An analysis of Japan’s connectivity to the global innovation system

In the modern knowledge-intensive economy, a nation’s competitiveness depends on the ability of its constituent firms to innovate. Extant research in national systems of innovation highlights institutions and public policies toward innovation as key determinants that affect firms’ innovation activities. This paper aims to widen the investigation by arguing that co-inventor connectivity allows firms to access the most tacit knowledge within global innovation systems. Therefore, it is one of the key factors that underpin a nation’s ability to develop and sustain its competitiveness.

Using a data set of 406,168 patents from US Patent and Trademark Office during the period of 1975-2004, this study analyzed the Japanese system of innovation through co-inventor networks.

Surprisingly, the authors found that compared to other advanced countries such as Germany and Denmark, the Japanese innovation system is quite closed.

The dimension of tacit knowledge is crucial in the current environment of rapid cycle time, short product lifespans and increasing emphasis on exploratory innovation. Hence the authors speculate that closedness to global innovation systems could be one of the reasons why many of Japan’s traditionally powerful multinational enterprises exhibit weak performance in recent years.