Freeman Spogli Institute for International Studies Program on Energy and Sustainable Development Stanford University


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Industrial Policy Reconsidered in a Digital World

Journal Article

Authors
Kenji E. Kushida - Stanford University
John Zysman - University of California, Berkeley

Published by
Japan Spotlight, page(s): 35-39
July/August 2013


In our current era, the advent of digital technologies and accelerating globalization is driving ever-faster commoditization of firms and products.  With rapidly improving Information and Communications Technology (ICT) tools, manufacturing is decomposed with finer granularity, and corporate functions can be outsourced and offshored more than ever before.  Services can be unbundled into activities that can be taken apart, reconfigured, and transformed with the application of algorithms.  Overall, firms are experiencing accelerating shifts in the sweet-spot for markets and business models in their search for sustainable advantage.

As firms struggle to adjust in this global, digital world, governments are also under pressure to examine their options to retain value in their national contexts; wealthy nations face the challenge of how to remain wealthy.

Japan is no exception, and from this vantage it is worth reconsidering the potential role that industrial policy can play in its growth strategy.  We will proceed in three sections, each of which builds from our previous research (indicated below the title), towards a set of recommendations for thinking about industrial policy in this digital, global era.  Each point contributes something new to Japan’s discourse about a new growth strategy.