U.S. Described as Ahead in Key Technologies : Japan: But the study by the Economic Planning Agency said the Asian nation leads in areas with the greatest commercial potential.
Despite the massive investments Japan has made in developing new technologies, the nation continues to lag significantly behind the United States in many key areas. And commercialization of a large number of the technologies under development is still decades away.
Those are two of the conclusions of a comprehensive new report just released by Japan’s Economic Planning Agency entitled “A Technology Forecast for the 21st Century.”
The report, assembled by a group of Japan’s leading corporations, scientists and think tanks, evaluates 110 critical technologies. The report analyzes Japan’s competitive position in those technologies, the year they are likely to be widely commercialized and the value of the newly created markets.
The good news for the United States is that it still leads Japan in 43 of the critical technologies, with particular strengths in new materials, energy, pharmaceuticals and environment. Japan leads in 33 areas, with obvious strengths in automation, electronics and transportation.
When comparing itself to Europe, on the other hand, Japan puts itself in the lead in 61 areas, with Europe leading in only 26, including such areas as new-generation automobiles.
The good news for Japan is that it leads in the areas with the greatest commercial potential. Of the 17 technologies that the report estimates are likely to lead to markets worth more than $7 billion in annual sales in Japan, 13 are in electronics. Memory devices, high-definition television and optical communication are all technologies that rate potential market sizes of $22 billion a year or more and in which Japan rates itself the leader.
The results of the report will be submitted to the Economic Council, an advisory body to Prime Minister Toshiki Kaifu.
Because those putting together the report included representatives from such major Japanese corporations as Toyota, NEC and Hitachi, its conclusions could be somewhat biased in Japan’s favor. The report concludes, for example, that Japan is twice as competitive as the United States in the area of neurocomputers, an assessment many American scientists in the field would disagree with.
On the other hand, it may be a surprise to some that Japanese experts consider the United States far ahead in the development of new materials such as ceramic gas turbines, substances for high-speed semiconductors and new types of metals.
In many of the critical areas in which America leads, the report sees the market potential as surprisingly low. In cancer research, for example, America is given a significant lead, but the experts believe that the cure, which will come around the year 2030, will have a market in Japan worth less than $3 billion.
While the forecasts make for interesting reading, perhaps the more significant point about the report is that the Japanese government is already thinking about the impact of technology in the year 2010.
“Everybody is writing reports about the year 2000, so we thought we should look longer term to the year 2010,” said Junichi Kikuchi, a professor specializing in industrial policy at Aoyama Women’s College who chaired the committee that put the report together. “We felt that we should get ready for the impacts of the technology or we might not see these technologies come to fruition.
“As our population ages, economic growth will fall and we will need next-generation technology to support society.”
One of the more surprising conclusions of the committee, he said, was that the development of technology does not by itself assure the development of a healthy market for products in that technology. High-definition TV technology, for example, has been around for a long time but is taking awhile to be accepted in the marketplace because of its high cost.
The committee members decided that there were areas of technology that would grow rapidly without any prodding. Those areas include information technology, automation and electronics.
In other areas, however, the report says significant changes must be made in the regulatory environment in order for Japan to catch up with the West. In the area of pharmaceuticals, for example, the 10- to 20-year process for testing drugs has prevented industry from making more rapid progress, Kikuchi said.
Kenji Yoshioka, the Economic Planning Agency official responsible for putting the report together, said government regulations were seen as bottlenecks in a broad range of areas, including the development of a new generation nuclear power technology called a breeder reactor, the creation of artificial islands in high land price areas like Tokyo and the building of 100- to 200-story buildings.
“The technology is already there for these things, but regulations are slowing down their implementation,” Yoshioka said.
The report also discusses the importance of developing environmental technology in order to raise the quality of living in Japan. In some cases, however, the nation must decide what technology path is better to take. Rather than try to prevent carbon dioxide from getting into the air, for example, Kikuchi said, it might be economically more feasible to transform carbon dioxide into dry ice.
Kikuchi said that in the course of putting together the report, committee members became acutely conscious of the increasing degree to which progress in each area of technology depends on developments in other areas. “The lack of progress in a few areas like materials can hold back development in dozens of other areas,” he said. “It is in those weak areas that we have to focus our energies.”
