Abstract: R&D Strategy and Knowledge Creation in Japanese Chemical Firms, 1980-2010

Minoru Shimamoto

Abstract

This essay is concerned with the history of Japanese chemical firms' R&D strategies from the 1980s to the present. Although the three "ex-zaibatsu"-related general chemical firms (Mitsubishi Chemical, Mitsui Chemical, and Sumitomo Chemical) invested heavily in R&D in these new areas, they were not able to create the new large-scale businesses that they expected. Meanwhile, some high-performance specialized chemical manufacturers such as Shin-Etsu and Japan Synthetic Rubber (JSR) succeeded in developing new businesses in semiconducting or liquid crystal display materials independent of Ministry of International Trade and Industry (MITI) support. How did this happen? Large general chemical firms (Mitsubishi and the like) had the ability to conduct R&D in all three directions simultaneously, which had the effect of dispersing their efforts among several distinct, yet very ambitious, projects. On the other hand, the smaller, specialized chemical manufacturers concentrated their R&D on their areas of expertise. Further, through established long-term business relationships they obtained specific information about each customer's needs that was instrumental in commercializing their newly developed products. This outcome illustrates the unintended consequences of industrial policy and of the differing approaches to R&D strategy that determined failure and success in Japan’s modern chemical industry.

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