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Purpose: Sustainable functionality development (FD) is decisive to firm's profitability in their new innovation in a competitive market. While functionality instills attractive values in innovative goods leading to a dramatic increase in profit through increasing demand and higher prices, it obsolesces immediately in a competitive market. Therefore, how to maintain sustainable FD trajectory is decisive to firm survival strategy within the context of mega‐competition in a globalizing economy. Notwithstanding an increasing significance of this subject, dynamism enabling a sustainable FD trajectory still remains inside a black box. The purpose of this paper, on the basis of an empirical comparative analysis of the diffusion trajectories for copying machines developed by Canon and Ricoh, is to attempt to elucidate this dynamism. Design/methodology/approach: This paper employed a bi‐logistic growth model utilizing patent data for copying machine technologies. Findings: It was found that early undertaking of 2nd generational copying machinery initiated by Canon played a more decisive role in terms of its higher level of sustainable FD than with its competitor. Originality/value: This paper provides significant insight to firm's management of technology strategy in a competitive market.

A virtuous cycle between effective utilization of external resources and functionality development can be constructed. Given that the timely emergence of new functionality in an efficient way is crucial to a firm's competitive strategy in an era of mega‐competition, construction of such a virtuous cycle is a key element with regard to a firm's technopreneurial strategy. The purpose of this paper is to identify a trigger for such a virtuous cycle.

Empirical comparative analysis taking copying machines development trajectories in Canon and Ricoh and the patent data analysis were conducted.

Cumulative learning from preceding relevant technology development is found to stimulate intra‐technology spillover. Timely intra‐technology spillover from preceding innovation plays a triggering role.

Attempting a broad and comprehensive learning exercise should be strongly encouraged for the effective utilization of external resources for innovation. Fruitful effects of learning should be pursued to the hybrid management of technology fusing indigenous strength and the effects of the comprehensive learning.

Aiming at identifying the trigger emerging a virtuous cycle between effective utilization of external resources and functionality development, core technologies instilled in the copying machines just short of the emergence of functionality development were investigated. In order to anticipate thorough capturing of all dimensions of color technologies utilized for the emergence of new functionality development through indigenous development as well as utilization of externally developed technologies, F‐term retrieval of patent registration data was attempted.

This paper examines the effects of technological distance on the performance of manufacturing sectors relative to the proximity of R&D activities in adjacent prefectures in Japan, and identifies agglomeration effects in innovation and productivity. This analysis provides constructive insights to new start‐up firms, in a more empirical way, to assist them establish R&D centers or production centers in order to leverage performance, thereby increasing the probability of success. A central objective is to elucidate the inside of the “black box” leveraging technological proximity induced by patents registration performance as a proxy for innovation by identifying the governing factors such as R&D investment and technology stock. This can be of great benefit to policy researchers as it provides a better understanding of the dynamism involved in regional innovation systems and the impacts of clustering and research policy. On the basis of the foregoing analysis, the technological activity provides an overview of the dynamism of an industrial structure with respect to the contribution and impact of input (i.e. R&D investment, techology stock), output (i.e. registered patents) and performance (i.e. agglomeration of production) proxies in Japan.

Under the new paradigm of an information society, Japan’s institutions did not function as effeciently as they did in an industrial society. Consequently, Japan experienced a vicious cycle between non‐elastic institutions and insufficient utilization of the potential benefits of IT. However, the deployment of i‐mobile service (NTT DoCoMo’s mobile Internet access service) in the late 1990s provided encouragement that, once potential is exploited, Japan’s institutional systems can effectively stimulate the self‐propagating behavior of IT. The deployment of i‐mode service can be attributed to resonance between IT driven self‐propagating trajectory and “an institutional spiral trajectory” initiated by non‐organizational initiatives based on learning exercise from preceding services such as message exchange, mobile phone and Internet access. While i‐mode service itself was not necessarily successful in the global deployment, it induced mobile phone driven innovation that stimulated activation of Japan’s economy in the early 2000th by playing such a role as catalysis in disseminating spillover of core technologies. This paper, on the basis of an empirical analysis of the deployment trajectory of i‐mode service, attempts to identify the structural sources that enabled the dramatic deployment of IT and subsequent inducement of mobile phone driven innovation in Japan.

Japan’s chemical industry is currently amidst mega‐competition in the paradigm shift from an industrial society to an information society that emerged in the 1990s and consequent globalizing economy. The checkered development trajectory of Japan’s chemical industry has resulted in a fragile structure with increasing geographical constraints and excessive competition in certain markets among a number of small‐scale firms. A simultaneous solution to divergent activities for diversified customer requirements as well as dynamically changing external circumstances and convergence for improving competitiveness in core competent fields is thus essential. This paper attempts to identify an optimal trajectory for Japan’s chemical industry by providing a simultaneous solution to the above contradicting demands. A resilient structure that incorporates an optimal level of diversification based on a specific reinforced core competent field is postulated as a survival strategy in a business environment characterized by mega‐competition. Aiming at demonstrating the significance of a resilience structure, an empirical analysis focusing on Japan’s 28 leading chemical firms was conducted. An optimal level of technological diversification for Japan’s chemical industry firms was thereby identified, thus leading to construction of a resilient structure.

Contrary to its conspicuous achievement as an industrial society, Japan has been experiencing long lasting economic stagnation due to a paradigm shift toward an information society that emerged in the 1990s. This contraction can be attributed to the shift from a growth‐oriented trajectory in an industrial society to a functionality‐oriented trajectory in an information society. However, a noteworthy surge in new innovation in Japan has been observed in recent years in the leading edge innovation challenge in the Japanese manufacturing industry. This trend can largely be attributed to effective assimilation of cross‐functional spillover in an indigenous growth‐oriented trajectory. Thus, elucidation of the inside of the black box of cross‐functional spillover has become a crucially important issue for Japan’s shift to a functionality‐oriented trajectory. Constructive suggestions for this elucidation can be observed in the shifting dynamism from structural‐materials to functional‐materials in the area of certain fine ceramics. This dynamism is based on effective assmilation of cross‐functional spillover and can provide a significant insight for the foregoing elucidation. Prompted by this postulate, this paper attempts to analyze spillover dynamism in fine ceramics and to extract constructive suggestions suggestive to Japan’s shift from a growth‐oriented trajectory to a functionality‐oriented trajectory.

Contrary to its highest R&D intensity, Japan has dramatically decreased its productivity in the 1990s. This can be attributed to a low marginal productivity of technology. Such a productivity decrease compels a delay in R&D, which results in reduced R&D productivity leading to a vicious cycle between R&D and its return. In this context optimal timing of R&D is crucial, particularly during economic stagnation and consequent difficulties in financing R&D. This paper analyzes the rationale for optimal timing of R&D and its interacting relationship with marginal productivity of technology. Empirical analyses are attempted focusing on Japan’s leading high‐technology firms and their innovative products.

While Japan’s automotive industry increased its production during the bubble economy period in the late 1980s, it changed to dramatic decrease due to the bursting of the bubble economy in 1991 resulted in substantial decrease in its international competitiveness. Such dramatic change has urged Japan’s automotive industry to increasing expectation to agile product development (APD) technology implementation. At the same time, dramatic increase in global technology spillover in a globalizing economy has also urged Japan’s automotive industry to effectively utilize technology from the global marketplace. These complicated circumstances highlighted the significance of the effective utilization of potential resources in innovation and require Japan’s automotive industry to restructure its business strategy. These streams prompt us the following hypotheses with respect to the key direction of Japan’s automotive industry restructuring: (i) Increasing expectation to APD technology implementation urges further increase in technology stock; (ii) Challenge to APD technology implementation leads to increasing dependency on spillover technology in the world market; (iii) A disruption of the optimal balance between indigenous technology and effective utilization of assimilated spillover technology leads to decreasing the productivity of technology stock. On the basis of the empirical analysis of techno‐production structure of Japan’s automotive industry over the period 1982‐2000, this paper attempts to demonstrate these hypotheses. Consequently, the optimal trajectory of Japan’s automotive industry in maximizing the effective utilization of potential resources of innovation in an unbounded global economy is suggested.

Aging in Japan is advancing faster than in other major developed nations, and this is expected to have substantial effects on the country’s economic systems, including its social security system. What kind of effect will the falling birth rate, aging society and declining population have on the real estate market? Will the often mentioned real estate price asset meltdown really occur? The purpose of this paper is to address these questions by investigating how much demographic factors affected real estate prices in Japan and the USA.

The authors use regional panel data for Japan and the USA real estate prices and estimate the effects of demographic factors, such as dependency ratio, i.e. the ratio of population aged 65+ to population aged 20-64. For Japan, as no region-by-region quality-adjusted housing price indexes covering the entire country exist, data are constructed by conducting quality adjustment using hedonic regression.

Both in Japan and the USA, real estate prices in a region are inversely correlated with the old age dependency ratio in that region, and positively correlated with the total number of population in that region. The demographic factor had a greater impact on real estate prices in Japan than in the USA. For Japan, it was also found that demographic impact on land prices will be −2.4 per cent per year in 2012-2040, while it was −3.7 per cent per year in 1976-2010, suggesting that aging will continue to have downward pressure on land prices over the next 30 years, although the demographic impact will be slightly smaller than it was in 1976-2010, as the old age dependency ratio will not increase as much as it did before.

Japan’s regional panel data are newly constructed based on a hedonic approach. Analyzing the effect of dependency ratio for Japan and the USA panel data is a new challenge. Forecasting future impact of demographic factor on Japan’s land prices based on the population forecast is a new challenge.

The purpose of this paper is to identify the causal relationship between the independent variables such as process quality and product innovation in regard to the dependent variable of competitiveness, in the manufacturing sector of the automotive industry, specifically for Tier 1 auto parts manufacturing companies in the state of Nuevo León, México.

Based on a thorough review of the literature, an instrument was designed to measure the competitiveness of automotive industry manufacturing; it was applied to Tier 1 suppliers of automotive parts in the state of Nuevo León, México. Various statistical analysis tests were applied to the results; first, Cronbach's alpha to determine the reliability of the instrument, and next, a factor analysis to measure construct validity. In addition, a multiple linear regression analysis was carried out to identify the causal relationships between the variables analysed.

This study found that process quality as well as product innovation have independent and positive causal relationships with respect to competitiveness in automotive manufacturing.

The limitations of this paper are its focus on a single manufacturing sector, application in a single country and small sample size.

Companies that supply automotive parts will be able to invest in the key elements of quality and innovation while focusing their efforts on reinforcing their competitiveness.

Auto parts suppliers will be able to perform specific actions to improve their quality processes through lean manufacturing and quality assurance practices and by designing new and innovative products that will enhance their competitiveness.