"The Dynamics of Knowledge Regimes: Technology, Culture and Competitiveness in the USA and Japan"

by Dengjian Jin

Reviewed by Takahiro Miyao (GLOCOM)

Review:

It is often pointed out that the Japanese economy consists of two entirely different sectors in terms of competitiveness and efficiency. One is such exporting industries as automobile and electronics, and the other is more domestically oriented service industries such as banking and retail business. We all know how efficient the former is and how inefficient the latter is, even in our daily life. This book tries to explain why those differences exist and persist from the so-called "knowledge regime perspective," based on detailed analysis and adequate data.

The emphasis of this study is the dominant organizing principles and governance mechanisms of knowledge creation. The author contrasts "people-independent systems integration" as the US way of systemization with "people-dependent systems integration" as the dominant Japanese say of systemization, where a Japanese strength lies in people-centered shop-floor learning and knowledge creation. This kind of knowledge is often called "tacit knowledge," as pointed out Stanford University Professor Masahiko Aoki in his address at the International University of Japan:
http://www.glocom.org/opinions/essays/200107_aoki_value/
Also, see Masahiko Aoki, "Towards a Comparative Institutional Analysis":
http://www.glocom.org/books_and_journals/book_reviews/
20020121_towards/

Actually, the author points out that one of the Japanese advantages in manufacturing is flexible standardization that "is achieved through a dynamic process of knowledge creation and a transformation from tacit to explicit knowledge." The important point is that "tacit knowledge is shared among co-workers through a socialization process and is continuously transformed into explicit knowledge through an articulation and externalization process." And the articulated knowledge is embodied into manufacturing, leading to Japanese competitive advantages. A similar observation is made by Ronald Dore, "Stock Market Capitalism: Welfare Capitalism--Japan and Germany versus the Anglo-Saxons":
http://www.glocom.org/books_and_journals/book_reviews/
20011217_stock/

However, the author has to admit that the US approach seems to have some advantage in many of the key industries in our new information society, as he says that "the new information revolution has tilted the pendulum of competitive advantage back to the US side, and therefore, it is high time for Japan to learn the American way once again." Hopefully, the author will be able to explain more fully in his future study why information-related businesses are doing better in the US than in the Japanese environment, so that Japan can really learn from the US experience in a more "explicit" way.

"The Dynamics of Knowledge Regime"

List of contents:
1 Introduction

2 Sectoral Patterns of National Competitiveness

3 The Knowledge Regime Framework

4 Culture and Knowledge Creation

5 Contractual Governance for Knowledge Creation

6 Connectual Governance for Knowledge Creation

7 Quantification vs. Contextualization

8 Spontaneous vs. Organized Fusion

9 Modularity and Connectivity

10 Systems Integration: People-independence vs. People-dependence

11 The Great Synergy of Civilization