities (Robert,

1991; Etzkowitz, 2002; Shane, 2004; Ueyama, 2009; Nishizawa, 2012).

ETL has been selected as the subject for comparison with DEC, because the technological condition, the

transistor computer, was the same, and technology transfer from ETL to large companies was a means for

Japan to realize commercialization of new technology. MIT Lincoln Laboratory in the US and ETL

before World War II in Japan both have a history of being involved in military technology. Both

institutes gathered excellent students from across the country or universities. Their career path is to have

a certain degree of experience at the laboratory and then assume a post at university for fostering young

people, and the both institutes had a function of cultivating human resources of researchers. On the basis

of these circumstances, it should be noted that the focus of this study is not on the university-based

business start-up, but on the eco-system for promoting commercialization of new technology.

(4) For details, see iRobot Corporation's website:

http://www.irobot-jp.com/irobot/ (Date of access: February 25, 2012)

(5) For details, see the website of International Rescue System:

http://www.rescuesystem.org/ (Date of access: February 25, 2012)

(6) From an interview dated July 26, 2011

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