Institutional Foundations for Innovation-Based Economic Growth
Innovation is essential for the growth of a matured economy like Japan. This report examines the institutional foundations of innovation-based economic growth and explores the role of Japanese government in encouraging innovation by Japanese companies and entrepreneurs. We start by summarizing eleven elements that characterize the ecosystem of Silicon Valley, which is often considered to be the best example of innovation-based economy. We then discuss how those elements fit with six institutional foundations that support the innovation-based economic growth. Those are (A) financial system that provides funding for risky ventures, (B) labor market that provides high quality, diverse and mobile human resources, (C) interactions between industry, universities, and government to generate a constant stream of innovative ideas, products, and businesses, (D) industrial organization where large established firms and small startups grow together, (E) social system that encourage entrepreneurship, and (F) professionals that assist establishment and growth of startups. Japan has not yet established these institutional foundations. The government can help by encouraging development of these institutional foundations. If it is difficult to establish a certain institutional foundation in a short time, the government may instead help Japanese firms and entrepreneurs to tap the Silicon Valley ecosystem directly. The Japanese government has been trying numerous industrial policies that may encourage development of some of the six institutional foundations, as well as policies that directly support R&D as precursors for innovation. The latest attempts are found in the Abenomics growth strategy. Thus, we find that the underdevelopment of those institutions in Japan is not due to the lack of policy ideas. The problem has been the shortcoming in the efforts of policy evaluation to find out which policy interventions are actually promising and how those should be implemented to guarantee effectiveness. The policies that help Japanese firms and entrepreneurs to directly benefit from the Silicon Valley ecosystem have been lacking. It is worthwhile to try those policies if those are accompanied by rigorous policy evaluation and adjustments to find the effective policies.
Masahiko Aoki Memorial Conference
The Shorenstein Asia-Pacific Research Center (APARC) Japan Program with the Freeman Spogli Institute of International Studies (FSI) as well as the Stanford Graduate School of Business, the Stanford Institute for Economic Policy Research (SIEPR), and the Stanford Department of Economics will be hosting a memorial conference and service on December 4th and 5th in honor of the late Masahiko Aoki. December 4th will be a full day conference featuring topics within Masa's extensive field of study and research including theoretical and applied economics, theory of institutions, corporate architecture and governance, and the Japanese and Chinese economies. The day will culminate with a cocktail reception. The Celebration of Life on December 5th will be a gathering for family and friends in remembrance of Masa with a light lunch reception to follow.
December 4, 2015
Memorial Conference
Agenda
8:30am - 8:50am Breakfast & Registration
8:50am - 9:00am Welcome Remarks: Takeo Hoshi (Stanford University)
9:00am - 9:30am Kenneth Arrow (Stanford University), “The Role of Organizational Structure in the Economy”
9:30am - 10:00am Paul Milgrom (Stanford University), "Designing the US Incentive Auction"
10:00am - 10:30am Break
10:30am - 11:00am Koichi Hamada, Yale University, “Masahiko Aoki: A Social Scientist"
11:00am - 11:30am Kotaro Suzumura (Hitotsubashi University), “Masahiko Aoki (1938-2015): Recollections of his Pilgrimage and Legacy in Japan”
11:30am - 12:00pm Yingyi Qian (Tsinghua University), "Masahiko Aoki and China"
12:00pm - 1:15pm Lunch
1:15pm - 1:45pm Jiahua Che (Chinese University of Hong Kong) presenting Masahiko Aoki's
"Three-person game of institutional resilience vc transition: A model and
China-Japan comparative history"
1:45pm - 2:15pm Miguel Angel Garcia Cestona (Universitat Autonoma de Barcelona), "Corporate Governance and Employee Participation: some lessons from Mondragon"
2:15pm - 2:45pm Herbert Gintis (Santa Fe Institute), "General Social Equilibrium and its Dynamics"
2:45pm - 3:15pm Break
3:15pm - 3:45pm Dale Jorgenson (Harvard University), "
3:45pm - 4:15pm Avner Greif (Stanford University), "Comparative Institutional Analysis: China and Europe Compared"
4:15pm - 4:45pm Francis Fukuyama (Stanford University), "Asian Kinship, Industrial Structure, and Trust in Government"
4:45pm - 5:00pm Closing, Takeo Hoshi (Stanford University)
5:00pm - 6:00pm Cocktail Reception
*Agenda is subject to change and will be updated as speakers are confirmed
December 5, 2015
Celebration of Life
Agenda
10:30am - 11:00am Registration
11:00am - 12:00pm Celebration of Life
12:00pm - 1:30pm Lunch Reception
Corporate Affiliates Program welcomes 2015-16 fellows
As the new academic year gets underway, the Walter H. Shorenstein Asia-Pacific Research Center’s Corporate Affiliates Program is excited to welcome its new class of fellows to Stanford University:
- Yuta Aikawa, Ministry of Economy, Trade & Industry, Japan
- Wataru Fukuda, Shizuoka Prefectural Government
- Huang (Catherine) Huang, Beijing Shanghe Shiji Investment Company
- Avni Jethwa, Reliance Life Sciences
- Satoshi Koyanagi, Ministry of Economy, Trade & Industry, Japan
- An Ma, PetroChina
- Huaxiang Ma, Peking University
- Yuichiro Muramatsu, Mitsubishi Electric
- Tsuzuri Sakamaki, Ministry of Finance, Japan
- Tsuneo Sasai, The Asahi Shimbun
- Ravishankar Shivani, Reliance Life Sciences
- Aki Takahashi, Nissoken
- Mariko Takeuchi, Sumitomo Corporation
- Hideaki Tamori, The Asahi Shimbun
- Ryo Washizaki, Japan Patent Office
- Hung-Jen (Fred) Yang, MissionCare
During their stay at Stanford University, the fellows will audit classes, work on English skills, and conduct individual research projects; at the end of the year they will make a formal presentation on the findings from their research. During their stay at the center, they will have the opportunity to consult with Shorenstein APARC's scholars and attend events featuring visiting experts from around the world. The fellows will also participate in special events and site visits to gain a firsthand understanding of business, society and culture in the United States.
DBJ Initiatives for Japan's Growth Strategy
Toru Hashimoto was a member of the Board of Directors and President and Chief Executive Officer of the Development Bank of Japan Inc. (DBJ) from June 2011 to June 2015. He is currently Senior Advisor of the DBJ. Previously, Mr. Hashimoto was Chairman of Deutsche Securities Inc., an investment banking subsidiary in Japan of Deutsche Bank, from July 2003 to September 2008 after serving as Senior Advisor from January 2003 to June 2003. Prior to joining Deutsche Securities, he was Chairman of the Board of Directors of the Fuji Bank, Limited (currently the Mizuho Financial Group) from June 1996 to March 2002. Earlier, he was President and Chief Executive Officer from 1991 to 1996. He began his career at the bank in 1957. Mr. Hashimoto served as Vice Chairman of the Board of Councilors of the Japan Federation of Economic Organizations from 1997 to 2001 and Chairman of the Japanese Bankers Association from 1995 to 1996. He was also Vice Chairman of the Institute of International Finance, Inc. from 1997 to 1999. Mr. Hashimoto received a bachelor's degree in law from the University of Tokyo in 1957. He was a Fulbright Scholar at the Graduate School of Economics of the University of Kansas from 1959 to 1960.
The IT-Enabled Services Transformation, Cloud Computing, and New Production Paradigms: Implications for Dynamics of Competition in the US and Asia
Agenda
4:15pm: Doors open
4:30pm-5:30pm: Lecture, followed by discussion
5:30pm-6:00pm: Networking
For more information about the Silicon Valley-New Japan Project please visit: http://www.stanford-svnj.org/
Booseung Chang
Booseung Chang joins the Walter H. Shorenstein Asia-Pacific Research Center as Shorenstein Postdoctoral Fellow for the 2015-16 year. His research interests span comparative foreign policy and policymaking process.
Currently, he is working on two projects. One deals with application of game-theoretic approaches to the inter-Korean relations. Specifically, he is interested in how the tools of the game theory can contribute to the improvement of the cooperation as well as the security in the Korean peninsula. The topic of the other article will be the change of Japanese foreign policy. The goal of this article is to shed light on the implications of the recent change in Japanese security-related laws and to measure its domestic, regional, and global impact.
His dissertation, which he seeks to build upon, is titled “The Sources of Japanese Conduct: Asymmetric Security Dependence, Role Conceptions, and the Reactive Behavior in response to U.S. Demands.” It is a qualitative comparative case study of how key U.S. allies in Asia – namely Japan and South Korea – and major powers in Europe - the United Kingdom and France - responded to the U.S.-led Persian Gulf War and the Iraq War.
Chang completed his doctorate in political science from the Paul H. Nitze School of Advanced International Studies (SAIS) of Johns Hopkins University in 2014.
Before joining the Walter H. Shorenstein Asia-Pacific Research Center, he worked for the South Korean Foreign Service for 15 years between 2000 and 2015. During the service, he mostly worked on Northeast Asian affairs including the North Korean nuclear issue. He spent three years in the embassy in Beijing and two and a half years in the consulate general in Vladivostok.
Shinzo Abe and the Reality of Japanese Democracy
Writing for the National Bureau of Asian Research, Daniel Sneider examines Prime Minister Shinzo Abe’s recent attempts to revise Japan’s defense guidelines. He considers how these attempts may affect the Japanese domestic political landscape and the implications that Abe’s actions may have for key issues in the U.S.-Japan alliance, including the Trans-Pacific Partnership and U.S. military interests in Okinawa.
Amanda Davidovich
Shorenstein APARC
Encina Hall, Room E301
Stanford, CA 94305-6055
Amanda Stoeckicht joined the the Walter H. Shorenstein Asia-Pacific Research Center's Japan Program in July of 2015. Prior to Stanford, she worked in recruiting as well as finance and operations. She graduated from the University of British Columbia with a bachelor's degree in Japanese language and culture.
Stanford scholars weigh in on Shinzo Abe's WWII statement
Marking seventy years since the end of World War II, Japanese Prime Minister Shinzo Abe expressed “profound grief” on Friday for his country’s actions. While pointing to short comings in the statement, the Stanford scholars said the prime minister’s words represented a genuine effort to reflect on the past and provided opportunities to improve relations in the region.
The highly anticipated statement, issued on behalf of the Japanese cabinet, was closely followed by its East Asian neighbors who have raised concerns over Japan’s views of the wartime era.
Leaders of South Korea and China have said Japan has not apologized fully for crimes committed during WWII and each dispute historical narratives seen in the others’ textbooks, popular culture and other domains.
Advancing historical reconciliation in East Asia is a key research area of the Walter H. Shorenstein Asia-Pacific Research Center. The center leads a research project, Divided Memories and Reconciliation, which has produced numerous articles and books, including a ground breaking comparative study of high school history textbooks in China, Japan, South Korea, Taiwan and the United States.
In May 2014, the center convened an international conference “Pathways to Reconciliation” on historical issues, co-sponsored by the Trilateral Cooperation Secretariat, the governmental organization promoting Japan-China-South Korea trilateral cooperation.
Earlier this year, the Japan Program asked Stanford scholars to write their own version of the 70th anniversary statement as if they were the prime minister of Japan. The scholars’ statements were compiled into a report, published in May 2015.
Eight scholars contributed to the exercise in an effort “to understand the diversity of reasonable views on the issue of Japan’s responsibility for the cruel and violent war and Japan’s role in building a peaceful and prosperous world,” the introduction stated.
Themes that emerged in the report included a need for Abe to show heartfelt remorse about Japan’s actions during WWII and its desire to work toward a peaceful future.
Three noted Japan experts who contributed to that report offered their analysis of the prime minister’s statement issued yesterday in Tokyo.
Below are brief summaries of their analysis, you may click on each link to expand in full.
Duus recognizes that Abe’s statement offers a reiteration of the statements made by Prime Ministers Murayama and Koizumi by including four key words – aggression, colonial rule, apology and remorse. Unlike past statements, however, Abe’s begins by putting war in the historical context and offers a more explicit statement of the victims of the war, not only the three million Japanese but also citizens of China, Southeast Asia and the Pacific islands. The statement can be viewed as “a small but important step toward a truce in the history wars that have raged in East Asia for the last three decades,” he says. However, Abe's attempt at reconciliation will have little effect if he does not rein in contrary actions by neo-nationalists in his own party.
Peter Duus is the William H. Bonsall Professor of Japanese History, emeritus; and a senior fellow, by courtesy, Hoover Institution, Stanford University.
Hoshi notes that Abe’s statement mentions past apologies expressed by the Japanese government, but has no explicit apology from the current administration. He says there are two surprising elements about the statement. The first is the length – it is much larger than predecessors Murayama and Koizumi at 1,664 words in English and 3,970 characters in Japanese. The second is the emphasis on history rather than on forward-looking components. He says it is commendable that Abe provided an expanded view of history. Hoshi notes that it is nearly impossible to satisfy everyone’s views in such a statement, as scholars witnessed firsthand when working on the Japan Program project.
Takeo Hoshi is the Henri H. and Tomoye Takahashi Senior Fellow in Japanese Studies in the Freeman Spogli Institute for International Studies; a professor (by courtesy) of finance at the Graduate School of Business; and director of the Japan Program at the Shorenstein Asia-Pacific Research Center, Stanford University.
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Response by Daniel Sneider
Sneider says Abe’s statement must be judged on following criteria: that it is a valid effort to draw lessons from Japan’s wartime past and that it contributes to the improvement of relations in Northeast Asia. He says the statement advances these goals, but there remain a few caveats. Sneider says the version of history communicated “will not satisfy many people, including many historians,” but that it does move away from the idea that revisionist Japan was in a war of self-defense not aggression. To move Japan, China and South Korea toward reconciliation, the prime minister and his cabinet must embrace the spirit of the statement in full and open the door to convening a long-delayed trilateral summit.
A version of this essay was also published by Nippon in Japanese and English.
Daniel Sneider is the associate director for research at the Shorenstein Asia-Pacific Research Center, Stanford University.