2004 Volume 25 Pages 117-124
For sustainable economic growth, over the long term, the products of technological innovation prescribing the economic system as a whole must be disseminated throughout the entire national economy, while at the same time, we must manage the evolution of technological innovation to limit any "locking into" existing forms of technology or knowledge (stagnation of technical innovation) and to trigger all-new technological innovation for the next generation. The problem associated with this kind of resource allocation is one that is relevant on a both the micro- and macro-economic levels in terms of R&D in companies and science and technology policies for the national economy. The primary objective of this paper is to argue the conditions for innovation and economic growth over time and the results of innovation management in the Japanese economy. A several results could be suggested by computer simulation and an empirical examination as follows. Depreciation rate management can maintain sustainable growth with technological change over the long term. And Japan's asset securities reports demonstrate that Japan's listed manufacturing companies have satisfied the conditions for managing sustainable growth as suggested by the simulation results. But the private sector capital stock statistics demonstrate that Japan's unlisted manufacturing companies, which account for 99% of all manufacturing ones in Japan, might have failed to manage sustainable economic growth with technological change by depreciation rate since the late 1990s. It can be pointed out that one contributing factor to the IT productivity paradox is inefficiency that is caused by systemic inconsistency between Japan's listed and unlisted manufacturing companies.
