Discussion Papers In Economics
And BusinessTechnological advantage and market loss:
Siemens and the X-ray machine business in Japan (1900–1960)

Pierre-Yves DONZÉDiscussion Paper 10-17

Graduate School of Economics andOsaka School of International Public Policy (OSIPP)
Osaka University, Toyonaka, Osaka 560-0043, JAPANTechnological advantage and market loss:
Siemens and the X-ray machine business in Japan (1900–1960)

Pierre-Yves DONZÉDiscussion Paper 10-17

June 2010

Graduate School of Economics andOsaka School of International Public Policy (OSIPP)
Osaka University, Toyonaka, Osaka 560-0043, JAPANTechnological advantage and market loss: Siemens and the X-ray machine business inJapan (1900–1960)*

Pierre-Yves DONZÉ†

Abstract
This paper focuses on the involvement of Siemens on the market for radiology equipment inJapan between 1900 and 1960 from a business history perspective. It explores why theGerman multinational was unable to keep its dominant position on the Japanese market in theinterwar years, despite its technological competitiveness. In particular, it examines thestrategic choices made by the firm (export, licensing, direct investment) in relation to thechanging economic and technological environment, highlighting the importance, for foreign
multinationals, of working together with national trading firms involved in the distribution ofdrugs and products for doctors, as the Japanese medical market was already well structured
when the country opened up to the West. Four phases have been identified. At first, before
World War I, German manufacturers of X-ray machines, especially Siemens, enjoyed a virtual
monopoly in Japan and favored an export strategy. The political and technological shifts that
occurred during the war (interruption of trade with Germany, development of the Coolidge
X-ray tube by General Electric) led to a more competitive market in Japan. Siemens
reorganized its involvement in this business via a contract signed with a domestic medical
goods trade company, Goto Fuundo (1926). Yet this proved insufficient to overcome thecompetition, and Siemens finally decided to relocate some of its production facilities for
X-ray machines in Japan by entering into a joint venture with Goto (1932). Relations between
Siemens and Goto were severed by the war, and Goto tried until the 1950s to go it alone inthis field but failed due to a lack of organizational capability. As for Siemens, it reverted to its
export strategy approach, re-entering the market in the 1950s.

JEL : F23; N85; O32
Keywords: Siemens, Goto Fuundo, X-ray machines, medical market
Note: In this paper, the names of persons appear following the usage in Japan, that is, with thefamily name preceding the first name.

*・This work was supported by Grant-in-Aid for JSPS Fellow (21 09015). I thank for their kind assistance, theircomments and advice Angela Huang (Siemens Med-Archives) and Minoru Sawai (Osaka University).
†
Osaka University, Graduate School of Economics, Post-doctoral Research Fellow of the Japanese Society for
the Promotion of Science (JSPS), email: py.donze@gmail.com

Introduction
Medicine experienced a paradigm shift in the 20th century, changing from a small-scale,half-charitable activity to one of the main sectors of the economy.1 The transformation of
medicine into a business came about in the first half of the 20th century, largely driven by the
introduction of new technologies, such as drugs mass-produced by the pharmaceuticalindustry, medical laboratories and surgery equipment. 2 Among these innovations that
contributed to make medicine a profitable and growing activity, X-ray machines take pride ofplace: they changed the very nature of hospitals, which became institutions managed likemodern enterprises and established themselves as key actors on the health care market.3 Soon
after the discovery of X-rays by Wilhelm Roentgen (1895), 4 the manufacture of X-ray
machines became a high-growth business, rapidly controlled by the multinationals of theelectrical appliances industry (General Electric, Westinghouse, Siemens, Philips), as well assome independent specialized and mainly German firms (Müller; Reiniger, Gebbert & Schall;
Veifa).5 The key technology of these devices quickly appeared to be the X-ray tube, and thefact that the electrical appliances enterprises had mastered vacuum tube know-how allowed
them to become the main actors of this new industry.
Within the general framework of the global expansion of this industry, Japan appears as aparticular case for at least three reasons. First, one must consider the specific structure of theJapanese medical market. In comparison with other countries, it is characterized by relatively
atomized, highly privatized health-care institutions (hospitals, clinics),6 a particularity whichmeant that the health-care system relied on an increased number of small institutions rather
than on the concentration of health care in a few major urban hospitals. Indeed, the number ofhospitals increased from 395 establishments (of which 38.7% were private) in 1880 to 1344
(93.8% private) in 1920 and 2925 (96.1% private) in 1935. The proportion of beds per
hospital even tended to drop during the interwar years – from 37.9 in 1920 to 30.8 in 1935. As
for the clinics, included in the censuses since 1934, there were 35,772 in 1935.7 Keencompetition on the Japanese health-care market obviously accelerated the diffusion of new
medical technologies, as possession of state-of-the-art equipment gave establishments a clear
edge. Second, Japan was one of the very rare countries where domestic firms were able tocompete effectively over time with global multinationals in the X-ray machine field. This was
1

Donzé 2005.
Blume 1992, Löwy 1993, Stanton 1999, Pickstone 2000 and Stanton 2002 (particularly her introduction,1–18).
3
Rosner 1982, Howell 1995 and Donzé 2007.
4
About radiology in general, see Holtzmann Kevles 1997.
5
Chandler 1990, pp. 218-219 and 579, Kees 2003.
6
Ikai 2010, Sugaya 1981. According to the definition set up in 1933 by the Health Bureau of the Ministry ofInterior in 1933, hospitals (byoin) are health centers with 10 beds and more, while clinics (shinryojo) have fewer
than 10 beds. This limit was raised to 20 beds in 1948.
7
Nihon tokei kyokai 2006, vol. 5, pp. 170–171.
2

1

the case of the company Shimadzu Works (Shimadzu seisakujo), which arrived on this market
after the First World War, and succeeded in challenging Siemens and establishing itself as thedominant actor of this business in the 1920s. 8 Third, X-ray machines are a particulartechnology which became stable in the 1930s, that is, in an environment which was notfavorable for foreign enterprises in the case of Japan, due to an industrial policy aimed at
helping a national industry grow.9 The features of this environment (high-growth market,
local competitors, unfavorable policy to foreign firms) made it necessary for themultinationals involved in this business to adopt specific strategies. This paper focuses on thecase of the German multinational enterprise Siemens, attempting to shed light on its strategy
for the Japanese market for X-ray machines. The course of Siemens on this particular market
between 1900 and 1945 was characterized by its failure to keep the dominant position it had
until World War I. Even if it enjoyed an undeniable technological advantage on the worldwide
market of X-ray machines, it was unable to prevent newcomers from challenging it in Japan.
As most of the German multinationals were doing on a global scale, Siemens gave priority to
an export strategy rather than direct investments up to World War II, but did relocate part ofits production when so compelled by local political conditions or competition with other firms,
especially in Central and Eastern Europe.10 This phenomenon has been clearly explained by
Kudo Akira in the case of Japan.11 The presence of Siemens in Japan goes back to 1861, withthe gift of a telegraph to the Emperor upon the occasion of the signing of the treaty between
Germany and Japan.12 In the 1870s, the German firm delivered several electrical devices andappliances to the army, the administration and private companies. At first, it exported its
products through trading companies, subsequently arranging for representation in Japan bysending Hermann Kessler in, who opened an office in Tokyo (1887).13 The company was
officially registered under the name of Siemens Schuckert Electric Co. in 1905 (thereafter
Siemens Japan). Even though it favored exports and did not make any direct investments in
production, Siemens played a key role in technology transfer towards Japan, through theGerman and Japanese engineers who installed and maintained its equipment. In 1898,
Siemens Japan employed eight persons, six of whom were Japanese.14 However, the mainfeature of the strategy adopted by Siemens in Japan before 1945 was the realization of a large
direct investment after World War I, with the creation of the joint venture company Fuji
Electric (Fuji denki) together with the zaibatsu Furukawa (1923), a new firm to which
8

Shimadzu 1967.
Mason 1992, pp. 48-99, Udagawa 1987, Yuzawa and Udagawa 1990, Gaimusho tokubetsu shiryobu 1978.
10
Imakubo 2000.
11
Kudo 1998.
12
Siemens K.K. 1987, Takenaka 1991, Takenaka 2009, and Siemens Corporate Archives, Munich (thereafter
SCA), 7912 Chronology of Siemens-Schuckert D.K.K., Tokyo, 1944.
13
Siemens K.K. 1987, p. 17.
14
SCA, 7912 Chronology of Siemens-Schuckert D.K.K., Tokyo, 1944, p. 5.
92

Siemens gradually transferred its production during the interwar years.15
Yet most research carried out on Siemens in Japan during the first part of the 20th century
failed to consider the case of X-ray machines, a sector which also led in 1933 to a second
joint venture with a Japanese trading company specialized in medical goods, Goto Fuundo.
This joint venture was only mentioned in passing by the Ministry of Foreign Affairs in its
analysis of foreign direct investment (FDI) published in 1948,16 which is incidentally themain source used by historians who focused on FDI in Japan before World War II. Although
he used another source, also published in 1948, Kudo only listed Goto Fuundo as an operatingcompany of Siemens & Halske without giving any details of its activities or explaining its
specific development.17 This historiographic gap can also be explained by the unique path of
medical business within the Siemens group. Originally integrated within the enterpriseSiemens & Halske, the X-ray machine division was spun off into a new company when
Reiniger, Gebbert & Schall merged – Siemens-Reiniger-Veifa GmbH (SRV, 1925). Since then,this new firm based at Erlangen has been responsible for the production of medical devices
within the Siemens conglomerate (currently: Siemens Healthcare). It still has its own archive
center there, while the documents usually used by historians working on Siemens are kept in
another, Munich-based institution (Siemens-Archiv-Akt, SAA). This institutional
compartmentalization of archives is no doubt why Siemens’ activities with regard to X-ray
machines have not been taken into consideration.
One should also mention that the business of medical devices – essentially X-ray machines –was only a sideline in comparison with other traditional sectors of Siemens (telegraphs,
turbines, power stations, electrical appliances). It was, however, the only sector to lead to
specific direct investment and was instrumental in modernizing medical equipment andturning medicine into a business in Japan. The involvement of Siemens in the business of
X-ray machines in Japan is approached hereafter in four parts, which look at the firm’s
strategic choices (export, licensing, direct investment) against the background of the changing
economic and technological environment.

1. The beginnings of radiology in Japan: a monopoly of German manufacturers(1900–1914)
Up until World War I, the market of X-ray machines for medical use consisted only of imports
with the exception of a few machines assembled with imported parts from 1908 onwards by

15

Watanabe 1984.
Gaimusho tokubetsu shiryobu 1948, p. 99
17
Kudo 1998, p. 28.
16

3

Shimadzu Works, a manufacturer of scientific instruments. 18 As we lack foreign trade
statistics for these machines, it is not possible to determine the various market shares forindividual countries. However, a qualitative approach brings out the virtual monopoly
exercised by German manufacturers, mainly Siemens & Halske, Reiniger, Gebbert & Schall
AG (RGS) and Veifa. The book on Japanese radiology published in 1969 by Goto Goro as
some annals does not mention the acquisition of foreign X-ray machines that were not
German prior to 1914.19
Thus, the Japanese Imperial Army ordered one of the first radiology devices installed in Japan
from Siemens in December 1898, for its school of medicine.20 As for the company Siemens
Japan, 1901 was the year it received its first order from the Army, consisting of “a great many
Siemens-Roentgen apparatuses”. 21 In any case, the Army and the Navy were the first
customers of the German firm at the beginning of the 20th century. Japanese officers were
impressed by the portable X-ray machines used on the battlefield by the German Army during
the Boxer War and decided to acquire some.22 In 1904, in connection with the war against
Russia, the Imperial Army ordered some new X-ray equipment from Siemens, especially for
its garrison hospitals of Hiroshima and Matsuyama.23 After the war, the Army and the Navy
decided to equip all their hospitals with Siemens X-ray machines (1906).24
As the volume of orders rose, Siemens Japan adopted a strategy to actively develop thisbusiness, notably in civilian medical circles. In 1909, it launched new machines, and two
years later it opened a separate division for medical devices that employed four persons, allJapanese citizens, including a doctor, 25 developing a communication policy aimed atincreasing recognition for its products among civilian doctors. In 1903, Siemens had alreadypresented an X-ray machine at the Fifth National Industrial Exhibition of Osaka that had
impressed the public.26 But the goal of such an event was above all to stress the technologicalsuperiority of Siemens as a whole. Opening the medical division in 1911 had a more practicalaim: increasing sales of X-ray machines and penetrating the private medicine market. Thus, in
1910, a Siemens engineer displayed some devices at a conference of the Japanese Medical
Society (Nihon igakkai).27 This strategy of diversification towards the private sector was
successful. In the years leading up to World War I, Siemens of course continued its shipments
to the Army but extended in parallel its activities targeting universities and some of the most
18

Goto 1969, p. 64.
Goto 1969.
20
Goto 1969, p. 22.
21
SCA, 7912 Chronology of Siemens-Schuckert D.K.K., Tokyo, 1944, p.6.
22
SCA, 7912 Chronology of Siemens-Schuckert D.K.K., Tokyo, 1944, p.6.
23
SCA, 7912 Chronology of Siemens-Schuckert D.K.K., Tokyo, 1944, p. 7.
24
Goto 1969, p. 55.
25
Goto 1969, p. 69.
26
SCA, 7912 Chronology of Siemens-Schuckert D.K.K., Tokyo, 1944, p. 7.
27
Goto 1969, p. 75.
19

4

renowned private hospitals (Hayashi Hospital; Juzen Hospital; Ogata Hospital; Tamura
Hospital; etc.).28 In 1913, Siemens delivered scores of X-ray machines, especially to the
Navy and to several prefecture hospitals (Aichi, Gifu, Hiroshima, Yamaguchi), that is,benchmark medical institutions in their regions.
The virtual monopoly that German manufacturers, particularly Siemens, had over theJapanese market for X-ray machines can be explained by two factors: the relative weakness ofAmerican and British manufacturers until 1914, and the fascination of the Japanese scientificand medical world for German medicine. At the time, Germany and the other
German-speaking countries (Austria and part of Switzerland) were the favorite destination ofJapanese doctors trained abroad in the late 19th century.29 Moreover, when the Faculty of
Medicine of the University of Tokyo was founded, in 1871, its chairs were entrusted first toGerman doctors then, in the next generation, to Japanese doctors trained in Germany, mainly
at the University of Berlin.30 Of special note is the case of Julius Scriba (1848-1905), a
professor of surgery at the University of Tokyo who trained many Japanese surgeons. In
February 1898, he brought back an X-ray machine from Germany and set it up in his
department.31 The social networks of medicine appeared to have been a decisive channel forthe supply of X-ray equipment in Japan until 1914.

2. Political and technological breakdown: towards a competitive market (1914–1930)
The First World War was a double breakdown, on both the political and technological levels,
ending Siemens’ hegemony on the Japanese market for X-ray machines. On the one hand, as
occurred in other sectors of the economy, the war interrupted economic relations withGermany.32 Not only were imports of German goods stopped overnight, but holdings ofGerman companies, especially patents, were seized by the Japanese authorities. In the case of
X-ray machines, the abrupt disappearance of German firms, which had totally controlled thismarket until 1914, made it possible for rival companies to launch into this activity. This wasnotably the case with other foreign manufacturers, such as the American company Victors
X-Ray Corporation, close to General Electric. With the war, the Japanese importers anddistributors launched non-German X-ray machines and sometimes tried to engage inproduction. For example, the trading house Iwayashi Iwamoto Tokichi marketed X-ray
machines made by the British firm Watson and the American company Victors, delivering
28

Siemens Corporate Archives, Med-Archiv Erlangen (thereafter MAE), unmarked folder, Die Tätigkeit desHaus Siemens in Japan auf das Gebiet der elektromedizinischen Technik, 31 May 1958.
29
Donzé 2010.
30
Tokyo daigaku igakubu hyakunenshi henshuiinkai 1967, pp. 123–34.
31
Goto 1969, p. 22.
32
On the relationships between Japan and Germany, see Kudo, Nobuo and Pauer 2009.

5

around ten to hospitals in 1915.33 In addition, it set up a radiology division that was absorbed
after the war by the company Tokyo Medical Electric Co (Tokyo igaku denki), founded in
1916.34 As for the company Goto Fuundo, which went on to partner with Siemens in the
mid-1920s, it redirected its sourcing from Germany to France, the United States and theUnited Kingdom.35 Moreover, some domestic producers, such as Shimadzu, Tokyo Electric
Medical Care (Tokyo iryo denki) and Akiyama, began at the time to produce their own
devices.36 For example, in 1915 Shimadzu marketed its first serially produced X-ray machinefor medical purposes, the A model.37 These Japanese producers also took advantage of theabsence of German manufacturers to export their goods during the war, mainly to Russia,
India, China and Australia.38 In the first half of the 1920s, numerous small companies
brought machines onto the market. By 1923, the following companies were marketing some
X-ray devices: Shimadzu, Dainihon Roentgen, Okura Roentgen, Morikawa Works, Akiyama
Works and Goto Fuundo, not to mention distributors of foreign machines.39
Mention should be made of a major technological breakthrough in the United States, at thelaboratory of the multinational General Electric Co (GE) – the development of the Coolidge
X-ray tube (1913).40 The particularities of this tube (high vacuum; tungsten spiral filaments
for heating) enabled an easy control of the dosage of rays by delinking their volume (current)
from their penetrative power (voltage). This innovation made possible an excellent
application of radiology to medicine, largely contributing to its rapid diffusion. In Japan, thistechnology was controlled by Tokyo Electric Co, a GE-affiliate founded in 1905 that enjoyeda monopoly on imports and sales of Coolidge tubes in Japan, and subsequently their
manufacturing, from 1920 onwards.41 Yet until the early 1930s, GE did not produce complete
X-ray appliances but only tubes, which were sold to appliance makers. The American
multinational was however not the sole tube producer, even if its tubes were the best quality.
GE’s main rivals were German companies, namely Müller and Phoenix, which were
producing in the 1920s respectively for the Dutch company Philips and Siemens. In Japan,
there were also several manufacturers producing lower-quality copies (Kanezawa Medical
Appliances Co, Shibuya Roentgen Co).42 But until the beginning of the 1930s, both GE andTokyo Electric produced only X-ray tubes which they supplied to X-ray machine
33

Goto 1969, p. 126.
Goto 1969, p. 160.
35
Goto 1969, p. 126.
36
SCA, 15 Ln 376, R. Momotani, Future prospects in Japan with special consideration of the Siemens &Halske business, November 1919.
37
Goto 1969, p. 126.
38
SCA, 15 Ln 376, R. Momotani, Future prospects in Japan with special consideration of the Siemens &Halske business, November 1919.
39
Goto 1969, pp. 223-224.
40
Siemens 1957, vol. 2, pp. 79–80. On the Coolidge tube, see Arns 1997.
41
Tokyo shibaura denki 1963, p. 474.
42
Goto 1969–1970.
34

6

manufacturers, especially Shimadzu. The latter indeed approached Tokyo Electric and used
Coolidge tubes for its machines from 1917 onwards.43 An agreement was even signed in
1922 between the two firms, thereby securing Shimadzu’s supply.44
In the early 1920s, when Siemens was planning to come back onto the Japanese market for
X-ray machines, the structure of this market had changed radically. Although its main rivals
on the global scale, namely General Electric and Westinghouse Electric, did not take theopportunity to engage into this business, despite a favorable commercial flow between 1914
and 1918, some local newcomers had emerged and established themselves as dominant actors,
especially Shimadzu, which benefited from GE technology and adopted a particularly active
strategy of promotion of its machines within medical circles. The new competitiveness of thismarket throughout the world led Siemens to restructure this division, both on a global scale
and in Japan.

2.1 New organization of Siemens
The German industry for X-ray machines underwent broad concentration wave in the 1920s
which benefited Siemens.45 This rationalization of the means of production, made necessary
by the financial difficulties which many manufacturers faced after World War I, enabled this
sector of German industry to recover its prewar competitiveness. The main merger that
occurred at the time was the takeover of the company Reiniger, Gebbert & Schall AG (RGS)
by Siemens & Halske (1924). Founded at Erlangen in 1886, RGS was a maker of electricaldevices for medicine that embarked in 1896 on the production of X-ray machines for Wilhelm
Roentgen.46 After becoming a joint stock company in 1906, it opted for a strategy of growth
based on the acquisition of small rival firms, for example the Frankfurt-based manufacturer of
X-ray machines Veifa Werke (1916), subsequently setting up a holding company,
Industrieunternehmungen AG (Inag), in 1921. Bringing together some twenty small andmedium-sized firms involved in the production of medical appliances and materials, including
the X-ray machine makers RGS, Veifa, Sanitas and Polyphos, this holding aimed at
centralizing distribution in order to compete with big enterprises like Siemens. However, thisstrategy was not financially viable, resulting in the takeover of RGS and Inag by Siemens &Halske in 1924. Siemens then merged RGS with its own X-ray machines division into a newenterprise, Siemens-Reiniger-Veifa GmbH (SRV, 1925), subsequently renamed
Siemens-Reiniger Werke AG (SRW, 1927).

43

Goto 1969, p. 148.
Shimadzu 1967, p. 45. Goto 1969, p. 179 quotes 1920.
45
Siemens 1957, vol. 2, pp. 81–85 and SCA, 7912 Chronology of Siemens-Schuckert D.K.K., Tokyo, 1944, p. 4.
46
Siemens 1957, vol. 1, p. 280.
44

7

This rationalization of production in Germany in 1924 also provided an occasion to
restructure the import and distribution of X-ray equipment in Japan. For Siemens, thisbusiness was secondary in comparison with other key sectors such as telecommunication andenergy. In the report on business opportunities in Japan that he wrote in November 1919,
Momotani R., an employee of Siemens Japan, did not pay so much attention to X-ray
machines and tubes.47 In 1923, when the joint venture Fuji Electric was set up by Siemens &Halske and the zaibatsu Furukawa, a medical division employing six persons was organized.48
However, according to the corporate history published by Fuji Electric, it only imported
products and was not involved in production.49 Yet this division showed growth during themonths following the Great Kanto Earthquake (1 September 1923). Many hospitals andclinics used the reconstruction as an opportunity to reorganize themselves into modern
medical institutions. 50 Between September 1923 and June 1926, Siemens delivered to
medical establishments, mainly based in the Tokyo area, a total of 101 X-ray machines, 20
X-ray tubes and 32 various medical devices, such as electrocardiograms and diathermydevices.51
This division was headed from 1924 onwards by a German engineer sent by Siemens &Halske, Otto Kresta. A holder of a PhD in physics who specialized in X-ray devices, heplayed a key role in the reactivation and the development of the medical networks ofSiemens. 52 Indeed, he participated actively in events organized by the Japan Roentgen
Association (Nihon rentogen gakkai) from 1924 onwards. He was the only foreigner to attend
regularly up until World War II, and gave papers in German on X-ray machines, theiroperation and their use, which were then published in the journal of the Association (Japan
Roentgen Association Review; Nihon rentogen gakkai zasshi). This strategy of communication
aimed at scientific circles was also used in the 1920s and 1930s by the main rival companiesof SRW (Shimadzu, Tokyo Electric).53 Its objective was to strengthen the scientific image ofthe firm within the medical world and also to make its own new machine known. After 1926,
Kresta continued his activities inside the company Goto Fuundo, the medical goods trading
company with which SRW signed an agreement.

47

SCA, 15 Ln 376, R. Momotani, Future prospects..., op. cit.
SCA, 7912 Chronology of Siemens-Schuckert D.K.K., Tokyo, 1944, p. 2.
49
Fuji denki 1957, p. 281.
50
The same phenomenon can also be observed in the industry. See Imaizumi 2008.
51
MAE, unmarked folder, Die Tätigkeit des Haus Siemens in Japan auf das Gebiet der elektromedizinischen
Technik, 31 May 1958.
52
Momotani 1955, p. 42.
53
See for example Shimadzu 1967.
48

8

Tab. 1: Papers presented by Otto Kresta at the Japan Roentgen Association, 1924–1929
Title

Date

Technology of deep therapy devices

1924

X-rays and their application

1924

Protection against radiation from R-ray machines

1926

New trends in the X-ray field

1929

The Japanese climate and the processing of Roentgen machines

1929

Source: Goto 1969, various pages.
Note: No more conferences are mentioned after 1929.

2.2 A successful newcomer: Shimadzu Works
SRW was not the only X-ray machine producer to take up a specific communication strategy
towards the medical world. Indeed, the policy introduced through Kresta’s engagement within
Japanese medical networks since 1924 appears as an attempt to react to the establishment of acompetitive newcomer, namely the company Shimadzu Works (Shimadzu seisakujo), which
was then challenging the dominant position of SRW, thanks to the adoption of a completed
strategy of market penetration. Of course, the development of Shimadzu did not rely solely onmarketing strategy, but also depended on an internalization policy of know-how andtechnological capabilities. Founded at Kyoto in 1875 as a scientific instrument maker, thisfamily firm also engaged in the production of X-ray device for medical purposes in 1908,
successfully launching its first serial-produced machine in 1915. It the built its organizational
capabilities in the development of X-ray machine in the 1920s on the hiring ofuniversity-graduated engineers and the subcontracting of R&D to outside research centers.54
However, the key factor of Shimadzu’s ability to challenge Siemens on the Japanese market
was undoubtedly the adoption of an original marketing strategy, which consisted of threemain thrusts: establishing networks in the medical world, organizing scientific events andsetting up schools for radiology technicians.
First of all, Shimadzu established ties with medical circles through doctors. This approach
appears as a key element of the expansion strategy towards the medical field adopted by thecompany in the 1910s. When Shimadzu was turned into a joint stock company in 1917,
Shimadzu Genzo, owner of the firm and main shareholder, comprised 42 persons, of whom 12
were doctors. These practitioners were a key resource for the commercial opportunities of the54

Shimadzu 1967.

9

firm. They all had similar profiles: after graduating from the Universities of Tokyo and Kyoto
then training in Europe, they were running private hospitals they owned, in addition to which
several were engaged in professional associations, when Shimadzu Corporation Ltd wasfounded (1917).55 The career of Ogata Masakyo perfectly exemplifies these various aspects.
Born in 1864, himself the son of a doctor, he studied medicine at the University of Tokyo
before training in Germany and Austria, where he specialized in gynecology-obstetrics(1888–1892). Upon his return to Japan, he joined the hospital founded by his father at Osaka– which had acquired a Siemens X-ray machine at the beginning of the 1910s – where he took
over the management. Obtaining his PhD in medicine from the University of Tokyo in 1905,
he was a notable of Osaka in the early 20th century. President of the Osaka Physicians’
Association and of the Osaka Midwifery Association, as well as Vice-President of the
Dai-Nihon Physicians’ Association, he also served as Director of the Osaka Charity Hospital’s
College of Medicine and was a member of the Osaka Municipal Assembly. Finally, he ran amedical laboratory in the city of Osaka.56 Like him, the doctors who joined Shimadzu wereentrepreneurs who helped turn medicine into a business. For these private practitioners, newtechnologies such as X-ray machines were destined to not only improve their medical practice
but also strengthen their position on the medical market, which was then becoming more andmore competitive.57 As for the firm itself, the purpose of this collaboration with such doctors
was obvious: it allowed the company to access networks facilitating the sale and distributionof new devices, which were then launched on the market.
Shimadzu also developed a communication policy, primarily geared to organizing andparticipating in scientific events. For example, in 1921 it ran a one-week course (koshukai)
introducing the principles of X-ray machines and their possible applications to medicine.
Organized each year, this course became increasingly popular, with 22 participants in 1921,
80 in 1922 and 113 in 1924.58 It was subsequently taken over and pursued in 1940 by theJapanese Medical Radiology Society (Nihon igaku hoshasen gakkai).59 In addition to thisone-week course, Shimadzu actively engaged in the scientific life of medicine from themid-1920s onwards, mainly through the engineer Fukuda, who participated in the activities of
the Japanese Roentgen Association, presenting papers at annual conferences and publishingarticles in the society’s journal. 60 Shimadzu itself organized some scientific events. In
February 1924, to mark the first anniversary of Wilhelm Roentgen’s death, the enterprise set
up a Roentgen Festival (rentogensai), gathering together in Kyoto more than 200 persons who
55

Shimadzu 1967, p. 36.
Iseki 1921-1930, vol. 2, 78-79
57
Ikai 2010, 78-88.
58
Shimadzu 1967, 49. The numbers are unknown for the following years. In 1923, a similar course for dentists
was organized.
59
Shimadzu 1967, 49.
60
Goto 1969-1970.
56

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heard a series of scientific communications.61 A similar event has taken place since thenevery year, a practice which still exists today. Moreover, Shimadzu has also published since
1925 its own scientific journal, the Shimadzu Radiology Bulletin (Shimadzu rentogen jiho),
which largely consists of articles by the firm’s employees.62
Finally, the last communication strategy adopted by Shimadzu was to set up a training center
for radiology technicians. While contributing to the professionalization of the assistants incharge of X-ray machines in hospitals and clinics, the firm not only ensured the training of a
new generation of technicians able to use X-ray equipment effectively but also backed the
diffusion of this new technology into Japanese healthcare institutions and encouraged the useof its own apparatuses. The Training Center for X-Ray Technology (Rentogen gijutsu
koshujo) was opened at Kyoto in 1927. Renamed the Special School for X-Ray Technology(Rentogen gijutsu senshu gakko) in 1935, it remained a pioneer until the 1950s, playing a keyrole in the training of X-ray technicians in Japan until then. Together with the Osaka Schoolof Physiotherapy, which was founded in 1935 and ran courses for X-ray technicians from1935 onwards, it was the only training center for these technicians until 1950.
As the gross sales of the X-ray machine division of Shimadzu are unknown before 1935, it isdifficult to consider the growing competitiveness of this firm towards Siemens. According to
the corporate history published by Shimadzu, the sale of X-ray devices amounted at only one
or two machines each year at the beginning of the 1910s. It grew up to about 100 machines
and a value of 700,000 yen in 1924, and then to 250 machines in 1926, for a value estimatedat 1.7 million yen.63 In comparison to this growing importance, the export of X-ray machines
by SRW to Japan was less than 300,000 yen both in 1924 and 1926.64 Siemens had been
overcome in the first part of the 1920s by a domestic competitor who had adopted an active
marketing strategy of accessing a growing medical market.

2.3 The agreement with Goto Fuundo (1926)
In reaction to the loss of its market share, in 1926 SRW entered into an alliance with a small
trading firm specialized in the sale and the distribution of drugs and medical goods, Goto
Fuundo. Founded at Tokyo in 1886 by Goto Setuzo, a young graduate of the Faculty of
Pharmacology of the University of Tokyo (1883), this company was originally a manufacturer
and distributor of medicine that subsequently diversified into the trade then the production of
61

Shimadzu 1967, 50.
It was renamed Shimadzu Hyoron (1940) and still exists today. See www.shimadzu.co.jp/tec_news/index.html(website accessed 19 March 2010).
63
Shimadzu 1967, 353 and 356.
64
MAE, 770-2, Unser Export nach Japan und unsere zukünftigen Aussichten, 20 October 1934.
62

11

medical instruments and machines.65 This shift from pharmacy towards mechanics, whichmost certainly induced a technological paradigm shift, was not exceptional and can beobserved in several other cases. For example, this is what happened in the Osaka-based
company Shiraimatsu, a drug trading house established 1716 which converted to mechanics
and the production of equipments for hospitals in the 1870s.66 Another case is provided by
the company Sankyo, specialized in the import and distribution of drugs. In 1908, it opened adivision for importing and trading in medical devices, essentially from Germany. Nevertheless,it did not engage in production of machines.67 This transfer towards new activities canobviously be explained by the specificity of the medical market, structured during the Edo
period, and these firms’ control of distribution channels, which facilitated the flow of new
products.
Goto Fuundo followed a similar path along which medical instruments and appliances,
particularly X-ray machines, quickly took an important place beside drugs. Indeed, thiscompany did not give up the business of medicines despite the growth of the appliances
division. According to the 1928 edition of The Japan Industrial Directory, Goto possessed adrug factory at Nakano Wards, Tokyo, as well as several sale subsidiaries throughout Japan,
including one at Osaka, in the historical area of drug traders, Doshomachi. 68 This
infrastructure is still mentioned in the 1936 edition of the directory.69 Moreover, among thefive members of the board of directors of this family firm, there was Fukuhara Shinzo, the sonof the founder of the cosmetics company Shiseido, that is, a business which largely used thesame sales and distribution channels as the pharmaceutical industry.70
Beside its involvement in the medicines business, Goto Setuzo soon launched into the importand distribution of surgical instruments and equipment for hospitals. He regularly published a
trading catalog, the tenth edition of which came out in 1906.71 Among the foreign machines
he offered, there were some X-ray machines. In September 1900, he already delivered one to
the Faculty of Medicine of Sendai Second High School.72 Three years later, Goto Setuzo’s
tour of Europe, probably in Germany, marked a decisive step.73 That same year, he imported
some parts for X-ray machines from the German company Hirschman (1903) to Japan.74 In
1908, he obtained the exclusive importation and distribution rights for Japan for the X-ray

65

Goto 1969, p. 42.
Shiraimatsu kikai 2002.
67
Yamashita 2010, p. 145.
68
Nihon kogyo yokan, 1928, p. 105.
69
Nihon kogyo yokan, 1936, p. 127.
70
20 seiki nihon 2001, vol. 2, pp. 22-29.
71
Goto 1906.
72
Goto 1969, p. 30.
73
Goto 1969, p. 42.
74
Goto 1969, p. 42.
66

12

machines from the firms Hirschman and RGS.75 Moreover, he began to do business with
Siemens, from which he ordered several medical appliances in 1912, including six X-ray
tubes and a complete set of radiology equipment (orthoscope). 76 Finally, Goto Fuundo
adopted an active strategy of communication targeting medical circles early on. In April 1908,it organized for example a demonstration of the practical use of X-ray machines at a meetingof the Japanese Digestive Organs Diseases Association (Nihon shokakibyo gakkai).77 The
following year, Goto Ryohei published some articles on the use of X-ray machines in thejournal of this society.78
In order to maintain and repair the medical appliances and X-ray machines sold to thehospitals and clinics, Goto Fuundo was obliged to internalize some technical know-how
which subsequently helped it launch into production. In 1915, it engaged an engineer,
Watanabe Motomu, who graduated that same year from the Electric Department of Tokyo
Industrial College (Tokyo Institute of Technology since 1929).79 In 1921, he went on abusiness trip to Europe together with the doctor Fujinami Goichi, a pioneer of radiology inJapan and a professor at Keio University.80 Watanabe subsequently served on the board of
directors until after the war.81 A second engineer, Kawamura Kosaku, joined the company
around 1917. He graduated from the same department as Watanabe82 and became chiefengineer of Goto Fuundo around 1921.83 Finally, Goto Fuundo tried to start producing X-ray
machines in 1918, a decision that was clearly linked to the opportunity opened up by theinterruption of imports from Germany due to the war. Goto Fuundo founded a subsidiary thatyear, Tokyo Electric Industry (Tokyo denki kogyo), whose purpose was to manufacture
electrical appliances and particularly X-ray machines.84 To do so, it relied on top-flightresearchers. While the technical direction of the new firm was entrusted to Iwayama, anengineering graduate,85 Goto Fuundo hired as consultants professor Fujinami and professor
Torikata Uichi, who held a PhD in electrical engineering from the University of Tokyo andwas at the time director of the Electrotechnical Laboratory of the Ministry ofCommunication.86 Despite such excellent knowledge resources, this new firm seems to havequickly given up its activities. On the one hand, it is not quoted in 1919 in the main

75

Goto 1969, p. 64.
SCA, 7912, Lieferübersichten, 8 June 1935.
77
Goto 1969, p. 64.
78
Goto 1969, p. 67.
79
Goto 1969, p. 128.
80
Goto 1969, p. 194. On Fujinami, see Iseki 1921-1930, vol. 2, p. 222.
81
He was still a member of the Board in 1950. Goto Fuundo, Eigyo hokokusho, 1950.
82
Nikan kogyo shimbun 1934, p. 201.
83
Goto 1969, p. 194.
84
Goto 1969, p. 160.
85
Goto 1969, p. 160.
86
Iseki 1921-1930, vol. 5, p. 250.
76

13

directories listing industrial companies in the country.87 On the other hand, the company Goto
Fuundo was restructured in 1919, taking the form of a joint stock company with a capital of
550,000 yens.88 The objectives of this new society were notably the “manufacturing of […]surgical, chemical, physical, bacteriological, and optical apparatus and instruments, and othergeneral electrical apparatus and instruments” 89 , beside the traditional activities of Goto
(manufacture and sale of drugs, trade of various medical materials, hospital equipment). The
medical instruments and machines workshop of Tokyo Electric Industry was then clearlytaken over by Goto Fuundo in 1919, with a directory published in 1936 mentioning theexistence of a mechanics workshop attached to the company.90
Despite these difficulties, Goto Fuundo was a major dealer in medical appliances in the 1920s.
During that decade, it signed many exclusive import and distribution contracts with various
foreign medical equipment manufacturers, mainly German, such as the companies Mayer &Rotzler (1923), Veifa-Werke (1924), Phoenix, (1924), RGS (1924), all part of the holding
Inag.91 In return, Inag received 50,000 yen of the capital of Goto Fuundo (that is 9.1%), a
share which went to Siemens after it took over Inag. Other similar contracts were signed with
Siemens (1926), as well as the German manufacturer of devices for dentists, Adam Schneider(1928), and the Swiss producer of hospital equipment Schaerer (1928).92 For all these firms,
access to the Japanese medical market was the purpose of such agreements with Goto Fuundo.
For example, the contract signed with Mayer & Rotzler explicitly specified that “Gotoengages to make a generous advertisement for Mayer’s products, adapted to the territory
covered by the agreement. Goto especially undertakes to provide, as need be, catalogues inJapanese and Chinese language to the doctors and to draw their attention to the innovations
through appropriate leaflets, advertisements and publications in key journals, as well as giving
thought to a well-equipped, appropriate space for sale and demonstration.”93 The contracts
signed with the other firms bore similar clauses, with those signed with RGS and Phoenix also
stipulating the organization of “Roentgen courses” twice a year.94
For Siemens, the takeover of Reiniger, Gebbert & Schall AG (RGS) led to the restructuring of
the distribution of medical goods on the Japanese market and the signature of an exclusivity
contract with Goto Fuundo, which evidently possessed better networks with medical circles
than Fuji Electric. In 1926, Goto Fuundo signed two contracts, one with Siemens Reiniger
Werke (SRW), giving it exclusive rights to distribute its products on the Japanese market, and87This company was for example not cited in the 1919 and following editions of the Nihon kogyo yokan.
Goto 1969, p. 170.
89
MAE, unmarked folder, Statutes of S. Goto Fu-undo Co. Ltd., not dated (probably 1919).
90
Nihon kogyo yokan, 1936, p. 127.
91
MAE, unmarked folder, Contracts between Goto Fuundo and various foreign firms.
92
MAE, unmarked folder, Contracts between Goto Fuundo and various foreign firms.
93
MAE, unmarked folder, Contract between Goto Fuundo and Mayer & Rotzler (art. 3), 18 August 1923.
94
MAE, unmarked folder, Contracts between Goto Fuundo and various foreign firms.
88

14

the second with Fuji Electric, concerning the sale in Japan of the possible production of
medical appliances by this company.95 The 1926 contract between SRW and Goto Fuundo
was extended in 1931 and then again in 1934 for four years.96 In this context, Otto Kresta,
head of the medical division of Fuji Electric from 1923 onwards, was engaged by Goto
Fuundo in 1926.97 Paid by Goto Fuundo out of the funds owed to SRW, Kresta became amember of the board of directors and played a key role as a technical consultant until WorldWar II.98

Fig. 1: Sales from SRW to Goto Fuundo, in yen, 1924–1933
300 000
250 000
200 000
150 000
100 000
50 0001924 1925 1926 1927 1928 1929 1930 1931 1932 1933

Source: MAE, 770-2, Unser Export nach Japan und unsere zukünftigen Aussichten, 20 October 1934.
Note: Unknown before 1927.

For SRW, the commercial and financial consequences of this agreement were however
disappointing, as it did not enable it to overcome the competitiveness of Shimadzu and put an
end to a growing loss of market share. While the 1926 contract mentioned the guarantee ofannual orders for at least 250,000 yen,99 this sum was reached only three times by 1933,
95

SCA, 7912, Vertretung des UB Med und seiner Vorgänger in Japan, 1887-1979, 1979, p. 4.
MAE, 770-2, Contracts between SRW and Goto Fuundo, 12 November 1931 and 1 January 1934.
97
Momotani 1955, pp. 53-54
98
National Diet Library, Tokyo, Archives of the Supreme Commander of the Allied Powers (thereafter SCAP),CPC 41470, Memo, 2 October 1946.
99
MAE, unmarked folder, Contract between SRW and Goto Fuundo, 1926.
96

15

including for a year before the signature of the contract (see figure 1). Between 1926 and1931, Goto Fuundo’s orders from SRW only averaged 229,701 yen. Afterwards, the 30%
devaluation of the Japanese yen in December 1931 made German products more expensive
and largely explain the drop in orders, which plummeted from 95,550 yen in 1932 to 35,500
in 1933. However, SRW was still competitive with other foreign multinational enterprises.
According to a SRW internal document, the German firm exported X-ray machines to Japanto the tune of 77,000 marks in 1933, that is, more than the official value of the German
foreign trade statistics (76,000 marks).100 Obviously, Siemens had no German rival in Japan.
Moreover, American exports of X-ray machines amounted to a paltry 7,100 marks that same
year.101 However, SRW’s real competition appeared on the domestic market in the early
1930s, with the growth of Tokyo Electric and Shimadzu. The position of Goto Fuundo on themarket of medical devices was indeed weakening in the first half of the 1930s, with adividend rate that dropped from 10% in 1927 at least to 7% in 1930, 5% in 1931 and 4% in
1935.102

3. Producing in Japan (1930–1945)
The decision to transfer production of X-ray machines to Japan was a consequence of the newcompetitiveness of this market, following the launch of General Electric (GE) in the
production of complete X-ray equipment; until then, it had produced only X-ray tubes,
leaving the production of full equipment to a subsidiary, the Victors X-Ray Corporation, a
Chicago-based manufacturer of medical devices in which GE invested in 1920 and merged in
1926.103 The upcoming end of the validity of GE’s patent on the Coolidge X-ray tube in the
mid-1930s – 1934 in the case of Japan – on the one hand, and the development of German
multinationals in this business on the other hand led GE to become involved in the business ofcomplete X-ray machines, a high-growth market in the 1930s.
For Siemens, the issue was not the technology but rather the market. At a very early stage, it
controlled its supply of Coolidge-type high vacuum X-ray tubes. Even though its rival
Allgemeine Elektrizitätsgesellschaft (AEG) obtained manufacturing rights for the European
market for the GE patent shortly before World War I broke out, Siemens held some patents forGermany related to tungsten anti-cathodes necessary to the production of Coolidge X-ray
tubes. Thus, an agreement was signed between the two German multinationals, whereby AEG
could use the Siemens patents but undertook in exchange to produce a determined quantity of

100

MAE, unmarked folder, Gegenwärtiger Stand des SRW-Geschäfts in Japan, 4 January 1939.
MAE, unmarked folder, Gegenwärtiger Stand des SRW-Geschäfts in Japan, 4 January 1939.
102
MAE, 174, Dividendenzahlungen von Goto.
103
General Electric 1963, p. 6.
101

16

X-ray tubes for it.104 Until the end of the 1920s, Siemens had no problems supplying tubes.
Besides, two independent manufacturers emerged as producers of high-quality X-ray tubes
exported throughout the world, the companies C.H.F. Müller and Phoenix
Röntgenröhrenfabriken AG. While Müller was taken over by the Dutch multinational
enterprise Philips in 1927,105 SRW bought up Phoenix in 1932. Founded in 1918, this firm
above all supplied Veifa with X-ray tubes and worked essentially for Siemens after 1925.106
In fact, its takeover in 1932 reflected Siemens’ desire to secure its supply of X-ray tubes.
In reaction to the arrival of GE on the X-ray machines market, SRW tried to establish aninternational cartel with other European firms (AEG, Philips, Müller, Elema-Schönander) fora share of the world market. 107 Under this agreement, Japan belonged to the markets
attributed mainly to Siemens, together with Latin America, Sweden, Norway, Italy, Spain,
Yugoslavia and Switzerland. According to a document dated 1934, Siemens and Philips
shared the Japanese market with a relative proportion of 62%/38%.108 Philips and Müller
could thus export in Japan but no priority was given to their action. It was a privileged area ofSiemens’ business, where it encountered only American and domestic competitors.
The Japanese market for X-ray machines changed radically in the 1930s when GE’s patent for
the Coolidge tube expired (July 1934).109 Until then, the involvement of Tokyo Electric, GE’s
subsidiary in Japan, in the business of radiology had been limited to the import and then the
manufacture of tubes, an agreement having been signed in 1922 with the main Japanesemanufacture of X-ray machines, the company Shimadzu Works.110 Anticipating the end of
their monopoly, GE and Tokyo Electric had begun to produce complete installations in the
1930s with the launch of the Giba 75 machine in 1932, a standardized X-ray machine which
ensured the success of Tokyo Electric in the market. 111 Moreover, Tokyo Electric also
founded in 1930 a sales company, Nippon Medical Electric (Nihon iryo denki), whose task
was to market the machines imported from GE and produced in Japan by Tokyo Electric.112
As for the production of tubes, this market saw the arrival of several newcomers after 1934.
Shimadzu in particular managed to secure its supply of high-quality tubes thanks to its
cooperation arrangements with the company Japan Quartz Industry Co (Nihon sekiei kogyo),to which it subcontracted R&D. In 1934, it designed a prototype of a Coolidge-type tube
104

Siemens 1957, vol. 2, p. 80.
Kees 2003, p. 82.
106
Siemens 1957, vol. 2, p. 85.
107
MAE, 753, Verträge auf dem Arbeitsgebiet der Siemens-Reiniger-Werke AG. This document is undated but
more recent than 1932, as its maps represent Manchukuo, which was founded then. Except the United States,
Canada, Mexico, the United Kingdom and France, this agreement covers the entire world.
108
MAE, 770–2, letter received from an anonymous correspondent in Berlin by Otto Kresta, 28 July 1934.
109
Shimadzu 1967, p. 378.
110
Shimadzu 1967, p. 45. Goto 1969, p. 179 cites 1920.
111
Tokyo shibaura denki 1963, p. 708.
112
21 seiki 1998, p. 8.
105

17

based on a model of the German firm Müller.113 The production of these tubes was thenbrought back to Shimadzu (1940).114 The Japanese market for X-ray machines thus becamevery competitive in the early 1930s, due to the arrival of Tokyo Electric and the strengtheningof Shimadzu’s organizational capabilities. Already in 1930, the management of Siemens
feared the creation of a big Japanese X-ray company based on the rapprochement between
Goto Fuundo and Shimadzu.115 In November, the German direction explained to Kresta its
will to become closer to Goto Fuundo, in order to avoid this company drifting from SRW:
“We consider right to tie up already now and for the longer as possible with Goto concerning
the production.”116 That was done two years later.

3.1 The set-up of Goto Fuundo Manufacturing (1932–1934)
In June 1932, SRW signed in Japan a contract with Goto Fuundo to set up a joint venture,
Goto Fuundo Manufacturing (GFM), confirmed by the German management in November
1933. 117 Afterwards, SRW continued to support the development of Goto Fuundo, byparticipating in various capital increases (July 1938, February 1939, September 1939)118 andby granting a loan of 50,000 yen (April 1937).119
The objective of the new company GFM was, according to its statutes, “to produce
electro-medical apparatus, light therapeutic apparatus and Roentgen apparatuses for medical
purpose” except “high-vacuum or gas discharge tubes.”120 The capital of the new enterpriseamounted to 400,000 yen, shared equally between SRW and Goto Fuundo. SRW did not pay
any cash but received its shares in exchange for the free provision of licenses and know-how.
It undertook to give GMF the necessary patents and blueprints for its devices, as well aspractical assistance through some engineers.121 GFM obtained the exclusive and free license
for the production in Japan of SRW’s X-ray machines. As for Goto Fuundo, it obtained its
shares against the provision of its factory and some cash. The company GFM was establishedat the same address as Goto Fuundo, and naturally took over its production facilities.
The management of GFM depended rather on Japanese managers linked to Goto Fuundo. Its
113

Shimadzu 1967, p. 378. In fact, the tubes of the firm Müller were made at that time by the Dutch company
Philips, to which Müller had belonged since 1927. See Kees 2003.
114
Shimadzu 1967, p. 80.
115
MAE, unmarked folder, Letter from SRW to Otto Kresta, 4 November 1930.
116
Ibid.
117
MAE, unmarked folder, Agreement between Goto Fuundo and SRW, 30 June 1932-25 November 1933. The
agreement was signed in 1932 in Japan and countersigned in Germany in 1933.
118
MAE, 174, various financial statistics on Goto, 1935-1943.
119
MAE, 174, Verzinsung des Darlehns, 1935-1944.
120
MAE, unmarked folder, Agreement between Goto Fuundo and SRW, 30 June 1932-25 November 1933, art.
3.
121
Ibid., art. 4.

18

board of directors was composed of three members, of whom two designated by Goto Fuundo
and one by SRW, as well as an Japan citizen inspector appointed by SRW.122 Goto Fuundo
was in charge of the management of GFM and undertook to pay a minimum dividend of 6%
and guaranteed Siemens 10% royalties on the sales and minimum annual orders for 300,000
yen, instead of 200,000 yen.123
However, SRW was not only looking for an agreement that could ensure good financial
results. Its concern was above all to control technology transfer. In particular, the German
multinational wanted to control potential innovations realized within GFM as well as possible
cooperation arrangements with other firms. The 1932 agreement on the establishment of thejoint venture included a long article on innovation, which mentioned notably that “inventions
and other propositions for improvements proceeding from the supervisors or employees shallbe communicated by Factory to SRW immediately, at the latest by the time when theprotection rights for such inventions or improvements are applied for in Japan. To utilize suchinventions and improvements and to acquire protection rights outside of Japan, SRW is
authorized exclusively.”124 Moreover, it planned that the “Factory shall not acquire the rights
of other inventions and protection rights unless SRW explicitly agrees to each such case. Incase SRW expresses its agreement, it will advise Factory as to the acquisition. Factory shall
do its best to help SRW acquire these rights for utilization outside of Japan under at least thesame advantageous conditions. It depends on the decision of SRW whether or not it accepts
the conditions.”125
The prudency of SRW can also be observed in the transfer of production, limited as much as
possible. The GFM production site was the workshop that Goto Fuundo possessed in theTokyo area since 1919, where it produced spare parts for X-ray machines and other medical
devices.126 Destroyed during the Kanto Great Earthquake in 1923, this factory was moved in
1927 to Urawa Ward, in the city of Saitama. It developed a production of “general medical
apparatuses such as Incubator, Mechanical Disinfection Apparatus, Centrifugal Precipitator,
Water Steriliser, Electric Transformer, Diaplasis Treatment Apparatus and all kind of
Roentgen equipment.”127 After 1934, this factory was not only the production center of SRW
products in Japan, but also the place where Goto Fuundo continued to manufacture appliances
and instruments on its own, an ambiguous situation that led to problems between Goto
Fuundo and Siemens after World War II. When he came to Berlin in December 1933, Kresta
spoke with two SRW representatives about launching a first production program in Japan, for
122

Ibid., art. 12.
Ibid., art. 11.
124
Ibid., art. 16.
125
Ibid., art, 16.
126
SCAP, CPC 41476, Letter from Goto Fuundo to an unknown recipient, 13 June 1949.
127
Ibid.
123

19

a value of some 100,000 marks and a limited volume of machines (30 small X-ray machines,
10 heliophos, 20 diathermy machines and various other appliances). 128 The discussions
showed that the transfer of production was restricted to a maximum, that is, to machines
whose import to Japan was no longer competitive. These smaller devices, which were meant
for the Army, the Navy and private hospitals, had a high-growth potential due to increasing
demand, but imported products were too expensive because of the high exchange rate and thecost of foreign currencies after the devaluation, combined with the cheap labor in Japan. It
was then decided to assemble these machines in the GFM factory with some parts imported
from Germany and others produced there. However, the launch of production was postponed
for about a year due to some negotiations with Tokyo Electric / GE.
At the same time as this production program was launched in Japan, the SRW management
began negotiations with Tokyo Electric in early 1934. The director of Tokyo Electric,
Yamaguchi, approached Siemens in the spring of 1934 on the occasion of a trip to Berlin. He
proposed to take over the production in Japan of SRW’s medical devices.129 Kresta proposed
to his German management to found a new joint venture company with Tokyo Electric andGoto Fuundo, endowed with a capital of 2.7 million yen, split between Tokyo Electric(44.4%), in charge of production, Goto Fuundo (29.7%), responsible for marketing, and SRW(25.9%), which would supply patents and brands. 130 However, Yamaguchi set someconditions to this agreement: he wanted to centralize all production at Tokyo Electric’s factory
and transfer Goto Fuundo’s workshop there.131 These conditions were not accepted by bothpartners. On the one hand, SRW claimed a negotiation with GE on the global scale and an
agreement between both multinationals. As for Goto Fuundo, on the other hand, it was not
acceptable to give up its production facilities.132 The impossibility to reach a satisfactory
agreement finally led SRW to envisage transferring production in Japan within GFM.

3.2 The growth of production in Japan (1935–1940)
The production of SRW machines under license really got underway in 1935. According to a
document dispatching the GFM manufacture by the origin of products between 1933 and1937, no production took place in Japan in 1933 and 1934 (see figure 2). However, once thedecision to produce X-ray machines in Japan was taken by SRW, the transfer was quick torealize and grow, as it can also be observed in the case of Fuji Electric since the mid-1920s.133
128

MAE, unmarked folder, Protokoll über eine Besprechung – Fabrikation in Japan, 7 December 1933.
MAE, 770-2, Letter from Sehmer (SRW Berlin) to Otto Kresta, 9 May 1934.
130
MAE, 770-2, Letter from unknown correspondent (Berlin) to Otto Kresta, 28 July 1934
131
MAE, 770-2, Letter from Otto Kresta to SRW, 28 July 1934
132
MAE, 770-2, Letter from unknown correspondent to SRW, 28 August 1934.
133
Udagawa 1987, p. 25. See also Watanabe 1984.
129

20

The value of products imported from Germany and sold by Goto Fuundo declined steadily
from 1934 onwards, dropping from 419,000 yen in 1934 to 174,000 yen in 1937, while thevalue in-house production increased sharply, from a mere 52,000 yen in 1935 to 270,000 yen
in 1937. In relative numbers, the share of domestic production went from 12.8% in 1935 to43.8% in 1936 and 60.8% in 1937.

Fig. 2: Gross sales of Goto Fuundo as the origin of products, in thousands of yen, 1933–1937
450
400
350
300
250
200
150
100
50
0
1933

1934
Siemens

1935

1936

1937

Goto Fuundo Manufacturing

Source: MAE, unmarked folder, Gegenwärtiger Stand des SRW-Geschäfts in Japan, 4 January 1939.
Note: Unknown after 1937.

Moreover, together with this growth of manufacturing in Japan, the transfer of production was
also characterized by an enlargement of the kind of machines, the production of which wastaken over by GFM. The evolution of the production programs between 1935 and 1938 shed alight on this phenomenon (see tab. 2). In 1935, GFM produced little more than orthoscopes.
From the following year onwards, however, the variety became larger, with not only different
kinds of X-ray machines but also diathermy devices. Thus, the transfer of production was
accompanied by a real technology transfer, also highlighted by the fact that the volume ofparts sent by SRW stagnated after 1934. The value of the parts supplied to GFM rose to the
35,800 mark in 1935, 22,600 in 1936 and 33,000 in 1937.134 Together with the growth of
134

Ibid.

21

production, GFM did not face a strengthening of its dependency on SRW but rather theinternalization of some resources.

Tab. 2: Number and kinds of machines produced by GFM, 1935-1938

1935

1936

1937 (second

1938 (firstsemester)semester)

Ultratherm (diathermy device)

-

17

18

15

Heliolex 300 mA 60 kV (X-ray

-

-

-

3

-

4

-

-

Tuto Heliophos (X-ray machine)

1

5

2

3

Orthoscope (X-ray machine)

22

17

-

4

Pantoscope (X-ray machine)

-

1

6

5

Tele-Pleoscope (X-ray machine)

-

1

-

2

Tele-Pantoscope (X-ray machine)

-

4

7

4

machine)Heliodor Duplex (surgery
appliance)

Source: MAE, unmarked folder, Gegenwärtiger Stand des SRW-Geschäfts in Japan, 4 January 1939.
Note: Unknown after 1937.

However, despite this collaboration and the production in Japan, SRW and Goto Fuundo
registered only a very small number of patents, although they were used in Japan. For theyears 1900–1945, while their main rivals Shimadzu (37 patents registered in the field of X-ray
machines) and Tokyo Electric (71 patents) made frenzied use of legal protection for theirtechnologies in Japan, SRW registered only six, all between 1926 and 1933, and its partner
Goto Fuundo only two, one in 1927 and one in 1939.135 This feature of SRW can be
surprising, as Siemens was in other cases a great user of the patent system.136 As a result, it
was thus legally possible to copy most of SRW’s X-ray machines in Japan. For SRW, thisstrategy embodied the technological competitiveness Siemens enjoyed in the field of X-ray
machines and stemmed from a desire to dominate the market by the excellence of the
products: as it transferred the production and assembly of consistently the best quality X-ray
machines to GFM, SRW would thus prevent their copy by domestic manufacturers that did
135

Database of the Industrial Property Digital Library, www.ipdl.inpit.go.jp/homepg.ipdl (accessed in February
and March 2010) and Japan Patent Office 1958.
136
Boch 1999.

22

not have the necessary organizational capabilities to develop such equipment. According to areport by the Tripartite Commission dated 1954, this was a deliberate strategy of SRW: “Itmight have been the intention of SRW to keep Goto Factory in possession of devices always
new and up-to-date as a precautionary measure to prevent competing companies from
imitating devices.”137 The testimony of Goto Fuundo’s board of directors runs along the samelines. In a letter sent to the Ministry of Finance in February 1954, they wrote: “Our Company
could manufacture and sell newest SRW type apparatuses by copying at the factory thoseequipments which were imported as goods from SRW under the terms of sales agreement.
Our Company took pride in the novelty and superiority of our products as compared witharticles of other makers. This was acknowledged by all persons interested in this line ofbusiness, whereby Our Company was placed in a position to compete with any other maker at
a margin sufficient to pay for the license fee.”138 Despite the development of its technologicalfacilities, GFM still depended on SRW for some parts of the production process, probably
with regard to practical know-how and tacit knowledge.139 It tried to register some patents forcopies of SRW machines in Japan but never succeeded: “the application has always been
rejected on the ground that the said equipment was a fact widely known to the public.”140
Besides, Goto Fuundo was not able after 1945 to successfully develop its own machines
without the support of SRW.
A look at gross sales for GFM between 1936 and 1945 shows two distinct phases in thedevelopment of the firm (see figure 3). First, the years 1936–1940 are characterized by thetransfer of production and of technology from SRW, with gross sales that rose from 137,000
yen in 1936 to 326,000 yen in 1939, the stagnation observed in 1940 resulting quite obviously
from the severance of commercial relations with SRW due to the war in Europe. Indeed, thelast delivery of X-ray machines and parts from Germany occurred in September 1940.141
These four years of cooperation with SRW had a positive impact on the ability to compete ofGoto Fuundo, which was marketing GFM production. While its dividend rate was dropping in
the years 1930–1934, it entered a new period of growth (5% in 1937, 7% in 1938 and 8%
since 1940). 142 However, in comparison with its main rival on the Japanese market,
Shimadzu, GFM’s growth was limited. While Shimadzu saw gross sales for its X-ray
machines division go up from 1.7 million yen to 2.5 million yen in 1937,143 sales by Goto

137

SCAP, CPC 34029, Disposition of vested interests formerly owned by Siemens Reiniger Werk AG underlicence agreement with K.K. Goto Fuundo, 5 March 1954.
138
SCAP, CPC 34029, Letter from Goto Fuundo to the Minister of Finance, 5 February 1954.
139
This can also be observed in the chemical industry, for example. Kudo 1998.
140
SCAP, CPC 41476, Letter from Goto Fuundo to an unknown recipient, 13 June 1949.
141
SCAP, CPC 34029, Letter from Goto Fuundo to the Minister of Finance, 5 February 1954.
142
MAE, 174, Dividendenzahlungen von Goto, 1927-1943.
143
SCAP, USB-12, M1654-7, Interview with Shimadzu Manufacturing Co. Ltd, 26 October 1945.

23

Fuundo of SRW products only rose from 407,000 yen to 444,000 yen over the same period.144
These numbers apparently include only SRW products (imported from Germany andmanufactured by GFM). Overall gross sales of Goto Fuundo, consisting as well of products
made in-house and goods supplied by firms other than SRW, must have been higher but there
are no supporting documents. However, for SRW, which distributed all its production in Japanthrough Goto Fuundo, this comparison with Shimadzu reveals a situation on the Japanese
X-ray machines market that was completely different to what it was before the First World
War: between 1914 and 1935, SRW moved from a virtual monopoly to a second-rankcompetitor.

Fig. 3: GFM gross sales, in thousands of yen, 1936–1945
1200

1000

800

600

400

200

0
1936

1937

1938

1939

1940

1941

1942

1943

1944

1945

Source: SCAP, CPC 41474, Siemens Reiniger Werke, Cost Accounting, no date.
Note: The values are different to these given in SRW document used for figure 2 but the trend and the order ofmagnitude are similar.

For Goto Fuundo, the end of commercial relations with SRW in 1940 did not put an end to thegrowth of the firm, which continued during the war thanks to strong demand from X-ray
equipment from the Army and the Navy. GFM gross sales increased steadily despite thecut-off of supplies of German parts and machines, peaking at one million yen in 1945. The
value of Goto Fuundo gross sales during these years is not known, but this firm continued to144

MAE, unmarked folder, Gegenwärtiger Stand des SRW-Geschäfts in Japan, 4 January 1939.

24

pay a dividend of 8%, which shows that it enjoyed good business conditions.145 However,this development could not reverse the balance of power with Shimadzu: gross sales for its
X-ray machines division amounted to 6.7 million yen in 1943 and 6.2 million yen in 1944.146

4. Difficulties in the post-war period (1945–1960)
The breaking-off of relations between SRW and Goto Fuundo during the war led after 1945 toa financial conflict, as a result of which both companies continued to operate on their own on
the Japanese market for X-ray machines. While Goto Fuundo failed in its go-it-alone strategy,
SRW possessed all the financial and technological resources it needed to ensure its come-backon this market in the 1950s.
Business relations between Goto Fuundo and SRW lasted until September 1940.147 Even
though the agreement signed by both partners ran until 31 May 1944, owing to the war in
Europe SRW was unable to meet its commitments (delivery of parts, technical assistance).148
Consequently, Goto Fuundo considered itself released from the contract. It went on producing
and developing X-ray machines without any financial compensation to SRW. The problem offinancial compensation was raised in 1946 and aggravated relations between both firms until
1953, appearing to be obviously a factor in SRW’s decision to stop collaborating with Goto
Fuundo. According to a survey made by the Foreign Property Division in 1946, the sum owed
by Goto Fuundo to SRW for the years 1940–1944 came to a total of 123,290 yen, in the formof unpaid royalties and dividends. The amount was not contested, and was paid by Goto
Fuundo,149 though Goto Fuundo did object to go on paying licensing fees for the productionof X-ray machines after the war. The agreement signed in 1933 between Goto Fuundo and
SRW on the establishment of GFM and the transfer of production to Japan concerned a periodof twenty years, that is, until 31 December 1953. It made provision for the payment oflicensing fees to SRW in exchange for technical assistance (blueprints, patents, engineers).
Yet SRW was no longer able to fulfill its commitments. At first, the Tripartite Commissionintervened to recoup the licensing fees owed by Goto Fuundo. In July 1952, it had alreadyrecovered the sum of 2.2 million yen for the years 1945–1950.150 However, Goto Fuundo
refused to pay any more money after 1951, a decision supported by the American occupation
authorities.151
145

MAE, 174, Dividendenzahlungen von Goto, 1927-1943.
SCAP, USB-12, M1654-7, Interview with Shimadzu Manufacturing Co. Ltd, 26 October 1945.
147
SCAP, CPC 41470, Memo, 2 October 1946.
148
SCAP, CPC 41473, Memorandum to the Controller Division, no date.
149
Ibid.
150
SCAP, CPC 34029, Disposition of vested interests formerly owned by Siemens Reiniger Werk AG underlicence agreement with K.K. Goto Fuundo, 5 March 1954.
151
Ibid.
146

25

Above and beyond the financial issue, Goto Fuundo’s attitude was marked by a desire to go italone as far as its development on the X-ray machines market was concerned. Moreover, theTripartite Commission did not favor SRW’s continued involvement in Goto Fuundo. Thus,
although SRW still held some shares in the capital of Goto Fuundo (9.1%) and GFM (50%),
their boards of directors no longer included any German members.152 Some negotiations
began in 1949 about the purchase of the German shares by Japanese shareholders, but it took
some ten years to reach an agreement.153 In the meanwhile, Goto Fuundo continued its
activities in the 1950s, producing prewar X-ray machines and copies of Siemens models.154
However, it lacked organizational capabilities, such as in-house R&D or technical cooperation
with foreign multinationals, to remain competitive in a high-growth market. Indeed, thereconstruction of hospitals and the fight against tuberculosis led to a steadily increasing
demand for X-ray machines: national production of X-ray machines for medicine rose from2,794 machines in 1947 to 3,769 in 1950, 5,042 in 1955 and 7,511 in 1960.155 The foreign
multinationals came back in force to the Japanese market through partnerships with local
companies. In 1951, Shimadzu signed a technical cooperation agreement with the Americancompany Westinghouse Electric.156 As for Toshiba (the former Tokyo Electric, which mergedwith Shibaura Works in 1939), it resumed relations with GE, which once again became ashareholder (1953), and signed several technical cooperation agreement with various
American companies in the 1950s (GE, Western Electric, RCA).157 When it came to copingwith such rivals, Goto Fuundo had not sufficient financial and human resources to remaincompetitive on this market characterized by endless product innovation. During this decade,while Shimadzu registered 52 patents in Japan, Toshiba 30 and Hitachi 25, Goto Fuundo had
only one.158
Finally, Fuji Electric, the joint venture in which Siemens was still engaged after the war,bought up the German shares of Goto Fuundo. Yet Goto Fuundo’s production and innovation
facilities were too weak to enable Siemens to re-establish itself on a growing and competitivemarket. In 1957, Otto Kresta was replaced by a new representative, Alfred Schenz, whose
main task was to develop a medical devices division at Fuji Electric. However, this did not
involve the transfer of production to Japan. Siemens reverted to its export strategy,
restructuring its representation in Japan accordingly. In 1960, Fuji Electric obtained exclusive
rights for the import and distribution of SRW products in Japan, while Goto Fuundo became
152

Ibid. and Shokenshori chosei kyogikai shiryo (microfilms), 60th management report of Goto Fuundo, 1950.
SCAP, CPC 34029, Disposition of vested interests formerly owned by Siemens Reiniger Werk AG underlicence agreement with K.K. Goto Fuundo, 5 March 1954.
154
SCA, 7912, Vertretung des UB Med und seiner Vorgänger in Japan, 1887-1979, 1979, p. 6.
155
Kikai tokei nenpo, various volumes.
156
Shimadzu 1967, pp. 130 and 140.
157
Tokyo shibaura denki 1963, pp. 320-321.
158
Database of the Industrial Property Digital Library, www.ipdl.inpit.go.jp/homepg.ipdl (accessed in February
and March 2010) and Japan Patent Office 1958.
153

26

an agent of Fuji Electric. This strategy paid off, as the value of Japanese imports of X-ray
machines from Germany shot up from 1.8 million yen in 1951 to 30.3 million in 1955 and57.8 million in 1960. In addition, they dominated the market for foreign X-ray machines in
the 1950s, with an import share of 42.5% (value), against 30.9% for the United States and15.4% for Netherlands.159 Subsequently, the growth of this business led SRW to move themedical devices division from Fuji Electric to the company Siemens Japan Ltd, in charge ofthe import and distribution of products of the Siemens group that were not produced in Japan(1965). It became an independent subsidiary in 1979, Siemens Medical System Ltd.160

Conclusion
The example of the involvement of Siemens on the Japanese market for X-ray machines andthe development of the strategy followed by the German multinational, as presented in thiscontribution, make it possible to highlight an evolution characterized by both the firm’s global
strategy and the particular conditions of the Japanese market. Regarding the strategy of thecompany Siemens Reiniger Werke (SRW), the case study analyzed here confirms the point ofview of Kudo Akira, according to which German enterprises favored an export strategy “as far
as they were able.”161 Until World War I, German manufacturers totally dominated theJapanese X-ray machines market and then did not envisage any potential transfer of
production. However, market conditions evolved in the 1920s towards increased competition,with the emergence of local manufacturers (Shimadzu) and the launch of General Electric andits subsidiary Tokyo Electric into the production of complete X-ray installations rather than
only tubes. Notwithstanding, the management of SRW considered only timidly and underpressure the idea of a direct investment. Even though it had access to an infrastructure which
could have easily made possible the production of X-ray machines in Japan, either within thecompany Fuji Electric or with its commercial partner Goto Fuundo, which possessed
production facilities since 1919, SRW was reluctant to embark on production in Japan andfollowed a very cautious technology transfer policy even after the creation of the joint venture
Goto Fuundo Manufacturing (GFM), endeavoring to control innovation of this subsidiary andtransfer only the most necessary technologies.
The strategy of SRW in Japan can also be explained by the particular conditions of theJapanese health care market, and especially by the distribution networks that were still
controlled in the interwar period by drugs trading houses which often dated back to the early
Meiji period, or even the Edo era. More than drugs, medical instruments and machines were
159

Nihon gaikoku boeki nenpyo 1951-1960. Data not mentioned in 1950 and before 1949.
SCA, 7912, Vertretung des UB Med und seiner Vorgänger in Japan, 1887-1979, 1979, pp. 7-8.
161
Kudo 1998, p. 218.
160

27

not traditional consumer goods for a broad public, but rather for specific customers (doctors,
hospitals). Consequently, access to the social networks of medicine was a key issue forforeign manufacturers of X-ray machines, which explains the need to collaborate with thetrading houses that controlled these distribution channels or to adopt specific marketingstrategies as did Shimadzu since the end of the 1910s. Despite its technologicalcompetitiveness, Siemens failed in maintaining its dominant position on the medical market
due to a lack of involvement into marketing. This was why it entered into an agreement in
1926 with a Japanese firm specialized in the trade of drugs and medical instruments, Goto
Fuundo, not one of the big general trading firms (sogo shosha). Other firms active on the
medical market, such as some Swiss pharmaceutical companies, also used Japanese
specialized trading houses to access this particular market.162
Nevertheless, access to medical markets made possible through the alliance with Goto
Fuundo was not a sufficient comparative advantage for Siemens in the early 1930s in order torecover its market share, and it had to envisage eventually giving up its export strategy for a
direct investment. The new competition from domestic firms such as Shimadzu and Tokyo
Electric as well as the devaluation of the yen appear to have been two decisive factors in thedecision to change strategies. However, despite the establishment of the joint venture Goto
Fuundo Manufacturing (GFM) in 1933, SRW kept its cautious attitude in the transfer oftechnologies related to the production of X-ray machines. It first considered an agreementwith General Electric to secure its market share, both in Japan and on a global scale;
subsequently, once the transfer of production was decided, this involved only a limited
number of machines and was apparently based on the assembling of machines, with key parts,
probably tubes, dispatched from Germany. Moreover, the 1933 agreement planned for real
SRW control over potential innovations made within GFM. Technologies linked to X-ray
machines were controlled by a handful of enterprises in the world, and controlling theirspread was a strategy to prevent newcomers from entering the market. Besides, after the
breaking-off of relations between SRW and Goto Fuundo due to the war, in 1940, theJapanese side was not able to keep on operating as an independent firm. It abandoned
production in the mid-1950s to become a sales agent for SRW products on the Japanesemarket. Viewed from this angle, the export strategy followed by SRW appears to primarilyreflect a desire to maintain its comparative advantage on the market, thanks to its
technological resources.
The course of Siemens on the Japanese X-ray machine market during the interwar appears asa failure. Despite its technological advantage, the German multinational was not able tocompete effectively with the domestic newcomers since the early 1920s and neither the162

This was for example the case with Ciba, which exported since 1900 its products to Japan towards the
medicines’ trading and manufacturing company Takeda. See Donzé forthcoming in 2010.

28

commercial agreement nor the production joint venture with Goto Fuundo helped it toovercome its market loss. Still, one should wonder why so powerful a company as Siemens
did not adopt a marketing strategy similar to the one implemented by Shimadzu. Twoelements may explain this lack of engagement. Firstly, the relative importance of the Japanesemarket for Siemens must be taken into account. The German firm enjoyed a dominantposition on the European market where it was able to sell large amounts of X-ray machines,
as a result of which the Japanese market may have been viewed as secondary by the German
managers. Secondly, the position of the X-ray business within the Siemens conglomerateshould also be considered. Since the takeover of its main rival in Germany, the company RGS,in 1924, the production of X-ray machines was pursued within a new affiliate company based
at Erlangen. The incorporation of this company within the group and the relations with theholding company may also explain the weakness of SRW’s marketing strategy with regard to
Japanese X-ray machines.
Beyond the case of Siemens, it would be productive to extend this research on the diffusion of
X-ray technologies to contribute more largely to the emerging field of business history of
medicine. In particular, it would be necessary to take due account of local producers, such as
Shimadzu, in order to understand the factors that helped them not only emerge on the market
but also growth and compete with foreign multinationals like Siemens or General Electric,
and to compare this phenomenon with other countries where newcomers were unable to last(France, United Kingdom). Also, a key issue for understanding the business history of
medicine in Japan appears to be the analysis of the other side of the market: the consumers of
products such as X-ray machines, namely hospitals, clinics and doctors, that is, the actors who
used these new technologies to make medicine a profitable and growing business.

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