High-Technology Restructuring in the USA and Japan

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Abstract
In this paper, the comparative responses of the USA and Japan to the rise of new high-technology industries are examined. The United States pattern mainly revolves around the rise of high-technology districts like Silicon Valley and Route 128 which comprise dense networks of small entrepreneurial firms and other related institutions. Despite its tremendous innovative capabilities, this pattern generates significant costs (that is, high turnover of labor, chronic entrepreneurship, and an emphasis on breakthrough innovations at the expense of manufactured products) which are not sufficiently recognized by proponents of the flexible specialization or ‘simple flexibility’ thesis. The Japanese approach to restructuring is contrasted as one of ‘structured flexibility’ where large corporations perform important ‘system governance’ functions in the linking of manufacturing and innovation and act as focal points in just-in-time production complexes. Japan's pattern of ‘structured flexibility’ overcomes many of the limitations of high-technology organization in the USA.