A dynamic model of technological growth: Diffusion of Japanese investment networks overseas

The management literature focuses on the value of firm-specific resources for the competitive advantage. It is proposed that the interactions with the vendors internationally promote organizational learning about the value of newly emergent resources. The learning enhances organizational profitability, and helps upgrade technological capability, through trading of the know-how. Consequently, Japanese corporations are trying to market their firm-specific services through direct diffusion of investment networks overseas for added technological growth. The proposed model is summarized below: Globalization [arrow right] Organizational Planning [arrow right] Organizational Programming [arrow right] Organizational Learning [arrow right] Organizational Profitability [arrow right] Organizational Development [arrow right] Technological Capability [arrow right] Technological Investment [arrow right] Technological Trading [arrow right] Technological Servicing [arrow right] Technological Exchange [arrow right] Technological Growth It is hypothesized that, as the Japanese firms sought to diffuse their investment networks overseas, there was an increasing entropy in their power to program new learning about the creative emerging market options. Further academic research is recommended on the cultural forces, and the system of productive work in Japan, for explaining why the Japanese firms have not been able to successfully correct the sustained detrimental-effects of investment diffusion. American firms could play a leading role in diffusing their own learning about the revolutionary turnaround in productivity growth over the late 1980s and early 1990s to the Japanese firms. The conclusions suggest a need to evaluate the firm-specific resources as essentially dynamic options , which could be operated for substantially higher levels of productivity than are being realized empirically. For dynamic modeling of technological growth, there is a need to scientifically quantify the overall growth potential of the firm-specific resources, as against just the existing profitability . As for the managerial implications, the model highlights that the less productive resources imply higher cost, and the firms owning such resources could seek to trade them in the market for generating additional revenues and sustaining competitive advantage. Such trading could generate a significant demand for worldwide organizational learning of how these firm-specific resources are developed, and consequently help the maturing firms owning non-tradable resources generate increasing rents.