THE BUSINESS ENVIRONMENT IN THE OPTOELECTRONICS INDUSTRY -- JAPAN AND THE UNITED STATES

In assessing the international competitiveness of private sector firms in industries such as optoelectronics, considerable attention has been focused on the business environment within which such firms operate. In particular, many such assessments ask how the business environment in the United States compares with the business environment abroad within which foreign competitors operate. In survey after survey of U.S. firms, business environment is viewed as the greatest area of disadvantage for American high-technology firms. In this area, such surveys suggest that American high-technology firms are at their greatest disadvantage when compared with firms operating in Japan. It is argued that the role the Japanese government plays within the Japanese economy has put American firms at a particular disadvantage when competing globally with Japanese firms. In this regard the most commonly cited Japanese government practices are "financial support... including R&D grants/credits, investment credits, favorable tax treatment, and low interest rate loans to finance exports, R&D, and investment" (DOC 1994, V-8).

This particular characterization of Japanese government practices comes from the responses of U.S. firms included in a U.S. Department of Commerce assessment of the U.S. optoelectronics industry. When these firms were asked to provide specific examples of such practices, however, "many companies mentioned MITI of Japan, but few gave specific examples of how MITI programs benefited the optoelectronics industry" (DOC 1994, V-8).


Published: February 1996; WTEC Hyper-Librarian