Regionalization of Innovation Policies: The Case of Japan

Abstract

This article contributes to discussions concerning the geographical dimension of innovation systems by shedding light on recent ‘regionalization’ efforts being made in the Japanese context. The current government's cluster initiatives, with national industrial and science and technology policies centred on strengthening university–business links, are critically examined in light of the development of Industry–Science Relationships (ISRs) and Regional Innovation Systems (RISs) set within multi-level governance structures of knowledge production. The recent development of regional policies for innovation, set against the development of the globalizing knowledge-based economy, draws attention to issues concerning the limited scope of multi-level governance structure in Japan today. Regionalization of innovation policy needs to be situated within a wider geographical paradigm, which links knowledge value chains encompassing local, regional, national and transnational levels.

Acknowledgements

An earlier version of this article was presented at the conference held at DIW Berlin, June, 2004. I appreciate the very useful discussion on that occasion. I would like to thank Professor Phil Cooke for helpful comments. The final version of this article was written when the author participated in the European Forum “The role of universities in the innovation systems”, at the European University Institute, Florence, Italy. The author acknowledges the support of the European Forum and Hitotsubashi University during this period.

Notes

1. Systems approaches to innovation vary in emphasis and level, but they share a common core idea that: “the overall innovation performance of an economy depends not so much on how specific formal institutions (firms, research institutions, universities, etc.) perform, but on their interplay with social institutions such as values, norms, legal frameworks, and so on” (Smith, 1995, p. 72, my emphasis). It contrasts with the linear model of innovation which is a simple deterministic model that simply represents the sequence from basic and applied research to product and process development.

2. Regional innovation systems are “places where close inter-firm communication, socio-cultural structures and institutional environment may stimulate socially and territorially embedded collective learning and continuous innovation” (Asheim & Isaksen, 2002, p. 83). Comparative analysis of the regional innovation systems provided some guidance for policy-makers as ‘policy-oriented innovation stimulation models’ (Hassink, 2001, p.224). The ‘institutional thickness’ (Amin & Thrift, 1994, p. 15) found in local systems such as Baden-Württemberg in Germany and northern Italy has provided models of regional innovation systems for other regions.

3. Evidence in Japan shows that industries and firms that are highly dependent on access to local tacit knowledge have a propensity to agglomerate in certain regions (Gonda & Kakizaki, 2001, as cited in OECD, 2002b).

4. I acknowledge the useful comment on this point from one of the anonymous referees.

5. See, http://www.silicon-seabelt.org/en/index.html (accessed 27 December 2004).

6. See, http://www8.cao.go.jp/cstp/english/leaflet.pdf (accessed 31 January 2005).

7. See, http://www8.cao.go.jp/cstp/english/basicplan01-05.pdf (accessed 31 January 2005).

8. Some TLOs form private companies limited and some form incorporated foundations. The TLOs are separate organizations from the national universities in the legal sense. Although there has been public funding for TLO activities, this is in decline. University staff have voluntarily made financial investment in TLOs, but after April 2004, universities are allowed to invest in TLOs directly as organizations.

9. Organizations such as the Japan Science and Technology Corporation (JST) have started sponsoring programmes aimed at national universities and national laboratories to encourage the development of research into marketable products, with university administrators acting as liaison between the faculty members and JST.

10. In terms of local economic development, there is a division of labour between prefectural government and METI regional economic bureau. The prefectural government oversees ‘local platform’ schemes whereas METI regional bureau administers wider cross-prefectural ‘cluster’ development. The METI industrial ‘clusters’ were chosen in light of this geographical administrative criteria, which do not necessarily represent the most successful local industrial agglomerations in Japan.

11. The budget for the Industrial Cluster Project amounts to 680 million yen in FY 2004, and the nine METI bureaux have forged relationships with 5800 SMEs, having links with 220 universities across the country (Kodama, 2004).

12. There are 13 Cooperative Link of Unique Science and Technology for Economy Revitalization (CLUSTER) programmes encompassing 15 regions in Japan. The budget for the CLUSTER programme is 500 million yen per region per year, lasting for 5 years. Apart from CLUSTER, there are 19 areas designated as the CITY AREA programme (Cooperation of Innovative Technology and Advanced Research in Evolutional Area) covering smaller areas. See http://www.rieti.go.jp/users/cluster-seminar/pdf/003_p_en.pdf (accessed 25 February 2005).

13. This is partly due to conventional Japanese employment practice within the public sector, which has encouraged the career path as ‘generalists’ with wider but unspecialized experiences, rather than acknowledging specialists with focussed expertise.