Japan's Computer and Communications Industry: The Evolution of Industrial Giants and Global Competitiveness

By Martin Fransman | Go to book overview

5 The Evolution of the Japanese Optical Fibre Industry

CHAPTER OVERVIEW

The chapter begins with a brief, simplified account of the basics of optical fibre technology. A detailed analysis is then provided of the invention, innovation, and diffusion processes that led to, and subsequently followed, Corning's 1970 breakthrough in optical fibre. However, so as not to overload the reader with the complex details that are necessary for an explanation of the evolution of optical fibre technology, this analysis is presented in Appendix 2.

The main body of the chapter, acccordingly, continues from the point when Corning's breakthrough was announced in 1970. A detailed examination is then undertaken of the response of NTT and its family of suppliers--including Sumitomo Electric, Fujikura, and Furukawa--to Corning's result. How optical fibre knowledge was assimilated in Japan and diffused to the Japanese cable suppliers and how the Japanese companies managed to produce world-record-breaking low-loss optical fibres is then analysed.

The following section contains an examination of the process of innovation involved in the development of the Japanese VAD (vapour phase axial deposition) process for producing optical fibres. It was this innovation that allowed the Japanese patent office to refuse Corning's patent applications in Japan and facilitated the domination of the Japanese market by the Japanese cabling companies. How important was the VAD innovation? How did it differ from the process technologies used in the major Western companies? Does the VAD process have any competitive advantages over the other alternative technologies? How was the VAD technology diffused to three further Japanese companies--Hitachi Cable, Dainichi-Nippon Cable, and Showa Electric Wire and Cable--making Japan the most competitive market in the world for optical fibre? What role did AT&T play in diffusing optical fibre technology to Japan? These questions are examined in this section.

The legal battles between Corning and Sumitomo Electric are then analysed. The globalization of controlled competition is then discussed, as NTT in the early 1990s added Western and other Japanese companies to its group of suppliers developing new optical-fibre-related transmissions systems. This chapter ends with an analytical section. The first analysis involves a detailed account of the way in which controlled competition worked in the case of optical fibre in Japan, throwing light on the strengths and, equally important, the weaknesses of this Japanese form of organization.

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