Industrial standards are deeply entrenched in the Japanese economy, often enforced by law. In Japan there is a standard for just about everything.
It started during industrialization. Japan was a nation of craftsmen who did things their own way. The Japanese set about developing the standards needed for an industrial economy. For example, residential construction practices once varied widely throughout Japan, but these were unified to allow identical construction materials to be sold nationwide.
During the postwar expansion, Japan’s quirky domestic standards sheltered Japanese companies from strong foreign competitors. This helped give small Japanese companies a safe place to practice and grow big enough to enter the global market.
These days, Japanese companies are already global competitors. Their sophisticated electronic products are profitable at volumes that only a worldwide market can provide. In this environment, quirky national standards are the kiss of death. Japan’s unique cell phone standards have trapped Japanese electronics companies in a market that cannot support them all. Paul McLellan observed that Japanese semiconductor companies now compete mostly with one another.
Japan’s culture of standardization makes them a leader in many fields of international standards, which is good for Japan. But the quirky national standards trick no longer works.
