By focusing on Japanese investment in R & D, relative to those of France and the United States, this paper offers an unique perspective on the remarkable evolution in Japan's international technological competitiveness since the 1960s. The empirical findings, based on annual flow and stock measures of inputs to the R & D process, indicate that Japan's technological development over twenty-five years is particularly striking when compared to that of the United States. For France, a more recent period of relative technological decline is identified. More disaggregate comparisons reveal that Japan's technological challenge has been particularly acute in communications and electronic equipment, electrical machinery, computers, chemicals, automobiles, and precision instruments.
Views expressed in the paper are those of the authors and do not necessarily reflect those of the Bank of Japan or Institute for Monetary and Economic Studies.