Innovation, Competitive Advantage 1990s, Us-japan Economic Development

There are some difference in economic development between U. S and Japan in the last decade of 20 century. American economy increased continuously, while Japanese economy bugged down in economic depression after the collapse of eco- nomic bubble. The writer believe that it based on the difference in competitive advantage between U. S and Japan. It is the difference in competitive advantage and competitive power of enterprise, industry and country that lead to different e- conomic development. What causes the reversion of the competitive status be- tween the two countries? The writer argues that the differences in innovation and its effect mould different competitive status and lead to different development re- sults. Technology innovation and institution innovation that all belong to innova- tion have the same thinking nature. They play a important role in creating com- petitive advantage. There are three ways for a firm to gain competitive advantage: cost leadership, differentiation and focus. Technology innovation can lead to the cost decline and at the same time enforce the differentiation. The enterprise also can get the advantage of initiative from technology innovation. Institution innova- tion influences competitive advantage of firm in two ways. Frist,it can creat a e- lastic institution circumstance. Second, it can prompt the technology innovation. The enterprise?s advantage will lead to the competitive advantage of industry and country. There are some difference in innovation and its effect between two coun- tries. On one hand, about technology innoration ,both American and Japanese em- phasize the importance of the innovation. But their enterprise have different inno- vation pattern. The Japanese 揺volutionary 損attern is suit to the particular time and put an important effect on Janpanese economic miracle. However, it is unfit for today?s condition. American ?revolutionary?pattern show great vitality in nowadays. Its advantage lies in the ability to judge the direction of technology in- novation and industry development. On the other hand, about institution innova- tion,American market institution is more perfect than Japanese. American rejust- ed lots of its regulation from late 80s to 90s after it realized its advantage dacay. This created a good institution eicrumstance and prompted technology innovation of its enterprise. Japanese pastwar economic institution faced crisis under new II Abstaret condition. It is the crisis of basic market institution. But Japanese goverrnent didn?t research the source of the crisis but did what the American goverment do. We can conclude that the long economic depression of Japanese in 199Os resulted from the wrong institution innovation strategy and degree.