Lai Tran Tung1
Abstract: At the end of the 20th century, Japan quickly became one of the leading countries in industrial development and among the countries with the highest economic growth in modern world history based on its science and technology. One of the "secrets" to its success is the development and ownership of a number of high-tech industries. This is a valuable lesson not only for Vietnam but also for other countries around the world. The article analyzes Japan's experience in high-tech industrial development, from which lessons are drawn for Vietnam.
Keywords: Japan, Vietnam, Industry, High-tech industry
1. Introduction
Being a country severely affected by wars and natural disasters, the Government and people of Japan have transformed Japan into the world's third largest economic power (after the US and China), becoming a leading industrialized country in the world thanks to its continuous efforts. Japan relies on the efficient exploitation of the world's resources as well as promotion of internal strengths and thanks to appropriate steps the Japanese high-tech industry has made an important contribution. In 2000, Japan led the world in robotics science and had more than half (402,200 out of 742,500) of robots for manufacturing industry2. As of 2010, according to the statistics of researchers in Russia, the proportion of G7 industrialized countries (including Japan) accounted for 80-90% of all the world's high-tech products and there were 50 big technologies in the world, among which Japan ranked 3rd (the US accounted for 22 major technologies; Germany: 8-10 technologies; Japan: 7 technologies; France: 3-5 technologies). The total revenue of civil high-tech products in the world was about 2,300 billion USD, of which Japan ranked the second (USA accounted for 39%, Japan 30%, Germany 16%, the figure of Russia was 0.3% only). In terms of annual export of high-tech products, Japan ranked third (the US earned 700 billion USD, Germany: 530 billion USD, Japan: 400 billion USD3). Tokyo of Japan was recognized as the No. 1 high-tech city in the world in 2018 and at the 2019 G20 Summit which Japan was the host country, it introduced many scientific and technological achievements, including a high-tech field with many products such as robot hands, civil aircraft, space waste generators, most of which appeared the first time or never seen outside Japan.
2. Japanese experience in developing high-tech industry
Firstly, it is the flexibility in adjusting industrial development strategies.
The government's swiftness to seize the opportunities brought about by high technology was initiated after the successful development of heavy industries such as steelmaking and car manufacturing. Based on prediction of the market, development trend of science and technology, Japan has shifted from labor-intensive industries to high-tech industries. Accordingly, the Japanese Government began to strongly support companies turning to high-tech fields, marking an important step in the country's development ladder.
Today, Japan has proposed industrial strategies and policies before the fourth industrial revolution to sustain economic growth in the face of a declining population and addressing global environmental problems. Therefore, in 2014 Japan renewed its Industrial Cluster Plan to revitalize industry and regions of Japan. Accordingly, Japan is focusing on industries based on the achievements of the fourth industrial revolution such as the robot manufacturing industry and the manufacturing industry of hi-tech products in medicine. The goal that Japan sets is that by 2020, it will invest up to 2.4 trillion yen for the smart industry. With its existing scientific and high-tech background, Japan is confident of being one of the leading countries in the fourth industrial revolution and is currently focusing on the fields of technology attached to this revolution, and the robot manufacturing industry have become the mainstay of the country's economic growth strategy.
Secondly, creating a favorable environment for science and technology development
Japan's high-tech industry development strategy is to develop endogenous capabilities to create high-tech products for export, paying special attention to scientific and technological activities. In order to strengthen macro management and administration for scientific and technological development, Japan passed the Basic Law on Science and Technology in 2005, merged the Department of Science and Technology with the Ministry of Culture and Education into the Ministry of Education, Science and Technology in 2007.
Japan established the Tsukuba science city in 1970 attracting research and training institutes, industrial parks, manufacturers and researchers to create the linkage and cooperation between research institutes and universities with high-tech product manufacturing enterprises. In 2001, Japan established the National Center for High Technology in this science city and issued a self-regulatory mechanism for it, creating favorable conditions for the Center so that it had a close relationship but it was not affiliated with the Ministry of Economy and Trade of Japan. Furthermore, it had an affiliate network with science centers and universities throughout the country.
Thirdly, increasing the investment in research and development towards combining science and technology with production
With the goal of promoting the development of the most advanced technology in the world and high technology, the Government of Japan has shifted its focus to invest in national research and development projects aiming at raising the scientific and technology level. This includes programs to strengthen research and development investment projects for both the public and private sectors, and train highly qualified research and development human resources. Japan has paid special attention to basic domestic research activities: it prioritizes high-tech commercial areas and promotes information dissemination activities related to technology development and technology transfer to businesses. It encourages State sector researchers and universities to participate in private high-tech industry development activities.
To accomplish this task, the Government of Japan planned to fund research and development. Accordingly, Japan allocated funds from the government to support research and development projects: The Japanese Council of Science and Technology spent 17 trillion yen on research and development during 1995-2000 and in this period, the expenditure for research and development continued to increase, from 2.3% of GDP in 1995 to 3.1% in 20004, 3.29% in 2015 with a budget of 155 billion USD5.
Scientific research in Japan must be linked to production, which means that it must be applied to production to get competitive edge in the market. Japan has focused on investing in high-tech research for practically effective industries, for example in developing electronics industry, Japan focused on research and development of high-tech field of IC industry. This industry earns about US $ 1 billion in profit each year, higher than the traditional steel industry.
However, the main source of funding for research and development in Japan is the business itself, as the government funding is only a very small amount compared to the research and development budget of some countries like USA, UK, France, Germany ... To get high technology applied in production and increase competitiveness in the market, it is the businesses in Japan that invest in research and development and direction to commercial value of the product.
In Japan, there are 4 types of participation in scientific research, including: academic science and technology; governmental science and technology; enterprise science and technology and popular science and technology. In particular, enterprise science and technology play a key role in linking research and development activities with reality. Therefore, policies to encourage and promote linking high-tech research and development with reality are directed at enterprise science and technology. To enhance this incentive, Japan has policies to support private businesses doing science and technology research, and these research facilities are treated equally as public universities and research institutes. Japan adjusted tax policies to create more favorable conditions for state-owned research institutions, which encouraged the establishment and creation of a favorable environment for private research facilities in research institutes. Therefore, Japanese research institutes are developing very fast, contributing effectively in high-tech research and development, associated with production and business activities.
Currently, from a management perspective, the Japanese Government has also gradually introduced and implemented policies to promote technology and it sees large Japanese corporations as the main driving force in the implementation of public technology initiatives related to the fourth industrial revolution. Accordingly, Japanese science and technology focuses on emerging breakthrough fields such as artificial intelligence (AI), Big-Data, Blockchain or Internet of Things. Japan consequently not only invests large amounts of money in developing faster and more powerful robots but also sponsors an entirely new intelligent environment, creating a living space for its citizens which can be done safely and positively by intelligent technology.
Fourthly, issuing protection policies for enterprises producing domestic high-tech products
In order to develop high-tech industry, the Government of Japan has allowed the establishment of a series of companies manufacturing high-tech products and issued many policies to protect the domestic market, limiting foreign competition to facilitate these companies’ operation. These protection policies have applied solutions that both provide finance and support the purchase of foreign technologies and are maintained until these companies are competent and ready to compete in the international market. With the strong support of the government, high-tech product manufacturing companies in Japan have quickly become powerful and advanced global high-tech product manufacturing groups and have captured the huge market shares in the international market for high technology products.
According to 2001 statistics, Japan accounted for 17% of the total export value of high-tech products of the world, the most prominent of which is electronics - telecommunications, computers and office equipment6. So far, Japan has made many inventions that contribute greatly to the change of the world such as 3D printing technology, the best-selling Toyota Corolla wheel of all time, the first selfie stick in the world, car navigation systems or the phenomenon of Pokémon game. These technological innovations have proven Japanese bold steps and technological innovations decades ahead. The high-tech products under the Japanese brand also reach out globally and develop sustainably.
In recent years, Japanese high-tech manufacturing enterprises have faced increasing challenges from rivals in the world market. Therefore, the Japanese Government must strengthen protection of intellectual property by tightening rules for foreign enterprises wishing to invest in domestic technology companies. As a result, from August 2019, foreign investors must obtain approval from the Japanese Government if they want to buy shares of companies on the list of 20 controlled sectors.
Fifthly, developing high-tech industry based on the dynamic interaction of the internal and external systems, and successfully transforming the external forces into internal forces
In order to develop high-tech industry, the Government of Japan has taken steps to maximize the use of resources from abroad and to adapt high technology to Japanese conditions. Japan continues to follow the motto of combining "Western technology" with "Japanese spirit", namely in technology transfer and application, it develops high technology in its own way. In order to obtain high technology transferred into production, Japan applied many forms such as: direct import of technology, purchase of invention patents, encouraging Japanese people to study abroad to acquire new knowledge of the West, and "import" outstanding experts from many different countries around the world.
However, Japan did not just passively import high technology, rather they patented high technology based on imported technology. Accordingly, Japan does not imitate the prototype of foreign high-tech products, but always seeks to improve imported technology to adapt them. Based on imported inventions, Japan has developed, or researched, imitated production of high-tech products, creating high-tech products bearing the Japanese brand.
To accomplish this task, the Japanese Government has issued policies to attract talented people from countries with preferential salaries; encourage individuals and organizations to approach foreigners with appropriate patents and copyrights, attracting them to Japan to work; attract back students studying abroad ... By that way, the number of experts in the field of high technology abroad to work in Japan is increasing. At the same time, Japan not only studied abroad in technique and technology, but they also learned all other advanced aspects of economic institutions, management experience, educational development experience ... related to high- tech industry.
3. Some lessons for Vietnam in developing high-tech industry
Currently, Vietnam has also initially enacted a number of policies to encourage high-tech development, including high-tech industries, such as the Law on High Technology, which was passed by the National Assembly on November 13, 2008 ; Decision No. 49/2010/QĐ-TTg, dated 19 July, 2010, approving the List of high technologies prioritized for development investment and the List of hi-tech products encouraged for development; Decision No. 2457/QĐ-TTg dated 31 December, 2010 approving the National Program of high technology development; Decision No. 842/QĐ-TTg of 1 June, 2011, approving the "Plan for developing a number of hi-tech industries up to 2020".
In particular, the Decision No. 347/QĐ- TTg of the Prime Minister, dated 22 February, 2013 also set out the program to develop the following hi-tech industries: the information technology industry; automation equipment manufacturing industry; biotechnology industry; new material industry. Accordingly, on 22 December, 2014, the Ministry of Industry and Trade issued Document No. 12854/BCT-KHCN guiding the ministries, provincial committees, corporations, research institutes and universities under the Ministry of Industry and Trade register to implement high-tech industry development projects. So far, there have been a number of projects approved by the government. However, these are only separate projects of corporations under the Ministry of Industry and Trade, there lack projects of strategic importance at the national level.
In general, the development of high-tech industry in Vietnam has not been as expected, domestic enterprises are at small number and scale, which also depends on foreign invested enterprises. Policy on industrial development of Vietnam in the recent time tried to focus on all aspects, so it is impossible to know what are the priority and breakthrough. At the same time, there are many key national programs on industrial development, so an enterprise producing high-tech products may join another program other than the National High-Tech Development Program and still receive incentives, supports. From Japanese experience in developing high-tech industry, some valuable lessons for Vietnam can be drawn as follows:
First, it is necessary to rely primarily on internal resources coupled with effective mobilization of external resources in the development of high-tech industry. Importing high-tech activities is important, but it is essential to improve the ability to absorb and develop high-tech in the country. Accordingly, endogenous technology capacity should be improved. The Government of Vietnam should timely come up with a national high-tech research and high-tech development project that Vietnam gives priority to at the national, strategic level, which can attract the participation of many research, production and business units, etc. throughout the country. The Government should investment heavily and support research and development organizations, combine State and private activities in scientific and technological research and development activities; adopt incentive and remuneration policies for scientific and technological development activities.
It is necessary to promote international cooperation to absorb technological advances, including management science. Joint research activities, technical expert exchange in industries should be accelerated to save time of technology development process (from idea to technology commercialization) in domestic and foreign markets.
In addition, the Ministry of Science and Technology should focus on organizing international integration activities in science and technology, including good implementation of signed bilateral and multilateral agreements. At the same time, it should actively expand partners, content and new forms of cooperation, promoting services of supporting international exchanges in science and technology, searching for technology secrets, technology transfer brokers, building a database on foreign technologies and domestic technology demands, developing technology market, incubate technology businesses, train experts in teams. In particular, it needs to pay special attention to supporting the need of finding and innovation of technology from enterprises and localities. The agency should act as the focal point for processing information of the scientific and technological representation system in order to further improve the effectiveness of international cooperation activities.
At the same time, a mechanism to attract talents to work in the high-tech industry should be set up. Specifically, the State needs to create a favorable environment for them to promote their intelligence and to be devoted, share incentives to encourage high- tech industry researchers in private businesses, adopt preferential policies on entry, exit and residence associated with simple conditions and procedures for foreign scientists and technology experts working in enterprises in Vietnam. Attention should be paid to the training of high-quality human resources for high-tech industry in particular, science and technology in general.
Secondly, in the context that Vietnam either lack conditions or is unable to develop all industries and high-tech fields, it should select the key sectors, fields and products that have competitiveness in the international market. Most attention should be focused on researching emerging high- tech fields. Consequently, key and high- tech industries will be established as the backbone for other industries to develop, in which a number of industries related to the fourth industrial revolution may be researched and developed.
In the coming time, Vietnam needs to build strong strategic companies in manufacturing, creating high-tech products in general, and high-tech industries in particular, bearing Vietnam's brand. Vietnam should not be seen as a consumer country that strongly absorbing global products and inventions. Therefore, the government needs its own policies to protect and build strategic companies and centers that are strong in a number of high- tech sectors into the international product supply chain. Each economic region and province and city should make a list of hi- tech products prioritized for their local production, which will have the potential to become a key local product and supportive policies to promote development.
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High-tech industry is a new field in Vietnam, playing a particularly important role for developing countries in improving labor productivity and narrowing the development gap. Japan's experience in high-tech industry development is a useful lesson for Vietnam in management, policy, research and enterprise agencies to apply and come up with appropriate strategies and policies, especially in the context that Vietnam needs to enhance the access to the achievements of the new production revolution to effectively participate in the global value chain, promote industrialization, modernization and deep integration into the world economy today.
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1 Ph.D., Military Technical Academy, Ministry of Defence
2 Nguyen Van Day, Nguyen Hai Ha, Doan Thi Thu Hang (2014), "Experience of the US and Japan in linking science and technology with reality", Economy and Forecast Review, No. 19, pp. 52-55.
3 Le The Mau (2010), "Russia's position in the world's high-tech market", http://www.tapchicongsan.org.vn/ Home/The-gioi-van-de-su-kien/2010/2925/Vi-tri-cua-Rus sia-tren-thi-truong-cong-nghe-cao-cua-the.aspx.
4 Ministry of Industry and Trade – Vietnam Research Institute of Electronics, Informatics and Automation (2007), Summary report of ministerial level project 2007 “Researching and developing Vietnam's list of high-tech industrial products period to 2020”, p.62.
5 Nguyen Tien (2017), “Which nations and corporations pay most for R&D ?”, https://m.viet times.vn/ quoc-gia- va-cong-ty-nao-chi-nhieu-tien-nhat-cho-hoat-dong-rd- 142397.html.
6 Ministry of Industry and Trade – Vietnam Research Institute of Electronics, Informatics and Automation (2007), Summary report of ministerial level project 2007 “Researching and developing Vietnam's list of high-tech industrial products period to 2020”, p.62.
REFERENCES
1. Ministry of Industry and Trade – Vietnam Research Institute of Electronics, Informatics and Automation (2007), Summary report of ministerial level project 2007 “Researching and
developing Vietnam's list of high-tech industrial products period to 2020”, Hanoi.
2. Prime Minister (2010), Decision No. 2457/QĐ-TTg, dated 31 December, 2010 Approving the National Program of High Technology Development, Hanoi.
3. Prime Minister (2013), Decision No. 347/QĐ-TTg, dated 22 February, 2013, Approving the program on development of a number of hi-tech industries under the National Program on high technology development, Hanoi.
4. Ministry of Industry and Trade (2014), Document No. 12854/BCT-KHCN on registration and proposal for implementation of High-tech Industrial Development Project, 22 December, 2014, Hanoi.
5. Nguyen Van Day, Nguyen Hai Ha, Doan Thi Thu Hang (2014), "Experience of the US and Japan in linking science and technology with reality", Economy and Forecast Review, No. 19, Hanoi.
6. Le The Mau (2010), "Russia's position in the world's high-tech market", http://www.tapchi congsan.org.vn/Home/The-gioi-van-de-su-kien
/2010/2925/Vi-tri-cua-Russia-tren-thi-truong- cong-nghe-cao-cua-the.aspx.
Sources cited: JOURNAL OF Vietnam Review of Northeast Asian Studies, Vol. 8 - 2020
