Increasing number of M&A is being reported. Many are initiated to enhance its competitive position proactively, which marks the difference from those prevalent a decade ago for the survival of business that turned out to be unprofitable. Reorganization improves productivity and frees up redundant resources. But it does not necessarily mean sustainable growth of the economy, unless freed-up resources are utilized to produce higher value-add.
While Japan enjoyed economic recovery, driving it were the industries which formed their base of competitiveness in the ‘80s. Emerging economies brought a renewed opportunity to the once- mature industries. But as the history of Japanese steel, automotive, and electronic industries tells, active demand and fierce competition will eventually facilitate the development of industry clusters in the emerging markets. Developing new industries and thereby keeping relative wealth of domestic market will be crucial in ensuring Japan's sustainable growth. Japanese R&D is highly concentrated in large corporate sector. With its objective being business development for the company, corporate R&D tends to favor self-sufficiency and be kept inside until it's ready for business. Whether it's tailored-medicine or smart power, development of new industries requires "suriawase" of technical seeds across multiple industries and with emerging market application. However rich collective seeds are in the economy, if they are not exposed to multi-disciplinary "suriawase" early enough, it will not result in new industries in competitive timeframe. Technical seeds must be unlocked from the corporate wall. Well-touted practice of supplier management by Japanese automakers is in a sense open innovation albeit it's limited within a supplier network. It's time to extend that network beyond the traditional boundary in order to explore broader application and faster commercialization of technical seeds. Disciplined pursuit of R&D efficiency by corporations and political means to stimulate cross-disciplinary "suriawase" are needed to ensure sustainable growth of Japan.
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