Abstract
This paper attempts to analyze how "the Japanese technology" was formed in the Japanese machine tool industry, and presents how Japanese machine tool builders won the competition for R & D and innovation in the domestic as well as international markets. The key innovation in the machine tool industry in the 1970s was numerically-controlled (NC) machine tools and computerized numerically-controlled (CNC) machine tools. During the competition for innovation of CNC, drastic changes in the rank order of individual firms in terms of amount of production occurred. Prior to the transformation, the "Big 5" companies with a long tradition occupied the largest market share. After the innovation, however, the "Big 3" firms which were not big in size at their origins increased their market share tremendously. This paper explained how this drastic change stemmed from the viewpoint of different attitudes towards innovation and technology management between Big 5 and Big 3.
