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Innovation in Japan?

Mark Marich

Japan’s economy has been in the doldrums for some time, and things are getting worse in the current downturn. If they hope to jumpstart growth, Japan’s leaders need to embrace a new approach to innovation.

A new report from Harvard Business School researchers suggests that Japan’s hierarchical forms of business organization serve to impede innovation by “locking out” certain forms of new ideas and concepts. The authors suggest that Japanese policy makers need to introduce new legislative measures that break up these barriers.

Suggested reforms include stricter antitrust enforcement, improving the legal infrastructure (e.g., supporting training for more business law attorneys), and lowering barriers to foreign investment. All of these steps will help free up the flow of ideas and creativity in Japan’s business sectors.

Working Paper: “Capitalizing on Innovation:  The Case of Japan,” by Robert Dujarric and Andrei Hagiu, Harvard Business School

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