Following the leader: comparing industrial strategy for computers in Japan and France
Creators: name: Lee, Clement
Publisher: name: University of British Columbia
Year: 2009

description: Since the early 1960s, American companies have consistently dominated the computer markets in virtually all OECD countries with one notable exception: Japan is the only OECD country where domestic companies have successfully rolled back American corporate domination of its computer market to under thirty percent. Furthermore, Japanese companies have emerged as the only serious long-term challengers to American technological and commercial leadership on international markets. This is quite a remarkable achievement considering Japan's relatively late entry into a market where the development constraints have been as severe as in other industrialized nations. This thesis examines the historically-parallel transformation of two groups of "industrial followers" - the Japanese and French populations of computer companies - in order to shed light on relevant issues of strategic importance: How do we account for the rapid ascendancy of the Japanese computer industry to international competitiveness whereas other national computer development efforts have been forestalled? To what extent is the Japanese pattern of computer development unique, and to what extent does it conform to the prevailing pattern of international competition? In our comparison of the "deviant" Japanese case with the "control" French case, the operative questions are defined as: What combinations of conditions could account for patterned variations in (1) aggregate domestic industry outcomes; and (2) the trajectory or path of domestic industrial change over time? Three major sets of conclusions concerning the parameters of international competition, national outcomes, and national trajectories of development, emerge from the comparison. First, it will be argued that the computer industry leader IBM defined the parameters of international market competition for at least two decades following the mid- 1960s. Secondly, it will be argued that Japanese and French domestic industry outcomes fell within those parameters. Different national strategies determined just where within the parameters domestic outcomes lie; that is to say, they account for the variance in Japanese and French computer industry outcomes. National strategies, however, did not change those parameters. The competitive success of the Japanese industry is attributable to "market-conforming" strategies that generally respected and worked within the prevailing terms of international market competition as defined by IBM. French strategies, for the most part, have struggled against the terms of international competition and have subsequently failed to advance the competitiveness of the domestic industry. Finally, comparison of Japan and France suggests the path of national computer industry change over time has been non-linear (or multi-linear) and contingent on the interplay between the domestic structure of state-business power relations, on the one hand, and on the other hand, response from the broader international market. In the short term, different power structures of state-business relations in the domestic policy process account for the divergence in national trajectories of development. In the long-term, however, response from the broader international market had a decisive, if indirect, influence on the partial convergence of national development trajectories. Put differently, the comparison confirms the strategic developmental orientation of Japanese and French computer industry policy. National policy, however, were only able to advance the strategic interests of domestic industry when they conformed to the prevailing terms of international competition as defined by the industry leader IBM. When policy ignored or attempted to challenge head-on the prevailing terms of global competition, their strategic efforts failed, forcing a revision of national policy and a reorientation of collective action on the market. This study affirms the industry leader's role in defining the first order constraints on the development path of industry followers.