DURING THE past decade, the U.S. experienced the lowest growth in manufacturing productivity of any of the seven major industrialized nations. The causes of this lag are myriad, and no one fix will produce a solution. But the direct link between productivity growth and innovation inevitably focuses attention on this crucial component of industrial health.
Of the many likely explanations for the relatively low level of innovation one, a lack of basic R&D, has been pretty well ruled out. But serious deficiencies appear at the very next steps: the direct transfer of new advances into the marketplace, and their evolution and application to related products and processes. Here there is no doubt that other countries, especially Japan, are outperforming us.
The image of a Japanese economic system that can do no wrong becoming something of a popular myth. Certainly there has been some romanticizing of Japanese achievements. But there has also been little recognition that, on the whole, Japan's record in purely technological innovation has been quite weak. On the other hand, its strengths in the realm of social innovation -- which make it possible to quickly apply or adapt to new technologies and to get the highest productivity levels from old ones -- are tremendous.
The Japanese have developed numerous ways to bridge the gap between the interests of workers and management, easing the introduction of new technologies that may displace some workers or require extensive restraining. Quality-control circles bring workers and foremen together to identify and solve production problems, helping to give many Japanese products an unrivaled reputation for reliability. Ways have been devised to keep worker motivation high, despite the fact that pay is largely on the basis of seniority. At the national level, policies have been developed to support promising young industries and to hasten the decline of obsolencent ones. A slow but reliable consensus-building process for major decisions substitutes for an adversarial system, not only in labor-management relations, but in government-business dealings and in the regulatory process as well. A measure of the difference between the Japanese and U.S. approach is that the United States has 20 times more lawyers per person than Japan.
Possibly the most important of Japan's recent social innovations has been in conscious determination to learn from other countries' successes -- copying, adapting or improving as the situation demands. Nowhere is the American weakness more evident. While there is widespread recognition here that social problems are holding back technological change and hence industrial growth, there is little interest in how the Japanese and others have solved these problems, and nothing has been done to systematically study their solutions and how they might be applied in this country. Meanwhile, the Japanese, well aware that their record has been weak in the purely technical realm and that they cannot afford to rest on the achievements of the past decade, are losing no time in developing programs to learn how other societies foster technical creativity. If the United States wishes to regain its industrial leadership, there is a lot that can be learned from the Japanese success -- first and foremost the importance of learning to learn from others.