Characterizing R&D and HRD in the innovation process of Japanese SMEs: analysis based on field study

ABSTRACT

To analyse the nature of R&D and HRD among Japanese SMEs, the Japan Team selected the following three firms from the manufacturing industry, depending upon size in terms of the number of employees, types of products, orientation toward innovation and so on. The three firms selected were Dynic, Kyokko Electrics (Kyokko for short) and Maeda Precision Manufacturing (Maeda for short). In the context of formal or informal R&D, Dynic and Kyokko own R&D centres, while Maeda does not, which is due to the size of firms. This study analyses their R&D and HRD organizational structures and implementations and identifies factors which determine the nature of their R&D and HRD. The factors promoting innovation extracted based on the in-depth interviews are (1) the size of firm, (2) types of product and production, (3) seeds of innovation, (4) attitude toward risk and (5) learning process. The common factor acting as the basis for the firms’ R&D structure was identified as ISO9001 which three firms commonly introduced and applied. Their HRD are also different, which are due to (1) level of new employees and (2) the size of firm. The policy implications for further promotion of innovation are also discussed.

KEYWORDS:

• Formal R&D
• informal R&D
• cross-functional team
• OJT
• ISO9001

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes on contributors

Masatsugu Tsuji, Ph.D., is Professor of Economics, Faculty of Economics, Kobe International University, and Professor Emeritus of Osaka University. He received B.A. from Kyoto University in 1965; M.A. from Osaka University in 1967; and Ph.D. in Economics from Stanford University, US in 1976. His services include as visiting professor of Carnegie Mellon University, US and National Cheng Kung University, Taiwan; Board of Director, ITS; Editorial Board, JISfTeH. Current research focuses on identifying factors promoting innovation in Japan and ASEAN economies. Publications include Industrial Clusters, Upgrading and Innovation in East Asia, Edward Elagr, 2011, From Agglomeration to Innovation: Upgrading Industrial Clusters in Emerging Economies, Palgrave Macmillan, 2009, Industrial Agglomeration and New Technology, Edward Elgar, 2007.

Hidenori Shigeno, Ph.D., is Professor of Economics, Faculty of Economics, Kobe International University. He received B.A. from Meij University in 1982; M.A. from Meij University in 1984; and Ph.D. in Applied Informatics from University of Hyogo, Japan in 2017. Current research focuses on the open innovation of SMEs (Small and Middle Enterprises) in Japan and ASEAN economies, and he seeks how to support SMEs for innovation and other regional activities. He collaborates with others in the fields across the borders of academia, business, and policy-makers.

Yasushi Ueki, Ph.D., is Economist of ERIA located in Jakarta, Indonesia and received Ph.D. in international public policy from Osaka University, Japan in 2004. Prior to joining ERIA in January 2014, he was a research fellow at the Institute of Developing Economies located in Chiba, Japan since 1999. He served United Nations Economic Commission for Latin America and the Caribbean located in Santiago, Chile as an expert during 2002–2005. His recent researches focus on technology transfer and innovation for development in ASEAN economies.

Hiroki Hiroki, Ph.D., is Professor of Management Information System, Faculty of Economics, Kinki University, Osaka, Japan. He serves as a board member of the Japan Society for Information and Management. Received B.A. in Economics from Kwansei Gakuin University; M.A. in Informatics from Kansai University; and Ph.D. in Economics from Osaka University, Japan. Major areas of specialty include Management Information System and Management of Technology. Current research focuses on innovation using ICT. Publications include Theory and Practice of Information Security Management (in Japanese), Hakuto-Shobo, 2004, which received the Telecom Social Science Encouragement Award by the Telecommunications Advancement Foundation in March 2005.

Teruyuki Bunno, Ph.D., Professor of Business Management, Faculty of Business Administration, Kindai University, Osaka, Japan. He received BA in 1985 from Doshisha University, MA in 1997 and Ph.D. in 2003 from Osaka University, Japan. Major areas of specialty include innovation, life cycle of firms, and new business creation. Current research focuses on the roles of human resources in the process of firm growth and innovation using ICT.