Management and policy concerns in the transition to the knowledge driven economy in Japan

In this paper, an analysis is made of the management and policy concerns in the transition to the knowledge driven economy in Japan. A comprehensive viewpoint is taken on what is meant by knowledge driven, embracing more than the new economy, or IT revolution. Japan has been competitive in the old economy, but may be lagging behind in the new economy. The traditional areas of strengths in the old economy is discussed. These strengths are no longer sufficient for meeting mega-competition in the era of the knowledge driven economy. Japanese firms would have to undergo major structural as well as managerial changes in order to face global competition. Japanese corporate weaknesses are linked to the weaknesses in the innovation system. An analysis is made of the weaknesses in the Japanese innovation system such as government policies to strengthen the Science and Technology bases, discussing why they have not been successful. Japan will have to overcome these weaknesses in the innovation system to successfully achieve the transition to the knowledge driven economy.