Global Competition and Technology Standards: Japan’s Quest for Techno-Regionalism

Global Competition and Technology Standards:

Japan’s Quest for Techno-Regionalism

Hidetaka Yoshimatsu

This article examines Japan’s evolving commitments to technology develop-ment and technology diffusion in Asia. It explores Japan’s technology strate-gies in three areas—Internet protocol, open source software, and horology—focusing on the importance of technology standards. The development anddiffusion of technology standards has become one of the core elements in es-tablishing industrial competitiveness. The importance of technology standardsencouraged the Japanese government and firms to pursue a regional policy todevelop and diffuse new technological ideas and standards in Asia. Japan’scommitments were accepted by its neighbors because they could obtain vari-ous benefits from collaboration with Japan, such as technological exchanges,technology transfer, and financial aid.

KEYWORDS: Japan, Asia, technology policy, Internet protocol, open source soft-ware, horology

The Japanese economy and Japanese industry experienced a decade-long recession in the 1990s. The collapse of the bubble economy

in the early 1990s led to a sharp decline in stock and land prices. Fi-nancial turmoil due to nonperforming loans impeded a return togrowth, and bankruptcies and unemployment rose to historical levels.The keiretsu networks, which were regarded as the base of Japanesebusiness strength, eroded over the course of the decade.

Given the gradual decline in economic performance and overall in-dustrial competitiveness, the Japanese government and firms intensi-fied a strategy to utilize core industrial competencies for the revitaliza-tion of the Japanese economy. Japanese industry retained a competitiveedge in digital consumer products, car navigation systems, nanotech-nology, and a number of other areas. A critical strategy in these and

Journal of East Asian Studies 7 (2007), 439–468

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other sectors is to make the particular technology a standard in the mar-ket. While the Japanese economy experienced a serious setback in the1990s, trade in goods, services, and technologies between Japan andAsia expanded steadily during that period. Japanese manufacturerscontinued to engage in foreign direct investment (FDI) in East Asia,which led to the formation of dense production networks in the region.

Close economic linkages with Asia and the growing importance oftechnology for industrial competition influenced the technology poli-cies and strategies of both the Japanese government and Japanesefirms. In this article, I examine Japan’s evolving commitments to tech-nology development and technology diffusion in Asia by examining theimportance of technology standards. I advance three arguments in thediscussion. First, the development and diffusion of technology stan-dards have become one of the core elements in establishing industrialcompetitiveness and thus in shaping a state’s technology policy. Sec-ond, the Japanese government and Japanese firms pursued a regionalapproach—promoting collaboration with Asian countries in developingand diffusing new technological ideas and standards. Third, Japan’sneighboring countries accepted and supported Japanese technologystandards largely because they hoped to secure greater opportunities forjoint technology development and technology transfer.

I begin with the literature on the state’s preferences for technolog-ical advance and the implications of technology standards. I then in-vestigate the policies and strategies of the Japanese government andJapanese firms regarding the development of particular technologiesand their diffusion in Asia. The empirical contribution of the piece fo-cuses on three sectors: Internet protocol, open source software, andhorology.

Industrial Competitiveness and Technology Standards

What kind of strategies does a government adopt to improve the tech-nological base and increase the technological capabilities of its firms?When a state remains at an early stage of industrialization, an inward-looking technology policy seems to be appropriate. The state fosters thetechnologically important sectors by providing export subsidies andgovernment procurement and by regulating the entry of foreign rivalfirms and products into the domestic market. In addition, major firmscreate collaborative relationships to achieve common technical goals,

440 Global Competition and Technology Standards

and the government sustains such corporate activities by organizinggovernment-funded research consortia or providing tax breaks, gener-ous subsidies, and loans. Through such strategies, the governmentseeks to raise its capabilities to learn and adopt standardized foreigntechnology for mass production.

However, a variety of forces have revealed limitations of theclosed, inward-looking approach to technological development, espe-cially for advanced states. First, changes in the global business envi-ronment make inward-looking technology policy less feasible. Firmsneed access to much larger markets and technological bases in order tofinance the huge and rising costs of conducting research and develop-ment (R&D) for new innovation. The domestic market is often toosmall to secure sufficient economies of scale and financial and humanresources. Collaboration with foreign firms has become increasinglyimportant for securing access to the latest R&D and the funding for it.This is especially the case for firms from advanced states because of theneed to establish a solid position in all major markets in the so-calledtriad of high-growth Asia, North America, and Europe.

Second, trends toward economic openness and market liberaliza-tion have gained momentum. States are pursuing deregulation and pri-vatization measures, reducing the scope of government intervention inthe market and creating more transparent business-government rela-tions. Undue state intervention and tight relationships with the govern-ment might have been valuable in the past, but they can also impede in-novation in the private sector.

Third, the development of multilateral trade institutions made itdifficult to adopt a closed technology policy. Differing national techni-cal standards have acted as substantial nontariff barriers to internationaltrade. To rectify this situation, the World Trade Organization (WTO)system urges harmonized international or regional standards. For in-stance, the Agreement on Technical Barriers to Trade of the WTO stip-ulates that “where technical regulations are required and relevant inter-national standards exist or their completion is imminent, Members shalluse them, or the relevant parts of them, as a basis for their technical reg-ulations.”1 Thus, the WTO urges member states to promote more opentechnology policy.

Importantly, the emergence of a new liberalized global economydoes not straightforwardly undermine interstate competition for techno-logical advance. To the contrary, increased globalization can magnify thepotential costs and benefits that result from any one country’s competi-tive advantage or disadvantage.2 Moreover, intensive global competition

441Hidetaka Yoshimatsu

has created a world dominated by new types of technology-driven mo-nopolies and oligopolies that can distort the nature of competition in themarketplace.3 If a state hopes to hold firms and sectors with the potentialof challenging these monopolies and oligopolies, it has strong incentivesto prop up these firms and sectors by enhancing their competitive edge.

In this context, there is a vital role to be played by technology stan-dards. Technology standards are valuable in industrial sectors wherenetwork externalities matter. Where network externalities exist, theutility that users can derive from consumption of a given good or ser-vice increases with the growing number of the installed base of users.4

These network externalities, however, require compatibility and inter-operability in the exchange of data and products and raise the im-portance of the broader diffusion of standards that cover such inter-operability and compatibility. Technology standards also providesubstantial benefits for consumers by bolstering the credibility of tech-nologies as well as by expanding features that are common across allbrands.5

Thus, technology standards change the nature of corporate compe-tition. Even if a firm invents an innovative technology, or a whole in-dustry in a particular country produces a cluster of new technologies,that firm or industry cannot become a winner if it fails to make the tech-nologies accepted in the regional or global market. Firms have to tran-sit from their own to international standards. Government should havestrong incentives to encourage firms to make efforts to diffuse technol-ogy standards in the marketplace.

Two questions arise regarding the development and dispersion ofspecific standards. The first is how the government and firms cooper-ate to establish and diffuse particular standards. The characteristics ofstandards themselves matter. It is difficult to sustain a bad standard ifthere is a competing product that is superior. At the same time, pastcompetition over standardization suggests that a technology standardthat holds advantages in such economic variables as price and qualityalone does not always win in competition.6 Governments and firms canmake their standards win in the standarization game by strategicallylocking in such standards in the broader markets.

The second question is why the second-tier states agree to acceptstandards that the first-tier state develops and tries to advance, particu-larly given that they also have strong incentives to improve their owntechnological capabilities. Geographical proximity, overall economiclinkages with the first-tier state, and the offer of various kinds of pay-offs—including opportunities for joint research and technology transfer


and exchanges—are all likely to affect the preferences and behavior ofthe second-tier countries.

I address those two questions by examining Japan’s technology pol-icy toward Asia. Japan was long regarded as a paradigmatic “techno-nationalist” state with strong domestic orientation.7 Its government harnessed indigenous technological capacity by assisting corporate in-vestment and allocating credit to targeted sectors with an eye to creatinginternationally competitive firms. In the development process, the gov-ernment limited the entry of foreign capital stringently, although ad-vanced foreign technology was aggressively absorbed. In the 1990s, theJapanese government attempted to rejuvenate the depressed domesticeconomy by carrying out a neoliberal reform program. While the gov-ernment welcomed the entry of foreign firms into the Japanese market,it began to sponsor internationalized cooperative research programs.

However, the extent to which the Japanese government and Japa-nese business changed their philosophy of technological developmenthas been the subject of controversy. Some scholars give credit to Japan’sshift to a more open technology policy. For instance, Gregory Corningargues that Japan’s R&D programs represented by the Human FrontierScience Program, Intelligent Manufacturing System Program, and RealWorld Computing Program invited participation of foreign firms inorder to leverage complementary resources and capabilities.8 Others arestill skeptical about such changes toward a more open technology pol-icy, asserting that Japan’s core ideologies of national self-sufficiencyand techno-nationalism have remained fundamentally unchanged.9

In examining Japan’s technology policy toward Asia, it is neces-sary to consider the policy implications that derive from deepeningeconomic linkages between Japan and Asia. Production and distribu-tion networks that Japanese firms formed through FDI into Asia in theearly 1990s created a sophisticated division of labor in the region.10

Linkages through FDI contributed to the steady rise of East Asia as agroup in Japan’s overall trade. China, including Hong Kong, surpassedthe United States as the primary trade partner in 2004. In accordancewith the enhanced economic interdependence, the Japanese govern-ment has intensified its policy-oriented commitments to Asia, aiming atthe diffusion of particular ideas about administrative guidance and fi-nancial architectures.11

These changes hint at the possibility that the Japanese governmentand Japanese firms have also shifted their technology policy towardAsia by intensifying their incentives to diffuse their own technologicalinnovations and ideas. The necessity of diffusing technology standards


induces the Japanese state to pursue a regionally oriented technologypolicy, in addition to a domestically oriented one, in order to make itsfirms compete against their foreign rivals that dominate the major mar-kets in the world. The Japanese state seeks to build a “regional base”where it retains more political and economic leverage in strengtheningits firms’ position in the global technology game. The neighboring coun-tries accept Japanese initiatives for technology development largely be-cause they can secure access to opportunities for joint technology de-velopment and technology transfer.

Proceeding from these assumptions, I examine Japan’s technologypolicies in three industrial segments: Internet protocol, open source soft-ware, and horology. The three cases are selected because of differencesin the standardization process. The standardization process is normallyclassified in two categories. The first is the market-based model inwhich several competing standards are introduced into the market andthe most broadly used one becomes the de facto standard. The second isthe committee-based model in which the formal standardization author-ity formed by governments or international organizations decides on thede jure standard.

The horological case was selected as representative of the commit-tee-based model. The standards for watches are discussed and decidedon at the Horology Technical Committee of the International Organiza-tion for Standardization (ISO/TC114). The cases of Internet protocoland open source software are examples of the market-based model.However, there are nuanced differences between the two cases. In thecase of open source software, the developer of open source softwareaims to challenge the existing dominant standard: Microsoft Windows.This is a competition within the same generation. In the Internet proto-col case, companies seek to diffuse a newly developed, next-generationstandard, and precommercial competition is fierce.

The Pursuit of New Internet Protocol Standards

Corporate Strategies and Government Policies

The technology that this section highlights is Internet protocol versionsix (IPv6). The Internet protocol is data-oriented protocol used forcommunicating data across a packet-switched Internetwork. The Inter-net protocol version four (IPv4) was the first version of protocol to bewidely deployed. But IPv4, which uses 32-bit addresses, has the prob-


lem of a limited number of Internet addresses (4.3 billion). The next-generation protocol, IPv6, uses 128-bit addresses and can rectify thisproblem by offering a virtually infinite number of addresses. Even inearly 2006, the live addresses in the publicly accessible Internet werestill dominated by IPv4, and IPv6 accounted for a tiny share. However,quite a few firms and governments have been eager to deploy IPv6 anddevelop IPv6-related technologies and products.

Although quite a few Asian states, including China, India, andSouth Korea, set up a national strategy for IPv6, Japan was particularlyserious in its development and diffusion. Japanese information tech-nology (IT) firms did not establish a solid position in the Internet busi-ness due to a failure to enter the market in a timely fashion. For a longtime, the routers that underpinned the PIv4 network were dominated bya single US firm, Cisco Systems. The company accounted for morethan 70 percent of Internet addresses under the IPv4 network. Routersmade by different firms could be used on the Internet on condition thatthey complied with the de facto standard set by Cisco Systems.

Japanese IT firms aimed to expand their business in the Internet ageby spearheading the development and diffusion of IPv6. IPv6’s merit ofan infinite number of addresses was particularly important for JapaneseIT firms that hoped to take the lead in creating a ubiquitous Internet so-ciety where various kinds of digital electronic products would be con-nected through the Internet. In particular, they aimed to establish inter-national competitiveness by promoting collaboration between digitalconsumer appliances (hardware) and broadband (service).

In the new millennium, Japanese IT firms intensified their effortsto develop IPv6-related technologies. In October 2000, the IPv6 Pro-motion Council was established by eighteen firms and universities. Thecouncil aimed to assist in the development and diffusion of IPv6-basedapplications and to help ensure a smooth transition from IPv4 to IPv6.12

The executive board members included all major Japanese IT firms,such as NEC, Fujitsu, Toshiba, Matsushita, Sony, and NTT Communi-cations. The council set up four working groups and implemented trialtests for IPv6-compliant consumer electronic products.

In May 2003, Hitachi, Cisco Systems, NEC, Fujitsu, and JuniperNetworks announced that they would jointly develop standard softwarefor connecting networks for IPv6. The software would enable data tobe transmitted freely across equipment by different companies runningdifferent software. The standard software was based on the result of theparticipation of five firms in the “Japan Gigabit Network Experiment”sustained by the Telecommunications Advancement Organisation of


Japan, an organization affiliated with the Ministry of Internal Affairsand Communications (MIC).13 The experiment connected thirty-sevenrouters from different manufacturers in a nationwide network transmit-ting data at 2.4 gigabits per second.

The Japanese government sought to support the development ofIPv6 by incorporating this objective into Japan’s overall IT strategy: e-Japan strategy.14 The e-Japan strategy issued in January 2001 raisedan objective of promoting “a shift to the Internet networks equippedwith IPv6 that provides enough address space and stricter protection ofprivacy and network security, in anticipation of various Internet accessdevices and digital consumer electronics that will become popular andalways be connected to the Internet.” In August 2002, MIC received theSecond Interim Report on Internet Policy Direction in the Twenty-firstCentury from the Telecommunications Council. The report, the mostcomprehensive plan for Internet policy, showed concrete measures forthe introduction and distribution of IPv6 as well as guidelines for thetransition of Internet infrastructures to IPv6-based ones. The primaryobjective was that Japan shall distribute the transitional model to othercountries and thereby contribute to the worldwide development ofIPv6.

The government has adopted several measures to sustain the de-velopment and diffusion of IPv6. The first was support for R&D andfield experiments for IPv6 and content distribution. The IPv6 Develop-ment Field Trial was conducted with an annual budget of 2 billion yenin 2003–2005. This trial aimed to conduct demonstration experimentsto realize a smooth transition of the whole infrastructure from IPv4 toIPv6. The second was favorable tax treatment for the use of IPv6-readyrouters. Qualified firms that introduced IPv6-ready routers were enti-tled to write off 12 percent of installation expense, which exceeded theregular legal depreciation limit for calculating the corporate tax. Thefixed property tax to be paid to the local government was also cut by25 percent.

IPv6 and IT Cooperation with Asia

The diffusion of IPv6 was incorporated into Japan’s overall IT strategytoward Asia. The main pillar for Japan’s IT policy for Asia was the AsiaBroadband Program (ABP), which the Japanese government formallylaunched in March 2003.15 The program aimed to make Asia a globalinformation hub in parallel to Europe and North America by 2010through policies for preparing network infrastructures pertaining to


broadband platforms and relevant policies for introducing and diffusingbroadband platforms. Among seven goals for the program, a concreteone was to “facilitate the transition of IPv4 networks to IPv6-ready net-works in Asia.”16 In order to achieve this goal, the program stipulateda number of concrete measures: to establish transition technologies andtransition models, to establish IPv6-ready satellite technologies com-patible with terrestrial systems through R&D, and to encourage thewidespread use of the fruit of joint experiments in Asian countries.

In August 2004, the Japanese government presented the ABP at thefirst Association of Southeast Asian Nations Plus Three (ASEAN+3)Telecommunications and IT Ministers Meeting. At the meeting, the min-isters deliberated on measures for promoting the preparation of broad-band platforms and capacity building. They also reached a commonrecognition that cooperation between ASEAN and the three NortheastAsian countries should be further strengthened. Concrete programs toimplement the ABP followed. In February 2004, MIC opened a website,Asia Broadband Program, which included an outline of the ABP, vari-ous programs, and future policy directions.17 The following month, theAsia Broadband Symposium was held in Tokyo, where lectures by ex-perts and a panel discussion by government officials from Asian coun-tries were organized.

What benefits did Asian countries draw by collaborating with theABP? Several Asian countries could secure official development assis-tance (ODA) funds through the ABP. For instance, Vietnam obtainedloans of 19.4 billion yen in 2003 for the North-South Submarine FibreOptic Cable Link project. In the same year, Japan provided Laos with agrant of 220 million yen for the Implementation of International Tele-phone Switching System project.18 As for IPv6 development in the ABP,some Asian countries could implement joint projects and experimentswith Japanese funds. Japan and Singapore implemented IPv6 large-scalemulticast technology and IPv6 dynamic band allocation and manage-ment technology. Moreover, Japan and China undertook practical appli-cation test programs for an international communications system usingIPv6 and for a joint international remote content development system.19

In addition to efforts to create wide recognition of IPv6 at the re-gional level, the Japanese government attempted to develop and diffuseIPv6 in the narrower Northeast Asian framework. In January 2002,MIC minister Toranosuke Katayama made a formal visit to Seoul andBeijing. At the meeting in Korea, Katayama and his Korean counter-part, Yang Seung-taik, agreed to promote cooperation in the develop-ment and standardization efforts for the fourth-generation (4G) mobile


communications systems as well as in IT policies, including competitionpolicies, broadband Internet policies, and e-commerce. At a ministerialmeeting in China, Katayama and his Chinese counterpart, Wu Jichuan,signed a memorandum of understanding to promote collaborative ef-forts in next-generation Internet (IPv6) and third-generation (3G) mo-bile communications systems. Moreover, both ministers agreed to con-struct a Japan-China information and communications technology (ICT)partnership and to hold a Japan-China-Korea ICT ministers meeting.20

Japan, China, and South Korea later intensified programs to promoteICT cooperation.

In September 2002, the first tripartite IT ministers meeting was heldin Marrakech, Morocco. Government officials as well as representativesfrom the research institutes and private businesses attended the meeting,and the ministers agreed to coordinate telecom policy and jointly pro-mote broadband platforms and R&D activities. At the second IT minis-ters meeting, in Cheju, South Korea, in September 2003, the ministersidentified seven areas for cooperation.21 The ministers agreed to estab-lish a working group to promote substantial cooperation in each of theseven areas. At the third ministerial meeting, in Sapporo in July 2004,international cooperation on the radio frequency identification (RFID)sensor network was added as a new area of cooperation. This new themeaimed at realizing a ubiquitous network society through R&D and jointverification experiments on technologies concerning RFID and the sen-sor network, as well as joint research on the ubiquitous network. In thearea of IPv6 cooperation, the three countries agreed to set up a NextGeneration Internet (NGI) working group to promote the exchange ofinformation and experts as well as joint R&D, standardization, and thedevelopment of IPv6 application services. At the second meeting of theNGI working group, in November 2004, the participants agreed to pro-mote interoperability and interconnection of IPv6 products through theIPv6 Ready Logo Program.

Japan’s interests in developing and diffusing IPv6 technologies andproducts are also seen in bilateral collaboration with China. The Japa-nese government implemented a number of joint IT experiments. InDecember 2003, MIC set up a high-speed, high-capacity internationalcircuit between Japan and China and launched joint IT experimentswith China on a variety of applications. A large number of universitiesand private corporations from both countries joined these experiments,which were designed to promote the diffusion of IPv6 and achievecompatibility within a multilingual environment. The Ministry ofEconomy, Trade and Industry (METI) has also implemented activities


to promote the development and diffusion of IPv6 in China in close col-laboration with the private sector. In February 2002, METI and the Chi-nese National Development and Reform Commission (NDRC) con-cluded the memorandum of cooperation. Four months later, METI andNDRC reached an agreement to conduct the IPv6 Collaboration Be-tween Japan and China project, which lasted from June 2002 to March2005.22

Why were Japan and China interested in promoting various jointprojects? Japan’s attempts to promote collaboration with Chinastemmed from a desire to establish ascendancy in the new Internet pro-tocol technologies by penetrating the huge Chinese market. With con-tinuous high economic growth and the willingness to introduce the lat-est technologies, China has built large-scale Internet and mobile phonenetworks. As of March 2003, China counted 60 million Internet usersand more than 200 million mobile phone users.23 The Chinese govern-ment intensified its commitments to the development of IPv6 largelybecause of the shortage of IPv4 addresses in the country.24 Given thesetrends, the Japanese government and firms had a strong desire to dif-fuse its IPv6 technologies and products in China and establish the solidposition in the next-generation Internet protocol standard.

China aimed to utilize Japan’s sufficient financial resources for thedevelopment of IPv6 technologies and networks. For instance, METIundertook the IPv6 Japan-China project with the successive budgets of650 million yen in 2002, 600 million yen in 2003, and 570 million yenin 2004. These amounts were quite large for one bilateral project.Moreover, China hoped to get the know-how of commercial servicesand expertise of various application developments. The introduction ofIPv6 in the latest network facility required a test bed for R&D of ap-plication into various services integrating voice, data, and images. TheJapanese government and firms had conducted various R&D activities,field trials, and commercial services in Japan.

In brief, the Japanese government and Japanese firms have at-tempted to establish institutional linkages for cooperation in the IT fieldthrough various regional frameworks, including through theASEAN+3, in Northeast Asia and through bilateral cooperation. In thisattempt, the development and diffusion of IPv6 technologies and prod-ucts were given priority. This was because Japanese firms, which re-tained a weak competitive edge in the Internet business, would be ableto establish a strong position by penetrating the broader market in Asia.Asian countries accepted Japan’s efforts largely to secure financial as-sistance and technological expertise from Japan.


The Development of Open Source Software

Corporate Strategies and Government Policies

Japan’s decade-long recession had negative impacts on its electronicssector, which had been the engine for Japan’s economic growth. In the1990s, the major Japanese electronics firms were forced to scale downtheir businesses and decrease investment in capital and R&D. In thenew millennium, the firms could go back to a growth trend, largely be-cause of the success of digital consumer electronics products. The hugepopularity of digital cameras, digital versatile disk (DVD) recorders,and liquid crystal display televisions increased profits of major elec-tronics firms.

However, the integration of consumer electronics and digital tech-nology posed a new challenge for Japanese electronics firms. The inte-gration meant that operating software is key to retaining the competi-tive edge in hardware products. Moreover, Japanese electronics firmsneeded to counter the advance of computer firms into the consumerelectronics market. Japanese electronics firms were shocked by Apple’ssmashing success with the iPod in the audiovisual area where they hadbeen the dominant players. Microsoft has also gradually shifted itsbusiness emphasis to the digital consumer electronics market. Theleader of the computer industry sought to dominate overall software inthe consumer electronics market with Windows-based technology justas it did in the personal computer (PC) market. Microsoft had aprospect that a PC would become the controller of all kinds of elec-tronic equipment in the home, such as TVs, DVDs, mobile phones, andaudio equipment.

Japanese electronics firms aimed to develop the TV as the mainconsumer electronic product in the home. They believed that while aPC would become a commodity with low profits, a TV would becomea profitable product by maintaining high picture quality and permittingaccess to content through the Internet. For instance, Kunitake Ando,Sony’s president, stated in his keynote speech at the 2003 InternationalConsumer Electronics Show that television would play the leading roleagain in the future with the speeding up of Internet access.25 Regardlessof whether the PC or the TV becomes the key product in the home, thedevelopment of software was clearly a central strategy in competitionin the Internet-connected consumer electronics market. To win thiscompetition, Japanese electronics firms needed to develop their ownoperating software, independent of the dominance of Microsoft.


In the new millennium, the major Japanese electronics firmslaunched concrete projects to advance the development of their own op-erating software. In December 2002, Sony and Matsushita announcedthat they would study the functions and performance required for next-generation digital home appliances—like shorter start-up/response timesand small memory consumption—and develop basic operating softwareon the basis of the Linux open source software (OSS). In June 2003,Sony and Matsushita established the Consumer Electronics Linux Forum(CELF) with six other companies: Hitachi, Toshiba, NEC, Royal PhilipsElectronics, Samsung Electronics, and Sharp.26 The CELF aimed to dis-cuss and formalize requirements for extensions to Linux to meet theneeds of consumer electronic products such as audio and visual productsand mobile phones. They agreed to disclose source codes to the forummembers when they achieved some degree of success in resolving tech-nology issues. In June 2004, the group released some source codes for theLinux version for digital consumer electronic products. Moreover, thepackages included many functional expansions (patches) and tools de-veloped by the worldwide development community, making it possiblefor even someone unfamiliar with Linux to get it up and running quickly.

In response to moves in the private sector, METI has implementedvarious policies for supporting the development of OSS technologiesand communities for OSS. The ministry secured 1 billion yen in 2003,0.9 billion yen in 2004, and 1.42 billion yen in 2005 to implement pro-grams for supporting OSS development and deployment. METI con-ducted surveys on environments for the use of OSS. In March 2003,METI released a report concerning the security insurance of OSS. Fivemonths later, METI published another report on the situation and prob-lems regarding the use of OSS in Japan. The report covered licenses,guidelines to introduce OSS, and case studies. Moreover, METI con-ducted a pilot project regarding OSS at the National Institute for Ad-vanced Industrial Science and Technology. This project aimed to ex-amine issues and problems regarding OSS desktop environment. InJanuary 2006, METI established an open source software center withinthe Information-Technology Promotion Agency (IPA), a METI-affili-ated organization. The center, established jointly with NEC, Hitachi,Fujitsu, and NTT Data, aimed to collect and share technology informa-tion held by firms and to publicize it for developing new technologysystems using OSS.

Indeed, the main areas in which OSS is used are desktops andservers. However, METI’s commitment to OSS development wasdriven by the desire to maintain the international competitiveness of


Japanese firms in the digital consumer electronics market. This stancewas clearly shown in METI’s reports and in the remarks of its officials.In September 2002, METI’s Commerce and Information Policy Bureauorganized the Strategic Study Group for e-Life. The group issued a re-port for e-Life initiative in April 2003. The first point in its seven-pointaction plan was “the promotion of common and standard technologies.”The report proposed that open source software such as Linux and TRONwould be a significant choice for a platform of digital consumer elec-tronics products.27 Hidetaka Fukuda, director of the IT Industry Divisionof the bureau, stated at the Open Source Way 2002 that Japan’s compe-tence would be harmed if digital consumer electronics products con-verged on the same operating software and applications that run on it.28

Japan’s Commitments to OSS Development in Asia

In parallel to a commitment to the development of OSS in Japan, co-operation with Asian countries has become a critical policy agenda. Ac-cordingly, METI took the lead in institutionalizing region-based coop-erative programs for developing OSS. In October 2002, METIproposed holding an Asia Open Source Software Symposium at theeASEAN IT working group. The first Asia OSS Symposium, held inMarch 2003 at Phuket, Thailand, was attended by some 100 partici-pants from fourteen countries in Southeast and Northeast Asia.29 Thesymposium, sponsored by the Center of the International Cooperationfor Computerization (CICC), a METI-affiliated organization, has beenheld biennially since then and has increased the number of participat-ing countries with formulating a concrete agenda for cooperation.30 Atthe second symposium in Singapore, the number of participating coun-tries increased to eighteen when countries from South Asia joined on.At the fourth symposium, in Taipei, the participants agreed to set upfive working groups: Asia repository, human resource, standards, lo-calization, and business.

Committed to all of Asia, Japan wanted to create a forum where theparticipating countries would deepen the mutual recognition and un-derstanding of particular technologies and technology standards. Thisapproach was effective for Southeast Asian countries whose softwareindustries were at a primitive stage. These countries could get updatedinformation and opportunities for network formation at forums thatwere funded by the Japanese government.

In addition to such a forum-based approach, Japan has advancedjoint research cooperation with countries that retained higher techno-


logical capabilities: China and South Korea. The origin of cooperationamong Japan, China, and South Korea for OSS development dates backto November 2002. At the twentieth Asian-Oceanian Computing Indus-try Organization (ASOCIO) Symposium, the Japan Information Tech-nology Services Industry Association (JISA), the Chinese Software In-dustry Association (CSIA), and the Federation of Korean InformationIndustries (FKII) confirmed common interest in developing OSSjointly.31 The three associations decided to encourage their governmentsto exhibit positive commitments to the development of OSS and con-sidered concrete initiatives to create tangible programs for this objec-tive.32 In November 2003, JISA, CSIA, and FKII held the China-Japan-Korea OSS Business Conference in Osaka, Japan. The conferencebrought together some 500 participants from the public and private sec-tors. The three associations agreed on four agenda items at the confer-ence.33 Each industry then set up a domestic OSS promotion body: theChina OSS Promotion Union, the Japan OSS Promotion Forum, and theKorea OSS Promotion Forum.34 Thus, the first initiative to promoteOSS development among Japan, China, and South Korea was taken bythe private sector.

In 2004, trilateral OSS cooperation involving both the public andprivate sectors evolved rapidly. In April, the first Northeast Asia OSSPromotion Forum met in Beijing. At the same time, a trilateral IT Di-rectors-General Meeting was held.35 In July, the second forum was heldin Sapporo, Japan. Government officials and representatives of opensource promotion groups reported on the situation regarding OSS andOSS promotion activities in each country. At the forum, the three coun-tries agreed to set up three joint working groups: Technology Develop-ment and Assessment Working Group (WG1), Working Group onHuman Resource Development (WG2), and Standardization and Certi-fication Study Working Group (WG3). The third forum was held inSeoul in December 2004, followed by the fourth in Tianjin, China, inApril 2006, and the fifth in Fukuoka, Japan, in November 2006. Al-though political relations between Japan and China and between Japanand South Korea deteriorated during 2004–2006 due to Japanese primeminister Koizumi’s visit to Yasukuni Shrine, the institutionalization ofcollaborative initiatives evolved. While WG2 and WG3 drew up a char-ter to provide basic guidelines for tier activities, WG1 set up the serversub–working groups and the desktop sub–working group.

In August 2005, evidence of the first achievement from this trilateralcollaboration appeared. Three software firms—Japan’s Miracle Linux,China’s Red Flag Software, and a Korean firm, Haansoft—announced


that they had developed Asianux 2.0, a local Asian version of the Linuxoperating system. Asianux 2.0 had the same basic design as Linux butwas compatible with Asian languages and scripts.36 Although the launch-ing of Asianux 2.0 resulted from the accumulation of activities at thebusiness level, collaboration at the governmental level sustained suchbusiness activities.

Japan’s motivations to promote trilateral cooperation in OSS de-velopment were slightly different from those for IPv6 diffusion. Japa-nese firms retained strength in “embedded” OSS used in consumerelectronics products, digital cameras, and mobile phones. The Japanesegovernment and firms hoped to expand the scope of business opera-tions in these areas by activating studies and research on standardiza-tion for the embedded Linux in collaboration with China and SouthKorea. One of the major tasks of WG3 was to study existing interna-tional standardization activities for embedded Linux and identify re-quirements from the three countries.

At the same time, Japan hoped to mitigate moves toward the de-velopment of original standards in China. China had strong aspirationsfor the self-reliance of technology development.37 Such aspirationswere shown in the IT field and exemplified by TD-SCDMA (time division–synchronous code division multiple access) in 3G mobilecommunications, and WAPI (wireless LAN authentication and privacyinfrastructure) in Wireless LAN.38 China had a firm desire to developindigenous OSS from the national security standpoint. The Chinesegovernment has vigorously supported OSS development since the Min-istry of Information Industry sponsored a promotion meeting, “Chinaand Linux,” in June 1999. The Chinese government extended intensivesupport for software firms such as Red Flag and other nongovernmen-tal enterprises working on Linux operating software as a way to pro-mote the software key project of the High-Tech Research and Devel-opment Program (the so-called 863 Program).

The Japanese government and Japanese firms were concerned thatthe Chinese government might develop OSS on its own standard base.Such a development would stymie the entry of Japanese firms andproducts into the Chinese market. A METI official who was involvedin the IT policy explained an objective of cooperation with China asfollows: “Through collaboration with China, we will prevent Chinafrom pursuing the original standards and making China build onto theinternational standards.”39

Why, then, do South Korea and China promote collaboration withJapan? The Korean government has actively committed itself to devel-


oping IT technologies and investing in the establishment of an infor-mation superhighway infrastructure. South Korea became one of themost advanced broadband nations, and its leading IT firms—SamsungElectronics and LG Electronics—expanded their shares in the globalmobile market with the quick adoption of CDMA (code division mul-tiple access) technology. Seoul has striven to improve technology onCDMA mobile and broadband services and has expanded these ser-vices to Asia. For this objective, exchanges of technological expertisewith Japan were indispensable. When Japanese and South Korean ITministers held a meeting in January 2006, Korean officials introducedtelevision services using Internet networks while Japanese officialsdemonstrated terrestrial digital TV broadcasting for mobile phones.40

South Korea aimed to advance this kind of collaboration through theOSS initiative. Moreover, South Korea held the common perceptionwith Japan that the development of an original OSS is a prerequisite forsecuring the sound development of the next generation of mobilephones and digital consumer electronic products with bright growthprospects. An official of the Korean government–affiliated Korea IT In-dustry Promotion Agency (KIPA) stated that “under the current systemdominated by Microsoft’s Windows, we are allowed to just developlow-end applications. Only with open-source systems like Linux canwe lead the global market.”41

China wanted to collaborate in OSS development primarily for na-tional security reasons. As already explained, China had strong aspira-tions for developing indigenous OSS in order to avoid the situation wherethe core technology is controlled by a US company. Two additional fac-tors should be mentioned. First, China wanted to reduce the payment oflicensing fees for software developed by foreign firms and to enhancefreedom of action by increasing the amount of software developed by do-mestic firms. Second, China hoped to demonstrate and utilize the exper-tise it had accumulated through past commitments. For instance, the Stan-dardization and Certification Study Working Group (WG3) wasestablished at China’s strong request.42 Beijing intended to utilize itsdesktop OSS capabilities, which led to the drafting of Linux standards.The collaboration with Japan and the utilization of Japanese technologi-cal expertise were valuable factors in achieving these objectives.

To summarize, Japanese electronics firms, which long retainedcompetitiveness in the consumer electronics market, faced a challengefrom computer producers due to the integration of consumer electronicsand digital technology. The integration meant that operating softwarebecame key in determining the competitiveness of hardware products.


Accordingly, the Japanese government and electronics firms tried topromote OSS development. Significantly, they considered close collab-oration with Asian countries a critical pillar for developing open source.While the government has developed a forum for open source through-out Asia, the Japanese government and Japanese firms have promotedconcrete R&D collaboration with China and South Korea.

Japan and the Diffusion of Horology

Japanese Watch Producers and Horological Standards

Watch production in the world is divided mainly between Europe andAsia. In Europe, Switzerland, France, Italy, and Germany are major watchmanufacturers, while in Asia, Japan, China (including Hong Kong), India,and South Korea engage in the production of watches and specific watchcomponents. According to an estimate by the Japan Watch and Clock As-sociation (JWCA), total watch production in the world was 1.25 billionunits in 2005. Analogue quartz watches had an 82 percent (1.03 billion)market share, followed by digital quartz (200 million) and mechanicalwatches (20 million). Japan’s production, including overseas, accountedfor 58 percent of the world’s total watch production, and 68 percent oftotal production of the analogue quartz watch.43 While Japan is strong inproducing mid- and low-priced quartz watches, European countries, rep-resented by Switzerland, retain competitiveness in the production ofhigher-priced mechanical watches.

Standardization in watch production is a matter of interest to com-ponent manufacturers, to firms engaged in watch assembly, and to dis-tributors and retailers. Existing watch production standards are relevantprimarily in terms of health, safety, quality, and interchangeability.44

An international body that is responsible for dealing with all standardsrelating to watches, miniature clocks, and clocks is the Horology Tech-nical Committee of the International Organization for Standardization(ISO/TC114), which was established in 1965. Currently, there are nineparticipating members (P members) and sixteen observer members (Omembers).45 Switzerland, Japan, and France have provided the chair-manship and secretariat of the ISO/TC114 and its subcommittees.46

When the ISO/TC114 was established, Switzerland was the mostadvanced nation in watch production. From the 1920s until the 1950s,the Swiss horological industry shared half of the world’s total produc-tion and 80–90 percent of total exports.47 In the 1970s, the Japanese


horological industry showed remarkable growth—thanks to the innova-tion of quartz watches, which enabled Japanese manufacturers to mass-produce watches of high quality. This innovation reversed the positionof Japan and Switzerland in watch production, making Japan theworld’s primary watch-manufacturing nation in 1980.

Through the 1980s and early 1990s, Japanese watch producers ad-vanced horological technologies further to make accurate, irrefrangible,and functional watches. Despite such advancements, Japan faced diffi-culty in making its horological technologies accepted as internationalstandards at the ISO/TC114. Deliberations at the committee did not ex-hibit notable changes. Switzerland forged close linkages with other Eu-ropean countries. The Federation of the Swiss Watch Industry (FH,Fédération de l’Industrie Horlogère Suisse) encouraged its counterpart inFrance, Germany, the United Kingdom, and Italy to organize the Stand-ing Committee on European Watchmaking Industry (CPHE, Comité Per-manent de l’Horlogerie Européenne). The horological association ineach country has hosted a CPHE meeting biennially, and common is-sues, such as the European Union’s directives and laws and EuropeanCommittee for Standardization (CEN) matters, have been discussed atthe meetings. Through these opportunities, the CPHE members havebeen able to coordinate their interests and positions regarding ISO/TC114 activities.

For a long time, the P members of ISO/TC114 were Switzerland,Japan, France, Russia, Germany, China, and the UK. Switzerland couldlead deliberations at the committee by successfully drawing supportfrom the European members for its positions. Japan tried to deepen dis-cussions on technical issues at the committee’s meetings, but Switzer-land was disinclined to have such discussions and tried to settle differ-ences on technical matters by putting them to a vote. The Japanesemembers were dissatisfied with the persistent lack of discussions ontechnical issues.48

In Switzerland, the horological industry is the third largest indus-try sector and a pillar of the country’s domestic industry. The Swisshorological industry comprises small and medium-sized manufacturersof mechanical watches. Switzerland was reluctant to adopt high-leveltechnology standards that were beyond these manufacturers’ capabili-ties. Even standards that had sufficient technological validity were notaccepted when they did not meet the conditions of the Swiss horologi-cal industry.49 Accordingly, local standards in Switzerland wereadopted as international standards through the ISO/TC114. This situa-tion was repeated for thirty years, until the ISO/TC114 plenary meeting


in Berlin in 1995.50 At that meeting, Japan advanced several importantproposals on technologies that reflected remarkable progress in itshorological industry in the 1990s. However, most of them were notadopted. At the meeting, it was decided that the following plenarymeeting would be held in Japan.

In brief, Japan could become the world’s largest watch producer inthe 1980s through innovation in quartz watches. However, it failed tomake its technical standards accepted at the international standard-setting committee. Switzerland, the previous leading watch producer,controlled deliberations on technical issues at the ISO/TC114 by suc-cessfully utilizing close linkages with other European nations. The Jap-anese horological industry needed to set up strategies to raise the posi-tion of its technology ideas and standards at the deliberations of theISO/TC114 meetings.

Close Linkages with Watch-Producing Countries in Asia

For a long time, standardization was not a major target of industrialpolicy for the Japanese government. However, the government’s stancebegan to change in the mid-1990s. In July 1996, METI strengthenedthe Standard Division of the Agency of Industrial Science and Tech-nology. The new post of deputy director-general for Standard Affairsand two new sections—the International Standard Section and ControlSystem Standard Division—were set up.51 In December 1996, the gov-ernment issued the Program for Reform and Creation of the EconomicStructure. One of the goals of this program was “to promote the systemto lead international standardisation activities in accordance with therising importance of international standards.”

In line with gradual changes in the government’s posture towardstandardization, the Japanese horological industry sought to make the1997 ISO/TC114 meeting an opportunity to make Japanese technicalproposals accepted as international standards. For this objective, the in-dustry adopted two strategies. The first was the formation of close com-munications with watch-producing countries in Europe. The Japanesehorological industry considered it difficult to have sufficient discus-sions at the plenary meeting only, because a few-hour discussion oneach technical issue was too short. Accordingly, it hoped to have an op-portunity for discussions before the plenary meeting where it could ex-plain Japan’s technological ideas and merits.

In February 1997, the Japanese horological industry dispatched amission to Switzerland, France, and Germany. The mission members


visited the secretariat of the ISO/TC114 and FH in Switzerland, theCentre Technique de l’Industrie Horlogère (CETEHOR) in France, andthe Deutsches Institut für Normen (DIN) in Germany. They explainedJapan’s proposals and opinions on major technical issues and gainedsupport for most of their proposals. Moreover, Japan and Switzerlandagreed to hold a meeting outside the regular plenary meeting.52

The second and more critical strategy was to strengthen linkageswith watch-producing countries in Asia. For a long time, Japan andChina were the only two non-European members of the ISO/TC114.China, which became a P member in 1979, did not express its opinionsat the plenary meetings, largely due to the language problem, andtended to support Swiss proposals at final voting.53 Japan tried tochange China’s posture in the meetings by increasing the Chinese in-dustry’s technical knowledge and by helping it improve its technologi-cal level. From 1995 to 1997, the JWCA held a meeting with the Horo-logical Association of China (HAC) three times and providedsuggestions and guidance regarding specific horological technologies.Japan’s support helped enhance the activities of the standardization re-search group within the HAC.54

Japan’s weak position at the ISO/TC114 meetings derived largelyfrom the small number of members from Asia. Switzerland could leaddiscussions about technical matters by gaining support from its neigh-boring countries. Given this situation, Japan made efforts to change themember imbalance by encouraging watch-manufacturing countries inAsia to participate in the ISO/TC114 meetings. India registered as a Pmember but did not attend the plenary meetings. In May 1997, the Jap-anese horological industry sent a mission to India to induce India’sISO/TC114’s committee members to express opinions at the plenarymeetings. Japan could confirm through the talks that India was nothappy with the gap between the existing ISO standards and the situa-tion in India and that India would support the idea that opinions fromAsian countries should be reflected in international standards. Partici-pation in the ISO/TC114 would serve to achieve this objective.55

In June 1996, Japan also sent a mission to South Korea to solicittheir support. The JCWA encouraged the Korea Watch and Clock In-dustry Cooperative to participate in the 1997 plenary meeting. Sincethe Korean horological industry was still young, the industrial membersknew little about ISO standards and activities of the ISO/TC114. SouthKorea was not ready to be a P member of the ISO/TC114 but withJapan’s encouragement agreed to attend the 1997 Tokyo meeting as anobserver.56


The ISO/TC114 Tokyo meeting was held in May 1997 with partic-ipation from seven countries (Japan, Switzerland, France, China, India,the UK, and South Korea). Since India and South Korea attended themeeting, Asia’s representation was almost equal to Europe’s. The delib-erations at the meeting proceeded smoothly, largely because Japan heldprior consultation and set up opportunities for technical exchange. TheJapanese horological industry succeeded in getting most of its proposalson technical issues accepted at the meeting. Moreover, a technical ex-change session on allergies in the watchmaking industry was organizedon Japan’s recommendation. Japan hoped to have an opportunity forsubstantive discussions on technological matters before voting on tech-nology standards. The participants also adopted a resolution to create aworking group on allergenic materials.57 Japan succeeded in having theallergenic material issue included on the committee’s agenda.

After the 1997 Tokyo meeting, Japan continued its efforts tostrengthen linkages with watch-manufacturing countries in Asia, espe-cially with China. The JWCA set up institutional linkages with the HAC.In March 2002, the Japan-China Horological Association’s Interchangewas institutionalized, and its first executive meeting was held in Shang-hai.58 This linkage provided Japan with an opportunity to discuss a vitalissue for the Japanese horological industry: the infringement of intellec-tual property rights. Japan and China agreed to establish a workshop onintellectual property rights to discuss the situation of property right in-fringements in China and to propose concrete countermeasures to dealwith this problem. The interchange talks also encouraged technical ex-changes between Japan and China. In accordance with an agreement atthe talks, the first standardization workshop between the JWCA andHAC was held in Beijing in October 2002.59 Through regular meetingsfor technical exchange, Japan could explain the technical backgroundand rationale for Japanese standards, which helped generate support forJapanese proposals at the ISO/TC114 meetings.

Japan’s efforts to strengthen communication and technical ex-change led to positive support from China and India for Japanese pro-posals at the ISO/TC114 meetings. For instance, at the 1999 plenarymeeting,60 India and China gave strong support for Japanese proposalsregarding precious metal coverings, antimagnetism, and watch glasses,which led to a confrontation between three European members andthree Asian members.61 Switzerland had successfully managed deliber-ations on technical matters at the previous meetings, but this was notthe case at the 1999 meeting. With India and China’s support, Japan’s


influence on technical issues rose considerably. In fact, at the end of themeeting, Switzerland proposed to Japan that the two countries holdconsultations prior to the next plenary meeting. At the 2001 meeting inZhuhai, China, and at the 2003 meeting in Neuchâtel, Switzerland,Japan’s influence increased further. While most of Japan’s proposalsand opinions were adopted, a Swiss proposal was defeated by the finalvote. Moreover, revisions were made in the conduct of meetings toallow sufficient discussion before voting takes place. This was largelybecause Japan had organized prior consultation with Switzerland andFrance and had set up opportunities for technical exchange with China.

China and India benefited from Japan’s commitment to improvecommunication at the executive level and to foster technical exchange.They could better understand the importance of standard setting at theinternational standards committee and could gain up-to-date informa-tion on horological technologies. This led to active involvement ofChina and India in the ISO/TC114 meetings. At the 1999 plenary meet-ing, India and China offered opinions and suggestions at various sub-committee and working group meetings. The two countries exhibitedkeen interest in the ISO/TC114 activities. The 2001 meeting was sup-posed to be held in Switzerland, but China’s strong proposal that themeeting be held in China was accepted. The enhanced presence ofChina and India at the meetings reflected their growing confidence andexpertise in technical matters.

The horological case exhibits at least two critical implications inassessing Japan’s commitment to technology standards. First, technol-ogy standards are important for a mature sector like horology in whichthe Japanese industry has strong technological capabilities. Unlike thecases of IPv6 and OSS, the Japanese industry had already established astrong position with high-level technologies. However, it was forced toassume serious business burdens because its technological ideas failedto be translated into international standards. Thus, even in a relativelymature sector, the diffusion of technology standards has become a vitalissue in maintaining international competitiveness. Second, the forma-tion of close linkages with Asian countries was a major factor in hav-ing Japanese horological standards accepted at the ISO/TC114 meet-ings. Japan’s proposals and opinions received attention at thecommittee meetings largely due to backing from Asian members. Tech-nical exchange and communications at the executive level contributedto Asian countries’ increasing interest in the ISO/TC114 meetings andtheir support for Japan’s proposals in the committee meetings.


Conclusion

My major goal in this article has been to elucidate the relationship be-tween Japan and Asian countries as regards technology developmentand technology diffusion. Technology standards have become increas-ingly important in retaining international competitiveness, and Japanhas adopted strategies to diffuse its own standards in Asia in three areas:Internet connection, open source software, and watch manufacturing.

Japanese firms have engaged in different degrees of competitive-ness in the three areas. The Japanese horological industry has main-tained a competitive edge by catching up with its Swiss rival. Japaneseelectronics firms, which had long maintained strong competitiveness,faced new dynamics caused by the integration of consumer electronicsand digital technology. In the Internet business, Japanese firms failed toestablish a competitive position largely because they were late enteringthe business. The common key factor in improving and retaining com-petitiveness in the three areas has been technology standards. The Jap-anese horological industry needed to have its own technologies andtechnological ideas accepted as international standards. Japanese elec-tronics firms had to develop new operating software in order to win inthe battle over the newly emerging digital consumer electronics market.Japanese IT firms sought to establish their position by taking the leadin developing a new Internet protocol technology.

Japanese firms in the three areas retained a relatively high level oftechnology and sources for new technologies. However, they could notgain genuine international competitiveness unless technologies andtechnological ideas were accepted more broadly. Accordingly, the Jap-anese government and firms pursued collaboration with their counter-parts in Asia, mainly through three strategies. The first was the forma-tion of a region-based forum for diffusing technology. This was thecase in OSS development. METI took the lead in launching the AsiaOSS symposium. The second was technical cooperation with Asiancountries. In the horological industry, Japanese firms have advancedtechnical exchanges with China and India. This strategy contributed tothe improvement of the technology level in these countries and gener-ated strong support for Japanese proposals on technology issues at theISO committee meetings. The ABP also aimed to promote technical co-operation with Asian countries. Among various policies under the ABP,the diffusion of IPv6 technologies was given priority. The Japanesegovernment and business actors have also promoted bilateral collabo-ration with China for diffusing IPv6 products. The third strategy was


joint development under specific institutional mechanisms. The gov-ernment and firms of Japan, China, and South Korea set up the North-east Asia OSS Promotion Forum to stimulate OSS development. Thethree countries also institutionalized the trilateral IT ministers meeting,where the development and diffusion of IPv6 technologies became amajor agenda item for talks.

Japan’s technology policy in all three segments examined here em-phasized collaboration and linkages with Asia, which indicated a shiftin Japanese preferences for technology innovation. The Japanese gov-ernment and firms were strongly motivated to establish and diffuse Jap-anese technology standards in order to raise their presence at interna-tional forums or to challenge the existing Western rivals. Thismotivation encouraged them to adopt Asia-based technology policiesand strategies in addition to domestic-oriented technology policies.Thus, regionalism was used as an intermediate way to strengthen polit-ical and economic leverage to raise the position of industrial and tech-nology power in the international marketplace.

This article has also considered why Asian countries collaboratedwith initiatives and projects that were intended to develop and diffuseJapanese technology standards. As shown in the ABP, some Asiancountries could secure ODA funds through technology-oriented pro-grams. In the horological case, technological exchange was a vital fac-tor that encouraged Asian countries to promote collaboration withJapan. In the IPv6 and OSS cases, China and South Korea, which wereat a relatively advanced technological level, were motivated to promotetechnological collaboration with Japan for several reasons. Both coun-tries shared common interests with Japan: to decrease the payment oflicensing fees to Western firms and to stimulate the development ofnew markets for their firms. China and South Korea also expected tobenefit from Japanese-funded projects and joint technology develop-ment as well as to obtain information about various experiments thatJapan had conducted in the domestic market. China, in particular, in-tended to utilize Japanese technological expertise in order to achieve itsown technological objectives.

Hidetaka Yoshimatsu is professor of international relations at RitsumeikanAsia Pacific University, Japan. He is the author of Japan and East Asia inTransition: Trade Policy, Crisis and Evolution, and Regionalism (2003) andhas published articles that focus on trade and industrial policy and regionalismin East Asia in journals such as Asian Survey, Pacific Review, Pacific Affairs,and Review of International Political Economy.


Notes

This study is supported by research funds from Ritsumeikan Asia Pacific Uni-versity. I would like to thank Stephan Haggard and anonymous reviewers fortheir helpful comments and suggestions.

1. Agreement on Technical Barriers to Trade, Article 2.4.2. Graham Vickery, “Global Industries and National Policies,” OECD

Observer, no. 179 (December 1992–January 1993): 11. 3. Daniele Archibugi and Jonathan Michie, “Technological Globalisation

and National Systems of Innovation: An Introduction.” In Daniele Archibugiand Jonathan Michie, eds., Technology, Globalisation and Economic Perfor-mance (Cambridge: Cambridge University Press, 1997), pp. 2–3.

4. Michael L. Katz and Carl Shapiro, “Network Externalities, Competi-tion, and Compatibility,” American Economic Review 75, no. 3 (1985): 424–440.

5. Carl Shapiro and Hal R. Varian, Information Rules: A Strategic Guideto the Information Economy (Boston: Harvard Business School Press, 1999),p. 231.

6. A famous example is the Beta-VHS struggle in standards for video-cassette recorders. Although the Beta format was technologically superior toVHS technology, JVC, the main VHS producer, could win in the battle againstSony, the major Beta producer, primarily because of the effective formation ofthe VHS “family”; see Gregory W. Noble, Collective Action in East Asia: HowRuling Parties Shape Industrial Policy (Ithaca: Cornell University Press,1988), pp. 95–100.

7. Richard J. Samuels, “Rich Nation, Strong Army”: National Securityand the Technological Transformation of Japan (Ithaca: Cornell UniversityPress, 1994).

8. Gregory P. Corning, Japan and the Politics of Techno-Globalism (Ar-monk, NY: M. E. Sharpe, 2004).

9. Marie Anchordoguy, “Japan at a Technological Crossroads: DoesChange Support Convergence Theory?” Journal of Japanese Studies 23, no. 2(1997): 363–397; D. H. Whittaker, “Crisis and Innovation in Japan: A New Fu-ture Through Technoentrepreneurship?” In William W. Keller and Richard J.Samuels, eds., Crisis and Innovation in Asian Technology (Cambridge: Cam-bridge University Press, 2003); Derek Hall, “Japanese Spirit, Western Econom-ics: The Continuing Salience of Economic Nationalism in Japan.” In EricHelleiner and Andreas Pickel, eds., Economic Nationalism in a GlobalizingWorld (Ithaca: Cornell University Press, 2005).

10. Fukunari Kimura, “Kokusai boeki riron no aratana choryu to higashiajia” [New trends in international trade theory and East Asia], Kaihatsu KinyuKenkyushoho 14 (January 2003): 106–116.

11. Douglas Webber, “Two Funerals and a Wedding? The Ups and Downsof Regionalism in East Asia and Asia-Pacific After the Asian Crisis,” PacificReview 14, no. 3 (2001): 339–372; Walter Hatch, “Regionalizing the State:Japanese Administrative and Financial Guidance for Asia,” Social ScienceJapan Journal 5, no. 2 (2002): 179–197; Hidetaka Yoshimatsu, “Japanese Pol-


icy in the Asian Economic Crises and the Developmental State Concept,” Jour-nal of the Asia Pacific Economy 8, no. 1 (2003): 102–125.

12. For the activities of the council, see its homepage at www.v6pc.jp/en/index.phtml.

13. Nihon Keizai Shimbun, May 2, 2003.14. Japan’s e-Japan strategy began with the enactment of the Basic Law

on the Formation of an Advanced Information and Telecommunications Net-work Society (IT Basic Law) in November 2000. The IT Strategic Headquar-ters, which was set up in accordance with the law, formulated the e-Japan strat-egy in January 2001. The strategy aimed at “making Japan the world’s mostadvanced IT nation within five years.” To achieve this goal, the e-Japan strat-egy prescribed four priority policy areas: the creation of the world’s most ad-vanced environment for the Internet, the facilitation of e-commerce, the real-ization of e-government, and the development of high-quality humanresources. The government continuously reviewed and revised the e-Japanstrategy, formulating the e-Japan 2002 program in June 2002 and the e-Japanstrategy II in July 2003. Furthermore, in order to materialize the strategy, thegovernment formulated the e-Japan Priority Policy Program in March 2001, inJune 2002, in August 2003, and in June 2004.

15. In the e-Japan Priority Policy Program 2002, issued in June 2002, theIT Strategic Headquarters showed a prospect that the ABP should be formu-lated within 2002 as one of concrete measures toward the realization of an in-ternationally balanced IT society in Asia. Afterwards, MIC prepared for theformulation of the ABP. In July 2002, MIC organized the Study Group for theAsia Broadband Program. The purpose of this group was to deliberate on thespecific substance and goals of the program. The group published a final reportin December 2002 after holding six meetings. Importantly, four specialists andbusiness representatives from China, South Korea, and Singapore becamemembers of the study group. They explained conditions of the IT market andpolicy in their countries as well as their views on the broadband policy.

16. Other goals were to ensure broadband access for all people in Asia:construct international broadband networks with sufficient bandwidths to di-rectly link Asian countries, prepare environments for secure and easy use ofICT in Asia, digitize and archive major Asian cultural assets, develop machine-translation technologies between major Asian languages, and increase thenumber of ICT engineers and researchers in Asia.

17. The homepage of the Asia Broadband Program is www.asia-bb.net.18. “Collaboration with Asian Economies, Financial Assistance,” Asia

Broadband Program, available at www.dosite.jp/asia-bb/en/index.html. 19. “Practical IPv6 Application Test Program,” Asia Broadband Program,

available at www.dosite.jp/asia-bb/en/2004/index.html. 20. MPHPT Communications News 12, no. 22 (February 4, 2002): 1–2,

available at www.soumu.go.jp/joho_tsusin/eng/Releases/NewsLetter/Vol12/Vol12_22/22net.pdf.

21. These seven areas were 3G and next-generation mobile communica-tions, next-generation Internet (IPv6), digital broadcasting, network and infor-


mation security, open source software, telecom service policy, and the 2008Beijing Olympic Games.

22. This project was implemented by the Communications and Informa-tion Network Association of Japan (CIAJ) and China Education and ResearchNetwork (CERNET), headquartered at Tsinghua University. The project in-cluded R&D on networks, applications technology, and technology standards.

23. Ricky Lu, “China Starts Full-Scale Implementation of IPv6,”IPv6style, May 26, 2003, available at www.ipv6style.jp/en/special/20030526/index.shtml.

24. In December 2003, the Chinese government formally launched theChina Next Generation Internet (CNGI) project. The project aimed to constructa backbone IPv6 network linking China’s major cities by collaborating with sixChinese telecom operators and research institutes, such as China Netcom,China Unicom, and the China Education and Research Network.

25. Nikkei Electronics Asia, January 22, 2003.26. For the activities of the CELF, see its homepage at www.celinuxforum

.org.27. METI, “Kihon senryaku hokokusho: e-Life inishiatebu” [Report on

basic strategy: e-Life initiative], April 2003, p. 22, available at www.meti.go.jp/kohosys/press/0003917/0/030411e-life.pdf.

28. Frederick Noronha, “Liberalisation Technology for the Lands of Di-versity?” In Niranjan Rajani, ed., Free as in Education: Significance of theFree/Libre and Open Source Software for Developing Countries, available athttp://global.finland.fi/english/publications/pdf/free_as_in_education.pdf.

29. The second symposium was held in Singapore in November 2003, thethird in Hanoi in March 2004, the fourth in Taipei in September 2004, the fifthin Beijing in March 2005, the sixth in Sri Lanka in September 2005, and theseventh in Kuala Lumpur in March 2006. For the development of the Asia OSSSymposium, see its homepage at www.asia-oss.org.

30. The CICC was established in June 1983 to cooperate with and assistdeveloping countries in the introduction of computers and information tech-nology and thereby to promote computerization for their economic and socialdevelopment. The homepage of the CICC is at www.cicc.or.jp/japanese/index.html.

31. The ASOCIO was established in 1984 in Tokyo with an eye to pro-moting close collaboration among the industrial associations in the computingindustry in the Asian and Oceanian region.

32. Nikkei Computer, January 27, 2003, pp. 20–21.33. The first was to take the lead in establishing an OSS promotion body

in each country and to create the China-Japan-Korea OSS Promoting Partner-ship, where the activities of the three bodies would be united and coordinated.Other agenda items were that the promotion bodies would make concrete ac-tion plans, and that the three industries would encourage the governments toprocure OSS in order to guarantee and improve the quality of OSS.

34. The Japan OSS Promotion Forum was established in February 2004,and the Information Technology Promotion Agency, an MITI-affiliated organi-


zation, assumed the secretariat of the forum. Six working groups were set upunder the forum: desktop, development infrastructure, support infrastructure,business promotion, human research development, and standardization andcertification.

35. The three governments signed the memorandum of understandingconcerning ten areas for joint OSS promotion. The agreement aimed to pro-mote joint research for user identification systems and to support the develop-ment of the Northeast Asian OSS Promotion Forum by the private sector.

36. Nikkei Weekly, August 29, 2005. In April 2006, the three companiesestablished Asianux Corporation, a new joint venture created to become themain distributor of the common framework operating system in Asia, tostrengthen linkages with global vendors, and to promote OSS in Asia.

37. Evan A. Feigenbaum, China’s Techno-Warriors: National Securityand Strategic Competition from the Nuclear to the Information Age (Stanford:Stanford University Press, 2003).

38. Xiudian Dai, “ICTs in China’s Development Strategy.” In ChristopherR. Hughes and Gudrun Wacker, eds., China and the Internet: Politics of theDigital Leap Forward (London: RoutledgeCurzon, 2003), pp. 17–20.

39. Koichi Endo, “Nicchukan haiteku ‘sangoku domei’ no genso” [Thefancy of the trilateral high-tech alliance between Japan, China, and SouthKorea], Shokun, December 2004, p. 209.

40. “Japan, S. Korea to Continue Exchanging Views on Telecom Tech-nologies,” Japan Economic Newswire, January 16, 2006.

41. Korea Times, April 1, 2004.42. Nikkei BPnet, “China Proposed the Joint Development of Asian Linux

and Japan Calmed It Down,” July 29, 2004, available at http://itpro.nikkeibp.co.jp/free/NC/NEWS/20040729/147927 (accessed November 2, 2005).

43. The Japan Watch and Clock Industry Association, “The JapaneseWatch and Clock Industry in 2005: An Outlook on Its Global Operation,”available at www.jcwa.or.jp/eng/statistics/industry_05.html. There are no offi-cial data on world watch production.

44. ISO/TC114 Horology, “ISO/TC114 Business Plan: Executive Sum-mary,” May 9, 2005, p. 4, available at http://isotc.iso.org/livelink/livelink/fetch/2000/2122/687806/ISO_TC_114_Horology_.pdf?nodeid=1162373&vernum=0.

45. The nine P members are Switzerland, Japan, France, Germany, UK,China, India, South Korea, and Russia.

46. ISO/TC114 Horology, “ISO/TC114 Business Plan: Executive Sum-mary,” p. 11.

47. Shiro Asano, “Tokei sangyo ni okeru hyojunka senryaku” [The stan-dardization strategy in the horological industry]. In Watanabe Fukutaro andNakakita Toru, eds., Sekai hyojun no keisei to senryaku [The formation andstrategy of international standards] (Tokyo: Kokusai Mondai Kenkyujo, 2001),p. 52.

48. Interview, Japan Watch and Clock Association, Tokyo, February 2006.49. Asano, “Tokei sangyo ni okeru hyojunka senryaku,” pp. 49, 55.50. The ISO/TC114 plenary meeting has been held biennally.


51. Masahiro Fujita and Yozo Kawahara, Kokusai hyojun ga nihon wohoisuru [International standards roll up Japan] (Tokyo: Nihon Keizai Shin-bumsha, 1998), pp. 196–197.

52. Japan Watch and Clock Association, ISO/TC114 tokei kogyo hyojinkakokusai kaigi hokokusho [The report on the ISO/TC114 horology meetings](Tokyo: Japan Watch and Clock Association, 1997), pp. 26–28.

53. Asano, “Tokei sangyo ni okeru hyojunka senryaku,” p. 57.54. Ibid., pp. 50, 58.55. Japan Watch and Clock Association, ISO/TC114 tokei kogyo hyojinka

kokusai kaigi hokokusho, p. 31.56. Interview, Japan Watch and Clock Association, Tokyo, February 2006.

South Korea became a P member in 2003 and hosted a plenary meeting in2005.

57. Japan Watch and Clock Association, ISO/TC114 tokei kogyo hyojinkakokusai kaigi hokokusho, p. 3.

58. At the annual Interchange meeting, executives of both countries ex-changed information and opinions about various issues concerning technologystandards, intellectual property rights, statistics, and commercial relations.

59. At the meeting, the Japanese industry explained its proposals for theISO/TC114 meetings and gained understanding and support for them.

60. The 1999 plenary meeting was held at Bangalore in India with partic-ipants from six countries (India, Japan, Switzerland, France, China, and theUK).

61. Interview, Japan Watch and Clock Association, Tokyo, February 2006.


Global Competition and Technology Standards: Japan’s Quest for Techno-Regionalism

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