IPA also reports that U.S. IT technical employee distributions are almost the reverse of the Japanese distributions. Only 29% of the U.S.’s IT technical employees are located in IT service sector firms with the remaining 71% in user firms including software startups. This means that the bulk of software personnel in the U.S. are much better positioned to create software innovation.


Yes, Japan ranks second or third globally in the size of its software industry and it has an undisputed well-developed IT infrastructure and process capabilities in software development. Yet, we must ask, does this mean for software innovation and its impact on global competitiveness in products and service?



Selected findings from the national rankings produced by the World Economic Forum in its Global Information Technology Report 2015 are revealing. Japan ranks 24th on venture capital availability; 20th on importance of Information and Communication Technologies (ICT) to government vision; 27th on government success in ICT promotion; 14th on impact of ICT on new services and products; 39th on impact of ICT’s on new organizational models; 63rd on knowledge intensive jobs as a percentage of the labor force; 24th on impact of ICT’s on access to basic services; and lastly 25th on ICT use and government efficiency.



In summary, we see that Japan is an economy with an enormous capability for software innovation but one which is falling far short of executing and optimizing that ability to produce software innovation leading to more globally competitive products and services.


My short note this time is my proposition on why Japan has not been able to get fruition from what it has. I’ll continue to disclose what I think. What I do expect is the more will be discussed on this issue among the Japanese. Please send your thoughts to the ITPro editor team at Nikkei BP.

Robert E.Cole
Professor Emeritus, University of California, Berkeley
Robert E.Cole Professor Emeritus Robert E Cole is a long term student of Japanese work organizations. He served on the faculty of the University of Michigan in the Dept. of Sociology and School of Business Administration. At this time, his research focused on product quality in the U.S. and Japanese Auto Industries. In the 1980s, he served as Director of the Center for Japanese Studies and Executive Director of The U.S-Japan Auto study sponsored by Toyota and GM with participation by other auto firms as well. In 1990, he moved to the Univ. of California, Berkeley to the Haas School of Business Administration to begin his studies of the IT industry, first in Silicon Valley and then in Japan. He has published a number of articles on this subject including most recently (with Nakata Yoshifumi), "The Japanese Software Industry: "What Went Wrong and What Can We Learn From It?" California Management Review, Winter 2014.