Return of the inoperability

There has been unrest in the research community investigating the inoperability of an economic system under disaster situations. The inoperability input–output model (IIM), which is very popular in the risk management field, has become a center of argument, particularly from the input–output researchers, that IIM is a straightforward application of the standard Leontief input–output model. This paper revisits the concept of inoperability, rather than IIM, and proposes its new role in disaster impact analysis using a conventional tool, i.e. the RAS method, for illustrating how the inoperability of an economic system in the aftermath of disaster can be evaluated. The proposed framework is employed to examine the inoperability of industries resulting from the 1995 Kobe earthquake. The findings of the analysis reveal the usefulness of inoperability concept that can even incorporate resilience (gained operability) using the proposed framework of this paper.     

Banking System Reform in China: The Challenges to Improving Its Efficiency in Serving the Real Economy

The Chinese banking system reform since the country's accession to the World Trade Organization has yielded remarkable success. The major listed commercial banks have improved their operational performance significantly. However, there are some signs of changes in their financial results recently. The expanding debt of non‐profitable enterprises and local governments raises a question on the achievements of the previous reform. Considering that the competition among banks will become severer with financial liberalization under slower economic growth, the banks and supervisory authorities must continue to make greater efforts towards further reform in order to improve the banks' corporate governance and the risk management system.     

Technological innovation and diffusion of wind power in Japan

The purpose of this paper is to analyze the diffusion of wind power in Japan by focusing on the value chain and the interaction between technology and markets and to contribute towards recommendations on technology policy and management. This paper proposes a framework for analyzing the early stage diffusion of wind power systems by combining the use of several approaches considering wind power system as a complex technological system. Firstly, the business system approach is used as an analytical framework by focusing on efficiency, effectiveness and development criteria. As a second approach, the technological trajectory was analyzed based on the concept of technological disequilibrium and the evolutionary patterns of innovation of wind power generation systems were analyzed and the relationship between innovations at the sub-system, modular, and system level was identified. We apply the framework to investigate why wind power diffusion has not picked up momentum in Japan.The results include the following: (1) Technological imbalances within the product system were solved by technological innovation (2) The wind power business in Japan is insufficiently effective due to organizational disequilibrium (3) The technology system has begun to evolve in the direction of micro grid systems. (4) It is important to consider the demand-pull measures for wind power generation so that Japanese institution can have a “time slot” for ”learning by doing” to catch up and accelerate diffusion of wind power generation, including institutional reform of RPS law. Also further technological development related to stabilizing unstable wind energy is required.     

ADVERTISING RESTRICTIONS, COMPETITION, AND ALCOHOL CONSUMPTION

Distilled spirits producers recently voted to eliminate their voluntary ban on broadcast advertising. The ban received public support because of the high social cost associated with alcohol consumption and the belief that advertising promotes alcohol consumption and abuse. In spite of this belief, the empirical evidence indicates that advertising has no significant effect on the market demand for distilled spirits. This evidence has led many policy economists to conclude that eliminating the ban will have no effect on alcohol consumption. The purpose of this research is to show that this conclusion is incorrect because it ignores the fact that advertising restrictions may affect industry competition as well as market demand.     

Interlinkages between systems, key components and component generic technologies in building competencies

In the paper, an analysis is made of the intolinkages between systems, key components and components' generic technologies in building technological competencies. The sample consists of a set of seven Japanese and four European firm in the industrial, consumer electronics and materials sectors, engaged in the field of optoelectronics. Three tyes of information-—scientific publications, US patenting and interview data—are used. The findings demonstrate the existence ofsuch interlinkages.It was possible to confirm empirically the concept of generic technologies which are the basic underbing technologies forming thefoundation of a range of key components. The generic technologia are important for all firms, irrespectives of their final product markets. Building capabilities at the upstream and over a long period allows firms to develop more high value-added systems and products. It also provides forms with the opportunity to branch into new areas.     

Sales Forecasting in High-Technology Markets: A Utility-Based Approach

Accurate sales projections are of vital importance to the profitability and long‐term survival of high‐tech companies. This is especially true in the growth stage of product innovation, because major investments and marketing decisions are made in this phase. By examining recent empirical studies focusing on consumer behavior in high‐technology markets, several factors are identified that can affect individual buying decisions and aggregate sales, namely, interpersonal communication, democratization of innovation, direct and indirect network effects, forward‐looking behavior, and consumer heterogeneity. Against this background the diffusion‐modeling and the utility‐based approach are reviewed in terms of their basic conception and their applicability to the markets concerned. Based on this investigation a sales forecasting model for high‐tech products, specifically in the growth stage, is developed. The model has a utility‐theoretic background and a logistic structure. Since data are scarce in this early stage of the product life cycle two versions of the new approach are discussed, an extended version considering forward‐looking behavior and a more parsimonious (“myopic”) one. The performance of the new model is demonstrated using real sales data on the CD player, the DVD player/recorder, and the digital camera market. The empirical comparisons include alternative specifications of the Bass diffusion model as well as a proportional hazard model and consist of two steps. First, the models are checked as to whether they are able to represent the sales data at all. It is shown that both versions of the proposed model are at least equivalent, if not superior, to the models used as benchmarks in terms of fit. In the next step, the models are applied to predict future sales in the three markets. The resulting forecasts show that the proposed model performs significantly better than its benchmarks. Its parsimony enables reliable predictions, even in cases, where only short time series are available for parameter estimation. The model is able to anticipate decreasing diffusion rates as they occur at the end of the growth stage and, thus, helps to avoid overoptimistic sales forecasts, which may cause severe economic damages. The new approach is easy to calibrate and can be applied without specialized econometric expertise.     

Comments on the Model Testing by Goodwin and Meeran (2012): Comparison of the Utility‐based and the Gompertz Curve Approach for High‐technology Product Sales Forecasting

Starting from a comprehensive examination of recent empirical studies focusing on consumer behavior in high‐technology markets and the resulting identification of factors probably affecting individual buying decisions as well as aggregate product sales, Decker and Gnibba‐Yukawa developed and empirically verified a utility‐based sales forecasting approach in their earlier work. Based on data for 14 consumer electronic products and using the Gompertz curve as a benchmark, Goodwin and Meeran carried out a “more extensive testing” of this proposal. However, at least from a practical point of view, the plausibility of their testing framework regarding the market potential m is not unquestionable. This paper, therefore, first discusses some theoretical aspects of both approaches by addressing issues challenged by Goodwin and Meeran, especially regarding the use of short time series and the consideration of replacement purchases. Then, the quasi‐endogenous estimation method for m favored by Goodwin and Meeran for the Gompertz curve is examined in terms of sensitivity to better understand its influence on sales forecasts, and the adequacy of the suggested range for m in the case of the approach by Decker and Gnibba‐Yukawa is investigated. In addition, the results presented in Goodwin and Meeran are considered from a more distant perspective, and possible causes of the variations in forecasting accuracy are discussed, which finally reveals that the forecasting performance of the utility‐based approach is not that “disappointing” as claimed. It provides more accurate (or at least equivalent) forecasts than the Gompertz curve approach in 64% of the cases considered. Furthermore, if product 14 (portable MP3 players) is excluded from the analysis because of the nonconsideration of probably existing product improvement effects, then the utility‐based approach, on average, outperforms the benchmark in all forecasting years. Altogether, this suggests that the approach by Decker and Gnibba‐Yukawa could achieve more accurate forecasts when applying a more reasonable range for m, rather than varying it between 2 and 15 times the cumulative sales by the end of year 7 as proposed by Goodwin and Meeran. It turns out that the Gompertz curve approach can perform on a par with the utility‐based approach in high‐technology product sales forecasting based on short time series if the market potential m is estimated exogenously. A combination of the outcomes of both approaches can even lead to more accurate forecasts as when being used individually insofar as composite forecasting seems to be a practicable approach to the problem of shorter time series compelled by the accelerated diffusion speed in high‐technology markets, rather than relying on one presumably “best” model.     

Typology of structural change in a regional economy: a temporal inverse analysis

Earlier studies have investigated the hollowing-out phenomenon of the Chicago economy, in which the manufacturing sectors in Chicago have decreased their intermediate dependency within the region while the service sectors have increased their dependency. In this paper, a series of annual input–output tables for the Chicago metropolitan economy during the period of 1980–1997 was again employed for a further investigation of the structural change using an alternative tool, the temporal Leontief inverse analysis, that can assist in exploring trends and uncovering tendencies in individual sectors or groups of sectors within the context of an economy-wide system of accounts. The results are compared with the earlier studies for examining the nature and details of the hollowing-out phenomenon.     

Management and Policy Concerns over Shifts in Innovation Trajectories: The Case of the Japanese Robotics Industry

Innovation related network systems would need to be re-aligned and adapted within major technological shifts and their capability to re-align themselves determines the dynamic capabilities of a national innovation system. In this paper, we present a particular phenomenon in industrial evolution, which we call a shift in the 'innovation trajectory', taking the case of the Japanese robotics industry that now undergoes major shifts in many respects. We consider activities directly involved with innovation in the entire value chain from invention to commercialization, and identify the structural changes in the national systems due to the shifts in innovation trajectory. Having utilized the basic framework of 'Techno Economic Network', this paper analyzes six different structural shifts, which are related to product, technology, market, actor, competitive and socio-economic structures. This paper draws attention to the fundamental management and policy level concerns over the emerging shifts at four different decision making hierarchical levels. With concrete empirical evidences and results from interviews, this paper concludes that a new set of approaches is needed to shape these emerging innovation shifts.