RIPS' Eye No.41
“Innovate America” and Global Competition: New Reality

PHOTO : KozoOikawa

Kozo Oikawa

Senior Executive Director, Development Bank ofJapan Director, RIPS

Last December, the United States’ Council on Competitiveness published a report titled “Innovate America” (hereinafter the “New Report”). Most Japanese newspapers compared it with its predecessor, the so-called Young Report (1985) on global competition. From the start, Japanese (even more so than Americans) considered the Young Report to be very suggestive and later they saw this view confirmed by the excellent performance the US economy enjoyed throughout the 1990s. Thus, many Japanese anticipate that the New Report will have similar effects, but for the twenty-first century, because like its predecessor it is a comprehensive presentation coordinated by many exponents of US industry (e.g., IBM CEO Samuel Palmisano) to strengthen US competitiveness.

The New Report consists of three main pillars for future competitiveness: talent, investment, and infrastructure. I am particularly impressed by its stress on securing excellent human resources in the era of an aging society．It presents many ideas in fields like education, training, post?9/11 immigration policy, and even Social Security policy. And because President Bush in his recent state of the union address advocated the greatest change in Social Security since the presidency of Franklin D. Roosevelt, it appears that discourse on at least some of the New Report's ideas is off to a good start.

Also, we can see that the New Report differs from its predecessor in terms of perceived relationship between military technologies and overall R&D. The Young Report asserted the importance of intellectual property rights in developing advanced technologies and implied a lack of contribution by military institutions, saying “the Department of Defense and the National Aeronautics and Space Administration should make special efforts to share what they have learned that is applicable to private sector activities.” But we know the present prosperous information society has been realized thanks to the conversion of solely military technologies to dual-use ones such as the Internet, global positioning systems, and so forth. The New Report recognizes this contribution of military technologies properly, while at the same time pointing out that military institutions have recently been sluggish in addressing the long-term, huge risks of future R&D. I might say that the Young Report consistently viewed Japan as a serious external, competitive threat, whereas the New Report focuses more on internal threats.

Japan's current regional environment and socioeconomic conditions are similar to those of theUS in terms of aging society, economic globalization and other areas, but, Japan is completely different from the US in terms of the relationship between military and dualuse technologies.

Therefore, I feel a great need for us to elaborate the strategic policy we need in order to thrive in these more highly competitive times.

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