Abstract: The Interplay between Entrepreneurial Initiative and Government Policy: The Shaping of the Japanese Pharmaceutical Industry since 1945

Maki Umemura


The relative importance of entrepreneurs and policy-makers as agents of change in the Japanese pharmaceutical industry has fluctuated since 1945. During the American Occupation, the state assumed an active role in guiding the industry's development. Seeking a local supply of antibiotics, the Occupation authorities prompted Japanese firms with experience in fermentation technology to produce antibiotics. An unintended consequence was the birth of the modern Japanese pharmaceutical industry. Thereafter, the state took a more indirect role in industrial development. Although the 1970s saw a growing role for government in the form of stronger patent protection, only in the 1990s did it return to an actively interventionist approach. This presentation addresses the impact of industrial policy, an issue debated by Chalmers Johnson and his critics. It relates these debates to the Japanese pharmaceutical industry, an understudied sector of the Japanese economy.

BEH On-Line Paper