ABSTRACT
This chapter argues that the wide range of cooperative ventures, as well as in-house activities, that began in the pre-war and wartime eras and developed further in the post-war period contributed to a rapid learning process and helped enterprises in Japan advance technologically in a surprisingly effective way. It may be helpful in this context to examine briefly the form that industrial dualism took in the Japanese case earlier in the century. The direct and indirect ties between the small units/firms and larger establishments resulted in new skills and greater flexibility for both sectors. Subcontracting in pre-war and early post-war Japan displayed many of the characteristics found in developing countries today. The significance of the Japanese case is again that the small-scale sector was able to transform itself over time, based on its own efforts and in association with the large-scale sector.
