2020 Volume 19 Issue 2 Pages 29-44
This paper reexamines product development in the Japanese electrical industry after WWII from the perspective of strategies for reducing licensing costs. Immediately after the war, Japanese electronics manufacturers raised their own level of technology by introducing technology from abroad. However, in their effort to arrive at corporate policies enabling them to provide products at as low a price as possible, there was a limit to the sheer amount of licensing costs they could bear to carry out licensed production. Japanese electronics manufacturers, in many cases, engaged in cross-licensing based on their own patents in order to offset licensing fees and keep costs down. To further control licensing costs, manufacturers had no choice but to produce products based on licenses already in hand; each electronics manufacturer established a central R&D laboratory. Up until the early 1990s, “Not Invented Here” was a widely adopted philosophy which, as it turns out, was a historically unique approach.