Abstract: Stasis and Change: The Evolution of the Medical Devices Sector in Two Systems of Innovation, c.1990-2010

Maki Umemura


This paper examines the evolution of the medical devices sector in two countries where the state has played divergent roles in economic development: Japan and the United States. These countries are also the two leading markets for medical devices in the world. In particular, this paper focuses on the relative weakness of the medical devices industry in Japan, in contrast to the strengths of the U.S. medical devices industry. The paper uses the "system of innovation" framework, which has elaborated on how the external institutional environments in which firms are embedded shape innovative activity, and how the different institutions and interactions among different actors explain national comparative advantage in certain sectors. Through the experience of the medical devices sector, this paper follows the innovative capacities of firms in the system of innovation and the relative importance of institutions beyond and beneath the nation state in reshaping the nature of innovation. It looks at the roles of SMEs in terms of their engagement in substantial innovation at the technological frontier, and also considers the degree of institutional and organizational malleability in systems over time.