Organizational and environmental effects on innovation: A comparison of two countries

Significant changes in science and technology are the result of a complex interaction of environmental and organizational factors which are further contingent upon situational factors that may be culture specific. Numerous authors maintain that there are significant differences between Japanese and American organizations. These differences, it is proposed affect the innovativeness of organizations in both countries. The United States can be considered the leading innovator among industrialized nations as measured by its net exports of knowledge-intensive goods. However, the R & D trade balance, reflecting US export strength in technology-based manufactured goods, although increasing from 1960, has recently declined, while Japan has continued to increase its share of high-technology products. In this article factors are identified that affect the process of innovation within organizations and US and Japanese organizations are analyzed to clarify the contributing and inhibiting factors. Suggestions for improving the innovative climate within each country are offered.The author wishes to thank Professors Azumi, Nakamura, and Patrick, and the other members of theUniversity Seminar on Modern Japan, Columbia University for their suggestions on an earlier version of this paper in 1984.