Changes in the technology spillover structure due to economic paradigm shifts: A driver of the economic revival in Japan's material industry beyond the year 2000

Innovation is believed to be a driver of the economy in the 21st century. Above all, innovation in services and devices are essential to a post-information society. Importantly, materials continue to play a significant role in innovation, particularly in incorporating new functions in new devices. Now, Japan's economy is starting a significant recovery from the “lost decade”. Therefore, it is an appropriate time to review and elucidate the dynamics of material innovation before, during and after this time in order to better understand the process of innovation throughout this economic paradigm shift. In the context of innovation and economic paradigm, compound semiconductor materials lend themselves to understanding the dynamics involved because they play a critical role in introducing new functions and subsequently innovation to information communication technology. In this paper, patent applications filed by Sumitomo Electric Industries, Ltd., the world's largest firm of compound semiconductor material were investigated. Its patent applications for compound semiconductor substrates from 1980 to 2004 were examined in detail. Through this analysis, the following relationship between technology spillover and economic paradigm shift can be observed. In an industrial society, intra-technology spillover successfully led innovation. In contrast, in an information society, opportunities for both intra- and inter-technology spillovers decreased, partly because of economic stagnation, but also because of organizational inertia in business strategy. However, in a post-information society, simultaneously with the renewal of national science and technology policy and reformation of business management, inter-technology spillover emerged across industries, and the economy revived.