ABSTRACT
It is often assumed that Japan’s industrialisation over the last hundred years occurred relatively simply as a result of importing the Western technologies required for modern industry. The conventional assumption in economic thinking is that knowledge flows are automatic and costless; therefore, the international diffusion of production technology was considered to be a relatively easy process. However, recent research1 is providing evidence that the assimilation of imported technology is a difficult process which can only be brought about by the accumulation of technological capabilities2 by the technology-importing firm, which in turn depends upon in-firm (and related extra-firm) training and research activities. This view suggests that, in the process of industrialisation in Japan, industrial firms must have undertaken a considerable amount of training and research.
