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Panel Detail:

Tuesday, April 24, 2007
10:50 AM - 12:05 PM

Technology Innovation: The Key to Japan's Competitive Advantage?

Moderator:

Woodrow Clark II, Senior Fellow, Milken Institute; Founder, Clark Strategic Partners

Hideki Yamawaki of Claremont Graduate University listens to a panelist discuss recent industry innovations in Japan.

Japanese companies "have to incorporate global social values to be competitive in the future," said Hideki Yamawaki, Associate Dean of Claremont Graduate School and a professor of management. All of the companies represented on the panel -- Sharp, Sumitomo Electric and Honda -- seem to recognize that fact. "Increasing energy consumption produces massive environmental conditions," said Ryosuke Hata of Sumitomo Electric.

Not surprisingly, these same companies have also been innovators around technology-friendly products for a long time, in some cases decades. In fact, this "revolution" is just the next stage of evolution in Japan's economic growth, said Professor Yamawaki. In the 1950s and 1960s, the Japanese automotive industry responded to demand and capital constraints by inventing lean production. Then, in the export-led 1960s and 1970s, the industry responded to domestic and U.S. regulatory constraints by developing reliable compact cars. Now, in general, Japanese companies are responding to demographic and environmental constraints by spearheading new ways to both conserve energy and create sustainable energy.

The potential commercial, residential and industrial applications of environmentally friendly technology to products and services are numerous, said Shinichiro Yahiro of Sharp Electronics Corp. They also include so-called "off-the-grid" applications, such as remote housing and irrigation systems. Each panelist presented multiple examples of applications by his company across these categories.

Honda was the first company to introduce a hybrid automobile, in 2000, 20 years ahead of what had been forecast. Now the company is striving to create a zero-emissions vehicle based on alternative fuel sources, such as hydrogen power. As for skeptics who question the safety of smaller cars, Ben Knight of Honda Americas noted that small cars can be both safe and fuel-efficient. In fact, the Honda Civic hybrid is "in the lower half of cars in terms of fatalities in the U.S.," he noted. Moreover, Honda is on the verge of introducing the HondaJet, a private-use aircraft that will produce 30 percent to 35 percent less emission than comparable aircraft.

At Sumitomo, the vision of the GENESIS Project is to power the world via a network of solar panels located in deserts and connected by super-conducting wires. It may sound like fantasy, but the "door is open for mass-producing super-conductive cable" that has no electrical resistance, Hata said. To illustrate his point, he described Sumitomo's ongoing solar project with Albany, N.Y., to provide electricity to tens of thousands of households. To Hata, the idea is remarkable but also very old: "Human being were born and raised under the sun," he said, "and have relied on solar energy forever."

Yahiro explained that Sharp was one of the first companies to enter the solar energy market. And this emerging opportunity to develop environmentally friendly products "is the next pillar for our growth." Sharp has already installed 350,000 solar power units in homes across Japan, and in the United States, the company implemented a solar power system for Fedex in 2004 that meets 60 percent of peak demand for Fedex's Oakland distribution hub.

However, there are many obstacles to success, not the least of which is spurring demand for environmentally friendly products and services. As Knight said, it is "a chicken-and-the egg conundrum." Japanese companies must create products that consumers want in order to fund investments in infrastructure, but they must develop the infrastructure in order to create attractive new products.

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