Reactions of Japanese industrial managers to government incentives to innovation — An empirical study

This is a report on a study of the effectiveness of Government Incentive Programs (GIP's) for technological innovation in Japan. Such incentives are aimed at stimulating and promoting Research and Development/Innovation activities in Japanese firms. Effectiveness was measured by the level of recognition and acceptance of the GIP's by company officials in 20 Japanese manufacturing firms, categorized as follows: dynamic, intermediate, and stable industries. All were large firms, according to Japanese standards. The Japanese study was part of a five country cooperative study on this subject, designed and coordinated by the Program of Research on the Management of Research and Development at Northwestern University, Evanston, IL. The set of studies employed a nine-stage model of the process indicating the potential influence of federal actions on the perceptions, attitudes, decisions, and innovation outputs of industrial firms and the further impact of the firms' innovations on the economy. This study focused on four of these stages: awareness of the GIP's, attitudes toward them, general behavior affected by them, and specific decisions related to them. In the Japanese firms, it was found that once a firm is in the “attitude” stage (implying awareness) it will very likely also be in the action stages (general and specific decisions related to the application of the GIP's by the firm). Acceptance of the GIP's (measured by the stage score) by the firms is positively related to the attractiveness of the GIP (measured by a scoring method), and has low correlation with the age of the GIP.